Member Info for dallo

McCarthy alluded to the possibility of something maybe coming from "left field" to boost the share price in his Proactive propaganda ramblings.
We could do with some good news after years of appalling underperformance.
He has a major challenge to restore his reputation.

I am on the cusp of going under the 3% holding level following the placing and if 5G exercise it's share call then I will be under 3% and become a private citizen again even though I have not sold any shares.

Bid
RNS clearly states "dilution due to capital measures"
Also Cipio forgot to fill in the section relating to its previous holdings position...sloppy!
So Cipio didn't participate in Placing .
I wonder will we find out if any of the Institutions involved in Placing declare a notifiable interest.
ATB

It is my personal understanding that the placing was arranged when the SP was 42/44 p but during this time 2/3 private investors piled in and bought around 2 million shares between them and drove the SP to c54p.
The placing was oversubscribed by a large factor and wasn't influenced by the temporary spike to 54p.
Just my thoughts.
DYOR

Ethernity is currently in negotiations with mega International telecom operators
They have insisted on financial stability and cash resources as a vital component of doing business and signing multi year contracts.
Hence Ethernity had to act quickly or lose these contracts and had to raise funds to provide assurance .
I am 100% confident of this and that my views will be borne out very soon imho.
An announcement of such contracts will send the SP through the 80p warrants accelerator point and at which stage Ethernity will have over £12m in cash reserves to drive further contract wins.
This is the reality and I commend the management for adjusting to the new world of multi million $ deals .
Levi has put his money and reputation on the line and Mark has done a great job.
Now let them get on with it..
I am sure we will not be disappointed.
DYOR

Tracy
Keep the faith.
Much better weeks ahead.
ATB

Uhlf
The company is restricted by Market Abuse Rules in making forward looking statements in a placing document .
Hence it could not mention existing contract negotiations which may or may not come to to fruition .
However I am led to believe the fund raising was to finance existing, and future business opportunities.
I suggest this is the case but it is my personal belief for what it is worth.
Also I as a major shareholder could not be approached directly because of the very same Market Abuse Rules.
I can say no more as I am not conversant with what is going on in Ethernity.
DYOR

Skid/Uhlf
I fully agree with some of your observations only if this was an opportunistic grab for cash without a valid commercial reason.
If no substantive deals emerge in the next 3 months I will be deeply disappointed and will also question the basis of this fund raising and the intellect and acumen of management.
We all now expect serious delivery to justify this continual dilution .
Time will tell but I accept everyone's disappointment ( including mine) at the drop in the SP.
I suspect Levi and Co know much more than me and the rest of us.
Time to show us what they are made off and no more excuses.
I believe they will in spades.
PS
I wonder whether it was a small number of Institutions involved and will any of them have gone over the reporting limit.
Just a thought!

Sergi
Good review.
However let's remember what Ethernity had to deal with over the past 18 months
1 Global pandemic with Israel in severe lockdown for over a year.
2 5G rollout delayed
3 Change in strategy from licencing to higher value business solutions provider .
4 Emergency cash call
5 US/China trade /tech war which affected many Israel tech companies
6 Thousands of rockets fired into Israel from Gaza
many landing in Lod where Ethernity is based.
Then management showed it's mettle with Tarana , UEP etc ,visiting trade shows in US , vital US Patent secured, Tech Award finalist at Globo et al.
As for Mark misleading investors I can confirm the Interim statements were reviewed by the Board and the Nomads and were based on existing business and conservative new business forecasts
with no intangible aspirations.
So for example assume after Denver a large International telecom operator approached Ethernity with a sizeable deal proposal ( say $10m
over 4 years) but it's financial compliance department raised concerns about Ethernity's cash position in relation to a deal of this size.
Would you as a Board of a Public Company say:
A Sorry ..we have told the market we have enough cash for 2022 so thanks but no thanks or
B Arrange cash back stop with very interested Institutional and other investors and grab deal with both hands knowing it will be transformational.
Purely speculation on my part but this scenario is possible in the fast changing business/ 5G world.
If such deals materialise the effect on the SP will ensure the warrants are exercised thereby raising more substantial cash which in turn will give added reassurance to new customers creating a favourable domino effect.
This is PURE SPECULATION on my part but as someone who ran a Public Company you have to adapt fast to events which is what I think Ethernity did.
I understand the risks in Ethernity and we could all be deeply disappointed but the placing was inspired by events which management had to react to quickly.
If I am right ( rare I know!) then we will be happy campers in the next 6/9months.
My musings only so please do not take them as gospel.
DYOR

