Equity Fundraise of up to £4 million

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.

13 July 2021

Tern Plc

("Tern" or the "Company")

Equity Fundraise of up to £4 million

Subscription to raise £2 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 approximately £2 million, before expenses through a subscription of 10,710,400 new ordinary shares ("Ordinary Shares") of 0.02p each in the Company (the "Subscription Shares") at a price of 18.8 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 Directors intend that the net proceeds of the Fundraise will be used to: give the Company balance sheet strength to provide a strong negotiating position in relation to its portfolio companies and enable the Company to participate in follow-on investment opportunities, as appropriate, with any portfolio company syndications; provide funding for a new investment opportunity in due course and for working capital generally.

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 General Meeting on 2 June 2021.  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.

The Subscription is conditional upon the Admission of the Subscription Shares becoming effective not later than 8.00 a.m. on 26 July 2021, or such later time and/or date as the Company may agree (being not later than 8.00 a.m. on 4 August 2021).

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 26 July 2021.

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 an investment company it is important that Tern is able to continue to support the growth of its portfolio companies, particularly at a time when they are seeing significant market opportunities. We believe that the Fundraise is in the best interests of all of our shareholders, to allow us to maximise the value to our shareholders of our portfolio.

"We are pleased with the investor support that we have received for the Subscription and that the Retail Offer through PrimaryBid will provide a mechanism for existing and new retail shareholders to participate in the Fundraise at the same share price.

"We remain highly focussed on securing Tern shareholder value from our portfolio companies as we help them to develop commercially and position them for their next stages of development, whether that be through our continuous involvement, third party syndicated private equity investment, trade participation or the public markets. 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 341,048,501 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 341,048,501.  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

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, only investors who meet the criteria of professional clients and eligible counterparties will be procured. 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.