MOBETIZE, CORP. - FORM 10-Q - December 14, 2016

Attached files

file	filename
EX-31.1 - CERTIFICATION - MOBETIZE, CORP.	exhibit311.htm
EX-32.2 - CERTIFICATION - MOBETIZE, CORP.	exhibit322.htm
EX-32.1 - CERTIFICATION - MOBETIZE, CORP.	exhibit321.htm
EX-31.2 - CERTIFICATION - MOBETIZE, CORP.	exhibit312.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Mark One

[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934 for the quarterly period ended September 30, 2016

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from ______ to _______

Commission File No. 333-181747

MOBETIZE CORP.

(Exact name of registrant as specified in its charter)

Nevada

(State or Other Jurisdiction of Incorporation or Organization)

7299

99-0373704

(Primary Standard Industrial Classification Number)

(IRS Employer Identification Number)

8105 Birch Bay Square St, Suite 205, Blaine WA 98230

(Address of principal executive offices)

Issuer’s telephone number: (778) 588-5563

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or

15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was

required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-

accelerated filer, or a smaller reporting company.

Large accelerated filer ☐

Accelerated filer

☐

Non-accelerated filer ☐ (Do not check if a smaller reporting company) Smaller reporting company☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the

Exchange Act). ☐Yes ☒No

At December 14, 2016, the number of shares outstanding of the registrant’s common stock, $0.001 par

value was 23,450,233, the number of shares outstanding of registrant’s Series A preferred stock, $0.001

par value was 4,565,000, and the number of shares outstanding of registrants Series B preferred stock,

$0.001par value was 11,845,648.

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION

ITEM 1

Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

ITEM 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations 26

ITEM 3

Quantitative and Qualitative Disclosures About Market Risk

ITEM 4

Controls and Procedures

PART II

OTHER INFORMATION

ITEM 1

Legal Proceedings and Risk Factors

ITEM 2

Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 3

Defaults Upon Senior Securities

ITEM 4

Mine Safety Disclosures

ITEM 5

Other Information

ITEM 6

Exhibits

Signatures

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

As used herein, the terms “Company,” “we,” “our,” and “us” refer to Mobetize Corp., a Nevada

corporation, and its predecessors and subsidiaries, unless otherwise indicated. In the opinion of

management, the accompanying unaudited, consolidated financial statements included in this Form

10-Q reflect all adjustments necessary for a fair presentation of the results of operations for the

periods presented. The results of operations for the periods presented are not necessarily indicative of

the results to be expected for the full year.

MOBETIZE, CORP.

Consolidated Balance Sheets

September 30, 2016

(Unaudited)

US $

SEPTEMBER

MARCH 31,

30,

2016

ASSETS

Current Assets:

Cash

1,949 $

210,341

Accounts receivable

96,758

43,729

Prepaid expenses and deposits

52,242

59,516

Prepaid expenses and deposits – related party (Note 4a)

3,800

5,241

Total Current Assets

154,749

318,827

Property and equipment, net (Note 3)

10,114

11,828

TOTAL ASSETS

164,863 $

330,655

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

LIABILITIES

Current Liabilities:

Accounts payable and accrued liabilities

218,871 $

138,956

Accounts payable and accrued liabilities - related party (Note 4e)

169,841

75,749

Deposits due to customers

980

1,480

Promissory note – related party (Note 4a&e)

44,060

50,000

Convertible debenture (Note 5f)

300,000

275,000

Total Current Liabilities

733,752

541,185

Shareholder loans (Notes 4b&d)

59,995

47,476

TOTAL LIABILITIES

793,747 $

588,661

STOCKHOLDERS' DEFICIENCY

Common stock, $0.001 Par Value: 525,000,000 authorized and

23,450,233 and 28,750,881 common shares issued and outstanding,

respectively (Note 5)

23,450 $

28,751

Preferred stock – Class A, $0.001 Par Value: 250,000,000 authorized

and 4,565,000 preferred shares issues and outstanding (Note 5d)

4,565

Preferred stock – Class B, $0.001 Par Value: 250,000,000 authorized

and 11,570,648 preferred shares issues and outstanding (Note 5e)

11,571

Share purchase warrants (Note 8)

676,964

Share options (Note 8)

884,963

757,524

Additional paid-in capital

4,709,917

4,608,487

Accumulated other comprehensive loss

(9,456)

(9,236)

Accumulated deficit

(6,930,858)

(6,325,061)

Total Stockholders' Deficiency

(628,884)

(258,006)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY

164,863 $

330,655

The accompanying notes are an integral part of these consolidated financial statements.

MOBETIZE CORP.

Consolidated Statements of Loss and Comprehensive Loss

For the three and six months ended September 30, 2016 and 2015

(Unaudited)

US $

THREE MONTHS ENDED

SIX MONTHS ENDED

SEPTEMBER 30,

2016

2015

2016

2015

OPERATING REVENUES

Revenues

140,630 $

3,742 $

216,248 $

7,077

OPERATING EXPENSES

Depreciation

795

655

1,600

1,431

Director Compensation (Note 4g)

27,000

General and administrative

86,529

67,880

175,056

112,422

General and administrative – related party (Note

4a&b)

4,277

1,722

6,960

3,156

Investor relations and promotion

15,010

7,155

49,525

7,155

Listing fees

5,302

8,956

9,354

21,191

Management salaries and consulting fees

16,080

63,479

51,790

173,845

Management fees – related party (Note 4a)

15,000

30,000

37,500

60,000

Professional fees

12,002

10,743

96,705

38,010

Research and development

64,015

125,050

166,597

236,616

Research and development - related party (Note

4a)

30,896

12,205

58,050

12,836

Sales and marketing

29,578

7,269

53,761

Share compensation (Note 5)

7,200

Stock based compensation expense (Note 7)

54,581

127,439

Total Operating Expenses

338,738

357,423

822,045

720,423

NET LOSS

(198,108) $ (353,681) $ (605,797) $ (713,346)

NET LOSS PER SHARE

Basic and Diluted

(0.01) $

(0.03) $

(0.02)

WEIGHTED AVERAGE NUMBER OF

COMMON SHARES OUTSTANDING

Basic and Diluted

23,408,233

31,324,934

23,369,833

30,761,084

COMPREHENSIVE LOSS

Net loss

(198,108) $ (353,681) $ (605,797) $ (713,346)

Other comprehensive loss:

Cumulative translation adjustment

(62)

(6,499)

(220)

(5,040)

Comprehensive loss:

(198,170) $ (360,180) $ (606,017) $ (718,386)

The accompanying notes are an integral part of these consolidated financial statements.

MOBETIZE CORP.

Consolidated Statements of Stockholders’ Deficiency

For the six months ended September 30, 2016 and the year ended March 31, 2016

(Unaudited)

Common Shares

Preferred Shares

Class A

Class B

Warrants

Options

Accumulated

Additional

Share

and other

Other

Total

Paid-In

Subscriptions

Reserves

Accumulated Comprehensive Shareholder’s

Number

Value

Number

Value

Number

Value

Capital

Payable

(Note 8)

Deficit

Loss

Equity

Balance - March 31, 2015

30,185,505 $ 30,186

- $

- $

4,030,880 $

14,303 $

423,408 $ (4,255,516) $

(2,326) $

240,935

Stock payable for consultancy services

received (Note 5a)

18,181

Sale of 161,481 shares at $0.50/share

(Note 5b)

161,481

161

65,022

15,556

80,739

Sales of 2,724,688 shares at $0.25/share,

net of $12,122 financing fee (Note 5b)

2,724,668

2,725

403,850

262,470

669,045

Valuation of financing warrants on sale

of shares (Note 6d)

3,372

Exercise of warrants in the period (Note

5c)

189,500

189

94,561

94,750

Warrants issued on exercise of expiring

warrants (Note 6a)

