Just weighing in with my thoughts. I will attach a PDF if the...

Just weighing in with my thoughts. I will attach a PDF if the below links do not work...

On 30 June 2020 Etherstack announced they had entered into a ‘ Global Teaming Agreement’ with Samsung for 4G/5G Public Safety. It appears investors have reacted in jubilation to this teaming agreement.

Investing in a company that announces a teaming agreement with a major company, is a bit like investing in fledgling gold explorer who has just announced they have commenced drilling in a gold rich province, or a biotech company announcing they have completed a successful stage 1 trial of a Covid-19 treatment. The fulfillment of the goal takes time and there is always a risk that the goal will never be achieved.

A teaming agreement is an agreement between two parties when negotiating a contract/s with a third party, let’s say Party-X. It sets out the terms and conditions of how the two parties will work together when negotiating with Party-X. Samsung and Etherstack have formed a team, pooled their IP resources in order to secure one or more contracts with carriers of public safety communication. The teaming agreement will contain the terms and conditions of how Etherstack and Samsung co-operate and will likely include a non-disclosure of revenue clause.

While shareholders want to know how much revenue will flow from the teaming agreement, disclosure of revenue may be counterproductive. Non-disclosure is important because if other vendors (i.e. other bidders for Party X’s business) know the revenue, they may sharpen their pencils accordingly and the team Etherstack-Samsung bid becomes unsuccessful.

On the plus side, Samsung also announced the teaming agreement on their website:

https://www.samsung.com/global/business/networks/insights/press-release/etherstack-signs-global-teaming-agreement-with-samsung-for-4g-5g-public-safety/

A company the size of Samsung would have tens-of-thousands, if not hundreds-of-thousands agreements with its suppliers. So the fact that the Etherstack teaming agreement has made it to Samsung’s website should provide some comfort that Samsung also see this agreement as important—and that the disclosure of the agreement was not some ploy to manipulate the ASX.

Further, on 4^th September 2020, Samsung published a blog about building a More Connected Public Safety Network.

https://www.samsung.com/global/business/networks/insights/blog/building-a-more-connected-public-safety-network/

In this article Samsung discuss ‘bridge technology’ between LMR and MCPTX which they refer to as ‘The Land Mobile Radio-Interworking Function (LMR-IWF). This will enable existing LMR network users to freely talk with MCPTX networks and users. In a nutshell, existing users of LMR networks will not need to replace their legacy networks in order to adopt MCPTX. Now who has been working on LMR-IWF? You guessed it. Etherstack!

In Etherstack’s presentation to shareholders in June 2019 (slide 5) they refer to continued innovation in LMR-IWF product developments. Which does coincide with the 30 June 2020 announcement that Etherstack had been working quietly with Samsung for a year.

https://www.etherstack.com/investor/pdf/1940153.pdf

Don’t get me wrong, I am not here to pump Etherstack’s shares. The investment is risky because there is no guarantee that team Etherstack-Samsung will be the successful bidder. Nonetheless, there are many public safety networks globally so we can only hope that the team will be successful for at least some of them. Along with high risk comes high reward and investors need to decide how much risk they are prepared to tolerate.

In my case, it is too early to fold while Samsung are still publicising the agreement on their website and Samsung bloggers are promoting LMR-IWF. I only have a small holding at .90c per share.

GLTAH