Radcom raises $5.5m in private placement

Company chairman Zohar Zisapel will invest $1 million in the company.

Radcom (Nasdaq: RDCM) has raised $5.5 million in a private placement. One of the investors in the service assurance solutions for communications provider is its chairman Zohar Zisapel who will inject $1 million into the company.

Investment bank Roth Capital led a group of US institutional investors who have put $1.3 million into the company.

At the end of the second quarter of 2010, Radcom had $2.4 million in cash so the latest round of investment will improve the company's liquidity situation.

Radcom will issue ordinary shares to the investors at an aggregate purchase price of $5.5 million, with a price per share of $8.55, which is based on the average closing price of Radcom's ordinary shares on the thirty trading days prior to the execution date of the agreement, less a discount of 12%. The investors will also be granted warrants to purchase one ordinary share for every three ordinary shares purchased by them in the transaction. The exercise price of the warrants will be equal to the price per share to be paid in the transaction plus 25%, and they will be exercisable for a period of three years from the date of issue.

Radcom has also agreed to register with the US Securities and Exchange Commission (SEC) the resale of the shares and the shares underlying the warrants.

Radcom CFO Jonathan Burgin said, "We are grateful to receive this additional vote of confidence from new investors and current investors, many of whom have demonstrated such unwavering support of our Company throughout the years. We believe that the improving financial results that we have delivered over the past few quarters are justifying their support and confirming the market's growing need and demand for our solutions. The cash infusion from this transaction will help us fully leverage this momentum, taking advantage of favorable markets to create additional value for our shareholders."

Radcom's share was trading on Nasdaq today down 3.9% to $10.11, giving a market cap of $52.19 million.

Published by Globes, Israel business news - www.globes-online.com - on October 11, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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