Wednesday 3 May 2017
OPERATIONAL UPDATE-
Highlights
The IOT Group Limited (ASX: IOT) ("IOT Group" or "the Company") is pleased to update its shareholders on its activities.
The key points are:
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Trial Purchase Orders being converted into commercial quantities
Confirmed Purchase Orders of 2,600 ROVA for immediate delivery
Expect further and larger Purchase Orders over next month
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Positive discussions with other US retailers
Accounts being opened with additional Major Big-Box retailers
Expect up to 20,000 stores carrying ROVA and Air-Selfie by end of CY2017
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ROVA & AirSelfie receiving extremely favourable response
Most retail accounts plan to stock both products
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Trial Purchase Orders being converted into commercial quantities
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Background
IOT was formed and listed in March 2016 by combining a number of entities with various IOT related products. IOT's initial feature product was the ROAM-e.
By 4Q CY2016 it was clear to the IOT Board that the ROAM-e unique concept of coaxial exposed blades was being impacted by a trend towards "safe drones" with enclosed blades. As such IOT sought to re- orientate its product line with the introduction of ROVA. At this stage ROAM-e is still in development, to be re-positioned and compete with conventional outdoor quadcopters.
The market opportunity and the distribution network created by the introduction of the ROAM-e is now being exploited by the launch of the ROVA and AirSelfie
Over the last 6 months as part of its restructure, IOT has undertaken a number of steps including:
Discontinuation of non-core products;
Cleaning up outstanding legacy issues from previous strategy; as well as
Reducing staff numbers by nearly two thirds.
The recently released March 2017 Quarterly Results includes a number of significant impairments and redundancies but leaves the company "legacy free", with a heavily reduced cash burn going forward.
The objective is to allow IOT to concentrate on what it believes to be one of the most significant opportunities in the IOT market place.
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Products
IOT is currently focussing on two products - ROVA and AirSelfie. In summary, ROVA's features include:
Positioned as a selfie drone for lifestyle use vs a technical drone for enthusiasts;
Designed with safety in mind. Enclosed propellers and unique obstacle avoidance technology allow consumers to fly with confidence;
Easy to fly from the bespoke ROVA app, ROVA provides superb photography with it's 12mp
camera and 1080 @60fps recording;
ROVA is priced at a very accessible price point for new users to enter the drone market. It is almost half the price of the most serious competitor; and
ROVA's unique features and benefits are currently being marketed in a way that focuses on the role it can play in people's lives vs the technical specs of a drone
In summary, AirSelfie's key features are:
The only portable flying camera that can be integrated into a mobile phone cover;
A portable power bank allows 20 charges. Each charge provides 3 minutes of flying time;
Small and lightweight - fits into the palm of your hand;
Stable flying and hovering due to it's sophisticated sensors;
Easy to fly from the bespoke app; and
Stylish Italian design with an anodised aluminium frame
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IOT USA
Over the last 6 months IOT has sought to put in place a business model and practices consistent with
its move from being a "tech innovator" to being a "profit focused" company.
The previous arrangement with TopTech LLC for US sales and marketing created an unprofitable multi commission structure within the transaction process between the US agents, Top-Tech LLC and IOT.
During the March 2017 Quarter IOT re-negotiated its agreement with Top Tech LLC to build the distribution channels in the US. This arrangement simultaneously cancels all other agreements with TopTech LLC and Terrapin Ventures.
The new US distribution arrangements benefit IOT and its shareholders, by focussing the US team on margins and profitability rather than solely upon sales commission. IOT have established the US entity, IOT Group USA LLC ("IOT USA"). The original Top-Tech team are now 30% shareholders of the IOT USA.
Bryan Corlett has become Chief Executive Officer of the US sales office and now works exclusively for IOT USA. IOT USA's Managing Members are majority controlled by IOT Group Ltd representatives.
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Distribution Network
IOT is building a significant network of distribution outlets in North America. The table below details the scale and scope of IOT's current clients with Purchase Orders and "in progress" potential retail accounts.
Retailer
Scale
Amazon
On-line
Apple Stores
Over 400 Stores
B&H Photo
Large online presence
Barnes and Noble
640 Stores
Bed Bath & Beyond
1504 Stores
Best Buy Canada
Over 200 stores
Best Buy US
Over 1000 Stores
Brookstone
Over 200 stores
Hammacher Schlemmer
Over 50 million catalogues per annum and an Online presence
Macy's
728 Stores
Sam's Club
660 Stores
Target
1807 Target Stores
T-Mobile Stores
5,000 Stores
Walmart
4,200 Consumer Electronics ranging stores.
Wynett
Large distributor in US for smaller chains and single CE outlets.
To date IOT have received confirmation of purchase orders for 2,600 ROVA. These are for immediate delivery. IOT expects further and larger Purchase Orders in the immediate future.
All Accounts are now ranging for the pre-Christmas period and Purchase Orders are now being received for Q3 delivery. IOT believes it is well positioned by having a range of highly anticipated mass market consumer electronic products at an affordable gift price point.
Based on the Accounts that have been opened with a number of large North American retailers, ROVA and the AirSelfie are expected to be ranged up to 20,000 retail outlets plus three major online retailers across North America by the end of 4Q CY2017.
Meetings with other major retailers are being held across North America. IOT will announce Purchase Orders once they have been received.
- Product Pipeline
IOT are currently exploring new opportunities for Consumer Tech Products to take advantage of its growing North American sales distribution network. IOT will be announcing these new products over the next 6 months.
IOT Group Limited published this content on 03 May 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 24 May 2017 21:54:13 UTC.
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