NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR"). IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

5 October 2022

Tern Plc

("Tern" or the "Company")

Equity Fundraise of up to approximately £2 million,

comprising a Subscription to raise £1.3 million

and

a Retail Offer via the PrimaryBid Platform

Tern Plc (AIM:TERN), the company focused on value creation from Internet of Things ("IoT") technology businesses, announces that it has raised £1.3 million, before expenses through a subscription of 17,333,332 new ordinary shares ("Ordinary Shares") of 0.02p each in the Company (the "Subscription Shares") at a price of 7.5 pence per new Ordinary Share (the "Issue Price"), conditional upon admission to AIM (the "Subscription"). The Issue Price represents a discount of 14.29 per cent. to the closing mid-market price of an Ordinary Share on 4 October 2022, being the latest practicable business date prior to this announcement.

In addition to the Subscription, there will be an offer to retail and other investors via PrimaryBid Limited ("PrimaryBid") at the Issue Price (the "Retail Offer", and together with the Subscription, the "Fundraise"), to provide certain existing retail shareholders in the Company and other retail investors with an opportunity to participate in the Fundraise. A separate announcement will be made shortly by the Company regarding the Retail Offer and its terms. Those investors who subscribe for new Ordinary Shares pursuant to the Retail Offer (the "Retail Shares") will do so pursuant to the terms and conditions of the Retail Offer contained in that announcement.

The Directors intend that the net proceeds of the Fundraise will be used to provide Tern with a stronger negotiating position and funding for follow-on investment opportunities in the event that any of Tern's portfolio companies conduct a syndicated fundraise and for general corporate purposes.

The new Ordinary Shares to be issued under the Fundraise will be allotted by the Company pursuant to the existing authorities granted by shareholder approval to allot Ordinary Shares for cash on a non-pre-emptive basis by way of a special resolution passed at the Company's Annual General Meeting on 27 April 2022.  Neither of the Subscription nor the Retail Offer is underwritten.

The Subscription Shares and any Retail Shares, when issued, will be fully paid and will rank pari passu in all respects with each other and with the existing Ordinary Shares, including, without limitation, as regards the right to receive all dividends and other distributions declared, made or paid after the date of issue.

Application will be made for the Subscription Shares and any Retail Shares to be admitted to AIM ("Admission") and it is expected that Admission will take place and trading in the Subscription Shares and any Retail Shares will commence on or about 12 October 2022.

The Subscription is conditional upon the Admission of the Subscription Shares becoming effective not later than 8.00 a.m. on 12 October 2022, or such later time and/or date as the Company may agree (being not later than 8.00 a.m. on 26 October 2022).

A further announcement will be made following completion of the Retail Offer detailing the total amount raised by the Company through the Fundraise.

Allenby Capital Limited is acting as Nominated Adviser and sole Broker to the Company in relation to the Subscription.

Directors' participation in the Subscription

Ian Ritchie, Al Sisto, Bruce Leith, Sarah Payne, Matthew Scherba and certain of Matthew's family members have subscribed for a total of 379,998 Subscription Shares at the Issue Price in the Subscription (the "Directors' Participation"). Details of the Directors' Participation are outlined in the table below.

The FCA notifications, made in accordance with the requirements of UK MAR, are appended further below. 

Enquiries

Notice to Distributors

Solely for the purposes of the temporary product intervention rules made under sections S137D and 138M of the FSMA and the FCA Product Intervention and Product Governance Sourcebook (together, the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Subscription Shares have been subject to a product approval process, which has determined that the Subscription Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, as defined under the FCA Conduct of Business Sourcebook COBS 3 Client categorisation, and are eligible for distribution through all distribution channels as are permitted by the FCA Product Intervention and Product Governance Sourcebook (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Subscription Shares may decline and investors could lose all or part of their investment; the Subscription offers no guaranteed income and no capital protection; and an investment in the Subscription is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Subscription. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Allenby Capital Limited will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of the FCA Conduct of Business Sourcebook COBS 9A and 10A respectively; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Subscription Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Subscription Shares and determining appropriate distribution channels.

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them