REG - Tern PLC - Interim results for the six months to 30 June 2025
04/09/2025 07:00
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RNS Number : 9180X Tern PLC 04 September 2025
4 September 2025
Tern Plc
("Tern" or the "Company")
Unaudited interim results for the six months to 30 June 2025
Tern Plc (AIM: TERN), the company focused on value creation from Internet of
Things ("IoT") technology businesses, announces its unaudited interim results
for the six months to 30 June 2025 (the "Period").
Enquiries:
Tern Plc via IFC Advisory
Jane McCracken (Interim Non-Executive Chair)
Allenby Capital Limited Tel: 0203 328 5656
(Nominated Adviser and Broker)
Alex Brearley / Dan Dearden-Williams (Corporate Finance)
Kelly Gardiner / Guy McDougall (Sales and Corporate Broking)
IFC Advisory Tel: 0203 934 6630
(Financial PR and IR)
Tim Metcalfe
Graham Herring
Florence Chandler
Interim Non-Executive Chair's Statement
The first half of 2025 has been a period of both progress and adjustment for
Tern. The loss for the Period improved by 64% compared with the same period in
2024, supported by a further 7% reduction in administration costs. While
portfolio valuations were primarily affected by foreign currency movements, we
were pleased to invest 60% of funds raised in the Period into our portfolio to
meet ongoing commitments and to complete our first new investment in three
years, made possible through the continued support of our shareholders.
In January 2025, Tern made a strategic investment of £0.175 million in Sure
Ventures plc ("Sure Ventures" or "SV PLC"), acquiring a 2.7% holding. This
investment has provided Tern with investment exposure to a complementary
portfolio of high-growth technology companies in Artificial Intelligence
("AI"), Augmented Reality ("AR") and Virtual Reality ("VR"), and IoT, at an
attractive discount to Sure Ventures' reported net asset value. Importantly,
it further broadened our exposure beyond our core portfolio companies, while
also strengthening our relationship with the Sure Valley Ventures funds, where
we already have a direct interest in Sure Valley Ventures Enterprise Capital
LP ("SVV2"). We believe that this investment in Sure Ventures not only
enhances diversification and creates opportunities for synergies across our
portfolio but also has the potential to generate income for Tern through
distributions from portfolio exits. In line with our strategy, it represents a
disciplined allocation of capital to areas that we believe will deliver strong
long-term value for shareholders.
In January 2025, Tern hosted a well-attended online investor presentation and
Q&A session, reinforcing our commitment to transparency and open
communication with our shareholders. The event provided an opportunity to
share meaningful insights into the strategy and progress of our portfolio, as
well as to support shareholders in making informed decisions. Presentations
were delivered by several of our portfolio companies, including Device
Authority, FundamentalVR, Talking Medicines and Vortex IQ, a portfolio company
of SVV2. We intend to conduct further similar sessions in due course,
providing additional updates on the growth trajectories, market opportunities
and innovations across our portfolio.
During the first half of 2025, Tern completed two successful fundraises. In
February 2025, the Company raised approximately £0.2 million (before
expenses) through a placing of new ordinary shares, followed in May 2025 by an
underwritten Open Offer, raising approximately £0.3 million, which was
significantly oversubscribed. The Board considers that the shareholder
participation in both raises reflects continued confidence in Tern's strategy
and provides important resources to advance our objectives. The proceeds have
allowed Tern to meet our commitment to invest in SVV2, to be able to provide
follow-on support to portfolio companies where appropriate, and to strengthen
working capital to support the requirements of operating as an AIM-quoted
company.
In April 2025, we announced that Bruce Leith, a valued member of the Tern
executive team, had been appointed as Executive Chairman of Purple Transform
Limited, an investee company of SVV2. This appointment not only strengthened
Purple Transform's leadership but also provides a modest income stream to Tern
through fees, demonstrating the value of leveraging our team's expertise
across the portfolio in a way that contributes both to Company income and
investee company growth.
At our Annual General Meeting in June 2025, shareholders approved six out of
seven resolutions. The resolution regarding the disapplication of pre-emption
rights was not passed. The Board respects this outcome and remains committed
to open and constructive dialogue with shareholders, where it is able to, to
understand their views. We will continue to seek ways of aligning shareholder
expectations with the Company's strategic and financial requirements.
During the first half of 2025, Tern's portfolio continued to deliver strong
progress, with several companies achieving significant commercial and
operational milestones, seen through peer recognition and industry awards. The
Period has been marked by new partnerships and product advancements across the
portfolio, demonstrating both resilience and scalability.
