RM2 fails to secure forecast funding by end of November

Sustainable pallet developer RM2 International updated the market on its trading and financial position on Friday, reporting it had not yet been able to secure the funding required to confirm a 12-month production forecast for its Chinese manufacturing partner Zhenshi.

The AIM-traded company had said it would need to secure the funding by the end of November on 27 September.

Its board said it remained “confident” of the firm’s ability to obtain funding upon receipt of purchase orders for ELIoT-enabled smart pallets.

“This follows positive feedback received from trials undertaken by a number of potential customers in North America over the last few months and discussions with several Fortune 500 customers who have expressed an interest in the pallets,” it said in its statement.

RM2 described ELIoT-enabled smart pallets as containing an integrated device, allowing pallets to be “accurately tracked and traced”, improving efficiency and security in the supply chain.

Production forecasts for ELIoT-enabled pallets, including production in China and Mexico, would be confirmed following the signature of such contracts with customers.

The company said its unrestricted cash position at 31 October was $9.4m.

After SG&A, one-time costs and production expenses in November, it said it expected its cash balance at the end of November to be approximately $6m.

RM2’s monthly cash burn rate, excluding production costs and one-time costs, remained at approximately $1.4m.

“Taking into account production costs and known one-time costs, the company expects to have sufficient cash to continue operating through January 2018,” the board said.

“The company continues to advance its discussions with potential funding partners and will provide further updates as and when appropriate.”

RM2 said it remained committed to further reducing its overheads, and was continuing its efforts to monetise - to the extent possible, - certain historical assets.