Shares in Ethernity Networks experienced a decline following the announcement that the company has reached a settlement with 5G Innovation Leaders Fund. The agreement includes the termination of a subscription agreement, the issuance of new shares, and the elimination of liability towards the fund.
At 0834 GMT, shares were down 0.58 pence (-23%) to 1.88 pence.
The Israel-based provider of data-processing products, which is listed in London, disclosed on Friday that in relation to a share-subscription agreement made in February 2022, 5G Innovation Leaders Fund will be granted up to 150 million new ordinary shares. However, the deal restricts 5G from holding more than 24.99% stake in Ethernity Networks.
Ethernity Networks has already issued and allotted 44.9 million ordinary shares in a first tranche, with an additional 43.6 million ordinary shares to be issued upon receipt of a notice from the company.
Pending shareholder approval, Ethernity Networks is planning to issue 61.5 million new ordinary shares to 5G Innovation Leaders Fund.
If Ethernity Networks fails to receive shareholder approval at the general meeting, it will be left with an outstanding debt of $600,000.