(18,255)

18,255

Share options issued in the period (Note

711,427

Conversion of common to preferred

shares (Note 5d)

(4,565,000)

(4,565)

4,565,000

4,565

Shares issued for services (Note 5a)

54,727

32,429

(32,484)

Net loss for the year

(2,069,545)

Comprehensive loss for the year

(6,910)

Balance – March 31, 2016

28,750,881 $ 28,751

4,565,000 $ 4,565

- $

4,608,487 $

- $ 1,434,488 $ (6,325,061) $

(9,236) $

(258,006)

Conversion of common to preferred

shares (Note 5e)

(5,420,648)

(5,421)

5,420,648

5,421

Shares issued for services (Note 5e)

1,500,000

1,500

52,500

54,000

Shares issued to settle promissory note

(Note 5e)

4,650,000

4,650

41,850

46,500

Shares issued for services (Note 5a)

120,000

120

7,080

7,200

Share based compensation (Note 8)

127,439

Net loss for the period

(605,797)

Comprehensive loss for the period

(220)

Balance – September 30, 2016

23,450,233 $ 23,450

4,565,000 $ 4,565 $ 11,570,648 $ 11,571 $

4,709,917 $

- $ 1,561,927 $ (6,930,858) $

(9,456) $

(628,884)

The accompanying notes are an integral part of these consolidated financial statements.

MOBETIZE CORP.

Consolidated Statements of Cash Flows

For the six months ended September 30, 2016 and 2015

(Unaudited)

US $

SIX MONTHS ENDED

SEPTEMBER 30,

2016

2015

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

(605,797) $

(713,346)

Adjustments to reconcile net loss to net cash used in

operating activities:

Depreciation expense

1,600

1,431

Shares issued for services

61,200

6,630

Shares issued to settle promissory note-related party

46,500

Interest accrued on shareholder loans

1,900

Share based compensation

127,439

Changes in assets and liabilities

Accounts receivable

(53,029)

2,454

Accounts receivable – related party

14,687

Prepaid expenses and deposits

10,273

16,480

Prepaid expenses and deposits – related party

6,740

Accounts payables and accrued liabilities

79,915

33,573

Accounts payable - related party

94,092

26,736

Deposits due to customers

(500)

Shareholder loans

10,619

Promissory note-related party

(50,000)

Net cash used in operating activities

(269,048)

(611,355)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of computer equipment

(1,606)

Net cash used in investing activities

(1,606)

CASH FLOWS FROM FINANCING ACTIVITES

Proceeds from sale of common stock and warrant exercise,

net of financing costs

619,667

Proceeds from sale of common stock and warrant exercise,

net of financing costs - related party

228,240

Promissory Note, net of prepaid interest-related party

38,761

Shareholder loan related party

(53,105)

Proceeds from convertible debenture, net of prepaid interest

22,000

Net cash provided by financing activities

60,761

794,802

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(105)

(4,262)

NET INCREASE (DECREASE) IN CASH

(208,392)

177,579

CASH - BEGINNING OF PERIOD

210,341

312,899

CASH - END OF PERIOD

1,949 $

490,478

CASH PAID DURING THE PERIOD FOR:

Interest expense, net of interest income

22,490 $

1,025

Tax expense

- $

Supplemental cash flow disclosures (Note 11)

The accompanying notes are an integral part of these consolidated financial statements.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

1. Nature of Operations and Continuance of Business

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

Slavia, Corp. The Company’s name changed to “Mobetize Corp on August 13, 2013.

The Company 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”).

The Company’s activities are subject to significant risks and uncertainties, including the need to

secure additional funding to optimize the Company’s existing technology before another company

develops competitive products.

Going Concern

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

that the Company will continue to realize assets and discharge liabilities in the normal course of

business. As of September 30, 2016, the Company has an accumulated deficit of $6,930,858, a history

of net losses and a working capital deficiency of $579,003. These factors raise substantial doubt

regarding the Company’s ability to continue as a going concern. The continuation of the Company as

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 the Company be unable to continue as a going concern.

2. Summary of Significant Accounting Policies

a) Basis of Presentation

These unaudited financial statements are those of the Company and its wholly owned

subsidiaries, Mobetize Canada Inc., and Mobetize USA Inc. In the opinion of management, the

accompanying Consolidated Financial Statements of the Company contain all adjustments,

consisting only of normal recurring adjustments, necessary to fairly state its financial position as

of September 30, 2016 and March 31, 2016 and its results of operations and cash flows for the

three and six month periods ended September 30, 2016 and September 30, 2015 in accordance

with generally accepted accounting principles of the United States of America (“U.S. GAAP”).

Operating results for the three and six month periods ended September 30, 2016 are not

necessarily indicative of the results that may be experienced for the fiscal year ending March 31,

2017.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

2. Summary of Significant Accounting Policies - continued

b) Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to

make estimates and assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenues and expenses during the reporting period.

The Company regularly evaluates estimates and assumptions related to the collectability of

accounts receivable, revenue recognition, fair value of stock-based compensation, and deferred

income tax asset valuation allowances. The Company bases its estimates and assumptions on

current facts, historical experience and various other factors that it believes to be reasonable

under the circumstances, the results of which form the basis for making judgments about the

carrying values of assets and liabilities and the accrual of costs and expenses that are not readily

apparent from other sources. The actual results experienced by the Company may differ

materially and adversely from the Company’s estimates. To the extent there are material

differences between the estimates and the actual results, future results of operations will be

affected.

c) Financial Statements

These consolidated financial statements have been prepared in the opinion of management to

reflect all adjustments, which include only normal recurring adjustments, necessary to present

fairly the Company’s financial position, results of operations and cash flows for the periods

shown. The results of operations for such periods are not necessarily indicative of the results

expected for a full year or for any future period.

d) Cash

The Company considers all highly liquid instruments with maturity of three months or less at the

time of issuance to be cash equivalents. As of September 30, 2016, and March 31, 2016, the

Company had no cash equivalents.

e) Accounts Receivable

The Company evaluates the collectability of accounts receivable based on the age of receivable

balances and customer credit-worthiness. If the Company determines that financial conditions of

its customers have deteriorated, an allowance for doubtful accounts may be made or the accounts

receivable written off if all collection attempts have failed.

f) Prepaid Expenses and deposits

The Company pays for some services in advance and recognizes these expenses as prepaid at the

balance sheet date. If certain prepaid expenses extend beyond one-year, those are classified as

non-current assets.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

2. Summary of Significant Accounting Policies - continued

g) Revenue Recognition

The Company recognizes revenue from payment processing, licensing and the provision of

professional services. Revenue will be recognized only when the price is fixed and determinable,

persuasive evidence of an arrangement exists, the service has been provided, and collectability is

reasonably assured.

h) Property and Equipment

Property and equipment is accounted for at cost less accumulated depreciation and includes

computer equipment and office furniture. Depreciation is computed using the straight-line method

over the estimated useful lives of the assets, which are five years.

i) Research and Development Costs

The Company incurs research and development costs during the course of its operations. The

costs are expensed except in cases where development costs meet certain identifiable criteria for

capitalization. Capitalized development costs are amortized over the life of the related

commercial production.

j) Stock-Based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation –

Stock Compensation, which requires the measurement and recognition of compensation expense

based on estimated fair values for all share-based awards made to employees and directors,

including stock options.

ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant

using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its

method of determining fair value. This model is affected by the Company’s stock price as well as

assumptions regarding a number of subjective variables.

These subjective variables include, but are not limited to the Company’s expected stock price

volatility over the term of the awards, and actual and projected employee stock option exercise

behaviors. The value of the portion of the award that is ultimately expected to vest is recognized

as an expense in the consolidated statement of operations over the requisite service period.

