TIDMTERN TIDMPIRI

RNS Number : 5292Q

Tern PLC

28 June 2022

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE

28 June 2022

Recommended All-Share Offer

for

Pires Investments plc ( " Pires " )

by

Tern plc ( " Tern " )

to be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006

Notice of Tern General Meeting and posting of a circular to Tern Shareholders

On 1 June 2022 , it was announced that the Tern Directors and Pires Directors had reached agreement on the terms of a recommended all-share offer by Tern for the issued and to be issued share capital of Pires, to be effected by means of a court-sanctioned scheme of arrangement between Pires and Pires Shareholders under Part 26 of the Companies Act 2006 (the "Acquisition")(the "2.7 Announcement").

Pires has announced that it will be posting the Scheme Document to Pires Shareholders later today. The Scheme Document includes notices of the Court Meeting and the General Meeting to be held on 21 July 2022.

The Tern Directors announce that a circular (the "Circular") will be sent to Tern Shareholders later today which will include a notice of a general meeting to be held at 11.00 a.m. on 21 July 2022 at the offices of Reed Smith LLP at The Broadgate Tower, 20 Primrose Street, London, EC2A 2RS, at which the Resolution will be proposed. The Resolution, which will be proposed as an ordinary resolution, is to authorise the Directors to allot up to 98,865,712 New Tern Shares (GBP19,773.14 in nominal value) in connection with the Acquisition. This authority will expire on the date that all consideration due pursuant to the terms of the Acquisition has been satisfied.

A copy of the Circular will be available from Tern's website at www.ternplc.com shortly.

Words and expressions defined in the Circular shall, unless the context provides otherwise, have the same meanings in this announcement.

The full text of Part 1 of the Circular, which includes detailed information on the Pires investment portfolio and the Tern network of companies, is set out below:

Dear Shareholder,

Recommended all-share offer for Pires Investments plc

and

Notice of General Meeting

   1.       Introduction 

On 1 June 2022, the boards of directors of Pires and Tern announced that they had reached agreement on the terms of a recommended all-share offer whereby Tern will acquire the entire issued and to be issued share capital of Pires in exchange for the issue of New Tern Shares. The Acquisition is to be implemented by means of a court-sanctioned scheme of arrangement under Part 26 of the Act.

The implementation of the Acquisition is, among other things, subject to Shareholders approving the Resolution to grant authority to the Directors to issue the New Tern Shares as consideration under the Acquisition.

The full text of the Resolution is set out within the Notice of General Meeting at the end of this document.

The purpose of this document is to provide you with information about the Acquisition and also to explain why the Directors consider that the Acquisition is in the best interests of the Company and Shareholders as a whole, and why the Directors recommend that you vote in favour of the Resolution to be proposed at the General Meeting, notice of which is set out at the end of this document, as the Directors have irrevocably undertaken to do in respect of their own beneficial holdings of Tern Shares.

The Acquisition has also been unanimously recommended to Pires Shareholders by the Pires Board.

Shareholders are advised to read this document in its entirety.

The information contained in this document does not purport to be complete and should be read in conjunction with the full text of the Scheme Document which will be available at www.piresinvestments.com and www.ternplc.com and in hard copy at the registered offices of Pires and Tern until the time of the General Meeting. Shareholders should read the whole of the Scheme Document, in particular the Letter of Recommendation from a Non-Executive Director of Pires in Part One and the Explanatory Statement in Part Two.

   2.       Summary of the terms and conditions of the Acquisition 
   2.1     Terms of the Acquisition 

Under the terms of the Acquisition, which is subject to the Conditions and the other terms set out in Part Three (Conditions to the implementation of the Scheme and to the Acquisition) of the Scheme Document, Scheme Shareholders on the register of members of Pires at the Scheme Record Time will receive:

For each Pires Share held, 0.51613 New Tern Shares

Based on the Closing Price of 15.5 pence per Tern Share on 31 May 2022 (being the last Business Day before the date of the Announcement), the Acquisition valued:

-- each Pires Share at 8.0 pence, a premium of 53.8 per cent. to Pires' closing share price of 5.2 pence on 31 May 2022 (being the last Business Day prior to the commencement of the Offer Period) and a 31.1 per cent. premium to the average closing share price of 6.1 pence per Pires Share for the six months ended 31 May 2022;

-- the entire issued and to be issued share capital of Pires at approximately GBP14.9 million; and

-- the Enlarged Group at a combined market capitalisation of approximately GBP69.5 million (assuming completion of the Acquisition).

Based on the Closing Price of 12.75 pence per Tern Share on the Last Practicable Date, the Acquisition values each Pires Share at 6.58 pence and Pires' issued ordinary share capital on a fully diluted basis at approximately GBP12.30 million, representing a premium of:

-- 26.6 per cent. to the Closing Price of 5.2 pence per Pires Share on 31 May 2022 (being the last Business Day prior to the commencement of the Offer Period); and

-- 32.9 per cent. to the Closing Price of 4.95 pence per Pires Share on the Last Practicable Date.

The New Tern Shares will be issued credited as fully paid and will rank pari passu in all respects with the Tern Shares already in issue, including the right to receive and retain dividends and other distributions declared, made or paid by reference to a record date falling after completion of the Acquisition. Application will be made to the London Stock Exchange for the New Tern Shares to be admitted to trading on AIM.

Upon completion of the Acquisition, Pires Shareholders will own approximately 21.39 per cent. of the Estimated Enlarged Share Capital.

If any dividend or other distribution or return of value is proposed, declared, made, paid or becomes payable in respect of Pires Shares on or after the date of the Scheme Document and prior to the Acquisition becoming effective, Tern will have the right to reduce the value of the consideration payable for each Pires Share by up to the amount per Pires Share of such dividend, distribution or return of value.

The New Tern Shares to be issued and allotted to Scheme Shareholders in accordance with the Exchange Ratio will be rounded up to the nearest whole number. Under the terms of the Acquisition, Scheme Shareholders will receive 0.51613 New Tern Shares for every Pires Share held. If a Scheme Shareholder holds only one Pires Share, then one New Tern Share will be allotted and issued to such Scheme Shareholder. If a Scheme Shareholder holds more than one Pires Share, then the Scheme Shareholder will receive such number of New Tern Shares as is equal to such number of Pires Shares the Scheme Shareholder holds multiplied by 0.51613 and rounded up to the nearest whole number. By way of illustration, if a Scheme Shareholder holds 2,500 Pires Shares, they will receive 1,291 New Tern Shares calculated as follows: 2,500 Pires Shares multiplied by 0.51613 equates to 1,290.325 New Tern Shares and 1,291 New Tern Shares when rounded up to the nearest whole number.

   2.2     Conditions of the Acquisition 

Further details of the Conditions and further terms of the Acquisition are set out in Part Three (Conditions to the implementation of the Scheme and to the Acquisition) of the Scheme Document.

   3.       Background to and reasons for the Acquisition 

The Board believes that combining the two businesses by way of the Acquisition has compelling strategic and financial rationale, will be value accretive to Shareholders and will provide the opportunity for the Enlarged Group to:

   (a)        establish a company of greater scale and potential interest to institutional investors; 

(b) provide investors with increased diversity of exposure to specialist technology businesses at different stages of development;

(c) aid the development of the companies within each businesses' portfolio given their synergistic nature;

(d) further enhance the existing Sure Valley Ventures relationship through the businesses' combined investment;

(e) create a leadership position as the 'go to' investor in the IoT sector and other deep technology sectors that include AI, Machine Learning (ML) and Natural Language Processing (NLP);

(f) provide clear corporate synergistic benefits and cost savings, most notably Pires' public company costs, benefiting from the efficiencies created by the Enlarged Group;

(g) provide Pires and its portfolio companies with a greater ability to expand outside of the UK, particularly given Tern's North American presence, connections and history; and

(h) facilitate increased access to capital from a variety of sources as part of a larger group, in addition to the proceeds from potential exits of investments held by each business.

The Board believes that the terms of the Acquisition fairly reflect both Tern's and Pires' respective standalone businesses and their prospects as well as an appropriate sharing of the anticipated synergies resulting from the Acquisition.

