Letter to the Board of Directors Regarding the Capital Raise
14 September 2022
Board of Directors of Structural Monitoring Systems,
On 12 September 2022 Structural Monitoring Systems PLC (SMS) asked the ASX to place the company’s publicly traded CDIs in a trading halt as it prepares to announce a fresh fundraising round, to which ASX obliged and has since halted trading of the company’s CDIs. Upon learning of this news, Andrew Roberto, a Portfolio Manager at Drake and my designated Board nominee per the agreement reached and adopted in October 2021 between Drake Private Investments and the Board of Directors of SMS reached out directly to Executive Chairman Ross Love in order to inquire about the terms of investment such that Drake could “look at further supporting the company” and has yet to receive a response.
Given the behavior of this Board of Directors to date, we would like to remind you that the Board adopted an agreement in October of 2021 that specified that Drake would be offered its pro-rata share of any capital raises, and would have the right to underwrite its portion of the deal if need be. Drake expects the terms of this agreement to be honored and reserves all rights to pursue enforcement of this agreement. Up until this point, Drake has pursued enforcement of the agreement by way of an EGM, but we will not hesitate to pursue different remedies should the Board refuse to allow Drake to invest our pro-rata share of the capital raise.
In addition to being a violation of the agreement from October 2021, refusing to allow the largest shareholder of the company to participate in a funding round only further proves what Drake has been saying publicly since July – select members of this Board of Directors are more concerned with maintaining their place on the Board than acting in the best interests of all shareholders.
Drake Management & affiliates