4 July 2017

Tern Plc (AIM: TERN)

Device Authority Update

Tern Plc (AIM:TERN), the investment company specialising in Internet of Things, is pleased to provide an update on developments at its investee company, Device Authority Ltd. ("Device Authority").

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

Patent valuation

ipCapital Group, Inc. ("ipCG"), a premier IP strategy consulting practice, has provided an independent valuation of six of Device Authority's nine US patents as part of the process of finalising the accounts consolidating Device Authority's financial statements. ipCG worked with Device Authority to perform an update to the 2013 Uniloc ipValue ModelSM which had considered approximately 260 global active issued patents and pending applications that addressed five primary markets. This update considered the Device Authority subset of this portfolio which substantially focuses on six granted patents, two of which were applications at the time the original model was completed. Today, Device Authority maintains a portfolio of nine US patents, out of a total of fifteen patents.

IpCG estimates the risk-adjusted Net Present Value of the subset portfolio to be approximately $9 million over a five-year period beginning in 2018, and $18 million over the life of the portfolio (with an average expiration year of 2030).

IpCG found the subset portfolio to be highly relevant to applications in the Transaction & Communication Security market. For example, this patent portfolio details technology capable of identifying all physical routing devices through which a packet has travelled, authentication of computing and communications hardware, detection of tampering attacks, and other actions critical for IoT security.

IoT security platform update

Device Authority has released the latest version of its flagship IoT security platform. One of the first products to deliver password management and Public Key Infrastructure ("PKI") certificates to devices without human intervention, Version 5.5 introduces unique Automated Password Management ("APM") technology to tackle the real-world challenges organisations are facing today with cyber attacks involving connected devices. KeyScaler's APM reduces the challenge and removes the associated human risks of manually updating credentials on hundreds or thousands of IoT devices.

KeyScaler also includes an IoT PKI connector enabling Amazon Web Services ("AWS") customers to access it through the AWS Marketplace. The new AWS IoT PKI Connector supports certificate provisioning; revocation; 'thing' creation and certificate assignment, which is critical to securing IoT applications, their devices and data.

New contracts

Device Authority has signed a contract with a medical device manufacturer ahead of the launch of the manufacturer's IoT-enabled medical product later this year. Device Authority will be paid a subscription fee per annum per device. The product has the potential to ship tens of thousands of units over the coming years.

An OEM contract has also been signed with an IoT Platform Systems integrator that is launching a device asset management and analytics platform in the coming months. Device Authority will receive a percentage of the net revenues from the use of the application. This service is primarily focused in the Industrial IoT sector, providing secured real-time performance monitoring.

Al Sisto, CEO of Tern plc, said:

"Device Authority is continuing to make significant commercial progress, both in terms of securing contracts and in updating its product to meet rapidly changing market demands.  As a significant investor, Tern has long been persuaded of the quality of the Device Authority management team and product suite.  I am delighted to be able to report the conclusion of the independent valuation of Device Authority's suite of patents by ipCapital Group.  While this should not be seen as a direct comparator for the valuation of Device Authority as a Company, the Board of Tern does see this patent valuation as a validation of the market relevance of Device Authority and its technology, in this rapidly growing sector."

Enquiries

Tern Plc Al Sisto/Sarah Payne	via Redleaf
WH Ireland (NOMAD and joint broker) Mike Coe/Ed Allsopp	Tel: 0117 945 3470
Whitman Howard (Joint broker) Nick Lovering/Francis North	Tel: 020 7659 1234
Redleaf Communications Rebecca Sanders-Hewett/David Ison/Elise Palmer	Tel: 020 7382 4730

About ipCapital Group, Inc.
ipCapital Group, Inc. (ipCG) is a premier IP strategy consulting practice helping clients develop, manage, and use their IP effectively to support strategic business objectives. ipCG offers a range of services and proprietary methodologies to help companies throughout the full lifecycle of IP, from creation and strategic management to value extraction. Our work is data-driven, conservative, and backed by our deep expertise in IP strategy and monetization. 

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