TERN PLC

Capital/Financing Update • Sep 14, 2018

Tern PLC (TERN)

14-Sep-2018 / 07:00 GMT/BST Dissemination of a RegulatoryAnnouncement, transmitted by EQS Group.

The issuer is solely responsible for the content of this announcement.

14 September 2018

Tern Plc (the "Company", or the "Group") Issue of further loan to Device Authority Limited

Tern Plc (AIM: TERN), the investment company specialising in the Internet of Things ("IoT"), announces that it has provided a further conver"ble secured loan of US\$525,000 to its por*olio company, Device Authority Limited ("DA"). The loan is repayable on 28 December 2018 (the "DA Loan"). Following this investment, Tern's total conver"ble secured loan note posi"on with DA is US\$1,700,867.

The total funds secured by DA through this facility from DA's exis"ng shareholders, including Tern, are US\$730,516.

In providing this support, DA's shareholders, including Tern, are pleased with the progress DA con"nues to make with its partners, including the launch of a connected health solu"on with Thales and the ongoing recogni"on of its value in the IoT security market. This was highlighted by being recognised as the 2018 Emerging Star in the global IoT security market by Quadrant Knowledge Solu"ons. DA also con"nues to improve KeyScaler, and a recent new release introduces support for Comodo CA and IdenTrust (part of HID Global). These new service connectors offer customers greater flexibility and integra"on with Cer"ficate Authori"es ("CA") for enabling automated cer"ficate provisioning and management for IoT devices.

This fourth tranche of the conver"ble secured 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 in DA of at least USD\$2.5 million which is completed before 28 December 2018 ("Qualifying Fundraising"). The conversion will be into the most senior class of shares issued on the Qualified Fundraising at the lowest fundraising price per share.

If a Qualifying Fundraising is not completed before 28 December 2018, but DA is able to procure an exit, 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 the DA Loan have also been issued with 2.6 warrants for each \$1 of loan notes subscribed for by them (rounded down to the nearest whole number). Each warrant, which is exercisable at any "me before 13 September 2025, 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 28 December 2018.

Al Sisto, CEO of Tern, said: "We are very pleased to be con"nuing our support of Device Authority following the progress the company has been making with its partners, including the recent product launch with Thales. It is pleasing to see the company achieving recogni"on within the IoT security market for the products and partnerships being formed and we look forward to repor"ng on future developments."

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

Enquiries Tern Plc Al Sisto/Sarah Payne	via Redleaf Communica"ons
Allenby Capital (Nomad and joint broker) David Worlidge/Alex Brearley	Tel: 020 3328 5656
Whitman Howard (Joint broker) Nick Lovering/Christopher Furness	Tel: 020 7659 1234
Redleaf Communica.ons	Tel: 020 3757 6880

ISIN: GB00BFPMV798 Category Code:MSCH TIDM: TERN LEICode: 2138005F87SODHL9CQ36 Sequence No.: 6014 EQS News ID: 723583

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