Looking forward, the Board remains focused on creating long-term value by
supporting our early-stage, disruptive IoT portfolio companies. With careful
management of resources, shareholder backing, and a clear governance structure
in place, I believe that Tern is well positioned to deliver on its strategic
priorities during the remainder of 2025 and beyond.
Jane McCracken
Interim Non-Executive Chair
Financial review
6 months to 6 months to 12 months to
30 June 2025 30 June 2024 31 December 2024
£000 £000 £000
Investments 10,655 11,102 10,740
Net assets 10,286 10,708 10,709
Administration costs (555) (595) (1,197)
Loss for the period (959) (2,663) (3,772)
Net asset value per ordinary share 1.8p 2.5p 2.0p
The Company continues to manage its cash resources very diligently, with
strict cost controls in place to preserve value for shareholders. As at 30
June 2025, net assets stood at £10.3 million, compared to £10.7 million at
31 December 2024. This reduction reflects a modest £0.4 million decrease in
the fair value of the portfolio, driven primarily by the impact of currency
movements on Device Authority and Wyld Networks, which are valued in US
Dollars and Swedish Krona respectively. The net asset value (NAV) per share
was 1.8 pence at 30 June 2025 (31 December 2024: 2.0 pence).
During the Period, the Company successfully raised £0.5 million before
expenses, of which £0.3 million was invested. This included £0.16 million
into SVV2 and £0.17 million into Sure Ventures PLC, reflecting the Board's
strategy of supporting the growth of Tern's portfolio while meeting its
commitments. The investment into Sure Ventures PLC in January 2025 also marked
an important new addition to the portfolio, aligning with the Company's
long-term objectives.
The Company reported an unaudited cash balance of £0.1 million as at 30 June
2025, underlining the importance of disciplined financial management. A key
ongoing priority is ensuring that sufficient liquidity is maintained to meet
Tern's operating activities and its investment and loan repayment commitments.
The Company recognises the importance of its investment commitments in
securing future growth opportunities in the portfolio, while also noting that
any default would represent a significant risk to shareholder value. To this
end, continuous and careful attention is being paid to manage cash flows in
order to honour future obligations. Post-Period, on 31 July 2025, 64,248,646
new ordinary shares were issued at 1p per share for cash as a result of an
underwritten Open Offer raising £642,486 before share issue expenses.
For the six-month Period ended 30 June 2025, the Company recorded a total
comprehensive loss of £1.0 million, an improvement compared to a loss of
£2.7 million in the same period of 2024. The loss included a fair value
reduction of £0.4 million (six months to 30 June 2024: fair value reduction
of £2.0 million primarily driven by the decline in market value of Wyld).
Operating costs for the Period were £0.6 million, consistent with the same
period in 2024, reflecting the Company's ongoing efforts to keep expenditure
tightly controlled.
New fee income from Purple Transform, a company within the SVV2 portfolio, was
generated via nominal management fees for director services, modestly
enhancing the Company's recurring income streams.
Overall, the Company remains focused on disciplined cash management, meeting
its commitments, and supporting its portfolio companies to deliver long-term
shareholder value, despite the headwinds from currency movements and the
continued need for strict liquidity management.
Portfolio review
For the six months ended 30 June 2025, the key portfolio companies reported a
17% year-on-year decrease in aggregated annual recurring revenue ("ARR"),
compared with growth of 22% in the same period in 2024. This reflects the
impact of broader macroeconomic challenges, including tighter enterprise
budgets, longer customer decision-making cycles, and continued pressure on
technology spend. In response, portfolio companies have taken proactive steps
to preserve cash and strengthen operational efficiency, resulting in a 15%
year-on-year reduction in headcount within the portfolio, compared with a 25%
reduction in the same period last year. Despite these challenges, ARR per
employee declined marginally by 2% (six months ending 30 June 2024: 62%
increase), highlighting the underlying resilience and productivity of the
portfolio businesses during a period of adjustment. The ARR and number of
employees data above does not include InVMA Limited, which traded as Konektio,
which was placed into administration in March 2024 and from that point Tern's
holding in Konektio was held at zero value.
Device Authority Ltd ("Device Authority")
Valuation of holding: £4.0 million
Holding: 25.3% (before any dilution on exercise of share options)
In the first half of 2025, Device Authority advanced its strategic growth
through a series of important product, partnership, and market developments.