A few facts required here.
16 months ago Ethernity ran out of cash before it could get its new strategy of being a business solutions supplier to major International telecom players off the ground.
Mark managed a rescue placing with warrants at 12p plus a Subscription Agreement with 5G which allowed the company to engage with customers in a market that had finally emerged after delays caused by the pandemic and other factors.
Ethernity's tech is smart and unique but moving from a licencing business to a business solutions provider required further R&D , marketing ,staffing etc costs.
They company has now reached a stage where it is competing for major multi dollar contracts with large multinationals who will only do business with a company with strong cash resources to finance contracts and where the tech supplied is superior and cost effective compared to the competition.
The deals Ethernity currently have in the pipeline or expect to have in 2022 are of a magnitude 10 times plus greater than previous ones.
Ethernity realised over the past few months that customers wanted it's tech but needed more reassurance on cash resources given the expected scale of the deals.
Ethernity ,seeing the potential size and value of these opportunities, acted quickly like most flexible small companies must do , and proceeded to add backstop cash to its Balance Sheet at a time when the share price was at the low 40p level.
The Institutions were keen to invest at 35p and the placing was oversubscribed .
This shows that insttutional investors see the great potential in the company and backed it firmly.
Mark is a top class FD who has managed to navigate a tiny company from potential collapse to now being the position to negotiate $10m plus contracts with strong cash support on the balance sheet.
Even after the placing the company's market cap will be just c£25m ..a bargain given its massive potential and excellent patented IP.
I fully expect the 60p warrants to be accelerated before Christmas and further groundbreaking deals to be announced by then.
So criticism of Mark and talk of insider trading allied to huge discount in Placing price is utter rubbish .
He should be congratulated in my opinion.
The SP is only going one way from here and I for one am happy with the stronger Balance Sheet and existing and future business opportunities.
DYOR
IMHO

Uhlf
Totally disagree with you and 01234 about insider trading
If a leak occurred then the SP would have been 40p last Friday not 54p.
I hope this board is not becoming a cesspit like on that despicable ADFVN site .
Mark reads some of the boards and after comments about insider trading I feel he may view such views as a slight on his integrity .
I have given my views on the placing and I am signing off .
ATB

Skid
Because 5 weeks is a lifetime in the 5G world
The placing was not done in 2 days but over weeks when share price was in the 40p plus range.
Whatever has happened with current contract negotiations has lead to a sensible management decision to beef up cash to reassure the big beasts they are talking to that Ethernity is financially solid to deliver on a much bigger contract(s)
Put more cash on the balance sheet , take a short term dilution for greater reward is smart imho.
Levi knows this and so do I.....14% of a £200m plus market cap company is better than 20% of a €25m one.
I am more confident than ever now and have full faith in management to deliver big.
They are playing premier league football now having been in League2 with previous strategy.
DYOR

Skid
I think we are forgetting that Ethernity is now swimming in a bigger pond with larger fish.
If you are with the big boys then you must show financial strenght and this is the reason for the placing as the big boys want to see strong cash support in the company they are signing contracts with.
This is my take on it for its worth . I think I am right and I expect real progress in the next 6 months.
Still believe in the management .
Imho
But do your own research .

