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SerVision receives first US$1mln from Cascade

Published: 08:09 01 Mar 2017 GMT

share certificate with a silver bull and a bear on top
Once the new shares are admitted to AIM, Cascade will hold a 5.3% interest in SerVision

Mobile live video streaming specialist Servision Plc (LON:SEV) has confirmed it has received the first US$1mln from Cascade, the New York-based group of private investors.

The company told the market it has issued Cascade with 7mln shares at 11.4p; more than double yesterday’s closing price.

The payment represents the first half of the US$2mln Cascade agreed to put up last week.

The tie-up was significant in that SerVision managed to raise the cash at a 280% premium; almost unheard of on the AIM market.

The company will use the money to pay down some of its debt as well as helping it to take advantage of the “increasing number of global opportunities” for selling its IVG400-N security video streaming device.

The Israeli business also said the investment, coupled with expectations of improved trading during the current year, should mean it has sufficient working capital for the “foreseeable future”.

Significant shareholder

SerVision said it expects the new shares issued today to be admitted to AIM on 7 March, at which time Cascade will hold a 5.3% stake in the firm.

Gidon Tahon, SerVision’s chairman and chief executive, will still hold a 7.37% interest, the company added.

As part of the original agreement, Tahon will transfer some of his own shares to Cascade in the event that SerVision fails to issue the second tranche of shares in accordance with the deal, which the company considers “extremely unlikely”.

Potentially more money further down the line, too

As well as the initial US$2mln subscription, Cascade also has the option to invest up to a further US$4mln in two equal tranches.

The first tranche period runs until 20 October 2017 and gives the investor group the option to purchase shares at around 10.2p each, while the second period runs until 29 September 2018, with an option price per share of roughly 9.3p.

Should SerVision not have listed on the main market of the London Stock Exchange or on Nasdaq, or if it has not been sold at a higher value than today’s issue price before 21 February 2019, any new capital raised must first be used to buy back Cascade’s shares at the same price as which they were issued.

Shares opened 11% higher at 5.6p on Wednesday morning.

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