(FITB) Fitbug Holdings

Fitbug Holdings Plc / Epic: FITB.L / Index: AIM / Sector: Leisure

21 October 2011

Fitbug Holdings Plc ('Fitbug' or 'the Company')

Signs Agreement With MeYou Health

Fitbug Holdings Plc, the AIM traded provider of online personal health and well-being services, is pleased to announce that it has signed a device and software licence agreement with Boston-based MeYou Health, a wholly-owned subsidiary of Healthways, Inc. (Nasdaq: HWAY). This agreement will see Fitbug's technology support MeYou Health propositions and is in line with the Company's corporate strategy to expand its presence in the US health market. 

MeYou Health delivers web and mobile technologies designed to transform social networks into support systems and improve the well-being of users.  Recognising that people often fail when trying to make big, unrealistic health changes, MeYou Health suggests daily small actions and enhances social ties to inspire meaningful, lifelong change. 

Fitbug CEO Paul Landau said, "While the revenue from this pilot stage project at MeYou Health is modest, it offers significant future potential and presents an exciting opportunity to partner with an innovative leader in the US Health App and mobile health challenge arena.  The roll out of our online personal health and well-being services continues to gather momentum as demonstrated by the recent signing of a Master Services Agreement with the health services arm of one of the largest health insurers in the US and the opening a US sales and customer support office.  We look forward to strengthening this further as we increasingly expand our presence in our chosen markets."

Trapper Markelz, Head of Product at MeYou Health, said, "Choosing the right partner was a really important decision for MeYou Health.  We carried out a full market review looking at integrated device and software platforms plus the vendor's range of support services and value creation.  Fitbug was the clear leader and its technology is already proving to be versatile and straight forward to integrate."

**ENDS**

For further information visit www.fitbugholdings.com or contact:

About Fitbug

Fitbug is a leading provider of online health and well-being services to help individuals to improve their lifestyles by making realistic changes to their daily routine.  It combines activity tracking devices, which download to www.fitbug.com to provide an understanding of each user's daily activity achievements, with web technology which provides users with personalised weekly activity and nutrition targets, feedback, advice and encouragement. 

Key market sectors include health insurance and rewards providers, workplace health programmes, Primary Care Trusts, fitness operators and consumers.  Increasingly, Fitbug's platform acts as the driving force behind third party services such as white label sites, activity driven games and challenge microsites and rewards programmes.

 
The Company's main focus is now on building strategic partnerships with organisations, with the United States as a key market, which can integrate Fitbug into their own service/product offerings or resell to their customer base. 

Fitbug has a strong team headed by Executive Chairman Fergus Kee who was the former Managing Director of Bupa's £2.1 billion turnover UK and North American Division.

About MeYou Health and Healthways

Further information about MeYou Health and Healthways can be found on www.meyouhealth.com and www.healthways.com 

Healthways ia a leading US provider of specialised, comprehensive solutions to help people maintain or improve their health and well-being and, as a result, reduce overall costs. Its customer base includes 80% of US health insurance plans, 30 Blue Cross Plans and over 1000 employers. In total its services cover 38 million lives.

Fitbug Holdings Plc / Epic: FITB.L / Index: AIM / Sector: Leisure

22 September 2011

Fitbug Holdings Plc ('Fitbug' or 'the Company')

Interim Results

Fitbug Holdings Plc, the AIM traded provider of online personal health and well-being services, announces its results for the six months ended 30 June 2011. 

Overview

·    Reduced pre-tax loss of £189,000 (2010: loss of £291,000)

·    Strong interest from blue chip companies operating in the sophisticated US health market 
reflected by recent deals and growing sales pipeline

·    Agreement with the wellness services arm of one of the largest health insurers in the US - 
serves up to 60 million people in its entirety

·    Appointed new, ex Bupa, UK Head of Sales starting in October 2011

·    Strong revenue prospects for 2012 and 2013 with significant new business pipeline

Executive Chairman's Statement

I am pleased to report that the first half of 2011 saw reduced losses and significant progress in developing the capability of the Fitbug business.  We have focussed on building the necessary foundations to deliver strong growth in 2012 and 2013, particularly in the US market.

In my first full statement following my appointment as Executive Chairman in April, I set out my strong belief in the market potential for Fitbug's services, particularly in the US where the continued increase in healthcare costs, forecast to reach 20% of GDP by 2018, is widely recognised as unsustainable.  In the US, heightened obesity concerns and the Obama health reforms are together driving increased focus among health insurers on consumer engagement, activity tracking and health behaviour change which all play strongly in favour of Fitbug's offering.

