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RNS Number : 0579A
Ethernity Networks Ltd
25 September 2020
25 September 2020
ETHERNITY NETWORKS LTD
("Ethernity" or the "Company")
Share Subscription Agreement
Ethernity Networks Ltd (AIM: ENET.L), a leading supplier of
networking processing technology ported on FPGA (field programmable
gate array) for virtualised networking appliances, announces that
it has entered into a share subscription deed (the "Agreement")
with 5G Innovation Leaders Fund LLC ("5G Fund"), a U.S.-based
specialist investor, in relation to the issue of new ordinary NIS
0.001 shares ("Shares"), to raise up to GBP3,200,000.
5G Fund will make an initial investment of GBP500,000 for new
Shares ("subscription shares") valued at GBP547,000 in the next
five days. Additional investments of three tranches of GBP400,000
each will be made by 5G Fund for subscription shares valued at
GBP438,000 per tranche no later than, respectively, six months,
twelve months and eighteen months after the date of the initial
investment. Subject to the parties' consent, additional investments
of up to GBP1,500,000 in aggregate, for subscription shares valued
at up to GBP1,647,000, may be made under the Agreement. The
proceeds from the investment will be used by the Company for
general corporate and working capital purposes.
Each investment made by 5G Fund under the Agreement will be made
by way of a prepayment for subscription shares to be issued, at 5G
Fund's request, within 18 months of the date of the prepayment. The
number of subscription shares to be issued will be determined by
dividing the gross subscription amount (or a part thereof) by the
average of five daily volume-weighted average prices selected by 5G
Fund during a twenty trading day period immediately prior to the
date of their issue, rounded down to the next one tenth of a penny
(the " subscription price") .
ENET's CEO, David Levi, commented: "This investment assists in
supporting delivery of the three contracts signed in the past six
months along with others in the pipeline, and significantly
strengthens our ability to perfect our product offerings, including
our vRouter and UPF offload solutions, to ensure that they remain
best-in-class in the very competitive 5G market and to position
ourselves as market leaders as 5G networks advance toward mass
deployment."
Further Terms of the Agreement
Each investment tranche is subject to customary conditions
precedent. The Agreement includes representations and warranties by
the Company that are customary for an equity fundraising of this
nature. The Company is required to adhere to customary negative
covenants, including a restriction on engaging in a similar
transaction either during the currency of the Agreement or within
60 days after termination of the Agreement (for clarity, the
Agreement does not restrict the Company from raising additional
capital in an equity placing or placings).
5G Fund may postpone any of the investments other than the
initial investment by up to 60 days in the event that Company's
share price drops below an agreed level for more than two trading
days.
The Agreement contains events of default typical for a
transaction of this nature. 5G Fund's obligation to provide further
funding ceases if an event of default takes place.
The Company has the right, at its option, to repay any
subscription amounts in respect of which subscription shares are
not yet issued or requested to be issued (unless certain events of
default have occurred) provided that 5G can require 30 per cent of
any such repayment to be satisfied by the issue of subscription
shares.
Concurrently with the initial investment, the Company will issue
880,000 new Shares to 5G Fund at nominal value, which Shares 5G
Fund may apply towards the number of Shares that the Company is
required to issue under the Agreement. To the extent such Shares
have not been so applied, 5G Fund will make an additional payment
to the Company, determined on the subscription price as it stands
at the time of the payment. The Company will issue 455,130 new
Shares to 5G Fund in satisfaction of a fee.
Admission
Application is being made for the admission of 1,335,130 new
Shares to trading on the AIM, and dealings are expected to become
effective on or about 30 September 2020 ("Admission"). On
Admission, these new Shares will rank pari passu with the Company's
existing Shares.
Subsequent application will be made for any further subscription
shares issued and allotted to 5G Fund to be admitted to trading on
AIM. Such further Shares will only be issued to the extent that the
Company has corporate authority to do so.
Following Admission, the Company will have 41,713,150 Shares in
issue with each Share carrying the right to one vote. There are no
Shares currently held in treasury. The total number of voting
rights in the Company is therefore 41,713,150 and this figure may
be used by shareholders as the denominator for the calculations by
which they will determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the FCA's Disclosure Guidance and Transparency Rules.
Market Abuse Regulation (MAR) Disclosure
The information contained in this announcement is deemed by the
Company to constitute inside information as stipulated under
Article 7 of the Market Abuse Regulations (EU) No 596/2014. With
the publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
For further information, please contact:
Ethernity Networks Ltd. Tel: +972 8 915 0392
David Levi, Chief Executive Officer
Mark Reichenberg, Chief Financial
Officer
Arden Partners plc (NOMAD and Joint Tel: +44 207 614 5900
Broker)
Richard Johnson / Benjamin Cryer
Peterhouse Capital Limited (Joint Tel: +44 20 7562 0930
Broker)
Lucy Williams / Duncan Vasey / Eran
Zucker
VSA Capital Limited (Joint Broker) Tel: +44 20 3005 5000
Andrew Monk, Corporate Broking
Simon Barton, Corporate Finance
About Ethernity (www.ethernitynet.com)
Ethernity Networks (AIM: ENET.L) provides innovative,
comprehensive networking and security solutions on programmable
hardware for accelerating telco/cloud networks. Ethernity's FPGA
logic offers complete Carrier Ethernet Switch Router data plane
processing and control software with a rich set of networking
features, robust security, and a wide range of virtual function
accelerations to optimize telecommunications networks. Ethernity's
complete solutions quickly adapt to customers' changing needs,
improving time-to-market and facilitating the deployment of 5G,
edge computing, and NFV.
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END
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