TIDMCTAG
RNS Number : 6551A
CloudTag Inc.
27 March 2017
27 March 2017
CloudTag Inc.
('CloudTag', 'the Company' or 'the Group')
Final Results for the year ended 30 September 2016
CHAIRMAN'S STATEMENT
CloudTag Inc (AIM:CTAG.L), the company which develops personal
performance monitoring for the consumer health, wellbeing and
fitness markets, announces its final results for the year ended 30
September 2016.
The past year has been one of significant progress. The team at
Cloudtag has worked hard to push forward not just the headline
development of the Company's first product and related software but
have also built the foundations necessary to ensure that the
manufacturing supply chain can meet anticipated demand and the
distribution network can provide access to all potential customers
in our target markets. In constructing this infrastructure the
Company has recruited a formidable team of experienced experts in a
wide range of fields.
At the same time that we have been creating this operational
base, the management team has developed extensive corporate
governance policies, processes and procedures to ensure that the
Company is able to meet and exceed its corporate responsibility
obligations.
On 27 February 2017 the Company announced that its Nomad, Cairn,
had tendered its resignation and the Company has not appointed a
replacement. Accordingly, under AIM Rule 1, the Company's shares
will be delisted from the AIM market at 7 a.m. on 28 March 2017.
The Company will continue its operations as a private company and
the Board will continue to drive the Company forward and will seek
a return to listed status, in due course.
On behalf of the Board, I would like to thank all of Cloudtag's
employees and consultants for their commitment and hard work, and
other stakeholders for their continued support.
Anthony Reeves
Chairman
27 March 2017
STRATEGIC REPORT
Chief Executive's Review
The 12 months since our last annual report has been one of rapid
progress and development for the Company but has also presented its
own challenges. I am very proud of what the growing team has
achieved both in terms of product development and progress to mass
manufacture as well as the commercial and operational aspects of
the business.
Strategic overview
Product development
I am pleased to report that the product development effort
throughout 2016 resulted in the launch of Onitor, our new brand
identity. This work built upon the technical achievements on the
underlying technology during 2015 where third party testing
underpinned technical accuracy. The Board is aware that there has
been investor frustration that the Company did not release its
product to the retail market during the year. The Company is
determined to ensure that the product's performance marks a step
change to other available devices. Detailed R&D has focussed
effort on embedded systems electronics and underlying algorithms
and we have also undertaken technical work on production and
manufacturing processes. We have developed many proprietary
algorithms including but not limited to heart rate, ECG energy
expenditure and activity recognition. The Company has filed several
more patent applications and design registrations and design
patents to protect the intellectual property developed by the
group.
In tandem with the detailed work to develop the technical
capabilities of the product, we have explored opportunities to
identify potential markets for our products to seek out niche areas
where our technology will stand out from the established operators
in the general wearable technology markets. This work has
identified a number of B2C openings in the wellness market and
prospects in the automotive and e-textile industries.
During the year we undertook an exercise to review our
commercial infrastructure which led to the incorporation of a new
UK subsidiary to undertake the development of Onitor, our
refocussed product range, and two Cayman subsidiaries to focus on
the automotive and e-textile opportunities respectively.
Our early stage development work utilised the services of
specialist small volume fabrication works for the production of
samples for testing and review but it was necessary to review the
manufacturing supply chain to ensure that Cloudtag is capable of
providing goods in sufficient volume to meet anticipated demand. In
the latter part of the financial year we completed this task and
tooling and testing was undertaken with a volume manufacturer based
in Malaysia and component supply chains were finalised. Test runs
were successfully conducted in the second part of 2016.
In order to ensure that we can deliver our products to market we
have also established a distribution network designed to cover the
initial core markets in the UK, Europe and the USA. One of the
first steps was to engage with Second Chance with an agreement that
will provide them with exclusivity with a number of retailers and
resellers in certain markets subject to meeting a minimum order
requirement, and this was followed with agreements with CITIES and
Nemesis. These agreements will provide a solid framework to address
our initial markets.
