Tern PLC: Portfolio Update (749853)
November 22 2018 - 02:01AM
UK Regulatory
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Tern PLC (TERN)
Tern PLC: Portfolio Update
22-Nov-2018 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
22 November 2018
*Tern Plc (AIM: TERN)*
*Portfolio Update*
Tern Plc (AIM:TERN), the investment company specialising in the Internet of
Things ("IoT"), is pleased to provide an update on the activities of the
Group and its key portfolio companies since the publication of its Interim
Results, which were issued on 17 September 2018.
Tern has strengthened its portfolio during 2018 with GBP2.5m invested in the
year to date. Of this, a total of GBP1.9m was invested in FVRVS Limited
("Fundamental VR") for a 34.7% equity position. GBP1.1m of this total
investment was delivered since 30 June 2018. A further GBP0.6m was invested
into InVMA in tranches up to 10 July 2018 to maintain Tern's 50% equity
position. In addition, Tern has provided loans totalling GBP0.9m in 2018 to
Device Authority Limited ("DA"), maintaining its 56.8% equity stake and
bringing the convertible loan balance to GBP1.3m.
Since 30 June 2018, Tern has raised GBP2.9m, bringing the total cash raised in
the year to GBP6.0m and resulting in a cash balance of GBP2m at 31 October 2018.
This compares to the Directors' estimate of the annual operational cash burn
of Tern of approximately GBP0.9m. Cash not used for operational purposes is
intended to be used to invest in the current investment portfolio and new
investee companies as suitable opportunities arise.
*Al Sisto, CEO of Tern, said*:
"Our portfolio companies' progress represents our efforts to seek out the
most promising IoT companies, provide them with operating capital and
nurture them with our direct support and access to leverage our network of
resources. We help them build high performance teams to execute on their
growth strategies to scale and prepare for their next round of funding or
exit. With this in mind, we are particularly pleased with the rapid progress
reported from our new investment, FundamentalVR, which has secured a joint
development agreement with the Mayo Clinic and gained industry recognition
via numerous awards."
"We are also delighted to note the launch of new solutions between DA and
Comodo. We believe that customer engagements created by such partnerships
provide our portfolio companies with the scale to accelerate their growth
and value creation for Tern and its shareholders."
"I am pleased to report that our fundraising activities since the beginning
of 2018 have been successful in scope and have positioned us well to support
our existing investments in their journey to disrupt and innovate an array
of vertical IoT segments and the ability to further diversify our portfolio
of investments if a new opportunity is presented. We continue to work
towards realising value from the successes of our portfolio companies.
"We thank all the employees of our portfolio companies for their dedication
and our shareholders for their support."
*FundamentalVR*
FundamentalVR is a leading virtual reality ("VR") training and data analysis
technology platform. FundamentalVR's award-winning platform combines
immersive VR with cutting-edge haptics (the sense of touch) to create
low-cost and scalable "flight simulator" experiences, offering a new way to
allow skills development for surgeons. Tern took an initial 18.8% holding in
FundamentalVR in May 2018 to fund the transformation of its 'closed' system
into a scalable SaaS delivery system, which was envisaged to facilitate the
company's expansion in the USA - a core strategic market for FundamentalVR.
Subsequently, Tern increased its holding in FundamentalVR to 34.7% in
October 2018 to help accelerate and support FundamentalVR's strategic
objective of becoming the leading SaaS based immersive surgical simulation
and data gathering platform provider.
The additional GBP1.1m investment from Tern in October 2018 followed
Fundamental VR's signing of a three-year term joint development agreement
with the Mayo Foundation for Medical Education and Research ("the Mayo
Clinic"). This was aimed at accelerating FundamentalVR's progress in
building out its procedures portfolio and also included the current release
of the Fundamental Surgery platform showcasing live in the Mayo Clinic's
world-renowned simulation centres located in Arizona, Florida and Minnesota.
In addition to this agreement, since the interim report for the six months
to 30 June 2018, FundamentalVR has:
· Been named by Time Magazine as one of the best inventions in 2018;
· Launched its Fundamental Surgery virtual reality software in the U.S.
both for training and for experienced spine and orthopaedic surgeons;
· Announced the launch of Fundamental Surgery in Australia and New
Zealand;
· Won 'Most Impactful Breakthrough" at the Auggie Awards held at the
Augmented World Expo. This prestigious award recognises excellence in the
use of immersive technology in a variety of industries and use cases; and
· Placed the Fundamental Surgery platform into University College London
Hospital (UCLH).
FundamentalVR released its results for the year to 31 December 2017 in May
2018, announcing a loss for the year of GBP247,921.
*DA*
Tern has a 56.8% shareholding in DA, which is an award winning,
industry-recognised, international business which delivers innovations in
IoT security. Traditional identity authentication models ("IAM") and cyber
security platforms are data centre centric and not suitable to protect IoT
applications and secure the devices and data that use them. DA's KeyScaler
platform has been specifically designed to solve this issue, protecting the
IP of the application and the data of the enterprise that use these IoT
deployments.
