Ethernity Networks Share Discussion Threads

[pwhite73] 23/6/2024 08:37

If all the subscription shares are sold tomorrow then Bergen has no subscription shares on 07/07/2024 to base any warrant conversion calculations on!!!

[purchaseatthetop] 23/6/2024 08:30

The value of the subscription shares is completely unrelated to whatever Bergen actually sell them at or when.

The RNS says that the subscription shares value for warrant conversion calculation is the exercise price VWAP less 15% discount. It is totally clear to me at least!

It does not need interpretation. It is what the RNS says.

[pwhite73] 23/6/2024 08:17

Realdealy - "They should bring back Bruce Forsyths ' higher / lower' card game , I think they subscription shares are based on that idea."

Again that's correct. How much of the £800k warrants can be exercised is correlated to the price of the subscription shares. If the subscription shares are valued at 1p then only £400k of the warrants can be exercised. If the subscription shares are valued at 2p then no warrants can be exercised as the value of the subscription shares would be £800k which is the loan amount.

Bergen cannot exercise £800k of warrants independent of the value of the subscription shares whether sold or still held the RNS says so.

"The amount available to be exercised under the Warrant is £800,000, less the value of the 40,000,000 Subscription Shares".

Now it's about time you and DaddyWarbuck have the courage to tell Postman Patt he is wrong from your own interpretations of the RNS.

[realdealy] 23/6/2024 08:08

They should bring back Bruce Forsyths ' higher / lower' card game , I think they subscription shares are based on that idea. A fourth viewpoint.

[papillon] 22/6/2024 23:25

I've sent you a couple of PM's, countbasie1.

[purchaseatthetop] 22/6/2024 23:04

Back from a fabulous 60th party near Umbertide. Brilliant fun.

If the exercise price is 1.1p then they can convert £800k less (40m *1.1p) which is £360k of shares. So about 33m shares. The remaining £440k is up to Bergen depending on when they sell them for more or less than 1.1p. This is exactly what the RNS says.

The subscription shares are always worth only what the newest exercise price is. The total of 40m subscription shares plus the ability to convert at the exercise price is always £800k if Bergen can convert some balance of the loan at the exercise price.

[pwhite73] 22/6/2024 22:31

DW - "With the 40 million already issued and an additional 40 million maximum that can be allocated, then I feel the £800,000 would be recouped by the lender."

Bravo!!!...100% correct. We are both singing from the same hymn sheet. With 40 million subscription shares and a maximum of another 40 million additional shares if the share price is over 1p Bergen get their £800k back in full.

What Postman Patt is arguing is that the subscription shares are irrelevant in this matter. He thinks if the subscription shares are sold on Monday Bergen can still exercise the £800k warrants. But they can't if the exercise price is 1.1p for the maximum amount of shares that can be issued in this scenario is only another 40 million that amounts to £440k. So where is the remainder £360k coming from?.

Where its coming from is the 40 million subscription shares already sold or still held at 1.1p.

[daddy warbucks] 22/6/2024 22:10

Thanks, but I am as confused as everyone else. I think we will have to see how it plays out.I'm willing to take the chance and will hold. I can understand if others are more cautious and want to sell.If I had more spare cash, I would probably buy a few more.

[countbasie1] 22/6/2024 21:44

DaddyThanks for bringing some light and sense to the doom loop which is the two big super Ps

[daddy warbucks] 22/6/2024 21:40

PWhite. Thank you for the reply.I appreciate what you say, but I feel that the relevant rns states an additional 40 million can be allocated if the share price is above 1pWith the 40 million already issued and an additional 40 million maximum that can be allocated, then I feel the £800,000 would be recouped by the lender.Three of us have different views lol. I just wish they would write these news items in a clear way.

[pwhite73] 22/6/2024 19:12

DW - "Patt, it says it gets reset after 45 days, so if no shares are requested"

Part of the agreement is that the exercise price will reset after 45 days from closing date. This is not dependent on any request from Bergen.

RNS 17/05/2024 - "The Warrant is initially exercisable at a price of 1 pence per Ordinary Share for a period of 45 days from Closing. The exercise price will be reset on the 45th day after Closing,"

This is to protect the shareholders from massive dilution. If a Tarana contract lands next week and the share price returns to its highs of 60p ENET will not allow Bergen to exercise at 1p. On the other side of the coin if ENET announces Tarana have terminated the relationship and the share price slumps to 0.05p Bergen will lose money if they exercise at 1p. The reset is to protect both sides.

[pwhite73] 22/6/2024 19:03

patt - "All the subscription shares can be sold Monday. Makes no difference."

Let's try one final time because your scenarios are all based on the exercise price being under 1p which allows for more than 40 million extra shares to be issued.

All the shares are sold on Monday at 1.1p and the VWAP warrant exercise minus the 15% remains at 1.1p (the same price) throughout the exercise period. How much of the warrants can Bergen convert bearing in mind that no more than an additional 40 million shares can be issued if the exercise price remains over 1p during the exercise period?.

RNS 17/05/2024 - "Should the exercise price be above 1p throughout the exercise period, then 40,000,000 is the maximum number of additional Ordinary Shares that would be issued under the Agreement."

You see under your scenario Bergen would not receive their £800k back because 40m x 1.1p is only £440k. Bergen would be short of £360k as no more than 40m shares can be issued if the exercise price remains over 1p during the exercise period. Where will they get their £360k shortfall from?

