March 30, 2015

Tern ups investment in data security firm Cryptosoft

Investment company Tern (LON:TERN) has upped its investment in data security firm Cryptosoft.


Tern obviously believes it has a winner in Cryptosoft, which earlier this month announced it had struck a strategic agreement with a US-based software vendor specialising in 'the Internet of Things', as it has invested an additional £400,000 into the company.


The bulk of the investment will be the provision of a £390,000 loan facility, but the company has also subscribed for 10,000 'A' shares in the company.


Cryptosoft has two classes of shares, with all the 'A' shares owned by Tern, while Cryptosoft owns the 150 'B' shares that are in issue.


Lumping the 'A' and 'B' shares together, Tern's stake has risen to 98.6% but, perhaps more importantly, in the event of a sale of Cryptosoft, Tern will currently be entitled to 75% of the net sale proceeds.


As for the loan facility, Cryptosoft will pay Tern a £25,000 arrangement fee for the loan and 5% interest will be charged on outstanding amounts.


The loan is repayable in instalments by the end of 2017 and Tern has the option at any time to convert the outstanding loan balance into 'A' shares on a conversion ratio of one 'A' share per pound.


"This facility will enable us to build the sales force, improve our web presence, and extend our capabilities to exploit opportunities in the UK and North America and achieve our ambitious growth plans," said Jon Penney, chief technical officer and founder of Cryptosoft.



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