oldjoe1
03 Jan 2015
Re: Don't get caught out Tern – More on That Acquisition of Cryptosoft, More Questions and what of Nomad WH Ireland’s Role?Nigel Somerville, The Deputy Sheriff of AIM | Saturday 3 January 2015On Friday I highlighted a number of inconsistencies in two RNS released by Tern plc (TERN)regarding the acquisition of Cryptosoft and issues of shares which you can read HERE. It gets worse.The point was that because of inconsistencies in those releases compared to Companies House filings, Tern’s shareholders are currently unable to determine the issued share capital in Tern, and therefore what their shareholding represents. Then there is the small matter of what prices were they issued at? And since filings to Companies House imply three - or is it two - or is it just one - classes of ordinary share, what is the capital structure of Tern? Further, it is also unclear as to what Tern itself actually owns of Cryptosoft since the RNS implies 95% and the filing on Companies House says 100%. Just to be helpful, I’ve been digging….Tern’s RNS of 15 Sept 2014 announced the acquisition of Cryptosoft (you can read it HERE). Investors were told:Tern will own 95 per cent. of the issued ordinary share capital of Cryptosoft;And…Jon Penney and other employees will retain a minority 5 per cent. interest in Cryptosoft which entitles them to 25 per cent of the net proceeds of sale as and when Cryptosoft is sold.All this would have, of course, been signed off, checked and verified by Nomad WH Ireland. I have already pointed out that Tern’s filing to Companies House regarding this transaction stated “Acquisition of entire share capital of Cryptosoft Limited” which contradicts the RNS. But I wondered if, in fact, any of the above was completely true.I’ve taken a look at Cryptosoft’s capital structure on the Companies House website. On 12 Sept 2014 (three days before Tern bought its stake in Cryptosoft) Cryptosoft itself underwent a capital restructuring. You can read the return to Companies House for that HERE. And so we discover that there were, in fact, two classes of share in Cryptosoft at the time Tern plc bought in:A Shares of £1 each: there are 950 in issue. Prescribed particulars:Ordinary sharesa) carry one vote each,b) rank equally for dividendsc) rank equally on distributions (including on a winding up) andd) are non-redeemableB Shares of 33 1/3 pence: there are 150 in issue. Prescribed particulars:The holders of the B Shares are entitled to 25 per cent of the proceeds of sale of the Company on a sale.B sharesa) carry no voting rights,b) rank equally for dividends,c) rank equally on distributions (including on a winding up)d) are non-redeemable.What Tern told the market on 15 Sept 2014 is surely cobblers. If it owns 95% of the issued ‘ordinary’ capital then it owns 95% of the A-shares. If the minority 5% of nominal share capital is entitled to 25% of any proceeds resulting from the sale of Cryptosoft then that must be the B-shares. So who owns the other 5% of the A-shares? But Companies House was told that Tern bought the ‘entire share capital’ of Cryptosoft. Something is very wrong somewhere!Then one’s attention is then drawn to the small matter of beneficial ownership. The A-shares have a nominal value of £950 in total. The B-shares have a nominal value of £50 in total. That would mean that the A-shares represent 95% of nominal issued share capital. But it does not mean 95% beneficial ownership, does it?Since dividend and distribution rights are equal across the A- and B- shares, the A-shares are only entitled to 950/1100 = 86% of dividends and distributions.And if Tern only owns 95% of the ordinary shares (ie the A-shares), as per the 15 Sept RNS, then Tern is only entitled to 95% of that 86% = 82% of dividends and distributions.If Cryptosoft is sold on, Tern only sees 75% of the proceeds. This is the only part of the 15 Sept RNS which was clearly stated
seagull jim
25 Dec 2014
Re: Very pleasant... Most of the detailed posts are on the ADVFN board[link] would independent Signal Hill risk their reputation valuing Cryptosoft at $75m if they didn't have a bit more privy information than is out in the open at present? That compares to Terns market cap of just £4m. That independent Earnings Valuation only came to light last weekend and so we have only had two and half days of the re-rate. People should always focus on a Companies market cap rather than the share price. That is where people can slip up,Further endorsement is that they only raised a token £200k with the placing and if they thought things were going south then they would have rinsed the market for a much higher figure.They are just a few pointers along with the BoD taking no salary and just how big the Internet of Things (IOT) market is set to become next year. Al Sisto who has been in the business for 40 years spoke well of what he thought of Cryptosoft, so even if we get a small bite of the IOT encryption market then the current market cap of £4m on reflection is laughable.With so many other AIM sectors in the doldrums