In March 2025, Device Authority launched its KeyScaler Discovery Tool,
designed to enhance the visibility of unmanaged devices across networks by
providing detailed information, such as IP address, MAC address, open ports,
and certificate health. This was followed in May 2025 by the integration of
KeyScaler AI with Microsoft Copilot, enabling natural language interaction to
accelerate security insights and improve key cybersecurity metrics such as
mean time to discovery and response. In June 2025, Device Authority released
KeyScaler 2025, the latest version of its IoT identity and access management
platform, incorporating an enhanced user interface, AI-driven automation, and
a new Edge Remote Access Controller to extend security capabilities to
industrial and operational environments.
Device Authority also deepened its ecosystem partnerships, most notably
through its collaboration with Microsoft and CyberArk, announced in March
2025. This joint solution is targeted at manufacturers and leverages Microsoft
Azure IoT, Defender for IoT, and CyberArk's privileged access management
capabilities, combined with Device Authority's automated credentialing and
identity lifecycle management. The partnership provides a comprehensive
approach to device security and the Board believes that this positions Device
Authority at the forefront of compliance with the National Institute of
Standards and Technology ("NIST") and Zero Trust frameworks.
Together, the Board considers that these developments demonstrate Device
Authority's continued commitment to product innovation and strategic alignment
with key technology partners. By strengthening its platform capabilities,
expanding its relevance across critical industries such as manufacturing, and
deepening integrations with leading global providers, Device Authority has
reinforced its competitive positioning in the rapidly growing IoT and
operational technology (OT) security markets. The Board expects these
initiatives to support further customer adoption, expand recurring revenue
opportunities, and deliver long-term value to Tern's shareholders.
As at 30 June 2025, the unaudited fair value of Tern's shareholding in Device
Authority decreased to £4.0 million (31 December 2024: £4.3 million), which
was due to a £0.3 million fair value decrease, which was a direct effect of
the foreign exchange movement on the sterling value of Device Authority which
is valued in US Dollars.
FVRVS Limited ("FundamentalVR")
Valuation of holding: £3.6 million
Holding: 10.3% (before any dilution on exercise of share options)
In the first half of 2025, FundamentalVR reinforced its position as a market
leader in immersive medical training technologies. FundamentalVR achieved a
significant milestone in May 2025 when its flagship platform, Fundamental
Surgery, was awarded Best Healthcare & Wellness Solution at the 2025
Auggie Awards. As one of the most recognised Augmented Reality and Virtual
Reality industry awards, this award reflects both the quality and impact of
FundamentalVR's solutions in transforming surgical training and education.
The award underscores the growing importance of immersive learning platforms
within healthcare, particularly as hospitals, universities, and training
bodies increasingly seek scalable and cost-effective methods of upskilling
medical professionals. By combining virtual reality, haptics, and data-driven
performance insights, Fundamental Surgery enables healthcare professionals to
practice and refine skills in safe, repeatable environments, bridging the gap
between traditional classroom learning and hands-on surgical experience. This
value proposition continues to resonate strongly with healthcare providers
globally.
Recognition at the Auggie Awards provides more than brand visibility - it also
validates FundamentalVR's strategy of embedding extended reality (XR)
technology within clinical education and training. Such industry recognition
is expected to enhance credibility with institutional partners and strengthen
FundamentalVR's ability to pursue new commercial agreements with leading
healthcare providers, medical device manufacturers, and academic institutions.
The Board believes that it also recognises FundamentalVR's competitive
positioning against both established training providers and emerging
technology entrants in the healthcare simulation space.
FundamentalVR remains focused on scaling its platform to address the growing
global demand for healthcare training solutions, particularly as medical
systems continue to face resource pressures and increasing patient complexity.
With its innovative technology and expanding reputation, FundamentalVR is
considered to be well positioned to capture further market share and deliver
long-term value to stakeholders.
As at 30 June 2025, the unaudited fair value of Tern's shareholding in
FundamentalVR remained steady at £3.6 million (31 December 2024: £3.6
million).
Talking Medicines Limited ("Talking Medicines")
Valuation of holding: £2.1 million
Holding: 23.8%
Convertible loan notes of £0.3 million (included in the £2.1 million
valuation)
During the first half of 2025, Talking Medicines made significant progress in
both product innovation and international expansion. In January 2025, Talking
Medicines advanced its position in healthcare analytics by enhancing its
AI-powered platform, Drug-GPT. This technology transforms unstructured
conversational data - including social media posts, surveys, forums, and
conference discussions - into actionable intelligence on healthcare
professionals ("HCPs"). By capturing and analysing these insights, the
platform enables healthcare agencies to better understand HCP behaviours,
preferences, and emerging themes, thereby improving the effectiveness of
engagement and communication strategies.
