15th January 2016
CloudTag (CTAG:LN), the company that brings personal monitoring to the health, wellbeing and fitness markets, is pleased to release an operational update following the successful launch of its first wearable technology product, the CloudTag Track, at the Consumer Electronics Show in Las Vegas on 6 January 2016 and to announce an unsecured convertible loan facility of £1.25 million.
Launching the Cloudtag Track at CES has enabled the progression of existing relationships with potential customers and the creation of new opportunities for commercialisation. These include discussions with some of the world’s largest consumer technology manufacturers, one of Europe’s leading sporting goods distributors and two of North America’s largest department stores and retail groups. Furthermore, B2B opportunities with insurance providers and mobile phone operators have been generated. The Directors of CloudTag are confident that several of these opportunities will lead to commercial arrangements and look forward to updating the market in due course as discussions progress further.
The Company completed the development of its wearable product in November 2015, including the product design and electronics of the CloudTag Track and the beatSMART clip. Fully functional devices with the embedded algorithms measuring the full ECG, calculating energy expenditure and automatically identifying the various activity types were integrated with the mobile application and the Cloud architecture.
Production tooling has been setup and the production run of devices for the product launch were received by the Company in November 2015. The Company is now focussed on increasing the Far East production with commercial quantities of devices in Q2 2016 so that they are ready for delivery pending orders being received from retailers, distributors and other partners.
On 24 December 2015, the Company filed a number of UK patent applications covering the proprietary in-house designed sensors, signal processing algorithms, sensors utilising natural and man-made materials, innovative mechanical body attachments and the product system architecture. This is in line with the Company’s strategy to build on its current intellectual property portfolio. The innovative design of the product has also been protected through design registrations and design patent applications in the UK filed in the first days of January 2016.
Through H2 2015 the Company continued to grow its technical capabilities at its Research and Performance Unit building a team of more than 17 full and part time technical engineers as well as more than 30 directly involved technical team members of 3rd party shareholder partners. The in-house skill sets now include embedded systems architecture, sensor development, embedded software, mobile and cloud software, electrode hardware and firmware development, mechanical engineering, mechatronics, sensor systems integration and garment mechanical engineering. CloudTag has been working with Essex University’s Sport and Performance Unit to conduct third party independent validation tests of the wearable device and algorithms against the industry gold standard ECG and calorimetry equipment (CPX). As announced on the 26 October 2015, these test have shown very positive results with energy expenditure (kilocalories) showing correlation between 91% and 99% against the medical gold standard.
Convertible Loan Facility
CloudTag is pleased to announce that it has signed a £1.25m unsecured convertible loan facility with Hector Limited (“Lender”), a private equity company specialising in hi-tech SME’s (the “Facility”). Funds drawn down from the Facility will be used for purchase order funding with manufacturers and B2B partnerships in 2016 and for general working capital purposes.
Under the terms of the Facility, the Company may draw all or any part of the Facility on giving notice to the Lender. Any funds drawn will be subject to 10% annual interest and a 3.7% administration fee. There is no limit to the number of tranches the Company may request from the Lender up to an aggregate maximum of £1.25 million and each tranche may be repaid at any time within the Facility’s period up to the second anniversary of its drawdown.
The Lender may elect at its discretion to convert any tranche of drawn funds into new ordinary shares in the Company at a price of 2.25 pence per share, conditional on the Company having sufficient authority from shareholders to issue such number of new ordinary shares.
Issue of Equity
The Company has issued 2,500,000 new ordinary shares in settlement of fees totalling £53,125 due to a third party consultant (“Shares”). Application will be made for the admission of the Shares to trading on AIM and it is expected that dealings in these shares will commence on or around 22 January 2016.
Following the issue of the Shares, the total number of ordinary shares in issue is 209,608,770. This number may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company.
Amit Ben-Haim, CloudTag’s CEO, commented: “I am delighted with the very rapid progress made by the team over the past few months ensuring the delivery of our first product to its launch at CES in Las Vegas. The reception at CES was overwhelmingly positive and we are now turning all our attention to closing the commercial opportunities that we expect will lead to firm orders in due course.”