YGEN.L Regulatory News (YGEN)

ViaLogy PLC ("ViaLogy" or the "Company")

Placing and Open Offer to raise up to £1.6 million

Appointment of proposed directors

Adoption of Investing Policy

Capital Reorganisation

and

Notice of General Meeting

London, January 7 2014. ViaLogy PLC (AIM:VIY) is pleased to announce it has today posted to shareholders a notice of General Meeting and circular to shareholders setting out details of a Placing and Open Offer, board changes, the expansion of the Company's Investing Policy and a Capital Reorganisation.

The General Meeting will be held at 11.00 a.m. on 27 January 2014 at 4th Floor, Dean Bradley House, 52 Horseferry Road, London SW1P 2AF.

The shareholder circular will be available on the Company's website www.vialogy.com.

Capitalised terms used in this announcement are as defined in the shareholder circular.

Highlights

· Placing to raise £1.1 million (before expenses), by the issue of 1,100,000,000 Ordinary Shares at an Issue Price of 0.1p per share

· Open Offer to Qualifying Shareholders to raise up to a further £519,820 (before expenses) by the issue of up to 519,820,122 Ordinary Shares at an Issue Price of 0.1p per share on the basis of one Open Offer Share for every two Existing Ordinary Shares held

· Directors or Proposed Directors have subscribed in aggregate for £225,000 in the Placing

· Placing and Open Offer net proceeds to be used to explore corporate opportunities and for working capital

· Adoption of an expanded investing policy focussing in the facilities management and support services sectors

· Appointment of Nick Mustoe as Non-executive Director and Mark Collingbourne as Finance Director

· Capital Reorganisation

For further information:

ViaLogy PLC

Mark Collingbourne mark@vialogy.com/01620 810 183

Cantor Fitzgerald Europe

Mark Percy/Catherine Leftley 020 7894 7000

Introduction

On 29 October 2013, ViaLogy announced details of a proposed restructuring of its operational organisation. On 18 November 2013 ViaLogy posted to Shareholders a circular setting out the background to and the reasons for a restructuring of the Company, the resolution proposed having been duly passed at a general meeting held on 4 December 2013.

Set out in the proposed restructuring announcement and circular to Shareholders, ViaLogy stated that

additional funding would be required to provide working capital and to explore other corporate opportunities. To that end, ViaLogy is pleased to announce a conditional placing by CFE, as agent for the Company, of 1,100,000,000 New Ordinary Shares at 0.1p per share to raise £1,100,000 before expenses.

In addition, in order to provide Shareholders who have not taken part in the Placing with an opportunity to participate in the proposed issue of Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for Open Offer Shares at the Issue Price on the basis of one Open Offer Share for every two Existing Ordinary Shares held. If the Open Offer were fully subscribed for, the Company would issue 519,820,122 Ordinary Shares pursuant to the Open Offer to raise an additional £519,820.

The Open Offer provides Qualifying Shareholders with an opportunity to participate in the proposed issue of the Open Offer Shares whilst providing the Company with additional working capital.

The Issue Price is at a discount of 73.3 per cent. to the closing price of 0.375p per Existing Ordinary Share on 3 January 2014 (being the last practicable date before publication of this document).

The proposed Issue Price is less than the nominal value of an Existing Ordinary Share. The Company is not permitted under the Act to issue new shares at less than their nominal value so, in order to raise additional funds, the Company needs to reorganise its share capital to reduce the nominal value of its Existing Ordinary Shares.

The Placing and the Open Offer are conditional on, amongst other things, the passing of the Resolutions at the GM and Admission. If the Resolutions are passed, the Placing Shares and the Open Offer Shares will be allotted immediately after the General Meeting and Admission is expected to occur at 8.00 a.m. on 28 January 2014. The Placing and Open Offer are not underwritten.

Reasons for the Placing and Open Offer

On publication of the final results for the year ended 31 March 2013, ViaLogy announced that the Directors would seek to obtain further funding for working capital and the expansion of ViaLogy's business operations. This was reiterated in the circular to Shareholders dated 18 November 2013 where the intention of the newly constituted board to recapitalise ViaLogy was announced.

The Board is pleased to announce that it has today conditionally raised £1,100,000 (before expenses) by means of a placing by CFE, as agent for the Company, of 1,100,000,000 Placing Shares at 0.1p per share. In addition, the Company is pleased to announce that Qualifying Shareholders can participate in the funding of the Company through the Open Offer. The Open Offer is being offered to Qualifying Shareholders on the basis of one Open Offer Share for every two Existing Ordinary Shares held at 0.1p per share. In aggregate, if the Open Offer were fully subscribed for, the Company would raise an additional £519,820 through the issue of 519,820,122 Open Offer Shares.

