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

Right, we seem to have most people with us. So welcome. Good evening. My name is Tim Metcalfe from IFC Advisory, Tern's Financial PR and Investor Relations adviser. With me this evening, I've got Al Sisto, Tern's CEO; and Ian Ritchie, Tern's Chairman. What we're going to do is slightly different format to previous occasions. We're just going to run through a question-and-answer session. And I'd like to thank everybody who submitted their questions and opinions. Really appreciate it, all of those have been passed on to the Board. But what we've done is try to distill those into a number of subject areas and a number of questions that hopefully cover all of the areas that people have been asking questions on. However, even though we've got a lot of questions in advance, we do welcome further questions. So if you do have anything during the session, please don't hesitate to use the Q&A button, and I'll do my best to have a look at that and add those into the questions that are being asked.

So without further ado, we'll get things underway. And as I say, we're just going to go straight into the questions. So the first area that we've had a number of questions on, particularly after the announcement earlier today has been funding. And the company's funding going forward. So the first one is, can you give some more color on the funding facility announcement announced earlier today? And does this cover the likely needs for the funding this year obviously, with any exit proceeds or disposals or value realizations? Or however, various people have described them are taken into account.

Let me take that one, Tim. We're pleased to announce the facility today because it is on the path to our goal of self-financing. This is a 3-year facility with a cap of GBP 3 million as part of the facility that enables us to have the capital required to send our corner in negotiations that are continuously ongoing in the background within the portfolio companies. One of the key features here of this proposal was that we were able to leverage the assets created from the realization from Wyld, which is now an investment on our balance sheet and use it and our belief in its future strength as well as facilitators' belief in its future strength is the backdrop or the backbone for this facility. So it fits within the format of while providing us with a resource of our balance sheet to help us achieve self-financing. One of the other key features in this facility is warrant coverage where there's a warrant coverage of 50% of the drawdowns that was determined through the VWAP calculation to be done at 6.8p, of which at 6.8p is a small premium to our net asset value per share. So not only do we have this facility to help us fund and be aggressive in our negotiations with other parties interested in our portfolio that we have developed. But this warrant facility will, if exercise, generate GBP 375,000 worth of additional cash to the company, small in the grand scheme of things, but still, I think, a recognition of the value of our assets and the facilitators' belief in the future value of the things that we're doing at Tern. So I think hopefully, that gives you some color and some idea behind the facility and why we have it in place now to help us achieve and continue to achieve success within the portfolio.

Thanks, Al. An obvious question that a number of people have been asking me today. Does that, therefore mean that you won't be looking to raise equity at least until the share price is considerably higher than it is today?

Our goal, as I said earlier, is to try to achieve self-financing here. And it would be silly for me to say we won't raise money, but -- because we don't know what the future holds. But I think as we're pushing our companies to all achieve breakeven now that the parameters have changed, we believe this facility will provide us with the necessary capital to stand our corner. And I think that is of critical importance to our shareholders.

Okay. A question that was asked by a number of people ahead of today's announcement was that if you were to raise equity in the future, would you go to existing shareholders first i.e., through an open offer of rights issue or other structure that's cost effective?

I think, again, to make a definitive statement and an approach to any sort of fund raise would be out of balance because the market conditions at the time, we would dictate the route that we would take. But we have tried and continue to do what we tend to have our shareholders participate in any offering that we put out there, and we will continue to keep that top of mind in anything that we do. But again, coming back to where we are, we have created a facility using the Wyld shares, which I also believe is good for the Wyld shareholders because we're now tying up from an escrow point of view, a large block of shares that won't be traded. So I think the value that's been created in Wyld is being preserved as well as the future value of Wyld is being -- can be leveraged by us to help fund things in the future. So again, we have a commitment that we try to -- we [ have been tempted ], the commitment to keep, and that is in having our shareholders participate. And they're -- based on today's market conditions, I don't see any reason why we wouldn't do that. But again, we would have to determine at the time when the necessity arises due to the best thing for the shareholders, which may include or may not include participation.

Thank you. We've had a number of questions on the Board and central costs and structures and things. One, for you, Ian. Does the Chairman think the Board is of an appropriate size given the limited number of portfolio companies and that no new ones are being added at the present time?