Options granted to consultants are valued at the fair value of the equity instruments issued, or the

fair value of the services received, whichever is more reliably measureable.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

2. Summary of Significant Accounting Policies - continued

k) Income Taxes

Deferred income taxes are determined using the liability method for the temporary differences

between the financial reporting basis and income tax basis of the Company’s assets and liabilities.

Deferred income taxes are measured based on the tax rates expected to be in effect when the

temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities

are recognized based on anticipated future tax consequences attributable to differences between

financial statement carrying amounts of assets and liabilities and their respective tax bases.

The Company’s policy is to recognize penalties and interest, if any, related to uncertain tax

positions as general and administrative expense.

l) Basic and Diluted Net Income (Loss) per Share

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per

Share. ASC 260 requires presentation of basic and diluted earnings per share (“EPS”) on the face

of the income statement. Basic EPS is computed by dividing net loss available to common

shareholders and preferred shareholders (numerator) by the weighted average number of shares

outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive

common shares outstanding during the period using the treasury stock method and convertible

preferred stock using the if-converted method. In computing diluted EPS, the average stock price

for the period is used in determining the number of shares assumed to be purchased from the

exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their

effect is anti-dilutive. Due to the continued losses in the Company, all convertible instruments,

stock options, and warrants are considered anti-dilutive. Consequently, as of September 30, 2016,

the Company has nil (March 31, 2016 – nil) potentially dilutive shares.

m) Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of

comprehensive loss and its components in the financial statements.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

2. Summary of Significant Accounting Policies - continued

n) Financial Instruments/Fair Value

Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to

maximize the use of observable inputs and minimize the use of unobservable inputs when

measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of

independent, objective evidence surrounding the inputs used to measure fair value. A financial

instrument’s categorization within the fair value hierarchy is based upon the lowest level of input

that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels

that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for

identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are

observable for the asset or liability such as quoted prices for similar assets or liabilities in active

markets; quoted prices for identical assets or liabilities in markets with insufficient volume or

infrequent transactions (less active markets); or model-derived valuations in which significant

inputs are observable or can be derived principally from, or corroborated by, observable market

data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation

methodology that are significant to the measurement of the fair value of the assets or liabilities.

Financial instruments consist principally of cash, accounts receivable, accounts payable and

accrued liabilities, deposits due to customers, promissory note, shareholder loans, and convertible

debentures. Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825,

Financial Instruments the fair value of cash is determined based on “Level 1” inputs, which

consist of quoted prices in active markets for identical assets.

The recorded values of all other financial instruments approximate their current fair values

because of their nature and respective relatively short maturity dates and current market rates for

similar instruments. The Company is exposed to credit risk through its cash and accounts

receivable, but mitigates this risk by keeping deposits at major financial institutions and

advancing credit only to bona fide creditworthy entities. The maximum amount of credit risk is

equal to the carrying amount of these instruments.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

2. Summary of Significant Accounting Policies - continued

o) Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815

Derivatives and Hedging to determine whether the embedded conversion feature(s) should be

bifurcated from the host instrument and accounted for as a derivative at fair value with changes in

fair value recorded in income (loss). If the conversion feature does not require derivative

treatment under ASC 815, the instrument is evaluated under ASC 470-20, Debt with Conversion

and Other Options for consideration of any beneficial conversion feature.

p) Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or

foreign currency risks. The Company evaluates all of its financial instruments, including stock

purchase warrants and stock options, to determine if such instruments are derivatives or contain

features that qualify as embedded derivatives.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument

is initially recorded at its fair value and is then re-valued at each reporting date, with changes in

the fair value reported as charges or credits to income (loss). For option-based simple derivative

financial instruments, the Company uses the Black-Scholes option-pricing model to value the

derivative instruments at inception and subsequent valuation dates. The classification of

derivative instruments, including whether such instruments should be recorded as liabilities or as

equity, is re-assessed at the end of each reporting period.

q) Beneficial Conversion Feature

For conventional convertible debt where the rate of conversion is below market value, the

Company records a Beneficial Conversion Feature (the "BCF") and related debt discount.

When the Company records a BCF, the intrinsic value of the BCF is recorded as a debt discount

against the face amount of the respective debt instrument (offset to additional paid-in capital) and

amortized to interest expense over the life of the debt. The Company has determined that there is

no BCF with its convertible debt.

r) Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds

through the issuance of debt. These costs may be paid in the form of cash, or equity (such as

warrants). These costs are amortized to interest expense over the life of the debt. If a conversion

of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately

expensed.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

2. Summary of Significant Accounting Policies - continued

s) Foreign Currency

The functional and reporting currency of the Company and its subsidiary, Mobetize USA Inc., is

the United States Dollar (“U.S. Dollars”). The functional currency of the Company’s international

subsidiary, Mobetize Canada Inc., is the Canadian dollar. The Company translates the financial

statements of this subsidiary to U.S. dollars in accordance with ASC 740, Foreign Currency

Translation Matters using month-end rates of exchange for assets and liabilities, and average rates

for the annual period are derived from daily spot rates for revenues and expenses.

Translation gains and losses are recorded in accumulated other comprehensive income (loss) as a

component of stockholders’ equity. The Company has not, to the date of these consolidated

financial statements, entered into derivative instruments to offset the impact of foreign currency

fluctuations.

t) 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 the Company’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. The Company

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

material effect on the Company’s consolidated financial statements.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

2. Summary of Significant Accounting Policies - continued

u) 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. The Company 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. The Company is

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

statements.

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. The

Company 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 GAAP, an entity estimates the number of awards for which the requisite service period is

expected to be rendered and base the accruals of compensation cost on the estimated number of

awards that will 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. The Company is currently evaluating this guidance and the impact it will have on its

consolidated financial statements.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

3. Property and Equipment

Property and equipment, net consisted of the following:

September 30, 2016

March 31, 2016

Computer equipment

14,623 $

14,787

Furniture

1,190

1,204

Total

15,813

15,991

Less: accumulated amortization

5,699

4,163

Property and equipment, net

10,114 $

11,828

During the six months ended September 30, 2016, property and equipment decreased by $178 as a

result of foreign currency translation adjustments.

4. Related Party Transactions

For the three and six months ended September

30,

Three months ended

Six months ended

2016

2015

2016

2015

(a) Transactions incurred with the

CEO or companies controlled by

the CEO:

Management salaries and fees

15,000 $

30,000 $

37,500 $

60,000

Research and development

30,896

12,205

58,050

12,386

General and administration expenses

3,827

336

6,060

1,663

Issuance of promissory notes⁽¹⁾

19,060

44,230

Prepaid interest on promissory notes

5,314

Shareholder loans – applied to private

placement⁽²⁾

40,741

Conversion of promissory note⁽³⁾

46,500

68,783 $

83,282 $

197,654 $

74,049

(b) Transactions incurred with the

former CFO or a company

controlled by the former CFO:

General and administration expenses -

interest expense

450 $

1,386 $

900 $

1,493

Advances – applied to private placement⁽⁴⁾

110,000

137,500

450 $

111,386 $

900 $

138,993

(c) Warrant exercises

Former CFO⁽⁵⁾

- $

25,000

⁽¹⁾ The promissory notes bear interest at 12% per annum.

⁽²⁾ The shareholder loan from the CEO was later used as a subscription to a private placement.

⁽³⁾ 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 the Company (Note 5(d)).

⁽⁴⁾ 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.

⁽⁵⁾ The warrants were exercised into common shares at a price of $0.50 per common share.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

4. Related Party Transactions - continued

(d) Amounts owed to companies

controlled by the former

CFO:

September 30, 2016

March 31, 2016

Shareholder loan⁽⁶⁾

17,462

5,943

(e) Amounts owed to companies

controlled by the CEO:

Shareholder loans

42,533

41,533

Management fees

67,500

30,000

Amounts payable - for services received

and expenses incurred

102,341

45,749

Promissory note – June 2, 2017⁽⁷⁾

25,000

Promissory note – July 11, 2017⁽⁸⁾

19,060

Promissory note – February 14, 2017⁽⁹⁾

50,000

256,434

167,282

⁽⁶⁾ Shareholder loan balance is unsecured and due on demand.

