Notice of Special Meeting of Shareholders

6 May 2015
VMob Group Limited

Notice of Special Meeting

Notice is given that a special meeting of VMob Group Limited (the Company) will be held in the Topaz Room 2 & 3 at the Hilton Hotel, Princes Wharf, 147 Quay Street, Auckland on 22 May 2015 commencing at 2:30pm.

This Notice includes important information about upcoming corporate activities of the Company. Please read this document carefully.

Announcements
As shareholders of the Company are aware, the Board and management team have been preparing for an initial public offering of shares in the Company in Australia via the secondary listing of the Company on the Australian Stock Exchange (ASX) (the IPO). The Company’s management have engaged with advisers and the ASX to pursue the IPO and preparation is now well underway. The purpose of the IPO is, amongst other reasons, to facilitate Australian investors’ ability to easily trade in shares in the Company. However, prior to undertaking the IPO, the Board wishes to continue its existing capital raising activities to fund the Company’s short-term capital requirements.

Formal meeting matters
1. Ratification of Previous Share Private Placements
To consider and, if thought fit, to pass the following resolution as an ordinary resolution of the Company:

“That the 8,205,511 ordinary shares issued by the Company for private placement capital raising without shareholder approval since the last Annual Meeting, as allowed under NZAX Listing Rule 7.3.5, be ratified with immediate effect under, and for the purpose of, NZAX Listing Rule 7.3.5(a)(iii).” 

Explanation
NZAX Listing Rule 7.3.5 allows the Company to issue ordinary shares in a 12 month period without shareholder approval provided that the prescribed 25% threshold is not exceeded (i.e., no more than 25% of the total ordinary shares on issue at the start of the 12 month period).

The Company has relied on Listing Rule 7.3.5 to issue ordinary shares by private placement capital raising during the last 12 months, being 8,205,511 ordinary shares issued on 5 February 2015 to certain directors of the Company (being Scott Bradley, Phil Norman, Michael Carden and Timothy Cook), as well as institutional and private investors, at NZ$0.0106 per ordinary share.

The capital was raised to provide on-going working capital and to fund further international growth and current deployments. The payment was received by the Company for the issuance of such ordinary shares in January and February of 2015.

The Company has one class of securities on issue, being ordinary shares. Further information regarding customer wins and presentations regarding growth initiatives can be obtained from the investor section of the Company’s website: http://www.vmoblive.com/company/investor-info/. The latest investor presentation can also be found at: https://www.nzx.com/files/attachments/212023.pdf. Key current deployments include McDonald’s Japan, McDonald’s USA and 7-Eleven Australia, as previously announced to the market.

The 8,205,511 ordinary shares issued pursuant to the capital raising described above, and to be ratified if this ordinary resolution is passed, represent 61% of the 25% threshold prescribed by NZAX Listing Rule 7.3.5(a).

The Company may wish to raise further capital for growth in the short term and wishes to ensure that it has the flexibility to do so without exceeding the 25% threshold described above. NZAX Listing Rule 7.3.5(a)(iii) allows further headroom to be created for this threshold if previous share issues within the last 12 months are formally ratified by the shareholders by way of an ordinary resolution. Accordingly, the Company is seeking that Resolution 1 is passed in order to allow the Board the flexibility to decide on any such further capital raising.

Please note that the number of ordinary shares to be ratified pursuant to Resolution 1 reflects the intended twenty-five for one share consolidation (which will take place prior to the date of the Special Meeting at which Resolution 1 is expected to be passed). This number therefore reflects the post-consolidation number of ordinary shares issued by the Company for private placement capital raising without shareholder approval since the last Annual Meeting. For additional information regarding the share consolidation, please refer to the announcement made on 21 April 2015: https://www.nzx.com/companies/VML/announcements/263363.

Should Resolution 1 not be passed by shareholders, this would limit the ability of the Company to raise further capital for growth in the short term without shareholder approval by restricting the headroom the Company would have until it hits the 25% threshold prescribed by NZAX Listing Rule 7.3.5(a).

