Ethernity Networks shares bounce 200% after contract win

29th Nov 2023 09:52

(Sharecast News) - The share price for AIM-listed Ethernity Networks trebled on Wednesday after the Israel-based semiconductor group won a "significant" contract worth $800,000.

The contract is with an existing, unnamed "long-term networking data communications customer" which has been licensing Ethernity's ENET flow processor tech for over ten years.

The new deal will expand its existing licence to cover a wider range of products which should increase future annual royalties.

David Levi, chief executive, commented: "I am extremely pleased with the results of the company's cash collection from customers during the temporary suspension of proceedings (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."

The company had entered into the TSP process in October after a period of "financial strain" on the back of difficulties collecting customers' outstanding debts. It said the TSP was a "preventive measure to give the company time to resolve issues with creditors and seek remedies under Israel's Insolvency and Economic Rehabilitation law".

The stock was up 199% at 2.32p by 1116 GMT, giving Ethernity Networks a market capitalisation of £4.4m, but still remains significantly below the 10p level it started the year at. Two years prior, the share price stood around the 50p mark.