Working capital

As outlined in the circular dated 18 November 2013, the costs associated with VEC operations will be fully borne by VEC and not ViaLogy. In addition, Dr. Sandeep Gulati and Dr. Robert W. Dean will each, voluntarily, with effect from 1 January 2014, further reduce their respective salaries to a nominal amount of £1 per month until completion of the VEC Funding, at which point the ViaLogy Board will review the appropriate level of compensation.

The estimated net proceeds of the Placing and the Open Offer (assuming the Open Offer is taken up in full) are anticipated to amount to approximately £1,519,820 (before expenses). The Board believe that the net proceeds of the Placing and the Open Offer will provide the necessary funding to sustain the business, with its revised cost base as set out above and in the circular dated 18 November 2013, in the near and medium term whilst it seeks a suitable acquisition to develop its new business.

The Placing

The Company has conditionally raised £1,100,000 (before expenses) by means of a placing of

1,100,000,000 Placing Shares, which are not subject to clawback, at the Issue Price for the benefit of the Company. The Issue Price is at a discount of 73.3 per cent. to the closing price of 0.375p per Existing Ordinary Share on 6 January 2014 (being the last practicable date before publication of this document). The Placing is conditional, inter alia, upon:

● the Placing Agreement becoming unconditional in all respects;

● the passing of the Resolutions at the GM; and

● Admission of the Placing Shares and the Open Offer Shares to trading on AIM.

The Placing Shares, when issued and fully paid, will rank equally in all respects with the Ordinary Shares arising pursuant to the Capital Reorganisation and the Open Offer Shares, including the right to receive all dividends and other distributions declared, made or paid after Admission.

It is expected that Admission will become effective and dealings in the Placing Shares will commence on 28 January 2014.

Directors' participation in the Placing

Adam Reynolds, a Director of the Company and Nick Mustoe, a proposed director of the Company, have each conditionally agreed to subscribe for Placing Shares and further details of their participation are set out below:

*Assuming Open Offer taken up in full

The conditional agreements entered into by Adam Reynolds and Nick Mustoe to subscribe for Placing

Shares are classified as related party transactions for the purposes of the AIM Rules. The Independent Directors consider, having consulted with the Company's nominated adviser, CFE, that the terms of Adam Reynolds' and Nick Mustoe's participation in the Placing are fair and reasonable insofar as Shareholders are concerned. In providing advice to the Independent Directors, CFE has taken into account the commercial assessment of the Independent Directors.

Open Offer

In order to provide Qualifying Shareholders who have not taken part in the Placing with an opportunity to participate in the Company's increasing share capital, the Company is providing all Qualifying Shareholders with the opportunity to subscribe at the Issue Price for an aggregate of up to 519,820,122 Open Offer Shares. This allows Qualifying Shareholders to participate whilst providing the Company with the flexibility to raise additional equity capital to further improve its financial position.

The Open Offer Shares will be made available to Qualifying Shareholders at the Issue Price on the basis of one Open Offer Share for every two Existing Ordinary Shares held. Shareholders are being offered the opportunity to apply at the Issue Price for additional Open Offer Shares in excess of their pro rata entitlements to the extent that other Shareholders do not take up their entitlements in full. In the event that applications are received for in excess of 519,820,122 Open Offer Shares, excess applications will be scaled back pro rata to the number of excess Open Offer Shares applied for by Qualifying Shareholders under the Excess Application Facility. The Open Offer Shares have not been placed subject to clawback nor have they been underwritten. Consequently, there may be few than 519,820,122 Open Offer Shares issued pursuant to the Open Offer.

Both the Placing and the Open Offer are conditional upon, amongst other things, the approval by

Shareholders of the Resolutions at the General Meeting and upon the Placing Agreement becoming

unconditional in all respects.

The Open Offer Shares, when issued and fully paid, will rank equally in all respects with the Ordinary Shares arising pursuant to the Capital Reorganisation and the Placing Shares, including the right to receive all dividends and other distributions declared, made or paid after Admission.

The estimated proceeds of the Open Offer assuming that it is subscribed in full (before expenses) are

anticipated to amount to £519,820.

It is expected that Admission will become effective and dealings in the Open Offer Shares will commence on 28 January 2014.

The terms and conditions applying to the Open Offer are set out in Part III of the circular to shareholders.

The Capital Reorganisation

The Board is proposing to undertake a reorganisation of the capital structure of the Company. Currently the Company has one class of shares, being the Existing Ordinary Shares. The number of Existing Ordinary Shares currently in issue is 1,039,640,244.

The proposed Issue Price is less than the nominal value of an Existing Ordinary Share. The Company is not permitted under the Act to issue new shares at less than their nominal value so, in order to raise additional funds, the Company needs to reorganise its share capital to reduce the nominal value of its Existing Ordinary Shares.

