Notes to Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

1.     Nature of Operations and Continuance of Business

Mobetize   Corp.   (“Mobetize”)   was   incorporated   in   the   state   of   Nevada  on  February   23,  2012,   as

Slavia, Corp. Mobetize’s name became “Mobetize Corp on August 13, 2013.

Mobetize   provides   Fintech   solutions   and   services   to   enable   and   support   the   convergence   of   global

telecom   and   financial   services   providers   (“Customers”)   through   its   Global   Mobile   B2B   Fintech   and

Financial   Services   Marketplace   (“Hub”).   Mobetize’s   activities   are   subject   to   significant   risks   and

uncertainties,    including    the    need    to    secure    additional    funding    to    optimize    Mobetize’s    existing

technology to effective counter competitive products.

Mobetize’s   unaudited   consolidated   financial   statements   are   prepared   in   accordance   with   accounting

principles   generally accepted in the United States.    These unaudited   consolidated financial statements

include   the   accounts   of   Mobetize   and   its   wholly   owned  subsidiaries,  Mobetize   Canada   Inc.,  and

Mobetize USA Inc. All significant intercompany transactions and balances have been eliminated.

The    accompanying    unaudited    consolidated    financial    statements    of    Mobetize    should    be    read    in

conjunction   with   the   financial   statements   and   accompanying   notes   filed   with   the   U.S.   Securities   and

Exchange   Commission   in   Mobetize’s   Annual   Report   on   Form   10-K   for   the   fiscal   year   ended   March

31,    2016.    In    the    opinion    of    management,    the    accompanying    financial    statements    reflect    all

adjustments   of   a recurring nature   considered   necessary to   present   fairly Mobetize’s   financial   position

and the result of its operations and its cash flows for the periods shown.

The   preparation   of   financial   statements   in   accordance   with   accounting   principles   generally   accepted

in   the   United   States   requires   management   to   make   estimates   and   assumptions   that   affect   the   amounts

reported.   Actual   results   could   differ   materially   from   those   estimates.   The   results   of   operations   and

cash   flows   for   the   periods   shown   are   not   necessarily   indicative   of   the   results   to   be   expected   for   the

full year.

Going Concern

These   unaudited   consolidated   financial   statements   have  been   prepared   on   a   going   concern   basis,

which   implies   that   Mobetize   will   continue   to   realize   assets   and   discharge   liabilities   in   the   normal

course   of   business.   As   of   December   31,   2016,   Mobetize   has   an   accumulated   deficit   of   $7,071,813,   a

history   of   net   losses   and   a   working   capital   deficiency   of   $710,669.   These   factors   raise   substantial

doubt   regarding   Mobetize’s   ability to   continue   as   a   going   concern.   The   continuation   of   Mobetizeas   a

going   concern   is   dependent   upon   continuing   financial   support   from   management,   increasing   sales,

securing   debt   or   equity   financing,   cutting   operating   costs,   launching   viable   products,   and   realizing

profitable   operations.   These   financial   statements   do   not   include   any adjustments   to   the   recoverability

and   classification   of   recorded   asset   amounts   and   classification   of   liabilities   that   might   be   necessary

should Mobetize be unable to continue as a going concern.

7

MOBETIZE CORP.

Notes to Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

2.

Recent Accounting Pronouncements

a)     Recently Adopted Accounting Standards

In  June  2014,  ASU  guidance  was  issued  to  resolve  the  diversity  of  practice  relating  to  the

accounting   for   stock   based   performance   awards   that   the   performance   target   could   be   achieved

after the employee   completes the required service period. The update is effective prospectively or

retrospectively   for   annual   reporting   periods   beginning   after   December   15,   2015.   The   Company

adopted   this   ASU   on   April   1,   2016,   prospectively.   The   adoption   of   this   ASU   does   not   have   a

material effect on Mobetize’s consolidated financial statements.

