(Alliance News) - Ethernity Networks Ltd on Wednesday touted a new contract win, after signing with a long-term networking data communications customer.
Ethernity Networks is an Israel-based supplier of data processing semiconductor technology for networking appliances. Shares in the firm more than doubled to 2.20 pence each in London on Wednesday morning.
The contract is valued at USD800,000. Ethernity expects to receive the entire amount in the fourth quarter.
According to the terms of the agreement, Ethernity has agreed to expand a pre-existent licence to use its ENET flow processor technology. The processor delivers a patented programmable pipeline of technical innovations to accelerate telecommunications carriers and cloud networks.
The customer, which went unnamed, has been licencing this technology for over ten years. The new licence expansion, Ethernity explained, will make it possible to deploy the tech on a broader range of ethernet access system products.
The consideration for the licence expansion is USD500,000. A further USD300,000 was also agreed as a prepayment against future royalties.
Ethernity was optimistic that the expansion of the licence contract would lead to higher year-on-year royalties going forward. It was also hopeful that the agreement would lead to further business with its customer.
As a result of the contract, total cash collection is expected to total between USD1.5 million and USD1.7 million in the fourth quarter of this year, and between USD4.5 million and USD4.7 million over the whole year.
By Holly Beveridge, Alliance News reporter
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Ethernity Net (ENET)