Radcom Ltd. (Nasdaq: RDCM; TASE:RDCM) has $2.5 million in a Private Investment in Public Equity (PIPE) offering. Radcom's chairman Zohar Zisapel, who owns 20.7%, invested $1.65 million, which will increase his holding to 25%, but because he is the controlling shareholder, the company will seek the approval of its shareholders at a special meeting on January 30.
Radcom develops, and markets network test and service monitoring solutions for communications service providers and equipment vendors. It specializes in next generation Cellular as well as voice, data and video over IP networks. The PIPE offering will be held at an average closing price of the company's shares on the ten trading days prior to the shareholders' meeting, less a discount of 10%. Investors will also be granted warrants to purchase one ordinary share for every three ordinary shares purchased by them in the transaction.
Radcom also said it is currently negotiating terms with a venture lending firm for a loan of $2.5 million, which together with the PIPE offering, will more than double its cash in hand. It had $4.6 million in cash at the end of September.
Radcom is currently traded at $0.82, giving the company a market cap of $14 million. It was recently relegated to the Nasdaq small cap index, after it failed to meet the threshold requirements for listing on the market's main index.
Radcom CFO Jonathan Burgin said, "The extra cash will give us added financial stability. The focus here is not the share's listing, but the company's business. Over recent quarters the company's losses have depleted our cash in hand. We bid in major tenders where we had a technological lead, but we ran into difficulty because of our financial positioning. We expect to see significant contract wins, once we complete the offering and move back to profitability."
Radcom's share was 0.62% stronger in afternoon trading on the Tel Aviv Stock Exchange.
Published by Globes [online], Israel business news - www.globes.co.il - on December 20, 2007
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