Digital security systems developer SerVision has admitted that December was a weak trading month nearly six months after the year end.
A number of contracts slipped into 2017 but related costs had already been incurred. Overall revenues were slightly higher in 2016 but gross margin was lower so there was a higher loss. The 2016 results should be reported on 30 June, which will ensure that trading in the shares is not suspended.
The share price fell 0.5p to 3.5p.
A general meeting is being held to enable SerVision to issue additional shares to Cascade, if it takes up its options. Cascade has an option to subscribe for a further $4m in two tranches. The first option lasts until 20 October and is exercisable at 12.66 cents (9.97p) a share, while the second option lasts until 29 September 2018 and is exercisable at 11.51 cents (9.06p) a share.
Cascade has already invested $2m at 11.3p a share, giving it a 10% stake in SerVision.
The share issues have been at a significant premium to the market price. The catch is that if SerVision has not moved to the Main Market or Nasdaq or been taken over at above the issue price then any cash raised after 21 February 2019 will have to be used to buy back shares issued to Cascade at the price they were issued - as long as Cascade still owns the shares. SerVision boss Gidon Tahan has provided a personal guarantee.
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