TERN Tern Plc

 
 Tern PLC (TERN) 
Tern PLC: Portfolio and Investments Update 
 
12-Nov-2019 / 07:05 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
12 November 2019 
 
        Tern Plc ("Tern" or the "Company") 
 
        Portfolio and Investments Update 
 
 Tern Plc (AIM:TERN), the investment company specialising in the Internet of 
    Things ("IoT"), is pleased to provide an update on the activities of the 
  Company and its six portfolio companies since 30 June 2019, being the date 
                which marks Tern's half year end. 
 
 Since 30 June 2019 to date, Tern has invested GBP1.1 million in its portfolio 
   companies, predominantly in the form of convertible debt. The Company has 
       also raised a further GBP1.75 million through an equity subscription in 
                November 2019. 
 
 Turnover of Tern's principal portfolio companies* for the nine months ended 
30 September 2019 was ahead compared to the comparable period in 2018. As is 
     common in early stage businesses, the majority of revenue attainment is 
       often delivered within the fourth quarter and our principal portfolio 
   companies have opportunities that, if concluded, will enable them to meet 
       the Company's expectation that the year-on-year turnover of principal 
      portfolio companies will increase by 50%. We also anticipate continued 
   growth in employee headcount within the principal portfolio companies* by 
    the year end, particularly in the light of the recent further funding of 
                FundamentalVR and DA. 
 
   The Company is in discussions regarding several potential new investments 
             although none of these are at an advanced stage of negotiation. 
 
* Principal portfolio company growth excludes Seal Software Group Limited 
and Push Technology Limited, in which Tern has a <1% holding and minimal 
influence. 
 
                Device Authority Limited ("DA") 
 
                Tern holding: 56.8% 
 
                Sector: Security 
 
                Invested Since: September 2014 
 
      Tern has a 56.8% holding in DA, which specialises in IoT security. The 
   investor group, which Tern leads, committed a further convertible secured 
          loan to DA in November 2019 amounting to US$775,000, of which Tern 
   contributed approximately US$583,000. This is in addition to the $315,000 
  convertible secured loan provided to DA in September 2019, as announced on 
      26 September 2019. Following this investment, Tern's total convertible 
      secured loan note position with DA is US$3,313,650. The recent loan is 
  repayable on 31 March 2020, in line with all other outstanding loans. This 
funding is in line with the investor group's support of the success that the 
business has achieved and the continued development underway at the company. 
       On 31 October 2019, DA disclosed it had been accepted into the Venafi 
         Machine Identity and Protection Development Fund, a US$12.5 million 
      initiative to protect all machine identities, established by Venafi, a 
                leading provider of machine identity protection. 
 
  Since 30 June 2019, DA has continued to strengthen its active partner base 
 and on 3 September 2019, DA announced its latest KeyScaler software release 
   with more support for Microsoft Azure IoT and a new solution for managing 
       Hardware Security Modules (HSM) called "HSM Access Controller", which 
 delivers granular authentication and authorization controls for IoT devices 
                and enterprise services connecting to HSM platforms. 
 
                FVRVS Limited ("FundamentalVR") 
 
                Tern holding: 26.9% 
 
                Sector: Healthcare IoT 
 
                Invested Since: May 2018 
 
  Tern's shareholding in FundamentalVR is now 26.9% with a valuation of GBP3.0 
million. FundamentalVR is a leading virtual reality ("VR") training and data 
        analysis technology platform. FundamentalVR's award-winning platform 
     combines immersive VR with cutting-edge haptics (the sense of touch) to 
  create realistic simulator experiences. It is a revolutionary way to allow 
    medical device and pharma companies to accelerate skills development for 
 medical practitioners with the goal of accelerating their product adoption. 
 
   FVR announced a GBP4.3 million Series A fundraise, including a GBP0.5 million 
          convertible loan note conversion by Tern, on 30 October 2019, at a 
    post-money valuation of GBP11.3 million. This fundraise was significant in 
that it encompassed both financial and industry participants and resulted in 
   a fair value increase in Tern's investment of GBP0.6 million. FundamentalVR 
has also continued to build revenue with new contracts and a strong pipeline 
                of new business. 
 
