REG - Ethernity Networks - Variation of warrant instruments

Ethernity NetworksAnnouncement

25/05/2023 07:00

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RNS Number : 5619A  Ethernity Networks Ltd  25 May 2023

25 May 2023

 

ETHERNITY NETWORKS LTD.

("Ethernity" or the "Company")

 

Variation of warrant instruments

 

Ethernity Networks (AIM: ENET.L; OTCQB: ENETF), a leading supplier of data
processing semiconductor technology for networking appliances, announces a
variation of the exercise price of the warrant instruments (the "Warrants")
that were granted in connection with the fundraise undertaken by the Company
in January 2023 (the "January Fundraise").

 

The net proceeds of the January Fundraise and the Company's fundraise in May
2023 (the "May Fundraise"), have, inter alia, provided the Company with
additional working capital to support the delivery of customer contracts. The
Directors believe that the proceeds that would be receivable by the Company
through the exercise of any of the Warrants would further strengthen the
Company's balance sheet and provide additional confidence to prospective
customers as to the Company's financial position. It would also provide
additional working capital to support the fulfilment of anticipated new
customer orders.

 

The initial 15p exercise price of the Warrants represents a premium of over
400% to the closing mid-market price of an Ordinary Share on 24 May 2023. The
Directors consider therefore that it is appropriate to amend the exercise
price of the Warrants to a level that is more attractive to Warrant holders
and which would still provide meaningful funding to the Company should the
Warrants be exercised in full.

 

The Company has on 24 May 2023, varied the exercise price of the 23,571,430
Warrants from 15p to 6p per new ordinary share in the Company ("Ordinary
Share"), representing a 107% premium to the closing mid-market price of an
Ordinary Share on 24 May 2023 and a 100% premium to the issue price of the
Company's recent placing, announced on 11 May 2023. In addition, the Warrants
contain an "accelerator clause" whereby the Company is entitled to require the
warrant holder to exercise the subscription rights to which to which the
holder is entitled in the event that the mid-market price of an Ordinary
Shares should close above a certain price for any period of five consecutive
days prior to expiry on 8 February 2025. This "accelerator clause" has been
varied from 20p to 7.5p, applicable on the same basis as outlined above and in
the Warrants.

 

All of the terms of the Warrants remain unchanged and as announced on 17
January 2023. The expiry date of the Warrants remains as 8 February 2025.

 

Related party transaction

 

David Levi and Shavit Baruch (the "Directors") hold 3,028,571 and 668,771
Warrants respectively, by virtue of their participation in the January
Fundraise. The variation of the exercise price of the Warrants held by the
Directors constitutes a related party transaction under the AIM Rules for
Companies. The independent directors of Ethernity (excluding David Levi and
Shavit Baruch) consider, having consulted with the Company's nominated
adviser, Allenby Capital Limited, that the terms of the transaction are fair
and reasonable insofar as the Company's shareholders are concerned.

 

The FCA notification, made in accordance with the requirements of the UK
Market Abuse Regulation is appended further below.

For further information, please contact:

 

 Ethernity Networks Ltd                                        Tel: +972 8 915 0392
 David Levi, Chief Executive Officer
 Mark Reichenberg, Chief Financial 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.

 

Notification and public disclosure of transactions by persons discharging
managerial responsibilities and persons closely associated with them.

 

 1    Details of the person discharging managerial responsibilities / person closely
      associated
 a)   Name                                                         David Levi

 2    Reason for the notification
 a)   Position/status                                              CEO
 b)   Initial notification /Amendment                              Initial notification
 3    Details of the issuer, emission allowance market participant, auction
      platform, auctioneer or auction monitor
 a)   Name                                                         Ethernity Networks Ltd.
 b)   LEI                                                          213800LZJO33QBNXU496
 4    Details of the transaction(s): section to be repeated for (i) each type of
      instrument;

      (ii) each type of transaction; (iii) each date; and (iv) each place where
      transactions have been conducted
 a)   Description of the financial instrument, type of instrument  Warrants over ordinary shares of NIS 0.001 nominal value each

      Identification code

                                                                   ISIN: IL0011410359
 b)   Nature of the transaction                                    Variation of exercise price of existing warrants over ordinary shares
 c)   Price(s) and volume(s)

                                                                                       Price(s)            Volume(s)
                                                                                       6p exercise price   3,028,571

 d)   Aggregated information                                       N/A
 e)   Date of the transaction                                      24 May 2023
 f)   Place of the transaction                                     Outside a trading venue

 

 

 1    Details of the person discharging managerial responsibilities / person closely
      associated
 a)   Name                                                         Shavit Baruch
 2    Reason for the notification
 a)   Position/status                                              Director
 b)   Initial notification /Amendment                              Initial notification
 3    Details of the issuer, emission allowance market participant, auction
      platform, auctioneer or auction monitor
 a)   Name                                                         Ethernity Networks Ltd.
 b)   LEI                                                          213800LZJO33QBNXU496
 4    Details of the transaction(s): section to be repeated for (i) each type of
      instrument;

      (ii) each type of transaction; (iii) each date; and (iv) each place where
      transactions have been conducted
 a)   Description of the financial instrument, type of instrument  Warrants over ordinary shares of NIS 0.001 nominal value each

      Identification code

                                                                   ISIN: IL0011410359
 b)   Nature of the transaction                                    Variation of exercise price of existing warrants over ordinary shares
 c)   Price(s) and volume(s)

                                                                                       Price(s)            Volume(s)
                                                                                       6p exercise price   668,771

 d)   Aggregated information                                       N/A
 e)   Date of the transaction                                      24 May 2023
 f)   Place of the transaction                                     Outside a trading venue

 

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