TIDMRM2
RNS Number : 3366J
RM2 International SA
29 March 2018
29 March 2018
RM2 International S.A.
("RM2" or the "Company")
US$36m Placing, Pref. Share Conversion and Notice of EGM
Conditional Placing of 2,535,211,265 new Ordinary Shares at a
Placing Price of 1 pence each to raise US$36 million before
expenses and Conditional Conversion of All Convertible Preferred
Shares into 3,156,907,940 new Ordinary Shares
Introduction
Your Board announces today that the Company has conditionally
raised US$36 million before fees and expenses by a Placing (to be
effected in two tranches) of 2,535,211,265 new Ordinary Shares to
existing institutional investors, certain directors and members of
senior management at a Placing Price of 1 pence per Placing Share.
For the Placing to proceed, the Company requires Shareholders'
approval to authorise the Directors to disapply existing
Shareholders' pre-emption rights in relation to the issue of the
Placing Shares and the Conversion Shares on a non pre-emptive
basis.
The Company is today posting a circular to Shareholders to give
you notice of the General Meeting to consider and, if thought fit,
approve the Resolutions to grant this authority (the "Circular").
The General Meeting is to be held at 5 Rue de la Chapelle,
Luxembourg, L-1325, Luxembourg at 7 a.m. BST/8 a.m. CEST on 13
April 2018. The formal notice of General Meeting is set out at the
end of the Circular. The Circular is also available on the
Company's website.
Assuming the Shareholders approve the Placing, the issuance of
the first tranche of 1,279,049,295 new Ordinary Shares (gross
proceeds of $18,162,500) (the First Tranche Subscription) will take
place immediately following the General Meeting. The issuance of
the second tranche of 1,256,161,970 new Ordinary Shares (gross
proceeds of $17,837,500) (the Second Tranche Subscription) would
occur ten business days following a drawdown notice issued by the
Company and is subject to the satisfaction of the Key Performance
Indicators described herein. The Board believes that raising equity
finance using the flexibility provided by a non pre-emptive placing
is the only viable option for the Company at this time. This allows
investors the opportunity to participate in the Placing to raise
urgent funding for the Company's survival and avoids the
requirement for a prospectus, which is a costly and time consuming
process.
Should the Placing prove successful and subject to shareholder
authorization, the Board intends shortly afterwards to make an open
offer at the Placing Price of up to the pound sterling equivalent
of EUR5.0 million (the Open Offer), the maximum permitted without
requiring the Company to publish a prospectus under the EU
Prospectus Directive. The Open Offer would be made available to all
Shareholders to allow those Shareholders who could not participate
in the Placing to have the opportunity to invest. Authorization for
the Open Offer would be sought from the Shareholders at the General
Meeting of the Company to be held on 13 April 2018.
For the Placing to proceed, the holders of 120,457,808
Convertible Preferred Shares who are subscribing in the Placing for
at least 75% of the same quantum of Placing Shares (expressed in
British pound sterling) have agreed to convert their Convertible
Preferred Shares into 3,026,761,003 Ordinary Shares at the Placing
Price (the Participating Conversion Shares) and the holders of
14,357,963 Convertible Preferred Shares who are not subscribing in
the Placing have agreed to convert their Convertible Preferred
Shares into 130,146,937 Ordinary Shares in application of the
anti-dilution provisions in the Company's Articles (the
Non-Participating Conversion Shares). Both the Participating
Conversion Shares and the Non-Participating Conversion Shares
include the payment of all accrued dividends on such shares.
The Participating Conversion Shares and the Non-Participating
Conversion Shares are collectively referred to herein as the
Conversion Shares. The Conversion Shares will represent
approximately 65.2 per cent. of the First Tranche Enlarged Share
Capital and 51.8 per cent. of the Enlarged Share Capital assuming
issuance of Shares pursuant to the Second Tranche Subscription.
Following conversion of the Convertible Preferred Shares into the
Conversion Shares (the Conversion), no Convertible Preferred Shares
will remain outstanding and the Company's equity will consist of a
single class of Ordinary Shares.
The Conversion Shares will be issued by using distributable
reserves (to the extent available) and share premium, and will,
when issued, be subject to the Articles, be credited as fully paid
and will rank pari passu in all respects with the Ordinary Shares
then in issue, including the right to receive all dividends and
other distributions declared, made or paid in respect of such
Ordinary Shares after the date of First Admission.
In order to issue such Conversion Shares, the Company requires
Shareholders' approval including authorization to the Board to
disapply existing Shareholders' pre-emption rights in relation to
the issuance of the Conversion Shares on a non pre-emptive
basis.
The Board therefore requests Shareholders to vote in favor of
the authorization to the Board to proceed to increase the
subscribed share capital by an amount of US$36 million and to the
issue of the Placing Shares and the Conversion Shares within the
limits of the authorized share capital and to authorize the
Directors to disapply existing Shareholders' pre-emption rights in
relation to such issue of the Placing Shares and the Conversion
Shares.
The Company intends to use the net proceeds of the Placing to
fund: (i) the retrofitting of existing inventory of RM2 Blockpals
with ELIoT track and trace devices, (ii) the production of new RM2
ELIoT Pallets and (iii) its sales and general administrative
costs.
This announcement (and the Circular) provides you with
information about the Placing and the issue of the Conversion
Shares and explains why the Board considers these matters to be in
the best interests of the Company and its Shareholders, and why the
Directors recommend that you vote in favour of the Resolutions to
be proposed at the General Meeting.
The primary reason for the Resolutions is for the Company to be
able to raise sufficient funds for the Company to augment its
product offering and to meet its ongoing working capital
obligations and to enable the Company to continue as a going
concern.
If all of the Resolutions relating to the Placing are not
successfully passed at the General Meeting, and no other source of
funds has become available to the Company prior to the General
Meeting, the Chairman of the General Meeting will table for
immediate vote either (i) the resolution authorizing the Company to
dispose of all or substantially all of its assets if at such time
there is a viable offer for such assets or (ii) the resolution
authorizing the dissolution with immediate effect and voluntary
liquidation of the Company.
Background to the Placing and use of proceeds
1.1 Information on the Company
RM2 specialises in pallet development, manufacture,
supply and management and is seeking to establish
a leading presence in global pallet supply and
improve the supply chain of manufacturing and
distribution businesses through the effective
and efficient use and management of composite
pallets.
1.2 RM2's strategic progress
Since 2016, the Company made significant progress
in addressing difficulties it has encountered.
Firstly, it closed down its manufacturing facility
in Toronto and outsourced production to experienced,
world class partners. One of these partners,
Jabil, now has a dedicated facility in Ciudad
Juarez in Mexico, which is fully built out,
but in light of the distressed financial position
of the Company is operating below capacity.
Assuming the Placing is successful, it is expected
that Jabil will first retrofit existing inventory
of RM2 Blockpallets with ELIoT devices (described
below). Once the existing inventory is retrofitted,
the Company will be able to provide pallets
in significant numbers and at a fixed and competitive
cost during the second half of the year and
thereafter. Equipment is on site with RM2's
other manufacturing partner, Zhenshi in China,
which will enable it to provide a similar level
of scalable production subject to funding and
product demand.
