Ann: Variation to TV2U Deal & Deferral of Shareholder Meeting, page-3

TV2U Convertible Notes

In recent weeks, TV2U has raised $560,000 by the issue of convertible notes (Convertible Notes). The Convertible Notes will be partially satisfied by the issue of securities in GAL upon completion of the acquisition of TV2U on the following terms:

(a) as to $200,000 of the Convertible Notes, by the issue of shares in GAL at $0.014 per share; and
(b) as to $360,000 of the Convertible Notes, by the issue of shares in GAL at $0.016 per share together with one free attaching option for each share issued exercisable at $0.03 each on or before 31 December 2018 and additional shares in lieu of interest at 10% per annum.

The total number of securities in GAL to be issued on conversion of the Convertible Notes is 37,302,323 shares and 22,500,000 options.

GAL has also agreed to issue a further 8,571,429 shares on conversion of convertible notes issued to a legacy investor in TV2U. These shares are in addition to the GAL shares to be issued on conversion of convertible notes for which shareholder approval is sought at the upcoming shareholder meeting.

Capital Structure

The revised capital structure of the Company following completion of the acquisition of TV2U, the issue of additional shares on conversion of the Convertible Notes and minimum capital raising of $4m is expected to be as follows:

Shares Performance Shares Options Securities currently on issue1 762,247,323 Nil 7,882,3622 Consideration Securities to be issued to TV2U Shareholders (and their nominees) 714,285,714 1,035,714,286 Nil Securities to be issued pursuant to Capital Raising (to raise $4 million at $0.02 per share) 200,000,000 Nil Nil Securities to be issued to TV2U convertible note holders 92,302,3233 Nil 22,500,0004 Securities to be issued to GAL corporate adviser Nil Nil 100,000,0005 Total6 1,768,835,360 1,035,714,286 130,382,362