Remote Monitored Sys (RMS.L) Notice of General Meeting

Remote Monitored Systems plc (“RMS” or the “Company”) notes that a shareholder circular (the “Circular”) convening a general meeting of the Company (the “General Meeting”) has been posted to shareholders and will shortly be available on the Company’s website at: www.remotemonitoredsystems.com.

The Company is requesting approval for, inter alia, the issue of the Placing Warrants and Broker Warrants in connection with the Company’s Placing, announced on 18 December 2020.

The General Meeting will be held at 1:00 p.m. on 12 February 2021 at the offices of Pharm2Farm Ltd, BioCity Nottingham, Pennyfoot Street, Nottingham NG1 1GF, United Kingdom.

In light of the ongoing Covid-19 pandemic and with a view to taking appropriate measures to safeguard its Shareholders health and make the General Meeting as safe and efficient as possible, the Company is invoking certain of the meetings provisions in the Act and its Articles. For the purposes of the provisions of the Articles, the Company is designating the location of the meeting to be the place where the Chairman is located. Please note, however, that voting will only be able to take place by proxy. No Shareholder will be allowed entry into the meeting.

Shareholders will be able to submit questions by emailing info@remotemonitoredsystems.com ahead of the General Meeting. Only questions in relation to the Resolutions or business of the General Meeting will be considered.

Unless otherwise indicated, all defined terms in this announcement shall have the same meaning as described in the Circular.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Proposed issue of 420,000,000 warrants and Notice of General Meeting

1. Introduction

Authority to issue the Warrants

On 18 December 2020, the Company announced that it had raised gross proceeds of £5,000,000 through an oversubscribed placing of 400,000,000 new Ordinary Shares (the “Placing Shares”) at a price of 1.25 pence per Placing Share (the “Placing”). The Placing Shares commenced trading on AIM on 23 December 2020.

For each Placing Share subscribed for, each investor participating in the Placing is entitled to receive one non-transferrable warrant to subscribe for an Ordinary Share with an exercise period of 3 months from its issuance (subject to any extension) and exercisable at a price of 2 pence per Ordinary Share (the “Placing Warrants”).

In addition, the Company is issuing a further 10,000,000 warrants to each of Peterhouse and SP Angel (the “Joint Brokers”) pursuant to two separate placing agreements dated 18 December 2020 with the Joint Brokers (the “Broker Warrants”).

If, once issued, the Placing Warrants and Broker Warrants (together the “Warrants”) are exercised in full, it would result in the issue of a further 420,000,000 new Ordinary Shares.

The Board acknowledges that following the Placing and the conditional grant of the Warrants, few Shareholders have expressed their concerns about the potential dilution that may arise to their shareholding in the Company when the Warrants are exercised. As a result of those concerns, various changes to the Board took place, including the appointment of three new directors. The purpose of the Circular is to comply with the terms of the Placing, pursuant to which the Company is obliged to call a general meeting of its Shareholders and place the necessary resolution to the Shareholders to approve the grant of the Warrants.

The grant of the Warrants is conditional upon Resolutions 1 and 2 detailed below being passed by the relevant majority of Shareholders.

General Authorities

It is usual for quoted companies to possess the authorities to issue shares up to a certain limit and to disapply pre-emption rights without the need for recourse to shareholders, in order to allow the Company the flexibility to react to events. For AIM listed companies, this authority is usually in the range of 10% to 30% of the issued share capital.

In addition to the Resolutions 1 and 2, relating to the grant of the Warrants, the Directors are seeking authorities to allot and issue shares or grant rights to subscribe for shares in the Company up to a maximum aggregate nominal amount of £ 20,275.56, being 10% of the issued shares in the capital of the Company with the right to vote, and to disapply pre-emption rights in respect of such shares.

The power to allot and issue shares, and disapply pre-emption rights are conditional upon Resolutions 3 and 4 detailed below being passed.

2. General Meeting

I am writing to inform you of the General Meeting of the Company to be held at 1.00 p.m. on 12 February 2021 at the offices of Pharm2Farm Ltd, BioCity Nottingham, Pennyfoot Street, Nottingham NG1 1GF , United Kingdom. The notice of the General Meeting is included in the Circular being sent to shareholders.

Please note the instructions set out in the Circular with respect to the arrangements in place for this meeting. In light of the ongoing Covid-19 pandemic and with a view to taking appropriate measures to safeguard its Shareholders health and make the General Meeting as safe and efficient as possible, the Company is invoking certain of the meetings provisions in the Act and its Articles. For the purposes of the provisions of the Articles, we are designating the location of the meeting to be the place where the Chairman is located. Please note, however, that voting will only be able to take place by proxy. No Shareholder will be allowed entry into the meeting.

Explanatory notes to the notice of General Meeting

In the usual way we ask and encourage Shareholders to vote for the Resolutions by appointing the Chairman as a Shareholder’s proxy. Shareholders will only be able to appoint the Chairman as proxy for this particular meeting. Accordingly, Shareholders are encouraged to complete the enclosed Form of Proxy and return it by post to Share Registrars Limited, The Courtyard 17 West St, Farnham GU9 7DR or via email to voting@shareregistrars.uk.com (please include “Remote Monitored Systems” and your full name in the subject line of the email) as soon as possible but in any event to be received not later than 1.00 p.m. on 10 February 2021 or 48 hours before any adjourned meeting.