Secondly, in order to address issues of asset
retention, reduction of theft and utilization,
the Company has developed its RM2 ELIoT tracking
technology. ELIoT comprises a cellular device
which transmits the whereabouts of each pallet,
providing a previously unachievable level of
confidence in asset security. The underlying
technology is believed to be unique to RM2.
The Company has conducted a number of trials
of ELIoT-enabled pallets with customers in North
America and has signed or is in advanced negotiations
for deployment. While the Directors believe
that the RM2 ELIoT device is a robust product
based on trials and information from component
suppliers, it is a new product, and therefore
the longevity of which will be demonstrated
over its course of service.
1.3 Current trading and prospects
RM2 has an extensive pipeline of potential deployments
in North America and Europe, a good percentage
of which it expects to be successfully converted
over the upcoming 12-18 months. These include
numerous potential deployments of ELIoT pallets,
which have generated significant interest from
existing and potential customers following a
number of trials of the product. Discussions
are particularly advanced with a Fortune 500
company in North America around a phased deployment
of pallets into their internal network and expanding
with their supplier network. RM2 is also pleased
to announce that it has signed a 3-year contract
with another supplier in that network.
The conversion of a subset of these opportunities,
deployed and financed on schedule, is expected
to result in the Company generating positive
EBITDA in 2019.
The Company also notes that following the repayment
of the mortgage on the office building in Switzerland
sold last month, the Company is debt free.
1.4 Reasons for the Placing and use of proceeds
As announced on 9 March 2018, the Company believes
it has sufficient financial reserves to cover
its cash overheads only until mid-April 2018.
Beyond this, the proceeds of the Placing will
be required for the Company to meet its ongoing
working capital obligations and enable the Company
to continue as a going concern. Without the
Placing proceeds, the Board believes that it
is highly likely that the Company will become
insolvent, and insolvency proceedings, such
as administration or liquidation, will be commenced.
Accordingly, the net proceeds of this Placing
are expected to be used to fund: (i) the retrofitting
of existing inventory of RM2 Blockpals with
ELIoT track and trace devices, (ii) the production
of new RM2 ELIoT Pallets and (iii) its sales
and general administrative costs.
The Company has conditionally raised $36 million
(before fees and expenses) by way of a conditional,
non pre-emptive placing of 2,535,211,265 new
Ordinary Shares in two tranches at the Placing
Price. The Placing Price represents a discount
of approximately 76 per cent. from the closing
mid-market price of 4.25 pence on 27 March 2018,
being the latest practicable date prior to this
announcement of the Placing, and a discount
of approximately 48 per cent. from the three
month historical average closing mid-market
price of 2.91 pence. Assuming Shareholders approve
the Placing, the First Tranche Subscription
will take place immediately following the General
Meeting. The Second Tranche Subscription would
occur ten business days following a drawdown
notice issued by the Company and is subject
to the satisfaction of the Key Performance Indicators
described herein.
Following First Admission, the First Tranche
Placing Shares and the Conversion Shares together
will represent approximately 91.6 per cent.
of the First Tranche Enlarged Share Capital,
and assuming completion of the Second Tranche
Subscription, following Second Admission, the
Placing Shares and the Conversion Shares together
will represent approximately 93.3 per cent.
of the Enlarged Share Capital. In order to raise
funds quickly and to minimize the time and transaction
costs of the Placing, the Placing Shares are
only being placed with a limited number of existing
institutional shareholders directors and members
of senior management. The Placing Shares are
not being made available to the public.
The Placing Shares will, when issued, be subject
to the Articles, be credited as fully paid and
will rank pari passu in all respects with the
Ordinary Shares then in issue, including the
right to receive all dividends and other distributions
declared, made or paid in respect of such Ordinary
Shares after the date of Admission.
In connection with the Placing, the Company
has entered into Subscription Agreements with
placees. No element of the Placing is underwritten.
In accordance with the terms of the Subscription
Agreements, the Placing is conditional upon,
amongst other things, the passing of the Resolutions,
the Conversion, the conditions in the Subscription
Agreements relating to the Placing being satisfied
or (if applicable) waived, the Subscription
Agreements not having been terminated in accordance
with their terms prior to Admission and First
Admission occurring on or before 19 April 2018.
A drawdown notice for the Second Tranche Subscription
is expected to be issued by the Company before
the end of the year. The Second Tranche Subscription
is subject to the satisfaction of Key Performance
Indicators. Woodford will not be obliged to
subscribe for its pro rata of Second Tranche
Shares in the event that the subscription would
result in a breach of any regulatory or funds
limits set out in any constitutional or compliance
documentation. Woodford will use reasonable
endeavours to procure that any such breach is
avoided, but Woodford will not in any event
be required to reallocate the Fund allocations
specified in the investment agreement to other
Funds.
Application will be made to the London Stock
Exchange for the Placing Shares and the Conversion
Shares to be admitted to trading on AIM. Subject,
inter alia, to the passing of the Resolutions
at the General Meeting it is expected that admission
to AIM will become effective in respect of,
and that dealings on AIM will commence in, the
First Tranche Placing Shares and the Conversion
Shares on or around 19 April 2018.
Related Party Transaction
The table below sets out the positions of the Company's current
Significant Shareholders (as defined in the AIM Rules) and its
Chairman following the issue of the First Tranche Placing Shares,
the Conversion Shares and the Second Tranche Placing Shares.
Existing Holding % of First Holding Holding
holding of Ordinary Tranche of Ordinary of Ordinary
of Ordinary Shares Enlarged Shares Shares
and Convertible after Share after after
Preference admission Capital admission admission
Shares of First of Second of Second
Tranche Tranche Tranche
Placing Placing Placing
Shares Shares Shares
and Conversion
Shares
--------------------- --------------------- ----------- --------------------- -------------
Woodford
Investment
Management,
LLP ,
acting
on behalf
of funds
under
its management 184,380,716 3,220,027,777 66.5% 4,135,520,734 67.8%
------------------ --------------------- --------------------- ----------- --------------------- -------------
Verlinvest 45,631,110 76,432,752 1.6% 76,432,752 1.3%
------------------ --------------------- --------------------- ----------- --------------------- -------------
Ian Molson 12,207,776 279,167,583 5.8% 349,590,118 5.7%
------------------ --------------------- --------------------- ----------- --------------------- -------------
John
James
Walsh 26,439,717 26,439,717 0.5% 26,439,717 0.4%
------------------ --------------------- --------------------- ----------- --------------------- -------------
In addition, certain non-executive directors and members of
senior management have conditionally subscribed for Placing Shares
as set forth in the table below:
Existing Holding % of First Holding Holding
holding of Ordinary Tranche of Ordinary of
of Ordinary Shares Enlarged Shares Ordinary
and Convertible after Share after Shares
Preference admission Capital admission after
Shares of First of Second admission
Tranche Tranche of Second
Placing Placing Tranche
Shares Shares Placing
and Conversion Shares
Shares
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Lord
Rose 1,440,000 19,045,634 0.4% 36,651,268 0.6%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Paul
Walsh 2,029,091 6,430,500 0.1% 10,831,908 0.2%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Charles
Duro 627,500 2,388,064 0.0% 4,148,627 0.1%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Kevin
Mazula - 7,629,108 0.2% 7,629,108 0.1%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
JF Blouvac 2,500,000 10,129,108 0.2% 10,129,108 0.2%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Elizabeth
Pauchet 5,412,000 13,041,108 0.3% 13,041,108 0.2%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Payment for the subscription of Placing Shares by Kevin Mazula,
JF Blouvac and Elizabeth Pauchet (Management Subscribers) will be
effected by means of a reduction in salary over an eighteen-month
period following the Placing. Placing Shares subscribed for by
Management Subscribers shall be held in escrow by the Company's
Luxembourg attorneys and shall be released in eighteen equal
tranches, unless the employment relationship ceases before the end
of such eighteen-month period, in which case such shares shall be
released from escrow.
