Business
Variation of warrant instruments
Variation of warrant instruments.
About this update from Ethernity Networks Ltd.
[{"type":"text","content":"\n\n25 May 2023\n \nETHERNITY NETWORKS LTD.\n(\"Ethernity\" or the \"Company\")\n \nVariation of warrant instruments\n \nEthernity Networks (AIM: ENET.L; OTCQB: ENETF), a leading supplier of data processing semiconductor technology for networking appliances, announces a variation of the exercise price of the warrant instruments (the \"Warrants\") that were granted in connection with the fundraise undertaken by the Company in January 2023 (the \"January Fundraise\"). \n \nThe net proceeds of the January Fundraise and the Company's fundraise in May 2023 (the \"May Fundraise\"), have, inter alia, provided the Company with additional working capital to support the delivery of customer contracts. The Directors believe that the proceeds that would be receivable by the Company through the exercise of any of the Warrants would further strengthen the Company's balance sheet and provide additional confidence to prospective customers as to the Company's financial position. It would also provide additional working capital to support the fulfilment of anticipated new customer orders.\n \nThe initial 15p exercise price of the Warrants represents a premium of over 400% to the closing mid-market price of an Ordinary Share on 24 May 2023. The Directors consider therefore that it is appropriate to amend the exercise price of the Warrants to a level that is more attractive to Warrant holders and which would still provide meaningful funding to the Company should the Warrants be exercised in full.\n \nThe Company has on 24 May 2023, varied the exercise price of the 23,571,430 Warrants from 15p to 6p per new ordinary share in the Company (\"Ordinary Share\"), representing a 107% premium to the closing mid-market price of an Ordinary Share on 24 May 2023 and a 100% premium to the issue price of the Company's recent placing, announced on 11 May 2023. In addition, the Warrants contain an \"accelerator clause\" whereby the Company is entitled to require the warrant holder to exercise the subscription rights to which to which the holder is entitled in the event that the mid-market price of an Ordinary Shares should close above a certain price for any period of five consecutive days prior to expiry on 8 February 2025. This \"accelerator clause\" has been varied from 20p to 7.5p, applicable on the same basis as outlined a...