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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Rm2 International S.a. | LSE:RM2 | London | Ordinary Share | LU1914372336 | ORD USD0.01 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 8.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMRM2
RNS Number : 3366J
RM2 International SA
29 March 2018
29 March 2018
RM2 International S.A.
("RM2" or the "Company")
US$36m Placing, Pref. Share Conversion and Notice of EGM
Conditional Placing of 2,535,211,265 new Ordinary Shares at a Placing Price of 1 pence each to raise US$36 million before expenses and Conditional Conversion of All Convertible Preferred Shares into 3,156,907,940 new Ordinary Shares
Introduction
Your Board announces today that the Company has conditionally raised US$36 million before fees and expenses by a Placing (to be effected in two tranches) of 2,535,211,265 new Ordinary Shares to existing institutional investors, certain directors and members of senior management at a Placing Price of 1 pence per Placing Share. For the Placing to proceed, the Company requires Shareholders' approval to authorise the Directors to disapply existing Shareholders' pre-emption rights in relation to the issue of the Placing Shares and the Conversion Shares on a non pre-emptive basis.
The Company is today posting a circular to Shareholders to give you notice of the General Meeting to consider and, if thought fit, approve the Resolutions to grant this authority (the "Circular"). The General Meeting is to be held at 5 Rue de la Chapelle, Luxembourg, L-1325, Luxembourg at 7 a.m. BST/8 a.m. CEST on 13 April 2018. The formal notice of General Meeting is set out at the end of the Circular. The Circular is also available on the Company's website.
Assuming the Shareholders approve the Placing, the issuance of the first tranche of 1,279,049,295 new Ordinary Shares (gross proceeds of $18,162,500) (the First Tranche Subscription) will take place immediately following the General Meeting. The issuance of the second tranche of 1,256,161,970 new Ordinary Shares (gross proceeds of $17,837,500) (the Second Tranche Subscription) would occur ten business days following a drawdown notice issued by the Company and is subject to the satisfaction of the Key Performance Indicators described herein. The Board believes that raising equity finance using the flexibility provided by a non pre-emptive placing is the only viable option for the Company at this time. This allows investors the opportunity to participate in the Placing to raise urgent funding for the Company's survival and avoids the requirement for a prospectus, which is a costly and time consuming process.
Should the Placing prove successful and subject to shareholder authorization, the Board intends shortly afterwards to make an open offer at the Placing Price of up to the pound sterling equivalent of EUR5.0 million (the Open Offer), the maximum permitted without requiring the Company to publish a prospectus under the EU Prospectus Directive. The Open Offer would be made available to all Shareholders to allow those Shareholders who could not participate in the Placing to have the opportunity to invest. Authorization for the Open Offer would be sought from the Shareholders at the General Meeting of the Company to be held on 13 April 2018.
For the Placing to proceed, the holders of 120,457,808 Convertible Preferred Shares who are subscribing in the Placing for at least 75% of the same quantum of Placing Shares (expressed in British pound sterling) have agreed to convert their Convertible Preferred Shares into 3,026,761,003 Ordinary Shares at the Placing Price (the Participating Conversion Shares) and the holders of 14,357,963 Convertible Preferred Shares who are not subscribing in the Placing have agreed to convert their Convertible Preferred Shares into 130,146,937 Ordinary Shares in application of the anti-dilution provisions in the Company's Articles (the Non-Participating Conversion Shares). Both the Participating Conversion Shares and the Non-Participating Conversion Shares include the payment of all accrued dividends on such shares.
The Participating Conversion Shares and the Non-Participating Conversion Shares are collectively referred to herein as the Conversion Shares. The Conversion Shares will represent approximately 65.2 per cent. of the First Tranche Enlarged Share Capital and 51.8 per cent. of the Enlarged Share Capital assuming issuance of Shares pursuant to the Second Tranche Subscription. Following conversion of the Convertible Preferred Shares into the Conversion Shares (the Conversion), no Convertible Preferred Shares will remain outstanding and the Company's equity will consist of a single class of Ordinary Shares.
The Conversion Shares will be issued by using distributable reserves (to the extent available) and share premium, and will, when issued, be subject to the Articles, be credited as fully paid and will rank pari passu in all respects with the Ordinary Shares then in issue, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of First Admission.
In order to issue such Conversion Shares, the Company requires Shareholders' approval including authorization to the Board to disapply existing Shareholders' pre-emption rights in relation to the issuance of the Conversion Shares on a non pre-emptive basis.
The Board therefore requests Shareholders to vote in favor of the authorization to the Board to proceed to increase the subscribed share capital by an amount of US$36 million and to the issue of the Placing Shares and the Conversion Shares within the limits of the authorized share capital and to authorize the Directors to disapply existing Shareholders' pre-emption rights in relation to such issue of the Placing Shares and the Conversion Shares.
The Company intends to use the net proceeds of the Placing to fund: (i) the retrofitting of existing inventory of RM2 Blockpals with ELIoT track and trace devices, (ii) the production of new RM2 ELIoT Pallets and (iii) its sales and general administrative costs.
This announcement (and the Circular) provides you with information about the Placing and the issue of the Conversion Shares and explains why the Board considers these matters to be in the best interests of the Company and its Shareholders, and why the Directors recommend that you vote in favour of the Resolutions to be proposed at the General Meeting.
The primary reason for the Resolutions is for the Company to be able to raise sufficient funds for the Company to augment its product offering and to meet its ongoing working capital obligations and to enable the Company to continue as a going concern.
If all of the Resolutions relating to the Placing are not successfully passed at the General Meeting, and no other source of funds has become available to the Company prior to the General Meeting, the Chairman of the General Meeting will table for immediate vote either (i) the resolution authorizing the Company to dispose of all or substantially all of its assets if at such time there is a viable offer for such assets or (ii) the resolution authorizing the dissolution with immediate effect and voluntary liquidation of the Company.
