Significant Contract Win

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: [phone]
David Levi, Chief Executive Officer
Allenby Capital Limited (Nominated Adviser and Joint Broker)	Tel: [phone]
James Reeve / Piers Shimwell (Corporate Finance) Amrit Nahal (Sales and Corporate Broking)
Peterhouse Capital Limited (Joint Broker)	Tel: [phone]
Lucy Williams / Duncan Vasey / Eran Zucker

About Ethernity ( 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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