Woodford's and R. Ian Molson's (through a family vehicle, called
The Accommodation Trust) participation in the Placing and the
Conversion, Verlinvest S.A.'s, participation in the Conversion and
the participation in the Placing of the non-executive directors and
Management Subscribers are deemed related party transactions under
Rule 13 of the AIM Rules. Jan Dekker, being the only Director not
participating in the Placing and/or the Conversion, considers,
having consulted with the Company's nominated adviser, Strand
Hanson, that the terms of the respective participations are fair
and reasonable insofar as the Shareholders as a whole are
concerned.
General Meeting
A notice convening a General Meeting, to be held at 5 Rue de la Chapelle, Luxembourg, L-1325,
Luxembourg at 7 a.m. BST/8 a.m. CEST on 13 April 2018, is set out at the end of the Circular.
At this meeting resolutions will be proposed to authorise the Directors to issue (i) the Placing
Shares, (ii) the Conversion Shares and (iii) Ordinary Shares pursuant to an Open Offer, on
a non pre-emptive basis, and to amend the Articles accordingly, as set out in the Notice of
General Meeting.
For the Resolutions to be validly adopted, at least two thirds of the votes validly cast by
Shareholders present or represented at the General Meeting must be cast in favour in each
class of Shares and with a quorum of at least 50% of the Shares issued in each class of shares
(for the resolutions related to the Conversion Shares).
Action to be taken
Shareholders will find enclosed with the Circular a Form of Proxy or Form of Instruction for
use at the General Meeting. Whether you are going to attend the meeting or not, please complete
the Form of Proxy or Form of Instruction, following the instructions, and return it as soon
as possible to the Company's Registrars, preferably through the use of their electronic voting
system. Electronic votes must be lodged or forms must arrive at the latest by 7 a.m. BST/8
a.m. CEST on 11 April 2018 for Forms of Instruction and 7 a.m. BST/8 a.m. CEST on 12 April
2018 for Forms of Proxy. Returning the form will not stop you from attending the meeting and
voting if you wish to do so.
Recommendation
The Directors recommend that you vote in favour of the Resolutions to be proposed at the General
Meeting.
R. Ian Molson will not vote on the Resolutions relating to Placing (which include those related
to the Conversion) due to a conflict of interest. All other Directors will be voting in favour
of the Resolutions.
Risk Factors
Any investment in the Company is subject to a number of risks.
Accordingly, prospective investors should carefully consider the
risks set out below as well as the other information contained in
this announcement (and the Circular) and any other publicly
available information about the Group before making a decision
whether to invest in the Company. The risks described below are not
the only risks that the Group faces. Additional risks and
uncertainties that the Directors are not aware of or that the
Directors currently believe are immaterial may also impair the
Group's operations. Any of these risks may have a material adverse
effect on the Group's business, financial condition, results of
operations and prospects. In that case, the price of the Ordinary
Shares could decline and investors may lose all or part of their
investment. Prospective investors should consider carefully whether
an investment in the Company is suitable for them in light of the
information in this announcement (and the Circular) and their
personal circumstances.
Before making an investment, prospective investors are strongly
advised to consult an investment adviser authorised under FSMA who
specialises in investments of this kind. A prospective investor
should consider carefully whether an investment in the Company is
suitable in the light of his or her personal circumstances, the
financial resources available to him or her and his or her ability
to bear any loss which might result from such investment.
The following factors do not purport to be a complete list or
explanation of all the risks involved in investing in the Company.
In particular, the Company's performance may be affected by changes
in the market and/or economic conditions and in legal, regulatory
and tax requirements.
1 RISKS RELATING TO RM2 AND ITS BUSINESS
1.1 Early stage of operations
The commencement of RM2 earning material
revenues is difficult to predict and there
is no guarantee that RM2 will generate any
material revenues in the near future. RM2
has a limited operating history upon which
its performance and prospects can be evaluated
and faces the risks frequently encountered
by developing companies. These risks include
the uncertainty as to which areas to target
for growth. There can be no assurance that
RM2's proposed operations will be profitable
or produce a reasonable return, if any,
on investment.
1.2 Product development
RM2 intends to continue to develop products
which are designed to have a commercial
application. There is no guarantee that
any such product will be successful nor
that any products will actually result in
any commercial applications.
The success of RM2 is reliant upon there
being a demand for its products. In addition,
RM2 relies upon third parties to incorporate
its products into their own processes. A
particular third party having access to
RM2's products may fail to use the products
in an effective process or the products
or processes may not be or become commercially
viable. There can be no assurance that such
products will achieve commercial success
or be an attractive alternative to conventional
products or processes.
It is possible that RM2 focuses its activities
on a limited number of products and technologies
and that after such further development
has taken place, RM2 finds that the resulting
product is not successful or has no profitable
commercial application, or that the resulting
product has been superseded by other products
which have a more profitable commercial
application when compared with those of
RM2.
The development and manufacture of products
takes some time to complete. Depending on
the process, RM2 may not be able to develop
its products within the timeframe required
by its potential customers and/or that targeted
by its competitors. Further, the success
of RM2 may depend on its continued ability
to develop new products and to meet potential
customers' changing requirements.
1.3 Market acceptance
The development of a market for a new product
is affected by many factors, most of which
are beyond the control of RM2, including
the emergence of newer and more competitive
products or processes, the costs of the
products, regulatory requirements, including
any future regulatory changes, end-users'
perceptions as to the safety of any product
and the propensity of end-users to try new
products or processes.
If a market for any product fails to develop
or develops more slowly than anticipated,
RM2 may fail to achieve profitability with
respect to the associated products. In addition,
RM2 may not continue to develop such products
if market conditions do not support the
continuation of those products.
1.4 RM2 may experience accelerated demand for its products and services
RM2 expects to be able to meet its current
capital expenditures from internal resources
and the net proceeds of the Placing. In
the future, it may explore other sources
of financing including invoice discounting
and other debt facilities. A need to fulfill
large orders rapidly may require RM2 to
seek additional capital which could entail
the issuance of new equity, debt financing
or some combination thereof. If RM2 is unable
to raise the necessary additional financing
for any expanded working capital requirement
it could adversely affect its ability to
expand its business.