due to world economies the I believe the tech sector in 2015 will steal a march of others, with the Internet of Things (IOT) being a main driver.Even at a shareprice of 20p then Tern in valued at just over £8m. Place a standard tech PE ratio of say a modest 20 and they only need to make a profit of £400k p.a. With the BoD taking no salary (v rare on AIM) then that is a lot more achieveable.Couple that with the fact that the BoD and other large holders own over 60% of the Co's shares, large buying volumes this week, then I personally see the short term re-rate to the above £8m market cap / 20p a share by early 2015. As mentioned above, the volumes have been high which from a chartists perspective is another strong plus from a momentum perspective.Of course people should research, yet for me Tern is still under the radar re-rating wise and why its made it compelling for me. Its down to each person to balance up if the IOT market will take off and why Signal Hill placed such a high valuation of $75m on Crypto ? why not $750k or $7.m???Each to there own and DYOR etc 
seagull jim
25 Dec 2014
Tern - A quick overview A quick re-cap of the Beaufort securities overview from just two months ago for anyone new looking in (This is also before last weekends findings that independent Signal Hill have placed a $75m Earnings Valuation on Cryptosoft and in which Tern earns 95%). That valuation is against the current market cap for Tern of just £4m!!!...........Tern PLC invests in technology companies, works to improve execution and seeks to sell them for a gain. The company has a hands-on investment approach where they partner with management teams to provide strategic resources that build and grow great global companies. Investment returns are anticipated within 12-36 months.Value creation is at the core of the Company’s existence and yesterday Tern provided an update on its 95% owned investee company Cryptosoft Ltd, which specialises in encryption based data security.Cryptosoft has signed an agreement for a pilot programme to provide a new security service for the SIM based Machine to Machine (M2M) market space. This integrated solution offers the ability to provide data level encryption for information flows between all SIM enabled devices on a mobile network. The agreement provides for revenues generated to be shared between the network operator and Cryptosoft. Cryptosoft delivers the following capabilities: End-to-End application level security for data moving from device to device Network based security for all traffic within the network infrastructure. Secure Authentication of devices within the network. Al Sisto, Director of Tern and Cryptosoft Investment lead for the Company said:“Since acquiring 95% of Cryptosoft we have been working with management to rapidly monetise security products into key markets. My experience is that rather than developing proprietary sales forces selling stand alone products, we should first be prioritising building partnerships with those who have established track records providing customers with software products to create a force multiplier.”Our view: The Company has three other small investments in Flexiant, Push Technology and Seal Software.Flexiant is a global supplier of cloud orchestration software, allowing service providers to develop, launch and manage cloud service businesses fast. With global customers-sales partners include Parallels, Arrows and Dell-and research partners including BT, SAP, Ericsson Nokia and Telefonica.Push Technology is narrow band technology the delivers data securely to mobile devices fast. Customers include ICAP,HSBC, Lloyds Bank, Bet 365, WillHill and Betfair-speed of response and reply is critical. Partnerships include IBM, Vodafone, Telefonica.Seal Software has an innovative search engine for proactive extraction and presentation of contextual data with recurring revenue growing strongly. Resellers include IBM, Apttus and Selecttica.We anticipate a realisation of at least one of the investments within 12 months. We like the fact directors have invested £600,000 (and note its relevance to the company’s market cap) and they take no salary.
lambrini girl
24 Dec 2014
Re: Don't get caught out P&D..
Bazil_Brush
24 Dec 2014
Very pleasant... ... Christmas prersent You were right KKriss... He's more than doubled his money Bazil has had a lovely little multi bagger to pay for Christmas. Trader, if Signal Hill have got their projections correct this should rise again nicely after Christmas?? What are you thoughts?Happy Christmas to every one, (not many of us on this bb by the look of it. Over 60% up on the day at one point and not one single comment on here )B_B
trader inc
23 Dec 2014
60p - 100p Anyone seen the Signal Hill valuation for $75 million? Tern currently only valued at just over £3 million!Tern will be over 60p very shortly. At £1 it's only still valued at £40 million.This is the biggest Christmas present in ten years.Strong Buy.
kkrriiss
08 Dec 2014
Re: Don't get caught out Lol oh dear he,s doubled his money...kk