During the financial year, Cloudtag issued 100,507,122 shares
for cash raising GBP4,577,000 in aggregate, 12,220,000 shares in
repayment of loans and loan interest with an aggregate value of
GBP204,000, 1,000,000 shares in respect of warrants exercised
raising GBP80,000. In addition, 47,698,204 shares were issued to
settle fees with an aggregate value of GBP1,403,000. Since the year
end a further 11,817,949 shares have been issued in respect of
warrants exercised, raising GBP516,000 in cash. The Company also
raised GBP4.5 million gross, GBP3.8 million net through the issue
of convertible loan notes which were ultimately converted into
69,859,427 shares.
As is common with pre-revenue companies, the Board has raised
funding on a piecemeal basis as its development work has
progressed. Whilst this process provides flexibility and allows the
Company to raise funds at prices reflecting the progress made, it
does not provide forward visibility of the availability of funds
and only limited support for the Board's statement on going
concern. The Board recognises that many short term investors will
not be happy that the trading platform historically provided
through our listing on AIM has come to an end and this avenue of
funding will no longer be available to the Company. Nevertheless,
the majority of our fundraising has come from long term private
investors and the Board is confident that the Company will continue
to receive the support of these individuals such that it can
continue to raise the funds required to support the Company to
enable it to continue to operate on a day-to-day basis.
The Board of Cloudtag is committed to good Corporate Governance
and has implemented detailed policies and practices in conjunction
with external advisors. Whilst it may be difficult for any small
business to demonstrate full compliance with best practice, the
Board believes that it has established a good balance of robust
checks and balances within the practicalities of its size
restriction. Nevertheless, the Board recognises that there remains
room for further improvement and further development of all aspects
of governance will be an ongoing process. The Board continues to
retain external advisors on corporate governance matters and
currently, the Board is actively seeking to appoint additional
directors in the near future.
Review of the period
A summary of highlights during the period include:
During the period from September 2015 to September 2016 the
company achieved the following significant milestones:
-- Exhibited first product set, the Cloudtag Track(TM) and the
beatSMART(TM) Clip on schedule, at the Consumer Electronics show,
Las Vegas, USA in January 2016;
-- Signed a distribution agreement with Second Chance Limited
with exclusivity rights conditional on achieving sales values of
$5.2 million, which remains in place for H1 2017;
-- Appointed Dr Gerald Bereika as Non-Executive Director,
bringing experience and expertise in healthcare services and the
psychology of behavioural change to the Board;
-- Signed exclusive strategic commercial license agreement with
Imec International, who are shareholders in the Company and who, in
partnership with the Company, have developed the unique cutting
edge energy expenditure algorithms for the wearable technology;
-- Successful testing with the Human Performance Unit at the
Centre for Sports and Exercise Science, University of Essex proving
the accuracy of the product with comparative testing to the
industry gold standard medical equipment, ECG tracking with 98-99%
accuracy and energy expenditure (kcal) tracking between 91-99%
accuracy;
-- Reduction in Company's indebtedness through the conversions
of loans at preferential rates for the Company and conversion of
certain creditors;
-- Investment in areas of strategic focus whilst reducing costs
in non-core areas. Maintained R&D spend while increasing
expenditure on items with lasting benefits including for
manufacturing and one-off tooling costs, sales, marketing and
business development;
-- Successful fundraisings of GBP4,657,000 in equity and a
GBP1.25 million convertible debt facility;
-- Formation of two new Cayman Island subsidiaries, wholly owned
by Cloudtag Inc. which have yet to commence trading but, in the
future, will focus on applications of the Company's technology in
two new industries, e-textile and automotive;
-- Appointment of Chief Creative Officer, Mr Peter Griffith,
previously of Microsoft and Nokia where he was responsible for the
creation of a wide range of industry-leading consumer electronic
devices;
-- Signed a binding heads of terms with Griffin International
Companies Inc. which is part of the CITIES Market Studios Group one
of the largest commercialisation and distribution players with over
30 years' experience in North America, for the sale and marketing
of Cloudtag products in the USA and Canada;
-- Completed a switch to a high-volume manufacturer in Malaysia,
capable of meeting our anticipated production needs for the
foreseeable future and the Company arranged for stock to be
airfreighted directly to our distribution partners' warehouses;
-- Appointment of Director of Sales, Mr Bhav Dattani, with many
years of relevant industry experience having previously been the
Head of Sales for UK, Ireland and India for 8 years at Jawbone, a
world-leader in consumer technology and wearable devices, and also
having previous experience with global consumer electronics
companies such as Oregon Scientific and Sony UK;
-- Appointment of in-house chief legal counsel, Rana Chaterjee
is in line with the increased commercial activities in both the EU
and the US; and
-- Appointment of Chief Business Development Officer, Mr Yuval
Lange, Yuval has over 15 years of experience in the Technology,
Media and Telecoms (TMT) sectors, leading complex projects and
developing commercial engagements in various companies. His primary
focus is to expand the Company's strategic B2B opportunities
particularly in the UK and EU in addition to growing the Company's
B2B operations in the USA with further recruitments.