Shareholders will be able to submit questions by emailing info@remotemonitoredsystems.com ahead of the General Meeting. Only questions in relation to the Resolutions or business of the General Meeting will be considered.

On the day of the General Meeting

The meeting takes place at 1.00 p.m. on 12 February 2021.

The Chairman will open the meeting at the appointed time, formally put the Resolutions to the meeting and advise of the proxy votes received in advance. The Directors present at the meeting will consider the questions submitted by Shareholders after the formal business of the meeting has been concluded and provide answers by email following the meeting. There will be no presentation by the Directors or general question session in order to limit the time spent by Directors present at the meeting.

Explanatory notes to the notice of General Meeting

The following notes give an explanation of the proposed Resolutions. Resolutions 1 and 3 are proposed as ordinary resolutions. This means for these resolutions to be passed, more than half of the votes cast must be in favour of each resolution. Resolutions 2 and 4 are proposed as special resolutions. This means that for these resolutions to be passed, at least three quarters of the votes cast must be in favour each resolution.

Resolution 1 – Directors’ authority to allot shares in respect of the Warrants

This is an ordinary resolution to grant the Directors the authority to allot and issue shares and grant rights to subscribe for shares in the Company for the purposes of Section 551 of the Act up to the maximum aggregate nominal amount of £42,000 being the maximum required for the purposes of issuing the Warrants unconditionally.

Resolution 2 – Disapplication of pre-emption rights in respect of the Warrants

Resolution 2 proposes to disapply the statutory rights of pre-emption in respect of the allotment of equity securities for cash under Section 561(1) of the Act. This is a special resolution authorising the Directors to issue equity securities as continuing authority up to an aggregate nominal amount of £42,000 being the maximum required for the purposes of issuing the Warrants unconditionally for cash on a non pre-emptive basis pursuant to the authority conferred by Resolution 1 above. The authority granted by this Resolution will expire at the conclusion of next annual general meeting of the Company.

Resolution 3 – Directors’ general authority to allot shares

This is an ordinary resolution to grant the Directors the authority to allot and issue shares and grant rights to subscribe for shares in the Company for the purposes of Section 551 of the Act, other than for the Warrants, up to the maximum aggregate nominal amount of £20,275.56being 10% of the Company’s issued share capital.

Resolutions 1 and 3 replace any existing authorities to issue shares in the Company and the authority under these resolutions will expire at the conclusion of the next annual general meeting of the Company.

Resolution 4 – General disapplication of pre-emption rights

Resolution 4 proposes to disapply the statutory rights of pre-emption in respect of the allotment of equity securities for cash, other than for the Warrants, under Section 561(1) of the Act. This is a special resolution authorising the Directors to issue equity securities as continuing authority up to an aggregate nominal amount of £20,275.56, being 10% of the Company’s issued share capital, unconditionally for cash on a non pre-emptive basis pursuant to the authority conferred by Resolution 3 above. The authority granted by this Resolution will expire at the conclusion of next annual general meeting of the Company.

Action to be taken by Shareholders

Shareholders will find enclosed with the Circular a Form of Proxy for use at the General Meeting. The Form of Proxy should be completed and returned in accordance with the instructions printed on it so as to arrive at Share Registrars Limited, The Courtyard 17 West St, Farnham GU9 7DR or voting@shareregistrars.uk.com as soon as possible and in any event not later than at 1.00 p.m. on 10 February 2021. ONLY THE CHAIRMAN CAN BE APPOINTED AS YOUR PROXY FOR THIS PARTICULAR MEETING AND IN ADDITION SHAREHOLDERS CANNOT ATTEND THIS MEETING IN PERSON.

3. Social Media

The Board notes that the Company and its Directors remain the subject of much discussion on social media and investor discussion sites. Whilst the Board welcomes constructive dialogue, it has been saddened to note the abusive nature of a small minority of posts. The Board recognises that the subject of the Warrants has been an emotive one and hopes that with convening of the General Meeting these posts will now cease.

The Board takes the safety of the Group’s directors and employees very seriously and will take the necessary steps to counter any unacceptable posts in the future.

4. Guidance for Shareholders

The Board is not issuing a recommendation to Shareholders. Instead, the Board asks Shareholders to consider the following issues in deciding how to vote on the Resolutions 1 and 2 in respect of the Warrants:

Early Stage of Development and need for future capital – the Company’s subsidiaries are at an early stage in their developments and may require further funding to reach their full potential. Should the Warrants be approved and then exercised in full, they would raise £8.4m of cash for the Group.

Future Dilution – On 25 January 2021, the last practical date before the posting of the Circular, the Company’s share price was 2.98p, representing a premium of 49% to the exercise price of the Warrants. A sustained increase in the Company’s share price may allow the Company to raise future capital at higher prices and be less dilutive than the Warrants, however there can be no guarantee that this would be the case. For the avoidance of doubt, as at the date of the Circular, the Board does not have any specific future fundraising under consideration.

In deciding how to vote on Resolutions 3 and 4, the Boards asks Shareholders to note that these are the standard authorities usually granted to directors to give them the flexibility to operate and that the waiver of pre-emption rights over shares representing 10% of the existing issued share capital is at the bottom end of the range usually adopted by AIM listed companies.


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