Well, yes, we have essentially 4 Executive Directors, and all of them were very much engaged with the current portfolio. So Bruce is looking after Fundamental and Device Authority. Matthew is actually seconded at the moment to connect the call and they pay for his time. And Al is very much involved with talking medicines and also Device Authority. So they're all pretty well occupied. We are a public company. Sarah is our Financial Director, which is also the Company Secretary. And there is quite a substantial bit of work involved in being a public company, and we just can't -- we can't ignore that, and we kind of shook it. We have to do that. So I think the Executive Directors are all really required. And I'm the non-exec Chairman, but I have a nonexec fellow Director in Alan. Alan has got a huge experience, he's a charted accountant, a fellow partner -- a fellow -- a former partner in a major accountancy company. He chairs the Audit Committee and the Remuneration Committee. And that's essentially the skill set that he brings and also his contacts in the city, I'm based in Scotland. So I'm really more involved with the governance aspect. And then Alan is more involved with the city connections and the audit and remuneration. So I think the Board -- there's a decent size. I wouldn't want to cut the nonexecs down, and it's difficult to see how we would actually cut the Executive Directors down for the moment. One of the questions is, given the limited number of portfolio companies and no new ones being added, but we are always looking at new companies, and I would expect -- I'd anticipate that we will be looking at fresh investments when time arises when we have some exits or when we have resources.

Well, thank you, Ian. One thing that I see that other shareholders don't see is the amount of time and effort that goes into negotiating the contracts that stand behind any of the investments in the portfolio companies, the negotiations with other co-investors and all the documentation that goes behind that. I don't know if you want to make a comment on what you see in those very, very lengthy agreements and time consuming agreements.

Well, our modus operandi has changed a little bit recently because when we started, we were the -- basically the major investor or the sole investor in many cases in our portfolio of companies, that has now changed. We now have co-investors in all of our companies. And that does mean that we can't just push our way, we have to accommodate the plans and expectations of our fellow investors. That can be difficult, that can lead to challenging differences in opinion and so forth. We've always got to sort of reach agreement on what we do. But one important thing about all this is that our fellow investors -- we have to have confidence that we can stand our ground in an investment round. So if there's an investment round and we -- it turns out to be obvious that we can't deliver our stake, our share, we can be diluted quite heavily. So we have to be able to stand with our fellow -- our co-investors. And all our -- and we have to have confidence that we can do that.

Let me add to that -- what Ian said is spot on, but also what is spot on is our first investment has created now companies where we are now an investor alongside other investors. But the other investors that were alongside with have funds that have [ 300, 500 ] in the case of [ equity ], GBP 13 billion in assets. And for us, as the small investor, it takes a considerable amount of gymnastics in the negotiations to hold our ground and stand in a position where you, our shareholders, are protected from many of the unbelievable terms and conditions that get placed into these agreements that cause future problems for us to participate in, which I don't -- I won't go into the details, but there are span or after span that get tossed into these things that have not only impact in this round of funding, but have substantial problems for us in the future rounds of funding when those occur. So what we have been able to successfully do is attract new investors that have big funds who can fund the growth phase of our businesses, and also maintain a position where we haven't lost substantially in the negotiations. So we want to thank you for that giving us that capability, and hope we can do that in the future. And again, this loan facility sends a message to our co-investors that we're fully prepared to stand and sit at the table and wrestle as hard as we can for you, our shareholders.

Yes. Thanks, Al. We've already had a couple of questions come in. So thank you very much for that and keep them coming. One asks, which I'll answer why aren't other directors here today? Probably my fault. We just thought it was more efficient to have Alan, Ian answering the questions as Chairman and CEO rather than have the whole Board present. The next one that's come through is one for you, Ian. Just asked about remuneration. This has been asked before. Do you think it's appropriate?

