LONDON (Alliance News) - CloudTag Inc said Monday it raised GBP4.1 million in new funding by issuing senior unsecured zero coupon convertible notes to an unnamed "overseas institutional investor", while saying it has received its first non-binding purchase order from its European distributor.
The personal monitoring devices firm said the notes have a 12-month term and were issued at 10% discount to their nominal value of GBP4.5 million. They will be issued in two tranches, with the first tranche issued on or around Wednesday, raising GBP2.1 million. The second tranche depends on agreement from Cloudtag shareholders to waive pre-emption rights.
CloudTag said that if the notes are converted into ordinary shares, it will issue one warrant to the investor for each share.
CloudTag also said it has received a non-binding purchase order for its Cloudtag Track product from its European distributor Second Chance Ltd. The order, for which a delivery date still needs to be agreed, would have a value of GBP880,000. The customer wasn't named.
CloudTag said that, while Second Chance is unlikely to achieve its order commitment of USD5.2 million in 2016, it is inclined to extend the agreement with Second Chance into 2017, as there were mitigating factors such as CloudTag's decision in September to move its manufacturing to a larger manufacturer.
Late in September, Cloudtag had raised GBP550,000 from a share issue at 15.5 pence. The stock closed down 4.9% at 13.56p Monday.
By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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