Our main focus through 2011 to date has been on the large US healthcare market, which Fitbug entered in 2010.  Paul Landau, CEO of Fitbug Limited, and I have spent significant time in the US over recent months meeting with existing and prospective US partners/customers, assessing the opportunity and evaluating how best to realise that potential.  Developing these larger US accounts takes time but this work is now starting to bear fruit.  Four deals were announced by Fitbug in June 2011 including workplace health programmes for two major US corporations covering 16,000 employees and other smaller corporate contracts have since been agreed.  More importantly, earlier this month Fitbug signed a Master Services Agreement ('MSA') with the health services arm of one of the largest health insurers in the US, which through its businesses serves more than 60 million Americans.  This MSA accredits Fitbug as a supplier of services and agrees the overall terms of trade.  The first two Statements of Work under this MSA have also been agreed and will be implemented by mid October 2011.  Further opportunities that would fall under this MSA are under discussion.

After six months of market development activity, the overall US sales pipeline for 2012 is strong.  In line with this, we are planning to open a US sales and customer support office imminently to service this future growth and build revenue.  We hope to be in a position to announce further agreements and developments in the near future.

We also continue to develop Fitbug in the UK and other international markets.  Our partnership agreement with the rewards subsidiary of South Africa's largest health insurer, Discovery Health, announced in May 2011, the subsequent deals with Aujourdhui.com, France's leading diet club, and the relationship with Holmes Place International in the Middle East, further broaden Fitbug's market and customer base.

The UK remains a core market with great potential and an ever increasing understanding of the role that technology can play in delivering lifestyle and behavioural change solutions.  During the period, Fitbug secured business with various organisations and strengthened its pipeline of new prospects across various channels.  With significant time and focus being invested in the US sales strategy, we found ourselves needing additional resources to maximise our UK efforts.  We therefore employed a new UK Head of Sales and Business Development to accelerate revenue growth with particular focus on large employers and the Employee Benefit Consulting firms.  With over 25 years experience in the health industry this is a key appointment.  He joins Fitbug in early October.  For the last four years he has held the position of Commercial Manager in Bupa's client management division, responsible for a team of strategic account managers and a portfolio of large corporate clients spanning Bupa's full range of wellness and health insurance products.  Prior to that he managed the National Accounts team in Bupa's UK insurance division.

Capital investment made in Fitbug's software platform in the last financial year is now demonstrating its worth by enabling numerous partnership/sales discussions and innovative propositions to be delivered to meet the demands of the growing wellness markets in which we operate.  These propositions include API integration and activity based games and virtual challenges.  Over the coming period several important new developments will be released including Fitbug's first mobile 'App', the integration of additional tracking devices and numerous modifications to the user's online experience.  

Financials

In July 2011, the Company raised £770,000 by way of a placing of 19,250,000 new ordinary shares.  These funds, together with the strengthening of the balance sheet via conversion of outstanding debt earlier in the year, are being primarily used to support and accelerate the development of the Company's business in the US.

The results for the six months to 30 June 2011 show that the pre-tax loss for the period reduced to £189,000 (2010: loss of £291,000).  Whilst revenue remained flat at £793,000 (2010: £798,000), gross profit margin increased 4% to £525,000 (2010: £505,000).  Overhead and administrative expenses from continuing operations increased by 3% in the period to £871,000 (2010: £848,000).  

In the period, NW1 Investments Limited waived interest payable due from the Company of £75,000 and converted £175,000 of a loan to the Company for 3,500,000 ordinary shares in the Company, which resulted in a gain against the share price at the time of the transaction of £96,000.  At the end of the period, the Group's cash position was £172,000 (2010: £165,000).

Outlook

The business is now in a fundamentally stronger position than it was a year ago.  It has a clear strategy focussed on helping to deliver lifestyle and health behaviour change in key market sectors including health insurance, wellness services, rewards and workplace health programmes.

Geographically, the most important market is the US.  The main building blocks to deliver that strategy are now in place.  With the core Fitbug platform established, the propositions in good shape and with growing market interest, the over-riding focus is on driving revenue growth.  Year-to-date progress including the July fundraise, recent key account wins, a healthy sales pipeline of high quality partners, and the appointment of an experienced business development executive in the UK, leave the business well placed to deliver.