In March 2025, Talking Medicines strengthened its global footprint by joining
a Silicon Valley residency under the Scottish Enterprise MarketBooster
Programme. This strategic move marked a key step in Talking Medicines'
expansion into the US market, embedding it within one of the world's most
dynamic innovation hubs. The residency provided access to technology leaders,
talent, and the broader American healthcare ecosystem, supporting Talking
Medicines' ambition to scale its AI solutions and build deeper industry
collaborations in the United States.
Further recognition of Talking Medicines' innovation came in May 2025, when
Talking Medicines was selected to present at EIE25, Scotland's tech investor
showcase, and the Tech Tour Growth Deeptech 2025 events in Edinburgh. These
high-profile forums provided a platform to showcase Talking Medicines'
technology to international investors and industry leaders, while also
facilitating discussions regarding the healthcare and AI sectors.
Taken together, these developments underscore Talking Medicines' dual focus on
technological advancement and market expansion. With its Drug-GPT platform
continuing to differentiate its offering in the healthcare analytics space,
and its presence in the US market gaining momentum, the Board considers that
Talking Medicines is well positioned to accelerate growth and strengthen its
role as a leading provider of AI-driven insights for the pharmaceutical and
healthcare industries.
As at 30 June 2025, the unaudited fair value of Tern's shareholding in Talking
Medicines remained at £2.1 million (31 December 2024: £2.1 million) however
there was a nominal increase in fair value due to the addition of accrued
interest from the existing convertible loan notes during the Period.
Sure Valley Ventures Enterprise Capital Fund LP ("SVV2" or the "Fund")
Valuation of holding: £0.8 million
Holding: 6.1%
During the first half of 2025, SVV2 made strong progress in expanding and
supporting its portfolio. The Fund continued to build on its existing
portfolio of innovative early-stage technology companies, including Retinize,
Jaid, Captur, Vortex IQ, Ittybit, Phinxt Robotics, Purple Transform, Stylus
Education, and Vizgard, while also completing a number of new investments. In
February and March 2025, Inephany and Capably.AI were added to the SVV2
portfolio, followed by an investment into Literal Labs in June 2025. The Fund
also made a follow-on investment into Captur and supported Purple Transform
with a further commitment alongside Mercia Ventures. In addition, the Fund
closed an investment into Elelem, an innovative analytics platform for
generative AI. This takes the total number of SVV2 portfolio companies to 13
at the half-year stage. The Fund remains well positioned to continue this
momentum in the second half of 2025, where a further five to six investments
are anticipated, taking the SVV2 portfolio towards 19 companies by year-end
and on track to deliver investments in around 30 companies by the close of the
five-year investment period.
SVV2 continued to strengthen its focus on early-stage investments in AI,
immersive technologies, and cybersecurity, aligning with both market demand
and evolving UK government policy. In January 2025, the Fund was highlighted
by Sure Ventures as being well positioned to benefit from the UK Government's
AI Opportunities Action Plan, which seeks to accelerate the development and
adoption of AI across key sectors of the economy. Several of the Fund's
current portfolio companies were cited by Sure Ventures as examples of how
SVV2 is already backing innovative businesses capable of contributing to the
UK's AI Growth Zones initiative, spanning education, transportation, and
robotics. The Board considers that this validation reinforces the Fund's
investment thesis and its role in supporting UK technology innovation at a
critical stage of growth.
Together, these developments are considered to highlight the disciplined yet
strategic pace at which SVV2 is deploying capital, ensuring that investments
are made into companies with strong technological foundations and scalable
market opportunities. With its expanding base of early-stage AI technology
companies and increasing recognition within the UK's innovation landscape, the
Board considers that SVV2 is well positioned to capture further upside in the
second half of the year and beyond.
As at 30 June 2025, the unaudited fair value of Tern's shareholding in SVV2
was £0.8 million (31 December 2024: £0.7 million). Tern's additional
investment during the Period was in part offset by fees charged by the fund.
Sure Ventures PLC ("SV PLC" or "Sure Ventures")
Valuation of holding: £0.2 million
Holding: 2.7%
New to the portfolio in January 2025; SV PLC is a venture capital fund listed
on the Specialist Fund Segment of the London Stock Exchange. SV PLC focuses on
investing in early-stage software businesses within high-growth technology
sectors, including AI, AR, VR, and IoT.
