Tern Plc (TERN.L) Earnings Call Transcript & Summary

I'd like to welcome you all to the Tern investor webinar this evening. My name is Tim Metcalfe. I run IFC Advisory, which is Tern's Financial PR and Investor Relations Adviser. With me this evening, I've got Al Sisto, Tern's CEO; Sarah Payne, Tern's CFO, Bruce Leith, who is Founder, Investment Director and member of the Board of Tern. We've got Jo Halliday from Talking Medicines; Darron Antill from Device Authority; and Alastair Williamson from Wyld Networks. Al is going to start off with an introduction, followed by presentations from Jo, Darron and Alastair on their respective businesses. And then there's a time for a Q&A session at the end. I'd like to thank everybody who sent in questions and observations ahead of this session. Very, very helpful, and it helps us frame what we're going to say this evening. Given the number of people who are attending, unfortunately, it's not going to be possible, as usual, for those who attended these events in the past to go to you individually, unmute you and ask you to put the questions. But we do really encourage further questions. So if you have got anything, please use the Q&A button at bottom of the screen, type it in, and I will do my best to go through those questions at the end and put them to the relevant people here. If there is anything at the end of the presentation that you don't feel has been answered and you'd like answered, please don't hesitate to get in touch with me, and I will do my best to get answers for you. Okay. So without further ado, I'll hand over to Al to kick off proceedings. Al?

Thank you, Tim, and thank you all for attending today's Capital Markets Day. This webinar is a follow-on to our interim results released last Friday. Our purpose today is to showcase the progress that has been made by Talking Medicines, Device Authority and Wyld Networks. This will be followed by a general Q&A session, as Tim outlined. But before we start, I would like to take this opportunity to congratulate the team at FVR for completing a Series B round during the first half of 2022. This is a significant achievement as it signals funding support for growth and a change in the direction of travel for the company as they're expanding their relationships in the marketplace. It's also a significant milestone for Tern and our shareholders as the work that we have done and put into helping create this business has been recognized by one of the leading, if not the leading life science investor EQT. So well done, Richard and the team at FVR. And now I'd like to introduce Jo Halliday from Talking Medicines. Talking Medicines is changing the way big pharma, likes and things about their patients and is making an important -- has made important funding and market progress during the first half of 2022. In light of that, Jo, would you please share your screen and provide our shareholders with an update. Jo?

