REG - Ethernity Networks - Significant Contract Win

Ethernity NetworksAnnouncement

29/11/2023 09:30

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RNS Number : 0716V  Ethernity Networks Ltd  29 November 2023

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the Market
Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

29 November 2023

ETHERNITY NETWORKS LTD.

("Ethernity" or the "Company")

 

Significant contract win

 

·      Total contract valued at $800,000

·      Expansion of existing license to cover a wider range of products
which should increase future annual royalties

·      Entire amount expected to be collected in Q4 2023

·      As a result of this contract, total cash collection for Ethernity
is expected to total:

o  $1.5m to $1.7m during Q4 2023; and

o  $4.5m to $4.7m for FY 2023

 

Ethernity Networks (AIM: ENET.L; OTCMKTS: ENETF), a leading supplier of data
processing semiconductor technology for networking appliances, is pleased to
announce that it has signed a contract for $800,000 (the "Contract") with a
long-term networking data communications customer (the "Customer").

 

Pursuant to the Contract, the Company has agreed to an expansion of its
existing licence with the Customer (the "Licence Expansion") for the use of
Ethernity's "ENET flow processor" technology. The Customer has been licencing
this technology from Ethernity for over ten years and the Licence Expansion
permits the deployment of the technology on a broader range of the Customer's
ethernet access system products. The consideration payable for the Licence
Expansion is $500,000. The Customer will pay additional royalties to the
Company based on the number of uses of the ENET flow processor in the
Customer's products, such amount to be calculated on a quarterly basis. Under
the Contract, the Customer has agreed to a further payment to the Company of
$300,000 as a prepayment against future royalties.

 

The full $800,000 due under the Contract is expected to be received in Q4
2023. The $500,000 licence fee is expected to contribute towards the Company's
2023 revenues, whereas the $300,000 of royalty payments are expected to
contribute towards the Company's revenues in 2024.

 

The Company has received recurring royalty payments from the Customer under
the previous licence agreement for more than a decade, and the Board is
optimistic that the expansion of the license under the Contract will lead to
higher year-on-year royalties going forward. The Company is also hopeful that
it will be able to further expand its business with the Customer by utilising
newer Ethernity technologies for additional markets served by the
Customer.

 

The receipt of payments under the Contract would result in Ethernity having
received total cash collections from

its customer base of between $4.5 million and $4.7 million for FY 2023. Whilst
at this stage the total revenues for 2023 are unknown, these cash collections
will assist the Company in exiting the ongoing temporary suspension of
proceedings ("TSP") process. In addition, together with the contract win
announced on 2 November 2023, the Company has been able to secure the future
relationship with two important long-standing customers.

 

David Levi, CEO of Ethernity Networks, commented: "I am extremely pleased with
the results of the Company's cash collection from customers during the TSP.
This Contract, together with other ongoing contracts generated during Q4, will
result in an expected cash collection during Q4 2023 of between $1.5m to
$1.7m. As a result, I am optimistic for the future prospects of the Company".

 

For further information, please contact:

 

 Ethernity Networks Ltd                                        Tel: +972 3 748 9846
 David Levi, Chief Executive Officer

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

 Amrit Nahal (Sales and Corporate Broking)

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

 

About Ethernity ( www.ethernitynet.com (http://www.ethernitynet.com/) )

Ethernity Networks (AIM: ENET.L OTCQB: ENETF) provides innovative,
comprehensive networking and security solutions on programmable hardware that
increase telco/cloud network infrastructure capacity. Ethernity's
semiconductor logic offers data processing functionality for different
networking applications, innovative patented wireless access technology, and
fibre access media controllers, all equipped with control software with a rich
set of networking features. Ethernity's solutions quickly adapt to customers'
changing needs, improving time-to-market, and facilitating the deployment of
5G over wireless and fibre infrastructure.

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