During the financial year, the Company recorded a loss before
taxation of GBP8.3 million (2015: loss of GBP2.0 million)
representing a loss per share of 3.07 pence (2015: loss per share
of 1.06 pence).
We were pleased to see this progress continue into the period
post the year end, highlights during this period included:
-- Fundraising totalling GBP4.5 million gross through a
convertible loan note and GBP516,000 through the exercise of
warrants;
-- Appointment of David He as Chief Strategy and Data Officer
having previously worked in both consulting and investment banking.
In his recent role with Kurt Salmon (recently acquired by
Accenture), he worked with a number of private equity houses,
financial institutions, retailers, manufacturers and fashion brands
in a range of projects including business strategy, market &
trend analysis, omni-channel, manufacturing and store operations
across China, UK and Europe;
-- Final form agreement signed with Cities Market Studios
("CITIES"), for CITIES to act as the Company's sole and exclusive
sales representative to sell the Company's products to customers
identified by CITIES. CITIES is believed to be one of the largest
commercialisation and distribution players with over 30 years'
experience in North America;
-- Entered into a distribution agreement with Nemesis Limited
("Nemesis") ("Distribution Agreement"), a UK based company which
specialises in the distribution of wearable and automotive
technology accessories. The Distribution Agreement is intended to
complement the distribution rights granted to Second Chance Limited
and CITIES;
-- Launch of the new Company brand Onitor under which the
Company's product, the Onitor Track is being launched, including a
new consumer focussed website; and
-- Exhibited at the Consumer Electronics Show 2017 in Las Vegas
and ISPO in Munich with the Onitor Track.
Summary
While the first quarter of 2017 has had its challenges, we would
like to thank all of our dedicated shareholders for their continued
support during this unsettling period.
Looking forwards, we have built a strong and vastly experienced
team across all areas of the business, positioning us well to take
advantage of the commercial opportunities for the Onitor Track
release to both B2C and B2B consumers as well as developing the
product road map for 2017 and beyond. I look forward to bringing
updates to our shareholders as and when we make progress in line
with this strategy.
Business risks
There are a number of potential risks and uncertainties which
could adversely impact the achievement of our corporate aims.
The Group faces risks frequently encountered by new companies.
In particular, its future growth and prospects will depend on its
ability to fund and manage growth and to continue to expand and
improve operational, financial and management information and
quality control systems on a timely basis, whilst at the same time
maintaining effective cost controls.
In order to mitigate these risks the Company maintains regular
dialogue with its existing investors and the wider financial
community regarding the possibility of providing additional funding
as and when required. The Company's Chief Executive and executive
management applies dynamic management tools to reduce both
technological and financial risks on a daily basis and maintains
systems commensurate with the current stage of the business.
Strategies have been put in place for further appropriate systems
and management tools for when revenue streams commence later in
2017.
