SerVision plc Variation of Loan Agreement and SEDA and Draw Down (6669D)

TIDMSEV

RNS Number : 6669D

SerVision plc

08 July 2016

8 July 2016

SerVision plc

("SerVision" or the "Company")

Variation of Loan Agreement and SEDA with YA and further Draw Down of $786,500

SerVision (AIM: SEV), the AIM quoted developer and manufacturer of digital security systems, announces that on 7 July 2016 it entered into a deed of amendment (the "Deed of Amendment") whereby YA II PN Ltd (formerly, YA Global Master SPV Ltd) ("YA") and SerVision agreed to amend the terms of their existing loan agreement (the "Loan Agreement") and the Standby Equity Distribution Agreement ("SEDA"). The variation to the Loan Agreement has, inter alia, resulted in an increase in the maximum amount that can be advanced by YA to the Company from GBP1,000,000 to a total of GBP3,000,000.

Variation to Loan Agreement and SEDA with YA

As announced on 1 September 2014, the Company entered into the Loan Agreement with YA Global Master SPV Ltd and Yorkville and Yorkville Advisors Global, LP ("Yorkville"), a designee of YA Global Master SPV Ltd for a loan facility of up to GBP1 million backed by the SEDA. The Loan Agreement has been amended and supplemented subsequently pursuant to deeds of amendment dated 18 August 2014 and 13 August 2015. To date the Company has not drawn on the SEDA and it does not intend to do so at the current time. Details on the SEDA facility were contained in the announcement released by SerVision on 1 September 2014.

On 7 July 2016, SerVision entered into the Deed of Amendment with YA to amend the Loan Agreement and the SEDA. Pursuant to the terms of the Deed of Amendment, YA has agreed to lend to the Company up to a maximum aggregated amount of GBP3 million. In addition, the SEDA was amended to extend the commitment period by one year to 11 November 2017. The interest rate payable on the outstanding amount of the loan is 12% per annum. The parties have also agreed to convert the denomination of the loan from GBP to US$ at a GBP to USD exchange rate equal to 1.30.

As at the date of this announcement a total of GBP825,000 had previously been drawn down by SerVision under the Loan Agreement dated 11 November 2013, leaving an unused amount of GBP175,000. Following the Deed of Amendment being entered into and before the further draw down detailed below, the total amount remaining unused under the Loan Agreement was GBP2,175,000 (equivalent to $2,827,500).

As at the date of this announcement a total of GBP55,252.95 is outstanding under the Loan Agreement and this amount is being re-paid from the net proceeds of the draw down as detailed below.

Draw down under the Loan Agreement

On 7 July 2016, immediately following the entering into of the Deed of Amendment, SerVision requested a drawdown of a principal amount of $786,500 under the Loan Agreement, being the fourth draw down in total under the Loan Agreement. The funds were received by SerVision on 8 July 2016.

Pursuant to the conditions within the Deed of Amendment and the Loan Agreement, SerVision has agreed:

- That the outstanding principal under the Loan Agreement shall be capable of conversion into new ordinary shares in SerVision. Conversion shall be at the sole election of YA. The conversion price shall be calculated by reference to 80% of the average of the three lowest daily VWAPs during the 10 business days preceding the date that YA delivers a conversion notice. In no event shall the conversion price be lower than 3 pence;

   -     To pay a fixed implementation fee of $32,825 to YA in connection with the further drawn; and 

- To pay an implementation fee of $130,000 to YA for the extension to the maximum amount to be loaned and the SEDA extension.

The net proceeds of the draw down payable to the Company are $551,846, this being after deduction of the implementation fees detailed above and the repayment of the outstanding amount under the Loan Agreement. The net proceeds from the draw down will be used for general working capital purposes.

The repayment schedule for the principal drawn down on 7 July 2016 under the Loan Agreement is 11 equal monthly instalments of $40,200 of the principal together with accrued interest, with the remaining balance payable on 6 July 2017.

-ends-

 
SerVision plc                          [phone] 
Gidon Tahan, Chairman and CEO 
Allenby Capital Limited (Nominated     [phone] 
 Adviser and Joint Broker)                       5656 
Nick Athanas / James Reeve / Richard 
 Short 
 
 
Beaufort Securities Limited (Joint 
 Broker) 
                                     [phone] 
Elliot Hance                                   8300 
 
 
Cadogan Leander (Financial PR) 
                                 [phone] 
Christian Taylor-Wilkinson                   157 
 

Notes to Editors

SerVision is a pioneer in the field of security communications technology and a leading developer and manufacturer of fully integrated video recording and transmission systems for homeland security and transportation applications. The Company's core technology is proprietary video compression which is optimised for streaming real-time video over any type of cellular or narrowband network.

This information is provided by RNS

The company news service from the London Stock Exchange

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July 08, 2016 05:00 ET (09:00 GMT)