1.5 RM2 is expected to experience rapid growth. If RM2 is not
able to effectively manage its growth, its operations could be
damaged and profitability reduced
RM2's business and operations are expected
to experience rapid growth. This future
growth could place significant demands on
RM2's operational and financial infrastructure
and its ability to expand to meet such growth
will be tested. RM2 may need to expand and
enhance its infrastructure and technology,
and improve its operational and financial
systems and procedures and controls from
time to time in order to be able to match
that growth. If RM2 is unable to manage
its growth effectively, its operations could
be harmed and profitability reduced. The
growth of RM2's sales and profits in the
future will depend, in part, on its ability
to expand its operations through the roll-out
of its products and services to new potential
customers and into new markets and geographies.
Furthermore, in order to manage its planned
expansion, it will need continually to evaluate
the adequacy of its management capability,
operational procedures, financial controls
and information systems. Accordingly, there
can be no assurance that RM2 will be able
to achieve its expansion goals on a timely
or profitable basis.
1.6 RM2 will need to ensure that its financial risk limitation
policies, procedures and practices remain suitable as RM2 grows
The financial risk limitation policies,
procedures and practices RM2 has established
to date are suitable for a company of the
size and stage of development of RM2. As
RM2 seeks to grow, the design and implementation
of RM2's policies, procedures and practices
used to identify, monitor and control a
variety of risks may fail to be effective.
RM2's financial risk limitation methods
rely on a combination of internally developed
technical controls, industry standard practices,
observation of historical market behaviour
and human supervision. These methods may
not adequately prevent future losses.
A lack of effective internal controls could
have a material adverse effect on RM2's
reputation, business, financial condition
and operating results. Any material weaknesses
may materially adversely affect RM2's ability
to report accurately its financial condition
and results of operations in the future
in a timely and reliable manner.
1.7 RM2's expansion may not be successful
RM2's operations are subject to certain
risks including changes in government policies,
changes in political and economic conditions,
changes in regulatory environments, exposure
to different legal, regulatory or fiscal
standards, difficulties in staffing and
managing operations, and potentially adverse
tax consequences. There are no guarantees
that RM2 will be able to successfully expand
its operations in line with its current
expectations.
1.8 RM2 may experience unforeseen delays and cost overruns when
rolling out its products and services
Management effort and financial resources
are being employed by RM2 in rolling out
its products and services to potential customers.
Although RM2 has budgeted for expected costings,
additional expenses in the event of unforeseen
delays, cost overruns, unanticipated expenses,
regulatory changes and increases in the
price of materials and other manufacturing
equipment utilised in the production of
RM2's pallets may negatively affect RM2's
business, financial condition and results
of operations.
1.9 RM2 is dependent on developing relationships with existing and potential customers
The success of RM2's business is, and is
expected to continue to be, dependent on
the development of commercial relationships
with its existing and potential customers
and suppliers. There is no guarantee that
these relationships will be developed sufficiently
to the point of generating significant revenue
for RM2, or that such potential customers
will not seek to use alternative providers
of products and services similar to those
of RM2.
1.10 RM2 is dependent on continued availability of raw materials and manufacturing equipment
The raw materials and manufacturing equipment
utilised by RM2's manufacturing partners
in the delivery of its products and services
are readily available from a number of suppliers
and counterparties. However, any restriction
on the availability of such items may negatively
affect RM2's business, financial condition
and results of operations.
1.11 The Company depends on component and product manufacturing
and logistical services provided by outsourcing partners
Substantially all of the Company's manufacturing
is performed in whole or in part by outsourcing
partners located in Mexico and China. The Company
has also outsourced much of its transportation
and logistics management. While these arrangements
may lower operating costs, they also reduce
the Company's direct control over production
and distribution. It is uncertain what effect
such diminished control will have on the quality
or quantity of products or services, or the
Company's flexibility to respond to changing
conditions. Although arrangements with these
partners may contain provisions for warranty
expense reimbursement, the Company may remain
responsible to the consumer for warranty service
in the event of product defects and could experience
an unanticipated product defect or warranty
liability.
Any failure of the Company's outsourcing partners
to perform may have a negative impact on the
Company's cost or supply of components or finished
goods. In addition, manufacturing or logistics
in these locations or transit to final destinations
may be disrupted for a variety of reasons including,
but not limited to, natural and man-made disasters,
information technology system failures, commercial
disputes, military actions or economic, business,
labour, environmental, public health, or political
issues.
The Company has invested in manufacturing process
equipment, much of which is held at certain
of its outsourcing partners, and has made prepayments
to certain of its suppliers associated with
long-term supply agreements. While these arrangements
help ensure the supply of components and finished
goods, if these outsourcing partners or suppliers
experience severe financial problems or other
disruptions in their business, such continued
supply could be reduced or terminated and the
net realisable value of these assets could be
negatively impacted.
1.12 The Company faces substantial inventory and other asset
risk in addition to purchase commitment cancellation risk
The Company orders products and builds inventory
in advance of purchase orders. Because the Company's
markets are developing, competitive and subject
to other changes, there is a risk the Company
will forecast incorrectly and order or produce
excess or insufficient amounts of products.
1.13 Future operating results depend upon the Company's ability
to obtain RM2 ELIoT components and products in sufficient
quantities on commercially reasonable terms and on the timely
introduction of LTE-m (Long Term Evolution (4G)) technology
Because the Company currently obtains RM2 ELIoT
components and products from single or limited
sources, the Company is subject to significant
supply and pricing risks. There can be no assurance
that the Company will be able to negotiate,
extend or renew supply agreements on similar
terms, or at all. Suppliers of components may
suffer from poor financial conditions, which
can lead to business failure for the supplier
or consolidation within a particular industry,
further limiting the Company's ability to obtain
sufficient quantities of components on commercially
reasonable terms. The effects of global or regional
economic conditions on the Company's suppliers
also could affect the Company's ability to obtain
components and products. Therefore, the Company
remains subject to significant risks of supply
shortages and price increases.
The cellular LTE-m network is expected to be
introduced throughout much of North America
in the course of 2018. That network will permit
the utilization of a new, simpler and less-expensive
chip-set. When a component or product uses new
technologies, initial capacity constraints may
exist until the suppliers' yields have matured
or manufacturing capacity has increased. The
supply of components could be delayed or constrained,
or a key manufacturing vendor could delay shipments
of completed products to the Company.
1.14 Exchange rate fluctuations
RM2's principal revenues in the near term
are expected to be earned in US$. Currency
fluctuations may affect RM2's operating
cash flow since certain of its costs and
revenues are likely to be denominated in
a number of different currencies other than
US$ and any potential income may become
subject to exchange control or similar restrictions.
Fluctuations in exchange rates between currencies
in which RM2 operates may cause fluctuations
in its financial results which are not necessarily
related to its underlying operations.
RM2 does not currently have any foreign
currency hedges in place. If and when appropriate,
the adoption of a hedging policy will be
considered by the Board.
1.15 Competition
There can be no assurance that potential competitors
of RM2, which may have greater financial, research
and development, sales and marketing and personnel
resources than RM2, are not currently developing,
or will not in the future develop, products
and strategies that are equally or more effective
and/or economical as any products or strategies
developed by RM2 or which would otherwise render
its products or strategies obsolete.
