Cantono has raised the cash it needs to finance the expansion of its data centre business.
Cantono could raise up to £2m from convertible loan notes secured on the assets of the company and up to £250,000 from a share issue.
Cantono shares jumped 1.5p to 4p each, which values the current share capital at £1.16m.
So far, Cantono has raised £1.125m from an issue of convertible loan notes - £1.025m from A loan notes and £100,000 from B loan notes. Another £400,000 is expected to be raised before the end of the year.
A loan notes are convertible at 3p a share and there is no interest charge. If the loan notes are redeemed within 12 months then there will be a redemption premium of 200% plus the original amount, rising to 300% plus the original amount if they are redeemed after 13 months.
B loan notes have a five year term and if they are not redeemed by then an annual interest charge of 8.75% is payable. The other terms are the same as A loan notes.
These terms indicate just how difficult it is to raise cash.
Cantono has already sold its IT managed services businesses. Xploite will pay £1.9m upfront and £1.1m three months after the deal is completed later in December.
That cash will take the total raised to near to the £5m the company wanted.
The £1.125m of convertible loan notes already issued will be equivalent to 56.4% of the enlarged share capital of Cantono.
Cantono reported a loss of £7.8m on revenues of £8.5m in the year to May 2008.
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