Progress to Mass Manufacture & Commercial Launch
Cloudtag continues to progress the wearable device towards mass
manufacture and commercial launch. The completion of these steps to
mass manufacture may take longer than the Directors currently
anticipate and/or issues may arise during the process which may
delay launch of the products, however the products have been
produced with the high volume manufacturer in the Far East and
therefore this risk has been reduced. The products have been tested
for the core target markets, namely the UK, USA and Germany,
however they may need additional testing in order to be sold in
certain non-core markets.
Reliance on third-party contractors
The Company has brought much of the core technical know-how,
research, development and commercialisation of the product in-house
and appointed an experienced technical and operational management
team to mitigate risks related to the reliance of third party
contractors. Key strategic third party suppliers continue as equity
partners in the Company, therefore aligning all parties interests
in delivering a successful product.
However, the Group does rely on certain third party contractors
to manufacture, assemble and test its products and its failure to
successfully manage relationships with these contractors could in
turn damage Cloudtag's relationships with customers, decrease
anticipated sales and limit growth. The Company maintains good
relationships with developers through regular contact. It also
reviews alternative supply arrangements to ensure that the Company
has a second supplier should any
issues arise.
Legal and contractual risks
To mitigate this risk, the Company has appointed its own in
house legal counsel and has appointed experienced executives with
acute business acumen to negotiate contracts. These individuals
also engage lawyers with suitable expertise in the respective
fields of commercial law to ensure contractual terms are valid, and
secondly wherever possible contracts are written subject to English
law and enforced by English courts.
Impact of negative press
The Company cannot guarantee that those parties that currently
or will endorse its products have not conducted themselves in the
past and will not conduct themselves in the future in such a way as
to bring negative publicity upon the Company. There is the risk
that the above situation, or any product failure, may be of a high
profile nature. The Company is careful to conduct due diligence and
to vet its contractors to ensure a high standard of conduct in
order to mitigate this risk. Negative press may also impact on the
Company's ability to raise additional funding.
Product liability
The Group may become exposed to product liability risks arising
from the use of its technology in consumer products which, if not
adequately covered by insurance, may have a material adverse effect
upon the Group's financial condition.
The Company seeks to ensure that its insurance cover is adequate
for perceived material risks. Furthermore, all of the Company's
literature contains disclaimers and protections.
Competition/competing technology
The markets in which the Group expects to operate are
competitive and fast moving and may become even more competitive.
There can be no guarantee that the Group's competitors will not
develop similar or superior technology or offer superior product
applications or services to the Group's target markets which may
render one or more of Cloudtag's technologies or intellectual
property rights obsolete and/or otherwise uncompetitive.
Technologies used by the Group may have a shorter commercial life
than anticipated, if any, due to the invention or development of
more successful technology or applications by competitors who may
have greater financial, marketing, operational and technological
resources than the Group. In order to mitigate this risk, the
Company examines market movements and customer driven developments
to ensure it continues to utilise cutting edge technology.
This risk is mitigated by the large barriers to entry to
competitors looking to develop similar technology. This includes,
but is not limited to, the large intellectual property estate,
namely the 11 years of research and development to which the
Company has an exclusive world wide perpetual license and the
filing of a number of patents covering the unique, in-house-
designed sensors and signal processing algorithms for both the
hardware and software of the sensors, the innovative sensors design
and the mechanical body attachment. Further protection is afforded
by the highly skilled technical development team led by a globally
experienced and proven management team to develop these cutting
edge and innovative technologies.
Across the Group, Cloudtag has the talent, imagination,
expertise, tenacity and shared focus needed to excel in our chosen
markets. Given our relative size and close control of operations,
development and costs, we believe that Cloudtag has an agility and
a focus which sets us apart from the rest. We intend to leverage
these attributes to be quicker in design, development, reacting to
consumer needs and in establishing the relationships with
businesses and distributors needed to succeed. We have a simple but
effective management structure, allowing each of the management
team direct access to the Chief Executive, with efficient
communication across all levels of the Group.
Economic climate
The trading activities of the Group will, to a certain extent,
be dependent on the economic environment. This risk is mitigated by
the size and growth indicators of the wearable technology market.
At present the market is one of the fastest growing technology
markets in history and is predicted to reach $25 billion by 2019.
