TIDMRM2
RNS Number : 3838I
RM2 International SA
23 November 2018
23 November 2018
RM2 International S.A.
("RM2" or the "Company")
Share Capital Restructuring, Placing and Notice of EGM
RM2 today announces a restructuring of its share capital
(including a 200:1 Share Consolidation) and a conditional Placing
of 12,335,162 new Ordinary Shares following such Restructuring at a
Placing Price of 105 pence each to raise US$16,837,500 million
before expenses
A circular including a Notice of General Meeting will be posted
to Shareholders (the "Circular") on Monday, November 26, 2018 to
convene the necessary general meeting of the Company (the "General
Meeting") to approve the Resolutions to effect the Restructuring
and authorize the Placing. The General Meeting is to be held at 5
Rue de la Chapelle, Luxembourg, L-1325, Luxembourg at 10.30 a.m.
GMT / 11.30 a.m. CET on 11 December 2018.
A copy of the Circular and Notice of General Meeting will also
be available to view on the Company's website www.rm2.com.
Original Investors holding in aggregate more than two-thirds of
the existing voting rights of the Company have undertaken to, or
have indicated their intention to, vote in favour of the
Resolutions. Accordingly, it is anticipated that the Resolutions
will be approved at the General Meeting and therefore the
Restructuring and Placing will proceed.
An extract of selected parts of the Circular is copied out below
along with an indicative timetable of principal events related to
the Restructuring and Placing. The definitions that apply
throughout this announcement can be found at the end of this
announcement.
For further information:
RM2 International S.A. +44 (0)20 7638 9571
Kevin Mazula, Chief Executive Officer
Jean-Francois Blouvac, Chief Financial
Officer
Strand Hanson Limited (Nominated &
Financial Adviser and Broker) +44 (0)20 7409 3494
James Spinney / Ritchie Balmer / James
Bellman
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 smart 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
Dear Shareholder,
Restructuring of share capital (including 200:1 Share
Consolidation) and conditional Placing of 12,335,162 new Ordinary
Shares following such Restructuring at a Placing Price of 105 pence
each to raise US$16,837,500 before expenses
Introduction
Your Board announced on 29 March 2018 that the Company had
conditionally raised US$36 million (before fees and expenses) by
way of a placing of 2,535,211,265 Old Ordinary Shares at a placing
price of 1 pence per Old Ordinary Share to be effected in two
tranches.
The issuance of the first tranche of 1,279,049,295 Old Ordinary
Shares (gross proceeds of US$18,162,500) (the First Tranche
Subscription) took place following authorisations received at the
general meeting of the Company held on 13 April 2018.
As set out in the circular dated 29 March 2018, it was
anticipated that the second tranche of 1,256,161,970 Old Ordinary
Shares would be issued at a placing price of 1 pence per Old
Ordinary Share (the Second Tranche Subscription) following the
satisfaction, at Woodford's determination, of certain Key
Performance Indicators. As announced by the Company on 7 September
2018, the Company's execution of its business plan has fallen
behind schedule since March 2018, and therefore it has been
determined that the original placees (together, with Woodford, the
Original Investors), are not bound to subscribe for their
participation in the Second Tranche Subscription.
All of the Original Investors, other than one (the Placees),
however, have indicated to the Company that they would invest
further sums in the Company on the basis of pricing being at/around
the current market price, which is now at a significant discount to
the original placing price of 1 pence per Old Ordinary Share.
Following negotiations, a new subscription price of GBP0.00525 per
Old Ordinary Share was agreed (before the Restructuring), which is
the highest closing mid-market price attained by the Old Ordinary
Shares over the last month (being the period from 23 October 2018
to 22 November 2018).
With the Company's current share capital structure, it is not
possible to reduce the original placing price of 1 pence per Old
Ordinary Share to the current market value of the Old Ordinary
Shares (and the new subscription price of GBP0.00525 per Old
Ordinary Share) as this would result in a placing price lower than
the US$0.01 nominal value of the Old Ordinary Shares which would be
in contravention of the Luxembourg Companies Law.
