US$5.2 Million Distribution Agreement

25 January 2016

CloudTag Inc.

('CloudTag' or 'the Company')

US$5.2 Million Distribution Agreement

CloudTag (CTAG:LN), the company that brings personal monitoring to the health, wellbeing and fitness markets, is pleased to announce that it has signed a distribution agreement ("Agreement") for a minimum of US$5.2m of device sales with Second Chance Limited ("Second Chance"), for the CloudTag Track and beatSmart Clip, the Company's first wearable product.

Under the terms of the Agreement, Second Chance has agreed to purchase a minimum number of units of the Company's product at a fixed price by 31 December 2016, equivalent to US$5.2 million. These units will be distributed to Second Chance's network of retailers who have over 7,500 stores, with an emphasis on UK and further sales in mainland Europe. Second Chance has obligations to place minimum orders during each quarter in 2016. CloudTag has agreed to grant exclusivity to Second Chance over certain retailers and territories in the EMEA region, subject to Second Chance meeting these required minimum orders.

Second Chance is one of Europe's leading sporting goods distributors with over 25 years' experience, specialising in the distribution of sports related technology and accessories to the Europe, the Middle East and Africa (EMEA) in addition to providing sales acceleration, brand management, marketing and PR to support new products and drive product awareness.

CloudTag's CEO Amit Ben-Haim commented: "I am delighted to have closed our first commercial contract with a proven distributor in the EMEA region and to guarantee some minimum product sales. This marks a significant milestone for the Company."

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