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Nokia and Ericsson are the target through TietoEVRY. They are really the only alternative for those with Chinese spy concerns.
Bid I think that is the point of working with Fiberhome. The Ethernity IP is protected by patent. However I expect to see licensing deals as part of short term funding. Allowing third parties access to the tech to reproduce for royalties. The firmware and application cascades will be controlled by Ethernity.
Anyone just hear the Radio 4 prog about productivity ? How covid has kickstarted working from home as a real alternative to commuting to communal workspaces. Virtual reality will be used more with meetings etc. 5G will be pivotal in this working for a lot of businesses . Just need to hang in here for when it is properly kicking off. GLA
I know China is a very big market but I'm also really keen for this Tieto deal to reap rewards. The Chinese don't exactly have a great track record for respecting IP rights and in the back of my mind I think that as soon as they get their hands on the Ethernity kit they'll be hard at work copying it.. Let's hope David and co have some robust legal representation if that happens!
It's important to note that the UPF requires the ACEnic-100 or multiple ACEnic-100 to function depending on the load. These cards can run on any commercial off the shelf server and any third party UPF. However Ethernity has the industry leading infinitely scalable UPF ready to package with their ACEnic-100. These are several thousand dollars a unit. The requirement in China will be many millions of units as they are high density low reach in urban environments.
The UPF is the gateway to the edge, the key part to make it all work. There are others ready to go but most are tied to vendors, Ethernity has remained available with a high degree of flexibility. Third party arrangements like Fiberhome is how Ethernity will come to market. Without Fiberhome Ethernity would not have UPF under test by the major tender winners for China 5G.
"ACE-NIC100 selected by FiberHome Telecommunication Technologies for vBNG (virtual broadband network gateway) offload; now refocused for 5G User Plane Functionality (UPF) to be delivered for testing by Chinese operators during Q4 2020"
This is really interesting the vBRAS is a very specific function which now has been refocused to delivering UPF which appears to have been adopted by several of the large players. The same large players that took the bulk of the recent 5G tenders. This is the kind of mass deployment Ethernity need to put some volumes in the sales. As we know testing and selection was pencilled for late this year. That appears to be loosely holding the good. Mass deployment next year. Certainly mass deployment will last 10 years so a long term deal.
Well let's hope many take this up quickly, because at the moment I'm struggling to think of what near-term news we might get. If they aren't going to be doing bespoke stuff then we will need news of sales numbers and progress with the likes of Fiberhome and Tieto. We could be in for a bit of a news drought here..!
Bid that's exactly right. This is nice work and I suspect that we'll see a universal avionics solution from Ethernity soon. However this is not the main business which is mass deployment of ACEnic-100 with various add on products from the suite available. The great thing is that the ACEnic-100 is hugely versatile and can be used with any existing servers and integrated in any vendor package.
Many will take this up.
Ok that's what I understood it to mean. Those contracts I guess could be called be the 'salt on the salad' as Elon Musk likes to say .. nice upfront payments and revenues but not the core strategy of the business. The real meat of revenues will be in the mass deployment of the NICs and rollout of 5g networks in the coming 12/18 months.
Yes I believe so. It is the reason why they need short term finance Sept-Dec this year.
Hello all - just clarifying something in my mind regarding the contract negotiations from the 6th May update .. "and is now in contract negotiations for a new design order in the Summer for a complete hardware and software NIC solution for a Military/Aerospace tier-1 vendor which, on success, would lead to initial milestone revenue followed by recurrent multi-year revenue from 2021." Is that the contract that has been delayed for 6 to 12 months per the results last week?
The last couple of paragraphs are the opportunity for Ethernity
I have held inside once before in a AIM listed company and I didn't post. I watched people make assumptions and suggestions that I knew weren't correct but said nothing. I don't want to be in that position again. I Kew that there was going to be a placing in that share at 1p I bought I think just £25k in the placing. The share price was something like 1.6p. I couldn't sell any of my existing holding. The story had a Happy ending and we all lived happily ever after.
If that were to happen TL might I suggest you create a new account and continue posting? I know the Lse rules are really stringent (Lol) But I’m sure you could find away. Either that or start working for their PR .
I think that this is the difference in view, calling it the crunch point. I don't think that it's a crunch point at all, they have said "the Company will need to secure additional short term funding in the latter half of H2 2020 either via short term finance arrangements or an additional issue of equity"
That to me doesn't say to me that they have a do or die moment looming requiring anyone to panic or hold their breath. It tells me that they have options and will take the decision between September and December. I also know that lots can happen between now and then.
