NASA.L Regulatory News (NASA)

15 June 2011

Nasstar plc.

("Nasstar" or the "Company")

Issue of Equity

Notice of General Meeting

Nasstar plc (AIM: NASA), the hosted desktop cloud computing provider, is pleased to announce that the Company has raised £1.2 million through the conditional subscription to 15,000,000 new ordinary shares of 1p each in the Company (the "Subscription Shares"), at a price of 8p per Subscription Share, by new and existing institutional shareholders (the "Subscription"). The Subscription is conditional upon shareholder approval through the passing of certain resolutions to be proposed at a general meeting of the Company to be convened and the admission of the Subscription Shares to trading on AIM ("Admission"). The closing mid market price of an ordinary share in the Company on 14 June 2011, being the latest practical date prior to this announcement, was 9.5p.

Background to and reasons for the Subscription

"Cloud computing" is a broad term that encompasses all services delivered online, including consumer facing propositions such as Facebook, Twitter and online music and video. Consumers have embraced these services which are generally free to use and accessible via the latest mobile devices. Most consumers are also business users and their familiarity with using mobile devices and accessing cloud services will ultimately lead to greater adoption by business as traditional 'on-premise' computing comes up for replacement or as businesses seek to use new mobile devices and applications to benefit the way they operate. Consumer awareness and use of cloud computing is filtering through to business decision makers and the market for cloud business solutions has begun to show clear signs of growth, with cloud computing solutions now being considered to be the most cost effective and valuable way of delivering their core IT requirements going forward.

Since admission of the Company's shares to trading on AIM the Company has raised funds to develop a scalable cloud computing platform. The Company continues to dedicate resources to the development of further enhancements to its Hosted Desktop service. Nasstar Hosted Desktop is a cloud computing service that delivers Windows desktop and applications such as accounting software, CRM, opensource office, Microsoft Office, Outlook email, BlackBerry and other applications required in the cloud rather than using local hard drives. Nasstar's cloud services are designed and built to deliver businesses with a scalable solution that produce operational efficiencies and replace the traditional capital expenditure requirements of IT deployments with a simple usage based payment model.

 It is against this background that the Directors considered it an appropriate time to seek institutional investment to capitalise on the opportunity Nasstar has created for itself in the cloud market.

Nasstar's strategy to achieve scale

Nasstar's core strategy is to scale up its Hosted Desktop service. The Company believes that the proceeds of the Subscription will assist the Company in achieving this core strategy. Currently the Company is progressing opportunities in at least three other countries and additional resources will help the Company progress such opportunities and work more closely with key partners.

Use of proceeds

The net proceeds of the Subscription, totalling approximately £1.1m, will strengthen the Company's balance sheet and this will assist the Company in progressing potential partnerships with some larger organisations both in the UK and overseas. In addition the Company intends to scale up its hardware infrastructure at both its primary and secondary data centre facilities to accommodate current sales and anticipated new sales. Nasstar also intends to raise greater awareness of its Hosted Desktop white label programme amongst its channel partner community to help capitalise on its success to date.

Current trading

The Company's trading since the interim results to 31 March 2011 has continued in line with the Board's expectations and the current sales pipeline gives the Directors confidence for the future.

Notice of general meeting

The Company will today be posting to shareholders a circular and notice of general meeting, to be held at the offices of the Company's solicitors, Marriott Harrison, at Staple Court, 11 Staple Inn Buildings, London WC1V 7QH on Friday 8 July 2011 at 10.00am am at which the resolutions set out in the notice of general meeting will be proposed.

A copy of the circular and notice of general meeting will be available today from the Company's website, www.nasstar.com, in accordance with rule 26 of the AIM Rules for Companies.

About Nasstar plc

Nasstar (www.nasstar.com) provides Hosted Desktop, a cloud computing service that enables subscribers to access their desktop, applications and data in the cloud rather than using local hard drives. Hosted Desktop is a highly scalable service that provides benefits including anywhere access to computing, a standardised corporate desktop solution that can be accessed globally and in multiple languages and cost savings when compared to the traditional IT ownership model, replacing capital expenditure with a simple usage based payment model.

Nasstar was founded in 1998 by Charles Black. Nasstar plc was admitted to trading on the London Stock Exchange Alternative Investment Market in December 2005 (AIM: NASA).