TIDMENET
RNS Number : 9813M
Ethernity Networks Ltd
27 September 2021
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.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED
STATES, AUSTRALIA, NEW ZEALAND, CANADA, JAPAN OR THE REPUBLIC OF
SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE
UNLAWFUL.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO BUY, ACQUIRE
OR SUBSCRIBE FOR (OR THE SOLICITATION OF AN OFFER TO BUY, ACQUIRE
OR SUBSCRIBE FOR) ORDINARY SHARES TO ANY PERSON WITH A REGISTERED
ADDRESS IN, LOCATED IN, OR WHO IS A RESIDENT OF, THE UNITED STATES,
AUSTRALIA, NEW ZEALAND, CANADA, JAPAN OR THE REPUBLIC OF SOUTH
AFRICA OR IN ANY OTHER JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL OR CONTRAVENE ANY
REGISTRATION OR QUALIFICATION REQUIREMENTS UNDER THE SECURITIES
LAWS OF ANY SUCH JURISDICTION.
27 September 2021
ETHERNITY NETWORKS LTD.
("Ethernity" or the "Company")
Over-subscribed Placing and Subscription to raise GBP4.2m
Ethernity (AIM: ENET), a leading supplier of functional
acceleration ethernet adapter cards on FPGA (field programmable
gate array) for virtualised networking appliances, is pleased to
announce a placing (the "Placing") and subscription (the
"Subscription") (together, the "Fundraising") to raise GBP4.2m
(gross) through the issue of 12,000,001 new ordinary shares of NIS
0.001 each ("Ordinary Shares") at 35p per share (the "Issue
Price"). Arden Partners plc ("Arden") and Peterhouse Capital
Limited ("Peterhouse") are acting as placing agents to the Placing.
The Fundraising is not underwritten.
Summary / Highlights
- Fundraising to raise GBP4.2m* through the issue of 12,000,001
new Ordinary Shares ("New Shares") at the Issue Price. The issue
was over-subscribed and scaled back.
- David Levi, CEO, participating for 253,431 New Shares via the
Subscription in support of the fundraising
- Investors to receive warrants on a 1 for 1 basis, exercisable
at 60p, with 'accelerator clause' when the share price reaches 80p
for 5 consecutive days.
- Broker option ("Broker Option") to make available further
GBP250,000 to existing shareholders via Peterhouse.
- Net proceeds of approximately GBP3.94m* to strengthen the
balance sheet, to allow the Company to support the growing number
of engagements for its 5G offering towards successful field
deployments, and for general working capital purposes.
- Admission of the New Shares expected on or around 4 October 2021 ("Admission")
* excluding any additional funds raised through the Broker
Option
Details of the Fundraising
The Company has placed 12,000,001 New Shares at the Issue Price
raising gross proceeds of GBP4.2m before expenses (approximately
GBP3.94m net proceeds to the Company) . The New Shares will have
placing warrants attached, details of which are set out below.
The Issue Price represents a discount of approximately 20% on
the six month VWAP and 35 % to the closing price on 24 September
2021. The New Shares to be issued pursuant to the Fundraising will
represent approximately 17.8% of the Company's issued ordinary
share capital as enlarged by the Fundraising (excluding any New
Shares issued via the Broker Option).
As part of the Fundraising the Company will issue to investors
one warrant for every one New Share to subscribe for a further new
Ordinary Share at a price of 60p per Ordinary Share ("Warrants")
with a life term of 18 months from the date of Admission. The
Warrants are not transferable and will not be traded on an
exchange. The Warrant holders may exercise at any time during the
18 month life span of the Warrants, however the Warrants have an
accelerator clause if the closing mid-market share price of the
Company exceeds 80p over a 5-consecutive day period within 18
months of Admission. The Company may serve notice ("Notice") on the
Warrant holders to exercise their Warrants in the event that the
vesting criterion is met. In the event the Company serves Notice,
any Warrants remaining unexercised after 7 calendar days following
the notification of the Notice will be cancelled.
The New Shares are being issued under the Company's existing
share authorities.
The Fundraising is conditional, amongst other things, on
Admission occurring by no later than 8.00 a.m. on 4 October 2021
(or such later date as Arden, Peterhouse and the Company may agree,
not being later than 8.00 a.m. on 30 October 2021).
The Company has entered into a Placing Agreement with Arden and
Peterhouse (the "Joint Brokers"), pursuant to which the Joint
Brokers as agents for the Company, have agreed to use their
reasonable endeavours to procure placees for the Placing at the
Issue Price. The Placing Agreement contains warranties from the
Company in favour of the Joint Brokers in relation to, inter alia,
the accuracy of the information contained in the documents relating
to the Placing and also certain other matters relating to the
Company and its affairs. In addition, the Company has agreed to
indemnify the Joint Brokers in relation to certain liabilities that
they may incur in respect of the Placing.
The Joint Brokers may terminate the Placing Agreement in certain
circumstances (including for breach of warranty at any time prior
to Admission, if such breach is reasonably considered by the Joint
Brokers to be material in the context of the Placing, and in the
event of a force majeure event or material adverse change occurring
at any time prior to Admission.
Arden and Peterhouse have been issued with 32,971 and 201,960
warrants, respectively, to subscribe for further new Ordinary
Shares at the Issue Price per Ordinary Share. The warrants have a
life term of 24 months from the date of Admission.
