RM2 International SA Conditional Placing, GM Notice and Contract Update

Fecha : 23/07/2019 @ 01:00
Fuente : UK Regulatory (RNS & others)
Emisora : Rm2 International S.a. (RM2)
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RM2 International SA Conditional Placing, GM Notice and Contract Update

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RNS Number : 3376G

RM2 International SA

23 July 2019

23 July 2019

RM2 International S.A.

("RM2" or the "Company")

Proposed Conditional Placing, Notice of EGM and Contract Update

RM2 today announces a contract update and a conditional Placing of 300,000,000 new Ordinary Shares at a Placing Price of US$0.02 per Ordinary Share to raise up to US$6,000,000 million before expenses.

Notice of General Meeting

A circular including a Notice of General Meeting has been posted to Shareholders (the "Circular") to convene the necessary general meeting of the Company (the "General Meeting") to approve the Resolutions to authorise the Placing. The General Meeting is to be held at 5 Rue de la Chapelle, Luxembourg, L-1325, Luxembourg at 11:00 a.m. BST / 12:00 noon CEST on 31 July 2019.

The Notice of General Meeting also includes alternative Resolutions, to be proposed in the event that the Resolutions relating to the Placing are not approved, which seek shareholder approval for, inter alia, the voluntary liquidation of the Company and the delisting of the Company's Ordinary Shares from trading on AIM.

A copy of the Circular and Notice of General Meeting will also be available to view on the Company's website www.rm2.com.

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.

Contract Update

The Company also announces that, after rigorous testing of 15,000 pallets, it has extended its agreement with a Fortune 500 company in North America for the phased deployment of 150,000 pallets into their network. Expansion of pallet deployment with the supplier network of the Fortune 500 company continues to develop. The Company has also signed an agreement for the staged deployment in Mexico of RM2 ELIoT pallets, which, although total unit volumes are not yet determined, is expected to lead to the deployment of an additional 50,000 ELIoT pallets in 2019 and 150,000 ELIoT pallets in 2020. These developments, together with ongoing commercial discussions, mark progress towards the business being funded from operational cashflow.

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

Report from the Board of RM2 International S.A.

Dear Shareholder,

Introduction

The purpose of this circular is to notify Shareholders of the proposed General Meeting to consider and, if thought fit, approve the Resolutions (as defined herein). The General Meeting is to be held at 5 Rue de la Chapelle, Luxembourg, L-1325, Luxembourg at 11 a.m. BST/12 noon CEST on 31 July 2019. The formal notice of the General Meeting is set out at the end of this document.

As you will be aware from the Company's public announcements, the Company's Board of Directors (the Board) has been seeking additional funding for the Company. In light of the progress and results of that process to date, the Board has concluded that such funding will only be provided if it can be demonstrated that it raises sufficient equity to cover its Selling, General & Administrative expenses until it reaches EBITDA break-even, an amount of equity capital estimated by the Board to be a minimum of $6.0 million. After extensive discussions, the Board has been able to come to agreement on the Placing described herein to raise, if approved by Shareholders, $6.0 million in new equity finance.

The Board will continue to explore all opportunities to maximize value for shareholders, and, should additional equity capital be offered or a different transaction which, in the opinion of the Board, would be likely to provide a greater return to all of its shareholders crystallize in the limited time available, a circular setting forth the terms of such a transaction in accordance with the requirements of the AIM Rules will be distributed to shareholders along with a convocation to a new General Meeting of Shareholders and the General Meeting convened herein will not be held.

The Placing

The Company has entered into a conditional Placing agreement with an existing substantial shareholder (as defined under the AIM Rules), Richard Cashin, for the issue of up to 300,000,000 new Ordinary Shares pursuant to the Placing, which is conditional upon Shareholder approval and the satisfaction of certain conditions precedent. The Placing, if approved, will comprise two tranches, with a price of USD0.02 per Placing Share (the Placing Price). Each of the First Tranche Placing and the Second Tranche Placing is composed of monthly instalments of $1 million and the issue of 50,000,000 Placing Shares per instalment (each, an Instalment). Each Tranche is subject to the conditions precedents described herein, but once such conditions precedents are satisfied, the Instalments are not conditional.

