Ethernity Networks Ltd (AIM:ENET, OTCQB:ENETF) shares have been temporarily suspended from trading on AIM at the request of the company as it seeks a temporary suspension of proceedings (TSP) in Israel, where some business operations have been affected by the current emergency situation.
The 90-day TSP order is being sought from a Tel Aviv court to address creditor issues and draft a new business plan, with the aim of formulating and seeking approval of a debt arrangement under Israel's Insolvency laws.
With a current cash balance of US$107,000, the company plans an interim financing of 1,000,000 new Israeli shekel (NIS) (£205,278) to maintain operations, and it will seek court aid in recovering debts and addressing intellectual property infringements.
Ethernity has not yet received any significant cash payment that had been anticipated from a customer in the last two weeks. The customer was due to visit the company this week, but this has been postponed due the current emergency situation in Israel.
It noted that the cancellation of a contract with Israeli customer Siklu resulted in the company holding an excess stock of components which have not been used.
And after winning a US$3 million order with a Chinese customer and a US$4.6 million follow-on contract, the company said the customer has not collected the orders that have been fulfilled nor paid the contracted advance of the follow-on contract, resulting in Ethernity being owed US$1.1 million.
It said it is working to support the Chinese customer to seek a resolution.
Furthermore, Ethernity said it will be taking steps to claim against two of its long-term customers who have been violating the usage of one of its licences for several years.