Thank you, Al. I should just bring my slides up, which hopefully you can see now. So Jo Halliday, CEO of Talking Medicines, and I'm delighted to be here this afternoon to be part of this meeting hosted by Tern. We, at Talking Medicines are turning up the volume on the patient voice. So by listening to what people say about their medicines in the real world, that's not clinical environments or trials. We can spotlight and track experience from patients of lived experience. The feedback we gather is firsthand from ordinary people at home, amongst peers and unprompted by researchers. So it's given in their own plain words, not those interpreted by medics, a really important point. So the feedback that we have is pure gold. We make sense of it, we decode it so it can be understood. So over the next 10 minutes or so as an update, I'm going to talk through how capturing voice of the patient meets a critical pain point for our clients and how that translates into our opportunity for product-led growth and commercialization through growing MRR. I'm going to talk about how we manage and make our data insights addictive so that clients keep coming back for more. So Talking Medicines, we give patients a voice. We have a clear mission to be the world's leading provider of actionable patient intelligence. We do that through data mining using data science. That's artificial intelligence, machine learning and natural language processing. Put simply, the pharmaceutical industry has traditionally lacked patient insights once drugs are launched on the market. In a regulated and complex industry, it's difficult to isolate and extract the patient voice. However, 50% of medicines globally are not taken as directed. So there is a clear mismatch in understanding and support between those who make medicines versus those who consume them. And this is our part of the jigsaw. We're here to uniquely provide the missing piece through actionable patient insights at scale. We're setting the gold standard to pipe of data working to the highest quality standards and taking care to ensure compliance and trust were embedded for all of our key stakeholders through the way we collect, process and package our data. So it's a big market, a big market for Talking Medicines. Pharmaceutical companies spend a mega GBP 30 billion each year on marketing to target and support patients on the medicines primarily in the United States. To put this in context, brands like Walt Disney spend about GBP 3 million on marketing. So this marketing and advertising activity is outsourced by pharma companies to medical advertising agencies who pitch for agency of note status by medicine brand. The agencies then manage significant budgets on behalf of the pharma drug marketing teams to manage the business to consumer communication on behalf of them. Talking Medicines has developed proprietary know-how on extracting the patient voice, and it's commercialized to our cloud-based data-as-a-service solution called patient metrics. That success by clients through a web-based platform and subscribed for on a medicine brand basis. So they buy it by medicine. It's unique because of its ability through AI to isolate the patient voice away from other voices like health care professionals, medium, media, spammers and, importantly, bots. We're able to target agencies of note with patient metrics to deliver near real-time patient experience from listening, and we're continuously teaching our AI to be able to simulate and predict the next best action to impact outcomes. So looking at why our data is so relevant. In an uncertain world, post pandemic, consumers have become even more aware of their precarious health. The use of digital platforms has grown exponentially. Face-to-face doctor visits are still low and real-world insight has never been more critical. COVID taught us that sector can move faster, and it needs the finger on the pulse, and that's what we deliver. We plan for gold to find the nuggets of data that can change outcomes for medical advertising agencies. Through our AI, we're able to source unstructured signals from patients at scale. This is from social media, health networks, blocks, message boards. But we go beyond just sourcing from health care platforms because everyday people talk about their medicines on many lifestyle sites, could be cruising, could be gardening. We source patient signals from wherever people on medicines look for help and talk about their experiences. So we're led by their behaviors. The data is sourced legally and ethically at signals. It's de-identified before we use our AI to classify to the patient voice. From this unique elimination of noise, we're able to deliver robust and accurate insights within the context for that medicine or therapy, and that makes our data very actionable for the agency strategists and creative teams. So why will agencies buy patient metric service? They need a 360 on the lived experience. As a data tech company dedicated to life sciences, we use our science to structure those billions of unstructured signals. That gives agencies a view on sentiment, but we go much, much further to delivering context medicines. This speciality differentiates us from other general social listening. Agencies want to track a market basket of drugs to identify opportunities and to understand the competitive space at a drug or a therapy level. So let me give an example. When the FDA in the U.S. gave a black box warning. That's a U.S. government safety alert, it would seem a big deal for patients. It was given for an auto-immune medicine in the JAK inhibitor category that left the brand marketers wondering if that impacted on their drug or its competition. Patient metric data showed that patients were far more concerned with their daily routines and lifestyle than worrying about an FDA warning. So there was very low voice seen for discussion of clots or warnings, and we could confirm that, that black box warning didn't have an immediate impact on patient experience through our confidence score. That insight is significant to the messaging and patient support going out on that branded medicine. So where are we now? Earlier in 2022, as Al mentioned, we raised capital led by a Boston-based life science investor with follow-on funding from current investors, including Tern. The funding was planned to expand the U.S.-based sales operation, and that's been achieved. We've really fired up our U.S. operation as planned. Talking Medicines has established Talking Medicines, Inc. as a subsidiary earlier in the year. So our headquarters is here in Glasgow where I am today, but we also now have a front office in New Jersey to be close to both pharma, who are located in the Jersey area out; and also our target ad agencies, who are predominantly in Manhattan. So we've also grown our team significantly. We've recently hired a senior Chief Customer Officer based in the U.S. to spearhead MRR growth from the ad agency network. His experience of both pharma and working in top agencies to drive customer-centric revenue operations has been a big win for the team at Talking Medicines as we expand this operation. Many of our team were hired in the pandemic. So we have a really strong remote culture that successfully spans across the's U.K. and U.S. time zones. As a team, we invest significantly in building our employees and believe that, that is key to our future success. So we have great momentum coming out in the summer and into the brand planning season for agencies and pharma clients, and we're doing the business on the ground. So I'm just going to cover the why to buy and buy again. We have seen that our customers reach their eureka moment when they find gold nuggets in our data insights. Our data is fast, it's accurate and it's insightful. Without us, extracting those insights is pretty manual. It would need to come from nonspecific -- nonsector-specific social listening with results are full of noise, meaning that clients need to use additional time-consuming steps to try to get closer to the nuggets. And many of those steps are manual. Or it means running cross-sectional focus groups, which can be heavily biased and small scaled. So we believe we can improve efficiency by about 80% through using our AI-based tool. Our clean patient insights inspired virtuous circle once clients sign up to the first subscription. The more a client uses patient metrics, the more they can see opportunities for their own revenue growth with clients. Our product features help clients spot opportunities and broken windows from a patient's perspective. So through the platform, clients are able to track sentiment, attribution for marketing, patient language as well as patient confidence scores. These features open up new work streams that they may not have anticipated, which will, in turn, fuel the need for more data, bringing in more medicines to the platform. That accelerates our MRR through a strategy of land and expand. Within the top 100 health care agencies, there's a large number of networks enabling a ripple effect through a group once the first agency in the network adapts patient metrics. That drives our MRR. So we are changing the behaviors of our clients through data science, and we want it to be win-win for all. In terms of our relationship with Tern, their role has been pivotal in our acceleration. That's both through capital having been involved in the last 2 rounds. They've also played an important role of key institutional investor. Because of their stature and diligence around investments, the Scottish government acting through Scottish Enterprise, were able to match fund against the turn capital as an equity investor, in effect, doubling the amount we could raise from these 2 parties. Having both Tern and the Scottish government on our cap table as committed investors is credible and important to the future. On a day-to-day basis, Al Sisto acts our Chair of the Board and Sarah Payne as an observer. Both play an important governance role and business operations and stretching our agenda, for example, on ESG. CEO meetings amongst the portfolio of companies help on shared experiences and learning. Talking Medicines has been through a very significant stage this year in opening up the U.S. operation and moving our sales channel to focus on agencies, both of which Tern have been able to add value and support to. So Tern play an important role in our story today as well as planning for tomorrow. So as I conclude, as I said at the beginning, Talking Medicines really are turning up the volume on the patient voice. That patient voice needs to be heard. It's broad, it's diverse and it needs data science to cut through the classification and structuring of the patient voice in a way that couldn't be done without AI. We're here to disrupt the status quo. We know we have a unique offering. Patients deserve to be heard, and we can unlock their valuable insights. We found our market fit in selling to marketing advertising agencies in New York. We can enable them to win more business and retain business through enabling campaigns and strategies that resonate with patients in the real world. In doing so, we create win-win virtuous cycle. The future is bright. We're solving the problems of current clients, and that's a big market in itself. But we know there's many adjacencies in the broader health care sector, and we can create new sources and revenue as we grow. We're confident in our mission to be the world's leading source of actionable patient intelligence. And thank you very much for listening to the presentation and back to Al.

Thank you, Jo. And that was really informative. And again, it's an exciting business, sounding a real critical issue that, in fact, COVID has exacerbated. But with that, I'd like to introduce Darron Antill, the CEO of Device Authority, who will update us and our shareholders on the U.S. and EU recognition of the cybersecurity issues and, of course, on DA's progress to help solve this problem and many other problems in the world with cybersecurity with the help of its partners and its customers as critical references to gain more contraction. So with that, Darron?