Skid
Agree with your thoughts but I have been reliably informed that the company has sufficient cash to meet its operating costs for 2022 but new contracts which may push into late 2022 and even current contracts being negotiated of a larger size require backstop funding .
The company is insistent that the statement of adequate cash reserves for 2022 is correct based on the then existing and projected business outlook.
I think the current outlook is for much larger business volumes in 2022 and hence the placing.
Remember Ethernity has to invest time and money now to secure future contracts and therefore the potential higher value contracts in late 2022 require higher investment now.
By the way almost all the placing was taking up by Institutions which is very good news imho as this is the first time since the IPO that they have subscribed in size.
Also remember the share price was 40p 4 weeks ago.
More confident now and we should see SP move back up quickly when the dust settles. imho.
DYOR

Fairview
Fully agree
And if you really believe in the medium term outlook which obviously the placees do( who snapped up the discounted shares in an oversubscribed issue ) then you can buy some extra to get ahead of the 60p warrants.
All depends on your risk appetite .
Management has to deliver quickly now and produce substantial revenues as investors are tired of these cash calls .
As I have said repeatedly the next 6/9 months are critical .
I bought an additional 100k a few weeks ago at 41p and will now await some really positive updates which still look very probable.
Trust but verify!

Uhlf
Today's placing came as a surprise as I thought it would be toward the end of
the year when the SP was nearer £1 and the placing price at c70p.
Obviously, I was wrong but deals need financing, and the bigger the deal the larger the
the investment needed by Ethernity to deliver hence the need for more working capital as contracts
are now larger in size and value under the new strategic change in focus by the company.
I was not notified or approached to participate in the placing which is very bad form given my 3.7%
shareholding.
Still a firm believer in the company and its prospects and given the greater visibility over funding
I feel the derisking of the investment has improved greatly.
You can buy in the market now at a slight premium over the placing price so no big deal not
getting in on the placing and if you feel that the SP is heading back up you can get a better deal than
the 60p warrant holders if you have a taste for more risk.
Management is now under more pressure to deliver after further dilution of loyal shareholders
and as I have said before I will be looking for major delivery by management over the next 6/9 months.

Tracy
Your research has been excellent over the past 2 years but Ethernity changed its strategy 9 months ago which few investors were aware of.
The trust of many of your posts last year were Chinese related but now no Israeli company will upset Uncle Sam so focus has changed.
The market will not extrapolate future revenues without evidence and concrete deals showing recognisable income particularly in a little known micro cap
Hence the market is saying to paraphrase Ronnie Reagan " trust but verify".
I expect verification in the coming months.
As someone who has been in the markets for nearly 45 years I am happy with my investment here but work needs to be done and I have backed Levi and the team to deliver.
Thanks as always for your superb research .
ATB

Sergi
I have been banging on for the past 2 years about the necessity for the Ethernity IP to be validated by firm orders and revenues .
Due to the change in strategy late last year it has taken longer than we initially thought to see firm evidence but this is finally coming out of the shadows with the recent news.
Now let's ramp things up with further positive newsflow and off to the races we go.
ATB

Tracy
The faithful here see the potential ramp up in revenues from deals already announced but Mr Market hardly knows we exist with no broker coverage or financial media write ups .
The tech is difficult to understand for the investment community at large and the miniscule revenues mean we are overlooked by investors apart from the 15/20 band of brothers here and on ADVFN .
I think awareness is increasing slowly and soon we will be on the radar of a much larger audience but management has to deliver which I am sure it will.
Imho

Tracy
I still feel the market needs more visibility on 2022/23 revenues before it will significantly rerate the share.
We are making progress but no blockbuster deal (s)as yet even though Tarana , UEP 20 etc revenues could grow significantly but the markets needs firmer numbers not optimistic read throughs.
I feel momentum is building now and we will get
further contract/deal/ production announcements very soon.
I am hopeful of 5/6 such announcements over the coming months.
Then we will be on our way imho.
DYOR