Earnings Release • Nov 13, 2019
Earnings Release
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12 November 2019
Tern Plc (AIM:TERN), the investment company specialising in the Internet of Things ("IoT"), is pleased to provide an update on the ac'vi'es of the Companyand its six por*olio companies since 30 June 2019, beingthe date which marksTern's half year end.
Since 30 June 2019 to date, Tern has invested £1.1 million in its por*olio companies, predominantly in the form of conver'ble debt. The Company hasalso raised afurther £1.75million through an equity subscrip'on in November 2019.
Turnover ofTern's principal por*olio companies * for the nine months ended 30 September 2019was ahead compared to the comparable period in 2018. As is common in early stage businesses, the majority of revenue a9ainment is o:en delivered within the fourth quarter and our principal por*olio companies have opportuni'es that, if concluded, will enable them to meet the Company's expecta'on that the year-on-year turnover of principal por*olio companies will increase by 50%. We also an'cipate con'nued growth in employee headcount within the principal por*olio companies * by the year end, par'cularly in the light of the recent further funding of FundamentalVR and DA.
The Company is in discussions regardingseveral poten'al new investmentsalthough none of these are atan advanced stage of nego'a'on.
* Principal por olio company growth excludesSeal Soware Group Limited and Push Technology Limited, in which Tern has a <1% holding and minimal influence.
Device AuthorityLimited ("DA") Tern holding: 56.8% Sector: Security Invested Since: September 2014
Tern has a 56.8% holding in DA, which specialises in IoTsecurity. The investor group, which Tern leads, commi9ed a further conver'ble secured loan to DA in November 2019 amoun'ngto US\$775,000, of which Tern contributed approximately US\$583,000. This is in addi'on to the \$315,000 conver'ble secured loan provided to DA in September 2019, as announced on 26 September 2019. Following this investment, Tern's total conver'ble secured loan note posi'on with DA is US\$3,313,650. The recent loan is repayable on 31March 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 hasachieved and the con'nued development underwayat the company. On 31 October 2019, DA disclosed it had been accepted into the Venafi Machine Iden'ty and Protec'on Development Fund,a US\$12.5million ini'a've to protectall machine iden''es, established by Venafi,aleading provider of machine iden'ty protec'on.
Since 30 June 2019, DA has con'nued to strengthen its ac've partner base and on 3 September 2019, DA announced its latest KeyScaler so:ware release with more support for Microso: Azure IoT and a new solu'on for managing Hardware Security Modules (HSM) called "HSM Access Controller", which delivers granular authen'ca'on and authoriza'on controls for IoT devices and enterprise services connec'ng to HSM pla*orms.
Tern's shareholding in FundamentalVR is now 26.9% with a valua'on of £3.0 million. FundamentalVR is aleadingvirtual reality ("VR") training and dataanalysis technology pla*orm.FundamentalVR'saward-winning pla*orm combines immersive VR with cuIng-edge hap'cs (the sense of touch) to create realis'c simulator experiences. It is a revolu'onary way to allow medical device and pharma companies to accelerate skills development formedical prac''oners with the goal of accelera'ngtheir productadop'on.
FVR announced a £4.3million Series A fundraise, includinga £0.5million conver'ble loan note conversion by Tern, on 30 October 2019, at a postmoney valua'on of £11.3million. This fundraise was significant in that it encompassed both financial and industry par'cipants and resulted in a fair value increase in Tern's investment of £0.6 million. FundamentalVR hasalso con'nued to build revenue with new contracts and a strong pipeline of new business.
Since 30 June 2019, FundamentalVR has received Con'nuing Professional Development ("CPD") accredita'on for its en're current por*olio of surgical training simula'ons by the Royal College of Surgeons of England. It has expanded its team includinga new Vice President of Client Solu'onsand Partnerships for North America and as announced with the interim results on 25 September 2019,FundamentalVR secured significant commercial contract (worth approximately £0.5million) with aleading pharmaceu'cal company to create an addi'onal VR simula'on.
Holding: 50% Sector: IoT enablement Invested Since: September 2017
Tern has a 50% holding in InVMA, which delivers IoT products and applica'ons based on the industry leading PTC/Thingworx development pla*orm, delivering manufacturingand industrial process intelligence to create compe''ve advantage for its customers.
Since 30 June 2019, InVMA hasannounced that it is one of the ini'al companies to work on part of the Made Smarter ini'a've, helping customers to implement factory op'misa'on. Made Smarter is a £20 million na'onal programme partnering government and industry to maximise the benefit from increasingadop'on of digital technology with match-funding, specialistadvice, student placementsand leadership training.
InVMA used its PTC based product, AssetMinder(R), in its ini'al Made Smarter implementa'on, in conjunc'on with the UK's leading specialist thermocouple cable manufacturer, Heatsense Cables(R).
Holding: 100% Sector: IoT enablement Invested Since: June 2016
Wyld Networks, a company delivering secure intelligent mesh technology, empowering resilient IoTand 5G networks and crea'ng value for people, placesand things, isa 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 ini'al purchase order valued at £105,000 to develop and supply Low-Power Wide-Area Network (LPWAN) connec'vity for Delta-T's state of the art soil moisture sensors. Wyld Networks' experience in designing successful, efficient projects with communica'on industry standards (LoRa, LoRaWAN, NBIoT, LTE, CatM1, BLE) and Bluetooth makes Wyld Networks uniquely placed to deliver embedded networks with gateways to carry datalong distancesat low energy.
"I am pleased to report on the progressTern is making in increasingthe value of our investment por*olio,as our principal por*olio companies con'nue to make progress in achievingtheir objec'ves. DA's IoT security offeringand Wyld Network's solu'ons con'nue to be recognised by industry leaders such as Venafi and Delta-TServices,and we are very pleased to see InVMA selected to par'cipate in a major government backed project to help implement technology solu'ons. These developments, together with the recent news of asuccessfully syndicated Series A fundraise for FundamentalVR, which a9racted significant funding from both trade and ins'tu'onal players, demonstrate the posi've headway that our investee companies can make in a short period of 'me. We look forward to Tern and its shareholders benefiIng from their growth in the monthsand yearsahead."
| Tern Plc Al Sisto/Sarah Payne |
via Newgate Communica'ons |
|---|---|
| Allenby Capital Limited (Nomad and Joint broker) David Worlidge/Alex Brearley |
Tel: 0203 328 5656 |
| Whitman Howard (Joint broker) Nick Lovering/ChristopherFurness |
Tel: 020 7659 1234 |
| Newgate Communica0ons Elisabeth Cowell/Megan Kovach |
Tel: 020 3757 6880 |
ISIN: GB00BFPMV798 Category Code:UPD TIDM: TERN LEICode: 2138005F87SODHL9CQ36 Sequence No.: 28578 EQS News ID: 910317
End ofAnnouncementEQS News Service
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