Well, we are -- compared to the situation for talent, obviously. And we do look at salary surveys and remuneration reports for [ AIM-listed ] companies and investment companies. We are absolutely at the low end, we're very much at the low end of our executives in terms of remuneration. And the remuneration committee, which is, Alan and myself, independently, we believe that these are the sort of levels we have to pay to keep the skill set that we have. It should be pointed out, though, that there's a performance element in our remuneration package. And so this year, when things have been a bit more disappointing, the remuneration is almost 20% lower than last year. So in times when things are going well, performance-related aspects of the package can go up. And when times are tight, they don't. And so there's been no performance related aspect in the current remuneration. So I think we have to be competitive. We have to pay our staff, our employees the kind of remuneration that is required. But as I said, we are really at the low end of our competitive -- comparative companies.

Thank you, Ian. We've obviously got the AGM coming up, a couple of directors up for reelection and other normal resolutions being put to the meeting. One for you. The question asked bluntly, why should Mr. Sisto be reelected as CEO.

Is that for me or for Al?

I think it's for you, Ian. Al, can you give his selection speech if he wish...

No, no. that's perfectly okay. I mean, quite honestly, if I wasn't able to run this company, then I wouldn't be interested in continuing either. He is the heart and soul of the company. He brings the Silicon Valley aspect to the business. He brings huge experience of international technology business as does Bruce for that matter. So we have a real depth of experience in this -- in the type of situation that we are facing. Most of -- all of our companies are U.K.-based, but with the exception of Connecticut, they're actually aiming to grow their business mostly in the states. And the connections in the states that Al brings is absolutely vital to building that type of business opportunity. So as far as I'm concerned, Al and Bruce are both absolutely vital to the future of this company as a [steward], but certainly Al very much so.

Thank you. Al, I don't know if it's appropriate for you to say anything more than that, but we may leave it there with, Ian's comments.

I'll leave it with, Ian.

Keeping on these sort of matters. Questions asked why there been no director's share purchases recently given -- particularly given the softness in the share price?

Yes. I mean, to be honest, this is a situation that frustrates me enormously. I was trying to buy shares of the company from months and months and months last year. And eventually, they closed -- yes, we're offering close periods. We have deals underway or whatever, and we just can't, but not allowed to. So as soon as I was able to, I did buy shares, Al also bought shares last year. So we have been buying shares in recent times. But as a public company, we just can't do it willy-nilly. We are very much restricted by when we can do that.

Yes. I personally know that because I come under the same restrictions as the Board, and I would like to be buying shares. The part one on the sort of the central aspects, central costs. Anything you can talk about, about the cuts of that? Are there any sort of other areas that you're looking to focus on to make sure that the cost base is appropriate for an [indiscernible] company of this size?

I'll take that one. I think we are every month looking at our costs and trying to find ways to save money anywhere we can. One of the things that we're also dealing with right now is the inflationary aspects of services and service providers. What we were paying in 2019, 2020, in legal costs, accounting and services and advisory services for valuations, et cetera, to provide substance to what we do and have dramatically increased in cost at maybe 1.5 to 2x the rate of inflation. If you look at our cost basis today versus 2019, 2018, 2020 and adjust for inflation, I would argue that our cost base has actually come down with regard to what we're doing. And as I said earlier, we're always having to deal with unsolicited proposals coming into the companies from sources of capital that would like to take our percentage from where it is to something much less and that requires us to have the best available support, particularly on the legal side to give us the ammunition to fight with, to hold it around. So we're really looking at the impact of inflation, the impact of the cost for services in general that have gone up. And in fact, this rental increases is one of the things we're really focused on now is trying to figure out how to find a new place to go to save money because we're not happy with what we're paying for rent. So we're looking at very atomic levels of our cost structure and trying to stay flat or if possible, go down, given the cost of capital right now changing dramatically in the last 15 months.

Thanks, Al. As you've been speaking, we've had a few follow-ups to some previous points that have been made. One questioner asks how the PIs know when the close period is. Simple answer is, you don't, and you can't. Under [ MAR ], there is a month-long formal close period ahead of the expected release date of results. But other times that the company may be -- and directors may consider themselves in a close period to say that they are is actually inside information in itself. So I'm afraid that's something that can never be commented on whether the company is in a close period or not in a close period. As you say outside of those results dates -- if the results date has been announced. And so hopefully, there's some understanding in that one. On another point, the questioner makes -- really makes a comment here. The discussions we've had about skill sets and the Board makes no reference to actually the investing management's CEOs and other management skill sets. And could you comment on how their leverage enhance the overall value of the term portfolio?

