Ann: Notice of General Meeting, page-2

So.... what do people think of the latest round of perf shares to be issued?

Rant time.

Let me be clear up front, I'm happy with the progress of the company and of course the SP performance BUT not so keen on:

1. Another round of perf shares being issues for the reasons given.
2. The performance metric being used.

Ultimately the number of perf shares being issued is not huge in the grand scheme- 3million in total or at the vesting price of 0.50c a share comes out at $1.5mil in share based performance bonuses. My issue is the reference to what has been achieved that is relied on to hand out the bonus:

On 5 December 2017 - JK and Todd Richards were issued 500,000 shares each for reaching the following milestones:

1. Establish operational teams in Melbourne and Cyprus; and
2. Granting of electronic eMoney Institution license by the Central Bank of Cyprus; and
3. Revenue generation commencement in late 2016 by satisfying compliance legislation; and
4. Meeting key security and card scheme requirements by way of ISO27001 and PCI DSS certification; and
5. Completion of applications of card schemes principle memberships for Visa and Mastercard and executed a partnership agreement with JCB International; and
6. Other corporate initiatives.

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Now fast forward to today and they want to give JK another 1mil shares and 250k each to other board members for reaching the following milestones:

(a) establishment of operational teams in Melbourne and Cyprus in line with the Company's objectives and strategy.
(b) the grant of an Electronic eMoney Institution License by the Central Bank of Cyprus.
(c) establishment of the system required to deliver a working product to the Company's merchant customers.
(d) establishment of a working solution to provide identity services in line with current compliance legislation thereby allowing the Company to commence revenue generation in 2016.
(e) completion of capital raising initiatives to provide sufficient working capital to meet the Company objectives.
(f) the meeting of key security and card scheme requirements by way of ISO27001 and PCI DSS certification.
(g) completion of applications for principal membership with main card schemes Visa and MasterCard and execution of a partnership agreement with JCB International.
(h) completion of the application with the Australian Prudential Regulation Authority to become an Australian Deposit Taking Institution.
(i) Entry to the S&P ASX/300 Index – effective 18th March 2019.

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Do the two lists look for the most part the same with the exception of the ADI application, doing a cap raise and being placed in an index - by the way that's not correct either - they have been entered into the All Ords not the ASX300. Why don't they know what index they are in?!

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Then we get to the vesting requirements for the shares. They are linked to SP performance. The first tranche vest when the share price VWAPs at 40c for 15 days. So essentially they could hit that any day now and the second set at 50c.

Again performance has been tied to a low value metric. Not saying they will do this but other companies in the past have been known to do short term pump announcements to get the SP up for perf shares. Why not link performance with real metrics like EBIT targets. I am not so keen on the reason for these shares being issued as I think, at least in JKs case, he is being rewarded a second time over for much the same criteria, but I would at least be happy enough if they were linked to a real financial objectives such as the EBIT target of $10.7mil for example.

The only positive I see out of this is that JK thinks that revenue is going to go bananas. I say that because if these perf shares vest this FY then that is a further $3mil that will be on the books as "share based payments" so revenue will need to be a further $3mil higher to still come out with the guidance EBIT of $10.7mil.

Rant over....