Thank you, Al. And you can see my slides? Fantastic. Thank you for the invitation to present today. So many of you have probably heard from me before. Well, I thought I'd give you an update and overview, I guess, on a number of things that are going on in the market, where we sit in some of the significant progress that we've made. But just in terms of, I guess, the market that we operate in, there's a lot of independent research articles. I know a number of you follow it from industry analysts. Now there's a lot of buzzwords I think, that are coming out that are converging around the space that we operate at there. Zero Trust and machine identities is 2 important I guess, phrases, words, categories that are getting reported on, absolutely in our wheelhouse. And if you think about Zero Trust, that's really around never trust, always verify. That's really what Zero Trust is all about. And that starts with authentication and authorization, which is, again, in Device Authority's platform, KeyScaler, is really important. So Zero Trust is a big play for us. You see us change our tagline. The other category is machine identity, and I'll just touch on this in a minute, but for years would have been effectively identifying with servers, applications, laptops, desktops., So machine identities or how humans interact with them has been very important. But now you've got this other challenge that you need to solve around the Internet things, devices or things as people refer to. So people are trying to figure out how do we deal with the machine identities of those things. So these markets are converging. And if you look at some of the analysts' or large vendor reports, things like machine identities is now a very significant category, not only reported but track where people like Cyber R, [indiscernible], Keyfactor, Digiserve, as well as some of the leading analysts like Gartner and Forrester. The good news is that data breaches are on the up. And one thing I do like about Microsoft and companies like Verizon, they're well versed in reporting some of the significant breaches. So people have started to listen and really started to figure this out. And again, if you boil it down another level, another great piece of research talks to the market that we operate in now in terms of PKI or PKI for IoT, so managing keys and identities is 50% -- is now a spot for 50% of new deployments or nearly 50%, significant number. So there's lots going on. There's lots of new reports. I thought I'd just show you some of the pictures that you can look at it in your own time. But in terms of the market, the bit on the left has been done for the last 25 or 30 years, there are many large significant cybersecurity companies that have been acquired or have IPO on the left-hand side. The right is what Device Authority is all about, focusing on the right-hand side, devices that are critical infrastructure and medical devices, right that we're down to very small centers and small things as the market effectively grows. But the challenges on the right are so significantly different to those on the left. In the old days, I guess, or in the current times, you've managed the left-hand side of the corporate identities within the firewall. You can't do that with the Internet things or the device or outside of the firewall. So it's a whole different market. So think of it on the right. And the other challenge about the right is scale. There won't be enough people on the planet to manage all of those devices on the right-hand side. It is a magnitude of 50 to 100 times the challenge of managing human identities in the enterprise. So it's a significant opportunity, but it's also very complex. And the device identity is now becoming a new perimeter as opposed to the firewall that I showed you on the previous page. And I think it's well versed, and we see it, that effectively dealing with identities is one of the challenges people are still trying to figure out. They're trying to work out when do they deal with it. And often, we see projects blocked because they didn't deal with it early enough, and I'll touch on that a bit more. So in terms of -- a change is required, the old stuff on the left-hand side is legacy low insurance and is manual. The IT teams are working out how to manage the identities. But security can't be an afterthought for IoT use cases. I think for the last 5 years or so, it's been in our fold for too long. And now we know, you're moving into critical use cases where safety, fatalities could be a consequence, where disruption to key services, where identity and data authenticity is critical, and I'll talk about why that's becoming critical with regard to some of the compliance drivers in a minute. But the way you solve that, on the right, it's all about automation. You can't do it with people in the organization. Also often when we speak to customers, they've manually provisioned certificates or they're trying to solve the solution mainly for the first 20 devices. It takes too long. It's expensive. It's when they start thinking about 100, 1,000 and 10,000. It becomes a significant challenge, and automation is the key. And the reason I major on that is we invested heavily in automating a number of the functions within KeyScaler. And effectively, it's that life cycle automation platform. So I talked about compliance drivers. We do want the governments to stand up and mandate. Of course, we do. We want it to be a nice to do. We want it to be a must do and must add. And you've heard about SBOM, software bill of materials and the Biden Executive order originally kicked off by Trump. If you don't provide a SBOM for the devices in the military or in the critical infrastructure in any government or defense establishment, you won't be able to provide those cellular devices. So that's important. And then people think, okay, well, I've got time to do that. But then how can you prove the SBOM is from a valid authenticated device? Well, that's where we come in. So the attestation is very important. And what's really good news only last week, and I'm sure some of you saw this, but the EU is finally following what the White House put forward in their executive order with the Cyber Resilience app that got launched in the last 10 days or so as well. So new legislation coming through is further endorsement that this is serious. The significant borders are starting to do it, and they're starting to make it a necessity rather than a nice to do. Here's a quick slide of some of the logos that people were talking to. We've got POCs, we've got pilots, the number of customers, and some are moving to significant scale and production. I wanted to give you a flavor of this because they're lighthouse accounts, they're marquee logos, they're quality companies and some of them absolutely take us to new markets that we couldn't do on our own. So we have an expanding set of customers in really 4 primary verticals. And the one I would pick out where public sector and defense is very much an emerging vertical. And we've had some great and recent successes that are really going to grow significantly in the coming years because there's significant dollars attached to those type of initiatives. And I think with the EU getting behind it, we'll see more of that and hopefully, progressive conversations that we're having with people like the National Cybersecurity Center in the U.K. to further endorse that. So great logos. And I just wanted to talk through, I guess, the journey. One customer, this is what it is like. It's a land and expand. It's hard to get people going. But once you get them going, the potential is huge. These marquee logos are trying to solve a number of problems not just for one device but for many device types connecting to many cloud or on-premise applications. And it's not easy to do as it scales without your IT resources being totally consumed at resolving some of the provisioning authentication and data security challenges and then doing that through the life cycle and it's on the outside of your firewall. It's very complicated. It's difficult to do. But we do that. But I wanted to just present a picture, and this is one1 of our customers we're dealing with. We started in one project, and now we have a number of different scenarios when they're looking to roll out to different device groups. It is going to take a couple of years, but the potential is huge. So it just gives you an idea of the type of growth from one customer's journey. So if you don't know then what we do, and you've seen this picture, and I'm sure that many of you, you see it on our website, you see it in a number our live webinars. The key piece we do is on the right-hand side where we are either in people's private clouds or in their on-premise deployments connected to their IoT applications. We help make sure the device and the data is secure interacting with those applications. We've built that functionality into KeyScaler with 2 other critical pieces. How do you make sure you can connect to the devices? And there's now a plethora of devices, an increasing number of devices. You need a number of methods. We have IP, the critical infrastructure or critical safety devices, but we also have much simpler, smaller, easy-to-deploy methods as required in such as retail centers, for example. So working with people like Avnet is a way of extending out to that market. So connecting to devices is also key, but also plumbing into the right-hand side, the enterprise infrastructure. People will be investing in security for 25 years or so. They've made significant