      Since 30 June 2019, FundamentalVR has received Continuing Professional 
       Development ("CPD") accreditation for its entire current portfolio of 
  surgical training simulations by the Royal College of Surgeons of England. 
 It has expanded its team including a new Vice President of Client Solutions 
and Partnerships for North America and as announced with the interim results 
 on 25 September 2019, FundamentalVR secured significant commercial contract 
 (worth approximately GBP0.5 million) with a leading pharmaceutical company to 
                create an additional VR simulation. 
 
                InVMA Limited ("InVMA") 
 
                Holding: 50% 
 
                Sector: IoT enablement 
 
                Invested Since: September 2017 
 
            Tern has a 50% holding in InVMA, which delivers IoT products and 
        applications based on the industry leading PTC/Thingworx development 
   platform, delivering manufacturing and industrial process intelligence to 
                create competitive advantage for its customers. 
 
       Since 30 June 2019, InVMA has announced that it is one of the initial 
 companies to work on part of the Made Smarter initiative, helping customers 
   to implement factory optimisation. Made Smarter is a GBP20 million national 
   programme partnering government and industry to maximise the benefit from 
    increasing adoption of digital technology with match-funding, specialist 
                advice, student placements and leadership training. 
 
   InVMA used its PTC based product, AssetMinder(R) [1], in its initial Made 
     Smarter implementation, in conjunction with the UK's leading specialist 
                thermocouple cable manufacturer, Heatsense Cables [2](R). 
 
                Wyld Networks Limited ("Wyld Networks") 
 
                Holding: 100% 
 
                Sector: IoT enablement 
 
                Invested Since: June 2016 
 
     Wyld Networks, a company delivering secure intelligent mesh technology, 
     empowering resilient IoT and 5G networks and creating value for people, 
                places and things, is a wholly owned Tern investment. 
 
   Since 30 June 2019, Wyld Network's new CEO has joined the company and has 
       been driving the business forward. This is evidenced by Wyld Networks 
   securing a framework contract with Delta-T Devices, a world leader in the 
     development of sensors for the Agritech sector with an initial purchase 
  order valued at GBP105,000 to develop and supply Low-Power Wide-Area Network 
  (LPWAN) connectivity for Delta-T's state of the art soil moisture sensors. 
  Wyld Networks' experience in designing successful, efficient projects with 
communication industry standards (LoRa, LoRaWAN, NBIoT, LTE, CatM1, BLE) and 
  Bluetooth makes Wyld Networks uniquely placed to deliver embedded networks 
                with gateways to carry data long distances at low energy. 
 
                Al Sisto, CEO of Tern, said: 
 
    "I am pleased to report on the progress Tern is making in increasing the 
     value of our investment portfolio, as our principal portfolio companies 
  continue to make progress in achieving their objectives. DA's IoT security 
 offering and Wyld Network's solutions continue to be recognised by industry 
 leaders such as Venafi and Delta-T Services, and we are very pleased to see 
  InVMA selected to participate in a major government backed project to help 
implement technology solutions. These developments, together with the recent 
     news of a successfully syndicated Series A fundraise for FundamentalVR, 
       which attracted significant funding from both trade and institutional 
   players, demonstrate the positive headway that our investee companies can 
make in a short period of time. We look forward to Tern and its shareholders 
               benefitting from their growth in the months and years ahead." 
 
Enquiries 
 
Tern Plc                          via Newgate Communications 
 
Al Sisto/Sarah Payne 
 
Allenby Capital Limited                   Tel: 0203 328 5656 
 
(Nomad and Joint broker) 
 
David Worlidge/Alex Brearley 
 
                   Whitman Howard         Tel: 020 7659 1234 
 
                   (Joint broker) 
 
Nick Lovering/Christopher Furness 
 
           Newgate Communications         Tel: 020 3757 6880 
 
    Elisabeth Cowell/Megan Kovach 
 
ISIN:          GB00BFPMV798 
Category Code: UPD 
TIDM:          TERN 
LEI Code:      2138005F87SODHL9CQ36 
Sequence No.:  28578 
EQS News ID:   910317 
 
End of Announcement EQS News Service 
 
 
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2: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=651ae43b729f66c4a84987c5c3095246&application_id=910317&site_id=vwd&application_name=news 
 

(END) Dow Jones Newswires

November 12, 2019 02:05 ET (07:05 GMT)

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