They have cash and a facility to advance pending payments, they disclosed those payments are about $2m. They are not in any danger and I think that they will pick their time and method carefully.
I have contacted Ethernity and asked if they raise money if I can be part of that without moving inside as I will have to stop posting here.
Let’s hope so TL. Things are really starting to hot up now on the business front according to the results - the market for which Ethernity have been patiently waiting has finally arrived and will be unstoppable now. In essence it seems that the COVID-19 related delay to the Military/Aerospace T1 contact has resulted in the cash flow shortfall. It sounds like Sep/Oct will be the crunch point. Plenty of time to find a solution. They'll already be working on it...
So now we know that they won't be funding until at least September can the market stop panicking about it.
Every forward looking statement has a cautionary coverall. I would be surprised if you can find one without that. Fact is that the momentum is not in Ethernity hands and never has been
Agree TL lots of promising forward looking statements in this update indeed.
But have to highlight this statement -
We fully expect to see revenue growth during 2020, however in light of the disruptions resulting from COVID-19 there remains a significant element of uncertainty over the timing of near-term events.
The Company continues to operate in line with its budgeted cost base and R&D expense allocation and is expecting to generate positive cash flows from operating activities during 2021.
I am glad to see thay are still saying posotive cash flow from 2021, but I am expecting the already extended target of H1 2021 to now be H2 2021. We also need to know what the fund raising plan is ASAP, I don't agree that they are in no rush. £540K wont last them them a couple of months.
Missed this first time around.
"We have taken the decision to defer other technology developments, assigning our resources to focus on the ACE-NIC FPGA SmartNIC product. Once this has created the anticipated significant business and revenue streams, the Company will then revert to completing the developments of other value-add products. Furthermore, in order to ensure that our progress on the 5G offering is maintained and funded, the Company intends offering licensing deals on its IP of its PON and UEP technology.
Ethernity's large scale revenue target is the volume production and sale of cards directly to customers for integration with their virtualised networking function software, that then can run on any commercialised off the shelf (COTS) server"
Licensing deal on intellectual property PON and UEP. I wonder if that is the answer to the funding issue.
Ethernity are market leaders and I expect them to be involved in the majority of the deployments in some capacity. There will be many solutions but all will use fpga. ACE-NIC100's will become the industry standard I know that already. Ethernity are well ahead of the game and assuming the kit passes trial with the big three in China they will adopt probably through Fiberhome in a deal.
The valuation is based on macro events like this placing, lack of knowledge and focus if investors, delays, potential further delays, the AIM etc etc.
I see issues for a takeover, I see further partnerships and that may be linked to some short term funding.
I don't see the funding as an issue, they will have many options from the industry and Israel. However I am thankful for the cheap shares.
Great future prospects we all know that but they haven’t removed the uncertainty yet. The name of the game is aim.
The big conundrum is why is Ethernity Net only valued at £6 m ....around the same as a corner
shop ....when its addressable market for NICs over the next 5 years is £1.2 b.
Even if Ethernity got 5% of the market ( £ 1.2b x 5% =£ 60m or £12m revenues per annum) it would be valued
at maybe £70-80m( ie Net Profits of £6/7m per annum multiplied by a P/E of say 12)
Surely one of the big players must see this and be tempted to make an approach at 3/4 times the current share price.
Are we on this Board delusional and why is nobody else interested in the share.
Strange enigma but maybe we will do all right in the end.
the Company will need to secure additional short term funding in the latter half of H2 2020 either via short term finance arrangements or an additional issue of equity.
Lots of positives, some negatives or changes in focus. It's that kind of Industry. They seem in no rush to fundraise and it seems that business is as normal. The company is focusing R&D on the big open goal directly in front and this seems to be the right plan. That goal is becoming real now and the big players are testing Ethernity products. The market for the next 5 years is huge and it is only going to get bigger. Ethernity will grab the lion share as they have the best products and have cultivated the in market relationships.
Cash and recurrent revenues will be in the 100's millions. The prize is just beyond current reach but is coming our way, Ethernity is a winner and all you need to do is wait now. Yes short term it can be rough but this is going our way. If I were to give advice by what you can afford and don't sell even one share.