Notice of EGM

    RNS Number : 9735I
  Vivomedica PLC
  26 November 2008
   
     VivoMedica plc (the 'Company')

    26 November 2008
    Notice of General Meeting
    The Company announces that it has today posted a circular to shareholders setting out various resolutions to be passed at the Company's
General Meeting to be held on 18 December 2008. These resolutions include a proposed share capital reorganisation, which will enable a
Proposed Placing of securities in order to fund the continued development of the business.
    The circular is available for download at the Company's website: www.vivomedica.com
    The full text of the Chairman's letter contained within the circular is set out below. Definitions in this announcement shall bear the
same meaning as those in the circular to Shareholders.
    To the holders of Ordinary Shares and, for information only, to holders of options over Ordinary Shares
    Dear Shareholder,

                     Proposed Share Capital Reorganisation and Notice of General Meeting
    1.    Introduction
    VivoMedica has today announced a proposal to reorganise the Company's share capital by way of the Share Capital Reorganisation
conditional upon Shareholder approval to be sought at a General Meeting, details of which are set out below.  
    The Directors stated in the Company's interim results for the six months to 30 June 2008 that in order to continue the Group's progress
to date further funds would be required. The Directors consider that it would be in the best interests of the Company to seek to raise such
new funds through the Proposed Placing.  The Companies Act prohibits the Company from issuing Ordinary Shares at a discount to their nominal
value and it will, therefore, be necessary to reorganise the share capital of the Company to allow the Proposed Placing to take place. As
such, the Proposed Placing is conditional upon the passing of the Resolutions in relation to the Share Capital Reorganisation.
    Authority for the Share Capital Reorganisation will be sought from Shareholders at a General Meeting convened for 11.00 am on 18
December 2008. Further details of the Share Capital Reorganisation are set out below and details of the General Meeting are set out in the
Notice of General Meeting at the end of this document. 
    The purpose of this document is to give the background to and reasons for the Proposed Placing, the Share Capital Reorganisation, to
explain why your Board considers that the Proposal is in the best interests of the Company and its Shareholders as a whole and to recommend
that you vote in favour of the Resolutions at the forthcoming General Meeting.
    2.    The Placing
    At the Annual General Meeting, the Shareholders passed certain resolutions which, amongst other matters, authorised the Company to issue
shares on a non-pre-emptive basis in connection with a financing up to an aggregate nominal amount of £4,500,000.
    The Board believes that it remains in the best interests of the Company to raise further finance by way of the Proposed Placing. Subject
to the passing of the Resolutions, the decision as to whether or not to proceed with the Proposed Placing will be determined by the Board at
such time as the Board believes it appropriate to do so, having regard to market conditions.  
    New Ordinary Shares issued pursuant to the Proposed Placing will, if issued, rank in full for all dividends and otherwise pari passu
with the then existing New Ordinary Shares.
    The Board will seek the advice of its Nominated Adviser and Broker in connection with the Proposed Placing and as to which potential
investors New Ordinary Shares may be offered as part of the Proposed Placing. 
    The net proceeds of the Proposed Placing will be used to continue to fund the development of our two key technologies PathscoreTM and
DrugPrint® and for other general working capital purposes.
    3.    Background to and reasons for the Share Capital Reorganisation
    At the time of the Company's interim results for the six months to 30 June 2008, the Directors reported on the significant progress the
Company had made towards delivering high value solutions to the pharmaceutical industry and in realising the commercial value of the
Company's exclusive worldwide technology licences. We also stated that the nature of the Group's operations means that VivoMedica's future
income is dependent on securing collaboration agreements and/or sales/sub-licensing contracts within the markets it currently operates in,
and on developing new applications for the PathscoreTM and DrugPrint® products. As a result there can be a considerable and unpredictable
variation in the timing and amount of cash inflows generated from planned product launches.
    We therefore announced that in order to continue the Group's progress to date, further funds would be required.  The Directors therefore
intend to seek to raise new funds via the Proposed Placing.
    4.    Details of the Share Capital Reorganisation 
    The closing mid-market price of an Existing Ordinary Share was 0.7p on 25 November 2008, being the last dealing date prior to the
publication of this document. The Company's share price is therefore below the nominal value of an Ordinary Share of 2 pence each. In effect
this prohibits the Company from raising any further equity capital as, in order to comply with the Companies Act, any further shares issued
would have to be issued at a price at or above the nominal value. Consequently, the Board proposes to sub-divide the shares as detailed
below and reduce the nominal value of each Existing Ordinary Share to 0.1 pence per share. 
    Resolution 1 to be proposed at the General Meeting and as set out at the end of this document, proposes that each Existing Ordinary
Share of 2 pence each in nominal value be sub-divided into one New Ordinary Share of 0.1 pence each in nominal value and one new Deferred
Share of 1.9 pence each in nominal value. The New Ordinary Shares of 0.1 pence each so created will continue to carry the same rights as
attach to the Existing Ordinary Shares of 2 pence each (save for the reduction in nominal value).  
    Following the Share Capital Reorganisation, the Company's authorised share capital will remain at £14,000,000 comprising 700,000,000 New
Ordinary Shares and 700,000,000 Deferred Shares and the Company's issued share capital will comprise 200,555,662 New Ordinary Shares and
200,555,662 Deferred Shares.  
    5.    Share Rights
    The New Ordinary Shares arising on completion of the Share Capital Reorganisation will have the same rights as the Existing Ordinary
Shares, including without limitation, the same voting, dividend and other rights.
    The Deferred Shares will be transferable only with the consent of the Company and will not be admitted to trading on any market or
exchange. The Deferred Shares will not confer on their holders any right to receive notice of any general meeting of the Company nor any
right to attend, speak or vote at any such meeting. The Deferred Shares will not entitle their holders to receive any dividend or other
distribution and shall on a return of assets in a winding up of the Company entitle the holders only to the repayment of the amounts paid up
on such shares after the amount paid to holders of the New Ordinary Shares exceeds £700,000,000 per New Ordinary Share. The Deferred Shares
will also be incapable of transfer and no share certificates will be issued in respect of them.
    The Directors consider that the Deferred Shares to be of no economic value. The Deferred Shares will, subject to Shareholder approval
pursuant to Resolution 2 to be proposed at the General Meeting, be re-purchased by the Company, pursuant to a contract for purchase approved
in accordance with Resolution 1, for 1 pence in aggregate for all such shares and following such repurchase will be cancelled. The
repurchase of the Deferred Shares will be financed out of the proceeds of the issue of 1 Existing Ordinary Share by the Company to be
subscribed by an existing shareholder at a subscription price equal to the nominal value of such share.