Background to the Placing and use of proceeds
1.1 Information on the Company RM2 specialises in pallet development, manufacture, supply and management and is seeking to establish a leading presence in global pallet supply and improve the supply chain of manufacturing and distribution businesses through the effective and efficient use and management of composite pallets. 1.2 RM2's strategic progress Since 2016, the Company made significant progress in addressing difficulties it has encountered. Firstly, it closed down its manufacturing facility in Toronto and outsourced production to experienced, world class partners. One of these partners, Jabil, now has a dedicated facility in Ciudad Juarez in Mexico, which is fully built out, but in light of the distressed financial position of the Company is operating below capacity. Assuming the Placing is successful, it is expected that Jabil will first retrofit existing inventory of RM2 Blockpallets with ELIoT devices (described below). Once the existing inventory is retrofitted, the Company will be able to provide pallets in significant numbers and at a fixed and competitive cost during the second half of the year and thereafter. Equipment is on site with RM2's other manufacturing partner, Zhenshi in China, which will enable it to provide a similar level of scalable production subject to funding and product demand. Secondly, in order to address issues of asset retention, reduction of theft and utilization, the Company has developed its RM2 ELIoT tracking technology. ELIoT comprises a cellular device which transmits the whereabouts of each pallet, providing a previously unachievable level of confidence in asset security. The underlying technology is believed to be unique to RM2. The Company has conducted a number of trials of ELIoT-enabled pallets with customers in North America and has signed or is in advanced negotiations for deployment. While the Directors believe that the RM2 ELIoT device is a robust product based on trials and information from component suppliers, it is a new product, and therefore the longevity of which will be demonstrated over its course of service. 1.3 Current trading and prospects RM2 has an extensive pipeline of potential deployments in North America and Europe, a good percentage of which it expects to be successfully converted over the upcoming 12-18 months. These include numerous potential deployments of ELIoT pallets, which have generated significant interest from existing and potential customers following a number of trials of the product. Discussions are particularly advanced with a Fortune 500 company in North America around a phased deployment of pallets into their internal network and expanding with their supplier network. RM2 is also pleased to announce that it has signed a 3-year contract with another supplier in that network.
The conversion of a subset of these opportunities, deployed and financed on schedule, is expected to result in the Company generating positive EBITDA in 2019. The Company also notes that following the repayment of the mortgage on the office building in Switzerland sold last month, the Company is debt free. 1.4 Reasons for the Placing and use of proceeds As announced on 9 March 2018, the Company believes it has sufficient financial reserves to cover its cash overheads only until mid-April 2018. Beyond this, the proceeds of the Placing will be required for the Company to meet its ongoing working capital obligations and enable the Company to continue as a going concern. Without the Placing proceeds, the Board believes that it is highly likely that the Company will become insolvent, and insolvency proceedings, such as administration or liquidation, will be commenced. Accordingly, the net proceeds of this Placing are expected to be used to fund: (i) the retrofitting of existing inventory of RM2 Blockpals with ELIoT track and trace devices, (ii) the production of new RM2 ELIoT Pallets and (iii) its sales and general administrative costs. The Company has conditionally raised $36 million (before fees and expenses) by way of a conditional, non pre-emptive placing of 2,535,211,265 new Ordinary Shares in two tranches at the Placing Price. The Placing Price represents a discount of approximately 76 per cent. from the closing mid-market price of 4.25 pence on 27 March 2018, being the latest practicable date prior to this announcement of the Placing, and a discount of approximately 48 per cent. from the three month historical average closing mid-market price of 2.91 pence. Assuming Shareholders approve the Placing, the First Tranche Subscription will take place immediately following the General Meeting. The Second Tranche Subscription would occur ten business days following a drawdown notice issued by the Company and is subject to the satisfaction of the Key Performance Indicators described herein. Following First Admission, the First Tranche Placing Shares and the Conversion Shares together will represent approximately 91.6 per cent. of the First Tranche Enlarged Share Capital, and assuming completion of the Second Tranche Subscription, following Second Admission, the Placing Shares and the Conversion Shares together will represent approximately 93.3 per cent. of the Enlarged Share Capital. In order to raise funds quickly and to minimize the time and transaction costs of the Placing, the Placing Shares are only being placed with a limited number of existing institutional shareholders directors and members of senior management. The Placing Shares are not being made available to the public. The Placing Shares will, when issued, be subject to the Articles, be credited as fully paid and will rank pari passu in all respects with the Ordinary Shares then in issue, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of Admission. In connection with the Placing, the Company has entered into Subscription Agreements with placees. No element of the Placing is underwritten. In accordance with the terms of the Subscription Agreements, the Placing is conditional upon, amongst other things, the passing of the Resolutions, the Conversion, the conditions in the Subscription Agreements relating to the Placing being satisfied or (if applicable) waived, the Subscription Agreements not having been terminated in accordance with their terms prior to Admission and First Admission occurring on or before 19 April 2018. A drawdown notice for the Second Tranche Subscription is expected to be issued by the Company before the end of the year. The Second Tranche Subscription is subject to the satisfaction of Key Performance Indicators. Woodford will not be obliged to subscribe for its pro rata of Second Tranche Shares in the event that the subscription would result in a breach of any regulatory or funds limits set out in any constitutional or compliance documentation. Woodford will use reasonable endeavours to procure that any such breach is avoided, but Woodford will not in any event be required to reallocate the Fund allocations specified in the investment agreement to other Funds. Application will be made to the London Stock Exchange for the Placing Shares and the Conversion Shares to be admitted to trading on AIM. Subject, inter alia, to the passing of the Resolutions at the General Meeting it is expected that admission to AIM will become effective in respect of, and that dealings on AIM will commence in, the First Tranche Placing Shares and the Conversion Shares on or around 19 April 2018.
Related Party Transaction
The table below sets out the positions of the Company's current Significant Shareholders (as defined in the AIM Rules) and its Chairman following the issue of the First Tranche Placing Shares, the Conversion Shares and the Second Tranche Placing Shares.
Hot Features
Premium
Existing Holding % of First Holding Holding
holding of Ordinary Tranche of Ordinary of Ordinary
of Ordinary Shares Enlarged Shares Shares
and Convertible after Share after after
Preference admission Capital admission admission
Shares of First of Second of Second
Tranche Tranche Tranche
Placing Placing Placing
Shares Shares Shares
and Conversion
Shares
--------------------- --------------------- ----------- --------------------- -------------
Woodford
Investment
Management,
LLP ,
acting
on behalf
of funds
under
its management 184,380,716 3,220,027,777 66.5% 4,135,520,734 67.8%
------------------ --------------------- --------------------- ----------- --------------------- -------------
Verlinvest 45,631,110 76,432,752 1.6% 76,432,752 1.3%
------------------ --------------------- --------------------- ----------- --------------------- -------------
Ian Molson 12,207,776 279,167,583 5.8% 349,590,118 5.7%
------------------ --------------------- --------------------- ----------- --------------------- -------------
John
James
Walsh 26,439,717 26,439,717 0.5% 26,439,717 0.4%
------------------ --------------------- --------------------- ----------- --------------------- -------------
In addition, certain non-executive directors and members of senior management have conditionally subscribed for Placing Shares as set forth in the table below:
Existing Holding % of First Holding Holding
holding of Ordinary Tranche of Ordinary of
of Ordinary Shares Enlarged Shares Ordinary
and Convertible after Share after Shares
Preference admission Capital admission after
Shares of First of Second admission
Tranche Tranche of Second
Placing Placing Tranche
Shares Shares Placing
and Conversion Shares
Shares
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Lord
Rose 1,440,000 19,045,634 0.4% 36,651,268 0.6%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Paul
Walsh 2,029,091 6,430,500 0.1% 10,831,908 0.2%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Charles
Duro 627,500 2,388,064 0.0% 4,148,627 0.1%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Kevin
Mazula - 7,629,108 0.2% 7,629,108 0.1%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
JF Blouvac 2,500,000 10,129,108 0.2% 10,129,108 0.2%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Elizabeth
Pauchet 5,412,000 13,041,108 0.3% 13,041,108 0.2%
------------- ----------------------------- ---------------------- ----------- ---------------------- -----------
Payment for the subscription of Placing Shares by Kevin Mazula, JF Blouvac and Elizabeth Pauchet (Management Subscribers) will be effected by means of a reduction in salary over an eighteen-month period following the Placing. Placing Shares subscribed for by Management Subscribers shall be held in escrow by the Company's Luxembourg attorneys and shall be released in eighteen equal tranches, unless the employment relationship ceases before the end of such eighteen-month period, in which case such shares shall be released from escrow.
