Capital/Financing Update • Sep 26, 2019
Capital/Financing Update
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Dissemination of a RegulatoryAnnouncement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
26 September 2019
Tern Plc(AIM:TERN), the investment company specialisingin the Internet of Things ("IoT"), announces that, together with its co-investors, it has commi*ed a further conver,ble secured loan to its por-olio 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. Tern holds 56.8% of DA's issued share capital.
The Board believes that DA's model is gainingtrac,on and its commercial ac,vity is increasing.Following this investment, Tern's total conver,ble secured loan note posi,on with DA is US\$2,730,867.The loan is repayable on 31March 2020. As part of this process, it has been agreed by all noteholders thatall previous conver,ble loan notes provided to DA have theirmaturity date extended to 31March 2020.
The loan note accruesan interest coupon of 5 percent. perannum and is conver,ble automa,cally on comple,on of an equity fundraising by DA of at least US\$2.5 million if completed before 31 March 2020 ("Qualifying Fundraising"). The conversion will be into the most senior class of shares issued in the QualifyingFundraisingat the lowest fundraising price per share.
If a QualifyingFundraisingis not completed before 31March 2020, 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 addi,on to the accrued interest, or to convert the loan and accrued interest into Class A Preference Shares of DA ataconversion price of £0.036681585 per share.
Tern, together with its co-investors, 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 ,me before [25] September 2027, provides each warrant holder with the right to subscribe for one Class A Preference Share of DA for each warrant held atan exercise price of £0.036681585 per share.
Al Sisto, CEO of Tern, said: "DA boastsan industry recognised product, blue chip clients and a board which has an intrinsic understanding of the IoT security arena. We are pleased to provide this addi,onal capital and look forward to con,nuing to working closely with DA's management team as it focuses on building on the recent momentum established."
A shareholderconference call with accompanying presenta,on slides will be held at 10:30 AMGMT on Monday 14 October 2019.
The call will be hosted by the Company's CEO, Al Sisto, who will discuss the period under review and answer pre-submi*ed shareholder ques,ons to the extent that he isable to do so. No new material informa,on or update on trading will be provided.
Full details of how to join the call will be provided shortly butTern welcomes shareholder ques,onsahead of thisvia[email protected]. The Company will be unable to accept ques,ons submi*ed aIer 10:30 a.m. UK ,me on 10 October 2019. Al Sisto will aim to answer as many presubmi*ed ques,onsas possible duringthe call.
This announcement contains insideinformaon for the purposes of Arcle 7 of EU Regulaon 596/2014
via Newgate Communica,ons
| Enquiries |
|---|
| Tern Plc |
| Al Sisto/Sarah Payne |
Allenby Capital (Nomad and joint broker) David Worlidge/Alex Brearley Tel: 020 3328 5656
Whitman Howard (Joint broker)
Nick Lovering/ChristopherFurness
Tel: 020 7659 1234
ISIN: GB00BFPMV798 Category Code:MSCL TIDM: TERN LEICode: 2138005F87SODHL9CQ36 Sequence No.: 21341 EQS News ID: 880219
End ofAnnouncementEQS News Service
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