[daddy warbucks] 22/6/2024 16:51

Patt, it says it gets reset after 45 days, so if no shares are requested, they must have a figure in mind to reset it to or leave it at 1p, I would have thought.Could news come to reset it higher than 1p?

[purchaseatthetop] 22/6/2024 16:06

The exercise price is only calculated when the conversion request is made by New Tech/Bergen. They will then look back 30 trading days and average the five lowest VWAP during those days less 15%.

[daddy warbucks] 22/6/2024 15:58

I'm not clever enough to work out which one of you is correct lol. I will have to wait and see how it plays out.One hypothetical question though.Come the 7th July and no request is made for any shares to be issued, what do they calculate the revised price of the 40 million shares on?The Warrant is initially exercisable at a price of 1 pence per Ordinary Share for a period of 45 days from Closing. The exercise price will be reset on the 45th day after Closing, following which it will be calculated as the average of the lowest five daily VWAPs of an Ordinary Share during the twenty trading days before the receipt of a Warrant exercise notice by the Company, less a 15% discount.

[purchaseatthetop] 22/6/2024 15:55

This is the Tarana news I am really hoping for. First mentioned a year ago



Tarana Wireless in talks with Indian telcos to provide 5G FWA gear

Read more at:


Indian companies are now seeing data capacity drop as customers demand more and more data. This suggests that they will need Tarana gear to avoid really slow delivery of data


Come on Tarana. Announce that deal!

[lionel kipper] 22/6/2024 15:54

Beware , patts new login is jonesy on the chill board just in case he comes here , 6 weeks old user id , I should have sussed it !

[purchaseatthetop] 22/6/2024 14:30

All the subscription shares can be sold Monday. Makes no difference.

On 7/7/24 when they can first convert, say the VWAP is 0.75p after 15% discount.
Bergen can convert a maximum of £800k less (40m * 0.75p) so £500k of the loan.
Say they convert £200k. That would be 26.6m shares.

Say on 7/8/24 they convert again. VWAP is now 1p.
Bergen can convert a maximum of £800k less the previous £200k so £600k less (40m * 1p) so £200k of the loan. That would be 20m shares.

That’s the way it works. Then Bergen could only convert again if the VWAP fell below 1p.

[pwhite73] 22/6/2024 14:18

The calculated by reference is in relation to the warrants not the subscription shares. As I posted before. What happens if all the subscription shares are sold before the exercise date?

[purchaseatthetop] 22/6/2024 14:12

You missed the important part.

The RNS says
“The amount available to be exercised under the Warrant is £800,000, less the value of the 40,000,000 Subscription Shares, calculated by reference to the relevant exercise price,”

Calculated by reference to the relevant exercise price. But you see it your way. I think you are wrong. Makes no difference. We will see what happens now.

[pwhite73] 22/6/2024 13:53

This is also key to help you understand what is going on.

"Should the exercise price be above 1p throughout the exercise period, then 40,000,000 is the maximum number of additional Ordinary Shares that would be issued under the Agreement."

So if the subscription shares have a price of 1p that values them at £400k meaning only a maximum of 40 million shares can be issued at 1p under the warrants bringing a total value of £800k. This is the figure loaned to ENET.

[pwhite73] 22/6/2024 13:37

No. Where we fundamentally differ is that you ignore the subscription shares as part of the £800k fundraise package. You are essentially arguing that Bergen can exercise £800k of warrants in five tranches irrespective of whether or not they are holding the subscription shares and any value they may have sold the subscription shares for.

You are fundamentally wrong. The funding package includes the value of the 40m subscription shares whether held or sold and the right to exercise £800k warrants. The company says so in the RNS.

"The amount available to be exercised under the Warrant is £800,000, less the value of the 40,000,000 Subscription Shares"

In simple terms if the subscription shares are sold for £900k or have a VWAP value of £900k over the last 20 trading days Bergen cannot exercise the warrants.

Nobody else seems to want to comment on this part of the discussion because its too complicated for them and it's too complicated for you as well.

Speak Later

[purchaseatthetop] 22/6/2024 13:11

If the subscription shares are all sold on 24/6/24 it makes zero difference to the contingent warrant. That is there solely because they cannot quantify now exactly how many warrants will be required. Hence contingent.

If Bergen decide to convert 31/7/24 then the value of the 40m shares is the five day sversge VWAP at 15% discount for that day.

It took me about three days to grasp how full of risk this deal is. However, the fact that Bergen are not selling plus my research that says a series of good news items are coming mean that risk may not crystallise. But I am sure you differ. Which is fine by me.

BTW…postman PATT always delivers. Do you agree with me now?

[pwhite73] 22/6/2024 12:47

patt - "Therefore the value of the 40m subscription shares is NOT what they are sold for. It is their VWAP value on the moment of exercise."

And what if the subscriptions shares are all sold on Monday 24/06/2024 for 0.65p. What is their VWAP value if Bergen decide to exercise the first warrants on 31/07/2024?

[purchaseatthetop] 22/6/2024 12:18

The RNS says
“The amount available to be exercised under the Warrant is £800,000, less the value of the 40,000,000 Subscription Shares, calculated by reference to the relevant exercise price,”

“The exercise price will be reset on the 45th day after Closing, following which it will be calculated as the average of the lowest five daily VWAPs of an Ordinary Share during the twenty trading days before the receipt of a Warrant exercise notice by the Company, less a 15% discount.”

Therefore the value of the 40m subscription shares is NOT what they are sold for. It is their VWAP value on the moment of exercise.

Always best to take the worst case with Bergen because it could be even worse than that!