REG - Ethernity Networks - Update re TSP, lifting of suspension and subs. agt

Ethernity NetworksAnnouncement

16/10/2023 15:00

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RNS Number : 2714Q  Ethernity Networks Ltd  16 October 2023

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse (amendment)
(EU Exit) Regulations 2019/310 ("MAR"). With the publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

16 October 2023

 

ETHERNITY NETWORKS LTD

("Ethernity" or the "Company" or the "Group")

 

Update re Temporary Suspension of Proceedings application

 

Restoration of trading on AIM

 

Update on Share Subscription Agreement

 

Further to the Company's announcement on 12 October 2023 (the "Announcement"),
Ethernity Networks Ltd (AIM: ENET.L; OTCMKTS: ENETF), a leading supplier of
networking processing semiconductor technology ported on field programmable
gate arrays ("FPGAs") for virtualised networking appliances, announces that
the court in Lod has granted the Company with a 21-day Temporary Suspension of
Proceedings ("TSP") order (the "TSP Order"). A settlement manager has been
appointed by the court to review the Company's short-term budget and is
expected to provide his initial report to the court within 10 days, as part of
the process to determine whether the extended period for the TSP Order (as
detailed in the Announcement) will be approved. There can be no guarantee that
the court will approve the extended period.

 

During the TSP, the Company's creditors from prior to the date of the
application (being 12 October 2023), will not be paid during the process. Any
possible payment would be dictated by the settlement manager and after
negotiation with the creditor group.  Creditors arising subsequent to the
date of the application as a result of the ongoing operations of the Company
will be accounted for and paid in line with the budget prepared for the
settlement manager and subject to the settlement manager's approval.

 

Restoration of trading on AIM

 

Following receipt of the 21-day TSP Order, the temporary suspension of the
Company's ordinary shares from trading on AIM has been lifted and trading in
the ordinary shares on AIM has resumed.

 

Update on Share Subscription Agreement

On 13 October 2023, the Company received a demand letter on behalf of 5G
Innovation Leaders Fund ("Investor") in respect of the Share Subscription
Agreement ("Subscription Agreement"), details of which were announced on 25
February 2022. The demand letter notified the Company of an event of default
under the Subscription Agreement resulting from, inter alia, the application
for the TSP Order, and requested immediate repayment of the US$1,336,000
outstanding under the Subscription Agreement.  This amount will be handled by
the settlement manager alongside the Company's other pre-existing creditors
and further announcements will be made in due course.

 

For further information, please contact:

 

 Ethernity Networks Ltd                                         Tel: +972 8 915 0392
 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 / Stefano Aquilino (Sales and Corporate Broking)

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

 

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