In addition, the Board believes that the issue of the New Tern Shares will be value enhancing for Shareholders as there is considerable unlocked potential within the Pires investment portfolio (including unrealised value in the SVV1 investment portfolio which is entering its mature stage having substantially completed its investment stage) and that by using its hands-on approach and wide network of connections the Tern management team will quickly have an impact to realise such potential.

   4.       Information on Tern 

Tern is a public limited company incorporated in England and Wales whose shares are admitted to trading on AIM.

Tern is focused on value creation from IoT technology businesses and its network of companies comprises Device Authority Limited, Wyld Networks AB, InVMA Limited (trading as Konektio), FVRVS Limited (trading as FundamentalVR) and Talking Medicines Limited.

In March 2022, Tern announced that it had agreed to participate in a new venture capital fund, the New SVV Fund alongside the British Business Bank and other investors.

   4.1     Tern's investment strategy 

Tern's investment strategy is to invest in high-potential, private, UK software companies that solve significant real-world problems using new methods in large global markets.

Specifically, Tern targets investments in companies that have developed disruptive innovations to healthcare and industrial markets, employing the following technologies: AI, Machine Learning, Next Generation IoT Networking, Security (e.g., Information Security (InfoSec)) and Immersive Technologies such as AR and VR for the IoT.

Tern seeks to participate at the late seed stage or 'A' round, where there is often an equity gap, typically leading the investment round, bringing in other syndicate partners in later rounds, to capitalise the investee company initially and provide funding for future growth. When Tern invests in a company, it seeks to secure a position of influence, typically a board seat as chairperson. Subsequently, Tern provides substantial "hands on" support and value add through the Tern team's operating expertise and network, to accelerate the company's growth from the initial investment to a position when it can hold a series 'B' investment round. At the appropriate time, Tern will work to help the company secure a new lead series 'B' investor, using the Tern team's extensive network and working with the investee company's syndicate of third-party investors.

Ultimately Tern will seek to exit its investments at the appropriate time in order to crystalise value for Shareholders.

   4.2     Details of the Tern Network of Companies 

Tern's network of companies predominantly comprises:

   (a)        Device Authority Limited ('Device Authority') 

Tern has a 53.8 per cent. holding in Device Authority. Device Authority is a global leader in Identity and Access Management (IAM) for the IoT; focused on securing and automating zero trust for IoT industries in the automotive, medical device (IoMT), industrial (IIoT) sectors and evolving government and defence sectors.

Device Authority's KeyScaler(TM) platform provides zero-touch provisioning and complete automated lifecycle management for securing IoT devices and data at scale, with frictionless deployment across device provisioning, authentication, credential management, policy based end-to-end data security/encryption and secure OTA (Over the Air) and HSM (Hardware Security Module) updates.

KeyScaler(TM) is system agnostic and protects Device Authority's customers' global IoT deployments at the edge, in the cloud and integrating into complex policy-driven requirements, independent of the customers' proprietary hardware and software environments. KeyScaler(TM) is deployed both direct, and through key cloud platform and system integrator partners such as Microsoft, Wipro, Venafi and EnTrust.

In December 2021, as part of a US$2.9 million funding package, Device Authority received a US$1.25 million strategic investment from Venafi Inc ("Venafi"). Venafi is a privately held cybersecurity company that develops software to secure and protect cryptographic keys and digital certificates. In December 2020, Thoma Bravo, a leading private equity investment firm focused on the software and technology-enabled services sectors, with over US$114 billion of assets under management as of 31 March 2022, acquired a majority stake in Venafi in a deal valuing Venafi at US$1.15 billion.

The transaction with Venafi, fulfilled Tern's goal of obtaining an active strategic partner for Device Authority with solid cybersecurity credentials and a large presence in the United States. Following the Venafi investment Tern continues to hold a majority equity stake in Device Authority.

Device Authority has continued its reported positive business momentum following the strategic investment from Venafi, with the business being particularly focused on growing its monthly recurring revenues through its subscription base and its modularised licence platform, KeyScaler(TM). Particularly strong demand has come from the automotive sector, with the retail sector and the US Government, both as a customer and as a result of the effects of its policy, also being strong contributors to growth. The executive order from US President Biden in May 2021 that tasked the National Telecommunications and Information Administration (NTIA) and the Commerce Department with defining the minimum elements of a SBOM (software bill of materials), considered critical to improving transparency and security in the software supply chain and securing critical infrastructure, continue to provide sales opportunities and leads for Device Authority.

With the target of growing monthly recurring revenues, Device Authority started selling KeyScaler(TM) as a SaaS (KSaaS) product in late 2021, with initial customers on this model coming from the automotive, healthcare and retail sectors, enabling these customers to more rapidly onboard and scale in a secure, hosted cloud environment.

Other enhancements to Device Authority's product range include the launch of KeyScaler(TM) Edge in October 2021, which Device Authority believes is the first device identity centric IAM designed to address the complex end-to-end challenges of IoT security lifecycle management at the network edge. It is a lightweight version of KeyScaler(TM) that has been created specifically for network edge nodes, with the ability to register, authenticate, and provision security certificates and tokens to devices in the local network, independent of an available internet connection. This allows organisations the ability to automate edge deployments to drive efficiency at IoT scale and meet their compliance and regulatory obligations for private local network deployments, with safety, confidentiality, data theft/privacy, brand reputation, revenue protection being important factors.

In addition to new customer wins, Device Authority also continues to enter into further distribution partnerships. Device Authority has partnerships with leading IoT ecosystem providers, including Avnet, AWS, DigiCert, Entrust, Ericsson, HID Global, Microsoft, PTC, Thales, Titan Automotive Solutions, Trusted Objects, Venafi and Wipro, amongst others.

ABI Research reported in February 2022 that they consider Device Authority as the current industry leader in their IoT device identity lifecycle management competitive assessment.

Device Authority's website can be found at: https://www.deviceauthority.com

   (b)        Wyld Networks AB ('Wyld Networks') 

Tern has a 49.2 per cent. holding in Wyld Networks. Wyld Networks' shares are quoted on the NASDAQ First North Growth Market in Stockholm following an initial public offering in July 2021; the first for one of Tern's portfolio companies.

Wyld Networks is a virtual satellite network operator that develops and delivers innovative wireless technology solutions that enable affordable connectivity for IoT devices and sensors, potentially anywhere in the world - especially for the 85 per cent. of the world's surface where there are no traditional cellular networks. Wyld Networks' technology also enables mesh networks that utilise location aware technology and wirelessly mesh devices in areas where 4G or wifi are congested or not available.

Wyld's sensor-to-satellite module suite with LoRaWAN(R) allows IoT sensors to communicate directly from sensor to Low Earth Orbit satellites or in conjunction with terrestrial LoRa networks. Wyld's modems, devices, and embedded technology are designed to enable communication with the cloud, no matter the location, providing global IoT coverage.

Wyld Networks is a member of the LoRa Alliance(R), the global association of companies backing the open LoRaWAN(R) standard for the IoT. In December 2021, LoRaWAN(R) was officially approved as a standard by the International Telecommunication Union, the United Nations specialised agency for information and communication technologies. The LoRa Alliance(R) also provides a platform for Wyld to showcase its technology to over 500 member companies. The LoRaWAN(R) standard specification, developed and maintained by the LoRa Alliance(R), is a Low Power, Wide Area networking protocol designed to wirelessly connect battery operated 'things' to the internet in regional, national or global networks, and targets key IoT requirements such as bi-directional communication, end-to-end security, mobility and localisation services.

Wyld Networks, together with Eutelsat Communications, Senet Inc and TrakAssure, is also a founder member of the Multimodal IoT Infrastructure Consortium(TM) ("MMIIC"). The consortium was set up to bring integrated and interoperable terrestrial and satellite LoRaWAN(R) IoT connectivity to customers across the globe, as announced by Wyld Networks and Tern on 11 January 2022. The MMIIC consortium is focused on integrating the parties' platforms, and innovative sensor and hardware designs, coupled with providing collaborative service delivery and compelling pricing, to target the global supply chain, with container logistics and related asset tracking, as the first and anchor applications. Eutelsat will provide LoRaWAN(R) coverage via low earth orbiting satellites, while Senet, which owns and operates the largest publicly available LoRaWAN(R) network in the United States, is providing terrestrial LoRaWAN(R) network connectivity.