Reasons for the Placing and Use of Proceeds
As Ethernity continues to implement its strategy of becoming a
supplier of customised and differentiated system solutions, the
Placing will serve to position the Company in a stronger position
for the next stage of its development and growth.
The net proceeds of the Fundraising of approximately GBP3.94m
(excluding any additional funds raised through the Broker Option or
the exercise of Warrants) are to be applied to strengthen the
balance sheet, providing additional working capital to allow the
Company to support the growth and delivery of the recently secured
contracts and engagements for its 5G offering towards successful
field deployments.
Broker Option
In order to provide qualified Ethernity shareholders ("Existing
Shareholders") and other qualified investors with an opportunity to
participate on the same exact basis as the Fundraising (with the
same Placing Price and identical warrant entitlement), the Company
has granted Peterhouse Capital a Broker Option over a minimum of
714,286 New Ordinary Shares in the Company exercisable at the
Placing Price ("Broker Option Shares"). Full take up of the minimum
number of shares under the Broker Option would raise a further
GBP250,000.10 for the Company, before expenses.
Existing Shareholders who hold shares in the Company and are on
the register of members as at the close of business on 23 September
2021, will be prioritised for participation in the Broker Option
(other than at the discretion of Peterhouse) and all orders from
such Existing Shareholders will be accepted and processed by
Peterhouse on a strictly "First Come, First Served" basis. The
Broker Option has not been underwritten. Peterhouse is entitled to
participate in the Broker Option as principal.
The Broker Option is exercisable by Peterhouse on more than one
occasion, at any time from the time of this announcement to 5.00
p.m. UK time on 28 September 2021, at its absolute discretion,
following consultation with the Company. There is no obligation on
Peterhouse to exercise the Broker Option or to seek to procure
subscribers for the Broker Option. Peterhouse may also, subject to
prior consent of the Company, allocate new shares after the time of
any initial allocation to any person submitting a bid after that
time.
The Broker Option Shares are not being made available to the
public and none of the Broker Option Shares are being offered or
sold in any jurisdiction where it would be unlawful to do so. No
Prospectus will be issued in connection with the Broker Option.
To subscribe for Broker Option Shares, Existing Shareholders and
other qualified investors should communicate their bid to
Peterhouse via their stockbroker as Peterhouse cannot take direct
orders from individual private investors. Existing Shareholders or
other interested parties who wish to register their interest in
participating in the Broker Option Shares should instruct their
stockbroker to call Peterhouse on STX: 76086 or 020 7469 0938 or
020 7469 0936 or 020 7220 9797. Each bid should state the number of
Broker Option Shares the Existing Shareholder wishes to subscribe
for at the Issue Price
Director's subscription
David Levi is subscribing for 253,431 New Shares, with
associated Placing Warrants, through the Subscription. On
Admission, David Levi's interest in the Company's shares shall
comprise 9,437,160 Ordinary Shares representing approximately 14.0%
of the Company issued share capital as enlarged by the Placing and
Subscription.
As a Director and substantial shareholder of Ethernity, David
Levi is a related party of the Company under the AIM Rules for
Companies (the "AIM Rules"). As a result, his subscription is a
related party transaction pursuant to Rule 13 of the AIM Rules.
Accordingly, the independent Directors of the Company (being all
the Directors with the exception of David Levi), having consulted
with the Company's Nominated Adviser, Arden, consider that the
terms of the Director's subscription are fair and reasonable in so
far as the Company's shareholders are concerned.
Admission
The New Shares will rank pari passu with the Company's existing
Ordinary Shares and an application is being made to the London
Stock Exchange for admission of the New Shares to trading on AIM.
Admission is expected to occur at 8.00 a.m. on or around 4 October
2021.
Total voting rights
Following Admission (and excluding any new Ordinary Shares
issued via the Broker Option) the Company's enlarged issued share
capital will be 67,339,127 Ordinary Shares. The Company holds no
Ordinary Shares in Treasury. This figure of 67,339,127 Ordinary
Shares may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.
For further information, please contact:
Ethernity Networks Tel: +972 8 915 0392
David Levi, Chief Executive Officer
Mark Reichenberg, Chief Financial Officer
Arden Partners plc (NOMAD and Joint Broker) Tel: +44 207 614 5900
Richard Johnson / Oscair McGrath
Peterhouse Capital Limited (Joint Broker) Tel: +44 20 7562 0930
Lucy Williams / Duncan Vasey / Eran Zucker
About Ethernity ( www.ethernitynet.com )
Ethernity Networks Ltd. (AIM: ENET) provides innovative,
comprehensive networking and security solutions on programmable
hardware for accelerating telco/cloud networks performance.
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 and edge computing.
The notifications below are made in accordance with the
requirements of the EU regulation on market abuse.
Template for 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 Director
b) Initial notification Initial notification
/Amendment
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 ordinary shares of NIS 0.001 nominal value
financial instrument, each
type of instrument ISIN: IL0011410359
Identification code
b) Nature of the transaction Subscription for shares
c) Price(s) and volume(s)
Price(s) Volume(s)
35p 253,431
d) Aggregated information N/a - single transactions
e) Date of the transaction 24 September 2021
f) Place of the transaction Off Exchange
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END
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