If Shareholders approve the Placing, the issuance of the first Instalment of the First Tranche Placing Shares will take place immediately following the General Meeting. The first Instalment of the First Tranche Placing Shares would be issued for USD 1,000,000, payable on or about 31 July, with the second Instalment occurring on or about 31 August and the third Instalment on or about 30 September 2019. Therefore, assuming Shareholders approved the Resolutions relating to the Placing, there are no further conditions to completion of the First Tranche Placing and the company will receive minimum gross proceeds of $3,000,000.

Completion of the Second Tranche Placing, assuming the Placing is approved by Shareholders, would be subject to the Company having signed a term sheet for debt funding in the amount of at least $10 million, having entered into contracts for in aggregate at least 150,000 pallets with certain counterparties by September 30, 2019 and the shareholders approving (at the General Meeting) an employee share option scheme allowing for the award of up to 15 per cent. of the Enlarged Share Capital to beneficiaries (collectively, the Conditions). Subject to satisfaction of the Conditions, the Second Tranche Placing Shares would be issued for gross proceeds of, in aggregate, USD3,000,000, issued in three monthly Instalments on or about 31 October, on or about 29 November and on or about 30 December 2019. The Placing Shares will, when issued, be subject to the Articles, will be 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 their respective Admission.

Should the Placing be approved, 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 pending the conclusion of a debt facility. The funds available through the debt facility to be sought pursuant to the Conditions are expected to be dedicated to the retrofitting and production of pallets, leaving the proceeds of the Placing thereafter to fund sales and general administrative costs.

It is noted that, pursuant to the Subscription Agreement in relation to the Placing, Richard Cashin benefits from the right to have the Board nominate for election by the Shareholders such director as he may designate.

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 on a non pre--emptive basis.

The Board notes that Woodford Investment Management Ltd. currently controls approximately 34.2 per cent. of the Company's voting rights (based on current effective total voting rights in the Company of 25,081,086), which is a sufficient proportion of the Company's voting rights to block the approval of the Placing and that there is no assurance that Woodford Investment Management Ltd. will vote in favour of the Placing.

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. The Placing allows the Company 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 authorisation, the Board will consider ways of preserving a sufficient level of its Ordinary Shares in public hands, including making an open offer to all Shareholders following the Second Tranche Placing at the Placing Price of new Ordinary Shares up to the the maximum value permitted without requiring the Company to publish a prospectus under the EU Prospectus Directive (the Open Offer). 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 on the same terms.

Potential Liquidation

Should the Resolution relating to the Placing not be approved by the requisite number of votes at the General Meeting, the shareholders will be asked to vote on the dissolution of the Company with immediate effect and the placing of the Company in voluntary liquidation (the Liquidation), as more thoroughly set forth in the formal notice of the General Meeting below. If the Resolution relating to the Liquidation should be submitted and passed by the requisite majority at the General Meeting, then the Chairman of the Meeting will ask the Shareholders to vote on the Resolution relating to the Delisting as the listing of the Company's shares on the AIM market would serve no further purpose.

Should the requisite number of votes be cast in favor of the Resolution relating to Delisting, in accordance with Rule 41 of the AIM Rules, the Company will notify the London Stock Exchange of outcome of the vote, giving twenty business days' notice. Under the AIM Rules, it is a requirement that the Delisting is approved by not less than 75 per cent of votes cast by Shareholders (in person or by proxy) at a General Meeting. Subject to the Resolution relating to the Delisting being passed at the General Meeting, it is anticipated that Delisting would take effect at 7:00 am UK time on 20 August 2019.

Following the cancellation of trading in the Company's shares on AIM, the Ordinary Shares will not be traded on any public market and the CREST facility (through which the depositary interests representing Ordinary Shares are currently traded) will be cancelled. The Ordinary Shares will remain capable of being transferred on the Company's share register (and therefore not through CREST) for a limited time.

Upon the Delisting becoming effective, Strand Hanson Limited will cease to be nominated adviser and broker to the Company and the Company will no longer be required to comply with the rules and corporate governance requirements to which companies admitted to trading on AIM are subject, including the AIM Rules.

Board Recommendation

The Board considers, in light of the Company's circumstances, that the Placing is in the best interests of the Company and its Shareholders, and the Directors recommend that Shareholders vote in favour of the Resolutions pertaining to the Placing to be proposed at the General Meeting.

