Equity Fundraise of up to £2.2 million

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("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.

12 November 2020

Tern Plc

("Tern" or the "Company")

Equity Fundraise of up to £2.2 million

Subscription to raise £1.7 million

and

A Retail Offer via the PrimaryBid Platform

Tern Plc (AIM:TERN), the investment company specialising in the Internet of Things ("IoT"), announces that it has raised £1,700,400, before expenses through a subscription of 22,672,000 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").

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 Issue Price represents a discount of 14.3% to the closing middle market price of 8.75p per Ordinary Share on 11 November 2020, being the latest practicable date prior to the date and time of this announcement.

The Directors intend to use the net proceeds of the Fundraise to facilitate a new investment in due course, strengthen the Company's balance sheet to enable the Company to hold strong negotiating positions for any follow-on investment opportunities in the Company's principal portfolio companies and for working capital generally.

The new Ordinary Shares to be issued under the Fundraise will be allotted by the Company pursuant to 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 Annual General Meeting on 8 June 2020.  Neither of the Subscription nor the Retail Offer is underwritten.

The Subscription 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.

The Subscription is conditional upon the Admission of the Subscription Shares becoming effective not later than 8.00am on 27 November 2020, or such later time and/or date as the Company may agree (being not later than 8.00am on 4 December 2020).

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 27 November 2020.

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

Al Sisto, CEO of Tern, commented on the Fundraise: 

"As outlined in our recent portfolio update, the COVID-19 pandemic has helped produce an opportunity rich environment in the IoT sector, which has resulted in significant opportunities for both our portfolio companies as well as a healthy pipeline of future potential investments.

"We believe that the Fundraise is in the best interests of all of our shareholders, to enable us to maximise the value across our portfolio and to allow us to take advantage of the further value enhancing opportunities that we are seeing. We are very pleased with the investor support that we have received for the Subscription, and are pleased that the Retail Offer through PrimaryBid will provide a mechanism for existing and new retail shareholders to participate in the Fundraise.

"These are exciting times for Tern and I look forward to providing further updates on the progress of the Company and its portfolio companies in due course." 

Total Voting Rights

In accordance with the Financial Conduct Authority's Disclosure, Guidance and Transparency Rules, the Company confirms that on completion of the Subscription (but not the Retail Offer), the Company's enlarged issued ordinary share capital will comprise 323,671,434 Ordinary Shares. The Company does not hold any shares in Treasury.  Therefore, from Admission, the total number of voting rights in the Company will be 323,671,434.  Following the Admission of the Subscription Shares, the above figure may be used by shareholders in the Company as the denominator for the calculations to determine if they are required to notify their interest in, or a change to their interest in the Company, under the Disclosure Guidance and Transparency Rules. The Company will issue further announcements, in due course, following completion (if any) of the Retail Offer.

Enquiries

Information for Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (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 by Allenby Capital Limited, 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, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, investors should note that: the price of the Subscription Shares may decline and investors could lose all or part of their investment; Subscription Shares offer no guaranteed income and no capital protection; and an investment in Subscription Shares 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, only investors who have met the criteria of professional clients and eligible counterparties have been procured.  For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; 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 Subscription Shares.