Fundraising

12 November 2013

Not for release, publication or distribution, directly or indirectly, in whole or in part, in or into the United States of America, Canada, Australia, The Republic of South Africa, Japan, New Zealand or Russia.

ZincOx Resources plc

("ZincOx" or the "Company")

Proposed fundraising through the Subscription by the International Finance Corporation, Placing and Open Offer

ZincOx (AIM: ZOX), the developer of Asia's largest zinc recycling project, announces a proposed subscription of new ordinary shares ("the Subscription"), a proposed placing of new ordinary shares ("the Placing") and a proposed open offer of new ordinary shares ("the Open Offer") to raise up to approximately £5.59 million in total.

Highlights

· Subscription by the International Finance Corporation (the "IFC"), raising approximately £2.5 million, by which it will obtain an interest of approximately 11.56 per cent. in the share capital of the Company, assuming the Open Offer is fully subscribed.

· 12,530,160 new ordinary shares conditionally placed with other investors to raise approximately £1.94 million.

· Open Offer of up to 7,390,479 new ordinary shares to enable all shareholders to participate in the fundraising at the same price as the IFC and the placees on the basis of 1 new ordinary share for every 14 shares held.

· Excess application facility in place in the event that not all qualifying shareholders take up their entitlements under the Open Offer.

· Issue price of 15.5 pence, representing a discount of 1.59 per cent. to the closing mid-market price on 11 November 2013.

· Total proceeds of up to approximately £5.59 million to be used to:

o fund the final stages and improvements to the Company's Korean Recycling Plant;

o provide working capital for the Company; and

o continue pursuing the Company's projects in Thailand, Turkey and Russia.

Commenting on the proposals, Andrew Woollett, ZincOx's Executive Chairman, said: "I believe that the IFC's Subscription, which followed extensive due diligence, represents a strong endorsement of our technology and business strategy. The subscription provided the cornerstone investment for the successful placing. I am pleased that we will be able to include all of our loyal private shareholders in this fundraising through the mechanism of the Open Offer.

Now that the two major problems at the KRP (heat exchangers and blockages) have been addressed, the production ramp-up has regained momentum and plans to roll out our technology around the world will be accelerated by the IFC's support."

Atul Mehta, IFC Global Director of Manufacturing, Agribusiness, and Services said: "Game-changing technologies for recycling are necessary for the global economy to manage growing consumption in an era of scarce resources and climate change. Expansion of ZincOx technology can create jobs and contribute to a healthier environment, especially for developing countries where waste disposal regulation may not be stringent or enforced."

About the IFC

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, it uses its capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, its investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world's most pressing development challenges. For more information, visit www.ifc.org.

For further information, please visit www.zincox.com or contact:

Not for release, publication or distribution, directly or indirectly, in whole or in part, in or into the United States of America, Canada, Australia, The Republic of South Africa, Japan, New Zealand or Russia.

ZincOx Resources plc

("ZincOx" or the "Company")

Proposed fundraising through the Subscription by the International Finance Corporation, Placing and Open Offer 

1. Introduction and summary

The Company has today announced that it has, conditional upon the passing of the Resolutions and on Admission, raised an aggregate of approximately £4.44 million through a Subscription of approximately £2.5m (US$4 million) and a Placing of approximately £1.94 million. In addition, the Company announces that it is seeking to raise up to a further approximately £1.15 million through the Open Offer available to Qualifying Shareholders. The Subscription is being taken up by the International Finance Corporation ("IFC"), by which it will obtain an interest of approximately 11.56 per cent. in the share capital of the Company, assuming the Open Offer is fully subscribed.

The Issue Price represents a discount of 1.59 per cent. to the closing mid-market price of an Existing Ordinary Share of 15.75 pence on 11 November 2013, being the latest practicable date prior to the publication of this Announcement.

The IFC is the world's largest global development institution. The IFC is part of the World Bank Group, but unlike the World Bank itself, it is mandated to invest in sustainable private sector development. The IFC is only able to support projects being developed in emerging markets, such as those being progressed by ZincOx in Turkey, Thailand and Russia.