The primary reason for the Resolutions for the Placing 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 the resolutions authorising the dissolution of the Company with immediate effect, the appointment of a liquidator, the determination of the powers of the liquidator and the voluntary liquidation of the Company (the Resolutions relating to the Liquidation) and the Resolution relating to the Delisting. In such circumstances, it is unlikely that trading in the Company's Ordinary Shares on AIM would be restored. It is expected that the Company's subsidiaries would also be wound up or disposed of in due course. The Resolutions relating to the Liquidation propose that shareholders appoint Charles Duro of Duro & Goebel, a current director of the Company, as liquidator. Given Charles Duro's experience and training as a lawyer as well as his extensive knowledge of the Company and its subsidiaries, the Board believes that it would be most efficient and cost-effective to have Charles Duro serve as liquidator. The Resolutions are set forth in the formal notice of the General Meeting at the end of this document.

If none of the Resolutions are passed, it is likely that the Company would be forced into a compulsory liquidation process, which may not result in the return of any value to Shareholders, and it is unlikely that trading in the Company's ordinary shares on AIM would be restored.

Background to the Placing and use of proceeds

   1.1        Information on the Company & its strategic progress 

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.

Whilst, since 2016, the Company has made significant progress in addressing difficulties it has encountered, it remains in a difficult financial situation.

Firstly, it closed down its manufacturing facility in Toronto and outsourced production to experienced, world class partners. One of these partners, Jabil, Inc., 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 continue to retrofit existing inventory of RM2 Blockpallets with ELIoT devices (described below), build new RM2 Blockpallets and that such pallets would be deployed to customers

Secondly, in order to address issues of asset retention, reduction of theft and mis- or undeclared 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 its longevity will be demonstrated over its course of service.

   1.2        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. The Company has, on July 19, 2019 entered into an agreement with a Fortune 500 company in North America regarding the phased deployment of 150,000 pallets into their network. Expansion of pallet deployment with the supplier network of the Fortune 500 company continues to develop. The Company also signed on July 19, 2019 a distributor agreement for the staged deployment in Mexico of RM2 ELIoT pallets. In light of the slower than expected conversion of certain opportunities, and assuming the Placing is completed and debt financing is available by August 2019 on acceptable terms, the Company believes that it will be in a position to generate positive EBITDA in early 2020 subject to procurement of the debt financing required as a Condition to completion of the Second Tranche Placing.

   1.3        Reasons for the Placing and use of proceeds 

As announced on 26 June 2019, the Company's cash balance at the end of May 2019 was US$3.3 million. Its cash balance at the end of June 2019 was US$705,000 and, taking in to account its monthly cash burn, the Company does not have sufficient financial resources to fully meet obligations in to be incurred in August. As the Group and its auditors were unable to finalise the audit of the Company's annual consolidated financial statements for the year ended 31 December 2018 (2018 AFS) and publish them prior to 30 June 2019, as required by Rule 19 of the AIM Rules, dealings in the Company's ordinary shares were temporarily suspended from trading on AIM with effect from 7.30 a.m. on Monday 1 July 2019 (the Suspension). The shares will remain suspended from trading until such time as the Company's 2018 AFS have been published in compliance with AIM Rule 19, which the Company hopes it will be in a position to during Q3 2019 assuming the debt financing is secured.

As a consequence of the constrained financial situation of the Company, the Board has convened the General Meeting to vote on the Resolutions.

Should the Placing be approved, the proceeds will be required for the Company to meet its ongoing working capital obligations and enable the Company to continue as a going concern pending the procurement of debt financing of at least $10 million required as condition precedent to completion of the Second Tranche Placing. Without the Placing proceeds, the Board recommends that Shareholders vote in favor of the voluntary liquidation of the Company and the appointment of a liquidator for the orderly wind-up of the Company and the Group.

Pursuant to the Placing, the Company has conditionally raised $6 million (before fees and expenses) by way of a conditional, non pre-emptive placing of up to 300,000,000 new Ordinary Shares in two tranches at the Placing Price. The Placing Price represents a discount of approximately 81% per cent. to the closing mid-market price of 8.5 pence on 28 June 2019, being the latest date of trading in the Company's shares prior to the Suspension, and a discount of approximately 96 per cent. from the three month historical average closing mid-market price of 40.1 pence prior to the date of Suspension. Assuming Shareholders approve the Placing, the first Instalment of the First Tranche Placing will take place immediately following the General Meeting for USD 1,000,000, with the second Instalment occurring on or about 31 August and the third Instalment on or about 30 September 2019.