During the first half of 2025, SV PLC delivered a series of significant
portfolio and financial developments. A key highlight was the performance of
Infinite Reality ("iR"), which completed a $3 billion equity raise in January
2025, increasing its indicative valuation to $12.25 billion, which enhanced
the value of SV PLC's indirect holdings through its 25.9% interest in Sure
Valley Ventures Fund I ("SVV1"), which has an equity shareholding in iR.
Portfolio exits during the Period included the sale by SVV1 of Getvisibility
to Forcepoint, which delivered a 4.5x return on SVV1's cash invested. In June
2025, SV PLC stated that the proceeds of the Getvisibility sale had been used
to pay down its outstanding debt position, clear creditors and the residual
would be used to continue its investment strategy and alongside other imminent
potential exits, a special dividend would be considered by the SV PLC board.
While no dividend was declared by SV PLC for the year ended 31 March 2025,
consistent with the SV PLC's focus on capital growth, SV PLC reiterated that
there may be potential for one-off special dividends to be considered when
circumstances and liquidity events allow. SV PLC also stated that it is
exploring options to create liquidity from the iR holding, following its
substantial valuation uplift.
Overall, the Board considers that the first half of 2025 demonstrated the
resilience and growth potential of SV PLC's portfolio, underpinned by strong
exposure to high-growth technology sectors including AI, AR, VR, and IoT. The
Board also considers that SV PLC remains well positioned to capitalise on
strategic opportunities within its portfolio while continuing to deliver value
for shareholders through disciplined capital allocation and exit execution.
As at 30 June 2025, the unaudited fair value of Tern's shareholding in SV PLC
was £0.2 million. SV PLC's shares are traded on an active financial market
and the fair value is therefore determined by reference to the quoted market
price at the reporting date.
DiffusionData Limited ("DiffusionData")
Valuation of holding: £0.01 million
Holding: <1%
In the early months of 2025, DiffusionData, a provider of enterprise-grade,
real-time data streaming and messaging, launched an initiative to attract user
adoption and demonstrate its platform's capabilities. In February 2025,
DiffusionData announced that its flagship Diffusion Cloud platform would be
made available as a one-month free trial, with no deployment costs or
obligations. This trial offering is supported by access to service engineers
to assist with setup, showcasing DiffusionData's commitment to easing customer
onboarding and lowering barriers to adoption.
This strategic move aims to highlight the platform's strengths in supporting
real-time, low-latency data distribution-particularly valuable in environments
requiring live updates such as streaming pricing, market data feeds, or
customer notifications. Diffusion Cloud promises rapid integration with
existing infrastructure like Kafka or Redis, backed by in-memory caching and
no-code data transformation. These features support reduced development time
and operational cost savings.
As at 30 June 2025, the unaudited fair value of Tern's shareholding in
DiffusionData decreased to £0.01 million (31 December 2024: £0.02 million).
The fair value is assessed using the most recent offer price for a fundraise
in April 2025.
Wyld Networks AB ("Wyld Networks" or "Wyld")
Valuation of holding: £0.007 million
Holding: 0.4%
In the first half of 2025, Wyld Networks advanced its transition from
development into commercial operations, marking the beginning of customer
revenues from its satellite IoT solutions. Wyld Networks also continued to
streamline its cost base, which has supported a stronger financial position
and improved operational efficiency.
During the Period, Wyld continued to expand its patent portfolio and widen its
commercial footprint. Wyld received U.S. patent approval for its "Fusion
Platform," a key milestone in strengthening its intellectual property
portfolio. During the Period, Wyld also secured subscription commitments for
warrants of series TO6, raising approximately SEK 6.9 million, with a
subscription price set at SEK 0.028. These funds enhanced working capital
flexibility and supported ongoing product deliveries. Additionally, late 2024
saw a loan agreement of approximately SEK 4.3 million secured from Olsen Fond
& Försäkring, to finance operations and customer deliveries, with
repayment due by September 2025.
Post-Period end, Wyld announced the outcome of its July 2025 Rights Issue,
which was fully subscribed, raising approximately SEK 17.31 million before
costs, through a combination of subscriptions with and without rights as well
as allocations to underwriters. In line with underwriting agreements, the
company's board also approved a directed compensation issue, allocating
360,665,992 shares to underwriters at SEK 0.01 per share through set-off of
underwriting claims.
As at 30 June 2025, the unaudited fair value of Tern's shareholding in Wyld
Networks increased to £0.007 million (31 December 2024: £0.003 million) due
to a fair value increase (£0.003 million), and a small foreign exchange
movement on the Sterling value of Wyld Networks which is valued in Swedish
Krona. Wyld Networks' shares are traded on an active financial market and the
fair value is therefore determined by reference to the quoted market price at
the reporting date.
