Ann: Variation of Skyfii 'Earn Out' Share Entitlements, page-4

Separately, is the 21.8m earned-out shares issued now means that the remainder of 79.9m earned-out shares will be canceled?

Yes. At least that was my reading of the announcement. The problem was that the uncertainty of the number of earned-out shares meant that investors weren't interested in investing until it was more clear what the number of shares/dilution would be. So the vendors have decided in the interest of attracting investors to forgo the opportunity to achieve the 79.9m earn-out shares. Presumably, they have looked at their growth forecasts and decided that guaranteed 21.8m earn-out was probably a fair enough value representative of what they will achieve down the line. The value has to be achievable so as to encourage investors to start investing now rather than in 2017.