Subject to satisfaction of the Conditions, the Second Tranche Placing Shares would be issued for gross proceeds of, in aggregate, USD3,000,000, issued in three monthly Instalments on or about 31 October, on or about 29 November and on or about 30 December 2019.

Following completion of First Tranche Placing, the First Tranche Placing Shares will represent approximately 78.8 per cent. of the First Tranche Enlarged Share Capital, and assuming completion of the Second Tranche Placing, , the Placing Shares will represent approximately 88.1 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 one existing shareholder. 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 is entering into Placing Agreements with the subscriber. No element of the Placing is underwritten. In accordance with the terms of the Placing Agreement, the Placing is conditional upon, inter alia, the passing of the Resolutions, any conditions in the Placing Agreement relating to the Placing being satisfied or (if applicable) waived, the Placing Agreement not having been terminated in accordance with its terms prior to Admission. The Second Tranche Placing is subject to the satisfaction of the Conditions.

The Board notes that Woodford Investment Management Limited, currently the Company's largest shareholder, holds sufficient voting rights to block the Placing. There is no assurance that Woodford Investment Management Ltd. will vote in favour of the Placing.

   1.4        Delisting and Liquidation 

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 the resolutions authorizing the dissolution of the Company with immediate effect, the appointment of a liquidator, the determination of the powers of the liquidator and the voluntary liquidation of the Company (the Resolutions relating to the Liquidation) and the Resolution relating to the Delisting. It is expected that the Company's subsidiaries will also be wound up or disposed of in due course.

The Resolutions relating to the Liquidation propose that shareholders appoint Charles Duro of Duro & Goebel, a current director of the Company, be appointed as liquidator. Given Charles Duro's experience and training as a lawyer as well as his extensive knowledge of the Company and its subsidiaries, the Board believes that it would be most efficient and cost-effective to have Charles Duro serve as liquidator. The Resolutions are set forth in the formal notice of the General Meeting at the end of this document.

Noting the proposed liquidation process above, if the Delisting becomes effective following the General Meeting, Shareholders should be aware of the implications and principal effects of the Delisting, which include the following:

-- Public market - there will be no public market or trading facility on any recognised investment exchange for the Ordinary Shares and, consequently, there can be no guarantee that a Shareholder will be able to purchase or sell any Ordinary Shares.

-- AIM Rules - Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement for the Company to retain a nominated adviser, to be notified of certain events, including substantial transactions, financing transactions, related party transactions and fundamental changes in the Company's business, including certain acquisitions and disposals.

-- Independent advisers - the Company will cease to have an independent financial and nominated adviser and broker;

-- Regulatory, accounting and reporting requirements - as an unlisted company, the Company will be subject to fewer regulatory restrictions than as a listed company.

-- Tax - the Delisting may have either positive or negative taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent adviser immediately;

-- MAR - as an unlisted company there will no longer be a requirement for the Company to publicly disclose matters which constitute inside information which, as a listed company, it would be required to do pursuant to the provisions of the Market Abuse Regulation. Although the Company may in the future publicly disclose matters which the Directors consider prudent, the disclosure of information will not reflect the requirements of MAR.

The above considerations are not exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Delisting on them.

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 and the Second Tranche Placing Shares.

 
                      Existing holding      Holding of          % of First          Holding of          Holding of 
                        of Ordinary       Ordinary Shares    Tranche Enlarged     Ordinary Shares     Ordinary Shares 
                           Shares         after admission     Share Capital*      after admission     after admission 
                                         of First Tranche                        of Second Tranche   of Second Tranche 
                                          Placing Shares*                         Placing Shares*     Placing Shares* 
 Woodford 
  Investment 
  Management, LLP, 
  acting on behalf 
  of funds under 
  its management            23,720,250          23,720,250               12.5%          23,720,250                7.0% 
                    ------------------  ------------------  ------------------  ------------------  ------------------ 
 Richard Cashin              4,799,233         154,799,233               81.4%         304,799,233               89.6% 
                    ------------------  ------------------  ------------------  ------------------  ------------------ 
  Ian Molson                 2,448,499           2,448,499                1.3%           2,448,500                0.7% 
                    ------------------  ------------------  ------------------  ------------------  ------------------ 
 Jupiter Asset 
  Management                 1,871,842           1,871,842                1.0%           1,871,842                0.5% 
                    ------------------  ------------------  ------------------  ------------------  ------------------ 
 Polygon Global 
  Partners LLP               1,516,891           1,516,891                0.8%           1,516,891                0.4% 
                    ------------------  ------------------  ------------------  ------------------  ------------------ 
 