investments in the last 5 years, how they want to manage their key provisioning or how they want to manage security around their applications or people that interact with those applications like doctors, nurses or critical workers. So how you plumb into those enterprise investments is very, very important. And again, we've built that plug-and-play functionality into KeyScaler and specifically working with organizations like Microsoft to make those cloud applications very deployable and easy to use, which then moves on to some of my , as we call it, entirely false multipliers. Ecosystem is really important. And in IoT, you can't get away from it. I mean I'm an important part of the ecosystem. Microsoft weekly recognizes the fact that we're important. What I like about Microsoft deployments is they normally started or customers have. Then they get -- they hit a roadblock because they fundamentally can't provision on board a number of devices and think about how they manage the security of those devices at scale through the lifetime. So they put us in. And in the recent weeks, 3 new logos have been introduced, and now we're embarking on POCs of those type of opportunities, and they're huge in terms of their potential. Whereas some of Avnet speaks with the chip manufacturers and the device manufacturers. So the left side of my chart shown before. They help you get reached. Now they've been slower than [indiscernible] of life, bringing out their IoT Connect platform, but they made a choice to choose our identities piece of KeyScaler to get that into their platform to take that out. And previously, Avnet, just so everyone knows, have invested in companies that they did not select to put into their solution, which is endorsed by Microsoft and many others. So Avnet, I see as a great potential partner to take us to markets we otherwise wouldn't be able to touch necessarily. And then you've got the Virginia state, which is funded by the Department of Homeland Security. And I know we did a recent Q&A webinar. We went to an event in Europe as this blueprint that they've created, and Homeland Security is a tremendous endorsement globally. National Cybersecurity Center talks about it in the U.K. And funding of various programs, building out Blueprint, taking you to other government defense markets but also commercial opportunities that are coming off the back end of that as they are effectively driving how do you deploy and secure identities in this very critical infrastructure. Well, a critical infrastructure has a wide range of definition that covers a number of industries. So we're really excited about that, and we're looking to leverage that in North America but also replicate what we can in Europe and some of the other momentum through other bodies. And then I touched on before cybersecurity companies. To verify, they invested in the [indiscernible] last year but also entrust. Both of those organizations are big, PKI, cybersecurity vendors, dealing with trust for enterprises. The left side of my chart I showed before. They're all trying to figure out and they are doubling down with organizations like us because they know the solution we've got solves the things on the right-hand side of the picture I showed. So working with those type of partners gives me access to more customers and sales forces. And that really takes you back to the talk with Microsoft. Again, it's not just working with these vendors. It's making them a sales channel. And with Microsoft recently, just to close off on that, we just recently got IP co-sell sales, which for us is fantastic news. It means sales people get paid on Device Authority's KeyScaler. Quick slide of Microsoft. You're all going to go , this is an eye chart. The key thing here is we invest heavily for customers who want to integrate KeyScaler into their Microsoft Azure deployments. There's a number of functionalities and the ones that are really -- or as important, the new are at the bottom where you're now looking at some of the managed services capabilities. And the big umbrella that Microsoft is calling, Defender for IoT, where they make all their security acquisitions, put them under a bucket. KeyScaler, will have a plug into that. And the real key -- the key value here to Microsoft and its customers, it provides the breadth and depth required. It's plug and playable. That's what customers and what Microsoft need. So you have to invest that in that platform so it's easy to get deployed. It protects previous investments they already made in either Azure or on-premise ones they want to move to the cloud. And it makes sure we absolutely are Azure -- cloud-ready. But before all people asked, yes, we are also AWS and Google [ cloud-ready ], but AWS is a platform that people deploy in sometimes that we see Azure for the type of market [indiscernible] I'm talking about being the choice for them and for the systems integrators deploying. So we're getting back to business, I guess, post COVID, I just want to give you a heads up. Events are important to us. Getting back to business is important to us, but physically turning up of events, we get a lot of good leads. We've seen a number of our key partners often were with our partners. And you can see a big long list here. Last week, we made 30 contact points in Singapore alone, where that was a U.K.-sponsored admission in Singapore, we were invited. And we were 1 of the top 3 vendors for the number of traffic and activity of meetings. So that's the first event we had last week. So I'm delighted to be -- and you can see there's a number of things coming up. And I'm looking forward to attending some of these machine identity and Zero Trust events and also attending [ Active ], which is a big customer event, their own very cybersecurity summit. They take it that seriously, they invite key cybersecurity vendors in their own day summit and we'll be part of that. So look out for us around the world, and you'll see some of the activity around that. But industry analysts, we go to events as one thing. We get a lot of coverage, but punching above our weight and making sure we recognize is really important. We never diminish the value of independent analyst feedback. And if you haven't seen, there's a great report from ABI Research that absolutely categorize Device Authority as one of the leaders for device identity life cycle management named against 3 others, of which one is a very significant strategic partner in Entrust. And on the right-hand side, and I know some of you track this on the SPARK Matrix, and the new one is [ eminent ]. And look out for it. It looks great. I've seen it. But that will be out very soon. And that will be the 2022 version, which again further amplifies and endorses our leadership in terms of the impact we're making with customers but also the technology and the way that we interact with other people. There's significant names on there. It is a competitive market. We need investment to invest in that competitive market. But those players, it is a massive market. We just need to make sure we stay ahead of the curve and we win. And that's really where it comes down to organizations like Tern who have been a very, very supportive investor, really since I joined the company in [indiscernible] .And I remember when I joined the company, one of the first things I said to Al, we need to absolutely focus. We have a focus on device -- sorry, data security, but we need a device security solution as well. They go hand in hand. If you can't trust the device, you can't trust or secure the data. So that couple thing was really what was behind acquiring DA Inc. and also expanding in North America, and you heard Jo talk about that earlier, which is a huge market. That's where the big customers are coming from. That's where Microsoft is it has its biggest theater. That's where the other cybersecurity vendors, so it's a global market, and we need to have a significant presence. So investing in that and getting that right is really important. And Yes, I have experience on that, but so does organizations like Tern and ALP or other investors but specifically a number of the management team in Tern. And providing -- I put here patient investment capital because it's true. It does take time. You have to wake pivots. You have to adjust to the market. You have to make decisions. But making decisions like backing and working in Microsoft isn't easy and it doesn't come overnight. You have to work at it, and you get endorsement at it over time, and you get real functionality from your customers inputting into your product-led growth strategy that we talked about, where they want us to add advanced features. And we have a rule. We never do it only for one customer. If it could be repeated, its actual value differentiates us, we add those features in. And if they're advanced, we were possible charge customers to do that. So again, getting those inputs from our investors and investors in helping shape that is also very important. And then access to other cybersecurity partners and also investors. And I personally would want to thank all of the Tern team for the significant number of meetings I've had in recent weeks and a lot of them are either supported or very much introduced by the Tern team. And they've been second to none in making sure they do that. And I echo what Jo said before about ongoing mentoring but also collaboration with a number of the team across the board and really across the years as people have joined and add different skill sets. So that's my update, Al. I will pass back to you. Thank you.