⁽⁷⁾ 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.

⁽⁸⁾ The promissory note maturing on July 11, 2017 was issued with a twelve month term, comprises USD $19,060 (CAD

$25,000) principal, and bears interest at 12% per annum. The principal balance includes prepaid interest of USD $2,300

(CAD $3,000), due on maturity.

⁽⁹⁾ The promissory note maturing on February 14, 2017 was issued with a twelve month term, comprises $50,000 principal, and

bears interest at 12% per annum. The principal balance includes prepaid interest of $6,000, due on maturity.

(f) Amounts prepaid to a company

controlled by the CEO

September 30, 2016

March 31, 2016

Prepaid interest on promissory notes

3,800

5,241

Three months ended

Six months ended

September 30, 2016

September 30, 2016

(g) Transactions incurred with the

2016

2015

2016

2015

Chairman of the Company

Director Compensation⁽¹⁰⁾

27,000

- $

27,000

(h) Transactions incurred with the

Director of the Company

Issuance of Convertible Note⁽¹¹⁾

25,000

- $

25,000

⁽¹⁰⁾ On July 15, 2016 the Chairman was compensated $24,000 for past services provided to the Company from July 1, 2014

to June 30, 2016. On July 1, 2016, the Company entered into an agreement with the Company’s Chairman where the

Chairman would provide services to the Company at a monthly rate of $1,000 and a period of two years ending on June

30, 2018.

⁽¹¹⁾ Refer to Note 5 (f) for details of this convertible debenture.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

5. Common Stock and Preferred Stock

a) Common Shares Issued for Services:

During the six month period ended September 30, 2016, and the twelve month period ended

March 31, 2016, the Company entered into various consulting, advisory, and employment

agreements with consultants, advisors, and employees to provide services in exchange for shares

and/or cash, as applicable. Shares issued for services or as a sign in stock compensation, have

been valued at the service value amount and exchanged to common shares based on either the

quoted closing price of the Company’s common stock on the date of settlement, or where

issuance is delayed, at the average market price of the Company’s stock for the respective period

of service, as applicable.

During the six month period ended September 30, 2016, the Company settled $7,200 (twelve

month period ended March 31, 2016 - $32,484) in shares for services through the issuance of

120,000 common shares (twelve month period ended March 31, 2016 - 54,727) at $0.001 per

share, resulting in $7,080 (twelve month period ended March 31, 2016 - $32,429) being recorded

to additional paid-in capital.

b) Private Placements:

During the six month period ended September 30, 2016, and the twelve month period ended

March 31, 2016, the Company conducted nil and four private placements of investment units

respectively comprising common shares and warrants, as follows:

§ On September 1, 2015, the Company closed a private placement under which it sold

2,724,668 investment units for $0.25 per unit for gross proceeds of $681,167, which were

exclusively offered to subscribers of previous $0.75 private placements. Each investment

unit consists of one common share of the Company’s stock and one half-warrant. The

1,362,332 warrants are exercisable at $1.00 per share and are valid for three years from

the date of issue. $8,750 cash financing fees and 17,500 financing warrants with a value

of $3,372 were incurred with this private placement.

§ On September 1, 2015, the Company closed a private placement under which it sold

161,481 investment units for $0.50 per unit for gross proceeds of $80,739. Each

investment unit consists of one common share of the Company’s stock and one half-

warrant. The 80,740 warrants are exercisable at $1.00 per share and are valid for three

years from the date of issue. Neither financing fees nor financing warrants were payable

with this private placement.

c) Issuance of Common Shares on Exercise of Warrants, Options, and Settlement of Amounts:

§ On June 10, 2015, the Company issued 184,500 shares at a price of $0.50 per share for

proceeds of $92,250 upon the exercise of warrants. $184 was recorded to common shares

at the par value of $0.001 per share and $92,066 was recorded to additional paid-in

capital.

§ On August 15, 2015, the Company issued 5,000 shares at a price of $0.50 per share for

proceeds of $2,500 upon the exercise of warrants. $5 was recorded to common shares at

the par value of $0.001 per share and $2,495 was recorded to additional paid-in capital.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

Common Stock and Preferred Stock – continued

d) Authorization and Issuance of Series A Preferred Shares:

During the year ended March 31, 2016, the Company 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 sell the shares for a period of 2 years from the date

of issue.

On February 4, 2016, the Company converted 4,565,000 common shares held by the CEO of the

Company into 4,565,000 Series A Preferred Shares (Note 4(a)).

As at September 30, 2016, 4,565,000 (March 31, 2016 - 4,565,000) Series A Preferred Shares

were issued and outstanding.

e) Authorization and Issuance of Series B Preferred Shares:

During the six months ended September 30, 2016, the Company 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, the Company 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

the Company’s Chairman and Director into 300,000 Series B Preferred Shares, and 1,039,167

common shares held by the Company’s Director into 1,039,167 Series B Preferred Shares.

On July 15, 2016, the Company issued 200,000 Series B Preferred Shares at 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, the Company issued 1,300,000 Series B Preferred Shares with a fair value of

$0.15 per share to a company controlled by a Chairman of the Company, to settle $24,000 in

services payable. $1,300 was recorded to Series B Preferred Shares and $22,700 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.

On July 15, 2016, the Company issued 4,650,000 Series B Preferred Shares at a fair value of

$0.15 per share to a company controlled by the Company’s 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.

As at September 30, 2016, 11,570,648 (March 31, 2016 – nil) Series B Preferred Shares were

issued and outstanding.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

Common Stock and Preferred Stock – continued

f) Convertible Debenture:

In March 2016, the Company issued convertible debentures for gross proceeds of $275,000 (the

“Convertible Debentures”), net of $30,000 of prepaid interest, noting that $3,000 of prepaid

interest was paid by the Company to one Convertible Debenture holder during the period ended

September 30, 2016. The Convertible Debentures have a 12 month term, 12% annual interest rate,

pay the holder 12 months of prepaid interest on issuance, and have a conversion feature

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 common shares at a variable and discounted conversion price (“Conversion Price” -

see below) after 180 days from issue date, but no later than the maturity date. The Conversion

Price is calculated as a 50% discount to the average of the three lowest closing market prices over

any ten day trading period, ending one day prior to a notice of conversion provided by the holder.

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, at March 31, 2016, and at September 30, 2016.