Consumer focus is health and fitness with an expanding demographic
with disposable income.
Financial risk management objectives and policies
The Group's principal financial instruments comprise cash and
cash equivalents. The Group has various other financial instruments
such as trade receivables and trade payables, which arise directly
from its operations.
The Group is exposed to a variety of financial risks which
result from both its operating and investing activities. The
Directors are responsible for co-ordinating the Group's risk
management and focus on actively securing the Group's short to
medium term cash flows. The Group does not actively engage in the
trading of financial assets and has no financial derivatives. The
most significant risks to which the Group is exposed are described
below:
Cash flow risks
The Group seeks to manage risks to ensure sufficient liquidity
is available to meet foreseeable needs by investing cash assets
safely and profitably. The Directors prepare rolling cash flow
forecasts and seek to identify the need and raise additional
funding whenever a shortfall in facilities is forecast. The
delisting of the Company's shares from trading on AIM removes one
avenue of funding but, as evidenced during the financial year and
post year, end the Company's Chief Executive has been able to raise
additional funds as and when required. Further information on going
concern is given below.
Currency risks
The Group does not seek to hedge its foreign exchange risk and
the Directors consider that the exposure to movements in foreign
currencies is not significant. The impact of Brexit on the Company
is uncertain but will be monitored as the process advances. At the
time when the Directors consider that exposure to foreign exchange
trading risks becomes significant they will seek to adopt
appropriate hedging strategies and products.
Going concern
At 30 September 2016, the Group held cash balances of GBP30,000.
Since the year end the Group has renewed its draw-down facility
over GBP1.25 million of convertible loan notes, originally entered
into on 15 January 2016, and raised a further GBP4.5 million in
funding, GBP3.8 million, net of costs, from the issue of Loan Notes
to L1 Capital Global Opportunities Master Fund and GBP516,000 from
the issue of shares on the exercise of options and warrants. The
Group has not earned any revenue during the year ended 30 September
2016 or in the period subsequent to that date and the Group remains
in a development phase. To this point the operations of the
business have been financed from funds raised through the issue of
new ordinary shares (including to suppliers in settlement of
invoices for services rendered), together with funds raised from
loan facilities.
The Directors have considered the cash requirements of the
business for the next 12 months. As part of this process, they have
prepared detailed cash flow projections which assume that no
revenue is generated by the Group. These projections assume that
all avoidable costs can be reduced. The forecasts show that the
Company will need to raise further funds from external sources to
enable it to continue trading and continue with product
development.
The Company's AIM nominated adviser has resigned and a new
Nominated Adviser has not been appointed. As a consequence, trading
of the Company's securities on AIM will be cancelled on 28 March
2017. This will restrict the ability of the Company to raise new
funds by way of issue of share capital as the Company's shares will
not be traded on a recognised market.
Although the projections used for this purpose assume no revenue
is generated, the Directors believe that the Group will launch its
first product during the forthcoming twelve months with associated
revenue generation. Although revenue generation and the amount of
such revenue is uncertain, any such revenues generated would reduce
the amount of new finance necessary to support the Business. The
directors are continuing to explore alternative sources of finance
and have prepared the financial statements on the going concern
basis on the assumption that such sources of finance will be found
to enable the development of the product to continue.
