Mobetize Corp (SAVI) SEC Annual Report (10-K) for 2017

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☑  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2017 .



o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

.

TABLE OF CONTENTS

PART I

BUSINESS OVERVIEW

ITEM 1

Business

3

ITEM 1A

Risk Factors

13

ITEM 1B

Unresolved Staff Comments

13

ITEM 2

Properties

14

ITEM 3

Legal Proceedings

14

ITEM 4

Mine Safety Disclosures

15

PART II

FINANCIAL AND MARKET INFORMATION

ITEM 5

Market for Registrant's Common Equity, Related Stockholder Matters and

Issuer Purchases of Equity Securities

16

ITEM 6

Selected Financial Data

18

ITEM 7

Management's Discussion and Analysis of Financial Condition and Results of

Operations

19

ITEM 7A

Quantitative and Qualitative Disclosures About Market Risk

25

ITEM 8

Financial Statements

25

ITEM 9

Changes in and Disagreements With Accountants on Accounting and Financial

Disclosure

26

ITEM 9A

Controls and Procedures

26

ITEM 9B

Other Information

28

PART III

RELATED PARTIES AND GOVERNANCE

ITEM 10

Directors, Executive Officers and Corporate Governance

29

ITEM 11

Executive Compensation

32

ITEM 12

Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

34

ITEM 13

Certain Relationships and Related Transactions, and Director Independence

36

ITEM 14

Principal Accounting Fees and Services

37

PART IV

EXHIBITS

ITEM 15

Exhibits, Financial Statement Schedules

38

Signatures

39

2

PART I - BUSINESS OVERVIEW

ITEM 1.

Business

As used herein the terms "Mobetize," "we," "our," "us," refer to Mobetize Corp., and our

predecessors, unless the context indicates otherwise.

BACKGROUND

We were incorporated in the State of Nevada on February 23, 2012, as Slavia Corp. in order to assist

international students enroll in accredited universities, institutes, colleges or schools in Canada. Since we

were not able to raise sufficient capital to fund development in this business segment, management

determined to consider alternative strategies to create value for our shareholders.

On July 9, 2013, we entered into an Asset Purchase and Sale Agreement with Mobetize Inc., a Nevada

corporation, which caused us to acquire substantially all of the assets and none of the liabilities of

Mobetize Inc. in exchange for shares of our common stock. The assets conveyed included a license

agreement between Mobetize, Inc., Paysafe Group PLC (formerly Optimal Payments PLC) and

Rentmoola Payment Systems Inc. We changed our name to "Mobetize Corp." effective August 13, 2013,

in connection with this transaction.

We offer services in the United States through our Nevada subsidiary Mobetize USA Inc. and to clients

outside the United States through our Canadian subsidiary Mobetize Canada Inc.

A business office for Mobetize USA is located at 8105 Birch Bay Road, Suite 205, Blaine Washington

98230 and a business office for Mobetize Canada is located at #1150 – 510 Burrard St. Vancouver,

British Columbia, V6C 3A8. Our registered statutory office is located at Nevada Agency and Transfer

Company 50 West Liberty Street, Suite 880, Reno, Nevada 89501.

Mobetize trades on the OTCQB, an electronic trading platform owned by OTC Markets Group, Inc. under

the symbol "MPAY".

BUSINESS

Mobetize is an emerging technology and services company which provides Fintech services that enable

the convergence of global telecom and financial services providers ("Customers") through its Global

Mobile B2B Fintech and Financial Services Marketplace ("Hub").

Fintech - financial technology - is an umbrella term describing disruptive technologies involved in the

provision of financial services. Fintech is transforming the way money is managed and affects almost

every financial activity.

Our Hub provides a range of mobile financial services ("MFS") which include white label technology

platforms that support customer specific MFS application program interface ("API") consumption

protocols to enable services such as prepaid air-time and data top ups, mobile lending, international

money transfers, person to person ("P2P") transfers, Visa ™ /MasterCard ™ usage and bill payments on

either personal computers or mobile devices ("Services").  The Hub seamlessly integrates with Mobetize

Customers, who as a result are able to offer Services to their subscribers or members ("Users").

Users access the Services from the Hub through multiple access points including:

3

4

Mobile Banking and Fintech

A report published by the Federal Reserve Board titled Consumers and Mobile Financial Services

2016 found that the adoption of mobile financial services continues to increase in the United States. A

majority of consumers using these services cite convenience or acquiring a smartphone as their reason for

adoption. Forty-three percent (43%) of all mobile phone owners and fifty-three percent (53%) of

smartphone owners with a bank account had used mobile banking in the 12 months prior to the survey, up

from thirty-nine percent (39%) in 2014 and thirty-three percent (33%) in 2013.

In a report published by the Economist Intelligence Unit titled The Disruption of Banking

http://fintechnews.ch/fintech/banks-vs-fintech-fintegration-smartest-move-says-new-survey/2043/

(December 10, 2015) over 100 senior bankers were interviewed to ascertain the likely landscape for the

retail banking industry over the next five years. When bankers were asked how Fintech might disrupt the

banking industry, more than ninety percent (90%) of the bankers believed that Fintech firms will have a

significant impact on the future landscape of banking, with more than a third believing that Fintech will

win an equal share or even dominate the market.

As of February 2015, bank spending on new technologies in North America was projected by Juniper

Research to reach $17 billion dollars in 2015 and increase to $19.9 billion dollars in 2017.

The online statistics Internet portal Statista reported that the value of investment in financial technology

ventures on a global scale amounted to approximately $3 billion dollars in 2013 and was projected to

grow to around $8 billion dollars in 2018.

According to Juniper Research (July 2013), 800 million people would use mobile banking services in

2014, which number is expected to increase to 1.75 billion (32 percent of the global adult population) by

2019.

Smartphone sales and Telecoms

Over a third of the world's population is projected to own a smartphone by the end of 2017, up from 21.6

percent (21.6%) in 2014. Western Europe is due to become the largest regional market as almost 65

percent (65%) of its total population is forecast to own a smartphone by 2017, over twice the figure in

2012. Within North America, around 64 percent (64%) of the population will own a smartphone in 2017,

an increase of 13 percent (13%) on the figure from 2014. The smallest regional market for smartphones is

the Middle East and Africa, where smartphone penetration is expected to be 13.6 percent (13.6%) by

2017.

Telcoms are uniquely positioned to be the leading providers of mobile financial services to their

customers by leveraging their billing platforms. The fact that basic financial services can be done without

a banking relationship further strengthens the opportunity for telecoms.

Money Remittance

The World Bank reported that remittances to developing countries were expected to grow at about 3.3

percent in 2017 to $444 billion and estimated that in 2014 $131 billion dollars was sent from the United

States by residents and immigrant workers to their family members in their respective countries. The

United States is the largest market for these money transfer services accounting for over 22% of all global

money transfers.

5

TECHNOLOGY SOLUTIONS AND PRODUCTS

The Mobetize Global Mobile B2B Fintech and Financial Services Marketplace/Hub offers the following:

smartWallet:

Our smartWallet solution is provided via mobile web and web OS Apple and Android app to the desktop,

iPad, or mobile phone.

