Structured investment deed to raise £800,000

Ethernity Networks Ltd (AIM: ENET.L), a leading supplier of networking processing semiconductor technology ported on field programmable gate arrays for virtualised networking appliances is pleased to announce that it has entered into a structured investment deed (the "Agreement") with New Technology Capital Group, LLC ("New Tech") whereby New Tech will invest a gross amount of £800,000 in the Company (the "Fundraise"). The Fundraise is expected to close, and the Company expects to receive the proceeds, next week ("Closing").

In consideration of the gross Fundraise proceeds, New Tech has been granted a contingent warrant exercisable over new ordinary shares of ILS 0.001 each ("Ordinary Shares") as described below (the "Warrant"), and at Closing, the Company will issue 40,000,000 new Ordinary Shares (the "Subscription Shares") to New Tech.

The Warrant is initially exercisable at a price of 1 pence per Ordinary Share for a period of 45 days from Closing. The exercise price will be reset on the 45th day after Closing, following which it will be calculated as the average of the lowest five daily VWAPs of an Ordinary Share during the twenty trading days before the receipt of a Warrant exercise notice by the Company, less a 15% discount.

The Warrant has an eight-month exercise period and can be exercised in full or in part with a maximum of five exercise notices being issued in total. The amount available to be exercised under the Warrant is £800,000, less the value of the 40,000,000 Subscription Shares, calculated by reference to the relevant exercise price, such that New Tech will be entitled to exercise the Warrant only for an amount exceeding the difference between the maximum amount of £800,000 (or a lower amount outstanding at the time following prior exercise of the Warrant) and the value of 40,000,000 Subscription Shares at the relevant exercise price. The exercise price of the Warrant is prefunded by way of the £800,000 gross Fundraise amount and, accordingly, no additional payment will be made by New Tech to the Company in connection with the exercise of the Warrant.

Should the exercise price be above 1p throughout the exercise period, then 40,000,000 is the maximum number of additional Ordinary Shares that would be issued under the Agreement.

The Company will use the net proceeds of the Fundraise for general working capital purposes.

Ethernity Networks CEO, David Levi, commented: "We are pleased to announce the successful conclusion of this transaction. We have strong confidence in the Company's future prospects, anticipating a rise in the Company's value as we embark on strategic initiatives."

Total voting rights

Application will be made for the admission of 40,000,000 Subscription Shares to trading on the AIM, and dealings are expected to become effective on or about 24 May 2024 ("Admission"). On Admission, these new Shares will rank pari passu with the Company's existing Shares. Following Admission, the Company will have 417,642,243 Ordinary Shares in issue with each Ordinary Share carrying the right to one vote. There are no Ordinary Shares currently held in treasury. The total number of voting rights in the Company is therefore 417,642,243 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.