Remote Monitored Systems plc (LON:RMS) has announced an AGM statement.
Antony Legge, Executive Chairman of RMS, will make the following statement at today’s annual general meeting:
“Since 1 July 2020, just over one year ago, the Company’s shareholder base has more than tripled in size through the issues of shares to investors either directly or indirectly connected with or interested in Pharm 2 Farm Ltd. Initially, investors were excited with Pham 2 Farm’s ability to embed copper nanoparticles in such a way as to make anti-viral masks. During the COVID-19 pandemic, this was seen as a potential game changer. However, one cannot build a business around the short term demands of a single event, albeit one that has impacted the globe for over 18 months. Nor does such a narrow focus accurately reflect the underlying value of the intellectual property within the business.
As was said at the time of the acquisition in October 2020: ‘Unlike competing nanotechnology production processes, such as hydrothermal synthesis, Pharm 2 Farm’s process has the advantages of being highly efficient, using a small physical lab/factory footprint and is extremely scalable.’
So, what are nanoparticles and why are they so important?
Nanoparticles are materials with overall dimensions in the nanometre scale, that is less than 100 nanometres (which is 100 times smaller than the diameter of a human eyelash). They are made up of individual atoms that come together to make a particle but unlike larger minerals, they stop at the nanometre scale before growing any larger. Tailoring the structures of materials at extremely small scales makes it possible to achieve specific properties, thus greatly extending the materials science toolkit. Using nanotechnology, materials can effectively be made stronger, lighter, more durable, more reactive, more sieve-like, or better electrical conductors, among many other traits. Many everyday commercial products that are currently on the market and in daily use rely on nanoscale materials and processes. The more that one can control the size and shape of a nanoparticle, the more that one can specifically target particular solutions. The Company’s proprietary technology uses a spinning disk reactor to control both the size and shape of its nanoparticles. This highly scalable process is able to dial in nanoparticles with a very good polydispersity, typically +/- 2 nm tolerance, quickly and efficiently.
The challenge for the Company is to find commercial applications where our technology can add significant value to the end user.
We have already announced the launch of a new liquid nutrient for plants, building on the original work by Pham 2 Farm.
Also, Pharm 2 Farm has previously made reference to trials for a product that may counter the effect of Citrus Greening, a condition that causes poor vegetative growth, fruit drop, diminished fruit quality, and tree decline. In the U.S. alone it has reduced orange production in Florida by about 74% since 2005 and has caused US$4.65 billion worth of damage.
Similarly, Pharm 2 Farm had been undertaking trials for a new foodstuff for monogastric animals where our nanoparticles can significantly improve the bioavailability of key nutrients.
The Company is looking to continue both of these trials and is currently in discussions with potential partners for each product. However, such trials can be lengthy. In the case of Citrus Greening, four years could be required to bring a new product to market.
These are just two examples, and the Company is currently investigating many other opportunities. Progress on these new products has been delayed due to the development of and focus on the anti-viral mask, which has absorbed significant amounts of time for what is a very small team.
This is not to suggest that the development of the anti-viral mask was a failure. Far from it. Although sales have not come through as had been hoped at the height of the pandemic last year, the creation of the anti-viral layer has led to other opportunities in the general filtration market that are now being investigated. However, new product development takes time with uncertainty as to the eventual outcome and the Company has been keen to avoid creating expectations that are then not met.
A priority since the start of the year has been to manage the mask production business, where expectations had run ahead of what was deliverable and to then refocus the Group back on its core business of developing innovative solutions using our patented nano-production capability. This has included the decision to dispose of Gyrometric Systems Limited. As well as putting in place alternative sub-contracting manufacturing arrangements through Voltz Filters UK Limited, the board has also been working with Lemu in respect of the mask making machine that was installed, but never commissioned, at BioCity. Terms have been agreed, in principle to return the mask making machine to Lemu, further details of which will be announced in due course. In addition, the Company is investigating utilising the cash reserves to improve and increase the nanoparticle production capacity by developing a bespoke system, which has complex engineering challenges.
I appreciate that shareholders have been keen for news, but much of what has been achieved since the start of the year has had to happen behind the scenes and some remains a work in progress. Even so, I am confident that the Group is in a far better place that it was at the start of this year.
The second priority was to strengthen the management team, not least with the hiring of a new CEO and increasing Dr Gareth Cave’s involvement in the business. I am pleased to say that both of these have been achieved. An offer has been made to and accepted by a new CEO, whose appointment as from 1 September 2021 now remains subject only final contract and to completion of director due diligence that has to be carried out by our Nominated Adviser. Also, we have agreed, in principle, with Nottingham Trent University that Dr Cave’s consultancy agreement will be extended from 1 day per week to 3.5 days per week. Dr Cave will also move from being a non-executive director to an executive director, taking the role of the Group’s Chief Scientific Officer with effect from 1 September 2021, subject to contract.
The involvement of my other fellow directors, John Richardson, Richard Clarke and Felicity Sartain also should not be underestimated. They have each played a vital role in the last few months, providing insightful and valuable advice and support to the Group.
Part of re-building the executive team is the ability to offer an equity incentive that aligns with shareholder interests, hence the proposal today for shareholders to approve the EMI Share Option Scheme. Whilst issuing equity can be dilutive, with sensible share price targets the benefit to shareholders should outweigh the dilution effect. Issuing equity is also far more tax efficient for those concerned than making cash payments and also for cash that would otherwise be paid out to be re-invested in further growth of the Group’s operations.
It has been an interesting and challenging time for me since joining the board at the start of this year and with these changes in place, on the completion of the board changes outlined earlier, I will step back from Executive Chairman to non-executive Chairman with full confidence that we have the right team to take this business forward.”