Amit Ben-Haim
Chief Executive Officer
27 March 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 September 2016
Note Year ended Year ended
30 September 30 September
2016 2015
GBP000 GBP000
Operational, development,
manufacturing and
administrative expenses
Options and warrants
issued in payment
of remuneration
and services (1,532) (430)
Research and development
costs (2,846) (698)
Other administrative
expenses (3,843) (846)
Total operational
and administrative
expenses (8,221) (1,974)
Loss from operations (8,221) (1,974)
-------------- --------------
Finance cost (98) (15)
-------------- --------------
Loss before taxation (8,319) (1,989)
Taxation 12 125
-------------- --------------
Loss after taxation
and loss attributable
to the equity holders
of the Company and
total comprehensive
income for the period (8,307) (1,864)
-------------- --------------
Loss per share
Total basic and
diluted (pence per
share) (3.07) (1.06)
-------------- --------------
All of the activities of the Group are classed as
continuing.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2016
Share Share Convertible Retained Total
capital premium loan earnings equity
notes
GBP000 GBP000 GBP000 GBP000
Balance at 1 October
2014 154 3,719 - (4,487) (614)
--------- --------- ------------ ---------- --------
Issue of convertible
loan notes - - 1,050 - 1,050
Conversion of
convertible loan
notes 34 816 (850) - -
Issue of share
capital 17 554 - - 571
Share issue costs - (268) - - (268)
Transactions with
owners 51 1,102 200 - 1,353
--------- --------- ------------ ---------- --------
Options and warrants
issued in payment
of remuneration
and services - - - 430 430
Suppliers paid
in warrants - - - 34 34
Loss for the period - - - (1,864) (1,864)
Balance at 30
September 2015 205 4,821 200 (5,887) (661)
--------- --------- ------------ ---------- --------
Issue of convertible
loan notes - - 50 - 50
Conversion of
convertible loan
notes 12 188 (200) - -
Issue of share
capital 149 5,915 - - 6,064
Share issue costs - (6) - - (6)
Transactions with
owners 161 6,097 (150) - 6,108
--------- --------- ------------ ---------- --------
Options and warrants
issued in payment
of remuneration
and services - - - 1,532 1,532
Loss for the period - - - (8,307) (8,307)
Balance at 30
September 2016 366 10,918 50 (12,662) (1,328)
--------- --------- ------------ ---------- --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September 2016
30 September 30 September
2016 2015
Assets GBP000 GBP000
Fixed assets
Property, plant
and equipment 24 1
------------- -------------
Current
Trade and other
receivables 426 143
Cash and cash equivalents 30 16
------------- -------------
Total current assets 456 159
Total assets 480 160
------------- -------------
Liabilities
Current
Trade and other
payables 1,415 521
Loans 163 300
------------- -------------
Total current liabilities 1,578 821
Liabilities due
after one year
Loans 230 -
------------- -------------
Total liabilities 1,808 821
Equity
Issued share capital 366 205
Share premium 10,918 4,821
Convertible loans 50 200
Retained earnings (12,662) (5,887)
------------- -------------
Equity attributable
to owners of the
company (1,328) (661)
Total equity and
total liabilities 480 160
------------- -------------
The consolidated financial statements were approved by the Board
on 27 March 2016.
A Ben-Haim
Director
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 September 2016
Year ended Year ended
30 September 30 September
2016 2015
GBP000 GBP000
Operating activities
Loss after tax (8,307) (1,864)
Share based payments 1,532 430
Depreciation 5 1
Finance cost 98 15
Income tax credit to
profit or loss (12) (125)
Fees paid in shares 1,407 207
Increase in trade and
other receivables (133) (9)
Increase/(decrease) in
trade and other payables 891 (187)
Net cash outflow from
operating activities (4,519) (1,532)
Income tax receipts 137 255
Net cash outflow from
operating activities
after taxation (4,382) (1,277)
--------------------------------- ----------------------------------
Cash flows from investing
activities
Purchase of property,
plant and equipment (28) -
Net cash outflow from
financing activities (28) -
--------------------------------- ----------------------------------
Financing activities
Proceeds from issue of
share capital 4,432 983
Share issue costs (6) -
Other loans advanced 204 300
Other loans repaid (179) -
Finance cost (27) (15)
Net cash inflow from
financing activities 4,424 1,268
--------------------------------- ----------------------------------
Net change in cash and
cash equivalents 14 (9)
Cash and cash equivalents
at beginning of period 16 25
--------------------------------- ----------------------------------
Cash and cash equivalents
at end of period 30 16
--------------------------------- ----------------------------------
NOTES
1. Basis of Preparation
The Company was incorporated in the Cayman Islands which does
not prescribe the adoption of any particular accounting framework.
The Board has therefore adopted and complied with International
Financial Reporting Standards as adopted by the European Union
(IFRS).