Fergus Kee

Executive Chairman

21 September 2011

For further information visit www.fitbugholdings.com or contact:

Consolidated statement of comprehensive income

for the period ended 30 June 2011

Consolidated statement of changes in equity

for the six months ended 30 June 2011

The transfer to share premium in the period relates to the profit reflected in the statement on comprehensive income relating to the issue of equity in exchange for debt, which under United Kingdom law must be taken to share premium account.       

Consolidated Balance Sheet

at 30 June 2011

Consolidated cash flow statement

for the six months ended 30 June 2011

Unaudited notes forming part of the consolidated interim financial statements

for the six months ended 30 June 2011

1      BASIS OF PREPARATION

Fitbug Holdings plc is a company incorporated in the United Kingdom under the Companies Act 2006. Its registered office address is 1^st Floor Waterside House, 47-49 Kentish Town Road, London NW1 8NX.

The condensed consolidated interim financial statements of the company for the six months ended 30 June 2011 comprise the company and its subsidiaries (together referred to as "the group"). These interim statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The interim financial information has been prepared using the same accounting policies, presentation, method of computation and estimation techniques as are expected to be adopted in the group financial statements for the year ending 31 December 2011 and which were adopted in the audited group financial statements for the year ended 31 December 2010. During the period the Company issued shares with a market value of £78,750 at the date of issue in consideration for the cancellation of debt with a face value of £175,000. The difference between market value of the shares issued and the carrying value of the debt has been taken to profit in line with IFRIC Interpretation 19.

The financial information for the year ended 31 December 2010 has been extracted from the statutory accounts for that period. The auditors have reported on the statutory accounts for the year ended 31 December 2010 and their report was unqualified. The auditors' report drew attention by emphasis of matter to issues surrounding the ability of the company to continue as going concern. A copy of those financial statements has been filed with the Registrar of Companies.

The condensed consolidated interim financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) as adopted in the EU. While the financial figures included in this half yearly report have been computed in accordance with IFRSs as adopted in the EU applicable to interim periods, this half yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34.

2      LOSS PER SHARE

The loss per share from continuing and discontinued operations is based on a loss for the period attributable to equity holders of the Parent Company of £189,000 (2009 - loss of £291,000) and the weighted average number of ordinary shares being in issue for the period of 104,737,195 (2009 - 37,985,195).The loss per share from continuing operations is based on a loss for the period of £189,000 (2008: £333,000) and the same number of ordinary shares.

The exercise of the outstanding options would reduce the loss per share and hence have an anti-dilutive effect. There are 13,450,000 (2009: 1,450,000) shares that could potentially be issued under the terms of options that will potentially reduce future earnings per share.

3     GOING CONCERN

       The condensed interim financial statements for the six months ended 30 June 2011 have been prepared on the assumption that the Group will be able to continue trading as a going concern for the foreseeable future. At that date the Group had net liabilities of £241,000, which includes a £385,000 loan from NW1 Investments Limited, a company connected to 2 of the directors of the Group.

       In July 2011, the Company raised £770,000 (realising £735,000 after issue costs) by way of a placing of 19,250,000 new ordinary shares of 1 penny each in the company to enable the Group to continue to trade and develop a number of new market opportunities, particularly in the US. In the opinion of the directors, the new funds will provide the Group with sufficient working and development capital for its immediate requirements and they are optimistic that a number of opportunities currently available to them will generate improved revenue and profitability. The ability of the Group to continue as a going concern will depend on achieving revenue growth.

**ENDS**

Notes

About Fitbug

Fitbug is a leading provider of online health and well-being services to help individuals to improve their lifestyles by making realistic changes to their daily routine.  It combines activity tracking devices, which download to www.fitbug.com to provide an understanding of each user's daily activity achievements, with web technology which provides users with personalised weekly activity and nutrition targets, feedback, advice and encouragement. 

Key market sectors include health insurance and rewards providers, workplace health programmes, Primary Care Trusts, fitness operators and consumers.  Increasingly, Fitbug's platform acts as the driving force behind third party services such as white label sites, activity driven games and challenge microsites and rewards programmes.

 
The Company's main focus is now on building strategic partnerships with organisations, with the United States as a key market, which can integrate Fitbug into their own service/product offerings or resell to their customer base. 

Fitbug has a strong team headed by Executive Chairman Fergus Kee who was the former Managing Director of Bupa's £2.1 billion turnover UK and North American Division.