Tern PLC (TERN)
Tern PLC: Portfolio and Investments Update
12-Nov-2019 / 07:05 GMT/BST
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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
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
Device Authority Limited ("DA")
Tern holding: 56.8%
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")
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) , in its initial Made
Smarter implementation, in conjunction with the UK's leading specialist
thermocouple cable manufacturer, Heatsense Cables (R).
Wyld Networks Limited ("Wyld Networks")
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."
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
Nick Lovering/Christopher Furness
Newgate Communications Tel: 020 3757 6880
Elisabeth Cowell/Megan Kovach
Category Code: UPD
LEI Code: 2138005F87SODHL9CQ36
Sequence No.: 28578
EQS News ID: 910317
End of Announcement EQS News Service
(END) Dow Jones Newswires
November 12, 2019 02:05 ET (07:05 GMT)