* Each of the First Tranche Placing and the Second Tranche Placing are expected to be in three equal tranches and are subject to shareholder approval at the General Meeting and, in the case of the Second Tranche Placing, the satisfaction of certain Conditions. The figures stated here assume that both the First Tranche Placing and the Second Tranche Placing are completed and that there are no other changes to the Company's issued share capital between the time of this Circular and the completion of the Second Tranche Placing.

Richard Cashin's participation in the Placing is deemed related party transaction under Rule 13 of the AIM Rules as he is a Substantial Shareholder in the Company (as defined within the AIM Rules for Companies). The Directors consider, having consulted with the Company's nominated adviser, Strand Hanson, that the terms of Richard Cashin's participations fair and reasonable insofar as 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 11 a.m. BST/12 noon CEST on 31 July 2019, is set out at the end of this document. 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.

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 a.m. BST/11 a.m. CEST on 29 July 2019 for Forms of Instruction and 11 a.m. BST/12 noon CEST on 29 July 2019 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 as they intend to do in respect of their shareholdings in the Company of, in aggregate, 18.0 per cent. of the currently effective voting rights.

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 if market conditions do not support the continuation of those products.

   1.4      Need for additional financing 

In addition to the US$10 million debt financing required, as described in this circular, RM2 may require additional sources of capital to be able to meet its future obligations. Such additional sources of capital, which may take the form of debt financing, may not be forthcoming or available on acceptable terms. In the future, it may explore other sources of financing including invoice discounting and other debt facilities.

   1.5      RM2 may experience accelerated demand for its products and services 

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 continue its operations or expand its business

1.6 If RM2 is not able to effectively manage its growth, its operations could be damaged and profitability reduced

Future growth of RM2 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.

1.7 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.

   1.8      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.

1.9 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.

   1.10     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.

   1.11     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.

1.12 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.

1.13 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.

1.14 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 which is in process of being introduced throughout much of North America permits 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.

   1.15     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.

   1.16     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.

   1.17     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.

   1.18     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.

   1.19     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.

1.20 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.

   1.21     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.

   1.22     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.

   1.23     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.

   1.24     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.

   1.25     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.

   1.26     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.

   1.27     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.

   1.28     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.

   1.29     Publication of Annual Accounts; suspension from trading 

As announced on 1 July 2019, the Company and its auditors were not able to finalize the Company's fiscal year 2018 audited annual consolidated financial statements and as a consequence, the Company's Shares were suspended from trading on 1 July 2019. The Shares remain suspended from trading to date. There is no assurance that the Company will be able to finalize its 2018 AFS or that the suspension in the trading of its shares will be lifted.

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

   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. In the event that the Placing Resolutions are not passed, the Company may enter into a liquidation process and effect the delisting of its Ordinary Shares from trading on AIM; in such circumstances, it is unlikely that the Company's Ordinary Shares will be restored to trading on AIM.

   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 

Issuance of the Second Tranche Placing Shares is conditional on the satisfaction of the Conditions. In addition, the subscriber(s) for the Second Tranche Placing Shares may be unable to provide the funds for the purchase of such Shares at the time scheduled for the issuance. 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, which is contingent on securing US$10 million of debt funding, RM2 may require additional funds to continue as a going concern and 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 will give rise to highly 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 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 and will likely enter into a liquidation process and its Ordinary Shares will likely be delisted from trading on AIM

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 and the Group is unlikely to be able to continue as a going concern as a result. If the Resolutions relating to the Liquidation are passed, the Company would enter into a voluntary liquidation process and it is unlikely that its Ordinary Shares would be restored to trading on AIM. If the Resolution relating to the delisting of the Company's Ordinary Shares is passed, admission of the Company's shares to trading on AIM would be cancelled. If none of the Resolutions are passed, it is likely that the Company would be forced into a compulsory liquidation process, which may not result in the return of any value to Shareholders, and it is unlikely that trading in the Company's ordinary shares on AIM would be restored.

