RMS.L Share News (RMS)

(Sharecast News) - Remote Monitored Systems updated the market on its placing raising £5m on Wednesday, as well as potential additions to its board and the recent actions of substantial shareholder Dr Cave.
The AIM-traded firm said the proceeds of the placing would allow it to meet its immediate working capital requirements, and also accelerate projects to allow it to exploit the full potential of its technologies.

It said it had noted concerns raised about the scale of the fundraising, reiterating that it had identified an "imminent working capital shortfall" earlier in December, primarily due to the delay in the start of mask producing operations at its Pharm 2 Farm (P2F) business.

"To ensure that the company was sufficiently resourced, the company took market soundings from investors and discovered that there appeared to be significant demand from potential investors substantially in excess of the company's initial requirements," the board explained in its statement.

"Given the requirements to ensure that the company had resources in place in January the timing requirements of a pre-emptive issue were not considered appropriate in this instance."

Noting that availability of capital, the board said it recognised an opportunity to accelerate its plans to position P2F as a high value supplier of specialist nano materials and coatings, as well as to invest further in its two other businesses, Gyrometric and Clouveil.

"Under these plans, the company would invest in P2F to build its capability in specialist nano materials and coatings alongside a wholesale marketing operation with the eventual manufacturing of end products incorporating these specialist materials primarily being outsourced.

"This would enable P2F to focus on developing a broader range of nano products to be commercialised along these lines.

"The company has projects within its Gyrometric and Cloudveil businesses that can also be accelerated with focussed investment."

Remote Monitored Systems said its board was evaluating and ranking such opportunities, and was looking to apply the placing proceeds to the most compelling projects.

"The board notes the concerns raised by some shareholders in respect of the potential dilution which may result from the future exercise of the warrants that are being issued to placees pursuant to the placing.

"The board therefore intends to engage with placees in order to seek to restructure the warrants with the intention of reducing the potential dilution to existing shareholders."

Further updates over the warrants would be made in due course, the directors said, adding that the new shares had started trading on AIM earlier on Wednesday.

Looking at its board, Remote Monitored Systems said that following the acquisition of P2F, it had recognised the need - reflecting the "increased complexity" of the business - to further strengthen its board in order to deliver on its growth strategy and "fully exploit" the potential for its products.

"To this end, the company had already been considering a number of candidates for one or more new independent non-executive director positions."

The board said that, while recent commentary around the company was "unhelpful" in its pursuit of high quality candidates, it would provide further updates on its board in due course.

Finally, Remote Monitored Systems noted announcements issued by substantial shareholder Dr Cave, and following social media commentary, which reportedly included "threatening and defamatory comments" directed at the company and its officers.

The company said it had told Dr Cave that, in its view, he had been in "deliberate breach" of the relationship agreement entered into by him at the time of its acquisition of P2F.

It said it was reserving its rights to seek legal remedy in relation to the matter.

"Shareholders should note that Dr Cave, an academic, is a consultant to P2F supplied by Nottingham Trent University under P2F's contract with the university, and is required to spend only one day per week on P2F matters as he has an employment agreement with the university," the board said.

"He has also already been informed of governance concerns he has caused through his use of social media."

Remote Monitored Systems said it was taking legal advice on the matters, and intended to respond "very robustly", including pursuing those publishing defamatory information about the board, and "notifying the police where appropriate".

At 1605 GMT, shares in Remote Monitored Systems were down 5.96% at 1.22p.