Woodford's and R. Ian Molson's (through a family vehicle, called The Accommodation Trust) participation in the Placing and the Conversion, Verlinvest S.A.'s, participation in the Conversion and the participation in the Placing of the non-executive directors and Management Subscribers are deemed related party transactions under Rule 13 of the AIM Rules. Jan Dekker, being the only Director not participating in the Placing and/or the Conversion, considers, having consulted with the Company's nominated adviser, Strand Hanson, that the terms of the respective participations are fair and reasonable insofar as the Shareholders as a whole are concerned.
General Meeting
A notice convening a General Meeting, to be held at 5 Rue de la Chapelle, Luxembourg, L-1325, Luxembourg at 7 a.m. BST/8 a.m. CEST on 13 April 2018, is set out at the end of the Circular. At this meeting resolutions will be proposed to authorise the Directors to issue (i) the Placing Shares, (ii) the Conversion Shares and (iii) Ordinary Shares pursuant to an Open Offer, on a non pre-emptive basis, and to amend the Articles accordingly, as set out in the Notice of General Meeting. For the Resolutions to be validly adopted, at least two thirds of the votes validly cast by Shareholders present or represented at the General Meeting must be cast in favour in each class of Shares and with a quorum of at least 50% of the Shares issued in each class of shares (for the resolutions related to the Conversion Shares).
Action to be taken
Shareholders will find enclosed with the Circular a Form of Proxy or Form of Instruction for use at the General Meeting. Whether you are going to attend the meeting or not, please complete the Form of Proxy or Form of Instruction, following the instructions, and return it as soon as possible to the Company's Registrars, preferably through the use of their electronic voting system. Electronic votes must be lodged or forms must arrive at the latest by 7 a.m. BST/8 a.m. CEST on 11 April 2018 for Forms of Instruction and 7 a.m. BST/8 a.m. CEST on 12 April 2018 for Forms of Proxy. Returning the form will not stop you from attending the meeting and voting if you wish to do so.
Recommendation
The Directors recommend that you vote in favour of the Resolutions to be proposed at the General Meeting. R. Ian Molson will not vote on the Resolutions relating to Placing (which include those related to the Conversion) due to a conflict of interest. All other Directors will be voting in favour of the Resolutions.
Risk Factors
Any investment in the Company is subject to a number of risks. Accordingly, prospective investors should carefully consider the risks set out below as well as the other information contained in this announcement (and the Circular) and any other publicly available information about the Group before making a decision whether to invest in the Company. The risks described below are not the only risks that the Group faces. Additional risks and uncertainties that the Directors are not aware of or that the Directors currently believe are immaterial may also impair the Group's operations. Any of these risks may have a material adverse effect on the Group's business, financial condition, results of operations and prospects. In that case, the price of the Ordinary Shares could decline and investors may lose all or part of their investment. Prospective investors should consider carefully whether an investment in the Company is suitable for them in light of the information in this announcement (and the Circular) and their personal circumstances.
Before making an investment, prospective investors are strongly advised to consult an investment adviser authorised under FSMA who specialises in investments of this kind. A prospective investor should consider carefully whether an investment in the Company is suitable in the light of his or her personal circumstances, the financial resources available to him or her and his or her ability to bear any loss which might result from such investment.
The following factors do not purport to be a complete list or explanation of all the risks involved in investing in the Company. In particular, the Company's performance may be affected by changes in the market and/or economic conditions and in legal, regulatory and tax requirements.
1 RISKS RELATING TO RM2 AND ITS BUSINESS 1.1 Early stage of operations The commencement of RM2 earning material revenues is difficult to predict and there is no guarantee that RM2 will generate any material revenues in the near future. RM2 has a limited operating history upon which its performance and prospects can be evaluated and faces the risks frequently encountered by developing companies. These risks include the uncertainty as to which areas to target for growth. There can be no assurance that RM2's proposed operations will be profitable or produce a reasonable return, if any, on investment. 1.2 Product development RM2 intends to continue to develop products which are designed to have a commercial application. There is no guarantee that any such product will be successful nor that any products will actually result in any commercial applications. The success of RM2 is reliant upon there being a demand for its products. In addition, RM2 relies upon third parties to incorporate its products into their own processes. A particular third party having access to RM2's products may fail to use the products in an effective process or the products or processes may not be or become commercially viable. There can be no assurance that such products will achieve commercial success or be an attractive alternative to conventional products or processes. It is possible that RM2 focuses its activities on a limited number of products and technologies and that after such further development has taken place, RM2 finds that the resulting product is not successful or has no profitable commercial application, or that the resulting product has been superseded by other products which have a more profitable commercial application when compared with those of RM2. The development and manufacture of products takes some time to complete. Depending on the process, RM2 may not be able to develop its products within the timeframe required by its potential customers and/or that targeted by its competitors. Further, the success of RM2 may depend on its continued ability to develop new products and to meet potential customers' changing requirements. 1.3 Market acceptance The development of a market for a new product is affected by many factors, most of which are beyond the control of RM2, including the emergence of newer and more competitive products or processes, the costs of the products, regulatory requirements, including any future regulatory changes, end-users' perceptions as to the safety of any product and the propensity of end-users to try new products or processes. If a market for any product fails to develop or develops more slowly than anticipated, RM2 may fail to achieve profitability with respect to the associated products. In addition, RM2 may not continue to develop such products if market conditions do not support the continuation of those products. 1.4 RM2 may experience accelerated demand for its products and services RM2 expects to be able to meet its current capital expenditures from internal resources and the net proceeds of the Placing. In the future, it may explore other sources of financing including invoice discounting and other debt facilities. A need to fulfill large orders rapidly may require RM2 to seek additional capital which could entail the issuance of new equity, debt financing or some combination thereof. If RM2 is unable to raise the necessary additional financing for any expanded working capital requirement it could adversely affect its ability to expand its business.