The smartWallet allows Users to load funds into their mobile wallet and access global mobile financial

services such as prepaid top-ups for themselves or for gifts for family members, P2P money transfers,

international money transfer remittances, bill payments and bill management.

Users can load funds into their smartWallet from their bank account (ACH or real time ACH), via credit

or prepaid debit card, and PayPal.

The smartWallet can be integrated with an existing billing system to enable a mobile ‘my account' as part

of a mobile wallet with features including:

•

Registration - sign in and sign up

•

User Account Settings - Allows the User to update their information, edit/add and save different

payment methods while changing password and saving account numbers to favorites for fast

access.

•

View Balance - Users are able to track their balances by viewing their real-time balance.

•

Add and Save Services -Create, save, and edit a list of favorites for easy and fast access to all

transactions.

•

Favorites - Create, save, and edit a list of favorite contacts, remittances, airtime transactions and

more for convenience and accessibility.

•

Stored Payment Methods - Safely store and edit a list of preferred method of payments to load the

smartWallet to increase convenience and accessibility including credit cards, debit cards, ACH.

•

smartWallet is activated for customers who are Money Service Business ("MSB") compliant.

6

smartRemit:

A fully integrated mobile platform dedicated to providing convenient, efficient, scalable, and inexpensive

global money transfer solutions for Customers and Users.

smartRemit enables Users to send funds cross-border via multiple payout channels such as, direct bank

account deposits, pick-up at agent location, and home delivery. Users can send funds in one currency and

have the beneficiary receive in another. Cash delivery options include:

•

Cash to cash

•

Cash to account

•

Door service

•

Mobile transfers

smartRemit is accessed outside the smartWallet to ensure full Money Transfer Licensing compliance.

smartRemit provides Users with 24/7 mobile money transfer remittance capabilities.

smartCharge:

smartCharge enables real time prepaid mobile top-ups to any mobile phone and recharge transfers to over

350 mobile network operators in 90 countries, reaching 3.6 billion prepaid users. Users can send air-time

top-ups to any prepaid mobile phone globally.

smartBill:

smartBill is supported by our MSB licensed billing partner and allows Users to pay bills at approximately

14,000 companies within the United States, including utilities, cable companies, and mobile phone

providers.

smartCard:

smartCard is our white label Visa/MasterCard program that allows users to request (during sign-up or at

any time via the Mobetize app) a prepaid MasterCard ™ or Visa ™ card, which is linked to their

smartWallet. Users are able to move any cleared funds from their smartWallet on to their Visa ™ card or

MasterCard ™ , allowing them to make purchases both online and in retail locations, plus withdraw cash

from ATMs.

Users are able to track the balance and see recent transactions via the Mobetize smartWallet and can

easily move money back to the smartWallet. The smartCard has the same white-label branding as the

smartWallet for a seamless User experience.

smartLoan:

SmartLoan is a proprietary digitized lending product that allows borrowers to apply for secured and

unsecured loans ranging from $500 up to $35,000 to refinance credit card debt, student loans, weddings,

or household projects.

This lending solution is configurable, scalable and able to implement dynamic algorithms in a cloud-

based environment that enables Financial Institutions (FI's) to quickly launch their own online lending

products and controls.

7

This innovative software solution, built on the core Mobetize HUB, enables FI's to instantly meet Know

Your Client (KYC) and Anti Money Laundering (AML) compliance in addition to computing complex

algorithms for auto-adjudication of the personal bank lending process initiated from any tablet, PC or

mobile device.

Key benefits for FI's include:

•     An omnichannel and simple user experience for fast loan decisions and funding

•     Digitized back-office processes and interoperability

•     Ability to lead innovation with configurable KYC and heuristic adjudication rules

•     Configurable workflow of applications

•     Easy white-labeling configurability for branding and rapid launch

•     Opportunity to leverage new lending business models

•    Ability to respond to and address security and regulatory requirements

The smartLoan solution is offered by Mobetize to direct and platform lenders in North America who are

interested in growth within the online lending space.

Customer Relationship Management ("CRM") and Reporting Tool:

Mobetize provides Customers an online CRM and data analytics reporting system for all transactions

processed through the Hub.

The reporting system can be configured so that different levels within a customer's team can see and

access different levels of information. The reporting tool provides real time data, at different levels of

detail, allowing Customers to track User metrics as:

•

Transactions $ values

•

Transaction volume-by type of transaction

•

Number of registered users

•

Number of active users

•

Geographic splits

•

Other key performance Indicators

The web based CRM reporting tool also provides Customer's access to User data such as:

•

User information (name, address, etc.)

•

User transaction history

•

User wallet balance

This data is a key driver for User support services.

LATEST TECHNOLOGY AND PRODUCT DEVELOPMENTS

We are currently in the process of adapting our Hub to facilitate multiple Fintech services as part of our

banking channel strategy. Version 3.0 will be able to facilitate mobile money remittances offered

seamlessly by engaged FI's. The platform will facilitate KYC of the sender and authorize funds from the

user's FI bank account in real-time. Version 3.0 will offer native apps for both Android and iPhone. New

FI's can be rapidly on-board as part of the multi-tenanted platform, and in addition to a multi-lingual

branded user-application, each FI can offer their own retail market pricing. The product will form part of

an extended banking platform available initially to 174 FI's in Canada.

8

Between September 2016, and May 2017, we built and launched the smartLoan product. smartLoan

allows FI's to offer consumer on-line loan applications and adjudications. Functionality is a fully

compliant process that includes on-line KYC based on a wide range of data gathering that covers both

traditional and non-traditional sources for fraud detection and credit profiling that produces a multi-

variant scoring model. Based on our standard multi-tenanted architecture, the product can be quickly

white-labeled and new FI's on-board in weeks.

Over the same period, as part of our telecom channel strategy, we developed and launched the Mobile

Money Platform (MMP). MMP is a secure API gateway employing OAuth2 connections (industry

standard protocol) that allows business customers to transact data top-up credits to pre-paid mobile phone

customers worldwide. These may be top-ups direct-to-carrier or over-the-top ("OTT") services consumed

in addition to carrier data allowance. Again, built on a multi-tenanted model, the platform can rapidly on-

board additional customers with minimal overhead.

During March 2016, we completed the development of Version 2.1, which incorporates a new registration

system. The system includes text message verification and allows faster password recovery as well as

faster completion of the registration process on a mobile device.

We completed the development of Version 2.0 in October of 2015, for rollout to our Customers. Version

2.0 includes the most significant component and key differentiator of our offerings to date by enabling

international money transfer capabilities globally via our international money transfer partners. Version

2.0 also supports multi-language web services, with the Spanish language being the first non-English

language offered. Existing customers equipped with Version 2.0 can initiate international money transfers

from the United States via a network of nearly 200,000 payout agent locations, and instruct bank transfers

to over six hundred banks worldwide.

