Tern (AIM:TERN) announced it is investing $104,111 (approximately £78,000) in new unsecured convertible loan notes to be issued by Device Authority, one of its three core portfolio holdings.
The AIM-listed investment company, which specialises in backing early-stage Internet of Things technology businesses, is funding the investment from proceeds of its recent open offer.
Device Authority is running the same CLN issue more broadly, seeking up to $0.9 million from existing investors on identical terms.
As at 30 June, Tern's last published book valuation date, its holding in Device Authority stood at £4.1 million, the largest of its three core holdings alongside Talking Medicines at £2.0 million and FundamentalXR at £1.6 million.
Tern's equity stake in Device Authority remains unchanged at approximately 26.6%, before any dilution from share options, while its new CLN holding in the business takes its total Device Authority loan note position to approximately £0.29 million.
Device Authority, which supplies identity and access management technology for IoT devices in the automotive, medical device and industrial sectors through its KeyScaler platform, reported net assets of approximately £11.6 million and a loss of approximately £1.75 million for the year ended 31 December 2025 under its latest statutory accounts; Tern said it does not consider these historic, statutory figures representative of the business's current trading and prospects.
Read more about Tern and Device Authority
- 29/09/26Tern narrows first-half loss, portfolio value edges higher
- 16/09/26Tern investee Talking Medicines launches Intent to Prescribe tool
- 07/09/26Tern raises funds via underwritten open offer
- 12/05/26Tern shares soar as Device Authority partners with Xalient
The investment follows a pattern set earlier in the year with Tern's other core holding, Talking Medicines, where the company has repeatedly used follow-on convertible loan notes, funded from placing and open offer proceeds, to maintain its position ahead of qualifying fundraisings rather than inject fresh primary equity.
The convertible loan notes (CLNs) carry 8% annual interest and convert on a change of control at three times their face value plus accrued interest, or at a 25% discount to the price of a qualifying fundraise of at least $5 million by Device Authority; if neither event occurs, they mature on 30 June 2027.