REG - Tern PLC - Konektio update

TernAnnouncement

08/11/2023 07:00

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RNS Number : 6894S  Tern PLC  08 November 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.

8 November 2023

 

Tern Plc

("Tern" or the "Company")

 

Konektio() update

 

Further to the Company's announcement on 26 May 2023, Tern Plc (AIM:TERN), the
investment company specialising in supporting high growth, early-stage,
disruptive Internet of Things ("IoT") technology businesses, announces that it
has decided not to invest further in its portfolio company, InVMA Limited,
which trades as Konektio(TM) ("Konektio").

 

Tern announced on 26 May 2023 that Konektio had agreed a £2.5 million equity
fundraise, to be completed in two tranches.  The first tranche of £1.2
million (the "Konektio First Tranche") completed in May 2023 and the second
tranche of £1.3 million (the "Konektio Second Tranche") is due for completion
in Q4 2023.  Following Tern's investment in the Konektio First Tranche of
£100,000, Tern's shareholding in Konektio reduced to 28% (before any dilution
on exercise of any Konektio employee share options) and Tern's shareholding
had an unaudited book valuation of £0.9 million.

 

Tern announced on 26 May 2023 that it had committed to invest a minimum of
£0.28 million in the Konektio Second Tranche, with an option, at Tern's sole
discretion, to increase its investment amount up to £0.4 million.  However,
given the business performance of Konektio and, in particular, Konektio's
monthly recurring revenue growth not having met Tern's expectations, Tern has
decided not to invest in the Konektio Second Tranche.  As announced on 26 May
2023, should Tern not fulfil its commitment to invest a minimum of £0.28
million in the Konektio Second Tranche, 75% of Tern's holding in Konektio will
be transferred to a valueless class of Konektio deferred shares, which is now
anticipated to take effect in due course.

 

Tern's percentage holding in Konektio and its unaudited book valuation will be
determined when, and if, Konektio completes the Konektio Second Tranche and
Tern will provide an update in relation to this at the appropriate time.

 

Tern does not, at this time, envisage providing any more funding to Konektio
and the Company will look to realise value from its remaining holding in
Konektio in due course.

 

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(TM), 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 2022, the business recorded an increase in retained unaudited
losses of approximately £2 million and at that date had an unaudited deficit
of shareholders' funds of approximately £0.3 million.

 

Enquiries

 

 Tern Plc                                                       via IFC Advisory

 Ian Ritchie (Chairman)

 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)                                          tern@investor-focus.co.uk (mailto:tern@investor-focus.co.uk)

 Tim Metcalfe

 Graham Herring

 Florence Chandler

 

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