2. Pre-IPO Capital Raising
To consider and, if thought fit, to pass the following resolution as an ordinary resolution of the Company:

“That the Board may issue such number of fully paid ordinary shares that will raise up to NZ$3 million at a price of NZ$0.016 per ordinary share (or $0.40 per share post consolidation), during the period from the date of this resolution to the earlier of the listing of the Company’s ordinary shares on the Australian Stock Exchange and 12 months after the passing of this resolution, in accordance with NZAX Listing Rule 7.3.1(a).”

Explanation
The Company is currently engaged in a round of external capital raising (Pre-IPO Capital Raising) prior to the IPO. At present this has been limited to seeking expressions of interest, with no capital raising yet being finalised. The Pre-IPO Capital Raising is intended to raise at least NZ$3 million at a price of NZ$0.016 (or $0.40 per share post consolidation) per ordinary share equal to a 6% discount to the closing market price on 1 May 2015, prior to the NZX trading halt to undertake the share consolidation.

Based on current calculations, to raise the NZ$3 million at a price of NZ$0.016 per ordinary share would result in 187,500,000 ordinary shares being issued (or 7,500,000 ordinary shares at a post consolidation price of $0.40 per share) pursuant to the Pre-IPO Capital Raising.

Please note that this price per ordinary share will be calculated subsequent to and reflect the intended twenty-five for one share consolidation.

NZAX Listing Rule 7.3.1(a) allows the Company to issue shares where the precise terms and conditions have been approved by an ordinary resolution of shareholders. Accordingly, the Board is seeking shareholder approval, by way of ordinary resolution in accordance with NZAX Listing Rule 7.3.1(a), to conduct the Pre-IPO Capital Raising. 

The capital to be raised pursuant to the Pre-IPO Capital Raising will provide on-going working capital to support the Company’s international growth strategy and enable current and planned deployments of the VMob platform for recently acquired customers. Current customer deployments, including McDonald’s Japan, McDonald’s USA and 7-Eleven Australia have been announced to the market and can be viewed at the investor section of the Company’s website: http://www.vmoblive.com/company/investor-info/. The latest investor presentation can also be found at: https://www.nzx.com/files/attachments/212023.pdf. The Company is expecting to list on the Australian Stock Exchange in August 2015, with such listing to also include an offer of securities (subject to shareholder approval), at which stage the authority to conduct the Pre-IPO Capital Raising will cease. However, should the listing on the Australian Stock Exchange not occur, the Pre-IPO Capital Raising is authorised up until 12 months after the passing of Resolution 2 (in accordance with NZAX Listing Rule 7.3.2(b).

Any and all ordinary shares issued pursuant to the Pre-IPO Capital Raising shall, when issued, rank pari passu with all existing ordinary shares of the Company.

Should Resolution 2 not be passed by shareholders, this would limit the ability of the Company to pursue its international growth strategy and enable current and planned deployments.

By order of the board
Phil Norman

Important information

Ordinary resolution
Ordinary resolutions are required to be approved by a simple majority of the votes of those shareholders entitled to vote and voting on the question.

Dilution effect on current shareholders
Paragraphs (a) to (d) below set out the various dilution effects the passing of one, or both, of Resolutions 1 and/or 2 would have on the shareholdings of existing shareholders.

(a) Following the ratification of the ordinary shares pursuant to Resolution 1: 
The total number of ordinary shares of the Company currently on issue is 1,468,406,587 following the private placement in February 2015 of 205,137,771 ordinary shares, which Resolution 1 refers to. The issue of those ordinary shares had the effect of diluting existing shareholders’ percentage holding in the Company by 14%. For example, if a shareholder held ordinary shares equal to 1% of all ordinary shares before the issue of the 205,137,771 ordinary shares, that shareholder’s shareholding equalled 0.86% of all ordinary shares after the issue. Given that the 205,137,771 ordinary shares have already been issued, the ratification of this issue pursuant to the passing of Resolution 1 would have no further dilution effect than has already occurred, but this would allow the Company more headroom to issuer further ordinary shares (see paragraph (b) below).