3.11 Major shareholders are able to exercise significant influence over matters requiring Shareholder approval

Certain investment funds discretionary managed by Woodford currently own a total of 23,720,250 Ordinary Shares, representing 58.8 per cent. of the Company's issued share capital and 34.2% of the voting rights. Consequently, Woodford has the ability to block any measures requiring the vote of 66 2/3 or more of the Company's shareholders, including the Placing. Following completion of the First Tranche Placing, Woodford's holding in the First Tranche Enlarged Share Capital will be reduced to 12.5% and the holding in the First Tranche Enlarged Share Capital of Richard Cashin will be increased to 81.4%, and following completion of the Second Tranche Placing, Woodford's holding in the Enlarged Share Capital will be reduced to 7.0% and the holding in the Enlarged Share Capital of Richard Cashin will be increased to 89.6%.

In addition, pursuant to the Subscription Agreement, Richard Cashin benefits from the right to have the Board nominate for election by the Shareholders such director as he may designate.

As a result, as of the completion of the First Tranche Placing Richard Cashin will be 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 Ordinary Shares in issue at 
  the date of this document (of which 193,500 
  Ordinary Shares are held in Treasury)             40,347,671 
 Placing Price                                        USD 0.02 
 Placing Price discount to the price at 
  which the Company's shares were suspended 
  from trading on AIM on 1 July 2019                       81% 
 Number of First Tranche Placing Shares 
  to be issued pursuant to the First Tranche 
  Placing*                                         150,000,000 
 Total number of Placing Shares to be issued 
  pursuant to the Placing*                         300,000,000 
 Number of Ordinary Shares in issue following 
  completion of the First Tranche Placing*         190,347,671 
 First Tranche Placing Shares as a percentage 
  of the First Tranche Enlarged Share Capital*           78.8% 
 Gross proceeds of the Placing following 
  the First Tranche Placing                         $3,000,000 
 Expected percentage of shares in public 
  hands (as defined by the AIM Rules) following 
  Admission of the First Tranche Placing 
  Shares*                                                 3.7% 
 Number of Ordinary Shares in issue immediately 
  following Admission of the Second Tranche 
  Placing Shares (including 193,500 Ordinary 
  Shares held in Treasury)*                        340,347,671 
 Placing Shares as a percentage of the 
  Enlarged Share Capital*                                88.1% 
 Gross proceeds of the Placing from the 
  Second Tranche Placing                            $3,000,000 
 Total gross proceeds from the Placing*             $6,000,000 
 Expected percentage of shares in public 
  hands (as defined by the AIM Rules) following 
  Admission of the Second Tranche Placing 
  Shares*                                                 9.0% 
 Assumed GBP:USD exchange rate                            1.24 
 

* Each of the First Tranche Placing and the Second Tranche Placing are expected to be in three equal tranches and are subject to shareholder approval at the General Meeting and, in the case of the Second Tranche Placing, the satisfaction of certain Conditions. The figures stated here assume that both the First Tranche Placing and the Second Tranche Placing are completed and that there are no other changes to the Company's issued share capital between the time of this Circular and the completion of the Second Tranche Placing.

Expected Timetable of Key Events

 
 Issue of Circular to Shareholders   22 July 2019 
 Deadline for receipt of Forms       10:00 a.m. BST/11:00 a.m. CEST 
  of Instruction                      on 29 July 2019 
 Deadline for receipt of Forms       11:00 a.m. BST/12:00 noon CEST 
  of Proxy                            on 29 July 2019 
 General Meeting                     12:00 noon CEST on 31 July 2019 
 Admission of each equal tranche     1 August 2019, 31 August 2019, 
  of First Tranche Placing Shares,    30 September 2019 
  if applicable 
 Admission of each equal tranche     30 October 2019, 29 November 2019, 
  of Second Tranche Placing           30 December 2019 
  Shares, if applicable 
 
 
 

Each of the times and dates in the above timetable 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:

 
 2018 AFS                    Company's annual consolidated financial 
                              statements for the year ended 31 December 
                              2018 
 Admission                   admission of Ordinary Shares in the 
                              Company to trading on AIM becoming effective 
                              (pursuant to Rule 6 of the AIM Rules 
                              for Companies), 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; 
 Conditions                  the Company having signed a term sheet 
                              for debt funding on acceptable terms 
                              in the amount of at least $10 million 
                              and having entered into contracts with 
                              a certain customer for at least 150,000 
                              pallets by September 30, 2019 (the latter 
                              condition now having been fulfilled); 
 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); 
 Delisting                   cancellation of the admission to trading 
                              on AIM of the Ordinary Shares; 
 Directors                   the directors of RM2; 
 Disclosure Guidance and     the disclosure guidance and transparency 
  Transparency Rules          rules issued 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 Capital      the number of Ordinary Shares in issue 
                              following completion of the Second Tranche 
                              Placing (excluding any shares issued 
                              pursuant to an Open Offer); 
 Euroclear UK & Ireland      The Euroclear UK & Ireland Limited, 
                              a company incorporated in England and 
                              Wales, being the Operator of CREST; 
 First Admission             the admission of the First Tranche Placing 
                              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 in issue 
  Share Capital               following the issue of the First Tranche 
                              Placing Shares; 
 First Tranche Placing       150,000,000 Ordinary Shares to be issued 
  Shares                      by RM2 pursuant to the First Tranche 
                              Placing at the First Tranche Placing 
                              Price; 
 First Tranche Placing       the first tranche of the Placing to 
                              raise $ 3,000,000; 
 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; 
 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 11 
                              a.m. BST/12 noon CEST on July 31, 2019 
                              at which the Resolutions will be proposed; 
 Group                       the Company and its subsidiary undertakings; 
 Instalment                  monthly instalments of each of the First 
                              Tranche Placing Shares and the Second 
                              Tranche Placing Shares equal to $1 million 
                              and 50,000,000 Placing Shares per instalment 
 Liquidation                 The filing for voluntary liquidation 
                              of the Company and the wind-up of the 
                              Group 
 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); 
 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; 
 Operator                    the meaning given to it in the CREST 
                              Regulations; 
 Ordinary Shares             ordinary shares of $0.01 each in the 
                              capital of RM2; 
 Placing                     the conditional placing of the Placing 
                              Shares pursuant to the terms of the 
                              Placing Agreement; 
 Placing Price               USD 0.02 per Placing Share; 
 Placing Shares              The First Tranche Placing Shares and 
                              the Second Tranche Placing Shares; 
 Resolutions                 the Resolutions relating to the Placing, 
                              the Resolutions relating to the Liquidation 
                              and/or the Resolutions relating to the 
                              Delisting; 
 Resolution relating to      the resolutions to authorize the cancellation 
  the Delisting               of the admission to trading on AIM of 
                              the Ordinary Shares to be proposed at 
                              the General Meeting following the approval 
                              of the Resolutions relating to the Liquidation, 
                              if applicable; 
 Resolutions relating        the resolutions authorizing the dissolution 
  to the Liquidation          of the Company with immediate effect, 
                              the appointment of a liquidator, the 
                              determination of the powers of the liquidator 
                              and the voluntary liquidation of the 
                              Company; 
 Resolutions relating        the resolutions to authorise the Directors 
  to the Placing              to disapply existing Shareholders' pre-emption 
                              rights in relation to the issue of the 
                              Placing 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 Placing      150,000,000 Ordinary Shares to be issued 
  Shares                      by RM2 pursuant to the Second Tranche 
                              Placing at the Placing Price; 
 Second Tranche Placing      the second tranche of the Placing to 
                              raise an additional $ 3,000,000 million, 
                              subject to the satisfaction of the Conditions; 
 Securities Act              the US Securities Act 1993, as amended; 
 Shareholders                holders of Shares; 
 Shares                      Ordinary Shares; 
 Strand Hanson               Strand Hanson Limited, the Company's 
                              nominated adviser under the AIM Rules 
                              and broker; 
 Subscription Agreement      the agreement dated 21 July 2019 entered 
                              into between Richard Cashin and RM2 
                              in connection with the Placing; 
 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

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July 23, 2019 02:00 ET (06:00 GMT)

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