Wyld Networks continues its focus on the development of Wyld Connect (a satellite IoT terminal and module) and Wyld Fusion (a provisioning and payment platform). In particular, Wyld has completed the hardware development of Wyld Connect, the world's first Long Range-Frequency Hopping Spread Spectrum (LR-FHSS) sensor-to-satellite modem, to enable satellites to connect to devices/sectors across remote areas around the globe. Wyld is also continuing with the development of Wyld Fusion in preparation for the commercial launch of Wyld's end-to-end satellite IoT solution, planned for later in 2022.

Wyld Networks has signed agreements with customers in a number of market areas, including energy and agriculture with customers such as Chevron, Bayer, AgriSound, Treevia, as well as with system integrators such as Fujitsu and Wezen. These include revenue generating contracts, for example, the 23 March 2022 announced purchase order for its Wyld Connect IoT module from a Brazilian company for deployment in the forestry sector. This purchase order had a total value of SEK 11.3 million (approximately GBP900,000) over a three-year period, starting in 2022. On 10 March 2022 Wyld Networks announced purchase orders for its Wyld Connect IoT modules with a total value of US$1.7 million over a four-year period, starting in April 2022. The Wyld Connect solution being supplied in this instance will allow the customer, a South African company, to deploy IoT sensors in the agricultural sector to collect data directly from satellites.

Wyld Networks' website can be found at: https://wyldnetworks.com

   (c)        FVRVS Limited (trading as 'FundamentalVR') 

Tern has a 20.0 per cent. holding in FundamentalVR. FundamentalVR is a leading virtual reality training and data analysis technology platform with its initial applications being in surgical training.

FundamentalVR is led by surgical training experts and leading technologists with a mission to revolutionise surgical training by bringing simulation into the hands of medical professionals around the world, using low cost and easily accessible technology.

FundamentalVR's software platform takes advantage of readily available virtual reality software and devices, such as the Facebook owned Oculus Quest, and combines it with cutting edge haptics (being technology based on the sense of touch) to create a simulation system that can be used on any modern computer set up. Using computer learning, the software platform works together with haptic hardware devices to simulate the physical sensation of operating on human tissue. It also has the capability to provide artificial intelligence (AI) driven real-time feedback, procedure correction data and best practice insight. The result is a simulation system that provides surgeons with a more hands-on experience and aims to better prepare them for real life situations, resulting in better patient outcomes.

As previously announced by Tern, the adoption of FundamentalVR's haptics virtual reality simulation solutions, as a credible alternative to in-person and on human learning, has accelerated as a result of the challenges of social distancing and the reduction in elective surgeries due to the Covid-19 pandemic. The business is maintaining its focus on the strategic areas of the market where they see high growth potential, in particular ophthalmology, interventional, robotics and regenerative, and where their platform is most differentiated. The sales and marketing efforts are making steady progress within all these areas.

Tern has announced a number of new contract wins for FundamentalVR over the past year, including: a GBP0.6 million, four year contract in the area of interventional medicine, a strategically important area for FundamentalVR, to create a simulation platform in an area that can directly benefit from the fidelity and realism of the FundamentalVR platform; a GBP1 million four year contract with a new client within the fast-moving Robotics Assisted Surgical Systems (RASS) sector; and a GBP0.3 million contract with a major US medical institution with a globally renowned virtual hospital and hands-on clinical training facility to create a virtual education facility.

On 31 May 2022 it was announced that FundamentalVR had raised a total of GBP7 million in a Series B fund raising from existing investors and a new institutional investor, with an additional GBP1.2 million of convertible loan notes being converted, including the approximately GBP570,000 in loan notes held by Tern. The FundamentalVR Series B is intended to provide FundamentalVR with funding to enable to grow in line with its strategy, including expanding its US activities.

The quality of FundamentalVR's technology was recognised at a number of awards in 2021 and more recently. At the UK National Technology Awards 2021 FundamentalVR won both 'Virtual or Augmented Reality Product of the Year' and 'Healthcare Tech of the Year'. The business was also the recipient of the 'Frost & Sullivan Entrepreneurial Company of the Year' award in 2021. In May 2020, FundamentalVR's Fundamental Surgery platform won 'Best Mixed Reality Solution' at the XR Awards.

Validation work with partners is additionally being published, with New York University Langone issuing a validation study in September 2021 highlighting the improved skills transfer of FundamentalVR's HapticVR service over normal VR. This was backed up by a smaller study by the NHS.

FundamentalVR's website can be found at: https://www.fundamentalvr.com

   (d)        InVMA Limited (trading as Konektio) ('Konektio') 

Tern has a 36.8 per cent. holding in Konektio. Konektio helps industrial and manufacturing companies prosper by converging their physical assets with new transformational digital insights.

Konektio provides an Industrial IoT 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. Their primary product, AssetMinder(R), is machine agnostic and allows manufacturers to diagnose issues and proactively prescribe services plans, ultimately reducing downtime and improving operational efficiency.

Konektio's AssetMinder(R) is a modular, industry 4.0, IoT SaaS platform, using a wide range of analytical tools and AI and machine learning algorithms to connect up whole factory floors and processes, as well as managing resources into and out of the factory. AssetMinder(R) assesses the effectiveness and efficiencies of entire operations, putting customers in control of their assets and therefore directly impacting productivity, efficiency and business outcomes.

AssetMinder(R) captures usage and performance data from smart sensors, providing advanced insights to unlock data-driven intelligence that optimises processes, condition monitoring, machine uptime and profitability across a range of industries including manufacturing, transportation, utilities, smart infrastructure, and food processing. AssetMinder's technology is already deployed across thousands of assets, providing valuable insights and recommendations to people maintaining and managing critical devices and infrastructure.

The business rebranded from InVMA to Konektio in December 2021. The name change reflected its ambition to be a company that creates true connected Industrial IoT communication and collaboration solutions for a wide range of businesses, taking advantage of the industrial sector's desire for digital transformation. This is being achieved by rolling out AssetMinder(R) with customisable features to allow customers to choose what is right for them.

Konektio enjoyed a significant increase in sales of AssetMinder(R) in 2021. This business growth led to the recent recruitment of additional staff in the UK and the USA, accelerated product development, an increased channel and partner sales network, a material investment in new branding and the strategic decision to open its first overseas office in North Carolina, in the USA.

Konektio completed a GBP2,125,000 equity fund raise in December 2021, including GBP1,925,000 from institutional investors Mercia and Foresight and the founders, and GBP200,000 from Tern, to fund their future development.

Konektio is continuing to build momentum, with AssetMinder being in demand from customers who are looking for contactless monitoring of factory and remote assets. In particular, Konektio has benefited from Covid-19 accelerating the need and demand for contactless monitoring of factory and remote assets. Konektio has a strong sales pipeline, including opportunities in Europe and North America, and is continuing to build its recurring revenue base.

Konektio appointed Dr Ron Black as its Non-Executive Chairman in January 2022. Dr Black, who has recently taken on the role of Chief Executive Officer at Codasip, a leading supplier of processing solutions for integrated circuit designers, brings with him a wealth of technology, innovation, and global business scale-up experience, through his previous roles which have included Chief Executive Officer of Imagination Technologies and Chief Executive Officer of Rambus.

Konektio's website can be found at: https://konektio.com

   (e)        Talking Medicines Limited ('Talking Medicines') 

Tern has a 23.8 per cent. holding in Talking Medicines, the most recent company to join the Tern portfolio in November 2020.

Talking Medicines, based in Glasgow and London, and with a recently opened US office, is a social intelligence company designed specifically for the pharmaceutical industry. Through a combination of artificial intelligence and industry expertise, Talking Medicines has developed a next generation data platform, PatientMetRx(R), to deliver social listening for pharmaceutical companies. Its PatientMetRx(R) platform is driven by artificial intelligence models that use machine learning and natural language processing to scale real world data collection to a scale that is transformational versus traditional research. By structuring and translating the patient's voice into a Patient Confidence Score (PCS), Talking Medicines helps pharmaceutical companies understand patient confidence in their medicines, allowing marketing to be targeted and ultimately with the goal of delivering better patient outcomes.