Consequently, it is necessary for the Company to carry out a
restructuring of the share capital (the Restructuring) to
facilitate completion of the second tranche of the placing. The
Restructuring will result in the share capital of the Company being
reduced from 5,001,781,964 ordinary shares of US$0.01 (the Old
Ordinary Shares) to 25,008,909 ordinary shares of US$0.01 each (the
Ordinary Shares) by carrying out the following steps:
(a) decreasing the subscribed share capital of the Company by an
amount of US$1.64 by cancellation of 164 Old Ordinary Shares held
in treasury so as to decrease the share capital from
US$50,017,819.64 to US$50,017,818 (represented by 5,001,781,800 Old
Ordinary Shares of US$0.01 each), such that the share capital is
set at a number divisible by 200;
(b) undertaking a share consolidation (the Share Consolidation)
whereby every 200 Old Ordinary Shares will be consolidated into one
ordinary share with a nominal value of US$2.00 each (the Two Dollar
Shares) resulting in a share capital of US$50,017,818 represented
by 25,008,909 ordinary shares of US$2.00 each;
(c) eliminating any fractional shares held by Shareholders by
requiring the mandatory forfeiture to the Company without
consideration of any Old Ordinary Shares which cannot be exchanged
into a Two Dollar Share following the Share Consolidation (the
Fractional Old Shares), following which the Company will
consolidate the Fractional Old Shares forfeited into Two Dollar
Shares and hold these as treasury shares;
(d) suppressing the nominal value and decreasing the subscribed share capital by an amount of US$49,767,728.91 so as to decrease it from US$50,017,818 to US$250,089.09 represented by 25,008,909 Two Dollar Shares without nominal value, by absorption of deferred losses for an equivalent amount; and
(e) reintroducing a nominal value of US$0.01 to the Two Dollar
Shares (to be renamed as the Ordinary Shares).
Completion of these steps will result in the share capital of
the Company comprising 25,008,909 Ordinary Shares of US$0.01 on
completion of the Restructuring.
On this basis, the Company and Original Investors have agreed
that following completion of the Restructuring, the terms of the
Second Tranche Subscription will be replaced and will now consist
of a placing (the Placing) of 12,335,162 new Ordinary Shares (the
Placing Shares) at a price of 105 pence per Placing Share (the
Placing Price). The Placees, who had previously agreed to
participate in the Second Tranche Subscription, will now
participate in the Placing by signing new subscription agreements
with the Company (the Subscription Agreements).
The Company intends to use the net proceeds of the Placing to
fund: (i) the retrofitting of existing inventory of RM2 Blockpals
with RM2 ELIoT track and trace devices, (ii) the production of new
RM2 ELIoT Pallets and (iii) its sales and general administrative
costs.
For the Restructuring (including the Share Consolidation) and
the Placing to proceed, the Company requires Shareholders' approval
to authorise the Directors to (i) carry out the various steps of
the Restructuring, (ii) increase the subscribed share capital,
(iii) issue the Placing Shares and (iv) disapply existing
Shareholders' pre-emption rights in relation to the issue of the
Placing Shares on a non pre-emptive basis.
The purpose of this circular is to give you notice of the
General Meeting to be held at 5 Rue de la Chapelle, Luxembourg,
L-1325, Luxembourg at 10.30 a.m. GMT / 11.30 a.m. CET on 11
December 2018. The formal notice of the General Meeting is set out
at the end of this document.
This document provides you with information about the
Restructuring and the Placing 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 Resolutions).
The Placing is conditional on:
(a) the Resolutions being passed;
(b) the Restructuring being completed;
(c) the warranties of the Company in the Subscription Agreements
being true as at the date of the Subscription Agreements;
(d) all the Placees participating in the Placing pursuant to the Subscription Agreements; and
(e) Admission.
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.
Original Investors holding in aggregate more than two-thirds of
the existing voting rights of the Company have undertaken to, or
have indicated their intention to, vote in favour of the
Resolutions. Accordingly, it is anticipated that the Resolutions
will be approved at the General Meeting and therefore the
Restructuring and Placing will proceed.
However, if all of the Resolutions relating to the Restructuring
and 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 authorising
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 authorising 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 operational and the Company hopes to exploit more fully the
capacity by the end of 2019. Assuming the Placing is successful, it
is expected that Jabil will continue to retrofit existing inventory
of RM2 Blockpallets with RM2 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, if and when activated, will enable it to
provide 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. RM2 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 RM2 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 RM2 ELIoT pallets, which
have generated significant interest from existing and potential
customers following a number of trials of the product.
The initial deployment of RM2 ELIoT pallets in a Phase 1
contract with a Fortune 500 customer is continuing and receiving
positive customer feedback. The Company successfully completed a
100-unit trial and then entered into a pilot agreement for an
initial deployment of some 600 RM2 ELIoT pallets with one of the
world's leaders in the logistics industry, serving both internal
and external loops. RM2 was also pleased to announce in September
this year that it has entered into an agreement for the deployment
of standard RM2 BLOCKPAL pallets with a household name in the
homewares sector in North America. This contract is expected to
generate gross revenues in excess of US$1.5 million on an annual
basis subject to certain velocity thresholds being met. Under this
contract, RM2 BLOCKPAL pallets are delivered to Walmart's Sam's
Club stores.
