TERN PLC

Capital/Financing Update • Apr 11, 2019

Tern PLC (TERN)

11-Apr-2019 / 07:00 GMT/BST Dissemination of a RegulatoryAnnouncement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

11 April 2019

Tern Plc (the "Company", or the "Group")

Device Authority Update - issue of further conver ble loan

Tern Plc (AIM: TERN), the investment company specialising in the Internet of Things ("IoT"), announces that, together with its coinvestors, it has commi'ed a further conver)ble secured loan to its por+olio company, Device Authority Limited ("DA"), which specialises in IoT security. The total funds secured by DA through this loan are US\$418,895, of which Tern has contributed US\$315,000.

Following this investment, Tern's total conver)ble secured loan note posi)on with DA is US\$2,415,867. The loan is repayable on 31 December 2019.

Tern's con)nued support is testament to DA's strong track record of using the funds that it has raised to deliver cri)cal components of its go-to-market strategy. During 2018, DA enhanced its products to ensure that they met key client challenges and expanded its ecosystem of partners. DA has con)nued this trend in 2019 and has secured three new orders in Q1 through their partner network as well as consistently increasing annual recurring revenue quarter on quarter.

The loan note accrues an interest coupon of 5 per cent. per annum a nd is conver)ble automa)cally on comple)on of an equity fundraising by DA of at least US\$2.5 million if completed before 31 December 2019 ("Qualifying Fundraising"). The conversion will be into the most senior class of shares issued in the Qualifying Fundraising at the lowest fundraising price per share.

If a Qualifying Fundraising is not completed before 31 December 2019, but DA is able to procure an exit for its shareholders, the providers of the loan can elect to either receive 300% of the principal amount of the loan notes held by them in addi)on to the accrued interest, or to convert the loan and accrued interest into Class A Preference Shares of DA at a conversion price of £0.036681585 per share.

Providers of this loan to DA will also be issued with 2.6 warrants for each US\$1 of loan notes subscribed for by them (rounded down to the nearest whole number). Each warrant, which is exercisable at any )me before 10 April 2026, provides each warrant holder with the right to subscribe for one Class A Preference Share of DA for each warrant held at an exercise price of £0.036681585 per share.

As part of this process, it has been agreed by all noteholders that all previous conver)ble loan notes provided to DA have their maturity date extended to 31 December 2019.

Al Sisto, CEO of Tern, said: "We are pleased with the progress that DA con)nues to make with its partners, including the recent contract win with nCipher Security to deliver a security solu)on for high quality surgical devices. The capital we provided in 2018, together with our co-investors, made a marked difference to DA as it set out to refine its product and expand its partnership network, leading to new contract wins in the second half of 2018 and into Q1 of 2019. With this in mind, we are pleased to con)nue this support and to maintain our holding as DA focuses on building its client base in the coming months."

This announcement contains inside informaon for the purposes of Arcle 7 of EU Regulaon 596/2014

Enquiries
Tern Plc	via Newgate Communica)ons
Al Sisto/Sarah Payne
Allenby Capital	Tel: 020 3328 5656
(Nomad and joint broker)
David Worlidge/Alex Brearley
Whitman Howard	Tel: 020 7659 1234
(Joint broker)
Nick Lovering/Christopher Furness

ISIN: GB00BFPMV798 Category Code:MSCM TIDM: TERN LEICode: 2138005F87SODHL9CQ36 Sequence No.: 8171 EQS News ID: 798671

End ofAnnouncementEQS News Service