In order to enable the Subscription, the Placing and the Open Offer to be carried out, the Board proposes to undertake the Capital Reorganisation which is explained in more detail in paragraph 6 below.

The Subscription, the Placing, the Open Offer and the Capital Reorganisation are conditional, inter alia, on the approval of Shareholders.

2. Background to and reasons for the Proposals

The Company's aim is to become a major zinc recycler. Having demonstrated the process it has developed in its first recycling plant in Korea, it intends to roll out this technology to other parts of the world.

The Company is pioneering the use of RHF technology for the treatment of EAFD, a waste generated by the recycling of steel scrap for the production of a high quality zinc concentrate ("HZO") and an intermediate iron bearing material ("ZHBI"). The Company's first plant was completed in April 2012 and the production has been ramping-up since then. It had an initial throughput target of 175,000 tonnes per annum of EAFD, and, following debottlenecking, full production of 200,000 tonnes per annum is expected. 

Heat exchangers are used to recover energy from the off-gas from the RHF. The off-gas is highly corrosive. In September 2012, the base of the heat exchangers showed the first signs of significant corrosion and in March 2013 production was suspended to repair areas affected by excessive corrosion caused by poor fabrication. Another problem arose in April 2013 which involved a major blockage of briquettes on the hearth against the end wall of the furnace. Until the faulty parts of the heat exchangers were replaced in July 2013, these two problems led to the plant being in operation for only about 65 per cent. of the time. If these two issues are not taken into consideration, however, the plant's monthly availability was high and in line with the full production target of 91 per cent.

During production, it has now been demonstrated that one line of heat exchanges may be closed off and isolated and the off-gas diverted entirely through the other line. After cooling, repairs can be carried out in the closed line. At the beginning of October 2013, the plant was successfully operated at about 72 per cent. of feed rate with only one line of heat exchangers. The inner tubes of the heat exchangers are in direct contact with the corrosive off-gas and their periodic replacement was foreseen in the design. Rather than operate at reduced capacity for long periods while major repairs are undertaken, a spare heat exchanger will be used to replace a corroded unit so that full production can be resumed with the shortest possible delay. The corroded part of the other unit will then be replaced so that it can become the next spare unit.

The major blockage that was experienced in April caused some long term damage to the end wall of the furnace, which gave way in September, requiring suspension of production for two weeks while repairs were undertaken. Further major blockages have been avoided by monitoring the motors that rotate the hearth. Subsequently, minor blockages have occurred and been dealt with, but continuous monitoring of the problem areas using radar will commence next month and this will enable large pieces of material on the hearth to be detected and removed before they can create a blockage. 

Following the replacement of parts of the heat exchangers in the middle of July 2013, the plant had a record production month in August, but throughput in September was reduced whilst the RHF end wall was repaired. Since then, October set a new record for EAFD treated, 11,800 tonnes which enabled us to sell 2,963 tonnes of zinc in concentrate to Korea Zinc, at which level the project generated a modest positive EBITDA for the month.

Now that the two major problems (heat exchangers and blockages) have been addressed, the ramp-up has regained momentum. KRP's availability in October was above 92 per cent. and the recovery is averaging about 89 per cent. The emphasis is currently on gradually increasing the current feed rate (79 per cent. of target) while maintaining recovery. The initial throughput target (175,000 tonnes of EAFD per annum) should be achieved at the year end, with full production (200,000 tonnes of EAFD per annum) being reached after debottlenecking has been completed.

The zinc grade in KRP's feed is higher than expected, but the iron grade is lower. Consequently, the grade of iron in the iron product is less than expected, which reduces its attractiveness to the steel mills. The Company has decided, therefore, to reduce the target price from $60 to approximately $30 per tonne and is currently exploring other markets for this material. In addition, before full target zinc recovery is reached, a higher proportion of the zinc and other volatile elements remain in the iron product, effectively diluting the grade of the iron, to the extent that it becomes unattractive to the steel mills. When the recovery of zinc is improved, the iron grade and metallisation will improve as well, enabling the commercial testing in Korea to proceed.

At KRP, the original development plan foresaw the construction of an iron melter on site to produce pig iron and a slag that could be used in the cement industry. At a lower product value, the installation of our own melter becomes increasingly attractive and this concept is being re-evaluated.

