TIDMNLG
RNS Number : 3426C
Arria NLG PLC
15 October 2015
15 October 2015
Arria NLG plc ("Arria" or the "Company")
Subscription agreement with Lanstead Capital L.P.,
funding update and notice of general meeting
Arria NLG plc (AIM:NLG) is pleased to announce that it has
entered into two subscription agreements with Lanstead Capital L.P.
("Lanstead"), an institutional investor, together with related
sharing agreements.
A total of 18,750,000 new ordinary shares of 0.01 pence each in
the Company (the "New Ordinary Shares") have been conditionally
subscribed for by Lanstead at an issue price of 32 pence (the
"Issue Price") per New Ordinary Share (the "Subscription"). 15 per
cent. of the GBP6,000,000 gross proceeds of the Subscription, being
GBP900,000, will be retained by the Company and the balance of
GBP5,100,000 will be pledged by the Company pursuant to two sharing
agreements with Lanstead (the "Sharing Agreements"). The Sharing
Agreements, details of which are set out below, entitle the Company
to receive back those proceeds on a pro rata monthly basis over a
period of 18 months, subject to adjustment upwards or downwards
each month depending on the Company's share price at the time, as
explained in more detail below. The Sharing Agreements provide the
opportunity for the Company to benefit from positive future share
price performance.
It is the Company's intention to use the total proceeds from the
Subscription and the Sharing Agreements in the Company's continuing
operations, including for general working capital requirements. The
funding will assist the Company's plans for future product releases
and its growing sales efforts in the United States.
The Subscription
The Subscription is being conducted in two tranches, due to the
Company's current limited authority to issue new shares on a
non-preemptive basis.
a) The First Subscription
Pursuant to a conditional subscription agreement between the
Company and Lanstead (the "First Subscription Agreement"),
4,687,500 New Ordinary Shares (the "First Subscription Shares")
have been allotted to Lanstead at the Issue Price for an aggregate
subscription price of GBP1.5 million before expenses (the "First
Subscription"), conditional only upon admission to trading on AIM
of the First Subscription Shares ("First Admission"). Application
for First Admission has been made to London Stock Exchange and
First Admission is expected to become effective on 16 October
2015.
GBP0.225 million of the First Subscription proceeds (being 15
per cent. of the First Subscription) will be retained by the
Company and GBP1.275 million will be pledged to Lanstead under the
first of the Sharing Agreements under which Lanstead will then
make, subject to the terms and conditions of that Sharing
Agreement, monthly settlements (subject to adjustment upwards or
downwards) to the Company over 18 months, as detailed below. As a
result of entering into the first Sharing Agreement, the aggregate
amount received by the Company under the First Subscription and the
related Sharing Agreement may be more or less than GBP1.5 million,
as further explained below.
b) The Second Subscription
Pursuant to a conditional subscription agreement between the
Company and Lanstead (the "Second Subscription Agreement"),
14,062,500 New Ordinary Shares (the "Second Subscription Shares")
will be issued to Lanstead at the Issue Price for an aggregate
subscription price of GBP4.5 million before expenses (the "Second
Subscription"). The Second Subscription is conditional, amongst
other things, on the approval of the Company's shareholders at a
General Meeting (the "GM") of resolutions granting the directors of
the Company authority to allot the Second Subscription Shares and
dis-applying statutory pre-emption rights in relation to such
allotment. Further details of the GM are set out below.
Conditional on the passing of the resolutions to be put to
shareholders at the GM, GBP0.675 million of the Second Subscription
proceeds (being 15 per cent. of the Second Subscription) will be
retained by the Company and GBP3.825 million will be pledged to
Lanstead under the second of the Sharing Agreements under which
Lanstead will then make, subject to the terms and conditions of
that Sharing Agreement, monthly settlements (subject to adjustment
upwards or downwards) to the Company over 18 months, as detailed
below. As a result of entering into the second Sharing Agreement
the aggregate amount received by the Company under the Second
Subscription and the related Sharing Agreement may be more or less
than GBP4.5 million, as further explained below.
Both the First Subscription and Second Subscription are
conditional upon there being: (i) no breach of certain customary
warranties given by the Company to Lanstead at any time prior to
admission to trading on AIM of the relevant Subscription Shares;
and (ii) no force majeure event occurring prior to admission to
trading on AIM of the relevant Subscription Shares.