Talking Medicines welcomed Boston based life science investor Mark Bamforth in January 2022, when his family office joined existing investors to invest in the GBP1.59 million funding round. This provided Talking Medicines with the funds to support its expansion, particularly in the United States. This has already enabled them to gain further US recognition for their PatientMetRx platform, launched in February 2021, and continue to build their subscription base.

The company is focusing on expanding its PatientMetRx(R) subscription base amongst pharma brand teams and pharma marketing agencies. Talking Medicines has established an office in New Jersey, USA, to support these plans.

The business has been awarded a number of accolades, being included in the First 100 UK Digital Health Companies by the UK Government's Department of Trade and Industry.

Talking Medicines website can be found at: https://talkingmedicines.com

   (f)         The New SVV Fund 

In March 2022, Tern announced that it had agreed to participate in the New SVV Fund alongside the British Business Bank and other investors. The New SVV Fund will invest in a range of private UK software companies with a focus on companies in the immersive technology and metaverse sectors, including augmented and virtual reality, artificial intelligence, the IoT and security.

Tern believes its participation in the New SVV Fund is an excellent way to broaden Tern's exposure to exciting early-stage private UK technology companies with a modest capital commitment, whilst delivering a number of other potentially significant benefits in addition to the attractive financial returns it envisages from its participation. Tern believes its participation in the New SVV Fund will provide important technology insights, assist with business development and increase its network, thereby significantly enhancing the Tern ecosystem.

Tern has committed to invest up to GBP5.0 million in total over the 10 year life of the New SVV Fund, which would result in an interest in the New SVV Fund of approximately 5.9 per cent. The Tern Directors believe they will be able to fund investments into the New SVV Fund from Tern's ongoing available resources.

   5.       Information on Pires 

Pires is an investment company quoted on AIM focused on investment in next generation technologies. It invests both directly and through certain investment funds.

Pires' current investment portfolio can be analysed as follows:

   (a)        Sure Valley Ventures Fund 1 

Pires originally invested in SVV1 in November 2019. The fund is a venture capital fund focused on investing in the software technology sector, specifically focused on the high growth AI, AR/VR and IoT sectors. This will enable investors to gain access to potentially high growth companies through a publicly listed company.

In February 2021, Pires increased its exposure to SVV1 through the purchase of 1.5 million shares in SV, a listed specialist fund, from existing SV shareholders using new Pires Shares as consideration. As a result of this transaction, Pires achieved an aggregate (direct and indirect) interest in SVV1 of around 20 per cent., which comprises its original direct 13 per cent. interest in SVV1 and an indirect interest through its 28 per cent. shareholding in SV plc.

As at the date of this document, SVV1 had a portfolio of 14 investee companies at different stages of development spanning a range of sectors. The portfolio provides Pires with exposure to a number of key, cutting-edge and rapidly growing technology sectors. Further details of the portfolio companies and recent developments are set out below:

 
  Artificial intelligence 
 Ambisense                 Provides an AI platform to deliver environmental 
  (Ambisense Limited)       risk assessment to allow real-time gas 
                            and environmental monitoring using both 
                            IoT and sensor solutions. The company 
                            has already been awarded a number of 
                            major contracts and has a substantial 
                            pipeline of opportunities. 
                          -------------------------------------------------- 
 Buymie                    An artificial intelligence-based same 
  (Buymie Technologies)     day grocery delivery company operating 
                            in both the UK and Ireland working with 
                            companies such as Tesco, Lidl, Asda 
                            and the Co-op. Also recently announced 
                            a partnership with Asda in Leeds and 
                            Bristol. 
                          -------------------------------------------------- 
 Security 
 Nova Leah                 An artificial intelligence cyber-security 
  (Nova Leah Limited)       assessment and protection platform for 
                            connected medical devices. 
                          -------------------------------------------------- 
 Getvisibility             An artificial intelligence security 
  (Visibility Blockchain    company addressing the substantial problem 
  Limited)                  faced by corporations in storing, sorting, 
                            accessing and protecting data. Recently 
                            raised additional funds at a significant 
                            premium and has been voted as one of 
                            Ireland's top 18 start-ups. 
                          -------------------------------------------------- 
 PreCog                    A security solution platform company 
  (Polence Limited)         that provides data intelligence to combat 
                            crime, terrorism and protect vulnerable 
                            people. The company completed a GBP1 
                            million fundraising round in March 2021. 
                            Customers include leading law enforcement 
                            and security agencies, and transport 
                            infrastructure groups. 
                          -------------------------------------------------- 
 Smarttech247              A global artificial intelligence based 
                            cyber security cloud business that protects 
                            enterprises as they migrate to cloud-based 
                            IT operations. The company has recently 
                            won a major new contract with a Fortune 
                            Global 1000 company employing over 100,000 
                            staff and already has a purchase order 
                            under this contract for EUR6 million. 
                            It is also currently pursuing a listing 
                            by way of a reverse takeover process. 
  (Zefone Limited) 
                          -------------------------------------------------- 
 Immersive Technologies 
 Engage XR                 A developer of virtual reality and immersive 
  (Engage XR Holdings       experiences with a specific focus on 
  plc)                      education and enterprise learning and 
                            development. The company is quoted on 
                            AIM, has over 100 commercial customers 
                            and is rapidly growing revenue and margins. 
                            It recently raised EUR9 million in new 
                            funds. 
                          -------------------------------------------------- 
 Admix                     A platform enabling the monetisation 
  (WAM Group Limited)       of interactive programmatic brand placements 
                            in, for example, video games and other 
                            AR/VR applications. The company is rapidly 
                            growing revenues and numbers of active 
                            users. 
                          -------------------------------------------------- 
 Warducks                  A game development studio known for 
  (Warducks Limited)        the production of leading games and 
                            is soon to launch an AR game that could 
                            be the next Pokémon Go. 
                          -------------------------------------------------- 
 VividQ                    A deep tech software company which has 
  (VividQ Limited)          developed a framework for real - time 
                            3D holographic displays for use in heads 
                            - up displays and AR headsets and glasses. 
                            The company recently completed an GBP11 
                            million funding round at a significant 
                            premium. 
                          -------------------------------------------------- 
 Volograms                 A deep learning company that uses AI 
  (Volograms Limited)       to create 3D AR from 2D photos and videos. 
                            The company has launched a consumer 
                            AR Camera app called Volu and has pro 
                            - user and enterprise versions in development. 
                          -------------------------------------------------- 
 Virtex                    A company building a platform for the 
  (Virtex Limited)          next-generation of live, immersive entertainment 
                            within the VR gaming and e-sports industries. 
                            It is actively developing its new Stadium 
                            app. 
                          -------------------------------------------------- 
 Internet of things 
 CameraMatics              A platform enabling transport fleet 
  (MySafe Drive             managers to reduce risk, increase driver 
  Limited)                  safety and comply with growing industry 
                            governance and compliance. It recently 
                            raised EUR4 million at a 300 per cent. 
                            uplift in valuation. The company is 
                            growing revenues considerably and building 
                            its presence in the very significant 
                            US market where it has already won a 
                            number of new contracts. 
                          -------------------------------------------------- 
 Wia                       Provides a platform solution for smart 
  (WIA Technologies         buildings. Its platform provides full 
  Limited)                  device and application management, security, 
                            data capture and storage, analysis and 
                            control. 
                          -------------------------------------------------- 
 
 

The investment in SVV1 has already proven successful for Pires with a realisation and a cash distribution being achieved soon after the investment. This was as a result of the sale of one of the portfolio companies, Artomatix, in 2019 at a valuation of nearly 500 per cent. of the price of SVV1's original investment in the company. Following the progress made by Engage XR, which is quoted on AIM, in 2020, SVV1 also realised the value of its original investment through the partial disposal of its holding. This was the second cash realisation to be made from Pires' investment in SVV.

The success of the direct SVV1 investment provided the rationale to increase Pires' exposure to this portfolio by acquiring a shareholding in SV in February 2021, particularly when it was possible to do so on attractive terms.

