Tern plc (LSE:TERN) has expanded its investment in portfolio company Talking Medicines by receiving approximately £270,000 in new unsecured convertible loan notes.
The new notes were issued in exchange for the cancellation of roughly £87,000 of existing debt alongside around £48,000 of additional funding provided by Tern, financed through proceeds from its recent open offer. The loan notes carry annual interest of 10% and are convertible at a 20% discount in the event of a qualifying fundraising or exit transaction.
Following the latest investment, Tern’s total convertible loan note exposure to Talking Medicines has increased to approximately £0.79 million, while its equity ownership remains unchanged at 23.8%.
Investment reflects confidence in portfolio company growth
Management said the additional funding underlines Tern’s confidence in the future development potential of Talking Medicines despite the portfolio company’s historical losses and net liability position.
Talking Medicines uses artificial intelligence and advanced data science tools to extract strategic insights from conversational healthcare data, helping healthcare advertising agencies improve decision-making and productivity in the global healthcare marketing sector.
Tern stated that the strengthened funding position is expected to support Talking Medicines as it continues to scale its commercial strategy and expand within the multi-billion-dollar healthcare advertising market.
Weak financial profile continues to weigh on outlook
Tern’s overall outlook remains constrained by weak financial performance, including a sharp contraction in revenue, significant losses and persistent negative operating and free cash flow.
Technical indicators also continue to reflect a broader downtrend, although some early signs of stabilisation in oversold conditions have emerged. Valuation support remains limited due to negative earnings and the absence of dividend yield data.
More about Tern plc
Tern plc is an AIM-quoted investment company specialising in early-stage, high-growth Internet of Things and disruptive technology businesses. One of its key portfolio investments, Talking Medicines, applies artificial intelligence and data science to analyse conversational healthcare data and provide strategic intelligence to healthcare advertising agencies serving pharmaceutical clients in a market estimated to be worth more than US$23 billion.
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