Absolutely. I would say, our cadre of CEOs and the SLT teams at our companies have -- are comprised of founders and people who were the initial visionaries of the business and other folks that we, and some of the new investors, have been able to recruit into business. They are based on salary plus performance bonuses on achieving results and as well as stock options that are quite handsome stock options that are given to the senior teams that get rewarded at the time of a realization where there's a change of control or a liquidity event. So their incentives are very much in line with you, our shareholders' incentives to achieve growth, profitability and a realization and necessarily that order but in the combination of all those factors. And I would also point out that the largest part of the group makes a lot more money than we do in these positions because in order to recruit high-quality people, it's a very competitive marketplace. So the comp structures that we have in place within these businesses is market and it's not, again, not just Tern, but it's Tern and the other investors that compromise -- that compose the remuneration committees of these businesses in such a way that we have applied best practices as well as benchmarks to provide compensation that we believe is fair and creates the behaviors that we're looking for as the investor group to incentivize these individuals to achieve a realization of substantial benefit to the company, that company being Tern.

Which, I think neatly leads us on to talking about the portfolio of companies. A question here, can you comment on how each of the portfolio companies is currently doing? Just briefly, I know that could be a session in itself on each one.

I will be brief, but without these to somewhat precise given the rules of what we can say. But as we indicated in the results for 2022, the world has changed with regard to cost of capital. And as a consequence, the metrics for businesses have changed dramatically. As we reported in the end report, all of our businesses -- our businesses are growing in terms of recurring revenue with the key metrics that establish valuations. And I think that's proven to be a benefit given the valuation decrease in the metrics that calculate valuation so that we have been able to not take some of the 60%, 70% kind of downgrades within the portfolios. That said, from a business point of view, we also said we're driving every one of these to profitability because that's the metric for the creating realizable value at a multiple over the revenue. So every one of our companies is on the path to do that at various different stages, but the goal is to get there as quickly as possible. We're quite pleased with the performance that's going on with fundamentals. For surgery they have won a number of awards in the medical marketplace and have now recently introduced their SDK, which now creates a greater development resource to develop more IP for their business model that we think will help accelerate revenue and growth. They have one of the largest, if not the largest, life sciences investor in EQT in the business. And most recently, Apple with its new headset, I think it's really stimulated the idea of using AR and virtual reality to use in the education world, along the path the fundamental is taking while it is no longer technically a portfolio company, but it's an investment that we hold as a consequence of the realization on NASDAQ North. They're performing really well. Their order book, as Alastair has pointed out, is at record levels and should provide a substantial acceleration to breakeven as they begin delivering the land stations, the terminals that provide the connection to the satellite network that is also increasing. And I think a testimony to their performance is they just exercise their Tier 3 warrants at a 97.1% conversion. So I think in the Swedish marketplace on NASDAQ North, it's a stock that's well thought of and the warrants were a clear indication of people wanting to get more of the shares to move forward. Konektio, Matthew is in there, really helping the business achieve -- seeing great progress as a consequence of the new introduction of impact as one of the new capabilities of their baseline feature product Assetminder. It really is focused on the energy side of things and energy is one of the biggest problems in running factories and facilities that require constant utilization of resources like energy in ways that cost savings are critical, and I think the company is really positioned well in that area. And Device Authority is continuing to make progress. And it's really, I think, achieved success within the government area in the U.S. right now through the relationship they have with Virginia to attack the SBOM, on the secure bill of materials for software initiative that the government has set out through one of Biden's executive orders, and that is starting to gain momentum and traction across the U.S. and outside of the U.S. as tensions -- and particularly tensions in the cybersecurity world are increasing, they are positioned to see there. And then lastly, Talking Medicines, I think is really positioned well right now in that they were way ahead of the curve in using artificial intelligence. And in fact, they were early on users of ChatGPT to do duration of large language models, which is part of the technology behind the whole AI environment and have success now in New York in the pharma marketing area with people utilizing the Talking Medicines AI capabilities to create better insights into customer as well as the health care providers or doctor's utilizations, beliefs and understanding of what people are using these medicines for. And I think we're going to see some really important releases of information from Talking Medicines, the ethical use of this product as well as the success over the rest of the year of people adopting their approach to artificial intelligence, which really takes into account, precise data models that create value rather than create concerns or ethical issues. So I think we're -- we have a group of companies right now that are really positioned well in the markets that they serve. I hope it helped?

