REG-Tern PLC Tern PLC: Device Authority Update - issue of further convertible loan

TernAnnouncement

11/04/2019 07:00

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   Tern PLC (TERN)
   Tern PLC: Device Authority Update - issue of further convertible loan

   11-Apr-2019 / 07:00 GMT/BST
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   11 April 2019

                                        

                    Tern Plc (the "Company", or the "Group")

                                        

          Device Authority Update - issue of further convertible loan

    

   Tern Plc (AIM: TERN), the investment company specialising in the  Internet
   of Things ("IoT"), announces that, together with its co-investors, it  has
   committed a further  convertible secured  loan to  its portfolio  company,
   Device Authority Limited  ("DA"), which specialises  in IoT security.  The
   total funds secured by DA through this loan are US$418,895, of which  Tern
   has contributed US$315,000.

    

   Following this  investment, Tern's  total  convertible secured  loan  note
   position with DA  is US$2,415,867. The  loan is repayable  on 31  December
   2019.

    

   Tern's continued support is testament to DA's strong track record of using
   the funds  that  it has  raised  to  deliver critical  components  of  its
   go-to-market strategy. During  2018, DA  enhanced its  products to  ensure
   that they  met  key  client  challenges  and  expanded  its  ecosystem  of
   partners. DA has continued  this trend in 2019  and has secured three  new
   orders in  Q1  through  their  partner network  as  well  as  consistently
   increasing annual recurring revenue quarter on quarter.

    

   The loan note accrues an interest coupon  of 5 per cent. per annum and  is
   convertible automatically on completion of an equity fundraising by DA  of
   at least US$2.5 million if completed before 31 December 2019  ("Qualifying
   Fundraising"). The conversion will be into the most senior class of shares
   issued in the Qualifying Fundraising  at the lowest fundraising price  per
   share.

    

   If a Qualifying Fundraising is not completed before 31 December 2019,  but
   DA is able to procure an exit  for its shareholders, the providers of  the
   loan can elect to either receive 300% of the principal amount of the  loan
   notes held by them in addition to the accrued interest, or to convert  the
   loan and  accrued interest  into Class  A  Preference Shares  of DA  at  a
   conversion price of £0.036681585 per share.

    

   Providers of this loan  to DA will  also be issued  with 2.6 warrants  for
   each US$1  of loan  notes subscribed  for  by them  (rounded down  to  the
   nearest whole  number). Each  warrant, which  is exercisable  at any  time
   before 10  April 2026,  provides each  warrant holder  with the  right  to
   subscribe for one Class A Preference Share of DA for each warrant held  at
   an exercise price of £0.036681585 per share.

    

   As part of this process,  it has been agreed  by all noteholders that  all
   previous convertible loan notes  provided to DA  have their maturity  date
   extended to 31 December 2019.

    

   Al Sisto, CEO of  Tern, said: "We  are pleased with  the progress that  DA
   continues to make  with its  partners, including the  recent contract  win
   with nCipher  Security to  deliver a  security solution  for high  quality
   surgical devices.  The capital  we  provided in  2018, together  with  our
   co-investors, made a marked difference to DA  as it set out to refine  its
   product and expand its partnership  network, leading to new contract  wins
   in the second half of 2018 and into Q1 of 2019. With this in mind, we  are
   pleased to continue this support and to maintain our holding as DA focuses
   on building its client base in the coming months."

    

   This announcement contains inside information for the purposes of  Article
   7 of EU Regulation 596/2014

    

   Enquiries

   Tern Plc
                                     via Newgate Communications
   Al Sisto/Sarah Payne
    

   Allenby Capital                    

   (Nomad and joint broker)          Tel: 020 3328 5656

   David Worlidge/Alex Brearley
    

   Whitman Howard                     

   (Joint broker)                    Tel: 020 7659 1234

   Nick Lovering/Christopher Furness
    
                                      
   Newgate Communications
                                     Tel: 020 3757 6880
   Elisabeth Cowell/Fiona Norman

    

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   ISIN:          GB00BFPMV798
   Category Code: MSCM
   TIDM:          TERN
   LEI Code:      2138005F87SODHL9CQ36
   Sequence No.:  8171
   EQS News ID:   798671


    
   End of Announcement EQS News Service

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