In   January 2015,   an   ASU   was   issued   to   simplify the   income   statement   presentation   requirements

in   Subtopic   225-20   by   eliminating   the   concept   of   extraordinary   items.   Extraordinary   items   are

events   and   transactions   that   are   distinguished   by   their   unusual   nature   and   by   the   infrequency   of

their   occurrence.   Eliminating    the   extraordinary    classification   simplifies    income   statement

presentation   by   altogether   removing   the   concept   of   extraordinary   items   from   consideration.   This

ASU is effective for annual periods beginning after December 15, 2015, including interim periods

within those annual periods.  An entity may apply this ASU prospectively or retrospectively to all

prior    periods    presented    in    the    financial    statements.    Early  adoption    is    permitted.      Mobetize

adopted   this   ASU   on   April   1,   2016,   prospectively.   The   adoption   of   this   ASU   does   not   have   a

material effect on Mobetize’s consolidated financial statements.

b)     Recent Accounting Pronouncements

In   May   2014,   ASU   guidance   was   issued   related   to   revenue   from   contracts   with   customers.   The

new standard   provides a   five-step   approach   to be   applied to   all contracts   with   customers and also

requires    expanded    disclosures    about    revenue    recognition.    The    ASU    is    effective    for    annual

reporting   periods   beginning   after   December   15,  2017,   including   interim   periods   and   is   to   be

retrospectively    applied.    Early    application    is    permitted    only    as    of    annual    reporting    periods

beginning   after   December   15,   2016,   including   interim   reporting   periods   within   that   reporting

period.    Mobetize    is    currently    evaluating    this    guidance    and    the    impact    it    will    have    on    its

consolidated financial statements.

In   November   2015,   an   ASU   was   issued   to   simplify   the   presentation   of   deferred   income   taxes.

The   amendments   in   this   ASU   require   that   deferred   tax   liabilities   and   assets   be   classified   as   non-

current   on   the   balance   sheet   as   compared   to   the   current   requirements   to   separate   deferred   tax

liabilities   and   assets   into   current   and   non-current   amounts.     This   ASU   is   effective   for   annual

periods    beginning    after    December    15,    2016,    including    interim    periods    within    those    annual

periods.   Earlier   application   is   permitted.   This   ASU   may   be   applied   either   prospectively   to   all

deferred tax liabilities and assets or retrospectively to all periods presented.  Mobetize is currently

evaluating this guidance and the impact it will have on its consolidated financial statements.

8

MOBETIZE CORP.

Notes to Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

2.     Recent Accounting Pronouncements – continued

b)  Recent Accounting Pronouncements

In   February   2016,   Topic   842,   Leases   was   issued   to   replace   the   leases   requirements   in   Topic   840,

Leases.     The   main   difference   between   previous   GAAP   and   Topic   842   is   the   recognition   of   lease

assets   and   lease   liabilities   by   lessees   for   those   leases   classified   as   operating   leases   under   previous

GAAP.   A   lessee   should   recognize   in   the   balance   sheet   a   liability   to   make   lease   payments   (the   lease

liability)   and   a   right-of-use   asset   representing   its   right   to   use   the   underlying   asset   for   the   lease   term.

For   leases   with   a   term   of   12   months   or   less,   a   lessee   is   permitted   to   make   an   accounting   policy

election   by   class   of   underlying   asset   not   to   recognize   lease   assets   and   lease   liabilities.   If   a   lessee

makes this election, it should recognize lease expense for such leases generally on a straight-line basis

over   the lease term.    The accounting applied   by a   lessor is largely unchanged   from   that applied   under

previous   GAAP.    Topic   842   will   be   effective   for   annual   reporting   periods   beginning   after   December

15,   2018,   including   interim   periods   within   those   annual   periods   and   is   to   be   retrospectively   applied.

Earlier   application   is   permitted.    Mobetize   is   currently evaluating this   guidance and   the impact   it   will

have on its consolidated financial statements.

In   March 2016,   an ASU   was issued to reduce complexity in   the   accounting for employee   share-based

payment   transactions.     One   of   the   simplifications   relates   to   forfeitures   of   awards.     Under   current

vest.  This ASU permits an entity to make an entity-wide accounting policy election either to estimate

the   number   of   forfeitures   expected   to   occur   or   to   account   for   forfeitures   in   compensation   cost   when

they   occur.    This   ASU   is   effective   for   annual   periods   beginning   after   December   15,   2016,   including

interim   periods   within   those   annual   periods.    Earlier   application   is   permitted.    Mobetize   is   currently

evaluating this guidance and the impact it will have on its consolidated financial statements.