SVV1 has now substantially completed its deployment phase and is moving more towards a realisation phase which should lead to further returns to Pires and its shareholders.

   (b)        New SVV Fund 

In March 2022, Pires agreed to participate in the New SVV Fund, alongside the British Business Bank, SV, Tern and other investors. Pires has initially invested approximately GBP90,000 in the New SVV Fund and expects to invest up to GBP5 million in total over the life of the New SVV Fund, which would provide it with an interest of around 5.9 per cent. in the New SVV Fund. The New SVV Fund will invest in a range of private UK software companies with a focus on companies in the immersive technology and metaverse sectors, including AR and VR, AI, the IoT and security and will be managed by the same SVV1 team.

The New SVV Fund will be managed by the same SVV team which, to date, has been highly successful in achieving a number of cash realisations from, and upward revaluations of, companies in the SVV1 portfolio. The profit share arrangements within the New SVV Fund are designed to encourage the involvement of the Private Investors alongside the BBB, meaning that Pires and the other Private Investors would expect to receive a significantly enhanced share of the total return generated by the fund compared to industry standards.

In March 2022, the New SVV Fund invested in RETiniZE Limited. RETìníZE is one of Europe's fastest-growing creative-tech companies. It was founded in 2019 by father and son team, Phil Morrow (Chief Executive Officer), and Jack Morrow (Chief Technology Officer). Their roots and reputations were formed in high-end global film and television. The company originally spun out of Wild Rover Productions, formerly one of Ireland's leading independent TV producers. Until now, RETìníZE has been best known for its award-winning VR, AR and immersive multi-screen experiences. However, since 2019 the company has been in stealth mode, developing Animotive, its immersive animation production tool that is harnessing the latest VR technologies to transform the 3D animation production process. RETìníZE clients include BBC, National Geographic, World Health Organisation, Save the Children, BMW, Tourism NI and Seagate.

   (c)        Sure Ventures plc 

SV is a fund listed on the main market of the London Stock Exchange (ticker SURE) whose principal investments are a 25.9 per cent. stake in SVV1 (details of which are above), a holding in VividQ, a Cambridge-based deep-tech company with world-leading expertise in 3D holography and holdings two listed companies, Immotion plc and Engage XR.

Pires acquired 1.5 million shares in SV, at a price of 130 pence per share, in February 2021. The shares held by Pires constituted a holding of 28 per cent. of the issued share capital of SV at the date of purchase. The investment into SV also increased Pires' total holding in SVV1 at the time of acquisition as SV held a 25.9 per cent. interest in SVV1. Combined with Pires' direct holding of 13 per cent. in SVV1, the purchase of the interest in SV enabled Pires to increase its overall effective interest in SVV1 to approximately 20 per cent.

   (d)        Visibility Blockchain Limited ('Getvisibility') 

Getvisibility is an AI security company addressing the substantial problem faced by corporations in storing, sorting, accessing and protecting data. The company is a leader in data visibility and control, using state-of-the-art AI to classify and secure unstructured information. Getvisibility also provides risk and compliance assessments as well as enforcing protection on sensitive data.

Getvisibility has developed proprietary software that uses artificial intelligence to discover, classify and protect unstructured data typically contained in PDFs, spreadsheets, emails and text documents. In doing so Getvisibility helps organisations better visualise their data footprint to ensure more proactive management and security. Getvisibility utilises the latest in deep learning AI enterprise architecture to provide fast and accurate visibility of all the data within a client's environment.

The company operates across the US, Europe, the Middle East and North Africa with a presence in several industry sectors including banking, healthcare and the public sector. Getvisibility's clients include a number of international blue-chip companies including leading insurance, healthcare, data provision and finance firms as well as a leading global producer of energy and chemicals, a major airport group, one of the largest financial institutions in the Middle East as well as US government entities in the pharmaceutical and manufacturing sectors.

Pires made its original investment of EUR250,000 into Getvisibility in March 2020, with a follow-on investment of EUR62,000 in June 2021, as part of a EUR1.1 million funding round led by a new lead investor Herb Hribar, who has also become Chairman of the company. A further investment was made in March 2022 when Getvisibility raised a further EUR10 million from new investors including Alpha Intelligence Capital, a global venture capital firm which invests in deep artificial intelligence/machine learning technology - based companies and Fortino Capital Partners, a leading B2B software venture capital and growth equity firm.

Pires has a further interest in Getvisibility through the investments made in the company by SVV1 and SV.

   (e)        Polience Limited ('PreCog') 

PreCog is a security solution platform company that provides data intelligence to combat crime, terrorism and protect vulnerable people. With governments, organisations and the owners of assets being increasingly focused on identifying parties and individuals who may represent a security threat, security services and organisations are investing in real time solutions that can help provide them with additional intelligence to use their resources more efficiently and effectively, so they can act in a more proactive and preventative way.

PreCog provides a comprehensive security solution that, through their software platform and IoT hardware infrastructure, can monitor people flow and detect the movement of persons of interest thereby ensuring that locations are protected from those who wish to cause damage. PreCog is able to collect and analyse data to provide unique, scalable and actionable intelligence that helps its clients to combat organised crime, human trafficking and terrorism.

PreCog was incorporated in January 2020 and has participated in and been supported by the Microsoft for Startups programme and, through this programme, has established a partnership with Arrow ECS, a world-leading distributor and contract manufacturer. As part of this relationship, Arrow is manufacturing the hardware components for the PreCog system.

Pires made an investment of GBP250,000 into PreCog in March 2021 as part of a GBP1 million fundraising round.

   (f)         Low 6 Limited ('Low6') 

Low6 is a leader in sports gaming technology that powers franchises with their own branded gaming experiences to engage and monetise their digital fan bases. The company provides a white-labelled mobile platform to sports teams and franchises that enable them to offer a pooled sports betting experience to users of their fan- based apps. The company's directors believe there is a significant market opportunity for sports betting products that are designed to enhance the excitement of watching sports whilst, at the same time, being engaging and simple to use.

Under its B2B business model, Low6 will enter into a partnership with a sports team or franchise which enables the Low6 product to gain access to the partner's established fan base thereby reducing customer acquisition costs and strengthening brand and customer loyalty, which ultimately enhances customer retention. At the same, Low6's business model enables the underlying partner to share in the revenue generated from the Low6 platform, an aspect which should be particularly attractive to fans of the sports team or franchise concerned. Low6 can either embed its platform within a partner's app or build the app for its partners. The company believes that this partnership model is also highly scalable and Low6 expects to generate revenue from retaining a percentage of the stakes placed by the users of the platform.

Low6 already has several contracts with sports teams and franchises, including football clubs in the UK Championship and Scottish Premiership leagues. In addition, it also has partnerships with Sky Business and Yinzcam Inc.

Low6 has a three-year exclusive partnership with Yinzcam Inc, a US-based company which provides the apps for a number of the fan bases of leading sports teams and franchises with over 90 million installs of its mobile apps worldwide. It is currently involved with more than 190 professional teams, leagues and venues in the US, Canada, Spain and Australia. This relationship provides Low6 with access to this extensive client base. Low6 has also been working with Sky Business to develop a digitalised pub quiz product called Pubwars.

Pires made an initial investment equity investment of GBP200,010 in Low6 in December 2020 as part of a GBP1.5 million funding round. Subsequently, in February 2021, Pires made a further investment of GBP35,000 into Low6 by way of a convertible loan note as part of an extended funding round which raised a total of A$6 million (approximately GBP3.3 million) in convertible notes. Low6 has raised over GBP8 million to date. In February 2022, the company announced that is planning to achieve a listing by way of a reverse takeover of a company listed on the TSX Venture Exchange.

   (g)        Pluto Digital plc ('Pluto') 

In December 2020, Pires completed its first investment in the digital assets sector through an investment of US$200,000 in De Tech Studio Limited ('De Tech') , which was developing a decentralised finance technology platform ('YOP') and YOP tokens. Certain YOP tokens were sold to realise a cash profit and the balance of the investment was used to subscribe for shares in Pluto. At the time of the initial investment, Pires held a 15 per cent. equity interest in De Tech.