Unaudited Income Statement and Statement of Comprehensive Income
For the six months ended 30 June 2025
Notes 6 months to 30 June 2025 6 months to 30 June 2024 12 months to 31 December 2024
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Fee income 19 7 17
Movement in fair value of investments 7 (434) (1,988) (2,460)
Profit on disposal of assets - - (13)
Total investment deficit (415) (1,981) (2,456)
Administration costs (555) (595) (1,197)
Other expenses (9) (17) (66)
Movement in fair value of derivative financial instruments - 83 (83)
Operating loss (979) (2,676) (3,802)
Finance income 20 13 30
Loss before tax (959) (2,663) (3,772)
Tax - - -
Loss and total comprehensive loss for the period (959) (2,663) (3,772)
Earnings per share 6
Basic and diluted loss per share (0.18)p (0.64)p (0.86)p
Unaudited Statement of Financial Position
As at 30 June 2025
30 June 30 June 31 December 2024
2025 2024
(Unaudited) (Unaudited) (Audited)
Note £000 £000 £000
Assets
Non-current assets
Investments 7 10,655 11,102 10,740
10,655 11,102 10,740
Current assets
Trade and other receivables 212 71 185
Cash and cash equivalents 74 121 382
286 192 567
Total assets 10,941 11,294 11,307
Equity and liabilities
Share capital 8 1,417 1,389 1,406
Share premium 36,057 34,451 35,541
Retained losses (27,188) (25,132) (26,238)
10,286 10,708 10,709
Current liabilities
Trade and other payables 485 384 436
Short Term Loan 9 170 202 161
Total current liabilities 655 586 597
Total liabilities 655 586 597
Total equity and liabilities 10,941 11,294 11,307
Unaudited Statement of Changes in Equity
For the six months ended 30 June 2025
Share Share Retained Total
capital premium losses equity
£000 £000 £000 £000
Balance at 31 December 2023 1,380 33,391 (22,469) 12,302
Total comprehensive loss - - (2,663) (2,663)
Transactions with owners
Issue of share capital 8 813 - 821
Issue of shares upon exercise of warrants 1 296 - 297
Share issue costs - (49) - (49)
Balance at 30 June 2024 1,389 34,451 (25,132) 10,708
Total comprehensive loss - - (1,109) (1,109)
Transactions with owners
Issue of share capital 17 1,152 - 1,169
Share issue costs - (62) - (62)
Share based payment charge - - 3 3
Balance at 31 December 2024 1,406 35,541 (26,238) 10,709
Total comprehensive loss - - (959) (959)
Transactions with owners
Issue of share capital 11 551 - 562
Share issue costs - (35) - (35)
Share based payment charge - - 9 9
Balance at 30 June 2025 1,417 36,057 (27,188) 10,286
Unaudited Statement of Cash Flows
For the six months ended 30 June 2025
6 months to 30 June 2025 6 months to 30 June 2024 12 months to 31 December 2024
(Unaudited) (Unaudited) (Audited)
Note £000 £000 £000
OPERATING ACTIVITIES
Net cash used in operations 10 (500) (507) (1,069)
Purchase of investments (335) (303) (657)
Cash received from sale of investments - 4 250
Loans to portfolio companies - - (95)
Interest received - - -
Net cash used in operating activities (835) (806) (1,571)
FINANCING ACTIVITIES
Proceeds on issue of shares 562 821 2,100
Share issue expenses (35) (49) (111)
Proceeds on the exercise of warrants - 110 -
Loan repayment - (253) (334)
Net cash from financing activities 527 629 1,655
(Decrease)/Increase in cash and cash equivalents (308) (177) 84
Cash and cash equivalents at beginning of period 382 298
298
Cash and cash equivalents at end of period 74 121 382
Notes to the Unaudited Interim Financial Statements
For the six months ended 30 June 2025
1. General information
Tern is an investing company specialising in technology companies,
predominantly in the Internet of Things (IoT).
The Company is a public limited company, incorporated in England and Wales,
with its shares admitted to trading on AIM, a market of that name operated by
the London Stock Exchange.
The address of Tern's registered office is 27/28 Eastcastle Street, London W1W
8DH. Items included in the financial statements of the Company are measured in
Pounds Sterling, which is the Company's presentational and functional
currency.
2. Basis of preparation
The Company's financial statements have been prepared in accordance with
UK-adopted International Accounting Standards.
