@Valueinvestor0909 yes, I’ve been mulling it over too.

I read “change of control” as a customer either got brought out, or majority ownership changed or some such thing.

Why might that impact a software contract to run a key process at a mine, for example?

Well if the contract related to a particular mine, and the operatorship changed, then perhaps the new owner/operator has their own processes for running things, chose not to take on the $RUL products (which in any event were probably licensed by the initial operator and $RUL customer.) This then might have triggered an early exit clause making due a payment of some proportion of the remaining contract value.

But that’s just one scenario.

I’m a bit annoyed that they seem to be hiding behind the immateriality of the underlying contract to avoid giving further detail. As an illustration, let’s say $3m represented 50% of a contracted sum of $6m to be run over 4yrs remaining. Then that would have been $1.5m pa of revenue have the change of control not happened. So not material, but still a significant churn event.

I might drop a line to them and see if they are willing to explain this a bit better.

Any other StrawPeople have any bright ideas?

Sounds to me like you're on the money with what likely happened there with that contract @mikebrisy - I have seen somewhat similar things happen - for instance, previous management at Capricorn Metals (CMM) told GR Engineering Services (GRES, GNG.asx, a company I hold) that they were the preferred tenderer for the EPC contract to build Karlawinda - see here: https://www.felix.net/project-news/gr-engineering-secures-93m-epc-contract-for-karlawinda-gold-project-wa

and here: https://www.gres.com.au/news/article/23042018-120/appointment-as-preferred-tenderer-karlawinda-gold-project.aspx

...back in April 2018, and that was for a 3 mtpa mill. That article (1st link above, the felix.net article) said, "GRES has been engaged under a letter of intent to begin early works at the site before the finalisation of the EPC contract - which is expected to be valued at $93.1 million" so it seemed like the contract was a formality, and GNG did begin early works at Karlawinda, however there was plenty going on at CMM around that time, and after it, including numerous capital raisings, a takeover attempt which was blocked by a substantial holder ("Hawkes Point") who later tried to takeover the company themselves at a lower price than the one they had blocked, and that attempt got blocked as well, then 2 shareholders who together held 5.5% of CMM called a meeting to roll the Board, and that meeting (on 5 March 2019) was successful, so three directors were removed, two new ones were installed, then the MD, CFO and company secretary all quit the following day, then the new directors started stacking Capricorn with all ex-Regis people starting with Mark Clark and Mark Okeby - see here: CMM-03July2019-Equity-Raising-and-new-Board-Chairman-and-Director-both-ex-Regis.pdf (who came with an $18.26m CR) and then CMM-16Sept-2019-Management-and-Board-Appointments.pdf (all of those guys were ex-Regis - most having left in 2018, some in 2019).

I should mention in between those last two announcements, the two Marks managed to raise another $65m (via a placement to existing "Subs") and get Macquarie back onboard the CapMetals Karlawinda Financing Trainride by organising some well-priced gold hedging - see here: CMM-14-Aug-2019-Gold-Hedging-Done-Macquarie-back-on-board.pdf

Macquarie had lost interest when the previous funding arrangements had collapsed due to bad management and failed M&A shenanigans. But they were back on Board in late 2019. CMM's new management then organised a 1 for 5 share consolidation to get the share price higher (effective late November 2019), changed the design of the mill to increase annual throughput, formerly 3 mtpa, now 3.5 to 4 mtpa, announced the project debt financing was now finalised (completed), increased the KGP Ore Reserves by +35% to 1.20 million ounces and increased the Mineral Resources by +41% to 1,525,000 ounces (1.525moz) (CMM-17-Apr-2020-KGP-ore-reserves-increase-35%-to-1.20moz.pdf), got CMM added to the All Ords Index (June 2020), then announced (in July 2020) a fairly major re-jig of the mill design to increase the mill's annual capacity (again!) to 4.5 to 5 mtpa (formerly 3.5 to 4 mtpa) as well as that they had decided to construct a new ($4 to $5m) Airstrip to allow charter planes (with up to 100 passengers capacity) to land at the site, so the overall construction costs had gone up by about $17.5 million (using their midpoints) - see here: CMM-27July2020-Karlawinda-Gold-Project-Update.pdf - They also raised more capital ($32.3m) at that point "to increase process plant capacity and to accelerate exploration activities".

They also announced that they were going to use Mintrex and ECG Engineering to assist with the engineering and construction (E&C) of Karlawinda as well as Orway Mineral Consultants (OMC, which is part of Lycopodium, LYL.asx) and a couple of other companies for things like Instrumentation and electrical/electronic control systems. The bulk of the sourcing and Procurement was done directly by Capricorn management themselves, as well as the overall Project Management, as explained in each of the quarterly activities reports (links to those are below). Having done it all before at Regis (RRL) back in the Duketon days (when they were building out Duketon by adding more mines and mills), the Capricorn Board and Management now did NOT believe they required an EPC or an EPCM contractor to build Karlawinda for them - they basically did it themselves with some contractor assistance.

GR Engineering Services (GRES, GNG.asx) were never mentioned again in connection to Karlawinda after the CMM Board got rolled in March 2019, so... new management, new ideas. Not exactly the same thing, I know, but kinda, sorta, similar, in a way... Not sure if GNG were ever paid for those "early works" before the new CapMetals management told them their services would no longer be required, but the amount of work and the money involved was probably not very material.

Further Reading:

For anybody interested in what a new gold mill (processing plant) looks like during the various stages of construction, these activities reports have heaps of photos that document the Karlawinda build over the year or so it took to build:

CMM-Activities-Report-June-Qtr-2020.pdf

CMM-Activities-Report-September-Qtr-2020.pdf

CMM-Activities-Report-December-Qtr-2020.pdf

CMM-Activities-Report-March-Qtr-2021.pdf

CMM-02June-2021-Commissioning-Underway-at-KGP.pdf

CMM-Activities-Report-June-Qtr-2021.pdf

Footnote: CMM was added to the ASX300 Index in September 2020, and to the ASX200 Index in September 2022.

P.S. Sorry for getting offtrack there - this is, after all, supposed to be about RUL...

I expect some of the recent M&A activity (lithium perhaps) has captured a mine on RUL's customer list.

This is speculation as they've not been clear - as mentioned by @mikebrisy and @Valueinvestor0909.

As RUL sells SaaS and this is often on long contracts (typically for life of mine) they likely have termination clauses so a new owner is not stuck with a contract they don't need. The payout is probably a break fee amounting to an accelerated discount on the remaining subscription.

This lack of clarity is slightly at odds with their comments at the AGM to be more transparent with investors going forward, beginning with delivering webinars for earnings releases.

Disc: Held