Ethernity Networks Ltd (AIM:ENET, OTCQB:ENETF) said it has won a contract with a long-term networking data communications customer, including a US$800,000 payment for an expansion of its existing licence.
Shares in the company more than tripled to 2.45p on the news.
The supplier of data processing semiconductor technology said the full payment due under the contract is expected to be received in the current quarter, with a US$500,000 licence fee expected to contribute towards the company's 2023 revenues.
Further payments of US$300,000 are prepayments against future royalties and so are expected to contribute towards 2024 revenues.
Having received recurring royalty payments from the customer under the previous licence agreement for more than a decade, Ethernity's board expressed optimism that the expansion of the license will lead to higher year-on-year royalties.
There is also hope that the customer will take up newer Ethernity technologies for additional markets it serves.
With this contract coming in the same month the Israel-based company won a US$550,000 contract in the aerospace sector that is also expected to be fulfilled before the end of the year, Ethernity said its total cash collections have been between US$4.5 million and US$4.7 million in the calendar year which will assist in exiting the ongoing temporary suspension of proceedings process.
Chief executive David Levi said this and other ongoing contracts will result in an expected cash collection during the current quarter of between US$1.5-1.7 million.
"As a result, I am optimistic for the future prospects of the company," he said.