With the conversion of trials with large customers into
long-term contracts taking longer than anticipated, as previously
announced, the Company's expectation of turning EBITDA positive in
2019, as first noted on 9 March 2018, is very challenging. The
Company will provide further updates on this in due course and in
the meantime, continues to implement measures to reduce its cost
base. The Company also notes that following the repayment of the
mortgage on the office building in Switzerland sold earlier this
year, the Company is debt free.
1.4 Reasons for the Restructuring and the Placing and use of proceeds
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 proceedings, such as administration or
liquidation, will be commenced. The Placing cannot happen without
the Restructuring first taking place.
Accordingly, the net proceeds of this Placing are expected to be
used to fund: (i) the retrofitting of existing inventory of RM2
Blockpals with RM2 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 US$16,837,500 (before fees
and expenses) by way of a conditional, non pre-emptive placing of
12,335,162 new Ordinary Shares at the Placing Price. The Placing
Price represents a premium of approximately c.17 per cent. to the
closing mid-market price of 0.45 pence on 22 November 2018 (rebased
to take into account the Restructuring), being the latest
practicable date prior to the announcement of the Placing. Assuming
Shareholders approve the Placing, the issue of the Placing Shares
will take place immediately following the General Meeting.
Following Admission, the Placing Shares will represent
approximately 33.03 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 the Placees who subscribed for shares in the First
Tranche Subscription, and were due to subscribe for shares in the
Second Tranche Subscription. 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 the 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 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
Admission occurring on or before 12 December 2018.
Application will be made to the London Stock Exchange for the
Placing 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 Placing Shares
on or around 12 December 2018.
Requirement for future funding
Taking into account the net proceeds of the Placing, the Company
expects to have sufficient cash through at least April 2019, and
expects that it will require future funding thereafter to produce
RM2 ELIoT pallets, to meet its operating expenses, to respond to
business challenges, to enhance existing products and services and
to further develop its sales and marketing channels and
capabilities. Accordingly, RM2 has commenced developing its future
funding strategy and expects to engage in further equity or debt
financings in 2019. There is no guarantee that RM2 will be able to
obtain this additional financing on terms favourable to it, if at
all. In the event that 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 and in
extremis call into questions the Company's financial viability to
operate as a going concern.
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 Restructuring and the issue of the Placing
Shares.
Existing holding Holding of Ordinary % of Enlarged
of Ordinary Shares Shares after Share Capital
(after the Restructuring, the Restructuring
and assuming and issuance
all shares are of Placing Shares
held in one account,
limiting the
clawback of fractional
shares)
Woodford, acting
on behalf of
funds under its
management 16,100,138 25,623,947 68.62%
--------------------------- -------------------- ---------------
Richard Cashin 2,967,732 4,799,233 12.85%
--------------------------- -------------------- ---------------
Polygon Global
Partners LLP 1,516,892 1,516,892 4.06%
--------------------------- -------------------- ---------------
R. Ian Molson
and associated
Family Trusts 1,479,300 2,211,900 5.92%
--------------------------- -------------------- ---------------
In addition, certain non-executive directors have conditionally
subscribed for Placing Shares as set forth in the table below:
Existing holding Holding of Ordinary % of Enlarged
of Ordinary Shares Shares after Share Capital
(after the Restructuring, the Restructuring
and assuming and issuance
all shares are of Placing Shares
held in one account,
limiting the
clawback of fractional
shares)
Lord Rose 108,478 291,628 0.78%
--------------------------- -------------------- ---------------
Paul Walsh 45,402 91,189 0.24%
--------------------------- -------------------- ---------------
Charles Duro 25,190 43,505 0.12%
--------------------------- -------------------- ---------------
The participation in the Placing by Woodford, Richard Cashin, R.
Ian Molson (through a family vehicle, called The Accommodation
Trust) and the abovementioned non-executive directors is deemed to
be a related party transaction under Rule 13 of the AIM Rules.
David Binks, Jean-François Blouvac, Jan Dekker, Andrew Geisse and
Kevin Mazula being Directors not participating in the Placing,
consider, 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 10.30 a.m. GMT / 11.30
a.m. CET on 11 December 2018, is set out at the end of this
document. At this meeting resolutions will be proposed to authorise
the Directors to (i) carry out the various steps of the
Restructuring, (ii) issue the Placing Shares on a non pre-emptive
basis, and (iii) 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 and with a quorum of at
least 50 per cent. of the Shares issued.