During April 2015, we completed the production version of Mobile Web application 1.0. This suite of

products includes smartCard, Paypal, bank ACH, and credit card processing as cash-in options and

smartCharge, smartBill, person-to-person transfers, and smartCard for ATM withdrawals and POS

purchases as cash-out options. The CRM, reporting, and incident management tools are active in addition

to a desktop version and Representation State Transfer ("REST") API with all of the above features

The Hub will continue to be developed as a Fintech marketplace that offers stand alone Services, REST

API services for our financial technology products, and solutions that allow clients with existing

technologies, such as virtual wallets, to be able to include our Services in their systems. Development of

native applications for iOS and Android have commenced.

RECENT BUSINESS DEVELOPMENTS

On May 29, 2017, MPAY Gateway Services Inc. was formed in connection with a Joint Venture

Agreement with CPT Secure Inc. dated January 12, 2017, to develop payment processing technology and

agreed to issue 500,000 Series B Preferred Shares to CPT in consideration for the license of CPT

technology to the joint venture. The license has a two-year term that can be automatically renewed for

successive two year periods unless either party elects not to renew 60 days prior to expiration.

On February 1, 2017, dated effective December 15, 2016, we 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 through our Hub. The

parties agreed to a five-year strategic partnership from which we expect to generate revenue from service

level support fees and the sharing of transactional income; advance our technology alliance to accelerate

new Fintech revenue sharing opportunities; and focus our partnership on Fintech product innovation.

9

On September 27, 2016, effective September 20, 2016, we entered into a Software Application License,

Customization Development and Service Level Agreement with GF Financial Group to partner in

offering a mobile personal lending facility with omni-channel capabilities to its customers built on our

Fintech platform. GF Financial customers will be able to apply for and be approved for personal loans

initiated from their mobile devices. A roll out of the application was successfully implemented in the

second quarter of 2017.

On November 3, 2015, Mobetize formed a strategic partnership with Global Service Solutions, Inc.

("Global Service") to deliver a mobile money and financial services platform under its new brand

Gotawallet ™ .  Global Service, through its Got Prepaid ™ brand, provides distribution, through a nation-

wide channel of large distributors and retailers, to over one million end-users in the United States with

over fifty different prepaid cellular products. The products include a combination of hard card, real time

replenishments, and e-pin formats. The Got Prepaid ™ brand is highly regarded within the prepaid

segment of the market for its ability to provide quality customer service and technical support. Got

Prepaid ™ provides recharge capabilities for wireless AT&T, Verizon, T Mobile, H20, Red Pocket and

many other telecom providers. The project to deliver a mobile financial services platform was completed

in the second quarter of 2016.

On October 15, 2015, Mobetize signed a consulting services agreement with Tata Communications

(America) Inc., ("Tata"), to license Mobetize solutions as Tata's core mobile money platform. The parties

are working to create a global business to business channel strategy to develop a financial technology

services hub for telecom companies, enterprise and alternative financial service providers that Tata

already supports globally in its telecom network.

On October 7, 2015, Mobetize announced that it had formed a strategic partnership to deliver mobile

wallet and financial services to customers of Pure Minutes, Ltd. ("PML"). PML is a leading provider of

prepaid international calling services and mobile phone payment services for domestic and international

mobile carriers with an addressable customer base of over 1.1 million in the United States. In June 2016,

PML completed a white label application of the Mobetize smartWallet under the brand Digibux. The

online portal www.mydigibux.com has also been completed.

On August 10, 2015, Mobetize showcased Version 2.0 at the Prepaid Expo in Las Vegas, Nevada, a

product suite that incorporates the full mobile money product solution that can be white-labeled by any

telecom operator. The suite consists of a mobile wallet with key financial services offerings that include

global money transfer capabilities, US bill payments, global gifting of prepaid air-time top ups and paid

Visa ™ /MasterCard ™ programs for telecom operators. Mobetize allows its telecom operators to pick and

choose the financial services they want to deliver branded for their respective customers, which can be

launched through APIs, or as a stand-alone system.

Mobetize was selected from over 100 technology companies to speak and present at the 2015 Innovation

Showcase Event on May 29, 2015, held by the Telecom Council of Silicon Valley in Sunnyvale,

California. Mobetize showcased its Hub to decision level executives with some of largest telecom

companies in the world. The meetings resulted in numerous NDA's and discussions that remain ongoing

with several large global telecoms.

10

COMPETITION

The global Fintech industry is highly competitive. We compete against businesses in varied industries,

many of which are larger than we are, have a dominant and secure position in other industries, or offer

other goods and services to consumers and merchants which we do not offer. We compete against all

forms of Fintech service providers, including credit and debit cards providers, automated clearing house

and bank transfers providers, other online payment services providers, mobile payments providers, and

offline payment methods, including cash and check.

We compete primarily on the basis of the following:

•

ability to attract, retain, and engage Customers and their Users

•

ability to show that Customers will achieve incremental sales by using our Hub

•

security of transactions and the ability for Customers to integrate our Hub products and services

•

fee structure

•

ability to develop Services across multiple customer channels, including telecom and Fintech

service providers

•

Customer service

•

brand recognition

•

website, mobile platform and application onboarding, ease-of-use, and accessibility

•

system reliability and data security

•

ease and quality of integration into third-party mobile applications and operating systems

•

quality of developer tools such as our Hub programming interfaces

Mobetize seeks to differentiate itself from other industry participants. The vision of the Mobetize is to

develop an open marketplace of Fintech services and partnerships based on our Hub. Our open Fintech

architecture for telecoms and financial institutions uniquely positions us to potentially disrupt the current

money services infrastructure.

COMPETITIVE ADVANTAGES

Mobetize has developed a unique business and partnership model to simplify and orchestrate mobile

financial services.  There are two key business relationships which give us a competitive advantage:

· Telecoms and Financial Institutions – These are revenue share business partnerships that are our channels to acquire Customers and maximize transactional volumes. These partnerships can white label the Hub or integrate via the API consumption model to market the various MFS products to Users.

· Financial Partners – These are our strategic financial services partners who traditionally have bricks and mortar style financial services and products. We can digitize their regulatory compliance and service fulfillment.

Process

Mobetize co-develops innovation in a step-by-step manner, focused on the strategic goals of its

Customers.

The collaborative approach includes:

11



· gathering information from Customers and identifying pain points

· consulting with a Customer to devise and execute an innovation plan taking into account weaknesses and strengths.

· assisting with the education and training of Customer management and employees to insure they are well informed of the benefits the innovation and how it can accrue to them to insure an effective roll out.

· defining the correct engagement model, whether investor, acquirer, partner or accelerator

· regularly reviewing and creating data models to access user reactions and expectations to further the innovation plan. 

.

Advantages

1.

Customer Acquisition : Mobetize is scalable and cost effective to a significant number of

Customers.

2.

Lower Customer Costs : Mobetize provides the economic advantages of digital distribution over

physical distribution.

3.

Advanced Analytics : Mobetize generates data for advanced analytics which provides Customers

with significant advantages, including the ability to redesign products and to focus on the development of

contextual offers based on a better understanding of User needs.

4.

Leveraging Existing Infrastructure : Mobetize engages with the existing ecosystem of telecom

and financial service providers by leveraging of the technology that currently exists.

PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY

AGREEMENTS, AND LABOR CONTRACTS

Mobetize has no patents, registered trademarks, licenses, franchises, concessions, royalty agreements or

labor contracts other than as detailed in this report. However, we do assert common law trademark rights

for the following names in the field of mobile commerce:

· smartWallet

· smartRemit

· smartCharge

· smartCard

· smartLoan



Common law trademark rights are enforceable in provincial courts in Canada, and may be asserted

against those who appropriate, dilute, or damage the goodwill of our business by using the same or

similar trade names or trademarks. Unlike statutory trademark rights, which are acquired by registration

and provide nation-wide protection, common law trademark rights are acquired automatically and provide

protection only in the jurisdiction where a business uses a name or logo in commerce. We intend to rely

on common law trademark protection until such time as we deem it economical for our business to

register our trade names or trademarks.

We have not registered for the protection of any rights under trademark, patent, or copyright in any

jurisdiction.

12

GOVERNMENT REGULATION

Government regulation impacts key aspects of our business. We are subject to regulations that affect the

payments industry in the markets we operate.

Payments Regulation . Various laws and regulations govern the payments industry in the United States

and globally. In the United States, our partners hold licenses to operate as a money transmitter (or its

equivalent), which, among other things, relieve us from reporting requirements, bonding requirements,

limitations on the investment of customer funds and inspection by state regulatory agencies.

Outside the United States, the laws and regulations applicable to the payments industry in any given

jurisdiction are subject to interpretation and change.

Banking Agency Supervision . Based on our relationships with financial institutions in the United States,

we are subject to indirect regulation and examination by these financial institutions' regulators.

Consumer Financial Protection Bureau . The Consumer Financial Protection Bureau ("CFPB") has

significant authority to regulate consumer financial products in the United States, including consumer

credit, deposit, payment, and similar products. The CFPB and other similar regulatory agencies in other

jurisdictions may have broad consumer protection mandates that could result in the promulgation and

interpretation of rules and regulations that may affect our business.

Anti-Money Laundering and Counter Terrorist Financing . Mobetize is not subject to anti-money

laundering ("AML") laws and regulations in the United States and other jurisdictions outside of the

United States, as well as laws designed to prevent the use of the financial systems to facilitate terrorist

activities. Regardless of the nature of our business, we do intend to implement a comprehensive AML

program designed to prevent our Hub from being used to facilitate money laundering, terrorist financing,

and other illicit activities.

The mobile commerce industry is also subject to requirements, codes and standards imposed by various

insurance, approval, listing, and standards organizations. Depending upon the type of commerce product

and requirements of the applicable local governmental jurisdiction, adherence to requirements, codes and

standards of such organizations is mandatory in some instances and voluntary in others.

RESEARCH AND DEVELOPMENT

We spent $485,544 and $660,959 on research and development activities during the years ended March

31, 2017 and 2016 respectively. This work has focused on building and enhancing the Hub.

EMPLOYEES

Mobetize had five employees at March 31, 2017. Management uses consultants, attorneys, and

accountants to assist in the conduct of our business as deemed necessary.

ITEM 1A.

Risk Factors

Not required of smaller reporting companies.

ITEM 1B.

Unresolved Staff Comments

Not required of smaller reporting companies.

13

ITEM 2.

Properties

Our principal executive office is located at 8150 Birch Bay Square Street, Suite 205, Blaine, Washington

98230. Our telephone number is (778) 588-5563. We pay rent of approximately $30 per month for the use

of this space.

Our principal operating office is located at 1150-510 Burrard Street, Vancouver, British Columbia V6C

3A8. Our telephone number is (778) 588-5563. We pay rent of $4,900 per month for the use of this space.

We believe that we have sufficient office space for the foreseeable future.

ITEM 3.

Legal Proceedings

Stephen Fowler

Mobetize received a Citation and Notice of Assessment dated October 14, 2016 ("Citation"), that Stephen

J. Fowler ("Fowler"), a former director and chief financial officer, 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, Mobetize entered an appeal alleging that the

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

common stock which it intends to recover. Mobetize 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 held by the

Office of Administrative Hearings. A hearing date has not been set.

Mobetize received a Notice of Civil Claim dated April 26, 2017, filed in British Columbia Supreme Court

by a former director and chief financial officer, Fowler, naming Mobetize and its three present directors

as defendants. Fowler asserts claims against Mobetize for unpaid expenses, and breach of contract.  He

also asserts that his shareholdings in Mobetize have been diluted due to certain actions of its current

director, making claims including breach of contract, breach of fiduciary duty, misrepresentation and

conspiracy. Mobetize and its directors believe that Fowler's claims are without merit and are intent on

vigorously defending against this action.  Further, Mobetize has advanced counterclaims against Fowler,

including a claim that that while Fowler was an officer and director of Mobetize, that he caused it to issue

shares to himself to which he was not entitled.  Mobetize's counterclaims also assert claims against

Fowler of fraudulent or negligent misrepresentation, breach of fiduciary duty, negligence and unjust

enrichment. On June 23, 2017, Mobetize filed its response to Fowler's claims and its own counterclaims

against Fowler. No further steps in this action have been taken, and no trial date has been set.

Mobetize received a Complaint dated May 12, 2017, filed in the Second Judicial District Court of the

State of Nevada, by Fowler naming Mobetize and its three present directors as defendants. The Nevada

action concerns substantially the same facts and seeks substantially the same relief as Fowler's British

Columbia action.   Mobetize takes the position that the filing of duplicative actions in the two

jurisdictions constitutes an abuse of process, that British Columbia is the appropriate jurisdiction in which

the plaintiff's claims ought to be heard, and that the Nevada action ought to be dismissed or stayed for

these reasons. On June 23, 2017, Mobetize filed a Motion to Dismiss or in the alternative, an Application

for Preliminary Injunction to either dismiss or stay the Complaint. No steps in this action, have taken

place and no trial date has been set.

14

Cary Fields

Mobetize received a Complaint dated May 3, 2017, filed in the Eighth Judicial District Court of the State

of Nevada by Cary Fields ("Fields") naming Mobetize and its three present directors as defendants, to

obtain a preliminary injunction to enjoin a consolidation of Mobetize's common stock, and seek damages

for breach of fiduciary duty, conversion and unjust enrichment. Mobetize and its directors believe that

Fields' claims are without merit and are intent on vigorously defending against this action. On May 18,

2017, after due consideration, the court denied Fields application and determined not to grant a temporary

injunction. The court did not rule on the question of alleged damages to Fields. A formal order from the

court as to the denial of a preliminary injunction remains pending as does any resolution of the other

allegations in the Complaint.

ITEM 4.

Mine Safety Disclosures

Not applicable.

