December 2016 - Quarterly Report

Highlights
  • Focused and pursued Sales for the Company's Drone products, presented Rova, Roam-e and Vecta to 30 US agents and buyers and prepared for the Consumer Electronics Show in Las Vegas.
  • Executed a successful "cost reduction program" of closure of non-core operations to reduce monthly cash burn and to increase operational runway.
  • Closed OTT Premium business and OK Smartwatches to focus entirely on scaling up drone business and delivering sales.
  • Resolved legal and Board issues to focus on adding value to shareholders.
  • Solid cash balance of $7.1 million at end of quarter IOT Group's Rova
About IOT Group Limited (Internet of Things)

IOT Group has tapped into global niche markets by adapting and enhancing existing trend products and making them more affordable, useful and innovative for consumers. The IOT Group is designing and developing a range of drones including ROAM-e, our flying selfie camera, facial recognition and tracking software and much more; as we look to create a complete IoT ecosystem.

IOT Group Limited

ABN 66 140 475 921

Level 9

100 William Street

EAST SYDNEY NSW 2000

Phone: 1300 205 955

Email: info@theiotgroup.com

www.theiotgroup.com

Scott Brown Non-executive Chairman Ian Duffell Executive Director

Tod McGrouther Non-executive Director Ron Hollands Company Secretary

Business Update

IOT Group Limited (ASX: IOT) (IOT Group) (the Company) is pleased to provide this update to shareholders for the quarter ended 31 December 2016. During the period, the Company made significant progress both operationally and corporately.

Solid Operational Progress

  • During the Quarter, the Company made significant changes to the operational business and refocused the business to fast-track revenues. IoT Group developed and implemented the go-to-market strategy to clearly focus on marketing its range of world leading drone products.

  • As a result of this focused approach on the Company's drone business, the Board of IoT Group closed the non-core businesses which has reduced staff numbers by over 50%. This refocus has dramatically reduced costs and now allows the team to focus on sales of its Drones business.

  • Over the last quarter, the Company made several strategic decisions and achieved necessary milestones to ensure that business focus remains on the Company's Drones business.

    Drone Business Update

  • During the Quarter, IOT Group's marketing team worked to finalise websites, packaging and branding for the Rova, Roam-e, Vecta for sales presentations for December, the Consumer Electronics Show in January and their product launches in 2017.

  • In December, the US distribution IOT Team presented to over 30 agents and buyers to start the sales/order process in the US. These presentations took the team across the US and is building a sizeable order book for delivery Q2 onwards of 2017. Presentation were made of the Rova, Roam-e and Vecta with rollout programs being put in place for each IOT Drone product to be launched in 2017.

    IoT Group's ROVA personal drone with initial orders of 40,000 units placed with manufacturer AEE

  • Since the balance date, the Company announced that it had received a favourable customer reaction to the ROVA personal drone product. IoT Group has placed an order for the manufacturer (AEE) for 40,000 units funded by the Company's current cash reserves.

  • As a result of placing the order, the Company has been extended its distribution exclusivity rights from Australia, New Zealand and Japan by including the USA, Canada and Mexico.

  • The Company is expecting USA orders will be processed in February and expected in stores through March - April 2017.

  • By refocusing the IOT Group's core business this quarter, it has resulted in a significant reduction in the operating costs, tied in with the aggressive Sales program of its Drones business, IOT Group is confident that significant sales of drone products will occur in the following quarters.

Corporate

  • As at 31 December 2016, IOT Group had $7.1 million in cash. During the December Quarter, the Company continued to develop its business with net expenditure on operations being $2.9 million.

  • During the quarter the Company strengthened the Board with Mr. Tod McGrouther joined the Board as non-executive director.

  • During the quarter the Company ended the legal proceedings with Mr Kantor and his former business Coshareholders (Co - shareholders) in Roam Systems Pty Limited as detailed in the ASX announcement of 10 November 2016. The Company intends to call a meeting of shareholders to approve the cancellation of 27,715,610 shares in the Company.

Issued and quoted securities at end of current quarter

Total number

Number quoted

Fully Paid Ordinary Shares on issue

742,666,883

483,828,419

Unlisted options exercisable at $0.07 (7.0 cents) per option expiring on 30 June 2019

57,199,825

-

Unlisted options exercisable at $0.07 (7.0 cents)

per option expiring on 30 June 2019 upon achieving sales targets

4,000,000

-

Unlisted Employee and Director Options (various exercise prices).

51,700,000

-

Unlisted Options exercisable at 9 cents 31/12/22

7,750,000

-

Unlisted Options exercisable at $0.036 (3.6 cents) expiring 31 December 2017

5,833,286

-

For further information, please contact:

For further information on the Company please contact Investor & Media Relations contact: Jane Morgan jm@janemorganmanagement.com.au

Ph: + 61 (0) 405 555 618

IOT's products at the Consumer Electronics Show

IOT Group Limited published this content on 31 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 01 February 2017 08:41:03 UTC.

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