NLG.L Regulatory News (NLG)

20 October 2015

Arria NLG plc ("Arria" or the "Company")

Posting of circular and notice of general meeting

Arria NLG plc (AIM:NLG) is pleased to announce that, following the announcement of 15 October 2015 regarding the subscription agreements and related sharing agreements entered into by the Company with Lanstead Capital L.P. ("Lanstead"), a circular and notice of general meeting, together with a form of proxy, will today be posted to shareholders (the "Circular").

Notice of General Meeting 

The Directors of Arria announced on 15 October 2015 a £6,000,000 fundraising (before expenses) with Lanstead by way of:

· a completed subscription for 4,687,500 new ordinary shares at a price of 32p per share (the "Initial Subscription"); and

· a conditional subscription for 14,062,500 new ordinary shares at a price of 32p per share (the "Subscription"), which is subject, amongst other things, to approval of certain resolutions at a general meeting.

The Directors believe that, given the Company's requirements for additional financing, the Initial Subscription and the Subscription are currently the most appropriate way to raise additional funds for Arria. The Directors consider that they provide greater certainty than other available means of raising additional funds in a timely fashion and minimises transactional costs.

Accordingly, a general meeting of the Company is to be held at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL at 10.30 a.m. on 6 November 2015 (the "General Meeting"). At the General Meeting, the following resolutions (the "Resolutions") will be proposed:

1. an ordinary resolution, to grant authority to the Directors to allot shares in the capital of the Company up to an aggregate nominal amount of £59,887.00. This authority is in addition to the authorities granted to the Directors at the Annual General Meeting of the Company held on 27 January 2015, and will expire (along with such authorities) at the conclusion of the Annual General Meeting of the Company to be held in 2016; and

2. conditional on the passing of resolution 1 above, a special resolution, to dis-apply statutory pre-emption rights in respect of the allotment for cash of shares up to an aggregate nominal amount of £59,887.00. This authority is in addition to the authorities granted to the Directors at the Annual General Meeting of the Company held on 27 January 2015, and will expire (along with such authorities) at the conclusion of the Annual General Meeting of the Company to be held in 2016.

By way of explanation, the Resolutions will grant the Directors authority to allot the new ordinary shares of 0.1p each in the Company ("Ordinary Shares") in connection with the Subscription and dis-apply statutory pre-emption rights in relation to such allotments.

In addition, pursuant to the fundraising announced on 30 June 2015, the passing of the Resolutions will enable the Company to complete the issue of convertible loan notes and warrants convertible into, and exercisable over, in aggregate 3,778,358 Ordinary Shares (the authority for which being no longer available following the issue of Ordinary Shares to Lanstead for the Initial Subscription). This amount of shares relates to:

· the final tranche of £0.5 million of the £3.75 million funding announced on 30 June 2015, the funds of which are available to the Company subject to the passing of the Resolutions; and

· the issue of 1,000,000 warrants to MSL Capital Markets Limited in connection therewith.

In addition, at the General Meeting the Directors are seeking shareholder approval to provide the Company with the ability to issue up to a further 41,577,392 Ordinary Shares (or rights to subscribe for 41,577,392 Ordinary Shares), being approximately 33.7% of the issued Ordinary Share capital on Admission, as headroom for future fundraising or other opportunities that may arise. The Directors consider it important for such headroom to be in place to provide flexibility and speed to raise funds for the Company as required. Such shareholder approval will lapse at the Company's next annual general meeting.

In order for the Subscription to proceed, shareholders will need to approve the Resolutions at the General Meeting. If the Resolutions are not passed, the Subscription will not proceed, the Company will be unable to complete the issue of £500,000 of convertible loan notes and warrants pursuant to the fundraising announced on 30 June 2015 and no authority will be available to the Directors to issue further Ordinary Shares for cash. Accordingly it is important that shareholders vote in favour of the Resolutions, in order that these matters can proceed.

Recommendation

The Directors consider the Subscription and the Resolutions to be in the best interests of the Company and its shareholders as a whole. As previously announced, the Company continues to seek additional funding to support its operations, and the Subscription comprises part of that additional funding. If the Resolutions are not approved at the General Meeting then the Company's would need to seek an increased amount of additional funding from alternative sources in order to support its operations. There is no guarantee however that such increased amount of additional funding could be obtained in the requisite time frame or at all. Further, the Directors believe that any such funding, if obtained, would likely be on less favourable terms than the Subscription. If the Resolutions are not approved at the General Meeting, and no alternative funding can be raised, the Company's ability to operate as a going concern may be put at risk by the third quarter of the current financial year ending September 2016.

Arria will continue to explore options for additional funding as required to support substantial development of its NLG products which the Board believes is helping Arria to become a significant participant in the critical and growing Artificial Intelligence market. 

The Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, as they intend to do in respect of their, in aggregate, 9,214,931 existing Ordinary Shares (representing approximately 9.39 per cent. of the Company's existing issued share capital).

Admission to AIM

Application will be made to the London Stock Exchange for 14,531,250 new Ordinary Shares to be admitted to trading on AIM (being the 14,062,500 new Ordinary Shares to be issued under the Subscription and 468,750 new Ordinary Shares as the second tranche of value payment shares due to Lanstead). If the Resolutions are passed, it is expected that Admission will become effective and that dealings for normal settlement in these new Ordinary Shares will commence at 8.00 a.m. on 9 November 2015.

Website information

The Circular will shortly be available on the Company's website at http://www.arria.com/investorrelations/.

In addition, Arria has added to its website an illustration of the possible amounts payable to the Company each month under the sharing agreements with Lanstead, based on different Measured Prices (as defined in the Circular).

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