Pluto is a crypto venture capital and technology company that connects Web 3.0 decentralised technologies to the global economy. Pluto invests in, incubates and advises digital asset projects based on decentralised technologies (DeTech), decentralised finance (DeFi) and networks such as Ethereum and Polkadot. The company has a focus to bring DeFi and Metaverse (blockchain gaming and NFTs) to the global economy. Additionally, Pluto supports the operation of proof-of-stake networks by staking and operating validator nodes.

In 2021, Pluto invested in Maze Theory Limited ('Maze Theory'), a London-based digital entertainment studio, with a view to developing high quality games that incorporate token economics. As part of this arrangement, Pluto and Maze Theory formed a new gaming blockchain and metaverse studio joint venture, called Emergent Games. Given the experience of the team at Maze Theory and the work that they have done, Pluto is planning to extend its relationship with Maze Theory as it believes that this is a sector that provides an exciting growth opportunity.

Also, during 2021 Pluto fully acquired the YOP platform and has been actively developing this platform to help enable users to operate in and navigate the DeFi space, which has been growing rapidly.

Pires currently holds 32,518,876 shares in Pluto and warrants over 24 million new ordinary shares, subject to certain vesting conditions. Six million of the warrants have already vested.

Final results for the year ended 31 December 2021

Pires released its final results for the year ended 31 December 2021 on 15 June 2022. For the period under review, Pires reported a profit before taxation of GBP1,491,000 (for the 14 -- month period ended 31 December 2020: loss of GBP687,000). The profit or loss for Pires includes unrealised gains/losses in their portfolio of quoted equity investments which are marked to market, plus any return from and adjustment to the carrying value of its unlisted investments in the technology sector.

   6.       Pires Warrants 

The Scheme will extend to any Pires Shares which are allotted, issued or transferred to satisfy the exercise of Pires Warrants prior to 30 June 2022 (being the date on which the Pires Warrants lapse in accordance with their terms), save where a holder of Pires Warrants gives notice of exercise of the Pires Warrants by 29 June 2022 conditional on the Scheme becoming Effective.

   7.       Intentions regarding management and locations 

Following the Acquisition, Tern intends for Pires' future business to continue to be that of an investment company. On the Effective Date, the Board intends that the existing business activities of Pires will be transferred to Tern.

By way of background, Pires currently has three employees who are its three directors. Tern currently has eight employees, of which six are its directors.

On the Effective Date, it is proposed that Nicholas Lee will join the Board as a non-executive director and that John May and David Palumbo, currently the other non-executive directors of Pires will resign from the Pires Board. Mr. Lee's appointment to the Board is subject to approval from Tern's Nominated Adviser after completion of the customary director due diligence process to satisfy itself as to Board composition and independence and the suitability of a potential director for the purposes of the AIM Rules for Nominated Advisers.

Tern has no intention to redeploy any material xed assets of Pires. Tern intends to move Pires' location of business and headquarters to those of Tern as soon as practicable following completion of the Acquisition. Owing to the nature of the business, Pires has no research and development function. Tern has no plans to change this. Additionally, Pires has no existing pension schemes for its employees. Tern has no plans to change this.

Notwithstanding the above, no proposals have been made on the terms of any incentive arrangement for Nicholas Lee and there have been no discussions in respect of the terms of these arrangements.

Following the Acquisition, Tern's business will continue to be that of an investment company with an investment strategy that is focused on technology businesses. Tern does not intend for the Acquisition to result in changes to the continued employment of its current employees and all of the current members of Tern's Board and management will remain in their positions following completion of the Acquisition, with the only change to the Board being the addition of Nicholas Lee as a non-executive director. Tern does not intend for the Acquisition to bring about any material changes in the conditions of employment or the balance of skills or functions in relation to Tern's current employees and management. Additionally, Tern does not intend for the Acquisition to bring about any material changes to Tern's places of business, the location of its headquarters or its headquarters functions.

   8.       Scheme structure 

The Acquisition is being implemented by way of a Court-sanctioned scheme of arrangement between Pires and the Scheme Shareholders under Part 26 of the Act, although Tern reserves the right to elect to implement the Acquisition by way of an Offer (subject to the consent of the Panel and Pires). The procedure involves an application by Pires to the Court to sanction the Scheme, which will involve the Scheme Shares being transferred to Tern, in consideration for which Scheme Shareholders will receive 0.51613 New Tern Shares for every Pires Share held (on the basis described in paragraph 2 above).

To become Effective, the Scheme requires, among other things, the approval of a majority in number of the Scheme Shareholders present and voting (and entitled to vote), either virtually or by proxy at the Court Meeting, representing 75 per cent. or more in value of the Scheme Shares held by such Scheme Shareholders present and voting at the Court Meeting (or any adjournment of the Court Meeting) and the passing of the Pires Special Resolution necessary to implement the Scheme at the Pires General Meeting (or any adjournment of the Pires General Meeting). The Scheme is also conditional on the approval by Tern Shareholders of the Resolution at the General Meeting to approve the issue of New Tern Shares as the consideration for the Acquisition.

Following the Court Meeting and the Pires General Meeting and the satisfaction (or, where applicable, waiver) of the other Conditions, the Scheme must also be sanctioned by the Court. The Scheme will only become Effective upon a copy of the Court Order being delivered to the Registrar of Companies for registration.

Prior to the Scheme becoming effective, application will be made to the London Stock Exchange for the admission to trading on AIM of the Pires Shares to be cancelled.

If the Scheme becomes Effective, it will be binding on all Scheme Shareholders, irrespective of whether or not they voted in favour of, or against, the Scheme at the Court Meeting or in favour of, or against, or abstained from voting on the Pires Special Resolution at the Pires General Meeting. On the Scheme becoming Effective, Pires will become a wholly owned subsidiary of Tern on the Effective Date and Pires Shareholders will receive the New Tern Shares referred to above. Application will be made to the London Stock Exchange for the New Tern Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that trading in the New Tern Shares will commence on AIM on the Business Day following the Effective Date. Tern would then re-register Pires as a private company under the relevant provisions of the Act as soon as practicable after cancellation of trading of the Pires Shares on AIM.

Further details of the Scheme, including an indicative timetable for its implementation together with notices of the Pires Court Meeting and Pires General Meeting, are contained in the Scheme Document which is available at www.piresinvestments.com and www.ternplc.com and in hard copy at the registered offices of Pires Investments plc and Tern plc until the time of the General Meeting.

   9.       Conditions of the Scheme 

The Acquisition will be subject to the satisfaction (or, where applicable, waiver) of the Conditions and to the further terms set out in Part Three (Conditions to the implementation of the Scheme and to the Acquisition) of the Scheme Document, including, among other things:

-- the Scheme being approved by a majority in number of the Scheme Shareholders representing not less than 75 per cent. in value of the Scheme Shares held by such Scheme Shareholders present and voting, either in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court or at any adjournment of any such meeting;

-- the sanction of the Scheme by the Court with or without modification (but subject to any such modification being acceptable to Tern and Pires) and the delivery of a copy of the Court Order to the Registrar of Companies for registration;

-- the Scheme becoming effective by no later than 30 September 2022 or such later date as Pires and Tern may agree with (where applicable) the consent of the Panel and the approval of the Court (if required), failing which the Scheme will lapse;

-- approval by the Shareholders of the Resolution at the General Meeting, to authorise the allotment of New Tern Shares to Scheme Shareholders and otherwise pursuant to the Acquisition; and

-- confirmation by the London Stock Exchange of Admission on or before the Long Stop Date.

   10.     Irrevocable undertaking and lock-in agreement in relation to the Scheme 

Prior to the release of the Announcement, Tern received an irrevocable undertaking to vote, or procure to vote, in favour of the Scheme at the Court Meeting and the resolutions at the Pires General Meeting (or, if the Acquisition is implemented by way of an Offer to accept, or procure the acceptance, of the Offer) from RGO, in respect of an aggregate of 30,914,193 Pires Shares, representing approximately 19.15 per cent. of the issued ordinary share capital of Pires as at the last Business Day prior to the release of the Announcement.

