Tern PLC (TERN)
Tern PLC: Statement re COVID-19 and Portfolio Update
26-March-2020 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement 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.
26 March 2020
Tern Plc ("Tern" or the "Company")
Statement re COVID-19 and Portfolio Update
Tern Plc (AIM:TERN), the investment company specialising in the Internet of
Things ("IoT"), provides an update on the impact of COVID-19 on the Company
and the measures being taken by the Company and its principal portfolio
companies along with a general update on its principal portfolio companies.
Tern is taking every precaution to protect its employees, advisors,
suppliers and other stakeholders from COVID-19.
This is an unprecedented situation which is evolving daily. Tern has been
working closely with its portfolio companies, all of which are now working
remotely, since the outbreak was declared to ensure that they are well
prepared to navigate the months ahead. Tern has been providing operational
support and advice, helping each company to implement creative, pragmatic
solutions and to develop dynamic financial models in response to COVID-19.
Tern's management has also been holding regular sessions with the senior
leadership teams of its principal portfolio companies to share insights
regarding which methods and resources are delivering the best results.
Tern is monitoring the UK Government's support initiatives carefully as they
become clearer and their mechanisms are put in place for our effective use.
Tern has recently improved its cash position following the recent completion
of its GBP0.8 million fundraise, announced on 9 March 2020. Tern maintains a
positive view of the long-term growth potential of its portfolio and the
ability of its portfolio companies to generate additional value.
Portfolio update
FundamentalVR ("FVR")
Tern holding: 26.9%
Sector: Healthcare IoT
Invested Since: May 2018
Surgical simulation company FVR continues to work with its customers to
complete the simulations that they need to deliver their medical device and
pharma-based products. Its virtual reality-based platform can keep the
learner safe from unnecessary potential exposure to COVID-19, provide an
endless supply of virtual patients and measure the performance of the
healthcare professional in achieving the necessary operational skill levels
helping to create a more agile healthcare workforce.
The company has recently secured an additional contract with a leading
pharmaceutical company to provide a training platform for a new application
of their leading drug product.
Device Authority ("DA")
Tern holding: 56.8%
Outstanding loan: $3.6 million
Sector: Security
Invested Since: September 2014
DA recently announced the launch of KeyScaler as a Service ("KSaaS") hosted
in Microsoft Azure Cloud and four essential connectors to Microsoft Azure's
IoT Edge, IoT Central, Azure Key Vault and Active Directory Certificate
Services ("ADCS") products. These new Azure connectors are in addition to
Azure IoT Hub, Device Provisioning Service ("DPS") and Event Hub connectors
that are already part of the KeyScaler platform.
The recent shift to remote working has reinforced the importance of having
robust cloud computing infrastructure to the global business community, in
order to maintain business continuity and to manage Internet
infrastructures. Cloud computing makes this easier and the new DA products
make it more secure.
DA has recently secured a contract to provide security services to a leading
international automotive design and manufacturing company in conjunction
with its use of the Azure platform.
Further to the announcement on 9 March 2020, the maturity date for all
convertible loan notes provided to DA by Tern and others has been extended
to 30 September 2020.
Wyld Networks ("Wyld")
Holding: 100%
Outstanding loan: GBP1 million
Sector: IoT enablement
Invested Since: June 2016
Wyld has signed a cooperation agreement with one of the largest global
satellite operators to co-design, develop, test and market Low Power Wide
Area Network ("LPWAN") connectivity solutions for satellite communications
enabled IoT. Wyld will develop a terrestrial LPWAN satellite terminal
solution, to connect fixed and mobile IoT services direct to low earth
orbiting ("LEO") satellite constellations. Satellite IoT as a service will
provide connectivity to underserved areas in agriculture, transportation and
industrial verticals.
Wyld has filed a patent application for its disruptive mesh (Wyld Mesh) and
data curation (Wyld Fusion) technology platform to protect its IP and
further establish value.
InVMA
Holding: 50%
Outstanding loan: GBP50,000
Sector: IoT enablement
Invested Since: September 2017
InVMA continues to support its industrial and manufacturing customers, many
of whom are in the food and beverage industry or have seen significant
changes to normal manufacturing processes. Furthermore, InVMA's
AssetMinder(c) product continues to gain traction following the GBP0.8 million
global partnership deal announced on 13 January 2020.
Seal Software Group ("Seal")
Holding: less than 1%
Sector: contract/document management
Invested Since: 2014
The sale of Seal to DocuSign Inc for $188 million in cash, as announced by
Tern on 3 March 2020, continues to progress. Tern invested GBP50,000 in the
company and its investment was valued at GBP115,145 at 30 June 2019. The
proceeds from this sale are expected to be broadly in line with the
Company's valuation.
Al Sisto, CEO of Tern, said:
"Tern has been quick to implement measures which protect our principal
portfolio companies and our people from COVID-19. As investors in disruptive
technologies, we believe technology companies will provide a significant
contribution in leading the way out of the current public health and
economic situation. We therefore stand ready to support our portfolio
companies during this unprecedented crisis and, following our recent
fundraise, are prepared to tackle potential future liquidity challenges
should the need arise. Reassuringly, our portfolio companies are serving
diversified high-growth markets and generating revenues, with DA and FVR
having strong investor syndicates."
"Tern and the leaders of our principal portfolio businesses are facing new
hurdles and we are very pleased with the agility and selflessness
demonstrated by our business leadership and staff. Although there is not
enough clarity about the situation to finalise a robust new plan just yet,
we are implementing strategies and leveraging our portfolio company network
to ensure that the teams are sharing information and collaborating, in order
to make efficient use of everyone's time."
"Steering the ship in times of crisis will require course corrections and
smaller maneuvers which we are modeling and reviewing our investment
strategy and its execution regularly. We stand behind our high growth
portfolio companies and feel that they will emerge stronger when the economy
eventually improves."
Enquiries
Tern Plc via Newgate
Communications
Al Sisto/Sarah Payne
Allenby Capital Limited Tel: 0203 328 5656
(Nomad and Joint broker)
David Worlidge/Alex Brearley/Guy
McDougall
Whitman Howard Tel: 020 7659 1234
(Joint broker)
Nick Lovering/Christopher Furness
Newgate Communications Tel: 020 3757 6880
Elisabeth Cowell/Megan Kovach
ISIN: GB00BFPMV798
Category Code: MSCM
TIDM: TERN
LEI Code: 2138005F87SODHL9CQ36
Sequence No.: 54689
EQS News ID: 1007395
End of Announcement EQS News Service
(END) Dow Jones Newswires
March 26, 2020 03:00 ET (07:00 GMT)