Since Tern's initial investment over three years ago, DA has expanded its
product portfolio, world class team and partner network.
DA released its 2017 results in early October 2018, announcing losses of
GBP1.75m for the year to 31 December 2017, which were for the UK company only.
The unaudited consolidated losses for this period for DA and Device
Authority Inc combined, would have been of the order of GBP2.9m. Tern, along
with its co-investors Alsop Louie Partners and George Samenuk, have provided
US$2.9m in working capital, through a convertible loan note facility, to
support DA's continued commercial progress and success.
Since Tern's interim report for the six months to 30 June 2018, DA has:
· Announced a new IoT solution for private PKI networks with Comodo CA,
now called Sectigo;
· Announced a new solution to secure enterprise blockchain infrastructure;
· Entered into a technology partnership with TeamViewer, a global
connectivity powerhouse, to improve the connectivity and security of IoT
applications, devices and data around the world and at leading IoT event
in Amsterdam showcased a secure Industrial water pump use case;
· Issued a new software release that introduced broader support for Comodo
CA (Sectigo) and IdenTrust (part of HID Global), offering customers
greater flexibility and integration ease with Certificate Authorities for
enabling automated certificate provisioning and management for IoT
devices; and
· Been selected as the IoT device and data trust solution for a critical
medical device manufacturer due to launch its product in 2019.
*InVMA Limited ("InVMA")*
Tern has a 50% holding in InVMA, which delivers IoT applications based on
the industry leading PTC/Thingworx development platform, delivering real
business value and competitive advantage to its customers. InVMA released
its 2017 results in September 2018, announcing losses of GBP280,492 for the
fourteen months to 31 December 2017.
In June 2018, semiconductor giant Arm Technologies acquired Stream
Technologies, which has been the IoT connectivity partner of choice for
InVMA for three years. InVMA and Arm Technologies became partners, enabling
InVMA to offer enterprise customers with a robust end-to-end IoT platform
for managing, connecting, provisioning and updating devices that is easily
scalable and flexible.
Since the interim report for the six months to 30 June 2018, InVMA has:
· Acquired the intellectual property and other assets of AMIHO Technology
of Cambridge, with management support from Tern. The AMIHO software
acquired will enable InVMA customers to integrate the TrIoT software and
radio reference design into their products to enable them to robustly
connect on the LoRA and M-Bus protocol-based networks. These networks, for
example, provide the backbone for long range and low power sensors
including remote sensor and smart metering applications;
· Secured contracts to enable a leading Aerospace and Defence company, and
a global lift manufacturing company to use digital technology to transform
their Production Processes and Product Offerings respectively;
· Secured two new channel partners: _XL Group_ and _iaconnects_. These
partnerships will extend InVMA's reach into the oil and gas and facilities
management sectors respectively;
· Enhanced its turnkey asset performance management solution,
AssetMinder(R) with an advanced, wireless condition monitoring solution
enabling rapid retrofit of temperature and vibration measurement in safe
or Atex-classified environments (*ATEX* directive consists of two EU
directives describing what equipment and work space is allowed in an
environment with an explosive atmosphere);
· Secured a contract for AssetMinder(R) on an initial 23 sites for
critical asset monitoring for a UK public utility company, with their
specialist channel partner, Drive Management Services; and
· Continued to deploy DA on its range of interface & connectivity hardware
for AssetMinder(R).
*flexiOPS Limited ("flexiOPS")*
flexiOPS is a wholly owned Tern investment. It released its results for the
18 months to 31 December 2017 in March 2018, announcing a retained profit of
GBP232,389.
Since Tern's interim report for the six months to 30 June 2018, flexiOPS has
focused on the growth and support of its 90% held subsidiary, Wyld
Technologies Limited ("Wyld") and its ad-hoc mesh networking offering:
· The company has completed the initial productisation of its Wyld Mesh
and Wyld Fusion product platforms;
· Since completion of the Wyld product platforms, the company has begun
previewing the upcoming release with prospective customers in
transportation, its initial targeted market, with success and are actively
pursuing new opportunities; and
· Wyld has announced the appointment of a senior executive responsible for
new business development, to accelerate the development of opportunities.
*Other *
Tern maintains a holding below 1% in both Seal Software Group Limited and
Push Technology Limited.
***ENDS***
*Enquiries *
*TernPlc* via Newgate Communications
Al Sisto/ Sarah Payne
*Allenby Capital Limited* Tel: 020 3328 5656
(Nomad and Joint broker)
David Worlidge/ Alex Brearley
*Whitman Howard* Tel: 020 7659 1234
(Joint broker)
Nick Lovering/ Christopher Furness
*Newgate Communications* Tel: 020 3757 6880
Elisabeth Cowell/ Fiona Norman
ISIN: GB00BFPMV798
Category Code: PFU
TIDM: TERN
LEI Code: 2138005F87SODHL9CQ36
Sequence No.: 6632
EQS News ID: 749853
End of Announcement EQS News Service
(END) Dow Jones Newswires
November 22, 2018 02:01 ET (07:01 GMT)
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