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The hardest part given the ups and downs of finance costs, R&D, bloated new offices, etc is to value Ethernity.
We know David believes at least £100m.
£3m sales have been brining in an 8m loss
revenue OEM pays up 7.6M, Tarana 1.5m, Licences 0.75m, Aerospace 0.5m, Indian OEM 0.75m plus forward revenue
total 11.1m revenue 2024 (humour me), not long ago they were talking 9m.
margin 61% gives $6.75 Gross Margin. Operating costs slashed to $6m
Small profit.
EPS 0.15 off 500m shares
at PE 20 SP would be 3p
If this happens and dilution is to say 500m shares raising $2m at 1p.
Then the company value would be $15m
Basically the higher the SP at raise and the larger the cash raised the better the chance of survival.
The IFS I warn are massive. It was just a bit of fun and i am sure you have all constructed your own models?
Given the history of fund raises. They need to be very clear where they are with all their issues, they are well known so they need give a clear path to profitability as promised for Q4.
Dilution could be very heavy here especially as Bergen now have until the 7th to clear their shares. That is assuming they go down the shares raise again.
They are executing a plan step by step.
Ethernity Networks Ltd (AIM: ENET; OTCMKTS: ENETF), a leading supplier of
networking processing semiconductor technology ported on field programmable
gate arrays for virtualised networking appliances, announces that the date and
time of the Company's upcoming general meeting ("General Meeting"), details of
which were announced on 10 November 2023, has been changed to 11:00 a.m. IST
(09:00 a.m. GMT) on 7 December 2023 at 3rd Floor Beit Golan, 1 Golan St.
Corner HaNegev, Airport City 7019900, Israel.
The Company will shortly be posting to shareholders a new circular convening
the General Meeting on the revised date, a copy of which will be made
available on the Company's website at: https://ethernitynet.com/investors/
(https://ethernitynet.com/investors/) . The date of the General Meeting has
been brought forward as the Directors of Ethernity believe that it is in the
best interests of the Company to secure the increase in authority to issue
shares free of pre-emption rights as soon as possible, to give the Company the
best opportunity to exit the ongoing temporary suspension of proceedings
("TSP") process.
As previously announced, in order to exit the TSP, it is expected that the
Company will be required to raise additional funds. Whilst the structure of
this is not yet known, the Board believes it is prudent to put in place
sufficient authorities to permit an equity fundraising. Should any fundraise
take place, the Company will prioritise structures that would enable existing
shareholders to participate on the same terms as any incoming investors.
The Chairman's attitude, body language and lack of preparation at the AGM was embarrassing. Clearly distancing himself from they key decisions. If they have not agreed to listen to each other and he has agreed to do some work that makes a difference then he to should have gone.
Application has been made to the London Stock Exchange for the Tranche 1 Shares to be admitted to trading on AIM ("Admission"), and Admission is expected to occur on or around 14 November 2023. The shares will, upon Admission, rank pari passu with the existing Ordinary Shares of the Company.
Holdings should follow from ENET so expect TR1 and holdings in next 6 days unless Bergen have presold. At least 2 RNS then.
ENET Value yesterday close SP 2.4p MCAP 3.6m
Bergens 44.9m first tranche has diluted to SP 1.8p.
Assuming MCAP still 3.6m as new SP 1.8p reflects new share holding.
Bergens next 43.6m would dilute SP to 1.5p
Bergens last tranche 61.5m would dilute SP to 1.2p
To raise 1 million at 1.0p (20% discount) would mean another 100m shares need to be issued diluting SP to 1p
That leaves company value at 3.6 million value and 1 million cash in bank.
Very over simplified and assumes they can get a raise away at 1p.
Now what value Ethernity if all this happens
They would be a company valued at 3.6m with 1 million to sort out debts and orders at a minimum for next year should be 3.5m
Tarana at 1.5m
Aerospace 0.5
debt payments 1m
Licensing 0.5m
2024 = 3.5m.
what value the company would be above or below 3.6 m is hard to say with 400m shares
David Levi must hope to have news that will drive the SP upwards if not it heading towards 1p and Bergen can sell above 0.3p
Pumpky
The over simple answer is investing heavily in R&D to lead the market but not making sure they were going to be paid.
Read the RNS on 12th October. The company has been making brilliant product for many years with large and small OEMs seeking them out. What they did not do well enough was collect what they are owed. Their focus has sharpened and David Levi and team have learned a painful lesson on taking the eye off that ball. US contract great news, now can they get the $1 million dollar owed and orders delivered/accepted buy a large OEM that works in China and Indian markets.
It would seem a few samples have been given out to Daily Mail and Star. SP not good. I’ve run valuations on Tek and with 2 listed companies a delayed IPO for Microsalt( why uk?) and Guidant it looks fairly valued not undervalued. Granted the reverse engineering of Bellascura stopped a direct excessive dilutive raise. Not convinced it’s anything but priced about right. SP action hopefully does not hint at more dilution coming.
Notifications by shareholders and issuers
DTR 5.8 sets out the procedure for notification which must be made to the issuer and to the competent authority (in the UK, this is the FCA).
The shareholder must notify the company (and the FCA) within two trading days of the interest first arising or of any subsequent change. The company must notify the market by the end of the next following trading day. There is a prescribed form for the notifications (TR1) which can be downloaded from the FCA website: www fca.org.uk and DTR 5.10.1 provides that this information must be filed by electronic means.
Premier Miton advised company on 31st October. If then assuming a shareholder had crossed the 3% threshold that would be confirmed as crossed on 1st. Then TR1 if its coming would have to be today?
A year of tactical investments, record profits and Mike Ashley staff Bonus paying out at £10. Update early December and should move up to £10 sooner rather than later.
Warrants are 6p with accelerator at 7.5p if price holds above 7.5p for 5 consecutive days it brings immediate call for payment.. 6p is key as it locks in cash but 7.5 would be fantastic as it brings payment in straight away.
Premier Miton Exit was this week on Monday 30th, notified on Tuesday 31st. Assuming one of the buyers crossed 3% who bought should be shown 5 days later, TR1 tomorrow, Monday or Tuesday?
November 2021 - Ethernity MCAP 38M share price 52.8p shares 42M
Working with Tarana on G1, working with US Airforce on link bonding, working with Chinese OEM with markets in China and India, Licencing historic use of IP, others may have fallen through but these were planned partnerships.
Current MCAP £6.2M SP 4p shares 149M.
That's 2 years further down the line and more irons in the fire and a huge spend on R&D completed.
SP for MCAP 38M is 25p that's where we should be looking to be 6 times. Sort the short term and get back to being a company heading towards a 50M valuation.
RD and head count costs now under control, David promised profitability in Q4.
25p
Even if the 6p does not immediately deliver the 1.4M,it does become guaranteed. That guarantees the money will be coming and can be used as a credit if needed. Its the 7.5p that delivers the cash straightaway. Amazing turnaround and Tarana going like a train not just in USA but many other locations.