Well, thank you, Darron. Again, exciting progress and the continuation of expanding the utilization of the tools that you've developed at Device Authority. And I think, specifically, with the recent updates, the capability to retrofix a lot of the Azure stuff, that the market has been [indiscernible] but again, thank you, Darron, [indiscernible] the shareholders. And now I'd like to introduce Alastair Williamson, the CEO of Wyld. In 2021, Tern made a switch from a venture investor to institutional investor at Wyld, and as a result of the company's IPO and the business has expanded. We have also increased our holdings in this exciting business through the exercise of our warrants right earlier in the year, and we believe that this is a fundamentally good use of our capital in that we were able to exercise these warrants at a favorable price that we believe will have significant returns to our holders. And I think with that, it's also been a very significant year for Alastair and the company. And I'd like Alastair to provide you with an update on the progress and the exciting things that Wyld is doing in the marketplace to really bring Internet capabilities to everyone. Alastair?

Thanks, Al. Evening, everybody. So I've got about 13 slides I'm going to take you through, just give you an update on where we are at the moment and some of the stuff we're doing moving forward. So excuse me one moment, slight [indiscernible]. Okay. So Wyld Networks at a glance, for those that don't know us, we were founded in 2016 in Cambridge in the U.K. And currently, we have 28 employees as of the end of Q2 this year. And as Al said, we listed on the NASDAQ first North in Stockholm in July 2021. And we also placed ourselves on the OTCQB in the U.S. of May this year. And what do we do? So we provide our customers with the ability to collect data from their IoT sensors anywhere in the world by leveraging low-earth orbiting satellites. So we offer our customers a low-power, low-cost solution that gives them a really quick return on their investments. And our business model is very, very simple, very similar to a mobile operator in respect that we sell a piece of hardware, such as a mobile operator sells a mobile phone. We sell a piece of hardware called Wyld Connect, and our customers pay us a monthly fee for using our network. So just before I get into the whole presentation, I just want to touch a bit on Tern, Tern, our anchor investor. They are the first institutional investor that came into Wyld, and they came into Wyld in 2016. And they had a vision basically to combine 2 separate entities into Wyld Networks to create a world-leading virtual satellite operator for the Internet of Things. So Tern, yes, they're providing capital, but they are different to a lot of VCs. And yes, they've provided us with capital to fund and grow the company. They provide us capital in all 3 rounds. And we're a cornerstone investor in our IPO on the NASDAQ First North and also supported the Tier 1 warrants, which converted at about 98% early this year. But more than that, they're actually actively involved in shaping our strategy, both technically and commercially, helping us establish offices in the U.S., helping us with patent applications, helping us with trademarks. But they've also introduced the company to new partners and new customers around the world to actually support both our technology development but also our revenue growth. So for those that don't know me or don't know the company, so what do we do? What's the problem that we're actually solving? So today, only 50% of the world surface has access to wireless networks. The other 85% has no access to the Internet. And it's this lack of global connectivity that's actually holding back the growth of IoT networks from adding about USD 2 trillion to USD 3 trillion to global GDP over the next 10 years. So what we've done is we've developed a solution called Wyld Connect, and it's an affordable wireless solution that allows our customers to connect their IoT devices and sensors anywhere in the world to low earth orbiting satellites, basically providing 100% connectivity. So we are basically offering our customers the ability to connect their sensors anywhere in the world. So just -- what are the products and what's the actual solution? So -- on the left-hand side, I'll just go through the 3 products. There's Wyld Connect terminal. It's a terminal that connects to IoT sensors that are already deployed in the field. It transmits data up to the satellite. The satellite transmits data down to Wyld Fusion and Wyld Fusion provides that data to our customer. So that terminal sort of retails at a bit less than $100 per terminal. And then there's Wyld Connect, which is the module, which, in essence, is basically just the electronics that are embedded in Wyld Connect. So we've taken the electronics out, put it on to a small full factor chipset, and this is what we're currently selling in volume. And the customers that are buying Wyld Connect are integrating Wyld Connect into their sensor. So they're using a lot of the power, a lot of the microprocessing capability that exists within their sensor that we're providing them with the connectivity piece that allows them to send their data to satellite and back Wyld Fusion. So that's where our volume sales are coming from. And then there's Wyld Fusion. And that's the platform that sits on the other side, on the ground station side. It's a platform that sits in the cloud. It's a provisioning platform. It's a security platform. And most importantly, it's a payment platform because this is where we generate our reoccurring revenues. Our customers have to pay us up to $5 per month per device or $5 per month per Wyld Connect module to actually get access to their data. And that's all driven through Wyld Fusion. And then once the customers pay for the data, then the data is delivered to the data analytics tools. So just going to go through some of the use cases, and this is quite a busy slide. So it's best not to read. Probably easier to listen. So the use cases range in different market verticals, agriculture, utility, environment, energy, maritime and logistics. And if I look at agriculture, we're working with companies like DFM, Bayer, Syngenta, British American Tobacco. One of the use cases there is about how to increase the yield of crop and reduce the waste of water. So our solution is being integrated into soil moisture sensing -- sensors, deployed in agriculture. That data is sent to satellite, collected from satellites, run through data analytics. And farmers and growers can look at how they can reduce or optimize the use of irrigation to increase that yield but also reduce water. If you look at utilities, we're working the company. One example is DEWA, the Dubai Electricity and Water Authority. And they've basically launched a satellite with our technology inside the satellite, and they're looking at how can they collect data to manage electricity supply, how can they collect data to look at wind shear on pilots, high-voltage transmission lines, controlling the flow of water. So just an example, in utilities. And if you move to the environment, we're working with a company