15

PART II – FINANCIAL AND MARKET INFORMATION

ITEM 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities

Mobetize common stock is quoted on the OTCQB, a service maintained by OTC Link under the symbol

"MPAY." Trading in the common stock over-the-counter market has been limited and sporadic and the

quotations set forth below are not necessarily indicative of actual market conditions. These prices reflect

inter-dealer prices without retail mark-up, mark-down, or commission, and may not necessarily reflect

actual transactions. The high and low bid prices for the common stock for each quarter of the years ended

March 31, 2017 and 2016 are as follows:

Year

Quarter Ended

High

Low

2017

March 31

$0.09

$0.07

December 31

$0.08

$0.08

September 30

$0.10

$0.10

June 30

$0.12

$0.12

2016

March 31

$0.29

$0.29

December 31

$0.30

$0.30

September 30

$0.65

$0.64

June 30

$0.73

$0.70

The following is a summary of the material terms of our capital stock outstanding securities. This

summary is subject to and qualified by our articles of incorporation and bylaws.

Common Stock

As of March 31, 2017, there were 57 shareholders of record holding 23,450,233 shares of fully paid and

non-assessable common stock of the 525,000,000 shares of common stock, par value $0.001, authorized.

The Board of Directors believes that the number of beneficial owners is greater than the number of record

holders because a portion of our outstanding common stock is held in broker "street names" for the

benefit of individual investors. The holders of the common stock are entitled to one vote for each share

held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no

preemptive rights and no right to convert their common stock into any other securities. There are no

redemption or sinking fund provisions applicable to the common stock.

Preferred Stock – Series A

As of March 31, 2017, there was one shareholder of record holding 4,565,000 shares of fully paid and

non-assessable shares of Series A preferred stock of the 10,000,000 shares of Series A preferred stock,

par value $0.001, authorized.

Preferred Stock – Series B

As of March 31, 2017, there were 47 shareholders of record holding 13,688,408 shares of fully paid and

non-assessable shares of Series B preferred stock of the 25,000,000 shares of Series B preferred stock par

value $0.001, authorized .

16

Convertible Debentures

As of March 31, 2017, we had convertible debt securities convertible into shares of our Series B Preferred

stock for an aggregate principal amount of $240,000. The convertible debentures have 12 month terms at

12% and 6% annual interest rates that paid the holders 12 months of prepaid interest on issuance, with the

conversion feature exercisable at the option of the holder. The conversion feature enables the holder to

convert any portion of their outstanding convertible debenture into Series B Preferred stock 180 days

from the issue date, but no later than the maturity date as follows:

Convertible Debentures

Issue Date

Exercise Price

Expiration Date

$75,000

01/30/2017

$0.50

01/30/2018

$50,000

01/27/2017

$0.50

01/27/2018

$50,000

01/27/2017

$0.50

01/27/2018

$25,000

01/27/2017

$0.50

01/27/2018

$20,000

11/21/2016

$0.25

11/21/2017

$20,000

11/21/2016

$0.25

11/21/2017

Stock Options

As of March 31, 2017, we had 2,020,000 stock options outstanding, of which 1,563,000 are exercisable

each stock option with five year terms, to directors, employees, advisors, and consultants, pursuant to the

2015 Stock Option Plan, entitle the optionee to purchase shares of our common stock at an exercise price

of $0.60 that either vest on grant or over time based on tenure with Mobetize.

We do not have in effect any other compensation plans under which our equity securities are authorized

for issuance.

Promissory Note

As of March 31, 2017, we had two promissory notes outstanding in the aggregate amount of $43,798.

Warrants

As of March 31, 2017, we had 2,636,406 share purchase warrants convertible into shares of our common

stock as follows.

Share Purchase Warrants

Issue Date

Exercise Price

Expiration Date

694,414

6/25/2014

$1.00

06/24/2018

305,000

12/11/2014

$1.25

12/10/2018

81,670

03/17/2015

$1.25

12/10/2018

94,750

07/15/2015

$1.00

09/01/2018

1,460,572

08/31/2015

$1.00

09/01/2018

17

Dividends

We have not declared any cash dividends since inception and do not anticipate paying any dividends in

the near future. The payment of dividends on our common stock is within the discretion of the Board of

Directors subject to earnings, capital requirements, financial condition, and other relevant factors

including those contractual restrictions related to certain debt obligations and those limitations generally

imposed by applicable state law.

Transfer Agent and Registrar

Our transfer agent is VStock Transfer, LLC located at 18 Lafayette Place, Woodmere, New York, 11598

having a telephone number at (212) 818-8436 and a facsimile number at (646) 536-3179

Recent Sales of Unregistered Securities

On January 27, 2017, our Board of Directors authorized the issuance of four convertible debentures

convertible into shares of our Series B Preferred stock for an aggregate amount of $200,000 gross less

$24,000 in prepaid interest for 12 month terms convertible into shares of Series B Preferred stock at a

price of $0.50 per share 180 days from the issue date but no later than the maturity date.  The offering was

conducted pursuant to the exemptions from registration provided by Section 4(2) and Regulation D of the

Securities Act of 1933, as amended ("Securities Act") to the following persons:

Name

Issue Date

Consideration

Exemption

William Duberstein

01/27/2017

$50,000

Section 4(2)/Reg D

David Duberstein

01/27/2017

$50,000

Section 4(2)/Reg D

Donald Duberstein

01/30/2017

$75,000

Section 4(2)/Reg D

Alan Rothschild

01/27/2017

$25,000

Section 4(2)/Reg D

On November 21, 2016, our Board of Directors authorized the issuance of two convertible debentures

convertible into shares of our Series B Preferred stock for an aggregate amount of $40,000 gross less

$37,600 in prepaid interest for 12 month terms convertible into shares of Series B Preferred stock at a

price of $0.25 per share 180 days from the issue date but no later than the maturity date.  The offering was

conducted pursuant to the exemptions from registration provided by Section 4(2) and Regulation D of the

Securities Act of 1933, as amended ("Securities Act") to the following persons:

Name

Issue Date

Consideration

Exemption

Donald Duberstein

11/21/2016

$20,000

Section 4(2)/Reg D

Alan Rothschild

11/21/2016

$20,000

Section 4(2)/Reg D

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6.

Selected Financial Data

Not required of smaller reporting companies.

18

ITEM 7.

Management's Discussion and Analysis of Financial Condition and Results of

Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations and other

parts of this current report contain forward-looking statements that involve risks and uncertainties.

Forward-looking statements can also be identified by words such as "anticipates," "expects," "believes,"

"plans," "predicts," and similar terms. Forward-looking statements are not guarantees of future

performance and our actual results may differ significantly from the results discussed in the forward-

looking statements. Factors that might cause such differences include but are not limited to those

discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future

Results and Financial Condition below. The following discussion should be read in conjunction with our

financial statements and notes thereto included in this current report. Our fiscal year end is March 31.

DISCUSSION AND ANALYSIS

Mobetize's business model for the coming year is to complete the 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 as we maintain our focus on the convergence of telecom and financial services .

Our business development strategy is prone to significant risks and uncertainties certain of which can

have an immediate impact on its efforts to realize positive net cash flow and deter future prospects of

growth. Historically Mobetize has not been able to generate sufficient cash flow from operations to

sustain operations and fund necessary operating expenses. Therefore, there can be no assurance that

anticipated revenue will provide sufficient cash flows to sustain operations.

Mobetize's financial condition, results of operations and the carrying value of its technology depends on

its ability to develop, market and sell innovative products and Services to Fintech Customers. Smaller

technology companies in the Fintech segment of the market face a stiff competitive barrier to market

entry erected by larger competitors that are generally better funded and accepted for product innovation.