RM2 operates within competitive markets and
the Directors believe that it has adopted a
competitive business strategy. However, RM2's
business, results, operations and financial
condition could be materially adversely affected
by the actions of its competitors (including
their marketing and pricing strategies and product
and services development).
RM2 may be forced to change the nature of its
business as a result of competitive factors
and there is no assurance that RM2 will be able
to compete successfully in the market place
in which it seeks to operate.
1.16 Manufacturing technology
Even if new and advanced manufacturing or
production equipment becomes available for
the production of RM2's products, RM2 may
not have funds available or be able to obtain
necessary financing on acceptable terms
to acquire it for use by its manufacturing
contractors, or agree for its manufacturing
contractors to acquire or utilise it. Further,
any investment RM2 may make in a perceived
technological advance may not be effective,
economically successful or otherwise accepted
in the market.
1.17 RM2's expenses include fixed costs
A significant proportion of RM2's costs
may be fixed and may not then be easily
reduced in the short-term. Therefore, RM2
may not be able to reduce certain expenses
promptly in response to any future reduction
in revenue. Should such a reduction occur
and RM2 be unable to reduce its fixed expenses
accordingly, its business, financial condition
and results of operations may be materially
adversely affected.
1.18 Ability to attract and retain key executives, officers, managers and technical personnel
RM2 is headquartered in Luxembourg. The
Chief Executive Officer is currently based
in North America and the Chief Financial
Officer and the principal sales office are
located in Switzerland. Attracting, training,
retaining and motivating technical and managerial
personnel, including individuals with significant
technical expertise is a critical component
of the future success of RM2's business.
RM2 may encounter difficulties in attracting
or retaining qualified personnel. Managing
from disparate locations can pose challenges
in communication and decision-making. Continued
growth may cause a significant strain on
existing managerial, operational, financial
and information systems resources.
The performance of RM2 depends, to a significant
extent, upon the abilities and continued
efforts of its existing senior management
as well as the recruitment of further senior
management in line with the planned growth
in operations. The loss of the services
or failure to recruit key management personnel
or the failure to retain or recruit key
employees or the inability to effectively
communicate across international offices
could adversely affect RM2's ability to
maintain and/or improve its operating and
financial performance. In common with many
businesses, the success of RM2 will, to
a significant extent, be dependent on the
expertise and experience of the Directors
and key senior management, the loss of one
or more of whom could have a material adverse
effect on RM2.
1.19 RM2's disaster recovery plans may not be sufficient and if
they are not then there could be a material adverse effect on its
financial position
RM2 depends on the performance, reliability
and availability of its information technology
and communications systems. Any damage to or
failure of its systems could result in disruptions
to RM2's operations and websites, which could
reduce its revenues and profits, and damage
its brands.
RM2's systems are vulnerable to damage or interruption
from power loss, telecommunications failures,
computer viruses, computer denial of service
attacks or other attempts to harm its systems,
natural disasters, including floods and fires,
volcanic ash and vandalism, terrorist attacks
or other acts.
RM2's disaster recovery plans may not adequately
address every potential event and its insurance
policies may not cover any loss in full or in
part (including losses resulting from business
interruptions) or damage that it suffers fully
or at all.
RM2 relies on third parties, including data
centres and bandwidth providers, to host and
operate its websites. Any failure or interruption
in the services provided by these third parties
could harm its operations and reputation. In
addition, RM2 may have little or no control
over these third parties, which increases its
vulnerability to service problems. Any disruptions
in the services provided by these parties or
any failure of these providers to handle current
or higher visitor traffic or transaction volumes
could significantly harm RM2's business. RM2
may in the future experience disruptions or
delays in these services. If these providers
were to suffer financial or other difficulties,
their services could be interrupted or discontinued
and replacement providers may be uneconomical
or unavailable. Any of these events could have
a material adverse effect on RM2's business,
operating profit and overall financial condition.
1.20 Political, economic, regulatory and legislative considerations
Adverse developments in the political, legal,
economic and regulatory environment may
materially and adversely affect the financial
position and business prospects of RM2.
Political and economic uncertainties include,
but are not limited to, expropriation, nationalisation,
changes in interest rates, the retail prices
index, changes in taxation, changes in trade
tariffs and trade treaties and changes in
law. Whilst RM2 strives to continue to take
effective measures such as prudent financial
management and efficient operating procedures,
there is no assurance that adverse political,
economic, legal and regulatory factors will
not materially and adversely affect RM2.
1.21 Development of technology
Continuing research on and development of
RM2's technology may be required and there
can be no assurance that any of its future
technology will be successfully developed
or exploited. RM2 may encounter delays and
incur additional research and development
costs and expenses over and above those
anticipated or allowed for by the Directors.
For example while the Directors believe
that ELIoT is a robust product based on
trials and information from component suppliers,
it is a new product which has not yet been
able to demonstrate its longevity.
1.22 Unforeseen factors and developments
RM2's ability to implement its business
strategy may be adversely affected by factors
that it cannot currently foresee, such as
unanticipated costs and expenses, technological
change and severe economic downturn. All
of these factors may necessitate changes
to the business strategy described in this
announcement (and the Circular).
1.23 Market acceptance and future funding
Whilst the Directors believe that there
are viable markets for RM2's products and
services, there can be no assurance that
these will be generally adopted by RM2's
existing and potential client base.
Whilst the Directors believe that, taking
into account the net proceeds of the Placing,
RM2 has sufficient working capital for its
present requirements, that is for at least
12 months from the date of Admission, there
can be no assurance that RM2 would have
sufficient resources to fund further development
beyond that period.
1.24 Regulatory environment
RM2's operations may be subject to a variety
of national, federal, provincial, state, foreign
and local laws and regulations, including environmental,
health and safety laws, regulations, treaties
and conventions (together, "Regulations").
This includes, inter alia, those controlling
the discharge of materials into the environment,
requiring removal and clean-up of environmental
contamination, establishing certification, licensing,
health and safety, taxes, labour and training
standards, operation of equipment or otherwise
relating to the protection of human health and
the environment, and export control regulations.
The amendment or modification of existing Regulations
or the adoption of new Regulations curtailing
or further regulating RM2's business could have
a material adverse effect on RM2's operating
results and financial condition.
Whilst RM2 intends to work to comply with all
applicable Regulations, it cannot predict the
extent to which future earnings or capital expenditures
may be affected by compliance with such new
Regulations. In addition, RM2 may be subject
to significant fines, penalties or liability
if it does not comply with any such existing
or future Regulations.
There may be a change in the regulatory environment
which may materially adversely affect RM2's
ability to implement successfully the strategy
set out in this announcement (and the Circular).
1.25 Intellectual property and proprietary rights
RM2 relies upon maintaining the confidentiality
of the exact nature of the BLOCKPal manufacturing
process and its RM2 ELIoT technology and does
not for example have any patents. The details
of the manufacturing process and its RM2 ELIoT
technology are the Company's most important
intellectual property. The Company protects
this intellectual property by ensuring that
its relevant employees and manufacturers have
confidentiality provisions in their employment
and manufacturing contracts preventing them
from disclosing the confidential information
of the Group to anyone outside of the Group.