In order to allow the Proposals to proceed at an appropriate pricing, it is proposed to carry out the following capital reorganisation which will be subject to Shareholder approval at the General Meeting.

(a) Subdivision

The Directors propose to subdivide each Existing Ordinary Share into one new ordinary share of 0.1p

and one deferred share of 0.9p. The rights attaching to the Ordinary Shares and the Deferred Shares are summarised in the circular to shareholders.

Such subdivision would result in an issued share capital of 1,039,640,244 Ordinary Shares and

1,039,640,244 Deferred Shares. Shares to be issued under existing options and warrants will reflect the Capital Reorganisation.

Board Changes

It is the intention of the Board to appoint Nicholas Mustoe, aged 52, as Non-executive Director of the

Company, and Mark Collingbourne, aged 48, as Finance Director of the Company, immediately following the General Meeting.

Nicholas Mustoe

Nick started his career in 1981 working in London advertising agency Foote Cone and Belding followed by nine years at Lowe Howard Spink. In that time Nick worked across many clients including Tesco, Heineken, Whitbread, Vauxhall, Wicks, Weetabix, Bauer Publishing and Hanson Group Companies.

Nick started his own agency, Mustoes Merriman Levy ("Mustoes"), in 1993, which he ran as an independent agency for 15 years, with a brief period under the ownership of Japanese multi-national Hakuhodo. During this time the agency managed clients including Kia Cars, Lloydspharmacy, Doctor Marten, Bauer Publishing, Coca Cola, and Unilever.

In 2008 Mustoes merged with a leading PR agency Geronimo to form Kindred, the first fully integrated PR & Advertising agency. Nick subsequently led an MBO of Kindred in 2010.

Nick has always had a keen interest in business, backing start-up companies ranging from Hall & Partners (research), ABC Connection (on-line publishing) to Caravell (industrial refrigeration MBO). He also is Chairman of Kempton Park Racecourse, a trustee of charity Starlight Children's Foundation and a non-executive director of Hub Capital (corporate finance).

Mark Collingbourne

Mark Collingbourne is a fully qualified accountant with significant experience in financial management,

particularly in the area of publicly quoted companies. He has dealt with all aspects of PLC development from bringing small companies to flotation to supervising the on-going accountancy and ensuring the good governance of international businesses.

During his eight-year tenure with ViaLogy, Mark was a key member of the team that arranged its

transformation from a private US organisation to an AIM company, via a merger with Original Investments PLC. He also played a major part in arranging the financial details of the recent ViaLogy restructuring.

Previously, after periods with ITV Network Centre and Mechanical Copyright Protection Society Limited Mark was appointed Finance Director of Curtis Brown Group Limited, one of the UK's leading literary agencies, in 1996, where he managed the financial implications of the management buyout in 2001.

Mark continues to act as Chief Finance Officer and Company Secretary for a number of other small private companies.

Nicholas Mustoe, aged 52 has been a director or partner over the past 5 years as follows:

*Project Leaders London Limited was put into voluntary creditors liquidation on 18 July 2012. Nick Mustoe resigned as director on 17 February 2012.

Mark Kingsley Collingbourne, aged 48 has been a director or partner over the past 5 years as follows:

Save as set out above there is no further information required to be disclosed pursuant to paragraph (g) of Schedule 2 of the AIM Rules.

Share incentive arrangements

The Directors and Proposed Directors believe that share ownership is an important aspect of incentivising and retaining Directors and senior employees. It is the intention of the Company to establish a share based incentive scheme for directors and senior employees of the Company over 250 million Ordinary Shares.

The objective of the New Share Scheme is to align the financial interests of the directors and senior

employees with those of the Shareholders as well as to incentivise and retain them.

Following the passing of the Resolutions to be proposed at the GM, it is the intention of the Company to enter into option agreements with the following Directors and Proposed Directors under the New Share Scheme as follows:

On grant, these options under the New Share Scheme will be exerciseable at the Issue Price but will only vest if the Company's share price reaches or exceeds 0.5p for a continuous period of 30 days at any time during the period of five years from Admission.

Investing Policy

Whilst the Board will continue to be supportive of VEC and retain its interest in VEC for the foreseeable future, the Directors and Proposed Directors believe an expansion of the Company's investing policy will provide the opportunity to deliver enhanced returns for Shareholders. To that end, the Directors and Proposed Directors propose to expand the Investing Policy as follows:

● The Company will consider acquiring one or more companies, or subsidiaries of companies, focussed in the facilities management and or support services sectors. The Directors and Proposed Directors believe that the Facilities Management and Support Services sectors offer attractive opportunities to build a profitable group going forward. Acquisition targets will be either UK based or with a sizeable UK presence, which offer the ability to grow both organically and potentially through further acquisitions.