On July 25, 2016, the Company issued a Convertible Debenture for gross proceeds of $25,000,

net of $3,000 of prepaid interest (Note 4e). The Convertible Debenture has a 12 month term, 12%

annual interest rate, pays the holder 12 months of prepaid interest on issuance, and has a

Conversion Feature 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

common shares at a variable and discounted conversion price after 180 days from issue date, but

no later than the maturity date. The Conversion Price is calculated as a 50% discount to the

average of the three lowest closing market prices over any ten-day trading period, ending one day

prior to a notice of conversion provided by the holder. 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 and at

September 30, 2016.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

6. Share Purchase Warrants

The following table summarizes the continuity of share purchase warrants:

Number of warrants Weighted average exercise price (US$)

Balance, March 31, 2015

1,581,084

0.90

Exercised, June 10, 2015

(184,500)

0.50

Exercised, August 15, 2015

(5,000)

0.50

Issued, July 15, 2015

94,750

1.00

Issued, September 1, 2015

1,460,572

1.00

Expired, September 2, 2015

(310,500)

0.50

Balance, March 31, 2016

2,636,406

1.04

Balance, September 30, 2016

2,636,406

1.04

a) On July 15, 2015, 94,750 warrants were issued with an exercise price of $1.00 and a three year

term ending September 1, 2018 to holders of the September 3, 2013 warrants who had exercised a

total of 189,500 warrants during the six months ended September 30, 2015 prior to the expiry

date of September 2, 2015. These warrant holders each received a half warrant for each full

warrant they exercised. These warrants were valued at $18,255 using the Black Scholes method

criteria as below.

b) On September 1, 2015, 1,362,332 warrants were issued with an exercise price of $1.00 and a

three year term ending September 1, 2018 to the parties participating in the $0.25 private

placement for common shares (“$0.25 PP”) in the quarter. Each subscriber to the private

placement received a half warrant for each common share they subscribed for. These warrants

were valued at $262,470 using the Black Scholes method criteria as below.

c) On September 1, 2015, 80,740 warrants were issued with an exercise price of $1.00 and a three

year term ending September 1, 2018 to the parties participating in the $0.50 private placement for

common shares (“$0.50 PP”) in the quarter. Each subscriber to the private placement received a

half warrant for each common share they subscribed for. These warrants were valued at $15,566

using the Black Scholes method criteria as below.

d) On September 1, 2015, 17,500 finder’s warrants were issued with an exercise price of $1.00 and a

three year term ending September 1, 2018 to an arms-length third party assisting in the $0.25 PP.

These warrants were valued at $3,372 using the Black Scholes method criteria as below.

Each of the warrant issuances above were valued using the Black Scholes method, which included

the dividend yield as nil, risk-free interest rate of 1.07%, expected volatility of 70.42%, and expected

term of 3 years.

As at September 30, 2016, the following share purchase warrants were outstanding:

Number of warrants outstanding Exercise price (US$)

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

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

7. Share Options

The following table summarizes the continuity of share purchase options:

Weighted average

Number of options

exercise price (US$)

Balance, March 31, 2015

57,291

1.25

Issued

2,630,000

0.60

Expired

(36,000)

0.65

Cancelled

(270,029)

0.74

Balance, March 31, 2016

2,381,262

0.60

Expired

(69,729)

0.60

Cancelled

(32,723)

0.60

Balance, September 30, 2016

2,278,810

0.60

As at September 30, 2016, the following share purchase options were outstanding:

Number of options

Exercise

outstanding

vested

price (US$)

Expiry date

2,278,810

1,542,810

0.60

September 30, 2020

On August 10, 2015, the Company’s directors adopted the 2015 Stock Option Plan (“Stock Option

Plan”) which permits the Company to issue stock options for up to 3,000,000 common shares of the

Company to directors, officers, employees and consultants of the Company 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 3,000,000 shares allocation was approximately 10% of the issued and outstanding shares

as of August 10, 2015.

On October 1, 2015, 2,630,000 stock options from the Stock Option Plan were issued to directors,

employees, advisors and consultants for the exercise of up to 2,630,000 common shares with a $0.60

exercise price, a 5 year life, and vesting terms ranging from immediate to 32 months depending,

generally, on the tenure of staff.

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.

As at September 30, 2016, 1,542,810 of the granted options were vested, nil were exercised, 69,729

expired, and 32,723 of the unvested options were cancelled leaving 736,000 options unvested.

During the three and six months ended September 30, 2016, $54,581 (2015 - $nil) and $127,439,

respectively, in stock based compensation expense was recorded.

The intrinsic value of the options was $nil at September 30, 2016 and March 31, 2016.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

8. Reserves

The Company had the following Share Purchase Warrants and Share Options Reserve balances:

Share Purchase

Warrants

Share Options

Total

(Note 6)

(Note 7)

Reserves

Balance - March 31, 2015

377,311 $

46,097

423,408

Sale of 161,481 shares at

$0.50/share (Note 5b)

15,556

Sale of 2,724,688 shares at

$0.25/share, net of $12,122

financing fee (Note 5b)

262,470

Valuation of financing warrants

(Note 5b)

3,372

Warrants issued on exercise of

expiring warrants (Note 6)

18,255

Share options issued in the period

711,427

Balance – March 31, 2016

676,964 $

757,524

1,434,488

Stock based compensation

127,439

Balance – September 30, 2016

676,964 $

884,963

1,561,927

9. Concentration of Risk

During the three and six months ending September 30, 2016, revenues were $140,630 and $216,248,

respectively, compared to revenues of $3,742 and $7,077, respectively, during the same period in

2015. Revenues are currently generated through licensing, professional services, and payment

processing services provided by Mobetize to our existing Customers.

During the three months ended September 30, 2016, the Company had revenues from five customers

(2015 – revenues from two customers) with 66% (2015 – 67%) of revenues generated from the

Company’s largest customer.

During the six months ended September 30, 2016, the Company had revenues from five customers

(2015 – revenues from three customers) with 70% (2015 – 72%) of revenues generated from the

Company’s largest customer.

10. Commitment

The Company has an obligation under a rental lease for its operating office. As of September 30,

2016, the remaining term of the lease is twenty four months with monthly payments of $4,995. The

Company’s lease includes a renewal option.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

11. Supplemental Cash Flow Disclosures

September 30,

2016

2015

SUPPLEMENTAL NON-CASH INFORMATION:

Shares issued for services

61,200

6,630

Shares issued to settle promissory

46,500

note-related party

Prepaid interest on convertible promissory note

3,000

12. Segment Information

The Company 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

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

basis for purposes of allocating resources and evaluating financial performance.

13. Subsequent Events

The Company evaluated its September 30, 2016 financial statements for subsequent events through

the date the financial statements were issued. The Company is not aware of any subsequent events

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

The Company continues to seek recovery of 578,733 common shares and 101,726 share purchase

warrants issued as an overpayment to the Former CFO of the Company in consulting services and

settlement of expenses and liabilities.

On October 14, 2016, the Company received a Citation and Notice of Assessment (“Citation”), that

Stephen J. Fowler (“Fowler”), its former CFO, had initiated a complaint with the State of Washington

Department of Labor and Industries for amounts allegedly due to him for unpaid wages. The Citation

declared that Fowler is owed $45,000 in wages in addition to an assessed interest of $3,368.74, and a

penalty of $4,500. On November 8, 2016, the Company entered an appeal alleging that the

calculation of amounts due to Fowler was incorrect and that Fowler had improperly obtained shares

of the Company’s common stock which it intends to recover. The Company received a response from

the Department of Labor and Industries dated November 18, 2016, in which it was advised that

Fowler’s claim had been transferred to the Office of the Attorney General and that a hearing on the

matter would be requested of the Office of Administrative Hearings. A date for the hearing is yet to

be assigned.

On November 21, 2016, the Company issued a $20,000 convertible note, net of $1,200 prepaid

interest, to a Director of the Company. The note has a 12 month term, 6% annual interest rate, pays

the lender 12 months prepaid interest on issuance, and has a Conversion Feature 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

$0.25 per share.

MOBETIZE CORP.

Notes to the Consolidated Financial Statements

September 30, 2016

(Unaudited)

13. Subsequent Events-continued

On November 21, 2016, the Company issued another $20,000 convertible note, net of $1,200 prepaid

interest, to a shareholder of the Company. The note has a 12 month term, 6% annual interest rate,

pays the lender 12 months prepaid interest on issuance, and has a Conversion Feature 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

$0.25 per share.

On December 1, 2016, the Company issued 275,000 Series B Preferred Shares at a price of $0.10 per

share to the Company’s Consultant to settle $27,500 in amounts owing for services provided.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATION

PRELIMINARY NOTE REGARDING FORWARD LOOKING STATEMENTS

The following discussion should be read in conjunction with our financial statements, which are included

elsewhere in this Form 10-Q (“Report”). This Report contains forward-looking statements which relate to

future events or our future financial performance. In some cases, you can identify forward-looking

statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,”

“estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable

terminology. These statements are only predictions and involve known and unknown risks, uncertainties,

and other factors that may cause our or our industry’s actual results, levels of activity, performance or

achievements to be materially different from any future results, levels of activity, performance or

achievements expressed or implied by these forward-looking statements.