On 16 June 2022, Pires announced that it had received notifications for the exercise of Pires Warrants over 4,939,200 Pires Shares, which included notification of the exercise of Pires Warrants over 4,814,200 Pires Shares held by RGO. Application was made to the London Stock Exchange to admit the Pires Shares resulting from the warrant exercises to trading on AIM, which occurred on 21 June 2022. Accordingly, the irrevocable undertaking from RGO is now in respect of 35,728,393 Pires Shares representing 21.48 per cent. of Pires's issued share capital as at the date of this document.

This undertaking will remain binding in the event of a competing offer being made unless the value of such competing offer is an improvement of more than 10 per cent. of the value of the consideration under the Acquisition and is not matched or bettered by Tern (where such competing offer has been announced as a firm intention to make an offer in accordance with Rule 2.7 of the Code) or if the Scheme Document is not published within 28 days of the Announcement or the Scheme lapses or is otherwise withdrawn.

The irrevocable undertaking ceases to be binding if:

(a) Tern announces that it does not intend to proceed with the Acquisition and no new, revised or replacement scheme or offer is announced in accordance with Rule 2.7 of the Code at the same time;

   (b)      the Acquisition lapses or is withdrawn; or 
   (c)       the Acquisition has not become wholly unconditional by the Long Stop Date. 

In addition, this irrevocable undertaking also contains a contractual lock-in arrangement with Tern and Allenby Capital in respect of up to 18,440,496 New Tern Shares which will be issued to RGO should the Acquisition be completed, representing, in aggregate, approximately 4.09 per cent. of the Estimated Enlarged Share Capital. Pursuant to this lock-in agreement, RGO has agreed that for the period of one month from Admission it will not, and will use all its reasonable endeavours to procure that its connected persons will not, directly or indirectly effect or agree to effect a disposal of any legal or beneficial interest in any New Tern Shares issued to it following completion of the Acquisition. Thereafter, for a further two months, RGO shall only dispose of any New Tern Shares it holds in an orderly manner as Allenby Capital shall reasonably determine.

Further details of this irrevocable undertaking are set out in paragraph 9 of Part Seven (Additional Information) of the Scheme Document. A copy of the undertaking is available on Tern's website at www.ternplc.com and on Pires' website at www.piresinvestments.com, and will remain on display until completion of the Acquisition.

   11.     Admission of the New Tern Shares 

The New Tern Shares will be issued in registered form and will be capable of being held in certificated and uncertificated form.

Following the completion of the Acquisition, the New Tern Shares will be issued as fully paid and will rank pari passu in all respects with the Tern Shares in issue at the time the New Tern Shares are issued, including in relation to the right to receive notice of, and to attend and vote at, general meetings of Tern, and the right to receive and retain any dividends and/or other distributions declared, made or paid, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, by Tern in respect of the Tern Shares with a record date falling after completion of the Acquisition and to participate in the assets of Tern upon a winding-up of Tern.

Irrespective of the date on which completion of the Acquisition falls, Pires Shareholders will not be entitled to receive any dividend declared, made or paid by Tern for the benefit of the Shareholders by reference to a record date falling on or before the date on which the Acquisition completes.

Application will be made to the London Stock Exchange for the New Tern Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings for normal settlement in respect of the New Tern Shares at 8.00 a.m. on the first Business Day following the Effective Date.

No application has been made or is currently intended to be made by Tern for the New Tern Shares to be admitted to listing or trading on any other exchange.

   12.     General Meeting 

Set out at the end of this document is a notice convening the General Meeting to be held on 21 July 2022 at the offices of Reed Smith LLP at The Broadgate Tower, 20 Primrose Street, London, EC2A 2RS at 11.00 a.m., at which the Resolution will be proposed. The Resolution, which will be proposed as an ordinary resolution, is to authorise the Directors to allot up to 98,865,712 New Tern Shares (GBP19,773.14 in nominal value) in connection with the Acquisition. This authority will expire on the date that all consideration due pursuant to the terms of the Acquisition has been satisfied.

   13.     Action to be taken 

A Form of Proxy for use at the General Meeting accompanies this document. The Form of Proxy should be completed and signed in accordance with the instructions thereon and returned to the Company's registrars, Share Registrars Limited, 3 The Millennium Centre, Crosby Way, Farnham, Surrey GU9 7XX as soon as possible, but in any event so as to be received by no later than 11.00 a.m. on 19 July 2022. Proxies can also be registered through the online portal by logging on to www.shareregistrars.uk.com, clicking on the "Proxy Vote" button and then following the on-screen instructions, no later than 11.00 a.m. on 19 July 2022, or if the meeting is adjourned, not later than 48 hours before the time fixed for the adjourned meeting. The completion and return of a Form of Proxy will not preclude Shareholders from attending the General Meeting and voting in person should they so wish.

   14.     Recommendation and irrevocable undertakings 

The Directors consider the Acquisition to be in the best interests of Shareholders as a whole and recommend unanimously that Shareholders vote in favour of the Resolution, as those Directors who are interested in Tern Shares have irrevocably undertaken to, or to direct (and to use all reasonable endeavours to procure that) their nominees, do in respect of their own beneficial holdings (and the beneficial holdings which are under their control) of 21,100,898 Tern Shares representing, in aggregate, approximately 5.99 per cent. of Tern's issued ordinary share capital as at the Last Practicable Date.

Yours faithfully

Ian Ritchie

Non-Executive Chairman

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
                                                                    2022 (4) 
 Despatch of this document                                           28 June 
 Despatch of the Scheme Document                                     28 June 
 Latest time and date for lodging of                   11.00 a.m. on 19 July 
  Forms of Proxy for the General Meeting                                 (1) 
 General Meeting Voting Record Time                    11.00 a.m. on 19 July 
 General Meeting                                       11.00 a.m. on 21 July 
 Pires Court Meeting                                   11.00 a.m. on 21 July 
 Pires General Meeting                                 11.10 a.m. on 21 July 
                                                                         (2) 
 Last day of dealings in, and time                      5.00 p.m. on 28 July 
  for registration of transfers of,                                      (3) 
  and disablement in CREST of, Pires 
  Shares 
 Scheme Record Time                                     6.00 p.m. on 28 July 
                                                                         (3) 
 Scheme Court Hearing to sanction the                            28 July (3) 
  Scheme 
 Expected Effective Date of the Scheme                           29 July (3) 
 Suspension of trading, and dealings,                   7.30 a.m. on 29 July 
  in Pires Shares                                                        (3) 
 Cancellation of admission to trading                  7.00 a.m. on 1 August 
  of Pires Shares on AIM                                                 (3) 
 New Tern Shares issued to Pires Shareholders       By 8.00 a.m. on 1 August 
                                                                         (3) 
 Admission and commencement of dealing                 8.00 a.m. on 1 August 
  on AIM in New Tern Shares                                              (3) 
 Crediting of New Tern Shares to CREST                   As soon as possible 
  accounts                                                after 8.00 a.m. on 
                                                                1 August (3) 
 Despatch of definitive certificates                     Within 14 days from 
  for the New Tern Shares                                 the Effective Date 
                                                                         (3) 
 Long Stop Date                                   11.59 p.m. on 30 September 
 

Notes

(1) Forms of Proxy for the General Meeting must be lodged not later than 48 hours (excluding weekends and public holidays) prior to the time appointed for the General Meeting.

(2) The Pires General Meeting will commence at 11.10 a.m. or, if later, immediately after the conclusion of the Pires Court Meeting.

(3) These dates are indicative only and will depend, among other things, on the date upon which the Court sanctions the Scheme and the dates on which the Scheme Court Order is delivered to the Registrar of Companies. If any of the times and/or dates above change, the revised times and/or dates will be notified by Tern to Shareholders through a Regulatory Information Service.

   (4)       References to the time of day are to London time. 