1.5 RM2 is expected to experience rapid growth. If RM2 is not able to effectively manage its growth, its operations could be damaged and profitability reduced
RM2's business and operations are expected to experience rapid growth. This future growth could place significant demands on RM2's operational and financial infrastructure and its ability to expand to meet such growth will be tested. RM2 may need to expand and enhance its infrastructure and technology, and improve its operational and financial systems and procedures and controls from time to time in order to be able to match that growth. If RM2 is unable to manage its growth effectively, its operations could be harmed and profitability reduced. The growth of RM2's sales and profits in the future will depend, in part, on its ability to expand its operations through the roll-out of its products and services to new potential customers and into new markets and geographies. Furthermore, in order to manage its planned expansion, it will need continually to evaluate the adequacy of its management capability, operational procedures, financial controls and information systems. Accordingly, there can be no assurance that RM2 will be able to achieve its expansion goals on a timely or profitable basis.
1.6 RM2 will need to ensure that its financial risk limitation policies, procedures and practices remain suitable as RM2 grows
The financial risk limitation policies, procedures and practices RM2 has established to date are suitable for a company of the size and stage of development of RM2. As RM2 seeks to grow, the design and implementation of RM2's policies, procedures and practices used to identify, monitor and control a variety of risks may fail to be effective. RM2's financial risk limitation methods rely on a combination of internally developed technical controls, industry standard practices, observation of historical market behaviour and human supervision. These methods may not adequately prevent future losses. A lack of effective internal controls could have a material adverse effect on RM2's reputation, business, financial condition and operating results. Any material weaknesses may materially adversely affect RM2's ability to report accurately its financial condition and results of operations in the future in a timely and reliable manner. 1.7 RM2's expansion may not be successful RM2's operations are subject to certain risks including changes in government policies, changes in political and economic conditions, changes in regulatory environments, exposure to different legal, regulatory or fiscal standards, difficulties in staffing and managing operations, and potentially adverse tax consequences. There are no guarantees that RM2 will be able to successfully expand its operations in line with its current expectations.
1.8 RM2 may experience unforeseen delays and cost overruns when rolling out its products and services
Management effort and financial resources are being employed by RM2 in rolling out its products and services to potential customers. Although RM2 has budgeted for expected costings, additional expenses in the event of unforeseen delays, cost overruns, unanticipated expenses, regulatory changes and increases in the price of materials and other manufacturing equipment utilised in the production of RM2's pallets may negatively affect RM2's business, financial condition and results of operations. 1.9 RM2 is dependent on developing relationships with existing and potential customers The success of RM2's business is, and is expected to continue to be, dependent on the development of commercial relationships with its existing and potential customers and suppliers. There is no guarantee that these relationships will be developed sufficiently to the point of generating significant revenue for RM2, or that such potential customers will not seek to use alternative providers of products and services similar to those of RM2. 1.10 RM2 is dependent on continued availability of raw materials and manufacturing equipment The raw materials and manufacturing equipment utilised by RM2's manufacturing partners in the delivery of its products and services are readily available from a number of suppliers and counterparties. However, any restriction on the availability of such items may negatively affect RM2's business, financial condition and results of operations.
1.11 The Company depends on component and product manufacturing and logistical services provided by outsourcing partners
Substantially all of the Company's manufacturing is performed in whole or in part by outsourcing partners located in Mexico and China. The Company has also outsourced much of its transportation and logistics management. While these arrangements may lower operating costs, they also reduce the Company's direct control over production and distribution. It is uncertain what effect such diminished control will have on the quality or quantity of products or services, or the Company's flexibility to respond to changing conditions. Although arrangements with these partners may contain provisions for warranty expense reimbursement, the Company may remain responsible to the consumer for warranty service in the event of product defects and could experience an unanticipated product defect or warranty liability. Any failure of the Company's outsourcing partners to perform may have a negative impact on the Company's cost or supply of components or finished goods. In addition, manufacturing or logistics in these locations or transit to final destinations may be disrupted for a variety of reasons including, but not limited to, natural and man-made disasters, information technology system failures, commercial disputes, military actions or economic, business, labour, environmental, public health, or political issues. The Company has invested in manufacturing process equipment, much of which is held at certain of its outsourcing partners, and has made prepayments to certain of its suppliers associated with long-term supply agreements. While these arrangements help ensure the supply of components and finished goods, if these outsourcing partners or suppliers experience severe financial problems or other disruptions in their business, such continued supply could be reduced or terminated and the net realisable value of these assets could be negatively impacted.
1.12 The Company faces substantial inventory and other asset risk in addition to purchase commitment cancellation risk
The Company orders products and builds inventory in advance of purchase orders. Because the Company's markets are developing, competitive and subject to other changes, there is a risk the Company will forecast incorrectly and order or produce excess or insufficient amounts of products.