In evaluating these statements, you should consider various factors which may cause our actual results to

differ materially from any forward-looking statements. Although we believe that the predictions reflected

in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity,

performance or achievements. Therefore, actual results may differ materially and adversely from those

expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any

forward-looking statements for any reason.

We are considered an emerging growth company. Our auditors have issued a going concern opinion on

the financial statements for the year ended March 31, 2016. The continuation of Mobetize as a going

concern is dependent upon the continued financial support from its management, and its ability to identify

future investment opportunities and obtain the necessary debt or equity financing, cutting operating costs,

launching a viable product, and generating profitable operations from our future operations.

Mobetize’s plan of operation for the coming year is to complete the development and qualification of

products under development, and to increase sales of our existing products. Meanwhile, we will continue

internal research and development efforts and collaborate with development partners to ensure the

continuity of our product pipeline focused on the convergence of telecom and financial services.

RESULTS OF OPERATIONS

Operating Revenues, Operating Expenses and Net Losses

US $

Three Months Ended

Six Months Ended

September 30,

2016

2015

2016

2015

Revenues

140,630

3,742 $

216,248 $

7,077

Operating Expenses

338,738

357,423

822,045

720,423

Net Loss

(198,108)

(353,681)

(605,797)

(713,346)

Operating Revenues

The Company generated $216,248 of revenue in the six months ended September 30, 2016, compared to

revenues of $7,077 during the same period in 2015. For the three months ended September 30, 2016, the

Company generated $140,630 of revenue compared to $3,742 of revenue during the same period in 2015.

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

services provided by Mobetize to our existing customers.

The increase in revenues over the comparative three and six month periods can be attributed to an

increase in contract development revenue and the provision of professional services in the current three

and six month periods over the corresponding prior periods.

We expect that revenues will continue to increase in future periods as the Company anticipates its first

transactional revenues in the first half of the calendar year 2017.

Operating Expenses

Operating expenses for the three and six months ended September 30, 2016 and 2015 are outlined in the

following table:

US $

Three Months Ended

Six Months Ended

September 30,

2016

2015

2016

2015

Depreciation

795

655

1,600

1,431

Director compensation

27,000

General and administrative

86,529

67,880

175,056

112,422

General and administrative – related

party

4,277

1,722

6,960

3,156

Investor relations and promotion

15,010

7,155

49,525

7,155

Listing fees

5,302

8,956

9,354

21,191

Management salaries and consulting fees

16,080

63,479

51,790

173,845

Management fees – related party

15,000

30,000

37,500

60,000

Professional fees

12,002

10,743

96,705

38,010

Research and development

64,015

125,050

166,597

236,616

Research and development – related

party

30,896

12,205

58,050

12,836

Sales and marketing

29,578

7,269

53,761

Share compensation

7,200

Stock based compensation expense

54,581

127,439

Total Operating Expenses

338,738

357,423

822,045

720,423

For the six months ended September 30, 2016, operating costs were $822,045 compared with $720,423

for the six months ended September 30, 2015. The $101,622 increase is primarily attributed to a $27,000

increase in director compensation due to a services agreement with a company controlled by the

Company’s Chairman, a $62,634 increase in general and administrative expenses due to interest expense

incurred on outstanding promissory notes and an increase in expenses incurred in the normal course of

operations, a $42,370 increase in investor relations costs as we pursued additional efforts to raise

awareness in the public market, a $58,695 increase in professional fees mostly related to public company

disclosure, and a $127,439 increase in stock based compensation expense as a result of issuing stock

options to certain of the Company’s employees and advisors. The overall increase in operating expenses

was partially offset by a $144,555 decrease in management salaries and consulting fees as we internalized

certain roles while optimizing the management structure to reduce overhead cost, a $24,805 decrease in

research and development expenses as certain products under development were completed, and a

$46,492 decrease in sales and marketing efforts intended to reduce overhead costs.

For the three months ended September 30, 2016, operating costs were $338,738 compared with $357,423

for the three months ended September 30, 2015. The $18,685 decrease is primarily attributed to a $3,645

decrease in listing fees, the elimination of $63,479 in management salaries and consulting fees paid to the

former CFO, a $61,035 decrease in research and development expenses as certain products under

development are completed and a $29,527 decrease in sales and marketing intended to reduce overhead

costs. The overall decrease was partially offset by $27,000 increase in director compensation due to a

services agreement with a company controlled by the Company’s Chairman a $18,649 increase in general

and administrative expenses due to interest expense incurred on outstanding promissory notes and an

increase in expenses incurred in the normal course of operations, a $2,555 increase in general and

administrative expenses due to amounts paid to a related party, a $7,855 increase in investor relations

costs as we pursued additional efforts to raise awareness in the public market, a $18,691 increase in

research and development expenses as certain products remain in development, $7,200 in share

compensation expenses and a $54,581 in stock compensation expenses as a result of issuing stock options

to certain of the Company’s employees and advisors.

We expect that operating expenses will continue to increase over future periods as the Company strives to

expand its business as it focuses on research and development of products in its product pipeline and

expands its current revenue model to include transactional sales in 2017.

Net Losses

During the six months ended September 30, 2016, the Company recorded a net loss of $605,797

compared with a net loss of $713,346 for the six months ended September 30, 2015. The $107,549

decrease in the net loss is due to a $209,171 increase in revenues, partially offset by a $101,622 increase

in total operating costs.

During the three months ended September 30, 2016, the Company recorded a net loss of $198,108

compared with a net loss of $353,681 for the three months ended September 30, 2015. The $155,573

decrease in the net loss is primarily attributed to a $136,888 increase in revenues.

We believe that net losses will diminish over future periods as revenue is expected to continue to grow

and operating efficiencies are implemented with a focus on the prospect of net profit.

Liquidity and Capital Resources

US $

September 30, 2016

March 31, 2016

Current Assets

154,749 $

318,827

Total Assets

164,863

330,655

Current Liabilities

733,752

541,185

Total Liabilities

793,747

588,661

Working Capital Deficiency

579,003

222,358

The Company had a working capital deficit of $579,003 as of September 30, 2016, and has funded its

cash needs since inception with revenues generated from operations, debt instruments and private equity

placements. Existing working capital and anticipated cash flow are not expected to be sufficient to fund

operations over the next twelve months.

Total current assets as of September 30, 2016, were $154,749 which consisted of $1,949 in cash, $96,758

in accounts receivable, $52,242 in prepaid expenses and deposits and $3,800 in prepaid expenses to a

related party. Total assets were $164,863 which consisted of current assets, and property and equipment

of $10,114.

Total current liabilities as of September 30, 2016, were $733,752 which consisted of accounts payable of

$218,871, accounts payable to a related party of $169,841, deposits due to customers of $980, a

promissory note due to a related party of $44,060 and convertible debentures of $300,000. Total liabilities

were $793,747 which consisted of current liabilities and shareholder loans of $59,995.

Stockholders’ deficit as of September 30, 2016, was $628,884.

