Management Resource Solutions Regulatory News (MRS)

15 April 2019

Management Resource Solutions plc

("MRS", the "Company" or the "Group")

Update on acquisition of Alerion Consulting Ltd ("Alerion") and other matters

Notice of Requisition of General Meeting

The Company wishes to provide further information on the background to its recent acquisition of Alerion which was announced on 28 March 2019.

The board reiterates that it is very pleased to have acquired Alerion, which it believes to be an exciting business that will complement the service offering of the MRS Group, further enhancing the industry-leading services we offer to our customers.

As stated, Alerion's technology has been in the development phase pre-acquisition; this is now ready to be deployed on drones conducting aerial surveys at both our MRS Services Group Pty Ltd ("MRSSG") and Bachmann Plant Hire Pty Ltd ("BPH") operations. The Group has identified and budgeted costs of A$150,000 (£81,000) for marketing and hardware in order to generate the first external revenue stream. In accordance with the acquisition agreement, the Company has allocated A$555,000 (£300,000) of intra-group funding to Alerion to cover Alerion's costs.

The Alerion technology will operate through the Australian company Aerial Survey Solutions Pty Ltd (a wholly owned subsidiary of MRS). The survey team that currently operates within BPH will be managed by Elliott Talbott and operate the drones and undertake data analysis for current work streams. Further, MRS CEO Paul Brenton and Mr Talbott will continue to develop the external services (discussions and work on which are already underway), and as this grows, additional employees will be taken on to run the operations full time under the management of Mr Talbott. Under the terms of his service agreement, Mr Talbott has agreed to spend the equivalent of at least a day per week on Alerion's business for a salary of £35,000 per annum, as well as £750 per day for any additional work done. Additionally, Mr Talbott has informed the Company that he will be relinquishing a number of his other business commitments, including his roles at TitanBlock and Leinad Ltd, in order to focus on the roll out of Alerion within the Group. Mr Talbott will retain his role at Bolt.Global.

Further information on the vendors

· Elliott Talbott, the founder of Alerion was introduced to members of the board by Leon Hogan, a large shareholder of the company, for which he received a fee of £19,000. The other vendors are Mr Talbott's wife, and a company of which Mr Talbott is the sole beneficiary, and Christopher Grove (together the "Vendors").

· MRS's directors have had no previous business relationships with Mr Talbott or Alerion.

· Mr Grove is an IT consultant who received shares in Alerion in consideration for his work done to assist with the development of the software. Mr Grove has previously undertaken some IT and website support work for MRS. Mr Grove has also acted as an IT advisor to Leinad Ltd ("Leinad") which announced a technology licensing agreement with Altona Energy plc ("Altona") on 28 August 2018. Mr Talbott also undertook some work for Leinad.

· Leon Hogan is currently a shareholder in Altona and has also performed certain business development roles for Leinad as a consultant. John Zorbas, Chairman of MRS, was formerly a shareholder in Altona. Subsequent to the Leinad transaction, Tim Jones, Finance Director of MRS, was chairman of Altona for a short period.

· Mr Zorbas is also Chief Executive of URU Metals, an AIM company, in which Mr Hogan has been a small shareholder.

· The Company is informed that Mr Grove has previously provided services to businesses of Mr Hogan.

Furthermore, in light of a number of shareholder concerns regarding relationships of its shareholders and any potential conflicts of interest, the Board is commissioning its legal advisors to draw up a report to assess the merit or otherwise of such assertions and any potential conflicts of interest. The overall conclusions of the report will be communicated to shareholders in due course.

Valuation

The MRS board has a budget including projections for the costs and incremental revenues from the new Alerion operation. The existing MRS operations are projected to benefit from approximately A$240,000 (£130,000) savings per annum, before the costs of the Alerion subsidiary, from carrying out the surveys in-house rather than subcontracting surveys externally to third parties. The board has undertaken detailed financial analysis of the acquisition based on costs incurred historically on aerial surveying, along with specific revenue generating opportunities that have been identified following commercial discussions in Australia.

The board is confident that the acquisition represents an excellent opportunity for MRS and that the consideration paid for Alerion will provide an uplift in shareholder value and earnings per share over time. The board is commissioning an independent report on the bases and assumptions underlying their valuation of Alerion, the overall conclusions of which will be communicated to shareholders in due course. A further announcement will be made on appointment of the firm engaged to undertake the independent work.

Completion of Alerion acquisition and admission

As previously announced, the acquisition of Alerion completed on 28 March 2019 and it is expected that the Consideration Shares issued pursuant to the acquisition will be admitted to trading on Tuesday 16 April 2019.

The Vendors have agreed to extend their lock up period from an initial 6 months to a 6 month hard lock up plus a further 12 months orderly market lock in period.

Correction concerning July 2018 fundraising

Further to the announcement of 6 July 2018 concerning a fundraising from directors, employees and contractors, the Company wishes to clarify that one of the subscribers was Leon Hogan, who was not a director, employee or contractor.

Board of Directors

The Company stated in its corporate governance statement (that is available on the Company's website) that it would appoint an independent non-executive director to the board by November 2018. This appointment has been delayed, but it is now the intention to both accelerate this appointment and to appoint a second independent non-executive director such that the board will consist of five directors. Further details will be announced in respect of these appointments following completion of the customary due diligence. The Company will update its Corporate Governance Statement and its assessment of the independence of the Board accordingly in due course.

Notice of Requisition of General Meeting

The Company also announces that it has a received a requisition of a general meeting of the Company at which resolutions are to be proposed to remove John Zorbas and Timothy Jones as directors of the Company, to remove any directors appointed between 11 April 2019 and the date of the general meeting and to appoint Nigel Burton, Trevor Brown and Daniel Smith as directors of the Company.

The Company will send shareholders a notice of general meeting in due course in accordance with the requirements of the Companies Act 2006.

Update of debt restructuring

Further to the update in the half year results statement dated 28 February 2019, the Company continues to make progress on the debt restructuring and has recently agreed a term sheet with a major financial institution. The Company expects to provide a further update to shareholders upon completion of the debt restructuring.

For further information:

About MRS

Management Resource Solutions plc (MRS), through its subsidiaries Bachmann Plant Hire and MRS Services Group, offers plant hire, equipment repair, refurbishment and fabrication, mine rehabilitation, earthmoving, road construction and other support services to a wide base of private and public sector clients in Australia. MRS caters predominately for the mining, civil engineering, construction and infrastructure industries.

Further information on the Company can be found at http://www.mrsplc.info