1.13 Future operating results depend upon the Company's ability to obtain RM2 ELIoT components and products in sufficient quantities on commercially reasonable terms and on the timely introduction of LTE-m (Long Term Evolution (4G)) technology
Because the Company currently obtains RM2 ELIoT components and products from single or limited sources, the Company is subject to significant supply and pricing risks. There can be no assurance that the Company will be able to negotiate, extend or renew supply agreements on similar terms, or at all. Suppliers of components may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation within a particular industry, further limiting the Company's ability to obtain sufficient quantities of components on commercially reasonable terms. The effects of global or regional economic conditions on the Company's suppliers also could affect the Company's ability to obtain components and products. Therefore, the Company remains subject to significant risks of supply shortages and price increases. The cellular LTE-m network is expected to be introduced throughout much of North America in the course of 2018. That network will permit the utilization of a new, simpler and less-expensive chip-set. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers' yields have matured or manufacturing capacity has increased. The supply of components could be delayed or constrained, or a key manufacturing vendor could delay shipments of completed products to the Company. 1.14 Exchange rate fluctuations RM2's principal revenues in the near term are expected to be earned in US$. Currency fluctuations may affect RM2's operating cash flow since certain of its costs and revenues are likely to be denominated in a number of different currencies other than US$ and any potential income may become subject to exchange control or similar restrictions. Fluctuations in exchange rates between currencies in which RM2 operates may cause fluctuations in its financial results which are not necessarily related to its underlying operations. RM2 does not currently have any foreign currency hedges in place. If and when appropriate, the adoption of a hedging policy will be considered by the Board. 1.15 Competition There can be no assurance that potential competitors of RM2, which may have greater financial, research and development, sales and marketing and personnel resources than RM2, are not currently developing, or will not in the future develop, products and strategies that are equally or more effective and/or economical as any products or strategies
developed by RM2 or which would otherwise render its products or strategies obsolete. RM2 operates within competitive markets and the Directors believe that it has adopted a competitive business strategy. However, RM2's business, results, operations and financial condition could be materially adversely affected by the actions of its competitors (including their marketing and pricing strategies and product and services development). RM2 may be forced to change the nature of its business as a result of competitive factors and there is no assurance that RM2 will be able to compete successfully in the market place in which it seeks to operate. 1.16 Manufacturing technology Even if new and advanced manufacturing or production equipment becomes available for the production of RM2's products, RM2 may not have funds available or be able to obtain necessary financing on acceptable terms to acquire it for use by its manufacturing contractors, or agree for its manufacturing contractors to acquire or utilise it. Further, any investment RM2 may make in a perceived technological advance may not be effective, economically successful or otherwise accepted in the market. 1.17 RM2's expenses include fixed costs A significant proportion of RM2's costs may be fixed and may not then be easily reduced in the short-term. Therefore, RM2 may not be able to reduce certain expenses promptly in response to any future reduction in revenue. Should such a reduction occur and RM2 be unable to reduce its fixed expenses accordingly, its business, financial condition and results of operations may be materially adversely affected. 1.18 Ability to attract and retain key executives, officers, managers and technical personnel RM2 is headquartered in Luxembourg. The Chief Executive Officer is currently based in North America and the Chief Financial Officer and the principal sales office are located in Switzerland. Attracting, training, retaining and motivating technical and managerial personnel, including individuals with significant technical expertise is a critical component of the future success of RM2's business. RM2 may encounter difficulties in attracting or retaining qualified personnel. Managing from disparate locations can pose challenges in communication and decision-making. Continued growth may cause a significant strain on existing managerial, operational, financial and information systems resources. The performance of RM2 depends, to a significant extent, upon the abilities and continued efforts of its existing senior management as well as the recruitment of further senior management in line with the planned growth in operations. The loss of the services or failure to recruit key management personnel or the failure to retain or recruit key employees or the inability to effectively communicate across international offices could adversely affect RM2's ability to maintain and/or improve its operating and financial performance. In common with many businesses, the success of RM2 will, to a significant extent, be dependent on the expertise and experience of the Directors and key senior management, the loss of one or more of whom could have a material adverse effect on RM2.
1.19 RM2's disaster recovery plans may not be sufficient and if they are not then there could be a material adverse effect on its financial position
RM2 depends on the performance, reliability and availability of its information technology and communications systems. Any damage to or failure of its systems could result in disruptions to RM2's operations and websites, which could reduce its revenues and profits, and damage its brands. RM2's systems are vulnerable to damage or interruption from power loss, telecommunications failures, computer viruses, computer denial of service attacks or other attempts to harm its systems, natural disasters, including floods and fires, volcanic ash and vandalism, terrorist attacks or other acts. RM2's disaster recovery plans may not adequately address every potential event and its insurance policies may not cover any loss in full or in part (including losses resulting from business interruptions) or damage that it suffers fully or at all. RM2 relies on third parties, including data centres and bandwidth providers, to host and operate its websites. Any failure or interruption in the services provided by these third parties could harm its operations and reputation. In addition, RM2 may have little or no control over these third parties, which increases its vulnerability to service problems. Any disruptions in the services provided by these parties or any failure of these providers to handle current or higher visitor traffic or transaction volumes could significantly harm RM2's business. RM2 may in the future experience disruptions or delays in these services. If these providers were to suffer financial or other difficulties, their services could be interrupted or discontinued and replacement providers may be uneconomical or unavailable. Any of these events could have a material adverse effect on RM2's business, operating profit and overall financial condition. 1.20 Political, economic, regulatory and legislative considerations Adverse developments in the political, legal, economic and regulatory environment may materially and adversely affect the financial position and business prospects of RM2. Political and economic uncertainties include, but are not limited to, expropriation, nationalisation, changes in interest rates, the retail prices index, changes in taxation, changes in trade tariffs and trade treaties and changes in law. Whilst RM2 strives to continue to take effective measures such as prudent financial management and efficient operating procedures, there is no assurance that adverse political, economic, legal and regulatory factors will not materially and adversely affect RM2. 1.21 Development of technology Continuing research on and development of RM2's technology may be required and there can be no assurance that any of its future technology will be successfully developed or exploited. RM2 may encounter delays and incur additional research and development costs and expenses over and above those anticipated or allowed for by the Directors. For example while the Directors believe that ELIoT is a robust product based on trials and information from component suppliers, it is a new product which has not yet been able to demonstrate its longevity. 1.22 Unforeseen factors and developments RM2's ability to implement its business strategy may be adversely affected by factors that it cannot currently foresee, such as unanticipated costs and expenses, technological change and severe economic downturn. All of these factors may necessitate changes to the business strategy described in this announcement (and the Circular). 1.23 Market acceptance and future funding Whilst the Directors believe that there are viable markets for RM2's products and services, there can be no assurance that these will be generally adopted by RM2's existing and potential client base. Whilst the Directors believe that, taking into account the net proceeds of the Placing, RM2 has sufficient working capital for its present requirements, that is for at least 12 months from the date of Admission, there can be no assurance that RM2 would have sufficient resources to fund further development beyond that period. 1.24 Regulatory environment RM2's operations may be subject to a variety of national, federal, provincial, state, foreign and local laws and regulations, including environmental, health and safety laws, regulations, treaties and conventions (together, "Regulations"). This includes, inter alia, those controlling the discharge of materials into the environment, requiring removal and clean-up of environmental contamination, establishing certification, licensing, health and safety, taxes, labour and training standards, operation of equipment or otherwise relating to the protection of human health and the environment, and export control regulations. The amendment or modification of existing Regulations or the adoption of new Regulations curtailing or further regulating RM2's business could have a material adverse effect on RM2's operating results and financial condition. Whilst RM2 intends to work to comply with all applicable Regulations, it cannot predict the extent to which future earnings or capital expenditures may be affected by compliance with such new Regulations. In addition, RM2 may be subject to significant fines, penalties or liability if it does not comply with any such existing or future Regulations. There may be a change in the regulatory environment which may materially adversely affect RM2's ability to implement successfully the strategy set out in this announcement (and the Circular). 1.25 Intellectual property and proprietary rights RM2 relies upon maintaining the confidentiality of the exact nature of the BLOCKPal manufacturing process and its RM2 ELIoT technology and does not for example have any patents. The details of the manufacturing process and its RM2 ELIoT technology are the Company's most important intellectual property. The Company protects this intellectual property by ensuring that its relevant employees and manufacturers have confidentiality provisions in their employment and manufacturing contracts preventing them from disclosing the confidential information of the Group to anyone outside of the Group.
