REG - Tern PLC - Konektio Fundraise

TernAnnouncement

25/04/2023 07:00

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RNS Number : 3581X  Tern PLC  25 April 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018).  UPON THE PUBLICATION OF THIS
ANNOUNCEMENT THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE WITHIN THE PUBLIC
DOMAIN.

25 April 2023

 

Tern Plc

("Tern" or the "Company")

 

Konektio Fundraise

 

Tern Plc (AIM:TERN), the investment company specialising in supporting high
growth, early-stage disruptive Internet of Things (IoT) technology businesses,
announces that its portfolio company, InVMA Limited, which trades as Konektio
("Konektio") has completed a £0.3m equity fundraise (the "Konektio
Fundraise").  Tern has invested £0.1m in the Konektio Fundraise, with the
remainder provided by Konektio's other institutional investors Mercia and
Foresight.  Tern has also converted £0.5m of convertible loan notes in
Konektio ("Convertible Loan Notes").

 

Prior to the Konektio Fundraise, Tern had a holding of 36.8% in Konektio and
as at 30 June 2022, the date of Tern's last published book valuation, this
holding had an unaudited book valuation of £2.2m.  Since 30 June 2022, Tern,
alongside others, has provided funding to Konektio by subscribing for
Convertible Loan Notes, which bore annual interest of 8%, and the entire
principal amount and accrued interest have now converted, in line with the
Convertible Loan Notes' terms, into new equity in Konektio at a discount of
between 10% and 20% to the Konektio Fundraise price.  Post the Konektio
Fundraise, Tern's holding in Konektio has increased to 39.9% (before any
dilution on exercise of any Konektio employee share options) and Tern's
holding now has an unaudited book valuation, at the Konektio Fundraise price,
of £1.0m.

 

Including its participation in the Konektio Fundraise and the Convertible Loan
Notes, Tern has, to date, invested approximately £2.2m in Konektio.  The
Konektio Fundraise values Konektio in total at approximately £3m on a
post-money basis.

 

Commenting Al Sisto, CEO of Tern, said:

"The macroeconomic backdrop remains difficult, with high inflation and high
interest rates weighing heavily on the technology ecosystem.  The landscape
for technology company valuations has therefore deteriorated dramatically
within the last year.  Whilst I am encouraged by the support of our
co-investors in working to keep AssetMinder at the forefront of its markets
through this modest funding round, I am disappointed to have to report a 55%
decline in the fair value of our investment in Konektio.  In our view, this
fails to reflect the strategic progress that has been made within the business
and which we expect to continue over coming months.

 

"Our direct and hands-on support of Konektio is delivering results, and the
business continues to make progress.  We are encouraged by the market
acceptance of the new release of AssetMinder and the increase in Annual
Recurring Revenue (ARR) at the company.  The investor group are keen on
continuing this progress and look forward to the ability of the business to
become self-supporting."

 

About Konektio

 

Konektio provides an Industrial IoT Software as a Service (SaaS) platform to
Original Equipment Manufacturers (OEMs) and aftermarket customers, as well as
the connected product market.  The software enables remote asset monitoring
and management to drive productivity improvements.  Konektio's primary
product, AssetMinder, is machine agnostic and allows manufacturers to diagnose
issues and proactively prescribe services plans, ultimately reducing downtime
and improving operational efficiency.  According to the latest filed
financial statements for Konektio, for the 12 month period ended 31 December
2021, the business recorded an increase in retained unaudited losses of £0.4m
and at that date had unaudited net assets of approximately £1.8m.

 

Enquiries

 

 Tern Plc                                                                    via IFC Advisory

 Al Sisto (CEO)

 Sarah Payne (CFO)

 Allenby Capital Limited                                                     Tel: 0203 328 5656

 (Nominated Adviser and Broker)

 David Worlidge / Alex Brearley / Dan Dearden-Williams (Corporate Finance)

 Matt Butlin / Kelly Gardiner (Sales and Corporate Broking)

 IFC Advisory                                                                Tel: 0203 934 6630

 (Financial PR and IR)                                                       tern@investor-focus.co.uk (mailto:tern@investor-focus.co.uk)

 Tim Metcalfe

 Graham Herring

 Florence Chandler

 

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