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(Alliance News) - Remote Monitored Systems on Wednesday said it is seeking legal advice over a breach by 18% shareholder Gareth Cave as Cave announced intentions to requisition a general meeting to replace the board.
In August, Braveheart Investment Group PLC sold its 52% stake in Pharm 2 Farm Ltd to Remote Monitored. As part of the transaction, Remote Monitored Systems issued 289.6 million shares to P2F Founder Gareth Cave.
P2F uses a patented process for producing and functionalising nanoparticles for various applications including human, animal and crop health.
On Monday, Cave announced his intention to vote against issue of warrants to participants of Remote Monitored's December placing which raised GBP5 million, as he announced plans to lodge a requisition for a general meeting to "consider board changes to improve corporate governance".
On Wednesday, the company noted concerns by shareholders regarding the scale of the placing as well as concerns about potential dilution which may result from the future exercise of the warrants being issued to placees. In response, it said it will engage with placees in order to seek to restructure the warrants with the intention of reducing the potential dilution to existing shareholders.
Remote Monitored also stated it believes comments made by Cave on social media were in breach of the relationship agreement entered into at the time of the company's acquisition of Pharm 2 Farm.
"The company is taking legal advice in respect of these matters and intends to respond very robustly, including pursuing those publishing defamatory information about the RMS board and notifying the police where appropriate," it added.
In response, Cave said RMS made no formal announcement prior to admission of the placing shares that there was growing shareholder opposition to the issue of warrants, adding the company has also made unfounded allegations about him which he refutes and is taking legal advice over.
He added he will requisition a general meeting to remove the existing directors and to appoint a new board with "proper independent board oversight."
"I am disappointed that despite constructive discussions with RMS's advisers yesterday, the board of RMS has chosen to ride roughshod over shareholders' concerns. I believe that these would now be best satisfied by the cancellation of the warrants in their current form and comprehensive board changes which will allow myself and the Pharm 2 Farm team to concentrate on the many commercial opportunities presenting themselves," Cave said.
Shares in Remote Monitored were trading 6.0% lower at 1.22 pence each on Wednesday afternoon in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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