20 September 2022

ETHERNITY NETWORKS LIMITED

("Ethernity" or the "Company")

$4.6 million Follow-On Contract win

Ethernity Networks (AIM: ENET.L; OTCQB: ENETF), a leading supplier of networking processing semiconductor technology ported on FPGA (field programmable gate array) for virtualised networking appliances, is pleased to announce that it has signed a new follow-on contract with its existing customer, a Chinese broadband network OEM (the "Customer") following the initial contract with the Customer, details of which were announced on 18 October 2021.

Highlights

·    New follow-on $4.6 million contract with existing customer operating in India and China

·    For the provision of devices to enable Fiber-to-the-Room deployment

·    Brings total value of contracts with Customer for the Company's PON technology to $7.6 million

Under the contract, Ethernity will supply system-on-chip (SoC) devices with support for Gigabit Passive Optical Networking (GPON) Optical Line Termination (OLT), adapted to enable Fiber-to-the-Room (FTTR) deployments. The Ethernity solution offers GPON OLT over an extremely low-cost FPGA to serve residential and small office Customer Premises Equipment (CPE) for FTTR deployments.

Fiber-to-the-Room is a disruptive trend that uses passive optical fiber to reach residential, retail, enterprise, and automotive deployments. Passive fiber optic deployments provide greater reliability and performance than Wi-Fi and a greener and more power efficient solution than traditional copper cabling. By bringing fiber into the individual rooms of an apartment or small office, end users can benefit from higher throughput with an unmatched level of service to enable today's most data-hungry applications without experiencing lags.

This is the second major contract with this Customer, following an original $3 million GPON and XGS-PON OLT SoC order in October 2021. Given the success of that initial project, the customer proposed a follow-up project to address the larger FTTR market, targeting residential deployments, and expanding the Company's reach into a new mass volume market. This brings total contracts values for the Company's PON technology with the Customer to $7.6 million.

The committed orders under the new contract total $4.6 million and the Company expects that revenue from the new contract will be recorded in 2023 and 2024 and will make a significant contribution to 2023 revenues over and above the Company's existing order book. The Company has recorded initial revenues under the original $3 million contract in the current year, with further anticipated in the remainder of 2022 and the majority expected to be generated in 2023.

This is the largest singular FPGA volume based contract that the Company has entered into to date. Due to nature of the device being a major enabler within a new generation home gateway and the significant estimated volumes indicated by the Customer on top of the committed volume per the contract, this may justify moving to port the design integrated on the FPGA to an Application Specific Integrated Circuit (ASIC), so as to allow long-term competitive pricing.

David Levi, CEO, Ethernity Networks said: "This deal confirms our prior expectations that Ethernity's contract wins would lead to follow-on business. We are extremely pleased with the advances we have made on a deployable PON product with this OEM customer, and we are excited to begin work on this extended offering for the new FTTR market. This is a totally untapped market for Ethernity that utilises our existing 5G infrastructure technology to serve a major connected residential market. I believe this is the tip of the iceberg in this growing market for the Company and has the further potential to generate additional significant revenue flows."

About Ethernity Networks

Ethernity Networks (AIM: ENET.L) provides innovative, comprehensive networking and security solutions on programmable hardware for accelerating telco/cloud networks. Ethernity's semiconductor logic offers complete Carrier Ethernet Switch Router data plane processing and control software with a rich set of networking features, robust security, and a wide range of virtual function accelerations to optimize telecommunications networks. Ethernity's complete solutions quickly adapt to customers' changing needs, improving time-to-market, and facilitating the deployment of 5G, edge computing, and NFV.

For more information on Ethernity's products and solutions, please see The Company's website at www.ethernitynet.com.

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MARKET ABUSE REGULATION

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse (amendment) (EU Exit) Regulations 2019/310 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.