REG - Ethernity Networks - Placing and business update

Ethernity NetworksAnnouncement

02/02/2026 07:00

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RNS Number : 2773R  Ethernity Networks Ltd  02 February 2026

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2 February 2026

Ethernity Networks Limited

("Ethernity" or the "Company")

 

Placing and business update

 

Ethernity Networks Limited (AIM: ENET.L; OTCMKTS: ENETF), a leading supplier
of data processing and PON semiconductor technology for networking appliances,
is pleased to announce a proposed placing of 9,187,500,000 new ordinary shares
of no par value ("Placing Shares") at an issue price of £0.00004 (0.004p) per
share (the "Placing Price") to raise a total of £367,500 (approximately
US$505,000) before expenses (the "Placing").

 

It is intended that participants in the Placing will receive one warrant for
every Placing Share subscribed for, exercisable at the Placing Price for a
period of 12 months from date of grant (the "Warrants"), with an acceleration
clause triggered should the Company's share price reach 0.006 pence. If
exercised in full, the exercise of the Warrants would provide an additional
£367,500 of gross proceeds to the Company.

The grant of the Warrants is conditional on the Company convening a general
meeting (the "EGM") to seek approval for an increase in the Company's
authorities to issue and allot new ordinary shares of no par value ("Ordinary
Shares"). A circular convening the EGM will be posted shortly and a further
update will be made at that time.

 

The Placing is being undertaken by ALBR Capital Limited ("AlbR").

 

Business Update

For the year ended 31 December 2025, the Company generated approximately
US$1.03m in revenue (unaudited), derived from royalties, maintenance and
support services.

 

For 2026, the Company anticipates generating approximately US$1.7m to US$2m of
revenue from existing customers, driven by extended royalty income, continued
business with a U.S. Broadband customer, and ongoing engagements with the
Company's Tier-1 U.S. defense customer.

 

In addition, the Company expects to pursue further revenue opportunities
through:

 

·      collaboration with a semiconductor vendor, initially with an
FPGA/IP offering, with a planned transition to ASIC at scale;

·      the introduction of the Company's new high-capacity, ultra-low
latency traffic manager, targeting 400Gbps performance on FPGA and above 1Tbps
when implemented in ASIC, compared to the current ENET flow processor
performance of 60Gbps on FPGA; and

·      additional discussions and opportunities related to xPON
solutions.

 

Use of Proceeds

The net proceeds of the Placing will be used to support the Company's general
working capital requirements and to repay short-term debt and creditor
obligations, which currently amount to several tens of thousands of U.S.
dollars per month.

 

The Company believes that, should the Warrants be exercised in full, the net
proceeds of the Placing and Warrant exercises, together with anticipated
business activity and achievement of the 2026 revenue target of $2 million set
out above, will provide the Company with sufficient working capital to take
the Company towards the end of 2026. Notwithstanding this, the Company will be
seeking additional authorities at the EGM to provide the flexibility to
conduct a further fundraise, should it be required.

 

In order to further preserve cash, it is proposed that certain directors of
the Company ("Directors") will convert accrued and unpaid salaries and
director fees into new Ordinary Shares at the Placing Price. Under Israel
Companies Law, such conversion requires the approval of shareholders at a
general meeting, and a resolution to approve the conversion will be included
in the EGM. The amount of unpaid salaries and fees that will be converted into
equity will be determined following the EGM but will be up to £70,000 in
aggregate. Further updates will be provided in due course.

Details of the Placing

The Company has conditionally raised a total of £367,500 (before expenses)
through the issue of 9,187,500,000 Placing Shares at the Placing Price of
0.004 pence per share, utilising the Company's existing authorities to issue
new Ordinary Shares on a non-pre-emptive basis.

 

The Placing Price represents a 29% discount to the closing mid-market price of
an Ordinary Share on 30 January 2026.

 

Warrants

Conditional on the passing of the relevant resolutions at the EGM,
participants in the Placing will be issued with one Warrant for each Placing
Share subscribed for, resulting in the issue of 9,187,500,000 Warrants. The
Warrants will be exercisable at the Placing Price of 0.004p for a period of 12
months from the date of issue. The Warrants will not be transferable and will
not be traded on an exchange. The Warrants will contain an accelerator clause
such that the Company may serve notice ("Notice") on the Warrant holders to
exercise their Warrants in the event that the closing mid-market share price
of the Company's Ordinary Shares trade at 0.006p or more over a consecutive
five-day trading period from the date of grant. In the event the Company
serves Notice, any Warrants remaining unexercised after seven calendar days
following the issue of the Notice will be cancelled. Exercise of the Warrants
in full would raise an additional £367,500 for the Company.

 
Admission to Trading

Application will be made for the 9,187,500,000 Placing Shares to be admitted
to trading on AIM ("Admission"). Admission is expected to occur at 8.00 a.m.
on or around 6 February 2026.

 

Total Voting Rights

Following Admission, the Company's enlarged issued share capital will comprise
19,219,328,493 Ordinary Shares. The Company holds no shares in treasury. This
figure may be used by shareholders for the purposes of the FCA's Disclosure
Guidance and Transparency Rules.

 

David Levi, Chief Executive Officer, commented: "Following a challenging
two-year period, during which we refocused the business around our core IP and
significantly reduced our cost base, we believe the Company is now better
positioned for recovery and growth. With expected business from existing
customers, continued progress with our semiconductor partner, the development
of our new high-capacity Traffic Manager, and the successful completion of the
Placing together with the associated Warrants, we anticipate improved
financial stability to build a clear path toward sustainable, long-term
growth."

 

For further information, please contact:

 

 Ethernity Networks Ltd                                        Tel: +972 3 748 9846
 David Levi, CEO

 Tomer Assis, CFO

 Allenby Capital Limited (Nominated Adviser and Joint Broker)  Tel: +44 (0)20 3328 5656
 James Reeve / Piers Shimwell (Corporate Finance)

 Amrit Nahal (Sales & Broking)

 ALBR Capital Limited (Joint Broker)                           Tel: +44 (0)20 7562 0930
 Lucy Williams / Duncan Vasey

 CMC Markets UK plc (Joint Broker)                             Tel: +44 (0)20 3003 8632
 Douglas Crippen

 
About Ethernity Networks

Ethernity Networks (AIM: ENET.L; OTCMKTS: ENETF) provides innovative
networking and security solutions on programmable hardware, enhancing
telco/cloud infrastructure capacity. Its semiconductor logic enables advanced
data processing for networking applications, alongside patented wireless
access and fiber media controllers. Ethernity's solutions accelerate
time-to-market and support the deployment of 5G over wireless and fiber
infrastructure.

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