Cash Flows

US $

Six Months Ended

September 30,

2016

2015

Cash flows used in Operating Activities

(269,048)

(611,355)

Cash flows used in Investing Activities

(1,606)

Cash flows provided by Financing Activities

60,761

794,802

Effect of exchange rate changes on cash

(105)

(4,262)

Net Increase in Cash During Period

(208,392)

177,579

Cash flows used in Operating Activities

During the six months ended September 30, 2016, the Company used $269,048 in operating activities as

compared to $611,355 of cash used in operating activities during the six months ended September 30,

2015. The $342,307 change in cash used in operating activities over the comparative periods, is primarily

attributed to a number of items that are book expense items which do not affect the total amount relative

to actual cash used including depreciation, share based compensation, interest accrued on shareholder

loans, and shares issued to settle a promissory note with a related party. Balance sheet accounts that

actually affect cash, but are not income statement related items that are added or deducted to arrive at net

cash used in operating activities, include accounts receivable, shareholder loans, accounts payable and the

related party promissory note.

The Company expects to continue to use cash flow in operating activities until such time as diminishing

losses transition to profit on the expectation that revenues will continue to increase.

Cash flows used in Investing Activities

During the six months ended September 30, 2016, the Company used $nil of cash in investing activities

compared to $1,606 in 2015. Cash used in investing activities during the six months ended September 30,

2015 was due to purchase of computer equipment.

The Company expects to use cash flow in investing activities in future periods as it will require additional

investment to increase revenue.

Cash flows from Financing Activities

During the six months ended September 30, 2016, The Company received $60,761 of proceeds from

financing activities compared to $794,802 during the six months ended September 30, 2015. Proceeds

received during the six months ended September 30, 2016, were due to the issuance of convertible

debenture in the principal amount of $25,000 net of $3,000 in prepaid interest and the issuance of a

convertible debenture in the principal amount of $44,060 net of $5,314 in prepaid interest to the

Company’s CEO. Proceeds received during the six months ended September 30, 2015 consisted of funds

raised from private placements that included $228,240 of related party placements by the CEO and former

CFO of the Company.

The Company expects that cash flow provided by financing activities will continue until such time as it

can increase revenue to a point at which it can maintain operations and grow its business.

PLAN OF OPERATION AND FUNDING

We expect that working capital requirements will continue to be funded through a combination of our

existing funds and further issuances of securities. Our working capital requirements are expected to

increase in line with the growth of our business.

Further advances, equity instruments, debt instruments, and anticipated cash flows from operations are

expected to be obtained to fund our operations over the next twelve months. Generally, we have financed

operations to date through the proceeds of the private placements of equity, issuances of convertible

debentures, and advances by the way of promissory notes from directors. In connection with our business

plan, management anticipates additional increases in operating expenses and capital expenditures relating

to: (i) development expenses associated with a start-up business; and (ii) marketing expenses. We intend

to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect

we will need to raise additional capital and generate revenues to meet short-term operating requirements.

We have no current agreements, arrangements or understandings with any person to obtain funds through

bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in

effect, our inability to raise funds for the above purposes will have a severe negative impact on our ability

to remain a viable company. Additional issuances of equity or convertible debt securities will result in

dilution to our current shareholders. Further, such securities might have rights, preferences or privileges

senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If

adequate funds are not available or are not available on acceptable terms, we may not be able to take

advantage of prospective new business endeavors or opportunities, which could significantly and

materially restrict our business operations.

We have no current material commitments for future capital expenditures.

We have no current defined benefit plan with any of our officers and directors. The Company does

maintain a stock option plan for directors, officers and eligible consultants.

We have no current material plans for the purchase or sale of any plant or equipment.

We have no current plans to make any changes in the number of our employees.

We do not anticipate paying cash dividends in the foreseeable future.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Report, we do not have any off-balance sheet arrangements that have or are

reasonably likely to have a current or future effect on our financial condition, changes in financial

condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources

that are material to investors.

GOING CONCERN

The independent auditors' report accompanying our March 31, 2016, financial statements contained an

explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.

These consolidated financial statements have been prepared on a going concern basis, which implies that

the Company will continue to realize its assets and discharge its liabilities in the normal course of

business. As of September 30, 2016, the Company has an accumulated deficit of $6,930,858, a history of

net losses and cash used in operating activities, and working capital deficiency of $579,003. These factors

raise substantial doubt regarding the Company’s ability to continue as a going concern. The continuation

of the Company as a going concern is dependent upon continued financial support from management,

increasing revenue, procuring additional debt or equity financing as necessary, decreasing operating costs,

launching commercially viable products, and generating a profit. 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 the Company be unable to continue as a going

concern.

CRITITCAL ACCOUNTING POLICIES

Our significant accounting policies are summarized in Note 2 to our financial statements. While the

selection and application of any accounting policy may involve some level of subjective judgments and

estimates, we believe the following accounting policies are the most critical to our financial statements,

potentially involve the most subjective judgments in their selection and application, and are the most

susceptible to uncertainties and changing conditions.

Mobetize recognizes revenue from payment processing, licensing, and provision of professional services.

Revenue will be recognized only when the price is fixed and determinable, persuasive evidence of an

arrangement exists, the service has been provided, and collectability is reasonably assured.

Stock-Based Compensation

Mobetize records stock-based compensation in accordance with ASC 718, Compensation – Stock

Compensation, which requires the measurement and recognition of compensation expense based on

estimated fair values for all share-based awards made to employees and directors, including stock options.

ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using

an option-pricing model. Mobetize uses the Black-Scholes option-pricing model as its method of

determining fair value. This model is affected by Mobetize’s stock price as well as assumptions regarding

a number of subjective variables. These subjective variables include, but are not limited to Mobetize’s

expected stock price volatility over the term of the awards, and actual and projected employee stock

option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is

recognized as an expense in the statement of operations over the requisite service period. Options granted

to consultants are valued at the fair value of the equity instruments issued, or the fair value of the services

received, whichever is more reliably measurable. Embedded Conversion Features

Mobetize evaluates embedded conversion features within convertible debt under ASC 815 Derivatives

and Hedging to determine whether the embedded conversion feature(s) should be bifurcated from the host

instrument and accounted for as a derivative at fair value with changes in fair value recorded in income

(loss). If the conversion feature does not require derivative treatment under ASC 815, the instrument is

evaluated under ASC 470-20, Debt with Conversion and Other Options for consideration of any

beneficial conversion feature.

Derivative Financial Instruments

Mobetize does not use derivative instruments to hedge exposures to cash flow, market, or foreign

currency risks. Mobetize evaluates all of it financial instruments, including stock purchase warrants and

stock options, to determine if such instruments are derivatives or contain features that qualify as

embedded derivatives.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is

initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair

value reported as charges or credits to income (loss). For option-based simple derivative financial

instruments, Mobetize uses the Black-Scholes option-pricing model to value the derivative instruments at

inception and subsequent valuation dates. The classification of derivative instruments, including whether

such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting

period.

Beneficial Conversion Feature

For conventional convertible debt where the rate of conversion is below market value, Mobetize records a

Beneficial Conversion Feature and related debt discount.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required of smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act

of 1934, as amended ("Exchange Act"), are designed to ensure that information required to be disclosed

in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported

within the time periods specified in rules and forms adopted by the Securities and Exchange Commission

(“Commission”), and that such information is accumulated and communicated to management, including

the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required

disclosures.

Based on that evaluation, Mobetize’s management concluded, as of the end of the period covered by this

report, that our disclosure controls and procedures were not effective in recording, processing,

summarizing, and reporting information required to be disclosed, within the time periods specified in the

Commission’s rules and forms, and such information was not accumulated and communicated to

management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely

decisions regarding required disclosures.