No, thank you for that. Obviously, they're all making good progress. Can you talk about the future road map for them, i.e., what will determine when you look to realize value?

The idea of realizing value hit a speed bump in the second half of 2022 when companies were achieving results, the liquidity event results predicated on 20 to 25x multiples on the metrics that were being used. Those multiples have come down to 3.5 to 5.5x depending upon the nature of the business. We, as we said before, continue to constantly look at opportunities to create a realized -- realization within any one of our portfolio companies, but we want to do so in such a way that creates reasonable return for our investors. I mean if we look at Wyld as an example, the realization there was about a 5x multiple of capital invested, which was a pretty good result on the IPO. We're looking to achieve things like that or more within the framework of companies that we're invested in today. The market is substantially different. There's very little activity when I say very little activity. The activity level of investments is down about 30% in the U.K. alone and about 30% or more worldwide from venture capital being put to work inside companies today. So we have great customer -- our companies have very great customers, and you've seen some of the logos that have been put up on Capital Markets Day. So I think we're fortunate that our companies are doing businesses with companies that are billion-dollar businesses and industry leaders, and those industry leaders, hopefully, at some point want to have a competitive advantage and a competitive advantage that's delivered by our companies, and we can leverage that success. But the table today is a bit in disarray. We are not hesitating to have discussions with regard to realization or some strategic event. But we're also not going to give away the hard work that we've achieved with your assistance for less than what we believe to be a fair price. So we're looking, we're not saying no immediately to anything we're investigating everything to the fullest, which again, takes time and energy and money to do. But nonetheless, I think it's an important work that we do for you to achieve a result, I think...

By that, it's you, the shareholders, not me. No, I'm a shareholder. Yes. I think what I'm hearing there is this is something that's constantly looked at is soon as appropriate, but it's also about getting the appropriate timing and value timing.

Yes.

I've had a question come through, if you don't mind, I'll answer. They've said noting financial data is confidential on the portfolio companies. How does any bona fide bidder, investor actually evaluate them? Well, it's pretty simple, actually. If they are bona fide and they can do it. I used to be an M&A banker running these sort of processes. They are very formal. And if you were -- anybody on this call a bona fide bidder for any of these businesses, I'm sure you can have plenty of information, but you would have to pass quite a high hurdle before that information was given to you. You will be under substantial restrictions and it would only be given to people that aren't going to damage the commercial position of those businesses. So it's -- I know a frustration for probably everybody on this call, the amount of information they get on the portfolio of companies, but it is important to protect their commercial positions, and it's no different, frankly, to any other private equity or venture fund that you might like to invest in.

And there's one other feature that's included in the that, Tim, is that with every one of these discussions, when they end, there's a tail on the NDA and the tail of the NDAs is you, the investor can't trade in this business for 6 months to a year or say anything about the early information you gathered. So there's the front-end hurdles, but there's also the tail so that we're protected and you, our shareholder are protected from the information gained.

I promised to a lot of people that I will ask the majority, not all, the majority. And there are one or two questions that I don't understand. I'm afraid, but I would try and answer as many as I can. This one says, have you done down a historic exit opportunity, which you feel in hindsight should have been taken? Or were you too greedy?

[ Not that of ]...

No. Not at least.

All right. Well, I've asked that one. Moving on talking about the portfolio. I had a number of questions about NAV valuations. And obviously, those go out formally twice a year with the full year and interim results. I have had a question of saying, have they changed since the last set of results came out, which I think chose not quite a full understanding of how they're actually -- how they're calculated and how they're looked at? Al, Ian, any -- give a comment on.

