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Tern – where did 588,640 warrants converted at 0.02p come from?

By Nigel Somerville, the Deputy Sheriff of AIM | Tuesday 18 August 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.

Anyone following the saga of AIM-listed Tern plc (TERN) will know that the company has had a few difficulties in reporting share issues – see HERE for an example. Yesterday Tern released this RNS which announced the issue and allotment of 641,463 shares as a result of the exercise of 52,823 warrants at 3p a share, and 588,640 warrants which were exercisable at 0.02p per share. The problem is that I can’t find where those 0.02p warrants came from.

The list of outstanding warrants as at calendar FY14 is given in note 19 to the Annual Report and shows warrants exercisable at 4.6p, 2p, 3p and 4p. But none at 0.02p. I’ve checked back through the RNSs issued this calendar year and there look to have been no warrants issued so far this year at all.

So where have they come from?

Has there been yet another screw-up by the company and its Nomad, WH Ireland? Surely they will have checked and verified today’s RNS very carefully (especially in the light of a raft of restatements earlier this year), won’t they?

With the shares having closed yesterday at 14.625p that means that for the princely sum of £118 someone has been handed £86,088 worth of stock. So did yesterday’s RNS get the warrant exercise price wrong, or were these warrants undeclared – and if so, just how many more are there?

Yet another clarification is, of course, going to have to be forthcoming. 

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