Changes in Internal Controls over Financial Reporting

During the quarter ended September 30, 2016, there has been no change in internal control over financial

reporting that has materially affected, or is reasonably likely to materially affect our internal control over

financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any

other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or

affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal

proceedings. Management is not aware of any other legal proceedings pending or that have been

threatened against us or our properties except as follows below:

Stephen J. Fowler

The Company received a Citation and Notice of Assessment dated October 14, 2016 (“Citation”), that

Stephen J. Fowler (“Fowler”), its former CFO, had initiated a complaint with the State of Washington

Department of Labor and Industries for amounts allegedly due to him for unpaid wages. The Citation

declared that Fowler is owed $45,000 in wages in addition to an assessed interest of $3,368.74, and a

penalty of $4,500. On November 8, 2016, the Company entered an appeal alleging that the calculation of

amounts due to Fowler was incorrect and that Fowler had improperly obtained shares of the Company’s

common stock which it intends to recover. The Company received a response from the Department of

Labor and Industries dated November 18, 2016, in which it was advised that Fowler’s claim had been

transferred to the Office of the Attorney General and that a hearing on the matter would be requested of

the Office of Administrative Hearings. A date for the hearing is yet to be assigned.

ITEM 1A. RISK FACTORS

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the

information required by this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On July 15, 2016, our board of directors authorized the issuance of 6,150,000 shares of Series B Preferred

pursuant to the exemptions from registration provided by Section 4(2) Regulation S of the Securities Act

for consideration rendered to the following persons:

Name

Consideration

Price

Value

Series B

Exemptions

Preferred

Kent Carasquero

Services

$ 0.15

30,000

200,000 Section 4(2)/Reg S

Alligato, Inc.*

Debt Settlement

0.01

46,500

4,650,000 Section 4(2)/Reg S

Malek Ladki**

Services

0.018

24,000

1,300,000 Section 4(2)/Reg S

* Alligato, Inc. is a company owned and controlled by the Company’s CEO.

** Mr. Ladki serves on the Company’s board of directors.

The Company complied with the exemption requirements of Section 4(2) of the Securities Act of 1933, as

amended (“Securities Act”) based on the following factors: (1) the issuances were isolated private

transactions by the Company that did not involve a public offering; (2) the offerees had access to the kind

of information which registration would disclose; and (3) the offerees were either a consultant to the

Company, an entity owned by an officer and director of the Company or a director of the Company and

(4) the offerees were financially sophisticated.

On July 25, 2016, our board of directors authorized the issuance of a convertible debenture to Donald

Duberstein convertible into shares of the Company’s common stock for an aggregate amount of $25,000,

net of $3,000 in pre paid interest of 12% over a one year term convertible at the option of holder at a 50%

discount to the average of the three lowest closing market prices over any ten day trading period pursuant

to the exemptions from registration provided by Section 4(2) and Regulation D of the Securities Act of .

The Company complied with the exemption requirements of Section 4(2) of the Securities Act based on

the following factors: (1) the issuance was an isolated private transaction by the Company that did not

involve a public offering; (2) the offeree had access to the kind of information which registration would

disclose; and (3) the offeree was a director of the Company and (4) the offeree was financially

sophisticated.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on

page 36 of this Form 10-Q, and are incorporated herein by this reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this

report to be signed on its behalf by the undersigned, thereunto duly authorized.

MOBETIZE CORP.

DATE

/s/ Ajay Hans

December 14, 2016

By: Ajay Hans

Its: Chief Executive Officer

/s/ Elena Karamushko

December 14, 2016

By Elena Karamushko

Its: Chief Financial Officer and Principal Accounting Officer

INDEX TO EXHIBITS

Exhibit No. Exhibit Description

2.1*

Purchase and Sale Agreement with Mobetize, Inc., dated July 9, 2013, incorporated by reference to our Form

10-Q/A filed with the Commission on September 10, 2013.

3.1*

Articles of Incorporation, incorporated hereto by reference to the Form S-1, filed with the Commission on

May 30, 2012.

3.1.1*

Certificate of Amendment filed on August 8, 2013 incorporated by reference to the Form 8-K filed with the

Commission on August 15, 2013.

3.1.2*

Certificate of Designation Series A Preferred filed on February 4, 2016, incorporated by reference to the

Form 8-K filed with the Commission on February 11, 2016.

3.1.3*

Certificate of Amended Designation Series A Preferred filed on May 20, 2016, incorporated by reference to

the Form 8-K filed with the Commission on June 3, 2016.

3.1.4*

Certificate of Designation Series B Preferred filed on May 23, 2016, incorporated by reference to the Form 8-

K filed with the Commission on June 3, 2016.

3.1.5*

Certificate of Amended Designation Series B Preferred filed on May 31, 2016, incorporated by reference to

the Form 8-K filed with the Commission on June 3, 2016.

3.2*

Bylaws, incorporated by reference to the Form S-1, filed with the Commission on May 30, 2012.

3.2.1*

Amended Bylaws, incorporated by reference to the Form 8-K filed with the Commission on February 11,

2016.

10.1*

Management Services Agreement between Mobetize and Alligato, Inc. dated June 1, 2013, incorporated by

reference to the Form 8-K filed with the Commission on September 16, 2013.

10.2*

Management Services Agreement between Mobetize and 053574 BC Ltd. dated June 1, 2013, incorporated

hereto by reference to the Form 8-K filed with the Commission on September 16, 2013.

10.3*

Consulting Agreement between Mobetize and Stephen Fowler dated July 15, 2013, incorporated hereto by

reference to the Form 8KA filed with the Commission on October 28, 2013.

10.4*

Assignment of Debt Agreement between Mobetize and Stephen Fowler dated April 4, 2012, incorporated by

reference to the Form 8-K/A filed with the Commission on November 22, 2013.

10.5*

License Assignment Agreement between Telepay, Inc. and Baccarat Overseas Ltd. dated August 21, 2012,

incorporated by reference to the Form 8-K filed with the Commission on September 16, 2013.

10.6*

Consulting agreement between Mobetize and Tanuki Business Consulting, Inc. dated September 23, 2013,

incorporated by reference to the Form 8-K filed with the Commission on October 1, 2013.

10.7*

Consulting Agreement between Mobetize and Hugo Cuevas-Mohr dated October 1, 2013, incorporated by

reference to the Form 8-K filed with the Commission on March 18, 2014.

10.8*

Consulting agreement between Mobetize and Institutional Marketing Services, Inc. dated November 13,

2013, incorporated by reference to the Form 8-K filed with the Commission on March 18, 2014.

10.9*

Form of Subscription Agreement with the Subscribers dated June 25, 2014, incorporated by reference to the

Form 10-K filed with the Commission on June 30, 2014.

10.10*

Management Consulting Agreement between Mobetize Corp. and Ajay Hans dated July 1, 2014, incorporated

by reference to the Form 10-K/A filed with the Commission on July 13, 2016.

10.11*

Management Employment Agreement between Mobetize Canada Inc. and Elena Karamushko dated February

4, 2016, incorporated by reference to the Form 10-K/A filed with the Commission on July 13, 2016.

Code of Business Conduct and Ethics adopted by Mobetize Corp.’s Board of Directors on July 26, 2016

21*

Subsidiaries of Mobetize incorporated by reference to the Form 10-K/A filed with the Commission on July

13, 2016

31.1

Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act as adopted pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002, attached.

31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act as adopted pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002, attached.

32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002, attached.

32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002, attached.

99*

2015 Mobetize Stock Option Plan dated August 10, 2015, incorporated by reference to the Form 8-K filed

with the Commission on August 11, 2015.

101. INS

XBRL Instance Document^†

101. PRE

XBRL Taxonomy Extension Presentation Linkbase^†

101. LAB

XBRL Taxonomy Extension Label Linkbase^†

101. DEF

XBRL Taxonomy Extension Label Linkbase^†

101. CAL

XBRL Taxonomy Extension Label Linkbase^†

101. SCH

XBRL Taxonomy Extension Schema^†

Incorporated by reference to previous filings of the Company.

^†

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed”

or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933,

or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934,

and otherwise is not subject to liability under these section.

MOBETIZE, CORP. - FORM 10-Q - December 14, 2016

Attached files

MOBETIZE, CORP. Reports