A recent financial review has shown that, compared to previous estimates, operating costs have increased but that this is largely offset by higher zinc grade in the feed and zinc concentrate and the improved zinc smelter treatment charge. The EBITDA of the operation when in full production, assuming target availability, recovery rate and feed rate, is expected to reach approximately $18 million per annum at a zinc price of $1,900 per tonne and $28 million per annum at a zinc price of $2,250 per tonne. The current zinc price as at 7 November 2013 is $1,868 per tonne. The market analysts covering the zinc sector continue to talk of a shortage of zinc due to mine closures in the next twelve to eighteen months.

The rotary hearth furnace makes intermediate products that are used to feed processes that then produce industrial raw materials, metallic zinc and steel. Testwork has demonstrated that these intermediate products could, alternatively, be upgraded to produce industrial quality zinc oxide, pig iron and a slag suitable for sale to the cement industry. Such upgrading activities could be undertaken by ZincOx as part of an expanded rotary hearth furnace operation and would have the potential to double the revenues and enhance overall project returns.

The IFC

The Company has been in discussions with the IFC for more than a year and very recently the IFC made a decision to invest following technical, environmental and corporate governance due diligence. In order to comply with the IFC's governance policy, the roles of CEO and Chairman will be split.

As part of the arrangements with the IFC, the Company has entered into a Corporate Undertaking and Policy Agreement with the IFC which, inter alia, requires the Company to:

a) comply with strict corporate governance guidelines including a requirement to split the roles of CEO and Chairman;

b) permit the IFC to nominate a non-executive director to the board, provided it holds in excess of 10 per cent. of the Company's issued share capital;

c) offer the IFC the right to be included and to follow its rights in any future fund raising; and

d) comply with the IFC's requirements on environmental protection.

The opportunity to bring the IFC into the Company's shareholder register greatly enhances the Company's strength for the roll-out of the technology in Thailand, Turkey and Russia.

The Open Offer

The Company is aware that most private Shareholders are not able to take part in a Placing. For this reason, the Board has decided to make an Open Offer so that all Shareholders have an opportunity to participate at the same Issue Price as investors under the Subscription and the Placing.

3. Current trading and prospects

The adjusted Group loss after tax, attributable to Shareholders of the Company, was US$14.0 million for the six months to 30 June 2013 (six month period to 30 June 2012: adjusted loss of US$8.4 million and for the full year to 31 December 2012 adjusted loss was US$22.8 million). This represents an adjusted loss per ordinary share for the six months to 30 June 2013 of 13.49 cents (six month period to June 2012: adjusted loss per share 9.38 cents and for the full year to December 2012: adjusted loss per share 25.21 cents).

The Group revenue includes sales of zinc oxide from KRP totalling US$13.8 million in the six months to 30 June 2013 (period to 30 June 2012: US$0.5 million, year to 31 December 2012: US$9.7 million). The revenue for the Group improved by 47% for the six months to 30 June 2013 compared to the second half of 2012. It is worth noting that the zinc price fluctuated in the period within the range of US$1,829 per tonne of zinc to US$2,129. The market analysts covering the zinc sector continue to talk of a shortage of zinc due to mine closures in the next 12 to 18 months. The London Metal Exchange global inventory of zinc fell from 1,220,725 tonnes at the start of January to 1,017,975 tonnes on 7 November 2013.

4. Details of the Subscription, the Placing and the Open Offer

The Subscription and the Placing

Pursuant to the Subscription Agreement, the IFC have conditionally agreed to subscribe for the Subscription Shares at a total Subscription price of US$4,000,00 and a price of 15.5 pence per Subscription Share. They will subscribe for up to 16,130,000 New Ordinary Shares, with the exact number being determined one Business Day prior to Admission, when the then applicable exchange rate will be applied to the total Subscription price to determine its equivalent Sterling amount. Figures used in this Announcement therefore assume that the IFC subscribe for 16,130,000 new Ordinary Shares. The total Subscription price will be divided by the price per Subscription Share to determine the number of Subscription Shares to be issued to the IFC. The number of Subscription Shares will be rounded down to the nearest whole number, as appropriate. The Subscription is conditional, inter alia, on the passing of the Resolutions and the Subscription Agreement and the Placing and Open Offer Agreement becoming unconditional in all respects.