These interim financial statements have been prepared in accordance with the
recognition and measurement principles of IFRS applicable as at 30 June 2025.
They do not include all the disclosures required for full annual financial
statements and should be read in conjunction with Tern's audited financial
statements for the year ended 31 December 2024.
The financial information for the year ended 31 December 2024 included in this
interim report does not constitute statutory accounts as defined under Section
434 of the Companies Act 2006. The statutory financial statements for that
year have been filed with the Registrar of Companies and are available on the
Company's website at www.ternplc.com (http://www.ternplc.com) . The auditor's
report on those financial statements was unqualified and did not contain any
statements under Section 498(2) or 498(3) of the Companies Act 2006.
These interim financial statements have been prepared on a historical cost
basis, except for investments and certain financial instruments, which are
measured at fair value at the end of each reporting period. Historical cost is
generally based on the fair value of the consideration given in exchange for
assets.
3. Going concern
The financial statements have been prepared on a going concern basis,
following an assessment by the Board of the Company's cash flow, liquidity,
and future prospects. The Directors consider this basis appropriate, supported
by four key factors:
· Anticipated shareholder support for future equity fund raises;
· Demonstrated ability to generate cash through asset disposals;
· Potential access to additional debt funding; and
· Potential dividend income from Sure Ventures plc.
Despite this assessment, the Directors acknowledge that material uncertainty
exists, as the Company's ability to continue as a going concern is dependent
on the successful execution of one or more of the following: further
fundraising, realisation of assets, or receipt of investment income. These
factors are, to some extent, outside the Company's direct control. Failure to
achieve them may result in the need to dispose of assets at reduced values or
to accept unfavourable borrowing terms. There is no certainty that equity or
debt funding will be available, or if available, that it will be on acceptable
terms.
These circumstances represent a material uncertainty that may cast significant
doubt on the Company's ability to continue as a going concern. Nevertheless,
the Directors remain confident that sufficient cash flow can be generated
within an appropriate timeframe. Accordingly, they consider it appropriate to
prepare the financial statements on a going concern basis.
The interim financial statements do not include the adjustments that would be
required if the Company were unable to continue as a going concern.
4. Investments
The investment portfolio primarily comprises equity investments.
In accordance with IFRS 10, paragraph 4B, and the guidance set out in IFRS 9,
these investments are measured at fair value through profit or loss (FVTPL).
Valuations of investments denominated in foreign currencies are subject to
fluctuations in exchange rates, which can impact their reported fair value.
5. Critical accounting judgements and key sources of
estimation uncertainty
Estimates and judgements are continually evaluated, drawing on historical
experience and other relevant factors, including reasonable expectations of
future events.
The Company makes forward-looking estimates and assumptions, acknowledging
that actual outcomes may differ from these projections. The key areas of
estimation uncertainty that could result in material adjustments to the
carrying amounts of assets and liabilities within the next financial year are
outlined below.
JUDGEMENTS
IFRS 10 designation as an investment entity
A key judgement affecting the basis of preparation of the Company's financial
statements is that its activities are those of an investment entity. This
determination is made at each reporting date by reference to the criteria for
classification as an investment entity under IFRS 10. The Company was assessed
to meet the definition of an investment entity based on the following factors:
· It raises capital from one or more investors for the purpose of
providing investment management services;
· Its sole business purpose is to invest funds solely for capital
appreciation and investment income; and
· It measures and evaluates the performance of the majority of its
investments on a fair value basis.
Furthermore, the Company concluded that its investment-related activities do
not represent a separate substantial business activity, nor do they generate a
significant independent source of income for the investment entity.
ESTIMATES
Fair value of financial instruments
The Company holds unquoted investments valued at £10.5 million, designated as
held for trading upon initial recognition. The fair value of unquoted
financial instruments is primarily determined using the most recent
transaction price within the past six months. Where no recent funding rounds
have occurred, valuations are derived using alternative methodologies,
including discounted cash flow (DCF) analysis, supported by the most recent
offer prices for investments where available. The fair value of the investment
in SVV2 is based on valuations provided by the fund manager.
Due to the early-stage nature of these investments, alternative valuation
methods such as DCF analysis may not always be supported by observable market
inputs and, in many cases, may not be immediately realisable.
The Company also holds other financial assets measured at fair value through
profit or loss (FVTPL), including convertible loan notes. The valuation of
these instruments incorporates an assessment of the probability of different
redemption or conversion outcomes, which are factored into the fair value
calculation.