The NAV calculations are done twice a year, and they're done basically at a point in time. And that's the 31st of December and the 30th of June. And as a consequent of that, there are many variables that are applied to the valuation. For example, the strength of the pound against the krona in Sweden. So we had a big shift in value at the end of the year, December 31, with Wyld's valuation that we carry because the krona and the pound moves significantly. The other part of it is third-party validation of which we do during a period, and that third-party validation applies -- with the -- a third-party like EQT has offered to pay and for share -- new shares in our businesses and those get calculated into the net asset value calculation for the portfolio itself. And lastly, there hasn't been a third-party validation. We're required to get a third-party valuation organization to work with the accounting firm to agree on the valuation that we're proposing get carried forward and it's not something we set, but it's set between the accounting people and a third-party valuation organization that costs money to utilize, but provide you with a fair value of assessment at those 2 periods in time. If Wyld shares, for example, go up 20% on the 1st of January, we're not going to benefit from that because it's that one point in time, December 31. And quite frankly, if you look at our portfolio, you could argue in every month of the year, a goodness factor that could take the value up or both something that happened that might take the value down. So the industry and the accounting rules dictate how this is done. We live within the framework of how it's calculated.

My -- sorry...

No. It's just -- it's important to recognize the fact that net asset values is an [ art of science ], it really is. And also I think without exception, we would not sell any of the businesses at the current NAV. We're looking for a substantial exit, substantial realization from all of them. And -- but we have to be prudent, and we have to value, a very prudent value -- a very prudent valuation. So to some extent, that's part of the fact that we are on the company and that we're an investment company. So we have to air on the low side all the time. But when we actually come to realize these businesses, we'll be looking for a much higher valuation than the ones that are on the books. And of course, Wyld isn't a art of science because it's a public company. So it's -- that valuation is fixed and...

Fixed every day.

Exactly, yes. However, Wyld has now done their warrants. So they no longer have warrants hanging over them. And they've got really substantial business opportunities coming forward. So we do worry about silly, Wyld, too soon.

Thank you. Another couple of questions on SVV, Sure Valley Ventures. Just a question, I haven't heard much about it recently. Are we still active? Is Tern still an active participant?

Well, Tern is a very active participant. I'm actually on the investment committee. So -- and we're having an investment committee meeting in not too distant future here. They like every other venture capital firm are looking at their dry powder and looking at investments and trying to adjust what was some of the early thinking last year, end of last year to now in terms of making investments. It takes anywhere from 4 to 5 to 6 months minimally to decide whether you're going to invest in a business or not. And a lot of things that are on the screen to look at from an investment point of view, we're at values based on last year's thinking. And there's a lot of work going into changing expectations within those companies to now get an investment at some number less than what they thought they would get in terms of value. So someone who is thinking about being valued at GBP 10 million pre-money for an investment is probably looking at somewhere in the neighborhood of GBP 5 million to GBP 7 million pounds, a 30% decrease from where we were at last year. So there's that as one of the reasons for -- the slow down investments, but also the quiet nature of SVV. They have quite an incredible amount of deal flow. So I think we'll see some substantial activity in the second half of the year as the valuation reset sort of takes hold within the start-up community.

We're having a few sort of clarification questions coming through. One or two I'm afraid we can't answer on implied exit multiples and what you'd like to achieve as return on invested capital. I'm afraid as a public company, no public company could answer that one. But one question I just asked, in the portfolio sort of update briefly you gave, Al, you seem to skip DA. I don't think that was the case, but it's -- wasn't delivered...