RM2 ensures relevant suppliers have entered
into non-disclosure agreements restricting disclosure
by such suppliers of the confidential information
of the Group.
However, RM2 cannot be sure that other competitors
will not infringe upon, violate, challenge or
reverse engineer its intellectual property in
the future. If RM2 is not able to adequately
protect or enforce its intellectual property
rights, its business, results of operations
and financial condition may be materially adversely
affected.
RM2 is also subject to the risk that third parties
may allege that RM2's operations and use of
technology infringes upon their intellectual
property rights. RM2 cannot be sure that such
litigation will not be brought against RM2 in
the future and, if brought, whether RM2 would
be successful in defending itself against such
claims. Moreover, defending such claims may
result in protracted litigation, which could
result in substantial costs and the diversion
of RM2's resources, as a result of which RM2's
business, results of operations and financial
condition may be adversely affected. Furthermore,
RM2 customer contracts may contain indemnities,
whereby RM2 may agree to indemnify its customers
for third party intellectual property infringement
claims and RM2 cannot be sure that it would
have no liability to its customers in such circumstances.
1.26 Reliance on manufacturing sector for bulk of pallet orders
RM2 is reliant on the manufacturing sector
of the economy to produce goods in sufficient
volumes to drive demand for pallets on which
to transport those goods. A reduction in
manufacturing output may lead to a reduction
in the size of the pallet market and in
turn RM2 may find it more difficult to obtain
orders to produce or lease pallets.
1.27 Increases in input costs
RM2's operations require raw materials,
road transportation and water and electricity
supply. Any increase in these input costs
would affect the profitability of RM2 which
may find it difficult to pass on such increased
costs to potential customers.
RISKS RELATING TO THE COMPANY'S DOMICILE
2.1 Disclosure of interests in shares
Under the Luxembourg Companies Law, shareholders
in RM2 are not obliged to disclose their
interests in a company in the same way as
shareholders of certain public companies
incorporated in the United Kingdom. In particular,
the Disclosure Guidance and Transparency
Rules do not apply. The Articles have been
amended to incorporate provisions equivalent
to those contained in the Disclosure Guidance
and Transparency Rules, but these may be
amended by a resolution of the Shareholders.
2.2 Takeovers
As RM2 is not admitted to trading on a "regulated
market", it is not subject to any takeover
laws in Luxembourg or elsewhere.
RISKS RELATING TO THE ORDINARY SHARES
3.1 Suitability
Investment in the Ordinary Shares may not
be suitable for all readers of this announcement
(and the Circular). All potential investors
are accordingly advised to consult a person
authorised under FSMA who specialises in
investments of this nature before making
any investment decisions.
3.2 Investment in AIM-traded securities
Investment in shares traded on AIM involves
a higher degree of risk, and such shares
may be less liquid, than shares in companies
which are listed on the Official List. The
AIM Rules are less demanding than those
rules that govern companies admitted to
the Official List. It is emphasised that
no application is being made for the admission
of RM2's securities to the Official List
or to any other investment exchange other
than AIM. An investment in the Ordinary
Shares may be difficult to realise. Prospective
investors should be aware that the value
of an investment in RM2 may go down as well
as up and that the market price of the Ordinary
Shares may not reflect the underlying value
of RM2. Investors may therefore realise
less than, or lose all of, their investment.
3.3 Share price volatility and liquidity
The share price of quoted companies can
be highly volatile and shareholdings can
be illiquid. The price at which the Ordinary
Shares are quoted and the price which investors
may realise for their Ordinary Shares will
be influenced by a large number of factors,
some specific to RM2 and its operations
and others which may affect quoted companies
generally. These factors could include the
performance of RM2, large purchases or sales
of the Ordinary Shares, currency fluctuations,
legislative changes and general economic,
political, regulatory or social conditions.
3.4 Placing Shares Issued in Two Tranches
3.5 Issuance of the Second Tranche Placing Shares
is conditional on the satisfaction of certain
key performance indicators. In addition, the
subscribers for the Second Tranche Placing Shares
may be unable to provide the funds for the purchase
of such Shares at the time the Company issues
a drawdown notice. The occurrence of either
of these circumstances would lead to the Second
Tranche Placing Shares not being issued, in
which case the Company will not have the resources
to carry out its business plan.
3.5 Access to further capital
Following completion of the Placing, RM2 may
in future require additional funds to respond
to business challenges, enhancing existing products
and services and further developing its sales
and marketing channels and capabilities. Accordingly,
RM2 may need to engage in further equity or
debt financings to secure additional funds.
If RM2 raises additional funds through further
issues of equity or convertible debt securities,
existing shareholders could suffer further significant
dilution, and any new equity securities or convertible
debt securities could have rights, preferences
and privileges superior to those of current
shareholders. Any debt financing secured by
RM2 in the future could involve restrictive
covenants relating to its capital raising activities
and other financial and operational matters,
which may make it more difficult for RM2 to
obtain additional capital and to pursue business
opportunities, including potential acquisitions.
In addition, RM2 may not be able to obtain additional
financing on terms favourable to it, if at all.
If RM2 is unable to obtain adequate financing
or financing on terms satisfactory to it, when
required, its ability to continue to support
its business growth and to respond to business
challenges could be significantly limited or
could affect its financial viability.
3.6 Dilution
The Placing Shares and the Conversion Shares
will give rise to significant dilution for Shareholders
and, if available, future financings to provide
required capital may dilute shareholders' proportionate
ownership in RM2. Following completion of the
Placing, RM2 may raise capital in the future
through public or private equity financings
or by issuing debt securities convertible into
Ordinary Shares, or rights to acquire these
securities (which, in any such case, may not
be made available to existing holders of Ordinary
Shares). If RM2 raises significant amounts of
capital by these or other means, that could
cause further dilution for RM2's existing shareholders.
Moreover, the Placing and/or the further issue
of Ordinary Shares and/or Convertible Preferred
Shares could have a negative impact on the trading
price and increase the volatility of the market
price of the Ordinary Shares. RM2 may also issue
further Ordinary Shares, or create further options
over Ordinary Shares, as part of its employee
remuneration policy, which could in aggregate
create a substantial dilution in the value of
the Ordinary Shares and the proportion of RM2's
share capital in which investors are interested.
3.7 Future sale of Ordinary Shares
RM2 is unable to predict when and if substantial
numbers of Ordinary Shares will be sold
in the open market following the Placing.
Any such sales, or the perception that such
sales might occur, could result in a material
adverse effect on the market price of the
Ordinary Shares. RM2 may require additional
capital in the future which may not be available
to it.
3.8 Exchange rate risk to investors
RM2's functional currency is US$. Fluctuations
in currency could have an adverse effect
on the value of an investor's holdings in
RM2 where the principal accounting currency
of the investor is not US$ or where there
are inverse fluctuations between Sterling,
the currency in which the Ordinary Shares
are quoted, and US$, the currency in which
the Company's results are reported.