The Sharing Agreements
As part of the Subscription, the Company will enter into the
Sharing Agreements, pursuant to which Arria will return an amount
equal to 85 per cent. of the gross proceeds of the Subscription to
Lanstead. The Sharing Agreements will enable the Company to share
in any share price appreciation over the Benchmark Price (as
defined below). However, if the Company's share price remains less
than the Benchmark Price then the amount received by the Company
under the Sharing Agreements will be less than the 85 per cent. of
the gross proceeds of the Subscription which were pledged by the
Company to Lanstead at the outset.
Each of the Sharing Agreements provide that the Company will
receive 18 equal monthly settlement amounts as measured against a
benchmark share price of 42.66667 pence per share (the "Benchmark
Price"). The monthly settlement amounts for each Sharing Agreement
are structured to commence two months following the admission to
AIM of the New Ordinary Shares under the relevant Sharing
Agreement.
If the measured share price (the "Measured Price"), calculated
as the average volume weighted share price of the Company's
ordinary shares over an agreed period prior to the monthly
settlement date, exceeds the Benchmark Price, the Company will
receive more than 100 per cent. of that monthly settlement due on a
pro rata basis according to the excess of the Measured Price over
the Benchmark Price. There is no upper limit placed on the
additional proceeds receivable by the Company as part of the
monthly settlements and the amount available in subsequent months
is not affected. Should the Measured Price be below the Benchmark
Price, the Company will receive less than 100 per cent. of the
monthly settlement calculated on a pro rata basis and the Company
will not be entitled to receive the shortfall at any later
date.
For example, if on a monthly settlement date the calculated
Measured Price exceeds the Benchmark Price by 10 per cent., the
settlement on that monthly settlement date will be 110 per cent. of
the amount due from Lanstead on that date. If on the monthly
settlement date the calculated Measured Price is below the
Benchmark Price by 10 per cent., the settlement on the monthly
settlement date will be 90 per cent. of the amount due on that
date. Each settlement as so calculated will be in final settlement
of Lanstead's obligation on that settlement date.
Assuming the Measured Price equals the Benchmark Price on the
date of each and every monthly settlement, Arria would receive
aggregate proceeds of GBP6.0 million (before expenses) from the
Subscription and related Sharing Agreements, made up of the
GBP900,000 of the Subscription initially retained by the Company
and 18 monthly settlements of approximately GBP283,333.
The Company will pay Lanstead's legal costs incurred in the
Subscription and entering into the Sharing Agreements and in
addition, has agreed to issue to Lanstead 937,500 ordinary shares
of 0.01 pence each in the Company (the "Value Payment Shares").
Application has been made for admission to trading on AIM of
468,750 Value Payment Shares and their admission is expected to
occur on 16 October 2015. The issue of the remaining 468,750 Value
Payment Shares is, like the Second Subscription Shares, subject to
approval at the GM.
In no event will fluctuations in the Company's share price
result in any increase in the number of New Ordinary Shares issued
by the Company or received by Lanstead. The Directors believe that
a decline in the Company's share price would not result in any
advantage accruing to Lanstead and the Sharing Agreement allows
both Lanstead and the Company to benefit from future share price
appreciation.
The GM and further fundraising
A circular convening the GM will be sent to shareholders
shortly. At the GM shareholders will consider resolutions to permit
the Board of Directors to allot and issue up to GBP59,887.00
nominal value of new ordinary shares of 0.01 pence each ("Ordinary
Shares") and to dis-apply pre-emptive rights in respect of such
amounts (the "Resolutions"). This equates to 59,887,000 new
Ordinary Shares, with such authorities expiring if unused by the
Company's next annual general meeting.
The passing of the Resolutions would permit:
(a) the Second Subscription to be carried out and the associated
Value Payment Shares to be issued (in aggregate, 14,531,250 New
Ordinary Shares), :
(b) the issue of convertible loan notes and warrants convertible
into, and exercisable over, in aggregate 3,778,358 Ordinary Shares
pursuant to the fundraising announced on 30 June 2015. This amount
relates to the final tranche of the GBP3.75m fundraise 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; and
(c) the issue of up to a further 41,577,392 (or rights to
subscribe for 41,577,392 Ordinary Shares) as headroom for future
fundraising or other opportunities that may arise.
Holding in Company and Total Voting Rights
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