No. I talked about DA and the government and they're winning awards and becoming a critical part of the future thinking. And now that the attacks on IoT devices are happening strategically from bad-acting governments. There is a real necessity to change the way security is done. And I think KeyScaler is top of mind in the industry as one of the few capabilities that have the wherewithal to deal with hundreds of thousands of devices simultaneously. And so I think we're -- the company is in a new area. From a security point of view, it's a very conservative kind of world. So if you think how long, it took 12 years for ATMs to become popular and it was predominantly around security issues. They're in an area right now where I think the nature of the attacks and the problems being created, particularly by bad-acting governments are now causing governments to want things to happen. Going back to my days at RSA, we used to use the -- an example, and I think this is really relative to now as well is that you had seatbelts in your cars for years before you started to use them and you started to use them not because you wanted to be safe, but because the policeman was going to give you a ticket. You were going to get a citation. So seatbelt utilization went up dramatically. And because it went up dramatically, companies like Honda and Volvo positioned their vehicles as safety cars. They changed positioning of their business, and that changed that industry. And not only did seatbelts continue to improve, but now you have airbags and you have all sorts of other things that were spun from that change in belief systems. I think now with governments really taking an active interest in protecting their critical infrastructure, they will be passing laws requiring things to be, as we said earlier, SBOM, the SBOM being a real critical factor in improving to the government that you're a secure vendor to do business with the government. And I think that will accelerate dramatically the adoption of products like KeyScaler in the marketplace. So I hope that clarifies a little bit of the SBOM discussion.

I had another questioner ask, are co-investors in portfolio companies ascribing exactly the same value to them that turned us in its accounts? My understanding is probably, yes. Some instances, we don't know because they're not public and don't have to disclose it. Don't even disclose it to our underlying investors. But I think the answer to that is broadly, yes. Is that correct?

Yes. I think so, yes.

Yes. They would. They, as we put money in, add value. Now whether they carry that value inside their firm is up to them. But in terms of writing a check, their check and our check are based on the same science in terms of numbers of shares and the price per share that we agreed to. So there's no doubt about that being absolutely positively the same.

Can I just make a comment about that because our co-investors -- because we're a public company and our shareholders come in public, our co-investors in many of these situations are reading these comments, if there's negative comments about -- unjustified negative comments, then it does do us damage. It really does. And it's very -- I think it's important for our shareholders to support the company and not to trash it. There's no point in doing that. And actually, it could cause quite serious problems when we're come to doing -- I mean if our co-investors don't think we can stand investment, then they don't have any confidence in us doing that. That is very negative. And so it's really quite important, I think, that we take that quite seriously.

No, I think that's noted and certainly something that I see on a regular basis. I think we're getting towards the end of the session, but I just want to cover one or two sort of final questions that are coming through some revisiting old ground. Questioner asked any active future plans for an OTC listing or other listing in the U.S. I think our announcement clarified why we couldn't do it, Al. Okay, if you want to comment on that?

Yes. The way the law is written in the U.S. and the way we have to describe ourselves on AIM are in total conflict. So getting listed on anything in the U.S. would require us to change our listing in the U.K., and we would prefer, currently, the liquidity indicate ability that, that AIM and LSE provides a bar none to move forward. So, yes. I mean, again, very frustrating for us because if again, things were grandfathered in and my biggest complaint when we were doing this is how come Berkshire Hathaway, which is an investment company can do this. Well, they grandfathered in with a clause that allow them to do this through one other insurance companies, which is -- I think from a simplicity point of view and from a success point of view, we're looking to AIM and LSE to be our source of capital now and for the foreseeable future.

And I think it's important to note that we were actually breaking new ground here, AIM investing companies, which is the technical description, happy trying to go through this process with the SEC and listing in the U.S. So they had to work out how their rules fitted in with the AIM rules, and it could take quite some time and ultimately, wasn't the result we wanted, but it was what it was.

Yes. It was a very crazy search to define experts to actually advise FINRA and advice the SEC and then advise us as how we are structured versus the rules as they're interpreted. So very disappointing. But here we are, and we're moving forward and AIM and LSE is the way to go.

Yes. Absolutely. Okay. Well, we've gone beyond the 0.75 of an hour that I said to a couple of people who found me earlier, right would last. But hopefully, we have answered the majority, if not all of the questions that we can. There were one or two on there that I know we haven't answered, but the answer to them in many instances is, yes, it already happens. But if you feel that there is something that hasn't been answered, please do get in touch [email protected] and myself from the team will always try and answer your questions as well Al, Ian and the rest of the Tern team. But I'd like to thank everybody for joining us. I think it's quite remarkable that I've seen the participant list only go down by 2, and it's not because we've only got 2 on here, that's well over 100 people. So thank you very much for everybody for listening, sticking with us and look forward to your company in the future. Thank you.

Thank you. And again, we really appreciate your support.