3.     Property and Equipment

Property and equipment, net consisted of the following:

December 31, 2016

March 31, 2016

Computer equipment

$

14,285    $

14,787

Furniture

1,162

1,204

Total

15,447

15,991

Less: accumulated amortization

6,339

4,163

Property and equipment, net

$

9,108    $

11,828

During the nine months ended December 31, 2016, property and equipment cost decreased by $544 as

a result of foreign currency translation adjustments.

9

MOBETIZE CORP.

Notes to Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

4.     Convertible Debentures

Date of issuance

Principal

Interest

Maturity

March 2016 ⁽¹⁾

$

275,000

12% per annum

March, 2017

July 25, 2016 ⁽²⁾

$

25,000

12% per annum

July 25, 2017

November 21, 2016 ⁽³⁾

$

40,000

6% per annum

November 21, 2017

⁽¹⁾     March, 2016 Issuance:

§     Convertible  debentures  issued  net  of  $30,000  of  prepaid  interest,  noting  that  $3,000  of

prepaid interest   was   paid by Mobetize to one Convertible Debenture holder   during the period

ended December 31, 2016.

§     $50,000 is owed to a Director of Mobetize (Note 5(h)), issued on March 21, 2016.

§     The   conversion   feature   is   exercisable   at   the   option   of   the   holder   (the   “Conversion   Feature”).

The  Conversion  Feature  enables  the  holder  to  convert    any  portion  of  their  outstanding

Convertible   Debenture   principal   balance   into   Series   B   Preferred   shares   at   a   price   of   Fifty

Cents ($0.50) after 180 days from issue date, but no later than the maturity date.

§     The    Conversion    Feature    represents    an    embedded    contingent    redemption    feature    and    is

accounted    for    as    a    derivative.      The    fair    value    of    the    contingent    redemption    feature    is

immaterial and therefore not recognized at inception, or at December 31, 2016.

⁽²⁾     July 25, 2016 Issuance:

§     Convertible debenture issued net of $3,000 of prepaid interest.

§     The   Conversion   Feature   is   exercisable   at   the   option   of   the   holder.   The   Conversion   Feature

enables    the    holder    to    convert    any    portion    of    their    outstanding    Convertible    Debenture

principal   balance   into   Series   B   Preferred   shares   at   a   price   of   Fifty   Cents   ($0.50)   after   180

days from issue date, but no later than the maturity date.

§     The    Conversion    Feature    represents    an    embedded    contingent    redemption    feature    and    is

accounted    for    as    a    derivative.    The    fair    value    of    the    contingent    redemption    feature    is

immaterial and therefore not recognized at inception or at December 31, 2016.

⁽³⁾     November 21, 2016 Issuance:

§     Convertible debenture issued net of $2,400 of prepaid interest.

§     $20,000 is owed to a Director of Mobetize (Note 5(h)), issued on November 21, 2016.

§     The  Conversion  Feature  enables  the  holder  to  convert    any  portion  of  their  outstanding

Convertible   Debenture   principal   balance   into   common   shares   at   $0.25   per   share   after   180

days from issue date, but no later than the maturity date.

§     The   Conversion   Feature   represents   an   embedded   contingent   redemption   feature.     The   fair

value  of   the   contingent   redemption  feature   is   immaterial   and   therefore   not  recognized   at

inception or at December 31, 2016.

10

MOBETIZE CORP.

Notes to Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

5.     Related Party Transactions

Nine months ended December 31,

Transactions with related parties

2 016

2015

(a)     Transactions incurred with the CEO or companies controlled by the

CEO:

Management salaries and fees

$

91,039      $

90,000

Research and development

97,027

45,822

General and administration expenses

11,843

2,979

Conversion of promissory note ⁽¹⁾

46,500

-

$

246,409      $

138,801

(b)     Transactions incurred with the former CFO’s or a company

controlled by a former CFO:

Management salaries and fees

$

7,110      $

-

General and administration expenses

62,210

994

Advances – applied to private placement ⁽²⁾

-

137,000

$

69,320      $

137,994

(c)     Transactions incurred with the Chairman of Mobetize

Director compensation ⁽³⁾

$

30,000      $

-

December 31,

Related party balances, as at

2 016

March 31, 2016

(d)     Amounts owed to companies controlled by the former CFO:

Shareholder loan ⁽⁴⁾

$

17,837

$

5,943

(e)     Amounts owed to companies controlled by the CEO:

Shareholder loan ⁽⁴⁾

$

43,038

41,533

Management fees

82,500

30,000

Amounts payable - for services received and expenses incurred

123,020

45,749

Promissory note – June 2, 2017 ⁽⁵⁾

25,000

-

Promissory note – July 11, 2017 ⁽⁶⁾

18,620

-

Promissory note – February 14, 2017 ⁽⁷⁾

-

50,000

$

292,178

$

167,282

(f)    Amounts owed to the Chairman of Mobetize

$

3,000

$

-

(g)     Amounts prepaid to a company controlled by the CEO

Prepaid interest on promissory notes

$

2,450

$

5,241

(h)     Amounts owed to a Director of Mobetize

Convertible debenture – March 21, 2017 (Note 4(1))

$

50,000

$

50,000

Convertible debenture – July 21, 2017 (Note 4(2))

25,000

-

Convertible debenture – November 20, 2017 (Note 4(3))

20,000

-

95,000

50,000

(i)      Amounts prepaid to a Director of Mobetize

Prepaid interest on convertible debentures

$

4,099

$

5,839

⁽¹⁾     The   promissory   note   was   comprised   of   $50,000   principal,   offset   by   $3,500   of   prepaid   interest.   The   promissory   note

was converted into 4,650,000 Series B preferred shares of Mobetize.

⁽²⁾     The    advances    from  the    former    CFO  were    later    used    as    a    subscription    to    a    private    placement    which    included

subscriptions by the former CFO and direct family members.

⁽³⁾     On   July   15,   2016   the Chairman   was   compensated   $24,000. On   July   1,   2016,   Mobetize   entered   into   an   agreement   with

its   Chairman   where   the   Chairman   would   provide   services   to   Mobetize   at   a   monthly   rate   of   $1,000   for   a   period   of   two

years ending on June 30, 2018.

⁽⁴⁾     Shareholder loan balances are unsecured and due on demand.

⁽⁵⁾     The promissory note maturing on June 2, 2017, was issued with a twelve-month term, comprises $25,000 principal, and

bears interest at 12% per annum. The principal balance includes prepaid interest of $3,000, due on   maturity.

⁽⁶⁾     The   promissory   note   maturing   on   July   11,   2017,   was   issued   with   a   twelve-month   term,   comprises   $18,620   (CAD

$25,000)   principal,   and   bears   interest   at   12%   per   annum.   The   principal   balance   includes   prepaid   interest   of   $2,234

(CAD $3,000), due on   maturity.

⁽⁷⁾     The   promissory  note  maturing  on  February  14,  2017,   was  issued  with  a  twelve-month  term,  comprised  $50,000

principal,   and   bore   interest   at   12%   per   annum.   The   principal   balance   included   prepaid   interest   of   $6,000,   due   on

maturity. This promissory note was converted into 4,650,000 Series B preferred shares of Mobetize.

11

MOBETIZE CORP.

Notes to Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

6.     Common Stock and Preferred Stock

a)     Common Shares Issued for Services:

On  August  1,  2016,  Mobetize  settled  $7,200  in  shares  for  services  through  the  issuance  of

120,000   common   shares   with   a   fair   value   of   $0.06   per   share   and   a   par   value   of   $0.001   per   share,

resulting in $7,080 being recorded to additional paid-in capital.

b)     Authorization and Issuance of Series A Preferred Shares:

During   the   year   ended   March   31,   2016,   Mobetize   authorized   the   issuance   of   250,000,000   shares

of preferred stock with a par value of $0.001 per share and designated 10,000,000 of the preferred

stock   as   Series   A   preferred   shares   (“Series   A   Preferred   Shares”).   The   Series   A   Preferred   Shares

have   the   same   rights   and   privileges   as   the   common   shares,   with   the   exception   that   the   Series   A

Preferred   Share   holder   has   10   votes   per   Series   A   Preferred   Share   versus   one   vote   per   common

share and does not have the right to convert the shares into common shares for a period of 2 years

from the date of issue.