RM2 ensures relevant suppliers have entered into non-disclosure agreements restricting disclosure by such suppliers of the confidential information of the Group. However, RM2 cannot be sure that other competitors will not infringe upon, violate, challenge or reverse engineer its intellectual property in the future. If RM2 is not able to adequately protect or enforce its intellectual property rights, its business, results of operations and financial condition may be materially adversely affected. RM2 is also subject to the risk that third parties may allege that RM2's operations and use of technology infringes upon their intellectual property rights. RM2 cannot be sure that such litigation will not be brought against RM2 in the future and, if brought, whether RM2 would be successful in defending itself against such claims. Moreover, defending such claims may result in protracted litigation, which could result in substantial costs and the diversion of RM2's resources, as a result of which RM2's business, results of operations and financial condition may be adversely affected. Furthermore, RM2 customer contracts may contain indemnities, whereby RM2 may agree to indemnify its customers for third party intellectual property infringement claims and RM2 cannot be sure that it would have no liability to its customers in such circumstances. 1.26 Reliance on manufacturing sector for bulk of pallet orders RM2 is reliant on the manufacturing sector of the economy to produce goods in sufficient volumes to drive demand for pallets on which to transport those goods. A reduction in manufacturing output may lead to a reduction in the size of the pallet market and in turn RM2 may find it more difficult to obtain orders to produce or lease pallets. 1.27 Increases in input costs RM2's operations require raw materials, road transportation and water and electricity supply. Any increase in these input costs would affect the profitability of RM2 which may find it difficult to pass on such increased costs to potential customers.
RISKS RELATING TO THE COMPANY'S DOMICILE
2.1 Disclosure of interests in shares Under the Luxembourg Companies Law, shareholders in RM2 are not obliged to disclose their interests in a company in the same way as shareholders of certain public companies incorporated in the United Kingdom. In particular, the Disclosure Guidance and Transparency Rules do not apply. The Articles have been amended to incorporate provisions equivalent to those contained in the Disclosure Guidance and Transparency Rules, but these may be amended by a resolution of the Shareholders. 2.2 Takeovers As RM2 is not admitted to trading on a "regulated market", it is not subject to any takeover laws in Luxembourg or elsewhere.
RISKS RELATING TO THE ORDINARY SHARES
3.1 Suitability Investment in the Ordinary Shares may not be suitable for all readers of this announcement (and the Circular). All potential investors are accordingly advised to consult a person authorised under FSMA who specialises in investments of this nature before making any investment decisions. 3.2 Investment in AIM-traded securities Investment in shares traded on AIM involves a higher degree of risk, and such shares may be less liquid, than shares in companies which are listed on the Official List. The AIM Rules are less demanding than those rules that govern companies admitted to the Official List. It is emphasised that no application is being made for the admission of RM2's securities to the Official List or to any other investment exchange other than AIM. An investment in the Ordinary Shares may be difficult to realise. Prospective investors should be aware that the value of an investment in RM2 may go down as well as up and that the market price of the Ordinary Shares may not reflect the underlying value of RM2. Investors may therefore realise less than, or lose all of, their investment. 3.3 Share price volatility and liquidity The share price of quoted companies can be highly volatile and shareholdings can be illiquid. The price at which the Ordinary Shares are quoted and the price which investors may realise for their Ordinary Shares will be influenced by a large number of factors, some specific to RM2 and its operations and others which may affect quoted companies generally. These factors could include the performance of RM2, large purchases or sales of the Ordinary Shares, currency fluctuations, legislative changes and general economic, political, regulatory or social conditions. 3.4 Placing Shares Issued in Two Tranches 3.5 Issuance of the Second Tranche Placing Shares is conditional on the satisfaction of certain key performance indicators. In addition, the subscribers for the Second Tranche Placing Shares may be unable to provide the funds for the purchase of such Shares at the time the Company issues a drawdown notice. The occurrence of either of these circumstances would lead to the Second Tranche Placing Shares not being issued, in which case the Company will not have the resources to carry out its business plan. 3.5 Access to further capital Following completion of the Placing, RM2 may in future require additional funds to respond to business challenges, enhancing existing products and services and further developing its sales and marketing channels and capabilities. Accordingly, RM2 may need to engage in further equity or debt financings to secure additional funds. If RM2 raises additional funds through further issues of equity or convertible debt securities, existing shareholders could suffer further significant dilution, and any new equity securities or convertible debt securities could have rights, preferences and privileges superior to those of current shareholders. Any debt financing secured by RM2 in the future could involve restrictive covenants relating to its capital raising activities and other financial and operational matters, which may make it more difficult for RM2 to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, RM2 may not be able to obtain additional financing on terms favourable to it, if at all. If RM2 is unable to obtain adequate financing or financing on terms satisfactory to it, when required, its ability to continue to support its business growth and to respond to business challenges could be significantly limited or could affect its financial viability. 3.6 Dilution The Placing Shares and the Conversion Shares will give rise to significant dilution for Shareholders and, if available, future financings to provide required capital may dilute shareholders' proportionate ownership in RM2. Following completion of the Placing, RM2 may raise capital in the future through public or private equity financings or by issuing debt securities convertible into Ordinary Shares, or rights to acquire these securities (which, in any such case, may not be made available to existing holders of Ordinary Shares). If RM2 raises significant amounts of capital by these or other means, that could cause further dilution for RM2's existing shareholders. Moreover, the Placing and/or the further issue of Ordinary Shares and/or Convertible Preferred Shares could have a negative impact on the trading price and increase the volatility of the market price of the Ordinary Shares. RM2 may also issue further Ordinary Shares, or create further options over Ordinary Shares, as part of its employee remuneration policy, which could in aggregate create a substantial dilution in the value of the Ordinary Shares and the proportion of RM2's share capital in which investors are interested. 3.7 Future sale of Ordinary Shares RM2 is unable to predict when and if substantial numbers of Ordinary Shares will be sold in the open market following the Placing. Any such sales, or the perception that such sales might occur, could result in a material adverse effect on the market price of the Ordinary Shares. RM2 may require additional capital in the future which may not be available to it. 3.8 Exchange rate risk to investors RM2's functional currency is US$. Fluctuations in currency could have an adverse effect on the value of an investor's holdings in RM2 where the principal accounting currency of the investor is not US$ or where there are inverse fluctuations between Sterling, the currency in which the Ordinary Shares are quoted, and US$, the currency in which the Company's results are reported. 3.9 Dividends There can be no assurance as to whether dividends will be paid in future or in what amount. Subject to compliance with the Luxembourg Companies Law and the Articles, the declaration, payment and amount of any future dividends are subject to the discretion of the Directors, and will depend on, inter alia, the Company's earnings, financial position, cash requirements and availability of profits. A dividend may never be paid and, at present, there is no intention to pay a dividend in the short to medium term.