Pursuant to the Placing and Open Offer Agreement, the Joint Brokers have conditionally placed the Placing Shares with placees at a price of 15.5 pence per Placing Share to raise approximately £1.94 million (approximately US$3.10 million) before expenses. The Placing is conditional, inter alia, on the passing of the Resolutions, the Placing and Open Offer Agreement and the Subscription Agreement becoming unconditional in all respects, and Admission occurring on or before 3 December 2013 (or such later date as may be agreed).

The terms and conditions applicable to the Placing are set out in the Placing and Open Offer Agreement. The Joint Brokers have agreed to use their reasonable endeavours to procure placees for the Placing Shares. The obligations of the parties are conditional as described above. The Placing and Open Offer Agreement contains certain warranties given by the Company concerning the accuracy of information given in this document and other matters relating to the Company and its business. The Company has also agreed to indemnify the Joint Brokers against all losses, costs, charges and expenses which the Joint Brokers may suffer or incur as a result of, occasioned by or attributable to the carrying out of their duties under the Placing and Open Offer Agreement.

The Issue Price represents a discount of 1.59 per cent. to the closing mid-market price of an Existing Ordinary Share of 15.75 pence on 11 November 2013 (being the last practicable date prior to the publication of the Announcement). The Subscription Shares and the Placing Shares will represent approximately 27.7 per cent. of the issued share capital of the Company prior to the issue of the Subscription Shares, the Placing Shares and the Open Offer Shares.

The Open Offer

Pursuant to the Placing and Open Offer Agreement, the Open Offer is for up to 7,390,479 Open Offer Shares at the Issue Price (being the same as the Issue Price for the Subscription and the Placing) to raise up to approximately £1.15 million (before expenses). Only Qualifying Shareholders on the Company's register of members as at the Record Date may participate in the Open Offer.

Subject to the fulfilment of the terms and conditions, details of which are set out in the Circular, Qualifying Shareholders are being given the opportunity to apply for Open Offer Shares at a price of 15.5 pence per Open Offer Share, free of expenses, payable in full, in cash on application, on the basis of:

1 Open Offer Share for every 14 Existing Ordinary Shares

registered in the name of each Qualifying Shareholder at the Record Date and so in proportion for any other number of Ordinary Shares then held.

 Qualifying Shareholders may apply for more or less Open Offer Shares than they are entitled to under the Open Offer and applications in excess of the Open Offer entitlements will be dealt with under the Excess Application Facility. If applications under the Excess Application Facility are received for more than the total number of Open Offer Shares available following take-up of Open Offer Entitlements, such applications will be scaled back pro rata to the number of Excess Shares applied for by Qualifying Shareholders under the Excess Application Facility.

The Open Offer is conditional, amongst other things, upon Admission of the Subscription Shares, the Placing Shares and the Open Offer Shares becoming effective by not later than 8:00 a.m. on 2 December 2013. Accordingly, if such conditions are not satisfied, or, if applicable, waived, the Open Offer will not proceed and any Open Offer Entitlements admitted to CREST will thereafter be disabled.

The Subscription, the Placing and the Open Offer are interconditional and are all conditional on Admission.

Application will be made to the London Stock Exchange for the Subscription Shares, the Placing Shares and the Open Offer Shares to be admitted to trading on AIM conditional on the Resolutions being passed at the General Meeting. The Subscription Shares, the Placing Shares and the Open Offer Shares are expected to be admitted to AIM and commence trading at 8:00 a.m. on 2 December 2013.

5. Use of proceeds

As at 8 November 2013, the Company had cash holdings of approximately £0.51 million (approximately US$0.82 million), excluding any cash held by KRP. It is anticipated that the funds raised will be used by the Company in the following ways:

· approximately £0.625 million (approximately $1.0 million) to fund the final stages and improvements to KRP;

· approximately £1.88 million (approximately $3.0 million) to provide working capital for the Company; and

· the balance of the net proceeds (between approximately £1 million to £3 million or $1.6 million to $4.8 million) will be used to continue pursuing the Company's projects in Thailand, Turkey and Russia.