6. Loss per share
Loss per share is calculated by reference to the weighted average number of
ordinary shares in issue as follows:
6 months to 6 months to 12 months to
30 June 2025 30 June 2024 31 December 2024
£000
£000 £000
Loss for the purposes of basic and diluted loss per share (959) (2,663) (3,772)
Weighted average number of ordinary shares (see note below): Number Number Number
For calculation of basic and diluted loss per share 548,127,630 414,309,389 437,148,474
Loss per share
Basic and diluted loss per share (0.18)p (0.64)p (0.86)p
At 30 June 2025, 31 December 2024 and 30 June 2024 the diluted loss per share
is the same as the basic loss per share as the share options were underwater
which would have an anti-dilutive effect on the reported loss per share.
7. Investments
30 June 2025 30 June 2024 31 December 2024
£000 £000 £000
Fair value of investments brought forward 10,740 12,779 12,779
Interest accrued on convertible loan notes 14 12 28
Additions 335 303 657
Disposals - (4) (264)
11,089 13,090 13,200
Fair value adjustment to investments (434) (1,988) (2,460)
Fair value of investments carried forward 10,655 11,102 10,740
The convertible loan facility issued to Talking Medicines is a financial asset
with multiple embedded derivatives and the entire contract has been designated
at FVTPL, with any movement in fair value taken to profit or loss for the
year. As at 30 June 2025, the principal of the convertible loan outstanding
was £287,500 (30 June 2024: £287,500).
8. Issued share capital
30 June 2025 30 June 2024 31 December 2024
Number Number Number
Issued and fully paid:
Ordinary shares of £0.0002 578,237,820 432,700,318 524,993,062
Deferred shares of £29.999 42,247 42,247 42,247
Deferred shares of £0.00099 34,545,072 34,545,072 34,545,072
£000 £000 £000
Issued and fully paid:
Ordinary shares of £0.0002 116 88 105
Deferred shares of £29.999 1,267 1,267 1,267
Deferred shares of £0.00099 34 34 34
1,417 1,389 1,406
The ordinary shares have attached to them full voting, dividend and capital
distribution (including on winding up) rights. They do not confer any rights
of redemption.
The deferred shares have no voting or dividend rights. The deferred shares are
not quoted on the AIM market of the London Stock Exchange.
On 26 February 2025, 19,230,769 new ordinary shares were issued at 1.15p per
share for cash as a result of a placing raising approximately £0.2 million
before any share issue expenses.
On 8 May 2025, 34,013,989 new ordinary shares were issued at 1p per share for
cash as a result of an underwritten Open Offer raising approximately £0.3
million before any share issue expenses.
9. Short Term Loan
30 June 2025 30 June 2024 31 Dec 2024
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Short term loan 170 202 161
As at 30 June 2025, the outstanding principal on the loan was £0.16 million
(31 December 2024: £0.16 million). In September 2024, the security
requirement on the short-term loan facility was removed, and the repayment
period was extended by 12 months.
The loan is classified as a financial liability measured at amortised cost and
carries a rate of interest of 12%. Following the amendment to the agreement,
the loan (including both principal and accrued interest) is due for full
repayment in September 2025.
The amendment to the loan agreement does not qualify as a substantial
modification in accordance with IFRS 9.
10. Cash flow from operations
6 months to 30 June 2025 6 months to 30 June 2024 12 months to 31 Dec 2024
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Loss for the period (959) (2,663) (3,772)
Adjustments for items not included in cash flow:
Movement in fair value of investments 434 1,988 2,460
(Profit) on disposal - - 13
Share-based payment charge 9 - 3
Amortisation of loan implementation fee - 17 33
Movement in fair value of derivative financial instrument - 83 83
Finance expenses 9 20 44
Finance income (20) (13) (30)
Operating cash flows before movements in working capital (527) (568) (1,166)
Adjustments for changes in working capital:
- (Increase)/decrease in trade and other receivables (excluding loans to (22) 2 (14)
investee companies)
- Increase in trade and other payables 49 59 111
Cash used in operations (500) (507) (1,069)
11. Events after the reporting period
On 31 July 2025, 64,248,646 new ordinary shares were issued at 1p per share
for cash as a result of an underwritten Open Offer raising £642,486 before
any share issue expenses.
On 24 July 2025, it was announced that the Company had received a bridging
loan for approximately £45,000 with an effective annual interest rate of 12%.
The loan was fully repaid on 1 August 2025.
12. Availability of interim results
Copies of this report will be available from the Company's website
www.ternplc.com (http://www.ternplc.com) .
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. END IR UPUUWBUPAGQWRecent news on Tern
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