Original Investors holding in aggregate more than two-thirds of
the existing voting rights of the Company have undertaken to, or
have indicated their intention to, vote in favour of the
Resolutions. Accordingly, it is anticipated that the Resolutions
will be approved at the General Meeting and therefore the
Restructuring and Placing will proceed.
Action to be taken
Shareholders will find enclosed 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 10.30 a.m. GMT / 11.30
a.m. CET on 6 December 2018 for Forms of Instruction and 11.30 a.m.
GMT / 12.30 p.m. CET on 7 December 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, Charles Duro, Lord Rose and Paul Walsh will not
vote on the Resolutions relating to the Placing due to a conflict
of interest. All other Directors who also are Shareholders 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 document 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 document 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 or may suspend or delay
production of such products to adapt to demand in the market for
its 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. 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 RM2
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 document.
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 at
least through April 2019, there can be no assurance that RM2 would
have sufficient resources to fund its operations 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 document.
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.
2 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.
3 RISKS RELATING TO THE ORDINARY SHARES
3.1 Suitability
Investment in the Ordinary Shares may not be suitable for all
readers of this document. 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 Access to further capital
Following completion of the Placing, RM2 expects in future to
require additional funds to produce RM2 ELIoT pallets, to meet its
operating expenses, to respond to business challenges, to enhance
existing products and services and to further develop its sales and
marketing channels and capabilities. Accordingly, RM2 expects to
engage in further equity or debt financings to secure additional
funds. If RM2 raises additional funds through 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.
3.5 Dilution
The Placing 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 equity 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.
3.6 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.
3.7 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.
3.8 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 approval by the
shareholders at a general meeting, 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.
3.9 If the Resolutions relating to the Restructuring and 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
Restructuring and 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.
3.10 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 3,220,027,777 Shares,
representing, in aggregate, 64.4 per cent. of the Company's issued
share capital. Following completion of the Restructuring and
Placing, in which, as noted in Part 1 of this document, Woodford
has participated, Woodford's holding in the Enlarged Share Capital
will be 68.62 per cent. However, as the voting rights of Ordinary
Shares held by LF Woodford Equity Income Fund, Omnis Income &
Growth Fund and Woodford Patient Capital Trust Plc (each a fund
managed by Woodford, acting as agent for and on behalf of each
fund) are limited in aggregate to 19.5 per cent., 19.5 per cent.
and 49 per cent., respectively, of the total number of votes of the
Ordinary Shares in accordance with the Articles, Woodford's total
voting rights following the Restructuring and the Placing will be
45.6 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.
Placing Statistics
Number of Old Ordinary Shares in issue at the date
of this document 5,001,781,964
Notional Placing Price per Old Ordinary Share (prior 0.525 pence
to the Restructuring)
Number of Ordinary Shares in issue following the
Restructuring 25,008,909
Placing Price per Ordinary Share (following the 105 pence
Restructuring)
Placing Price premium to the closing middle market c. 17%
price on 22 November 2018 (rebased to reflect the
Restructuring)
Number of Placing Shares to be issued pursuant to
the Placing 12,335,162
Number of Ordinary Shares in issue immediately following
Admission 37,344,071
Placing Shares as a percentage of the Enlarged Share
Capital 33.03%
Expected percentage of shares in public hands (as
defined by the AIM Rules)
following Admission 11.12%
Gross proceeds of the Placing GBP12,951,919.23
Gross proceeds of the Placing $16,837,500
Estimated net proceeds of the Placing to be received
by the Company $16,727,500
Assumed GBP:USD exchange rate 1.30
New ISIN (following the Restructuring) LU1914372336
Expected Timetable of Key Events
Announcement of, inter alia, the Restructuring 23 November 2018
and the Placing
This document and the Form of Proxy or Form 26 November 2018
of Instruction posted to Shareholders
Latest time and date for receipt of Forms 11.30 a.m. CET on
of Instruction 6 December 2018
Latest time and date for receipt of Forms 12.30 p.m. CET on
of Proxy 7 December 2018
General Meeting 11.30 a.m. CET on
11 December 2018
Restructuring Record Date 5 p.m. GMT on 11 December
2018
Admission and dealings to commence in the 8 a.m. GMT on 12 December
Ordinary Shares (including Placing Shares) 2018
(following the Restructuring)
Ordinary Shares (including Placing Shares) 12 December 2018
in uncertificated form to be credited to
CREST accounts (CREST shareholders only)
(following the Restructuring)
Each of the times and dates in the above timetable is a
reference to the time in London unless otherwise noted 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.