c)     Authorization and Issuance of Series B Preferred Shares:

During the nine months ended December 31, 2016, Mobetize designated 25,000,000 shares of the

authorized   preferred   stock   as   Series   B   preferred   shares   (“Series   B   Preferred   Shares”).   The   Series

B   Preferred Shares   have   the   same rights   and   privileges   as   the   common   shares,   with the exception

that   the   Series   B   Preferred   Shares   have   an   anti-dilution   provision   and   the   Series   B   Preferred

Share holder does not have   the right to convert Series B Preferred Shares into common   shares   for

a period of 2 years from the date of issue.

On June 2, 2016, Mobetize converted 4,081,481 common shares held by a company controlled by

the CEO   into 4,081,481   Series B   Preferred   Shares,   300,000 common   shares   held by its   Chairman

and   Director   into   300,000   Series   B   Preferred   Shares,   and   1,039,167   common   shares   held   by   a

Mobetize Director into 1,039,167 Series B Preferred Shares.

On   July   15,   2016,   Mobetize   issued   200,000   Series   B   Preferred   Shares   with   a   fair   value   of   $0.15

per   share   to   settle   $30,000   in   services   payable.    $200   was   recorded   to   Series   B   Preferred   Shares

and $29,800 was recorded to additional paid-in capital.

On July 15, 2016, Mobetize issued 1,300,000 Series B Preferred Shares with a fair value of $0.15

per   share   to   a   company   controlled   by   the   Chairman   of   Mobetize   to   settle   $24,000   in   services

additional   paid-in   capital.   This   transaction   is   considered   a   capital   transaction,   as   such,   the   excess

fair value of the Series B Preferred shares issued has a $nil effect on additional paid-in capital.

On July 15, 2016, Mobetize issued 4,650,000 Series B Preferred Shares with a fair value of $0.15

per share to a company controlled by its CEO to settle $46,500 in an outstanding promissory note,

which   included   a   principal   of   $50,000   less   prepaid   interest   of   $2,500.   $4,650   was   recorded   to

Series B Preferred Shares and $41,850 was recorded to additional paid-in capital. This transaction

is   considered   a   capital   transaction,   as   such,   the   excess   fair   value   of   the   Series   B   Preferred   shares

issued has a $nil effect on additional paid-in capital.

12

MOBETIZE CORP.

Notes to Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

6.     Common Stock and Preferred Stock - Continued

c)     Authorization and Issuance of Series B Preferred Shares:

On   December   1,   2016,   Mobetize   issued   275,000   Series   B   Preferred   Shares   with   a   fair   value   of

$0.10   per   share   to   a   consultant   of   Mobetize   to   settle   $27,500   in   amounts   owing   for   services

provided. $275 was recorded to Series B Preferred Shares and $27,225 was recorded to additional

paid-in capital.

7.     Share Purchase Warrants

The following table summarizes the continuity of share purchase warrants:

Weighted

average exercise

Number of

price

warrants

$

Balance, March 31, 2015

1,581,084

0.90

Issued

1,555,322

1.00

Exercised

(189,500)

0.50

Expired

(310,500)

0.50

Balance, March 31, 2016 and December 31, 2016

2,636,406

1.04

As at December 31, 2016, the following share purchase warrants were outstanding:

Number of warrants

Exercise price

outstanding

$

Expiry date

694,414

1.00

June 24, 2018

386,670

1.25

December 10, 2018

1,555,322

1.00

September 1, 2018

2,636,406

13

MOBETIZE CORP.

Notes to Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

8.     Stock Options

On August 10, 2015, Mobetize’s directors adopted the 2015 Stock Option Plan (“Stock Option Plan”)

which   permits   Mobetize   to   issue   stock   options   for   up   to   3,000,000   common   shares   of   Mobetize   to

directors,   officers,   employees   and   consultants   of   Mobetize   with   a   maximum   term   of   5   years,   and   a

vesting schedule determined by the Board of Directors at the time of granting the options.