Despite recent successes in realizing revenue, Mobetize needs to continue to innovate and attract new

customers in order to grow its Fintech market presence. Whether Mobetize will be successful in

commercializing its products and Services in the manner embedded in our business model can in no way

be assured.

Despite our expectation, we have no agreements to obtain funds through bank loans, lines of credit or any

other sources. Since we have no financing committed, our inability to realize financing to maintain

operations and grow our business would materially restrict our business operations. Financing may not be

available upon acceptable terms, or at all. Should we be successful in securing future financing new

issuances of equity or convertible debt would dilute our current shareholders and might have rights,

preferences or privileges senior to our common or preferred stock. If financing is not available to us,

such severe limitation might cause us to consider a consolidation of existing common equity or a

going private transaction as a means to attract financing and maintain our business.

Our auditors have issued a going concern opinion on the financial statements for the year ended March

31, 2017. The continuation of Mobetize as a going concern is dependent upon continued financial support

from its management, and its ability to obtain necessary debt or equity financing, increase revenue, and

generate profitable operations

19

RESULTS OF OPERATIONS

During the twelve months ended March 31, 2017, Mobetize (i) continued to develop its Fintech

technology products and Services; (ii) entered into development and commercialization agreements with

corporate partners; (iii) acquired certain technology; (iv) secured debt and equity financing; and (ii)

satisfied continuous public disclosure requirements.

Operating Revenues, Operating Expenses and Net Loss

Our operating revenues, expenses and the resultant net losses are described below:

US $

Year Ended

March 31,

2017

2016

Operating Revenues

$

467,417

$

125,934

Operating Expenses

(1,463,291)

(2,195,479)

Net Loss

(1,153,254)

(2,069,545)

Comprehensive  Loss

(1,154,285)

(2,069,545)

Revenue

Mobetize realized $467,417 in revenue over the twelve months ended March 31, 2017, as compared to

revenue of $125,934 over the twelve months ended March 31, 2016, an increase of 271%. The increase in

revenues in the current period can be primarily attributed to growth in licensing, consulting and

development services provided by Mobetize to existing Customers. We expect revenue to continue to

increase over the next twelve months as we expect to add payment processing revenue from the

deployment of our Hub.

Operating Expenses

Our operating expenses for the twelve month periods ended March 31, 2017 and 2016 are described below:

US $

Year Ended

March 31,

2017

2016

Depreciation

$

3,958 $

3,107

General and administrative

286,013

491,010

General and administrative – related party

100,096

18,986

Investor relations and promotion

62,584

31,881

Investor relations and promotion- related party

20,000

-

Consulting fees

66,192

349,283

Management  fees – related party

287,073

568,009

Professional fees

151,831

72,244

Research and development

373,074

586,732

Research and development – related party

112,470

74,227

Total Operating Expenses

1,463,291

2,195,479

20

Mobetize realized $1,463,291 in operating expenses over the twelve months ended March 31, 2017, as

compared to operating expenses of $2,195,479 for the twelve months ended March 31, 2016, a decrease

of 33%. This decrease in operating expenses in the current period can be primarily attributed to the

decrease in general and administrative fees, consulting fees, management fees, and research and

development, offset by an increase in investor relations and promotion, and professional fees expenses

due to ongoing professional fees associated with legal challenges. We expect that operating expenses will

continue to increase as our growth model will require increases in general and administrative expenses,

research and development and marketing over the next twelve months.

Net Loss

Mobetize recorded a net loss of $1,153,254 over the twelve months ended March 31, 2017, as compared

to a net loss of $2,069,545 for the twelve months ended March 31, 2016, a decrease of 44%. The decrease

in net loss in the current period can be primarily attributed to the decrease in operating expenses and

increase in revenue. We expect that net losses will continue to decrease over the next twelve months as

revenue is first realized from payment processing, even though we anticipate increases in operating

expenses.

Income Tax Expense

As of March 31, 2017, Mobetize has net operating loss (NOL) carry forwards of approximately

$1,838,000. Should substantial changes in our ownership occur there would be an annual limitation of the

amount of NOL carry forward which could be utilized. The ultimate realization of these carry forwards is

due, in part, on the tax law in effect at the time and future events, which cannot be determined.

Liquidity and Capital Resources

Since inception Mobetize has experienced changes in liquidity, capital resources, and stockholders'

equity.

US $

March 31, 2017

March 31, 2016

Current Assets

709,000

318,827

Current Liabilities

713,550

541,185

Working Capital

(4,550)

(222,358)

Mobetize had negative working capital of $4,550 as of March 31, 2017 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 March 31, 2017, were $709,000 which consisted of cash, accounts receivable,

prepaid expenses and prepaid expenses to a related party. Total assets were $828,273 which consisted of

current assets, intangible asset and equipment. Total and current liabilities were $713,550 which consisted

of accounts payable, accounts payable to a related party, deposits due to Customers, a related party

promissory note, and convertible debentures.

Total stockholders' equity as of March 31, 2017, was $114,723.

21

Cash Flows

Our cash flows are described below:

US $

Year Ended

March 31,

2017

2016

Cash flows used in Operating Activities

(482,911)

(1,254,120)

Cash flows used in Investing Activities

-

(1,659)

Cash flows provided by Financing Activities

809,188

1,159,802

Cash Used in Operating Activities

Net cash used in operating activities for the twelve months ended March 31, 2017, was $482,911 as

compared to net cash used in operating activities of $1,254,120 for the twelve month ended March 31,

2016. The change in net cash used in operating activities in the current period can be attributed to losses

on settlement of accounts payable to a related party and a number of items that are book expense items

which do not affect the total amount relative to actual cash used including stock based compensation,

shares issued for services, amortization of an intangible asset and depreciation expense. 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, prepaid expenses and

accounts payable. Mobetize expects to continue to use net cash in operating activities in future periods

until such time net losses transition to net income.

Cash Used in Investing Activities

Net cash used in investing activities for the twelve months ended March 31, 2017, was $nil as compared

to net cash used in investing activities for the twelve months ended March 31, 2016, of $1,659. Mobetize

expects to use net cash flow in investing activities in future periods as it grows its business model.

Cash Provided by Financing Activities

Net cash provided by financing activities for the twelve months ended March 31, 2017, was $809,188 as

compared to net cash provided by financing activities for the twelve months ended March 31, 2016, of

$1,159,802. The change in net cash provided by financing activities in the current period can be attributed

to proceeds from the sale of Series B preferred stock, a promissory note from a related party and the

issuance of convertible debentures. Mobetize expects to continue to rely on cash provided by financing

activities as its business will require additional funding to meet forecast capital requirements to develop

its product line and expand its commercial reach.

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

funds and further issuances of securities as either debt or equity are expected to increase in line with the

growth of our business.