3.9 Dividends
There can be no assurance as to whether
dividends will be paid in future or in what
amount. Subject to compliance with the Luxembourg
Companies Law and the Articles, the declaration,
payment and amount of any future dividends
are subject to the discretion of the Directors,
and will depend on, inter alia, the Company's
earnings, financial position, cash requirements
and availability of profits. A dividend
may never be paid and, at present, there
is no intention to pay a dividend in the
short to medium term.
3.10 If the Resolutions relating to the Placing are not passed,
the Company will not be able to proceed with the Placing in the
form currently envisaged
The Placing is conditional, inter alia,
on the passing of the Resolutions. In the
event that the Resolutions relating to the
Placing are not passed, the Company will
not be able to proceed with the Placing,
with the result that the anticipated net
proceeds of the Placing will not become
available to fund proposed upcoming expenditure
and achieve the objectives currently pursued
by the Board. The Group is unlikely to be
able to continue as a going concern as a
result.
3.11 Major shareholder Woodford is able to exercise significant
influence over matters requiring Shareholder approval
Certain investment funds and client mandates
discretionary managed by Woodford currently
own a total of 112,754,011 Ordinary Shares
and 71,626,705 Convertible Preferred Shares,
representing, in aggregate, 34.1 per cent.
of the Company's issued share capital. Following
completion of the Placing, in which, as
noted earlier in this announcement, Woodford
has participated, Woodford's holding in
the Enlarged Share Capital will be 67.8
per cent.
In addition, Woodford benefits from the
right to have the Board nominate for election
by the Shareholders such director as Woodford
may designate. For as long as Woodford does
not exercise its rights to designate a director,
it will have the right to appoint an observer
to attend Board meetings. For as long as
Woodford has designated a director appointed
to the Board, the quorum for Board meetings
will include that director.
As a result, Woodford is able to exercise
a significant degree of influence over matters
requiring Shareholder approval, including
the election of Directors and significant
corporate transactions.
The risks noted above do not necessarily comprise all of the
risks potentially faced by RM2 and are not intended to be presented
in any assumed order of priority.
Although RM2 will seek to minimise the impact of the Risk
Factors, investment in RM2 should only be made by investors able to
sustain a total loss of their investment. Potential investors are
strongly recommended to consult an investment adviser authorised
under FSMA, who specialises in investments of this nature before
making any decision to invest.
Definitions
The following definitions apply throughout this announcement
(and the Circular), unless the context requires otherwise:
Admission First Admission and/or Second
Admission as the context requires;
--------------------------- --------------------------------------
AIM the AIM market of the London
Stock Exchange;
--------------------------- --------------------------------------
AIM Rules the rules for AIM companies
and their nominated advisers
issued by the London Stock
Exchange;
--------------------------- --------------------------------------
Articles articles of association of
the Company;
--------------------------- --------------------------------------
Board the board of Directors of
RM2;
--------------------------- --------------------------------------
CEST central European summer time;
--------------------------- --------------------------------------
Conversion the conversion of 134,815,771
Convertible Preferred Shares
into the Conversion Shares
as a condition of the Placing;
--------------------------- --------------------------------------
Conversion Shares 3,156,907,940 Ordinary Shares
(comprising the Participating
Conversion Shares and the
Non-Participating Conversion
Shares) to be issued by RM2
pursuant to the Conversion;
--------------------------- --------------------------------------
Convertible Preferred convertible preferred shares
Shares of $0.01 each in the capital
of RM2;
--------------------------- --------------------------------------
CREST the relevant system (as defined
in the CREST Regulations)
of which Euroclear UK & Ireland
is the Operator (as defined
in the CREST Regulations);
--------------------------- --------------------------------------
CREST Regulations the Uncertificated Securities
Regulations 2001 (as amended);
--------------------------- --------------------------------------
Directors the directors of RM2;
--------------------------- --------------------------------------
Disclosure Guidance the disclosure guidance and
and Transparency transparency rules issued
Rules by the Financial Conduct Authority
acting in its capacity as
the competent authority for
the purposes of Part V of
FSMA;
--------------------------- --------------------------------------
ELIoT RM2 ELIoT tracking technology,
comprising a cellular device
which transmits the whereabouts
of each pallet;
--------------------------- --------------------------------------
Enlarged Share the number of Ordinary Shares
Capital in issue following completion
of the Second Tranche Subscription
(excluding any shares issued
pursuant to an Open Offer);
--------------------------- --------------------------------------
Euroclear UK & The Euroclear UK & Ireland
Ireland Limited, a company incorporated
in England and Wales, being
the Operator of CREST;
--------------------------- --------------------------------------
First Admission the admission of the First
Tranche Placing Shares and
Conversion Shares to trading
on AIM becoming effective
(pursuant to Rule 6 of the
AIM Rules for Companies);
--------------------------- --------------------------------------
First Tranche Enlarged the number of Ordinary Shares
Share Capital in issue following the issue
of the First Tranche Placing
Shares and the Conversion
Shares (excluding any shares
issued pursuant to an Open
Offer);
--------------------------- --------------------------------------
First Tranche Placing 1,279,049,295 Ordinary Shares
Shares to be issued by RM2 pursuant
to the First Tranche Subscription
at the Placing Price;
--------------------------- --------------------------------------
First Tranche Subscription the first tranche of the Placing
to raise $18,162,500;
--------------------------- --------------------------------------
Form of Instruction the form of instruction for
use in connection with the
General Meeting accompanying
the Circular;
--------------------------- --------------------------------------
Form of Proxy the form of proxy for use
in connection with the General
Meeting accompanying the Circular;
--------------------------- --------------------------------------
FSMA the Financial Services and
Markets Act 2000, as amended;
--------------------------- --------------------------------------
General Meeting the extraordinary general
meeting of RM2 to be held
at 5 Rue de la Chapelle, Luxembourg,
L-1325, Luxembourg at 7 a.m.
