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Tern - Yet more clarifications of the clarification of 7 Jan 2015 needed

By Nigel Somerville, The Deputy Sheriff of AIM | Tuesday 10 February 2015


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Tern (TERN) has today issued an omnishambles of a misleading results statement. I shall turn to that later. But before then let’s look at yesterday’s omnishambles RNS from crony capitalist Angus Forrest. A clarification of a clarification of a clarification is still needed.

I suppose that it is full marks to one of Tern plc, its Nomad WH Ireland or perhaps AIM Regulation because in response to my articles HERE and  HERE  a clarification RNS was issued yesterday (Mon 9 Feb 2015) at 2.17pm which confirmed almost everything I had stated about the clarification RNS of 7 Jan 2015. But there is still more to clarify!

Having forced out the 7 Jan 2015 clarification RNS as the result of revealing, amongst other things, that Companies House filings did not agree with RNS statements over share issues, with reference to the RNS of 17 Sept 2014 – and, indeed that figures given in that RNS were self-contradictory – the 7 Jan clarification RNS was, I suppose, meant to have cleared the air. But it didn’t. Hence the RNS of yesterday: a clarification of the clarification.

You can read the first clarification RNS HERE  . I have already pointed to some incorrect statements in that clarification and much of that has now been admitted, although there is still yet to be any acceptance that Tern’s beneficial ownership of Cryptosoft has still not been correctly stated, as discussed HERE. But there is more.

In the 7 Jan clarification RNS it is stated that:

 -- On 17 September 2014, the Company announced that: 

          --  it had raised GBP85,000 by the issue of 6,800,000 new ordinary shares at a price of 1.25p per share. The Company also announced it had raised GBP200,00 convertible loan stock with a conversion price of 1.25p per share. 

   -- Al Sisto, executive director, had converted GBP30,000 of a GBP100,000 loan to the Company into 2,400,000 new ordinary  shares at a price of 1.25p per share

Now call me a pedant, but this lot adds up to a total of 9,200,000 shares being issued at 1.25p per share – on 15 Sept 2014, according to filings on the Companies House website. So this confirms (in part) the RNS of 17 Sept 2014. But upon checking filings at Companies House, we find that these figures are incorrect. And this, remember, was a clarification RNS. You would have thought it had been checked and double checked this time!

On the Companies House website are currently three filings relating to this shares issue. The first one, which appears to have been filed on 20 Oct 2014 claimed that a whole pile of shares resulting from the conversion of loan notes at 2.016p per share had in fact been issued at just 1.25p per share, alongside an issue of further new shares at 1.25p.

This was corrected in a second filing which appears to have been lodged on 19 Dec 2014 which stated that 9,200,000 shares had been issued at 1.25p (as per 7 Jan 2015 clarification RNS) and a further 894,125 shares had been issued at 2.016p per share (one presumes these were the conversion shares). That was nearer the mark, and matched the figures given in the 7 Jan 2015 clarification RNS.

But out of the blue, logged by Companies House on 22 Jan 2015 according to the document, came a filing that one single share had been allotted on 15 Sept 2014 at a price of 1.25p per share. That raises a question of exactly how many shares were issued that day at 1.25p per share. Tern plc has now had three goes at getting it right!

Would WH Ireland, as Nomad to Tern plc, care to explain this? How many shares were allotted at 1.25p per share on 15 Sept 2015? Was it:

a)      9,200,000 (as per the clarification RNS of 7 Jan 2015, in which case the filing to Companies House is wrong)

b)      1 (as per the Companies House filing described above, in which case what happened to the rest of the cash supposedly raised from the issue of the other 9,200,000 shares? Whatever, it would suggest that the clarification RNS of 7 Jan 2015 is wrong on this point

c)       9,200,001 shares, in which case the original RNS of 17 Sept 2014 is wrong, as is the clarification of 7 Jan 2015

Well? Which is it?

More top marks to WH Ireland for checking and verifying RNS content released by Angus Forrest, Chairman of Tern plc.

Time for a third clarification - a hat-trick, from the shamed Nomad to Rangers International Football Club plc - it is perhaps the best chance of a home team hat-trick at Ibrox this season. 

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