Cloudtag Inc Regulatory News (CTAG)

31 March 2014

CloudTag Inc.

("CloudTag" or the "Company")

Subscription and Issue of Fee Shares

CloudTag, the developer of wearable technology devices, announces that it has conditionally raised a further £50,000 (before expenses) through the subscription of 625,000 new ordinary shares of 0.1 pence each (the "Ordinary Shares") at a subscription price of 8 pence per Ordinary Share (the "Subscription") (the "Subscription Shares") by Anthony (Tony) Reeves, the Company's Non-Executive Chairman (the "Subscription"). Each Subscription Share has a warrant attached to it which entitles the subscriber to subscribe for one new Ordinary Share at 8 pence per share, such warrant to vest immediately on completion of the Subscription and to expire on the third anniversary of vesting (the "Warrants").

The terms and conditions of the Subscription are identical to those governing the £450,000 placing announced earlier today. Accordingly, the Subscription and the grant of the Warrants, is conditional, inter alia, on the Company obtaining approval from Shareholders to their allotment and associated disapplication of pre-emption rights at the Company's Annual General Meeting to be held at 11:00 am on 23 April 2014 at the offices of Fladgate LLP, 16 Great Queen Street, London WC2B 5DG (the "AGM").

Issue of Fee Shares

The Company has also agreed to issue, in aggregate, 412,500 new Ordinary Shares to Kitwell Consultants Limited and Tony Reeves in lieu of outstanding cash fees owed to both parties (together, the "Fee Shares"). The number of Fee Shares issued was calculated on the basis of 8 pence per Ordinary Share.

Kitwell Consultants Limited provides company secretarial services to CloudTag, and is beneficially owned by Mike Hirschfield, the Company's Interim Finance Director. Kitwell has been issued 162,500 Fee Shares (the "Kitwell Fee Shares"). Following the issue of the Kitwell Fee Shares, Mike Hirschfield will have a beneficial holding of 7,037,500 shares in CloudTag, which represents a holding of 4.6 per cent. in the Company following the issue of the Fee Shares, the Subscription Shares and the shares to be issued pursuant to the placing announced earlier today.

As noted above, Tony Reeves is the Company's Non-Executive Chairman. He is being issued 250,000 Fee Shares (the "Reeves Fee Shares") in lieu of outstanding director fees. Following the issue of the Reeves Fee Shares, and assuming completion of the Subscription, Tony Reeves will have a beneficial holding of 875,000 shares in CloudTag, which represents a holding of 0.6 per cent. in the Company following the issue of the Fee Shares, the Subscription Shares and the shares to be issued pursuant to the placing announced earlier today. Tony Reeves also holds 250,000 options over the Company's Ordinary Shares.

Application will be made to the London Stock Exchange for the Fee Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will be effective and trading will commence at 8:00 am on 7 April 2014.

Related Party Transaction

The Subscription and issue of the Reeves Fee Shares are considered a related party transaction under the AIM Rules for Companies. The Directors, other than Tony Reeves, having consulted the Company's nominated adviser, Strand Hanson Limited, consider that the terms on which the Subscription Shares and the Reeves Fee Shares will be issued to Tony Reeves are fair and reasonable as far as its shareholders are concerned.

Total Voting Rights

The Company has no Ordinary Shares held in treasury. The total number of voting rights in the Company following the issue of the Fee Shares will be 148,187,500. Following the issue of the Subscription Shares, and the shares to be issued pursuant to the placing announced earlier today, both of which are expected to occur immediately following the AGM, the total number of voting rights in the Company will be 154,437,500. These figures may therefore be used by shareholders in the Company, at the appropriate time, as the denominator for the calculations 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 under the FCA's Disclosure and Transparency Rules.

Following the issue of the Warrants, and the warrants associated with the placing announced earlier today, the Company will have 6,250,000 warrants in issue.

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