Regulatory Filings • Jan 28, 2020
Regulatory Filings
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Tern PLC (TERN) 28-Jan-2020 / 07:00 GMT/BST Dissemination of a RegulatoryAnnouncement 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.
28 January 2020
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 principal por(olio companies followingthe Company'sand por(olio companies'year end on 31 December 2019.
2019 has been ayear of valida&on forTern's investment strategy, evidenced both through the achievement of addi&onal third-party fundingin an investee companyand through the implementa&on of key commercial ini&a&vesacross the por(olio.
On 30 October 2019, Tern announced the comple&on of asuccessful Series A fundraise of £4.3million by FVRVSLimited ("FundamentalVR"). This fundraise was completed at avalua&on which resulted in a 27% upli< on the ini&al £1.9 million investment made by Tern in FundamentalVR during 2018 and a=racted a syndicate of leading strategic and financial investors. The fundraise resulted in an increase in the carrying value of Tern's investment in FundamentalVR but, more significantly, is expected to facilitate significant commercial progress by FundamentalVR in 2020.
On 13 January 2020, Tern announced the achievement by InVMA of an order commitment for its industry cri&cal AssetMinder product worth £817,000 overatwo-year period. This isavery significant milestone for InVMA and wasachieved asaresult of the re-posi&oning of InVMA from a service to a product business, in which Tern has been instrumental.
Tern now has a genuinely diversified por(olio of investments in high growth companies, with each of its principal por(olio companies having a disrup&ve technology in a global marketand they are all at very exci&ng stages of their respec&ve developments. Furthermore, each o fTern's principal por(olio companies is working with world class partners to accelerate the adop&on of their products which the Directors ofTern believe will provide significant prospec&ve value enhancements.
The Directors ofTern are confident that its por(olio companies will achieve further milestones during 2020, some of which may result in revalua&ons to the carryingvalues of investmentsand consequent increases in the netasset value ("NAV") of Tern. Management also con&nues to review new investment opportuni&es.
"FundamentalVR's syndicated Series A funding was an important recogni&on of the company's progress and a valida&on of Tern's business model. Each of our principal por(olio companies demonstrated the market viability of their product offerings during 2019. We expect our por(olio companies to achieve furthervalue enhancing events during 2020 and hope to see increases in the NAV ofTern asaresult."
The aggregate turnover ofTern's principal* por(olio companies for the year ended 31 December 2019 is an&cipated to be 27% ahead of the turnoverachieved in 2018.
This figure was adversely affected by some delays in commercial orders that were expected during Q4 2019, which are now an&cipated early in 2020. These, together with InVMA's January 2020 contract win,are expected to contribute to arapid start to 2020.
The growth in turnover, customers and partnersachieved by Tern's principal por(olio companies was supported bya 31% increase in aggregate employeesacross the por(olio in 2019, compared to 2018which the Directors believe will provide astrongfounda&on forgrowth in 2020.
* Principal por olio company growth excludesSeal Soware Group Limited and Push Technology Limited, in which Tern has a <1% holding and minimal influence.
FundamentalVR Tern holding: 26.9% Sector: HealthcareIoT Invested Since: May 2018
Tern's shareholding in FundamentalVR is 26.9% and following the fundraise announced in October 2019, this holding had avalua&on of £3.0 million.
On 30 October 2019,FundamentalVR announced a £4.3 million Series A fundraise, including a £0.5 million conver&ble loan note conversion by Tern, ata post-money valua&on of £11.3million. Thisvalidated the Tern business model,as it represented an increase in fair value within ayear
from Tern's most recent previous investmentand involved the introduc&on of trade and financial investment investors to this por(olio company, thereby reducingthe risk profile ofTern's investment.
In December 2019,FundamentalVR announced that it had secured another significant new contract (worth £0.5million) to create a Virtual Reality Hap&cSimula&on pla(orm fora new customer, aglobal pharmaceu&cal company. Asa result,FundamentalVR's technology is now being used by an array of customergroups includingclinicsand medical centres, device companiesand pharmaceu&cal companies.
Holding: 50% Sector: IoT enablement Invested Since: September 2017
Tern hasa 50% holdingin InVMA and asat 30 June 2019, this holding had avalua&on of £1million.
In January 2020, InVMA announced that it had secured an ini&al order commitment worth £817,000 over a two-year period to provide its AssetMinder solu&on to a global, mul&-billion Euro revenue supplier to the industrial and construc&on sectors. This order commitment was achieved with close support and mentoring from Tern and represents a significant strategic rela&onship f o r InVMA which validates the AssetMinder solu&on and reinforces the company's strategy of becoming a provider of IoT productsand services rather than aservices company.
Holding: 100% Sector: IoT enablement Invested Since: June 2016
Tern has a 100% holding in Wyld Networks and as at 30 June 2019, this holding had avalua&on of £78,000. Tern also has a short-term loan balance of £0.5million.
Wyld Networks has been building on its framework contract with Delta-T Devices, to build a network of meshed smartphones and IoT devices at the edge of the network in enterprise communica&on and IoT, improving opera&onal efficiencies in healthcare, smart factories and transporta&on.
Tern holding: 56.8% Sector: Security Invested Since: September 2014
Tern hasa 56.8% holdingin DA, which specialises in IoTsecurity,and asat 30 June 2019, this holding had avalua&on of £12.3million.
DA con&nues to work with and develop product sales viaitsac&ve partner base. Addi&onally, the company expanded its ability to penetrate the enterprise IoT markets with the addi&on of its Microso< Azure IoT central connector in December 2019. This enables an end-to-end service offering in the cloud with enhanced security. This key enhancement to KeyScaler is designed to op&mise and leverage the investment in IoT deployments by Microso< Azure's large customer base which representsan important new segment for Device Authoritygrowth.
| 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 Communica4ons Elisabeth Cowell/Megan Kovach |
Tel: 020 3757 6880 |
ISIN: GB00BFPMV798 Category Code:PFU TIDM: TERN LEICode: 2138005F87SODHL9CQ36 Sequence No.: 42957 EQS News ID: 962027
End ofAnnouncementEQS News Service
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