The Group's shares are, until 28 March 2017, listed on AIM, a
market operated by the London Stock Exchange plc, after which date
its shares will not be traded on a recognised market.
The principal accounting policies applied by the Group are set
out in the Company's financial statements. These policies have been
consistently applied to all the periods presented, unless otherwise
stated.
The financial information set out in this preliminary
announcement does not constitute statutory accounts. The
consolidated statement of financial position at 30 September 2016,
the consolidated statement of comprehensive income, consolidated
statement of changes in equity, consolidated statement of cash
flows and associated notes for the year then ended have been
extracted from the Group's 2016 financial statements upon which the
auditor's opinion is unqualified but contained a paragraph of
emphasis of matter relating to going concern.
2. Segmental Information
An operating segment is a distinguishable component of the Group
that engages in business activities from which it may earn revenues
and incur expenses, whose operating results are regularly reviewed
by the Group's chief operating decision maker to make decisions
about the allocation of resources and an assessment of performance
and about which discrete financial information is available.
The chief operating decision maker has defined that the Group's
only operating segment during the period is the development of
physiological technology. All of the corporate headquarter costs
are allocated to this segment.
The Group has not generated any revenues from external customers
during the period.
In respect of the non-current assets all (2015: all) arise in
the UK.
3. Loss per share
Year ended Year ended
30 September 30 September
2016 2015
Loss on ordinary activities
after tax (GBP000) (8,307) (1,864)
-------------------------- -----------------------------
Weighted average number
of shares for calculating
basic loss per share 270,594,687 176,281,283
-------------------------- -----------------------------
Basic and diluted loss
per share (pence) (3.07) (1.06)
-------------------------- -----------------------------
There are 29,700,000 share options and 58,683,334 warrants
unexercised as detailed in note 8. Their effect is anti-dilutive,
but are potentially dilutive against future profits. Additionally,
there is an amount of GBP173,999 (2015: GBP7,496) accrued in
respect of Directors fees which is due to be paid in shares at the
share price at the time of issue. The number of shares this equates
to is therefore variable but had these shares been issued on 30
September 2016, this would have equated to 877,011 shares at 19.84p
each.
Since the year end a further 81,677,376 shares have been issued,
and there has been a net increase in the warrants in issue of
58,041,478 whose impact is potentially dilutive.
4. Going concern - significant uncertainty
In forming our opinion on the financial statements, we have
considered the adequacy of the disclosures made in the principal
accounting policies of the financial statements concerning the
Group's ability to continue as a going concern.
The Group incurred a net loss of GBP8,307,000 during the year
ended 30 September 2016 and, at that date, the Group had net
liabilities of GBP1,328,000. Although further funds have been
raised by the issue of convertible loan notes and draw down on
borrowing facilities since the end of the financial year, the
ability of the Group to continue trading is reliant on its ability
to raise further funds to finance product development and other
activities until such time that sales of its product commence and
profits from such exceed fixed costs. The ability to raise future
funds is restricted by the fact that the Parent Company's shares
will not be traded on AIM after 28 March 2017 following the
resignation of the Company's Nominated Adviser. There can be no
certainty that further funds can be raised or about the timing of
the sales of the Group's product commencing or of the value of such
sales. These conditions, along with the other matters explained in
the principal accounting policies of the financial statements,
indicate the existence of a significant uncertainty which may cast
doubt about the Group's ability to continue as a going concern. The
financial statements do not include the adjustments that would
result if the Group was unable to continue as a going concern.
5. Publication of Annual Report and Notice of AGM
The accounts for the year ended 30 September 2016 will be posted
to shareholders shortly and laid before the Company at the Annual
General Meeting details of which will be announced in due course.
Copies will also be available on the Company's website
(www.cloudtag.com) in accordance with AIM Rule 26.
CloudTag Inc. +1 345 949 45 44
Amit Ben-Haim / Jamie Bligh contact@cloudtag.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BUGDXDGDBGRR
(END) Dow Jones Newswires
March 27, 2017 11:06 ET (15:06 GMT)
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