TERN PLC Tern PLC: Issue of further convertible loan to Device Authority Limited

Transparency directive : regulatory news

14/01/2019 08:00

Tern PLC (TERN)
Tern PLC: Issue of further convertible loan to Device Authority Limited

14-Jan-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.


14 January 2019

 

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

Issue of further convertible loan to Device Authority Limited

 

Tern Plc (AIM: TERN), the investment company specialising in the Internet of Things ("IoT"), announces that it has committed a further convertible secured loan of up to US$400,000 to its portfolio company, Device Authority Limited ("DA"). The total funds secured by DA through this loan from DA's existing shareholders, including Tern, are US$531,930.

 

Tern's commitment will be provided in two tranches: 60% of the total loan, which will see Tern contribute US$240,000, is payable immediately, taking Tern's total convertible loan note position in DA to US$1,940,867. The remaining 40% will be payable by 20 February 2019, if certain commercial milestones are met by DA. Following this second tranche of investment, Tern's total convertible secured loan note position with DA will be US$2,100,867. The loan is repayable on 30 June 2019, to coincide with the other outstanding loan notes to DA.

 

In providing this support, DA's shareholders, including Tern, are pleased with the progress that DA continues to make with its partners, including the recent contract secured with a leading medical device manufacturer (as announced on 27 December 2018).   

 

The loan note accrues an interest coupon of 5 per cent. per annum and is convertible automatically on completion of an equity fundraising in DA of at least US$2.5 million which is completed before 30 June 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 30 June 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 11 January 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 at 31 December 2018, Tern had an unaudited cash balance of approximately £1.9 million.

 

Al Sisto, CEO of Tern, said: "We are pleased to continue supporting DA given the progress the company has been making with its current and new partners, including the recent contract win announced in December 2018. We are confident in DA's ongoing progress and look forward to reporting on its future achievements within the IoT security space."

 

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

 

Enquiries

Tern Plc

Al Sisto/Sarah Payne

via Newgate Communications

 

Allenby Capital

(Nomad and joint broker)

David Worlidge/Alex Brearley

 

Tel: 020 3328 5656

 

Whitman Howard

(Joint broker)

Nick Lovering/Christopher Furness

 

Tel: 020 7659 1234

 

Newgate Communications

Elisabeth Cowell/Fiona Norman

 

Tel: 020 3757 6880

 



ISIN: GB00BFPMV798
Category Code: MSCH
TIDM: TERN
LEI Code: 2138005F87SODHL9CQ36
Sequence No.: 7151
EQS News ID: 765543

 
End of Announcement EQS News Service

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