The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM AUSTRALIA, NEW ZEALAND, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO BUY, ACQUIRE OR SUBSCRIBE FOR (OR THE SOLICITATION OF AN OFFER TO BUY, ACQUIRE OR SUBSCRIBE FOR) ORDINARY SHARES TO ANY PERSON WITH A REGISTERED ADDRESS IN, LOCATED IN, OR WHO IS A RESIDENT OF, THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL OR CONTRAVENE ANY REGISTRATION OR QUALIFICATION REQUIREMENTS UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

19 January 2023

ETHERNITY NETWORKS LTD

("Ethernity" or the "Company")

Result of Broker Option, Director Dealing and Total Voting Rights

Further to the Company's announcement at 7.00 a.m. on 17 January 2023 (the "Fundraise Announcement"), Ethernity announces that the Broker Option has now closed. The Broker Option has raised £100,000 at the Issue Price of 7p per share through the issue of 1,428,572 new Ordinary Shares ("Broker Option Shares"). In addition, conditional on the approval of shareholders to provide headroom for the issue of new Ordinary Shares at the EGM, recipients of Broker Option Shares will be granted one warrant for every Broker Option Share received, exercisable at a price of 15p per warrant (the "Broker Option Warrants"). The Broker Option Warrants will be on the same terms as the Warrants issued pursuant to the Placing, as detailed within the Fundraise Announcement.

The total amount raised by the Company under the Placing and the Broker Option is £1.65 million (before expenses).

Director participation

As detailed within the Fundraise Announcement, Shavit Baruch, VP R&D, is participating for 668,771 new Ordinary Shares at the Issue Price via the Broker Option.

Following this purchase, Shavit Baruch's interest in the Company's Ordinary Shares shall comprise 5,760,438 Ordinary Shares representing approximately 5.54% of the Company's issued share capital as enlarged by the Placing Shares, the Fee Shares and the Broker Option Shares.

Related party transaction

As a Director of Ethernity, Shavit Baruch is a related party of the Company under the AIM Rules for Companies.  The Directors of the Company (excluding David Levi and Shavit Baruch), having consulted with the Company's Nominated Adviser, Allenby Capital Limited, consider that the terms of Shavit Baruch's participation in the Broker Option are fair and reasonable in so far as the Company's shareholders are concerned.

Peterhouse warrants

Pursuant to the Placing and Broker Option, Peterhouse Capital has been granted warrants to subscribe for 573,429 new Ordinary Shares, at a price of 7p per Ordinary Share (the "Peterhouse Warrants"). The Peterhouse Warrants are exercisable for a period of 24 months from the date of Admission. The Peterhouse Warrants are not conditional on the passing of the resolutions at the EGM.

Admission to trading

Application has been made to the London Stock Exchange for the Broker Option Shares to be admitted to trading on AIM ("Second Admission"). Second Admission is expected to occur at 8.00 a.m. on or around 25 January 2023. The Broker Options Shares will rank pari passu with the Company's existing Ordinary Shares.

Total voting rights

Following Second Admission, the Company's enlarged issued share capital will be 104,044,638 Ordinary Shares. The Company holds no Ordinary Shares in Treasury. This figure of 104,044,638 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Defined terms in this announcement shall have the same meaning as set out in the Fundraise Announcement, unless otherwise specified herein.

For further information, please contact:

About Ethernity (www.ethernitynet.com)

Ethernity Networks (AIM: ENET.L OTCQB: ENETF) 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.

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them.