Corero Network Security PLC (LON:CNS) has announced a placing and share subscription to raise up to £3.25mln, before expenses, to be used mainly for the development of its SmartWall product.
In a statement, the AIM-listed network security company said in a statement it has conditionally raised approximately £0.95mln via a placing of 27,268,543 ordinary shares at a price of 3.5p each.
The company said it also intends to raise approximately £2.30mln by the conditional subscription for up to 65,588,600 shares in aggregate at the same price by two of its directors, chairman Jens Montanana and non-executive Richard Last, and existing major shaholder Juniper Networks Inc. (NYSE:JNPR).
The funds raised will be mainly used to market SmartWall in the US and Europe and further develop the system which is used to protect against cyber-attacks by making services unavailable by disrupting access to the Internet.
Corero pointed out that on 25 September 2019, it announced that in order to strengthen the firm's balance sheet, to provide it with additional working capital prior to being cash generative and to support the planned investment in sales and marketing, the company planned to undertake an equity fundraise before the end of the financial year to raise approximately £3.0mln, and also indicated that its hairman and major shareholder indicated support for the move.
The group said that should the placing and subscription - which requires shareholder approval - not proceed, it will need to seek alternative financing, adding that there can be no guarantee that such financing will be available in the required amounts or on acceptable terms for the working capital requirements of the group.