BST/8 a.m. CEST on April 13,
2018 at which the Resolutions
will be proposed;
--------------------------- --------------------------------------
Group the Company and its subsidiary
undertakings;
--------------------------- --------------------------------------
Key Performance reducing operating costs of
Indicators the business to a pre-determined
level, launching next generation
IoT Cat M ELIoT pallets and
achieving commercial deployment
of RM2 ELIoT pallets by certain
milestones, as determined
to Woodford's satisfaction
--------------------------- --------------------------------------
London Stock Exchange the London Stock Exchange
plc;
--------------------------- --------------------------------------
Luxembourg Companies Loi du 10 août 1915 concernant
Law les sociétés commerciales
(telle que modifiée)
- Law dated August 10, 1915
concerning commercial companies
(as amended);
--------------------------- --------------------------------------
Non-participating 130,146,937 Ordinary Shares,
Conversion Shares to be issued by RM2 pursuant
to the Conversion to existing
holders of Convertible Preferred
Shares who are not subscribing
for Placing Shares;
--------------------------- --------------------------------------
Notice of General the notice of the General
Meeting Meeting set out at the end
of the Circular;
--------------------------- --------------------------------------
Official List the official list of the UK
Listing Authority;
--------------------------- --------------------------------------
Operator the meaning given to it in
the CREST Regulations;
--------------------------- --------------------------------------
Ordinary Shares ordinary shares of $0.01 each
in the capital of RM2;
--------------------------- --------------------------------------
Participating Conversion 3,026,761,003 Ordinary Shares
Shares to be issued by RM2 pursuant
to the Conversion to existing
holders of Convertible Preferred
Shares who are subscribing
for Placing Shares;
--------------------------- --------------------------------------
Placing the conditional placing of
the Placing Shares pursuant
to the terms of the Subscription
Agreements;
--------------------------- --------------------------------------
Placing Price 1 pence per Placing Share;
--------------------------- --------------------------------------
Placing Shares The First Tranche Placing
Shares and the Second Tranche
Placing Shares;
--------------------------- --------------------------------------
Resolutions The Resolutions relating to
the Placing and the resolutions
to authorize the Directors
to sell all or substantially
all of the assets of the Company
and the resolution to dissolve
the Company with immediate
effect and the place the Company
in involuntary liquidation;
--------------------------- --------------------------------------
Resolutions relating the resolutions to authorise
to the Placing the Directors to disapply
existing Shareholders' pre-emption
rights in relation to the
issue of the Placing Shares
and the Conversion Shares,
and to amend the Articles,
to be proposed at the General
Meeting;
--------------------------- --------------------------------------
RM2 or the Company RM2 International S.A.;
--------------------------- --------------------------------------
Second Admission the admission of the Second
Tranche Placing Shares to
trading on AIM becoming effective
(pursuant to Rule 6 of the
AIM Rules for Companies);
--------------------------- --------------------------------------
Second Tranche 1,256,161,970 Ordinary Shares
Placing Shares to be issued by RM2 pursuant
to the Second Tranche Subscription
at the Placing Price;
--------------------------- --------------------------------------
Second Tranche the second tranche of the
Subscription Placing to raise an additional
$16 million, subject to the
issuance of a drawdown notice
by the Company and the satisfaction
of the Key Performance Indicators;
--------------------------- --------------------------------------
Securities Act the US Securities Act 1993,
as amended;
--------------------------- --------------------------------------
Shareholders holders of Shares;
--------------------------- --------------------------------------
Shares Ordinary Shares and Convertible
Preferred Shares;
--------------------------- --------------------------------------
Strand Hanson Strand Hanson Limited, the
Company's nominated adviser
under the AIM Rules;
--------------------------- --------------------------------------
Subscription Agreements the agreements dated 28 March
2018 entered into existing
institutional investors and
certain directors and members
of management and RM2 in connection
with the Placing and the Conversion;
--------------------------- --------------------------------------
UK the United Kingdom;
--------------------------- --------------------------------------
US or United States the United States of America;
and
--------------------------- --------------------------------------
Woodford Woodford Investment Management
Ltd.
--------------------------- --------------------------------------
All references in this announcement (and the Circular) to "GBP",
"pence" or "p" are to the lawful currency of the United Kingdom,
all references to "US$" or "$" are to the lawful currency of the
United States.
Placing Statistics
Number of Ordinary Shares in issue at the
date of this announcement 407,062,656
Number of Convertible Preferred Shares in
issue at the date of this announcement 134,815,771
Placing Price 1 pence
Placing Price discount to the closing middle c. 76%
market price on 27 March 2018
Number of First Tranche Placing Shares to
be issued pursuant to the First Tranche
Subscription 1,279,049,295
Number of Second Tranche Placing Shares
to be issued pursuant to the Second Tranche
Subscription 1,256,161,970
Total number of Placing Shares to be issued
pursuant to the Placing 2,535,211,265
Total number of Conversion Shares being
issued pursuant to the Conversion 3,156,907,940
Number of Convertible Preferred Shares in
issue immediately following Conversion 0
Number of Ordinary Shares in issue immediately
following First Admission 4,843,019,891
First Tranche Placing Shares as a percentage
of the First Tranche Enlarged Share Capital 26.4%
Conversion Shares as a percentage of the
First Tranche Enlarged Share Capital 65.2%
First Tranche Placing Shares and Conversion
Shares together as a percentage of the First
Tranche Enlarged Share Capital 91.6%
Gross proceeds of the Placing following
the First Tranche Subscription $18,162,500
Estimated net proceeds of the Placing to
be received by the Company following the
First Tranche Subscription $17,974,425
Expected percentage of shares in public
hands (as defined by the AIM Rules) following
First Admission 17.0%
Number of Ordinary Shares in issue immediately
following Second Admission 6,099,181,861
Placing Shares as a percentage of the Enlarged
Share Capital 41.6%
Conversion Shares as a percentage of the
Enlarged Share Capital 51.8%
Placing Shares and Conversion Shares together
as a percentage of the Enlarged Share Capital 93.3%
Gross proceeds of the Placing from the Second
Tranche Subscription $17,837,500
Estimated net proceeds of the Placing to
be received by the Company from the Second
Tranche Subscription $17,837,500
Total gross proceeds from the Placing $36,000,000
Total net proceeds from the Placing $35,811,925
Assumed GBP:USD exchange rate 1.42
Expected Timetable of Key Events
Announcement of, inter alia, the 7 a.m. on 29
Placing and the Conversion March 2018
The Circular and the Form of Proxy or 29 March
Form of Instruction posted to Shareholders 2018
Latest time and date for receipt 8 a.m. CEST on 11
of Forms of Instruction April 2018
Latest time and date for receipt 8 a.m. CEST on 12
of Forms of Proxy April 2018
General Meeting 8 a.m. CEST on 13
April 2018
First Admission and dealings to
commence in the First Tranche Placing 8 a.m. BST on
Shares and the Conversion Shares 19 April 2018
First Tranche Placing Shares and
Conversion Shares in uncertificated 19 April 2018
form to be credited to CREST accounts
(CREST shareholders only)
Each of the times and dates in the above timetable is a
reference to the time in London and is subject to change. If any of
the above times and/or dates change, the revised times and/or dates
will be notified by announcement by the Company on a regulatory
information service.
For further information:
+44 (0)20 7638
RM2 International S.A. 9571
Kevin Mazula, Chief Executive
Officer
Jean-Francois Blouvac, Chief
Financial Officer
Strand Hanson Limited (Nominated +44 (0)20 7409
& Financial Adviser and Broker) 3494
James Spinney
Ritchie Balmer
James Bellman
+44 (0)20 7638
Citigate Dewe Rogerson 9571
Simon Rigby
Ellen Wilton
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Notes to Editors
RM2 International S.A. specialises in pallet development,
manufacture, supply and management to establish a leading presence
in global pallet supply and improve the supply chain of
manufacturing and distribution businesses through the effective and
efficient use and management of composite pallets. It is quoted on
the AIM market of the London Stock Exchange under the symbol RM2.L.
For further information, please visit www.rm2.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEASDNADKPEEF
(END) Dow Jones Newswires
March 29, 2018 02:02 ET (06:02 GMT)
Rm2 (LSE:RM2)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rm2 (LSE:RM2)
Historical Stock Chart
From Jul 2023 to Jul 2024