RMS.L Regulatory News (RMS)

23 December 2020

Remote Monitored Systems plc ("RMS" or the "Company")

Update on Fundraising and response to announcements from Dr. Cave

The board of directors of Remote Monitored Systems plc ("Board"), is pleased to provide the following update in respect of the placing raising gross proceeds of £5m announced on 18 December 2020 (the "Placing"), potential additions to the Company's board and the recent actions of Dr Cave (a substantial shareholder in the Company and a director of P2F).

The Placing

The Board considers the Placing to be in the best interests of shareholders and the proceeds raised will allow the Company to meet its immediate working capital requirements and also accelerate projects to allow it to exploit the full potential of the Company's technologies. The Board notes concerns raised about the scale of the fundraising and provides some further background as set out below.

As announced on 11 December 2020, the Company identified an imminent working capital shortfall primarily due to the delay in the commencement of mask producing operations at its Pharm 2 Farm Limited ("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. 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 this availability of capital the Board recognized there was 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. The Board continues to evaluate and rank such opportunities and looks 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 in respect of the warrants are expected to be made in due course.

As previously announced, the new shares being issued pursuant to the Placing commenced trading on AIM earlier today.

Additions to the Company's board

Following the acquisition of P2F, the Company had recognised the need, reflecting the increased complexity of the business, to further strengthen the Board in order to deliver on the Company's growth strategy and exploit fully 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.

While the recent commentary in relation to the Company is unhelpful in the Company's pursuit of high quality candidates who can add experience and expertise to the Board, the Company looks forward to providing further updates to shareholders on this in due course.

Relationship with Dr. Gareth Cave

The Board has noted the concerns of some investors which it has sought to assuage through the actions noted above.

The Board also notes the announcements issued by Dr Cave and the ongoing social media commentary it has generated including threatening and defamatory comments directed at the Company and its officers. Dr. Cave has been informed by RMS that in its view he has been in deliberate breach of the Relationship Agreement entered into by him at the time of RMS' acquisition of P2F. The Company reserves its rights to seek legal remedy in relation to this 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. He has also already been informed of governance concerns he has caused through his use of social media.

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.

Further announcements will be made in due course.

- ENDS -

ENQUIRIES:

Remote Monitored Systems plc

John Richardson (Executive Director) +44 7751 118916

SP Angel Corporate Finance LLP +44 20 3470 0470

Nominated Adviser and Joint Broker

Stuart Gledhill

Caroline Rowe

Peterhouse Corporate Finance +44 20 7469 0930

Joint Broker

Lucy Williams