How to add cutline in Illustrator to print/cut in Roland VersaWorks?

I. Create the sticker “cloud” outline,

II. Add the outline to the original,

III. then add a cutline.

I. Create the background cloud outline

1. Live trace in 3 colours (create swatches)
2. expand so paths are visible
   (look for unnecessary paths outside the area and delete them)
3. select all and copy to a new layer
4. locked original layer
5. paste in place on the new layer duplicate layer
6. pathfinder->unite
7. effect->path->offset path
8. Object->Expand Appearance to get rid of more little bits in the shape
9. pathfinder->unite again to be sure only a single solid bounding shape
10. change fill colour to inspect for bits, (notice you may knock out the fill and only a cutline remains)
11. Inspect and try again trashing paths that interfere until a good solid bounding shape

Trouble?

12. During the live trace, an extra path may be encircling the whole, ungroup the paths, and trash the extra paths while drilling down in the layers tab.
13. Object->Ungroup to be able to select paths
14. Change fill colour after pathfinder unites
15. Round corners during path offset

II. Add the cloud outline

1. Instead of rearranging the two layers, unlock the original layer and “drag down” the top layer to the original layer as another object (takes practice), watch the video at 2:28 for how/where the pointer grabs the top layer to drag onto the original layer (the little “selector square” lights up on the right when you drag the coloured sure from one layer to the little sector sure in the next layer. If you do it right it is a “undo move selected” in the edit undo menu
2. Object->Arrange->Send to Back

III. Create a cutline

1. Select All and Object->Group
2. Copy all and paste in place on a new layer again
3. Pathfinder->Unite
4. No Fill
5. Single pixel stroke in the Versaworks colour swatch

Trouble?

6. Add Versaworks swatches to Illustrator
7. Versaworks cutline colour: CYMK: C:0 Y:0 M:100% K:0

Simplified Create a Sticker from a JPG/PNG:

1. New Document
2. Open Palettes: Swatches(open Versaworks library), Trace, Layers, Pathfinder
3. Place
4. Live Trace and Expand to Paths
5. Edit Colour (so whites are white and blacks are black)
6. Copy and Paste in place on a new layer duplicate layer
7. Pathfinder Unite
8. Effect Path Offset
9. Object Expand Appearance
10. Remove Fill and one point Versaworks swatch line.(swap fill/stroke clicking double curved arrow)

Save As *.eps