called Treevia, looking at deforestation and they're integrating our solution into their sensor, which gets deployed across thousands of trees in forest to look at -- went to harvest that timber and also to look at the health of forests. And then if we look at energy, we're working with Chevron as an example in monitoring corrosion in pipelines. So they're putting our sensor into -- or putting our device into sensors that look at collecting data to understand corrosion in pipelines. And there are hundreds of millions of miles of pipelines in rural areas, and they'll be using our solution to collect that data to ensure that those pipelines are not leaking oil or gas. We're working with another 2 companies in Brazil who want to or are deploying already turbines -- wind turbines. And they're using our solution to collect data to understand how to position that wind turbine depending on direction of wind, how much power it's generating and who to provide that power to. In maritime, we're working with a company and one example is Volvo. It's [ Penta ], the Maritime engine guys. They we'll be deploying our solution into their maritime engines to actually collect data to provide preventative maintenance indications. And in logistics, we're working with companies like Senet, Maersk, American Towers, and that's all about collecting data from IoT sensors that are on the move from farm to factory to warehouse. So they're on multiple use cases, and the ones that we are focusing on are obviously agriculture, utilities, environment, energy, maritime and logistics. So as you know, we've -- we're deploying solutions. We're signing up launch partners. We've got pilots running at over 20 locations across 4 continents. The one missing here actually is Bangladesh for British American Tobacco, that's being deployed. We have over 25 launch partners, and we've recently established a U.S. headquarter in Missouri and implemented sales organizations in Brazil and the Middle East. So where are we in our journey? As I said, we're going to be launching the commercial service this year. But what we're actually doing at this moment is collecting purchase orders for Wyld Connect. That's the hardware module. And we launched that hardware module in March this year, and we've generated orders of about SEK 31 million to date, and that represents about 92,000 Wyld Connect modules. So that's the module that's integrated into a sensor. But obviously, these orders, and we will continue to grow these orders by selling more Wyld Connect modules. But these orders, at this point in time, don't actually include the data service. That's the up to $5 per device per month, which is our reoccurring revenue. And we're currently at, at the moment, looking to get those data orders in as well as starting to continue to sell more Wyld Connect modules. So just an idea of who we're working with. As I said, we got about SEK 31 million worth of order backlog. That's with companies like Bayer, Treevia, DEWA, the Dubai Electricity Water Authority, [indiscernible] and a couple of others. But it's the number of launch partners that we're working with, which is significantly larger, and we're going through pilots with these companies. Once we've completed the pilots, we'll then go to collecting orders for Wyld Connect. That's the hardware piece and then collecting orders once we launch the service for the up to $5 per month per device reoccurring revenue. So companies like Syngenta, British American Tobacco, interesting. We're just deploying in Bangladesh. They have about 90,000 farms and they're looking for 4 sensors per farm. So you can do the maths on that. Senet, largest terrestrial LoRa IoT operator in the U.S. And American Towers, the largest terrestrial IoT operator in Brazil. These guys want to use our solution to expand their offering from terrestrial to satellite to actually offer their customers 100% global coverage. and other companies like Chevron, who I've mentioned before in KWS. But interestingly enough, I did a quick exercise on just the logos that are on this page. The market cap of all those companies just listed on those pages is over USD 518 billion. So what does it mean for us? So we know the market for the number of devices that's going to be deployed by 2025. And the market for satellite IoT devices, that's like Wyld Connect devices, is about GBP 250 million by 2025 and not including the data piece of it. But that sort of all equates to the total addressable market in 2025 of about $5.9 billion. But what does that mean for Wyld? So our view of what that means is that we have the ability to get about 11.3% market share by 2025, which would represent a value of about USD 670 million. So it's a large market that we're going after. So just some highlights before I come to a close. I think you'll all understand we are solving a real-world problem from 2 aspects. The first aspect is basically getting over this problem of only having 15% of the world surface having access to the Internet. So we're providing a 100% global connectivity solution. That solves a real problem. What I think also you need to understand is the other problems that we're actually solving are very critical to the world moving forward. In looking at how to use IoT devices and agriculture to reduce waste of water, to increase crop of yields; in energy, reducing spill of oil and spill of gas; and in supply chain, trying to ensure that goods get to their final destination in good quality, particularly perishable goods. So what we're doing is actually very good for the environment. We have a recurring revenue model, which is very important. So as I said, the Wyld Connect module is a one-off fee, it's about $40 for the Wild Connect module. And then there's the $5 per month for the use of the network, and that's up to $5 per device per month, and that actually brings our recurring revenue in -- we've got launch partners signed up over 25 of those. We've got about SEK 31 million in purchase orders. and we still have to add more purchase orders into that backlog and start to collect those data for orders to really build up that backlog before we launch the network. We have secured patents and we've secured trademarks and we're operating in a significant market. So I just want to sort of end with one slide and ask that -- we had a report written by a financial analyst company in Sweden called Red Eye. It was published on Friday last week. It's about a 50-page document, and it talks about our projected revenues as they see it. It goes into full finance review of Wild Networks. It talks about our competitors, our first step into the market, our leadership position and also talks about what they believe is our fair value share price, which they indicate to be SEK 24 as a base case and up to SEK 33 on the best case position. Now I do really urge you to have a look at that report. I do know that Tern put it out through LinkedIn. But if you don't have the ability to find that report, if you can send me an e-mail at [email protected], I'm more than happy to provide you with a copy of the analyst report. It's a very good report. And I guess that's it, it's always good to end on a video. So here we go. [Presentation]