22

Existing working capital, advances from directors, credit extended by directors and debt or equity

placement combined, with anticipated revenue are expected to be adequate to fund operations over the

next twelve months though we have no commitments for such working capital. Historically, we have

financed operations through private placements of equity and advances or loans from directors. Increases

in operating expenses and capital expenditures are expected going forward related to: (i) developmental

expenses; and (ii) marketing expenses. We intend to finance these expenses with further issuances of debt

or equity securities while remaining cognizant that additional capital to meet long-term operating

requirements. We currently have no agreements, arrangements or understandings with any person to

obtain funds through bank loans, lines of credit or any other sources. Since we have secured no such

arrangements the prospect exists that we will be unsuccessful in raising additional capital which failure

would have a severe negative impact on our ability to continue operations. Further, issuances of equity or

convertible debt will result in dilution to our current shareholders and could have rights, preferences or

privileges senior to our common stock. If sufficient capital is not available to us, we will not be able to

take realize our business model, which failure would materially limit or cause our business to fail.

We have no lines of credit or other bank financing arrangements.

We do not intend to pay cash dividends in the foreseeable future.

Our commitments for future capital expenditures were not material at year end.

We have no defined benefit plan or contractual commitment with any of its officers or directors, except

those entered into in the ordinary course in respect to employment or services agreements.

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

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

Off Balance Sheet Arrangements

As of March 31, 2017, Mobetize has no significant 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 is

material to stockholders.

GOING CONCERN

The independent auditors' report accompanying our March 31, 2017, financial statements contains an

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

These financial statements included in this annual report for March 31, 2017, have been prepared on a

going concern basis, which implies that Mobetize will continue to realize its assets and discharge its

liabilities in the normal course of business. As of March 31, 2017, Mobetize had an accumulated deficit of

$7,478,315. The continuation of Mobetize as a going concern is dependent upon the continued financial

support from its management, its ability to develop commercially viable products, its ability to offer

innovative Services, obtain the necessary debt or equity financing to realize its business model, and

ultimately generate profitable operations. Whether Mobetize can accomplish these objectives raises

substantial doubt regarding Mobetize's ability to continue as a going concern. 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.

23

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.

Revenue Recognition

Mobetize recognizes revenue from payment processing, licensing, and provision of consulting 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 consolidated comprehensive loss 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.

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 earnings.

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, 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. 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.

24

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 7A.

Quantitative and Qualitative Disclosures about Market Risk

Not required of smaller reporting companies.

ITEM 8.

Financial Statements and Supplementary Data

Our audited financial statements and notes thereto for the years ended March 31, 2017 and 2016 are

attached hereto as F-1 through F-28 .

25

MOBETIZE CORP.

Consolidated Financial Statements

March 31, 2017

        Index

Table of Contents .................................................................................................................................F-1

Report of Independent Registered Public Accounting Firm........................................................................F-2

Report of Independent Registered Public Accounting Firm........................................................................F-3

Consolidated Statements of Loss and Comprehensive Loss.......................................................................F-4

Consolidated Statements of Stockholders' Equity (Deficiency) .................................................................F-5

Consolidated Statements of Cash Flows.................................................................................................F-6

Notes to the Consolidated Financial Statements ......................................................................................F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Directors of

Mobetize Corp.

We have audited the accompanying consolidated financial statements of Mobetize Corp. (the "Company"),

which  comprise  the  consolidated  balance  sheet  as  of  March  31,  2017,  and  the  related  consolidated

statements of loss and comprehensive loss, changes in stockholders' equity (deficiency), and cash flows for

the year ended March 31, 2017. These consolidated financial statements are the responsibility of the Company's  management.  Our responsibility is  to express  an opinion  on these  consolidated  financial

statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight

Board (United States). Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the consolidated financial statements are free of material misstatement. An audit

includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial  statements.  An  audit  also  includes  assessing  the  accounting  principles  used  and  significant

estimates made by  management, as well as evaluating  the overall consolidated financial statement

presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,

the financial position of Mobetize Corp. as of March 31, 2017, and the results of its operations and its cash flows for the year ended March 31, 2017 in conformity with accounting principles generally accepted in

the United States of America.

The accompanying consolidated financial statements have been prepared assuming that Mobetize Corp.

will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, Mobetize

Corp. has suffered recurring losses from operations and has a net capital deficiency. These matters, along with the other matters set forth in Note 1, indicate the existence of material uncertainties that raises

substantial doubt about its ability to continue as a going concern. Management's plans in regard to these

matters are also described in Note 1. The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

"DAVIDSON & COMPANY LLP"

Vancouver, Canada

Chartered Professional Accountants

June 29, 2017

F-2

Report of Independent Registered

Public Accounting Firm

Grant Thornton LLP

T (604) 687-2711

Suite 1600, Grant Thornton Place

F (604) 685-6569

333 Seymour Street

www.GrantThornton.ca

Vancouver, BC

V6B 0A4

To the Board of Directors and Stockholders of

Mobetize Corp.

We have audited the accompanying consolidated balance sheets of Mobetize Corp. (a Nevada corporation)

and subsidiaries (collectively, the "Company") as of March 31, 2016 and March 31, 2015, and the related

consolidated statements of operations and comprehensive loss, changes in stockholders' equity, and cash

flows for each of the two years in the period ended March 31, 2016. These financial statements are the

responsibility of the Company's management. Our responsibility is to express an opinion on these financial

statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight

Board (United States). Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement. We were not engaged

to  perform  an  audit  of the  Company's  internal  control  over  financial  reporting.  Our  audits included

consideration of internal control over financial reporting as a basis for designing audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of

the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit

also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial

statements, assessing the accounting principles used and significant estimates made by management, as

well  as evaluating the  overall  financial  statement  presentation.  We  believe  that  our audits provide  a

reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,

the financial position of Mobetize Corp. and subsidiaries as of March 31, 2016 and March 31, 2015, and

the results of their operations and their cash flows for each of the two years in the period ended March 31,

2016, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will

continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company

has a history of operating losses. These conditions, along with other matters as set forth in Note 1, raise

substantial doubt about the Company's ability to continue as a going concern. Management's plans in

regard to these matters are also described in Note 1. The consolidated financial statements do not include

any adjustments that might result from the outcome of this uncertainty.

Vancouver, Canada

/s/ Grant Thornton LLP

July 11, 2016

Chartered Professional Accountants

F-3

MOBETIZE CORP.

Consolidated Balance Sheets

(Expressed in US dollars)

As at

MARCH 31,

MARCH 31,

2017

2016

MOBETIZE CORP.

Consolidated Statements of Stockholders' Equity (Deficiency)

For the Years Ended March 31, 2016, and 2017

(Expressed in US dollars)

Common

Preferred Stock

Preferred Stock

Accumulated

Stocks

Class A

Class B

Additional

Share

Warrants and

Other

Total

Paid-In

Subscriptions

Options

Accumulated

Comprehensive

Shareholder's

Number

Value

Number

Value

Number

Value

Capital

Payable

Reserves

Deficit

Loss

Equity

MOBETIZE CORP.

Consolidated Statements of Cash Flows

(Expressed in US dollars)

YEAR ENDED

MARCH 31,

2017

2016

MOBETIZE CORP.