3.10 If the Resolutions relating to the Placing are not passed, the Company will not be able to proceed with the Placing in the form currently envisaged
The Placing is conditional, inter alia, on the passing of the Resolutions. In the event that the Resolutions relating to the Placing are not passed, the Company will not be able to proceed with the Placing, with the result that the anticipated net proceeds of the Placing will not become available to fund proposed upcoming expenditure and achieve the objectives currently pursued by the Board. The Group is unlikely to be able to continue as a going concern as a result.
3.11 Major shareholder Woodford is able to exercise significant influence over matters requiring Shareholder approval
Certain investment funds and client mandates discretionary managed by Woodford currently own a total of 112,754,011 Ordinary Shares and 71,626,705 Convertible Preferred Shares, representing, in aggregate, 34.1 per cent. of the Company's issued share capital. Following completion of the Placing, in which, as noted earlier in this announcement, Woodford has participated, Woodford's holding in the Enlarged Share Capital will be 67.8 per cent. In addition, Woodford benefits from the right to have the Board nominate for election by the Shareholders such director as Woodford may designate. For as long as Woodford does not exercise its rights to designate a director, it will have the right to appoint an observer to attend Board meetings. For as long as Woodford has designated a director appointed to the Board, the quorum for Board meetings will include that director. As a result, Woodford is able to exercise a significant degree of influence over matters requiring Shareholder approval, including the election of Directors and significant corporate transactions.
The risks noted above do not necessarily comprise all of the risks potentially faced by RM2 and are not intended to be presented in any assumed order of priority.
Although RM2 will seek to minimise the impact of the Risk Factors, investment in RM2 should only be made by investors able to sustain a total loss of their investment. Potential investors are strongly recommended to consult an investment adviser authorised under FSMA, who specialises in investments of this nature before making any decision to invest.
Definitions
The following definitions apply throughout this announcement (and the Circular), unless the context requires otherwise:
Admission First Admission and/or Second
Admission as the context requires;
--------------------------- --------------------------------------
AIM the AIM market of the London
Stock Exchange;
--------------------------- --------------------------------------
AIM Rules the rules for AIM companies
and their nominated advisers
issued by the London Stock
Exchange;
--------------------------- --------------------------------------
Articles articles of association of
the Company;
--------------------------- --------------------------------------
Board the board of Directors of
RM2;
--------------------------- --------------------------------------
CEST central European summer time;
--------------------------- --------------------------------------
Conversion the conversion of 134,815,771
Convertible Preferred Shares
into the Conversion Shares
as a condition of the Placing;
--------------------------- --------------------------------------
Conversion Shares 3,156,907,940 Ordinary Shares
(comprising the Participating
Conversion Shares and the
Non-Participating Conversion
Shares) to be issued by RM2
pursuant to the Conversion;
--------------------------- --------------------------------------
Convertible Preferred convertible preferred shares
Shares of $0.01 each in the capital
of RM2;
--------------------------- --------------------------------------
CREST the relevant system (as defined
in the CREST Regulations)
of which Euroclear UK & Ireland
is the Operator (as defined
in the CREST Regulations);
--------------------------- --------------------------------------
CREST Regulations the Uncertificated Securities
Regulations 2001 (as amended);
--------------------------- --------------------------------------
Directors the directors of RM2;
--------------------------- --------------------------------------
Disclosure Guidance the disclosure guidance and
and Transparency transparency rules issued
Rules by the Financial Conduct Authority
acting in its capacity as
the competent authority for
the purposes of Part V of
FSMA;
--------------------------- --------------------------------------
ELIoT RM2 ELIoT tracking technology,
comprising a cellular device
which transmits the whereabouts
of each pallet;
--------------------------- --------------------------------------
Enlarged Share the number of Ordinary Shares
Capital in issue following completion
of the Second Tranche Subscription
(excluding any shares issued
pursuant to an Open Offer);
--------------------------- --------------------------------------
Euroclear UK & The Euroclear UK & Ireland
Ireland Limited, a company incorporated
in England and Wales, being
the Operator of CREST;
--------------------------- --------------------------------------
First Admission the admission of the First
Tranche Placing Shares and
Conversion Shares to trading
on AIM becoming effective
(pursuant to Rule 6 of the
AIM Rules for Companies);
--------------------------- --------------------------------------
First Tranche Enlarged the number of Ordinary Shares
Share Capital in issue following the issue
of the First Tranche Placing
Shares and the Conversion
Shares (excluding any shares
issued pursuant to an Open
Offer);
--------------------------- --------------------------------------
First Tranche Placing 1,279,049,295 Ordinary Shares
Shares to be issued by RM2 pursuant
to the First Tranche Subscription
at the Placing Price;
--------------------------- --------------------------------------
First Tranche Subscription the first tranche of the Placing
to raise $18,162,500;
--------------------------- --------------------------------------
Form of Instruction the form of instruction for
use in connection with the
General Meeting accompanying
the Circular;
--------------------------- --------------------------------------
Form of Proxy the form of proxy for use
in connection with the General
Meeting accompanying the Circular;
--------------------------- --------------------------------------
FSMA the Financial Services and
Markets Act 2000, as amended;
--------------------------- --------------------------------------
General Meeting the extraordinary general
meeting of RM2 to be held
at 5 Rue de la Chapelle, Luxembourg,
L-1325, Luxembourg at 7 a.m.