Okay. Well, thank you very much for listening to me. I made a slight mistake earlier on, which I'd just like to correct. When I talked about the report from Red Eye that you can get access to through [email protected], the actual best case position on their view on our share price was actually SEK 48 not SEK 33 Okay. Tim.

Well, thank you, Alastair, and thank you very much, Jo and Darron for some fascinating presentations there. Really, really appreciate it. Thank you very much to everybody who's submitted questions. I'll now do my best to go through those and apologies in advance that it might be dotting from place to place. I've done my best to try and group them, but I'll take them as they've come in.

Jo you gave the first presentation. So I've got a question for you. The questioner asks, do Talking Medicine sell medicine data multiple times to multiple agencies for competitor understanding, et cetera? Or is it just sold to the agency responsible for marketing the specific medicine?

No, really, really good question. It's really important for us that we don't go down narrow alleyways of that exclusivity so that our data is available to all parties because the points of differentiation is how the data is used as opposed to access to the data. And agencies move between brands very often. So they will be looking for different perspectives ultimately, they could be looking at the same data very differently and lots of examples in the market where you become stronger by working across the sector as in only working on a few medicines. So yes, open access in terms of you buy the data you see it.

Okay. Now a question really actually is applicable to Jo, Darron and Alastair. The question that says all of you seem to have very large addressable markets for your businesses. Significant number of opportunities, but you've obviously got limited resources in particularly, human resource. Could you just give us a little bit more color on how you're deciding on what opportunities to focus on? And is it a focus on short-term revenue, monthly recurring revenue or indeed something else? And if I could perhaps come back to you, Jo, to kick that off and then go to Darron and Alastair for their individual views.

Cool. No, again, I think that's absolutely right. You've got limited resource, and you are constantly running experiments on use of funds to make sure they are deployed to maximum effect and return. And we very much look to the long term and work back from it. But ultimately, we want to grow with customers. We've all talked about land and expand. So if we can't make those early customers happy, they're not going to lead us into that product like growth. So it's a balance and it's really, really hard. But [indiscernible] really tight management for us, it's about making sure we deliver now, but we really set that scene on work towards the future.

Darron, from a DI point of view.

We spent a lot of time, I guess, evaluating where you can win. And I think the biggest opportunity for us is people deploying in Microsoft Cloud. I always personally look for that. because I know we can add value. But in terms of investments in people, and I guess the next level is we're looking to add more into customer success team so that we can support those global logos, specifically in North America and Europe, and in development. I mean, we need to continue to innovate in our platform. And we also want to add some machine learning capabilities, again, adding in or extending our development team.

Okay. And Alastair?

Yes, sure. So just to -- we focus on markets based on the use case and our satellite coverage. So as we're growing the network, we get more satellites up, which allows us to go after more use cases. So currently at the moment, we are focusing on the use cases that we can satisfy with our current satellite coverage and then move from use case to use case to use case as we get more coverage. In respect to what we're doing in building the team, we're really focusing on the commercial. So we're focusing on sales teams in Latin America, and we've got a sales team down there. We got a sales team in the U.S. We now got a sales team in the Middle East. And we will next year once we've managed to consolidate the Americas, Europe, Middle East, we'll then go into Latin America -- into Asia Pac and start to build up our business there.

Okay. A couple of more questions for you, Alastair. The question says, is it possible for clients to get anything out of the Wyld Connect hardware without actually paying for the data subscription? Or will every Connect hardware sale end up on a monthly subscription?

Every Wyld Connect sale will end up on a monthly subscription. There is -- it's impossible for them to collect data without paying for it. It's a bit like a mobile network. You know you don't pay your bill, you don't collect it. You don't [indiscernible] your data. You can't use it.

Excellent. And the final follow-up one for you, Alastair. The question asked, how happy are the pilot customers with the product?

Very happy. The pilots are going really well. As I say, we've got over 25 of them going on at the moment. We're more than happy with the progress of our pilots.

Excellent, excellent. Now I had some sort of more general Tern questions and some specifics as well. Actually, one here, Sarah, it's probably one for you, which is a clarification from the interims that came out on Friday. Question says, the interims appear to suggest that the net assets have only fallen by 1% to GBP 30 million. And yet the net asset value per share has decreased by 8% to 8.5p. How is that possible when no shares have been issued?

Thanks, Tim. Yes, there's probably just a clarification needed there. Net assets did actually fall a little bit more than that. They fell from GBP 32.4 million at the end of 2021 to the GBP 30 million that they're at now as at 30th of June. That really reflected the GBP 2.4 million loss for the period, which included some of the fair value loss, which the interims -- talked about in some detail. I think potentially what the questioner is talking about is the investment valuation or our assets under management. That only fell by 1%. And that's purely because the loss of fair value on Wyld Networks, it's interesting that Alastair touched actually on valuation because, obviously, Wyld Networks is valued at point in time because it's a listed entity. So the valuation is really dictated at whatever point you closed your period on. And so that loss in fair value Wyld Networks was offset by the gains in fundamental that Al talked about at the beginning of the call. along with a fair value increase at Device Authority, again because of a foreign exchange revaluation, because it's denominated in U.S. dollars. Then there were some additional investments that went in, in the period for both the Wyld for a small amount on SEB and then also for Talking Medicines as well that kind of Jo referenced in her talk. So hopefully, that answers the question.

Certainly cleared it for me. Thank you, Sarah. Bruce, I think I'll fire this one at you because this is a question that's come up many times before on these type of events. I'm asked here why were there no metrics on the invested companies included with the interims? The Tern Board must know how frustrating this is for Tern shareholders. How can we judge the performance if we don't know the financial information? Can you give us a little bit more on why we don't?

I think the key point really is about not providing any of our competitors or DA or Wyld or Talking Medicines competitors with that type of information. Having run a small product company myself, you publish what you need to publish. So we're not going to provide competitive information in the field. It just won't happen. None of our comparative companies provide that information. So we will never do that. So -- and it can be frustrating. I'm sorry for the shareholders that feel that way, and we try and do that by providing key performance indicators. So people can see that there's growth in all of the companies that we invest in.

Okay. And a question that's come up from a number of people. Obviously, current share price is disappointing. This one for you, Bruce. Do you believe that the current board is fit for purpose, frankly, and particularly the executive team. And do you have faith in your executive colleagues and yourself indeed to deliver a promising future for Tern and its shareholders?

Well, having been the founder of the business and been instrumental in putting the board together, I can tell you the Board are very supportive of the executive team and in particular, of Al. And I would personally commend out to -- I've known now for 12, 13 years, I've worked with him before term. We've invested together. He's an exceptional businessman, and we're very fortunate to have someone of his caliber leading the team. So I can say that we absolutely take seriously what our shareholders say, and we discuss it intensely at Board meetings. But I as both a share shareholder and founder of the business, I believe we have an excellent team in place.

Thank you. Thank you. A question here that's not related to the 3 presenting companies, but it's regarding the Sure Valley Ventures funding. The question is a bit of a leading question here. The question says, when -- why are we still going on with Sure Valley Ventures when our original stake has already lost money, and how are we going to actually take this forward and why are we doing it. Anybody like to give some more color on the strategic rationale behind that?