Notes to Consolidated Financial Statements

March 31, 2017 and 2016

(Expressed in US dollars)

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") in Canada  and the USA.  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 March 31, 2017, the Company has an accumulated deficit of $7,478,315, a history of

net losses and a working capital deficiency of $4,550. 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 consolidated 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 consolidated financial statements of the Company have been prepared in accordance with

accounting principles generally accepted in the United States ("US GAAP") which include the

accounts of Mobetize Canada Inc., and Mobetize USA Inc., both of which are wholly-owned

subsidiaries of the Company. The consolidated financial statements are expressed in U.S. dollars.

All significant intercompany transactions and balances have been eliminated. The Company's

fiscal year-end is March 31.

b) Use of Estimates

The  preparation  of  consolidated  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 consolidated 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, fair values of

embedded derivative liabilities of convertible debentures, fair values of shares issued for non-cash

consideration, 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.

F-8

MOBETIZE CORP.

Notes to Consolidated Financial Statements

March 31, 2017 and 2016

(Expressed in US dollars)

2.  Summary of Significant Accounting Policies - continued

p) 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, accounts payable and accrued liabilities – related party  deposits due to

customers, promissory note, related party, 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.

Financial assets and financial liabilities are recognized at fair value on their initial recognition,

except for those arising from certain related party transactions which are accounted for at the

transferor's carrying amount or exchange amount.

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

of  their  nature  and  respective  short-term  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.

F-12

MOBETIZE CORP.

Notes to Consolidated Financial Statements

March 31, 2017 and 2016

(Expressed in US dollars)

2. Summary of Significant Accounting Policies - continued

q) 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.

r)    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

convertible debentures, 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.

s)    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.

t)    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.

F-13

MOBETIZE CORP.

Notes to Consolidated Financial Statements

March 31, 2017 and 2016

(Expressed in US dollars)

2.  Summary of Significant Accounting Policies - continued

u) 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 consolidated

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

Currency Translation Matters, using period-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 loss as a component

of stockholders' equity (deficiency). The Company has not, to the date of these consolidated

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

fluctuations.

v) Recently Adopted Accounting Standards

In June 2014, Accounting Standards Update ("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.

F-14

MOBETIZE CORP.

Notes to Consolidated Financial Statements

March 31, 2017 and 2016

(Expressed in US dollars)

2. Summary of Significant Accounting Policies - continued

w) Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, 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, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718):

Improvements to Employee Share-Based Payment Accounting , 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.

F-15

Audit Committee and Audit Committee Financial Expert

Our board of directors has determined that it has one member that would qualify as independent for the

purposes of serving on an audit committee but may not qualifies as an "audit committee financial expert"

as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the term is used in Item

7(d)(3)(iv) of Schedule 14A under the Exchange Act.

We believe that the members of our Board of Directors, who may additionally serve on our audit

committee in fulfilling that function, are collectively capable of analyzing and evaluating financial

statements and understanding internal controls and procedures for financial reporting. We believe that

retaining an independent director who would qualify as an "audit committee financial expert" would be

overly costly and burdensome.

ITEM 11.

Executive Compensation

Summary

The following table provides summary information for the years ended March 31, 2017 and 2016

concerning cash and non-cash compensation paid or accrued by Mobetize to or on behalf of (i) the Chief

Executive Officer and the Chief Financial Officer and (ii) any other employee to receive compensation in

excess of $100,000:

Chief Executive Officer, Chief Financial Officer (Current)

Our Chief Executive Officer and Chief Financial Officer serves pursuant to a consulting agreement dated

effective July 1, 2014, that entitles him to a management fee of $10,000 per month and eligibility to

receive stock options. Prior to his current management services agreement, our Chief Executive Officer

and Chief Financial Officer served pursuant to a management services agreement in exchange for $6,000

per month. The current management services agreement is in effect unless terminated by Mobetize or the

executive officer. The compensation package is deemed appropriate for our Chief Executive Officer and

Chief Financial Officer and was approved by Mobetize's Board of Directors.

For the year ended March 31, 2017, $327,315 was paid to or accrued for our Chief Executive Officer and

Chief Financial Officer or companies controlled by him of which $53,870 was salary, $67,500 paid as a

management services fee and $112,470 was paid to a related company for research and development

work. For the year ended March 31, 2016, $120,000 was paid in service management fees and $140,638

was due to the grant of stock options.

Chief Financial Officer (Former -Karamushko)

Our former Chief Financial Officer served pursuant to a management employment agreement dated

effective February 4, 2016, that entitled her to a salary of $10,417 CAD per month and eligibility to

receive 120,000 sign in stock options. Prior to the effective date of February 4, 2016, Ms. Karamushko

served pursuant to a management consulting agreement dated effective December 15, 2014, that entitled

her to a consulting fee of $8,000 CAD per month and eligibility to receive stock options.

Ms. Karamushko resigned as Chief Financial Officer effective December 1, 2016.

For the year ended March 31, 2017, $76,341was paid to or accrued for our former Chief Financial Officer

in salaries, consulting fees and incentive shares. For the year ended March 31, 2016, $80,432 was paid to

or accrued for our current Chief Financial Officer in salaries and consulting fees as well as due to the

grant of stock options.

Chief Financial Officer (Former-Fowler)

Our former Chief Financial Officer served pursuant to a management employment agreement dated

effective January 1, 2015, that entitled him to a salary of $9,000 per month and eligibility to receive stock

options. Prior to the effective date of the January 1, 2015 agreement, Mr. Fowler served pursuant to a

consulting agreement in exchange for $8,750 per month in consulting fees and an office allowance of

$250 per month. The compensation package was deemed appropriate for our Chief Financial Officer and

was approved by Mobetize's Board of Directors.

Mr. Fowler resigned as Chief Financial Officer and as a director of Mobetize effective February 4, 2016.

For the year ended March 31, 2017, $18,346 was owed to our former Chief Financial Officer. For the year

ended March 31, 2016, $230,638 was paid to or accrued for our former Chief Financial Officer of which

$90,000 was salary and $140,638 was due to the grant of stock options.

Stock Option Plan and Grant

Our board of directors adopted and approved the 2015 Mobetize Stock Option Plan ("Plan") on August

7, 2015, which provides for the granting and issuance of up to 3,000,000 million shares of our common

stock. Mobetize has 2,020,000 stock options outstanding from the Plan at a $0.60 exercise price per

share for five years to our named officers and directors of which 1,563,000 have vested.  At March 31,

2017, the Plan had 980,000 options available for future grant.

33

Our board of directors administers the Plan, however, they may delegate this authority to a committee

formed to perform the administrative function of the Plan. The board of directors or a committee of the

board has the authority to construe and interpret provisions of the Plan as well as to determine the terms

of an award. Our board of directors may amend or modify the Plan at any time. However, no amendment

or modification shall adversely affect the rights and obligations with respect to outstanding awards unless

the holder consents to that amendment or modification.

Long-Term Incentive Plan Awards

We do not have any long-term incentive plans that provide compensation intended to serve as incentive

for performance.

Compensation of Directors

The following table provides summary information for the year ended March 31, 2017, concerning cash

and non-cash compensation paid or accrued by Mobetize to or on behalf of its non-executive directors.