27 April 2022

Tern Plc

("Tern" or the "Company")

AGM Statement

Tern Plc (AIM:TERN), the company focused on value creation from Internet of Things ("IoT") technology businesses, announces that at the Company's Annual General Meeting ("AGM") being held later today Tern's Non-Executive Chairman, Ian Ritchie, will make the following statement:

"After two years of Covid-19 related restrictions it is pleasing to be able to welcome shareholders back to the AGM.

The last two years have been pivotal for all of Tern's network of companies* and I believe that all of them are now extremely well positioned for the future.  We have supported their growth from their early start-up days, to now alongside independent third party investors, who have invested after conducting thorough due diligence, demonstrating confidence in their management teams, business models and future prospects.

These actions have resulted in uplifts in their values, enabled them to gain significant commercial traction and grow their monthly recurring revenues, which we believe to be a key metric in establishing their value for a trade sale or IPO.  As these monthly recurring revenues continue to grow and the companies continue to enter into significant commercial contracts, we regularly evaluate the most appropriate next step to deliver value for Tern shareholders, whether that be through further third party syndicated private equity investment, a trade sale or IPO.

In July last year we undertook the first IPO of one of our companies, Wyld Networks, on the NASDAQ First North Growth Market in Stockholm.  Since the IPO we have seen a significant uplift in Wyld Networks' value as they have reinforced their market leadership position.  Wyld Networks continues to enter into further commercial partnerships to provide routes to market for their Wyld Connect Satellite IoT solution, which is intended to be a key part of the delivery of communications technology via the emerging constellations of low earth orbit satellites.  The public quotation of Wyld Networks has also provided us with a route to exit our participation at the appropriate time to maximise value for Tern shareholders.

With Device Authority we have continued to see significant progress, particularly in the US following the strategic investment from Venafi announced in December 2021.  The transaction with Venafi (whose major investor is Thoma Bravo), fulfilled the goal of obtaining an active strategic partner for Device Authority with solid cybersecurity credentials and a large presence in the United States.  Tern continues to hold a majority equity stake in Device Authority, a company with sufficient funding to implement its growth plans this year, and one that is enjoying material growth in its monthly recurring revenues from its subscription base and its modularised licence platform, KeyScaler®, together with receiving considerable additional interest, particularly in the US, following the strategic investment from Venafi.

FundamentalVR continues to go from strength to strength, adding additional capabilities to its immersive, surgical simulation application platform, Fundamental Surgery, and winning new contracts and customers.  The contracts, many of a long-term nature, being secured are a direct result of the careful deployment over the last two and a half years of the funds from the £4.3 million Series A raise, led by Downing Ventures, in October 2019.  The FundamentalVR team, assisted by Tern, continue to build the business and expand FundamentalVR's market position, specifically in the United States, and we were very pleased to see the quality of FundamentalVR's technology being recognised at a number of awards last year.  At the UK National Technology Awards 2021 FundamentalVR won both 'Virtual or Augmented Reality Product of the Year' and 'Healthcare Tech of the Year'.  The business was also the recipient of the 'Frost & Sullivan Entrepreneurial Company of the Year' award in 2021.

InVMA, now trading as Konektio following its £2.125 million investment round in December 2021, led by fund managers Foresight and Mercia, is another company continuing to build revenues on a monthly basis.  Konektio's Industrial IoT connected asset software as a service (SaaS) product, AssetMinder, is in ever increasing demand from customers who are looking for contactless monitoring of factory and remote assets.  Konektio has a strong sales pipeline and is continuing to build its recurring revenue base, particularly via its expansion into Europe and North America.  Following the December 2021 investment round Tern holds 36.8% of InVMA's equity, in what is now a simplified capital structure.

Talking Medicines, the most recent company to join the Tern portfolio, welcomed Boston based life science investor Mark Bamforth in January 2022, when his family office invested £1.19 million as part of a £1.59 million funding round.  This enabled Tern to recognise an uplift of approximately 62% on the amount invested in November 2020 and provided Talking Medicines with the funds to support its expansion, particularly in the United States.  This has already enabled them to gain further US recognition for their PatientMetRx platform, launched in February 2021, and continue to build their subscription base.

In March this year, we agreed to participate in a new venture capital fund, the Sure Valley Ventures UK Software Technology Fund (the "New SVV Fund") alongside the British Business Bank and other investors.  The New SVV Fund will invest in a range of private UK software companies with a focus on companies in the immersive technology and metaverse sectors, including augmented and virtual reality, artificial intelligence, the IoT and security.  We believe our participation in the New SVV Fund is an excellent way to broaden Tern's exposure to exciting early-stage private UK technology companies with a modest capital commitment, whilst delivering a number of other potentially significant benefits to Tern and its shareholders.  In addition to the attractive financial returns we envisage from our participation, we believe that it will provide important technology insights, assist with business development and increase our network, thereby significantly enhancing the Tern ecosystem.

In June last year we announced that an application was being made for Tern's shares to be publicly cross-traded on the OTCQB Market, based in the United States.  Whilst the process is ongoing, progress has been frustratingly slow whilst it is ascertained whether or not Tern's specific structure and classification under the AIM Rules enables the Company to be eligible to be publicly cross-traded in the United States under applicable US securities laws.  We continue to take advice in this regard and look forward to a final determination being made.

In conclusion, a stake in Tern should be seen as an ability to participate in the development of attractive early-stage IoT technology businesses, generally not available to public company investors, whose growth, with our guidance, targets long-term capital gains.  Whilst we are beholden to market dynamics and have relatively little control over when such value will be fully realised, it is our job to ensure that we work to achieve the strongest return for your investment, and we assure you that we will continue to make that our principal goal."

*Tern's "network of companies" or "our companies" comprise: Device Authority Limited, Wyld Networks AB, InVMA Limited (trading as Konektio), FVRVS Limited (Trading as FundamentalVR) and Talking Medicines Limited, which are companies that Tern has interests in.

Online Investor Presentation and Q&A Session

Tern's management and management from certain of Tern's network of companies will be hosting an online presentation and Q&A session at 5 p.m. UK time today, Wednesday 27 April 2022. This session is open to all existing and prospective shareholders.

Those who wish to attend, and have not already done so, should register via the following link and they will be provided with access details:

https://us02web.zoom.us/webinar/register/WN_WBJhT6wfSOiSPkwu1NTkaA 

Participants will have the opportunity to submit questions during the session, but questions are welcomed in advance and may be submitted to: [email protected].

Enquiries