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Tern PLC (TERN)
Tern PLC: Device Authority Update - issue of further convertible loan
11-Apr-2019 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
11 April 2019
Tern Plc (the "Company", or the "Group")
Device Authority Update - issue of further convertible loan
Tern Plc (AIM: TERN), the investment company specialising in the Internet of
Things ("IoT"), announces that, together with its co-investors, it has
committed a further convertible secured loan to its portfolio company,
Device Authority Limited ("DA"), which specialises in IoT security. The
total funds secured by DA through this loan are US$418,895, of which Tern
has contributed US$315,000.
Following this investment, Tern's total convertible secured loan note
position with DA is US$2,415,867. The loan is repayable on 31 December 2019.
Tern's continued support is testament to DA's strong track record of using
the funds that it has raised to deliver critical components of its
go-to-market strategy. During 2018, DA enhanced its products to ensure that
they met key client challenges and expanded its ecosystem of partners. DA
has continued this trend in 2019 and has secured three new orders in Q1
through their partner network as well as consistently increasing annual
recurring revenue quarter on quarter.
The loan note accrues an interest coupon of 5 per cent. per annum and is
convertible automatically on completion of an equity fundraising by DA of at
least US$2.5 million if completed before 31 December 2019 ("Qualifying
Fundraising"). The conversion will be into the most senior class of shares
issued in the Qualifying Fundraising at the lowest fundraising price per
If a Qualifying Fundraising is not completed before 31 December 2019, but DA
is able to procure an exit for its shareholders, the providers of the loan
can elect to either receive 300% of the principal amount of the loan notes
held by them in addition to the accrued interest, or to convert the loan and
accrued interest into Class A Preference Shares of DA at a conversion price
of GBP0.036681585 per share.
Providers of this loan to DA will also be issued with 2.6 warrants for each
US$1 of loan notes subscribed for by them (rounded down to the nearest whole
number). Each warrant, which is exercisable at any time before 10 April
2026, provides each warrant holder with the right to subscribe for one Class
A Preference Share of DA for each warrant held at an exercise price of
GBP0.036681585 per share.
As part of this process, it has been agreed by all noteholders that all
previous convertible loan notes provided to DA have their maturity date
extended to 31 December 2019.
Al Sisto, CEO of Tern, said: "We are pleased with the progress that DA
continues to make with its partners, including the recent contract win with
nCipher Security to deliver a security solution for high quality surgical
devices. The capital we provided in 2018, together with our co-investors,
made a marked difference to DA as it set out to refine its product and
expand its partnership network, leading to new contract wins in the second
half of 2018 and into Q1 of 2019. With this in mind, we are pleased to
continue this support and to maintain our holding as DA focuses on building
its client base in the coming months."
This announcement contains inside information for the purposes of Article 7
of EU Regulation 596/2014
Tern Plc via Newgate Communications
Al Sisto/Sarah Payne
Allenby Capital Tel: 020 3328 5656
(Nomad and joint broker)
David Worlidge/Alex Brearley
Whitman Howard Tel: 020 7659 1234
Nick Lovering/Christopher Furness
Newgate Communications Tel: 020 3757 6880
Elisabeth Cowell/Fiona Norman
Category Code: MSCM
LEI Code: 2138005F87SODHL9CQ36
Sequence No.: 8171
EQS News ID: 798671
End of Announcement EQS News Service
(END) Dow Jones Newswires
April 11, 2019 02:01 ET (06:01 GMT)