6. Reasons for and details of the Capital Reorganisation

The Company's Existing Issued Share Capital consists of 103,466,716 Existing Ordinary Shares which are currently in issue and credited as fully paid up.

The New Ordinary Shares proposed to be issued pursuant to the Subscription, the Placing and the Open Offer are proposed to be issued at an Issue Price, which represents a discount of 1.59 per cent. to the closing mid-market price of an Existing Ordinary Share of 15.75 pence on 11 November 2013 (being the last practicable date prior to the publication of this Announcement).

Under the provisions of section 580 of the Companies Act, the Company may not allot shares at a price which is less than the nominal value of those shares. To enable the Company to proceed with the Subscription, the Placing and the Open Offer, the Company's Existing Ordinary Shares will therefore need to be sub-divided and re-designated as described below and in the Notice of the General Meeting at the end of the Circular.

Details of the Capital Reorganisation

Pursuant to the Capital Reorganisation, it is proposed that each Existing Ordinary Share with a nominal value of 25 pence be sub-divided and re-designated into one New Ordinary Share of 1 penny and one Deferred Share of 24 pence. The Capital Reorganisation Record Date is 5:30 p.m. on 29 November 2013. Immediately following the Capital Reorganisation, every Shareholder will hold one New Ordinary Share and one Deferred Share for every Existing Ordinary Share held by them. A Shareholder's pro rata entitlement to Ordinary Shares will not be affected by such subdivision and redesignation. The Capital Reorganisation should not affect the market value of a Shareholder's aggregate holding of the Existing Ordinary Shares in the Company.

It is proposed that each New Ordinary Share will carry the same rights in all respects as each Existing Ordinary Share does at present, including the rights in respect of voting and the entitlement to receive dividends. Each Deferred Share will have very limited rights and will effectively be valueless. Such shares will have no voting rights, no rights to receive dividends and will have only very limited rights on a return of capital. The Deferred Shares will not be admitted to trading on AIM or listed on any other stock exchange and will not be freely transferable.

Amendments to the Existing Articles

As part of the Capital Reorganisation, the Company proposes to make consequential amendments to its Existing Articles to include provisions in respect of the Deferred Shares.

The Capital Reorganisation is conditional on the approval of the Shareholders at the General Meeting. Your Board asks that you vote in favour of the Resolutions to be proposed at the General Meeting to enable the Company to proceed with the Capital Reorganisation, the Subscription, the Placing and the Open Offer.

7. Directors' participation in the Placing

The Directors whose names are listed below have expressed their intention to subscribe for the following numbers of the New Ordinary Shares as part of the Placing:

The interests (all of which are beneficial unless otherwise stated) of the Directors and their immediate families and the persons connected with them (within the meaning of section 252 of the Companies Act) in the issued share capital of the Company or the existence of which could, with reasonable diligence, be ascertained by any Director as at the date of this document and as expected to be immediately following Admission are as follows:

8. General Meeting

The Company will shortly be posting the Circular to Shareholders attaching a notice convening a General Meeting to be held at the offices of Eversheds LLP, One Wood Street, London EC2V 7WS at 10:30 a.m. on 29 November 2013, to consider and, if thought appropriate, pass the Resolutions which will also be available on the Company's web-site at www.zincox.com. Qualifying shareholders will also receive an application form for the Open Offer. 

Shareholders should be aware that if all of the Resolutions are not approved by Shareholders at the General Meeting, the Company will not be able to complete the Capital Reorganisation, the Subscription, the Placing and/or the Open Offer and will therefore be required to seek alternative sources of finance which may or may not be forthcoming.

9. Timetable

The dates and times set out below are based on the Company's current expectations and may be subject to change. References to times in this announcement are to London times, unless otherwise stated.

10. Definitions

The following definitions apply throughout this Announcement, unless otherwise stated herein:

A reference to "£" is to pounds sterling, the lawful currency of the UK.