Definitions
The following definitions apply throughout this document, unless
the context requires otherwise:
Admission the admission of the Placing
Shares to trading on AIM becoming
effective (pursuant to Rule
6 of the AIM Rules for Companies);
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;
BLOCKPAL the composite pallet produced
and deployed by the Company;
Board the board of Directors of RM2;
CET Central European Time;
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 and Transparency the disclosure guidance and
Rules transparency rules issued by
the Financial Conduct Authority
acting in its capacity as the
competent authority for the
purposes of Part V of FSMA;
Enlarged Share Capital the number of Ordinary Shares
in issue following the Restructuring
and the issue of the Placing
Shares;
Euroclear UK & Ireland The Euroclear UK & Ireland Limited,
a company incorporated in England
and Wales, being the Operator
of CREST;
First Tranche Subscription the issuance of the first tranche
of 1,279,049,295 Old Ordinary
Shares which took place following
authorisations received at the
general meeting of the Company
held on 13 April 2018;
Form of Instruction the form of instruction for
use in connection with the General
Meeting accompanying this document;
Form of Proxy the form of proxy for use in
connection with the General
Meeting accompanying this document;
Fractional Old Shares the Old Ordinary Shares which
cannot be exchanged into a Two
Dollar Share following the Share
Consolidation;
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 10.30 a.m. GMT
/ 11.30 a.m. CET on 11 December
2018 at which the Resolutions
will be proposed;
GMT Greenwich Mean Time;
Group the Company and its subsidiary
undertakings;
Key Performance Indicators reducing operating costs of
the business to a pre-determined
level, launching next generation
IoT Cat M RM2 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 Law Loi du 10 août 1915 concernant
les sociétés commerciales
(telle que modifiée) -
Law dated August 10, 1915 concerning
commercial companies (as amended);
Notice of General Meeting the notice of the General Meeting
set out at the end of this document;
Official List the official list of the UK
Listing Authority;
Old Ordinary Shares the ordinary shares of US$0.01
each in issue before the Restructuring;
Operator the meaning given to it in the
CREST Regulations;
Ordinary Shares ordinary shares of $0.01 each
in the capital of RM2 following
the Restructuring;
Original Investors the original placees who would
have participated in the Second
Tranche Subscription;
Placees all of the Original Investors,
other than one, who had previously
agreed to participate in the
Second Tranche Subscription
and who will now participate
in the Placing;
Placing the conditional placing of the
Placing Shares pursuant to the
terms of the Subscription Agreements;
Placing Price 105 pence per Placing Share
following the Restructuring;
Placing Shares 12,335,162 Ordinary Shares to
be issued by RM2 pursuant to
the Placing at the Placing Price
following the Restructuring;
Resolutions the Resolutions relating to
the Restructuring and 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 to the the resolutions to authorise
Restructuring and the Placing the Directors to disapply existing
Shareholders' pre-emption rights
in relation to the Restructuring
and to the issue of the Placing
Shares, and to amend the Articles,
to be proposed at the General
Meeting;
Restructuring the Restructuring of the Shares
(including the Share Consolidation)
resulting in the share capital
of the Company being reduced
from 5,001,781,964 ordinary
shares of US$0.01 to 25,008,909
Ordinary Shares of US$0.01 each;
RM2 or the Company RM2 International S.A.;
RM2 ELIoT RM2 ELIoT tracking technology,
comprising a cellular device
which transmits the whereabouts
of each pallet;
Second Tranche Subscription the anticipated second tranche
of 1,256,161,970 Old Ordinary
Shares that it was anticipated
would be issued at a placing
price of 1 pence per Old Ordinary
Share following the satisfaction
of the Key Performance Indicators
set out in the circular dated
29 March 2018;
Securities Act the US Securities Act 1993,
as amended;
Share Consolidation the share consolidation whereby
every 200 Old Ordinary Shares
will be consolidated into one
Two Dollar Share with a nominal
value of US$2.00 as part of
the Restructuring;
Shareholders holders of Shares;
Shares Old Ordinary Shares, Two Dollar
Shares and Fractional Old Shares
(as applicable);
Strand Hanson Strand Hanson Limited, the Company's
nominated adviser under the
AIM Rules;
Subscription Agreements the agreements dated 23 November
2018 entered into between the
Placees and RM2 in connection
with the Placing;
Two Dollar Shares the ordinary shares of US$2.00
each in issue following Share
Consolidation;
UK the United Kingdom;
US or United States the United States of America;
and
Woodford Woodford Investment Management
Ltd.
All references in this document to "GBP", "pence" or "p" are to
the lawful currency of the United Kingdom, all references to "US$"
or "$" are to the lawful currency of the United States.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
STRBJBITMBJTBPP
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November 23, 2018 09:45 ET (14:45 GMT)
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