● Any such acquisition or acquisitions are likely to be acquired through a combination of equity issued to vendors and cash, but may include other forms of finance such as debt. Depending on the size of any acquisition, it is likely that the first such acquisition under the Investing Policy will be deemed to be a reverse takeover for the purpose of the AIM Rules, which would require shareholder approval and re-admission of the Company, as enlarged by the acquisition, to trading on AIM.

●The Company intends to be an active investor and will seek to add substantial value, both operationally and strategically, to the businesses and/or assets acquired or in which investments are made. The Company does not currently anticipate making minority investments but intends to focus on owning the whole of or a majority interest in one or more companies or assets.

The Directors and Proposed Directors are mindful that any such acquisition identified may require additional funding to both acquire the business and provide working capital for the enlarged Company and therefore further equity fundraisings may be undertaken by the Company in the future.

The Directors and Proposed Directors expect to make one or more acquisitions and/or undertake a reverse takeover transaction within 12 months of Admission. Although the Directors and Proposed Directors are already appraising and evaluating potential companies for acquisition or investment, no agreements have as yet been entered into and there is no guarantee that any such agreements will be entered into.

Cash held by the Company pending any acquisition will be managed by the Company and placed in bank deposits or in capital guaranteed schemes offered by major global financial institutions, in order to protect the capital value of the Company's cash assets. The Company may, where appropriate, also enter into agreements or contracts in order to hedge against interest rate or currency risks.

Any material change to the Company's Investing Policy will only be made following the approval by ordinary resolution of Shareholders in general meeting. In addition, if the Company has not substantially implemented its Investing Policy within 18 months of Admission, the Company will seek the approval of Shareholders at its next annual general meeting for its Investing Policy and on annual bases thereafter until such time that its Investing Policy has been substantially implemented. If it appears unlikely that the Company's Investing Policy can be implemented at any time, the Directors will consider returning remaining funds to Shareholders.

The Board will review the Investing Policy on an annual basis and will implement any non-material changes or variations as they consider fit. Details of any such non-material changes or variations will be announced as appropriate. Any material change or variation of the Investing Policy will be subject to the prior approval of Shareholders.

The Company will continue to retain its interest in VEC for the foreseeable future and, if opportunities arise to do so, will seek any license agreements of its technology to third parties.

Current Trading

The Company announced on 2 December 2013 its interim report for the six-month period to 30 September 2013. The Company reported a loss for the period of £1,130,356 which included a non-cash loss of £239,627 for amortisation and depreciation. The amortisation charges relate to the value of ViaLogy's intellectual property and associated research and development which is amortised over a period of six years. The cash outflow from operations during the period was £983,156.

Recommendation

The Directors unanimously believe that the Proposals are in the best interests of the Company and its

Shareholders as a whole and recommend Shareholders to vote in favour of the Resolutions, as they intend to do in respect of their own beneficial holdings of 9,801,716 Existing Ordinary Shares, equivalent to approximately 0.9 per cent. of the current issued share capital of the Company.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Record Date for the Open Offer 2 January 2014

Publication date of this document 7 January 2014

Announcement of the Open Offer 7.00 a.m. on 7 January 2014

Ex entitlement date for the Open Offer 8.00 a.m. on 7 January 2014

Open Offer Entitlements and Excess CREST

Open Offer As soon as possible after

Entitlements credited to stock accounts of

Qualifying CREST Shareholders 8.00 a.m. on 8 January 2014

Recommended latest time for requesting withdrawal of

Open Offer Entitlements and Excess CREST Open Offer

Entitlements from CREST 4.30 p.m. on 16 January 2014

Latest time for depositing Open Offer Entitlements and 3.00 p.m. on 17 January 2014

Excess CREST Open Offer Entitlements in to CREST

Latest time and date for splitting of Application Forms 3.00 p.m. on 20 January 2014

(to satisfy bona fide market claims only)

Latest time and date for receipt of completed 11.00 a.m. on 22 January 2014

Application Forms, and payment in full under the

Open Offer or settlement of relevant CREST instructions

(as appropriate)

Latest time for receipt of the Form of Proxy 11.00 a.m. on 25 January 2014

General Meeting 11.00 a.m on 27 January 2014

Record Date for the Capital Reorganisation 5.00 p.m. on 27 January 2014

Admission effective and trading expected to commence 8.00 a.m. on 28 January 2014

in the New Ordinary Shares

CREST members' accounts credited in respect of

Placing Shares and Open Offer Shares in uncertificated As soon as possible after

form 8.00 a.m. on 28 January 2014

Share certificates in respect of Placing Shares

and Open Offer Shares expected to be despatched by 7 February 2014