12th September 2016
CloudTag (CTAG:LN), the company that brings personal monitoring to the weight loss, wellbeing, fitness and digital health markets is pleased to announce an operational update and a placing to raise £500,000 net of expenses.
2016 has, to date, been an extremely active year for CloudTag. Our first product was launched at the CES 2016 and since then product development for our first generation wearable fitness tracker has been completed.
CE & UL marks for the product, which confirm the product meets EU and USA health, safety and environmental requirements were obtained at the end of 2015 and more recent product developments have also conformed to these product standards.
Following on from the Company’s operational update on the 16 June 2016, the Company has now completed its switch to a high volume manufacturer in Malaysia. The new manufacturer is capable of meeting our anticipated production needs for the foreseeable future. We have arranged for stock to be airfreighted directly to our distribution partners’ warehouses.
As previously announced, we entered into an agreement with Second Chance, a specialist distributor of sports related technology and accessories, in January 2016. Also as previously announced, Second Chance is currently discussing the award of an exclusivity period with three potential major retailers/etailers in the UK. Alongside these discussions, Second Chance is continuing discussions with potential customers in order to build the order book for H2 2016 and beyond. It should be noted that CloudTag’s customer is Second Chance who then on sell to the retailers and etailers.
We are delighted with the progress made in recruiting a highly reputable in-house team. We now have specialists in product development, industrial design, user interface, manufacturing, sales, branding and marketing. Further to the Operational Update of the 16 June 2016, we are also pleased to announce today the appointment of Bhav Dattani who will lead our European sales team. Bhav will initially focus on identifying new routes for consumer sales as well as B2B enterprise opportunities whilst assisting Second Chance in the exclusivity discussions referred to above. Bhav brings with him many years of relevant industry experience having previously been the Head of Sales for UK, Ireland and India at Jawbone, a world-leader in consumer technology and wearable devices, for 8 years and also having previous experience with global consumer electronics companies such as Oregon Scientific and Sony UK.
Additionally, the Company has appointed Rana Chatterjee as Chief Legal Counsel. Rana’s appointment is in line with the increased commercial activities in both the EU and the US. Furthermore, as previously announced, the Company continues to build its operations in the US supporting its commercial activities with CITIES Market Studios. We look forward to updating shareholders on progress in the US in future announcements.
As a rapidly growing business, the Directors maintain a clear focus on the working capital requirements particularly as we continue to build the team and prepare to finance stock production. Cloudtag has, to date, been successful in raising additional capital from investors with £2.93 million (including the subscription for £500,000 as further detailed below) having been raised since 1 April 2016. In addition, the Company is in the process of putting in place trade finance facilities to facilitate increased production levels if required. Furthermore, our manufacturer will fund production costs up to the point that the product is shipped to the Company or distributor.
As previously announced, the Directors have noted that there have been significant volumes of trading in the Company’s shares in recent weeks. As indicated in this update, good progress is being made on all fronts but it should be noted that Cloudtag is entering a highly competitive market and faces many challenges commonly associated with such entry. Plans have been put in place to address such possibilities and we are confident that our team has the skill and determination to resolve any such possibilities should they arise.
The Board is pleased to announce that it has raised £500,000 net of expenses through the issue of 4,347,827 new ordinary shares (“Shares”) at a price of 11.50 pence per Share. This compares with the mid-market closing price of a Cloudtag ordinary share on 9 September 2016 of 11.125 pence. The funds will be used for general working capital purposes.
Application will be made for the admission for the 4,347,827 Shares to trading on AIM and it is expected that dealings in the Shares will commence on or around 16 September 2016. The Shares will rank equally in all respects with the Company’s existing ordinary shares.
Following the issue of the Shares, the total number of ordinary shares in issue is 361,879,152. 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.