I'm happy to answer that. And certainly, I'm sure Al and Sarah can add to that as well. When you get to a certain point of investment, we bring in third-party investors, other VCs, other private equity companies. And whilst they're friendly, they're also competitive. And to have access to a friendly co-investor and someone like SVV is highly beneficial for us, and it allows us to look at other investment opportunities. I think bear in mind, this is a 5- to 10-year play. And as they invest in companies that we will also take a look at, there will be an exit. And that exit will provide an income stream for Tern, and that's goodness. So I think it's a really good, solid strategy to partner with SVV for those reasons.

And to add to that, I think there's proof points for the shareholders to look at with the performance of SVV 1, which is part and parcel of a lot of the decisions that the Board took to make this investment into SAB 2. We're getting curated deals. We're getting noncompetitors. I mean, because every one of our companies has attracted considerable interest from other investors. And these are competitive situations for us to protect our position for our shareholders in terms of being able to leverage the growth that guys like Darron and Alastair and Joe are creating within their business. So having a source that provides us with friendly access to opportunities that we believe can grow and satisfy the growth characteristics of our business objectives is a real benefit for us and for our -- we believe, for our shareholders.

Thank you, Al. I apologize in advance, I was going to be dotting around, and I'm reading the questions as they're being typed in. Next one is for you, Darron. I'm asked on -- your team is very small in comparison to like of some competitors like Ping Identity or Keyfactor . Do you see that as an impediment to grab market share?

Well, that's a really good question. I mean clearly, additional investment will help us invest in a number of areas. But I would say, while I might be smaller, that we're a bit more nimble, we can move a lot faster. So it does have its benefits. But we do need some more people, but it's not excessive. I mean at the end of the day, we're building a partnership in direct go-to-market. Dealing with people like Microsoft doesn't mean you're working directly. You're working with systems integrators. Even with their marketplace, there are online offerings as well. So we do need to invest in our head count, but it's not drastic. Does it really keep my size as big as competitors? The market is so big. We just need to execute well. And I showed you that analyst report. It's what we do with information like that to demonstrate that we're one of the leaders and they need to work with people like us. I mean I would add people like Ping Identity, actually -- I mean, I've spoken to them. They have their own investment fund. Clearly, they're on a trail to be acquired by another significant PE company. But they're interested in our space because what we do is solve problems that they can't do today despite what their sort of grander website position might say. So I'm always mindful of the competition, but -- or collaboration, as I like to call it, because, in many ways, they are your competitors but also you have to collaborate because we're part of an ecosystem, especially in larger customers. But we do need more investments specifically to really sales and marketing development and customer success teams, but that isn't drastic.

Alastair, quick one for you. I'm asked, do you think there are any opportunities arising from the Eutelsat acquisition of OneWeb?

Yes.

Okay.

OneWeb are extremely strong in low earth orbiting satellites. As you know, they have put up quite a few low earth orbiting satellites, mainly focusing at broadband. So they're going after Elon Musk's business. But one of the key things of that, what -- that differentiates OneWeb and SpaceX is that OneWeb are going after business customers, which is really good because we're in the business space. We're not providing solutions to the retail space for consumers.

Okay. Thank you. And just a follow-up question, Alastair, a clarification. You said that monthly fees are up to GBP 5 a month per device. Is there a -- is that an absolute maximum? And if so, is there a real minimum? Are there some devices where you only get a few cents, for example?

So it's up to $5 to be clear, per month per device. So when we talked about the 92,000 units we've already shipped, do the maths. But the up to $5 is predicated on the number of messages that we would allow them to send, which is based on the capacity of satellites. So once again, I point everyone to this great report from Red Eye. If you don't have it, contact me, [email protected], I'll send it to you. They basically did a report and came out with an average of USD 2.8 per month per device.

Okay. Thank you very much for clarification. We're getting towards the end of the time and indeed the questions, but one here for the Tern team. Do you see any upsides or downsides in the current weakness of sterling and strength of the dollar? Are we seeing more interest in investing from U.S. entities. And does it create any particular problems for Tern, either side of that particular conundrum?

Sarah, you want to take the FX and I'll now talk about investing side?

Well, I think from an FX is definitely is a bit of an unprecedented time at the moment to say that we're where we are with sterling and dollar. So it's -- I would say there's not been enough time for anything to feed through in terms of the opportunities that you would potentially see coming from such a swing in ForEx. I wouldn't be surprised over the coming months that starts to have a real impact actually in interest levels that we see feeding through. But so the earlier stages that we're looking at, it's not come through yet. That's not to say it won't do, and I'd certainly expect something to swing along that way as we proceed through the year, if we continue in the way the forecasts are with sterling staying pretty much where it is for the rest of the year, if not getting a little bit worse.

Okay. And from an investing side of this dollar strengthening, venture capital organizations in the United States as well as in Europe and the U.K. have all taken a step back and are looking at the investing climate, and we're seeing valuations coming down. What I am seeing here in the relationship to our companies is the interest levels that they have generated, particularly with the report from -- that Alastair talked about and ABI Research, et cetera, the U.S. investors are becoming curious in what we're doing, and we're seeing that also at Talking Medicines, they're becoming very curious as to the opportunities because there seems like a double opportunity to have step up and step up in value from investing, which is good for the companies but difficult for us. Because we have to really, as Bruce said earlier, continually create value for our companies. And to do so, it requires our ability to compete with these dollar-based organizations that look like they may be on the horizon coming to the U.K. So it's an interesting period in time. And like Sarah indicated, the forecasts right now are not showing a change in that dollar to pound ratio of any significance for at least the next 4 to 6 months. So it's going to become a very competitive period for us.

Understood. Well, I'm very conscious that a couple of our presenters had a hard deadline at quarter past 6. We've now gone a minute over that. So I'd like to finish. I have had a couple of people actually type in and say thank you very much to work to the 3 presenters thank you very much to the Tern team. One says Tern team, you may catch a lot of flat from many shareholders, but clearly, things are moving in the right direction and why is the share price only where it is. Well, hopefully, it won't be there for much longer. But I would like to thank everybody who's attended tonight, both on the presentation side, but most particularly those shareholders and potential investors who've taken the time to join us this evening. Any other questions, as I said at the beginning, please don't hesitate to get in touch with me, Tim Metcalfe. Contact details are on all of the Tern announcements. And we look forward to doing another one of these not for too long. So thank you very much, everybody, and enjoy the rest of your evening.

Thank you. Thanks, Tim.

Thank you. Thank you all.