KEY STATISTICS

 
 Number of Existing Tern Shares in issue prior               352,014,701 
  to the Acquisition                                                 (1) 
 Expected number of New Tern Shares issued 
  pursuant to the Acquisition                             98,865,712 (2) 
 Expected number of Tern Shares in issue immediately         450,880,413 
  following Admission                                             (1)(2) 
 Expected number of New Tern Shares as a percentage      21.93 per cent. 
  of the Estimated Enlarged Share Capital                         (1)(2) 
 Expected market capitalisation of the Enlarged          GBP57.5 million 
  Group on Admission                                                 (3) 
 ISIN number                                                GB00BFPMV798 
 TIDM of the Enlarged Group                                         TERN 
 

Notes

   (1)       Being the number of Tern Shares in issue as at the Last Practicable Date. 

(2) Based on the number of Tern Shares and Pires Shares in issue as at the Last Practicable Date, and on the assumptions that: (i) all of the Pires Warrants are exercised and the Pires Shares issued to satisfy the exercise of the Pires Warrants are acquired by Tern pursuant to the Acquisition and (ii) 2,419,361 New Tern Shares are issued to Cairn and RiverFort Global Capital Limited in satisfaction of certain fees payable by Pires in connection with the Acquisition, resulting in a total of 98,865,712 New Tern Shares being issued pursuant to the Acquisition.

   (3)       Based on the Closing Price of Tern Shares of 12.75 pence on the Last Practicable Date. 

Enquiries:

 
 Tern plc                                                via IFC Advisory 
  Al Sisto, Chief Executive Officer 
  Sarah Payne, Chief Financial Officer 
 Allenby Capital Limited 
  Financial Adviser, Nominated Adviser and 
  Broker to Tern 
  David Worlidge / Alex Brearley / Freddie 
  Wooding (Corporate Finance)                             +44 (0) 20 3328 
  Matt Butlin (Sales and Corporate Broking)                          5656 
 IFC Advisory                                             +44 (0) 20 3934 
  PR advisers to Tern                                                6630 
  Tim Metcalfe / Graham Herring / Florence      tern@investor-focus.co.uk 
  Chandler 
 

Important notices

Neither this announcement nor any of the documents referred to herein do or are intended to constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval pursuant to the Scheme or otherwise, in any jurisdiction in which such offer, invitation or solicitation is unlawful, nor shall there be any sale of any securities in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

The release, publication or distribution of this announcement and/or any of the documents referred to herein (in whole or in part) in, into or from jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and therefore persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.

Allenby Capital, which is authorised and regulated by the FCA in the UK, is acting as financial adviser, nominated adviser and joint broker exclusively for Tern and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Tern for providing the protections afforded to clients of Allenby Capital or for providing advice in relation to the Acquisition, the content of this announcement or any matter referred to herein. Allenby Capital's responsibilities as Tern's Nominated Adviser under the AIM Rules for Companies and AIM Rules for Nominated Advisers are owed solely to London Stock Exchange and no other person. Allenby Capital has not authorised and is not making any representation or warranty, express or implied, as to the contents of this announcement.

This announcement does not constitute a prospectus or prospectus equivalent document.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Forward-looking statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Offer, and other information published by Pires and Tern contain certain forward-looking statements, beliefs or opinions with respect to the financial condition, results of operations and business of the Wider Pires Group and the Tern Group. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts.

Forward-looking statements may often, but not always, be identified by the use of forward-looking terms such as "may", "will", "expects", "believes", "hopes", "anticipates", "aims", "plans", "estimates", "projects", "targets", "intends", "forecasts", "outlook", "impact", "potential", "confidence", "improve", "continue", "optimistic", "deliver", "comfortable", "trend", "seeks" or variations of such words and phrases or statements that certain actions, events or results "could", "should", "would" or "might" be taken, occur or be achieved or the negative of such terms or other variations on such terms or comparable terminology.

Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. These statements are based on assumptions and assessments made by Pires and/or Tern, as the case may be, in light of their experience and their perception of historical trends, current conditions, future developments and other factors that they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors that could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements are unknown.

Although it is believed that the expectations reflected in such forward-looking statements were reasonable at the time the statements were made, no assurance is given by Pires and/or Tern that such expectations or the assumptions and assessments underlying them will prove to have been correct and the circumstances may change. You are, therefore, cautioned not to place undue reliance on these forward-looking statements. Neither Pires nor Tern assumes any obligation, and Pires and Tern disclaim any intention or obligation, to update or correct the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law or regulation.

Save as specifically stated in this announcement, any such forward-looking statements have not been reviewed by the auditors of Pires or Tern or their respective financial advisers. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. There are many factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements is the satisfaction of any conditions to the Offer, as well as additional factors such as changes in global, political, economic, business, competitive, market and regulatory forces (including as a result of governmental, business or individual responses to the COVID-19 pandemic and any variant thereof), future exchange and interest rates, changes in tax rates and future business combinations or dispositions. Such forward looking statements should, therefore, be construed in the light of such factors. Neither Pires nor Tern, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur.

No Profit Forecasts or Estimates

No statement in this announcement (including any statement of estimated synergies) is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share or dividend per share for Tern, Pires or the Enlarged Group, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share or dividend per share for Tern, Pires or the Enlarged Group, as appropriate.

Publication on websites

Pursuant to Rule 26.1 of the Code, a copy of this announcement and other documents in connection with the Acquisition will, subject to certain restrictions, be available for inspection on Tern's website at www.ternplc.com and on Pires' website at www.piresinvestments.com no later than 12 noon (London time) on the business day following this announcement. The contents of the websites referred to in this announcement are not incorporated into, and do not form part of, this announcement.

Overseas jurisdictions

The release, publica ti on or distribu ti on of this announcement in or into jurisdic ti ons other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements. Any failure to comply with the applicable restric ti ons may cons ti tute a viola ti on of the securi ti es laws of such jurisdic ti on. To the fullest extent permi tt ed by applicable law, the companies and persons involved in the Acquisi ti on disclaim any responsibility or liability for the viola ti on of such restric ti ons by any person. Neither this announcement nor any of the documents referred to herein do or are intended to cons ti tute or form part of any offer or invita ti on to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securi ti es or the solicita ti on of any vote or approval pursuant to the Scheme or otherwise, in any jurisdic ti on in which such offer, invita ti on or solicita ti on is unlawful. The Scheme Document and the accompanying Forms of Proxy have been prepared for the purposes of complying with English law, the rules of the London Stock Exchange, the AIM Rules and the Code, and the informa ti on disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdic ti ons outside of England and Wales.

Unless otherwise determined by Tern or required by the Code, and permi tt ed by applicable law and regula ti on, the Acquisi ti on will not be made available, directly or indirectly, in, into or from a Restricted Jurisdic ti on where to do so would violate the laws in that jurisdic ti on and no person may vote in favour of the Acquisi ti on by any such use, means, instrumentality or form within a Restricted Jurisdic ti on or any other jurisdic ti on if to do so would cons ti tute a viola ti on of the laws of that jurisdic ti on. Accordingly, copies of the this announcement and all documents relating to the Acquisi ti on are not being, and must not be, directly or indirectly, mailed, transmi tt ed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdic ti on or any other jurisdic ti on where to do so would constitute a violation of the laws of that jurisdic ti on, and persons receiving such documents (including agents, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send such documents in or into or from any Restricted Jurisdic ti on. Doing so may render invalid any related vote in respect of the Acquisi ti on.

The availability of the New Tern Shares under the Acquisi ti on to Pires Shareholders who are not resident in the United Kingdom or the ability of those persons to hold such shares may be affected by the laws or regulatory requirements of the relevant jurisdic ti ons in which they are resident (which may affect the ability of such Pires Shareholders to vote their Pires Shares with respect to the Scheme and the Acquisition at the Mee ti ngs, or to execute and deliver Forms of Proxy appoin ti ng another to vote at the Mee ti ngs on their behalf). The New Tern Shares may not be offered, sold or delivered, directly or indirectly in, into or from any Restricted Jurisdic ti on or to, or for the account or benefit of, any Restricted Persons except pursuant to an applicable exemp ti on from, or in a transac ti on not subject to, applicable securi ti es laws of those jurisdic ti ons, or otherwise permi tt ed under applicable securi ti es laws of those jurisdic ti ons.

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END

NOGPPUWAQUPPGAR

(END) Dow Jones Newswires

June 28, 2022 12:00 ET (16:00 GMT)

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