A reference to "United States Dollars" or "US$" is to United States dollars, the lawful currency of the United States of America. 

A reference to "€", "EUR" or "Euro" is to currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community, as amended.

Peel Hunt LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company as nominated adviser and joint broker and no one else (including the recipients of this document) in connection with the Subscription, the Placing and/or the Open Offer described in this document and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Peel Hunt LLP or for advising any other person in connection with the matters described in this document. Peel Hunt LLP makes no representation, express or implied, with respect to the accuracy or completeness of any information contained in this document and accepts no responsibility for, nor does it authorise, the contents of, or the issue of this document, or any other statement made or purported to be made by the Company, or on its behalf, in connection with the Company or any of the other matters described in this document and, accordingly, to the fullest extent permitted by law disclaims all and any liability whatsoever whether arising out of tort, contract or otherwise which it might otherwise have in respect of this document or any other statement.

finnCap Ltd, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company as joint broker and no one else (including the recipients of this document) in connection with the Subscription, the Placing and/or the Open Offer described in this document and will not be responsible to anyone other than the Company for providing the protections afforded to customers of finnCap Ltd, or for advising any other person in connection with the matters described in this document. finnCap Ltd makes no representation, express or implied, with respect to the accuracy or completeness of any information contained in this document and accepts no responsibility for, nor does it authorise, the contents of, or the issue of this document, or any other statement made or purported to be made by the Company, or on its behalf, in connection with the Company or any of the other matters described in this document and, accordingly, to the fullest extent permitted by law disclaims all and any liability whatsoever whether arising out of tort, contract or otherwise which it might otherwise have in respect of this document or any other statement.

Important information

The distribution of this announcement, the Circular or any accompanying documents outside the UK may be restricted by law. Persons outside the UK who come into possession of these documents should inform themselves about and observe any such restrictions. Failure to comply with such restrictions may constitute a violation of the securities laws of such jurisdictions. This document does not constitute an offer to sell or an invitation to subscribe for, or solicitation of an offer to subscribe or buy, the Subscription Shares, the Placing Shares or the Open Offer Shares to any person in any Restricted Jurisdiction. In particular, this document is not for distribution in or into the United States of America, Canada, Australia, The Republic of South Africa, Japan, New Zealand or Russia. Accordingly, the Subscription Shares, the Placing Shares and/or the Open Offer Shares may not, subject to certain exceptions, be offered directly or indirectly in or into the United States of America, Canada, Australia, The Republic of South Africa, Japan, New Zealand or Russia. The Subscription Shares, the Placing Shares and/or the Open Offer Shares have not been and will not be registered under the United States Securities Act of 1933 (as amended) or under the securities legislation of any state of the United States of America, Canada, Australia, the Republic of South Africa, Japan, New Zealand or Russia and they may not be offered or sold directly or indirectly within those Restricted Jurisdictions or to or for the account or benefit of any national, citizen or resident of such jurisdictions.

AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. AIM securities are not admitted to the Official List of the United Kingdom Listing Authority. A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser. Neither the London Stock Exchange nor the UK Listing Authority have examined or approved the contents of this document. The AIM Rules are less demanding than those of the Official List of the UK Listing Authority.

The directors of the Company accept responsibility for the information contained in this document. To the best of the knowledge and belief of the directors (who have taken reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

Unless otherwise stated, an exchange rate of £1:US$1.6 has been used throughout this document, which is based on the exchange rate prevailing on 11 November 2013, being the last practicable date prior to the date of the Announcement.

Forward-looking statements

Certain statements contained in this document are or may constitute "forward-looking statements". These statements may be identified by words such as "expects", "looks forward to", "anticipates", "targets", "aims", "may", "would", "could", "intends", "plans", "believes", "seeks", "estimates", "will", "project" or words of similar meaning. They include all matters that are not historical facts. Such statements are based on the current expectations and certain assumptions of the Directors, and are, therefore, subject to certain risks and uncertainties. Forward-looking statements are not guarantees of future performance and a number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. The forward-looking statements in this document speak only as of the date of this document. Except as required by law, the Company disclaims any obligation to update any such forward-looking statements to reflect future events or developments.

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