BST/8 a.m. CEST on April 13,
2018 at which the Resolutions
will be proposed;
--------------------------- --------------------------------------
Group the Company and its subsidiary
undertakings;
--------------------------- --------------------------------------
Key Performance reducing operating costs of
Indicators the business to a pre-determined
level, launching next generation
IoT Cat M ELIoT pallets and
achieving commercial deployment
of RM2 ELIoT pallets by certain
milestones, as determined
to Woodford's satisfaction
--------------------------- --------------------------------------
London Stock Exchange the London Stock Exchange
plc;
--------------------------- --------------------------------------
Luxembourg Companies Loi du 10 août 1915 concernant
Law les sociétés commerciales
(telle que modifiée)
- Law dated August 10, 1915
concerning commercial companies
(as amended);
--------------------------- --------------------------------------
Non-participating 130,146,937 Ordinary Shares,
Conversion Shares to be issued by RM2 pursuant
to the Conversion to existing
holders of Convertible Preferred
Shares who are not subscribing
for Placing Shares;
--------------------------- --------------------------------------
Notice of General the notice of the General
Meeting Meeting set out at the end
of the Circular;
--------------------------- --------------------------------------
Official List the official list of the UK
Listing Authority;
--------------------------- --------------------------------------
Operator the meaning given to it in
the CREST Regulations;
--------------------------- --------------------------------------
Ordinary Shares ordinary shares of $0.01 each
in the capital of RM2;
--------------------------- --------------------------------------
Participating Conversion 3,026,761,003 Ordinary Shares
Shares to be issued by RM2 pursuant
to the Conversion to existing
holders of Convertible Preferred
Shares who are subscribing
for Placing Shares;
--------------------------- --------------------------------------
Placing the conditional placing of
the Placing Shares pursuant
to the terms of the Subscription
Agreements;
--------------------------- --------------------------------------
Placing Price 1 pence per Placing Share;
--------------------------- --------------------------------------
Placing Shares The First Tranche Placing
Shares and the Second Tranche
Placing Shares;
--------------------------- --------------------------------------
Resolutions The Resolutions relating to
the Placing and the resolutions
to authorize the Directors
to sell all or substantially
all of the assets of the Company
and the resolution to dissolve
the Company with immediate
effect and the place the Company
in involuntary liquidation;
--------------------------- --------------------------------------
Resolutions relating the resolutions to authorise
to the Placing the Directors to disapply
existing Shareholders' pre-emption
rights in relation to the
issue of the Placing Shares
and the Conversion Shares,
and to amend the Articles,
to be proposed at the General
Meeting;
--------------------------- --------------------------------------
RM2 or the Company RM2 International S.A.;
--------------------------- --------------------------------------
Second Admission the admission of the Second
Tranche Placing Shares to
trading on AIM becoming effective
(pursuant to Rule 6 of the
AIM Rules for Companies);
--------------------------- --------------------------------------
Second Tranche 1,256,161,970 Ordinary Shares
Placing Shares to be issued by RM2 pursuant
to the Second Tranche Subscription
at the Placing Price;
--------------------------- --------------------------------------
Second Tranche the second tranche of the
Subscription Placing to raise an additional
$16 million, subject to the
issuance of a drawdown notice
by the Company and the satisfaction
of the Key Performance Indicators;
--------------------------- --------------------------------------
Securities Act the US Securities Act 1993,
as amended;
--------------------------- --------------------------------------
Shareholders holders of Shares;
--------------------------- --------------------------------------
Shares Ordinary Shares and Convertible
Preferred Shares;
--------------------------- --------------------------------------
Strand Hanson Strand Hanson Limited, the
Company's nominated adviser
under the AIM Rules;
--------------------------- --------------------------------------
Subscription Agreements the agreements dated 28 March
2018 entered into existing
institutional investors and
certain directors and members
of management and RM2 in connection
with the Placing and the Conversion;
--------------------------- --------------------------------------
UK the United Kingdom;
--------------------------- --------------------------------------
US or United States the United States of America;
and
--------------------------- --------------------------------------
Woodford Woodford Investment Management
Ltd.
--------------------------- --------------------------------------
All references in this announcement (and the Circular) to "GBP", "pence" or "p" are to the lawful currency of the United Kingdom, all references to "US$" or "$" are to the lawful currency of the United States.
Placing Statistics
Number of Ordinary Shares in issue at the date of this announcement 407,062,656 Number of Convertible Preferred Shares in issue at the date of this announcement 134,815,771 Placing Price 1 pence Placing Price discount to the closing middle c. 76% market price on 27 March 2018 Number of First Tranche Placing Shares to be issued pursuant to the First Tranche Subscription 1,279,049,295 Number of Second Tranche Placing Shares to be issued pursuant to the Second Tranche Subscription 1,256,161,970 Total number of Placing Shares to be issued pursuant to the Placing 2,535,211,265 Total number of Conversion Shares being issued pursuant to the Conversion 3,156,907,940 Number of Convertible Preferred Shares in issue immediately following Conversion 0 Number of Ordinary Shares in issue immediately following First Admission 4,843,019,891 First Tranche Placing Shares as a percentage of the First Tranche Enlarged Share Capital 26.4% Conversion Shares as a percentage of the First Tranche Enlarged Share Capital 65.2% First Tranche Placing Shares and Conversion Shares together as a percentage of the First Tranche Enlarged Share Capital 91.6% Gross proceeds of the Placing following the First Tranche Subscription $18,162,500 Estimated net proceeds of the Placing to be received by the Company following the First Tranche Subscription $17,974,425 Expected percentage of shares in public hands (as defined by the AIM Rules) following First Admission 17.0% Number of Ordinary Shares in issue immediately following Second Admission 6,099,181,861 Placing Shares as a percentage of the Enlarged Share Capital 41.6% Conversion Shares as a percentage of the Enlarged Share Capital 51.8% Placing Shares and Conversion Shares together as a percentage of the Enlarged Share Capital 93.3% Gross proceeds of the Placing from the Second Tranche Subscription $17,837,500 Estimated net proceeds of the Placing to be received by the Company from the Second Tranche Subscription $17,837,500 Total gross proceeds from the Placing $36,000,000 Total net proceeds from the Placing $35,811,925 Assumed GBP:USD exchange rate 1.42
Expected Timetable of Key Events
Announcement of, inter alia, the 7 a.m. on 29
Placing and the Conversion March 2018
The Circular and the Form of Proxy or 29 March
Form of Instruction posted to Shareholders 2018
Latest time and date for receipt 8 a.m. CEST on 11
of Forms of Instruction April 2018
Latest time and date for receipt 8 a.m. CEST on 12
of Forms of Proxy April 2018
General Meeting 8 a.m. CEST on 13
April 2018
First Admission and dealings to
commence in the First Tranche Placing 8 a.m. BST on
Shares and the Conversion Shares 19 April 2018
First Tranche Placing Shares and
Conversion Shares in uncertificated 19 April 2018
form to be credited to CREST accounts
(CREST shareholders only)
Each of the times and dates in the above timetable is a reference to the time in London and is subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified by announcement by the Company on a regulatory information service.
For further information:
+44 (0)20 7638
RM2 International S.A. 9571
Kevin Mazula, Chief Executive
Officer
Jean-Francois Blouvac, Chief
Financial Officer
Strand Hanson Limited (Nominated +44 (0)20 7409
& Financial Adviser and Broker) 3494
James Spinney
Ritchie Balmer
James Bellman
+44 (0)20 7638
Citigate Dewe Rogerson 9571
Simon Rigby
Ellen Wilton
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Notes to Editors
RM2 International S.A. specialises in pallet development, manufacture, supply and management to establish a leading presence in global pallet supply and improve the supply chain of manufacturing and distribution businesses through the effective and efficient use and management of composite pallets. It is quoted on the AIM market of the London Stock Exchange under the symbol RM2.L. For further information, please visit www.rm2.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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