    6.    General Meeting
    A notice convening the General Meeting to be held at the offices of Buchanan Communications, 45 Moorfields, London EC2Y 9AE at 11.00 am
on 18 December 2008 is set out at the end of this document. At the General Meeting, the following Resolutions will be proposed:
    (1)    a special resolution to:
            (A)    sub-divide each Existing Ordinary Share into one New Ordinary Share with a nominal value of 0.1 pence and one Deferred  
Share with a nominal value of 1.9 pence; and
            (B)    amend the Articles to reflect the creation of the Deferred Shares; and
    (2)    conditional on passing Resolution 1, an ordinary resolution to authorise the Directors to repurchase the Deferred Shares pursuant
to a  contract for purchase.
    7.    Action to be taken
    A Form of Proxy for use by Shareholders in connection with the General Meeting accompanies this document. Whether or not you intend to
be present at the General Meeting, you are requested to complete and sign the Form of Proxy and return it to the Company's Registrars,
Capita Registrars, Proxies, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, so as to be received no later than 48 hours before
the commencement of the General Meeting.
    Unless the Form of Proxy is received by the date and time mentioned in the instructions, it will be invalid. The completion and return
of the Form of Proxy will not prevent you from attending the General Meeting and voting in person, if you so wish.
    8.    Recommendation
    The Directors consider the Resolutions to be in the best interests of the Company and therefore, unanimously recommend Shareholders to
vote in favour of the Resolutions at the General Meeting as they intend to do in respect of their own beneficial holdings of 4,322,857
Ordinary Shares representing 2.16 per cent. of the issued share capital at the date of this document. Funds managed by Merlin Biosciences
Limited have undertaken to vote in favour of the Resolutions in respect of their shareholdings which amount to 100,257,775 Ordinary Shares
which represent approximately 49.99 per cent. of the issued share capital at the date of this document.

    Yours faithfully
    Sir Christopher Evans
    Chairman 



    Contact:
    Buchanan Communications                                       020 7466 5000
    Tim Anderson / Catherine Breen
    Brewin Dolphin Investment Banking (NOMAD)        0845 270 8600
    Mark Brady / Alison Barrow

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