IMPORTANT NOTICE

Following a shareholders meeting on Tuesday 11th October 2011 it was decided that Kobalt Computers Ltd could no longer meet it's ongoing financial obligations and would therefore be forced to cease trading with immediate effect.

At this point in time, the Directors would like to make it clear that were it not for the actions of two separate companies contracted to provide merchant services to Kobalt Computers Ltd that this decision would not have been forced upon the shareholders of Kobalt Computers Ltd and the company would have continued its strong and rapid growth. The Directors and Shareholders of Kobalt Computers Ltd worked tirelessly in attempting to resolve the situation that led to today's announcement. It was an extremely difficult decision to reach but was the only option left due to the sudden untenable position that the company had been forced into.



AMENDMENT - 20TH OCTOBER 2011

Further to the update on 18th October, more information is now available.

It has previously been stated that two separate companies contracted to provide merchant services to Kobalt Computers Ltd were the major contributing factors to the company ceasing trading. The first of these companies was WorldPay, a merchant service provider that was contracted to provide these services for Kobalt Computers Ltd. During the time that WorldPay were providing Merchant services, Paypoint (previously known as Secpay) was contractedas a payment service provider; Kobalt Computers Ltd would like to make it very clear that Paypoint had at all times (since 2007) provided an excellent level of service and was not involved in any detrimental actions towards Kobalt Computers Ltd. The involvement of a payment service provider (PSP) is standard procedure for any company taking credit & debit card payments.

The second company is PayPal who, after WorldPay's contract was terminated, provided payment services from debit & credit card transactions and direct Paypal payments.

Both of these companies had retained substantial sums owing to Kobalt Computers Ltd. Kobalt Computers Ltd had to undertake legal action to recover these funds, which did result in partial return of the sums. The return of the remaining funds (due back on the days prior to the cessation of trading) was not forthcoming as Kobalt Computers Ltd believe they should have been under the legal agreements and contracts in place. Without these funds being returned it was impossible for Kobalt Computers Ltd to continue trading.

Immediately prior to the Shareholders meeting of 11th October 2011, WorldPay and PayPal were holding between them in excess of £75,000. Kobalt Computers Ltd stands by its view that these funds should have been returned to the company in full as per the legal and contractual agreements.

CONTINUATION OF KOBALT BRAND

Following investor interest, negotiations are currently underway to continue operating the Kobalt brand and product range. It is hoped that an announcement will be made regarding this on or around Thursday 27th October.

WARRANTY OF KOBALT COMPUTERS LTD PRODUCTS

As part of the negotiations for the continuation of the Kobalt brand, the various parties involved are exploring the possibility of limited warranty support. Further information will be provided at the earliest opportunity.