The following table summarizes the continuity of stock options:

Weighted

average exercise

Number of

price

stock options

$

Balance, March 31, 2016

2,381,262

0.60

Expired

(288,539)

0.60

Cancelled

(32,723)

0.60

Outstanding, December 31, 2016

2,060,000

0.60

Exercisable, December 31, 2016

1,469,500

0.60

As at December 31, 2016, the following share purchase options were outstanding:

Exercise

Number of options

Number of options

price

outstanding

vested

$

Expiry date

2,060,000

1,469,500

0.60

September 30, 2020

The   vested options   are measured using the Black Scholes   method, which included   a dividend   yield of

nil, risk-free interest rate of 0.68%, expected volatility of 76.7%, and expected term of 5 years.

During  the  nine  months  ended  December  31,  2016,  $167,033  (2015  -  $600,753)  in  stock-based

compensation   expense   was   recorded.   The   intrinsic   value   of   the   options   was   $nil   at   December   31,

2016 and March 31, 2016.

9.     Concentration of Risk

Revenues   are   currently   generated   through   licensing,   professional   services,   and   payment   processing

services   provided   by   Mobetize   to   our   existing   Customers.   During   the   nine   months   ended   December

31, 2016, Mobetize had revenues from four customers (2015 – revenues from four customers) with 56%

(2015 – 66%) of revenues generated from Mobetize’s largest customer.

14

MOBETIZE CORP.

Notes to Consolidated Financial Statements

December 31, 2016

(Expressed in U.S. dollars)

(Unaudited)

10.   Commitment

Mobetize has an obligation under a rental lease for its operating   office. As of December   31,   2016, the

remaining term of the lease is 21 months with monthly payments of $4,995. Mobetize’s lease includes

a renewal option.

11.   Segment Information

Mobetize  has   currently   operating   segments   located   in  Canada  and   the   United  States  of   America

(“USA”). Revenues   are generated in Canada and the USA   while all   assets are   located in Canada.   The

Mobetize’s   chief   operating decision   maker   reviews   financial   information   presented   on   a   consolidated

basis for purposes of allocating resources and evaluating financial performance.

12.   Subsequent Events

Mobetize   evaluated   its   December   31,   2016   financial   statements   for   subsequent   events   through   the

date   the   financial   statements   were   issued.   Mobetize   is   not   aware   of   any   subsequent   events   which

would require recognition or disclosure in the financial statements except as disclosed below.

Mobetize continues to seek recovery of 578,733 common shares and 101,726 share purchase warrants

issued   as   an   overpayment   to   the   Former   CFO   of   Mobetize   for   consulting   services   and   settlement   of

expenses and liabilities.

On   January   12,   2017,   Mobetize   entered   into   a   Joint   Venture   Agreement   (“Joint   Venture”)   with   CPT

Secure,   Inc.   (“CPT”),   to   further   develop   certain   payment   processing   technology   (“CPT   IP”)   on   a

50/50  basis.  In  connection  with  the  Joint  Venture,  Mobetize  agreed  to  issue  500,000  Series  B

Preferred   Shares   to   CPT   in   consideration   for   the   license   to   the   CPT   IP   which   will   be   contributed   to

the Joint Venture. The license to the CPT IP has a term to January 11, 2019, and can be automatically

renewed   for   successive   two   year   periods   unless   either   party   elects   not   to   renew   60   days   prior   to

expiration.

On   January   20,   2017,   the   holders   of   Convertible   Debentures   holding   an   aggregate   amount   of   three

hundred   thousand   ($300,000)   in   convertible   debt   elected   to   convert   their   respective   debentures   at

$0.50 a share into six hundred thousand shares of Series B Preferred Shares

On January 27, 2017, Mobetize issued twelve month Convertible Debentures in the aggregate amount

of   $200,000   net   of   $176,000   of   prepaid   interest   to   four   individuals   that   entitles   each   of   them   to

convert   any   portion   of   the   principal   into   Series   B   Preferred   Shares   at   a   price   of   $0.50   per   share,   180

days from issue date, but no later than the maturity date.

On   February   1,   2017,  dated   effective   December   15,   2016,   the   Company   entered   into   a  Software

Application   License,   Customization   Development   and   Service   Level   Agreement     with   Tata

Communications   (America)   Inc.   to   govern   the   global   deployment   of   our   Services   for   its   customers.

The parties agreed to a five-year strategic partnership.

15

ITEM 2.