(b) Following the ratification of the ordinary shares pursuant to Resolution 1 and if the full 25% of ordinary shares available to be issued by the Company pursuant to NZAX Listing Rule 7.3.5 are subsequently issued: 
The total number of ordinary shares of the Company on issue will be 1,835,508,234 if the full 25% of ordinary shares available to be issued by the Company pursuant to NZAX Listing Rule 7.3.5 are issued subsequent to the ratification under Resolution 1, being 367,101,647 ordinary shares. The issue of 367,101,647 ordinary shares (in addition to those 205,137,771 ratified in Resolution 1 which, as noted under paragraph (a) above, has no dilution effect in of itself) would have the effect of diluting current shareholders’ percentage holding in the Company by 20%. For example, if a shareholder held ordinary shares equal to 1% of all ordinary shares before the issue of the 367,101,647 ordinary shares, that shareholder’s shareholding would equal 0.80% of all ordinary shares after the issue.

(c) Following the issue of the estimated number of ordinary shares pursuant to Resolution 2 (on the basis that paragraphs (a) and/or (b) do not occur): 
The total number of ordinary shares on issue will be 1,655,906,587 following the estimated issue of 187,500,000 ordinary shares pursuant to the Pre-IPO Capital Raising. The issue of the 187,500,000 ordinary shares would have the effect of diluting current shareholders’ percentage holding in the Company by 11%. For example, if a shareholder held ordinary shares equal to 1% of all ordinary shares before the issue of the estimated 187,500,000 ordinary shares, that shareholder’s shareholding would equal 0.89% of all ordinary shares after the issue. However, this dilution is in percentage shareholding terms and does not reflect the increased prospects of the Company following the Pre-IPO Capital Raising.

(d) Following the ratification and issue of ordinary shares described under paragraphs (a), (b) and (c) above: 
The total number of ordinary shares on issue will be an estimated 2,023,008,234 following the ratification of the 205,137,771 ordinary shares pursuant to Resolution 1, the theoretical issue of 367,101,647 ordinary shares if the full 25% available to be issued are subsequently issued and the estimated issue of 187,500,000 ordinary shares pursuant to the Pre-IPO Capital Raising. Together, these actions would have the effect of diluting current shareholders’ percentage holding in the Company by a ratio of 27%. For example, if a shareholder held ordinary shares equal to 1% of all ordinary shares before the ratification of the 205,137,771 ordinary shares in Resolution 1, the theoretical issue of 367,101,647 ordinary shares if the full 25% available to be issued are subsequently issued and the estimated 187,500,000 ordinary shares in Resolution 2, that shareholder’s shareholding would equal 0.73% of all ordinary shares after the ratification and two issues. However, this dilution is in percentage shareholding terms and does not reflect the increased prospects of the Company following the Pre-IPO
Capital Raising.

Voting exclusions

The Company will disregard any votes cast on Resolution 1 by Scott Bradley, Phil Norman, Michael Carden and Timothy Cook and associated persons (as defined in the NZAX Listing Rules) of the aforementioned persons and the Company will disregard any votes cast on Resolution 1 by any other person who subscribed for securities under the placement of securities subject to ratification under Resolution 1 and associated persons (Disqualified Persons). However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the express directions (i.e. instructions to vote for or against the resolution) on the Proxy Form. Under NZAX Listing Rule 9.3.3, where any Disqualified Person is proxy for a person who is entitled to vote, they will not be entitled to vote if the direction on the Proxy Form allows the proxy discretion as to how to vote (i.e. discretion to exercise that vote as the proxy sees fit).

Proxies

Any shareholder who is entitled to attend and vote at the meeting may appoint a proxy to attend and vote instead of him or her. A proxy does not need to be a shareholder. If you wish to appoint a proxy you should complete the enclosed Proxy Form in accordance with the instructions on that Proxy Form. If you appoint a proxy you may either direct your proxy how to vote for you or you may give your proxy discretion to vote as he/she sees fit. If you wish to give your proxy discretion then you must mark the appropriate boxes on the Proxy Form to grant your proxy that discretion. If you do not tick any box for a particular resolution, then your instruction will be to abstain.

The Chairman of the Meeting and each director is willing to act as proxy for any shareholder who wishes to appoint him/her or as an alternative to the named proxy. 
The Proxy Form must be received by the Company at least 48 hours before the start of the meeting.

More information
If you have any questions, or for more information, please contact Steve Allan on +64 27 480 9991 or steven.allan@vmoblive.com.

Address

If you are filling out a proxy form, please send it to:

(a) If by post:

Computershare Investor Services Limited
Private Bag 92119
Auckland 1142
New Zealand

(b) If by fax:

+64 9 488 8787