Tern Regulatory News (TERN)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018). UPON THE PUBLICATION OF THIS ANNOUNCEMENT THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE WITHIN THE PUBLIC DOMAIN.

26 May 2023

Tern Plc

("Tern" or the "Company")

Konektio Fundraise

Tern Plc (AIM:TERN), the investment company specialising in supporting high growth, early-stage, disruptive Internet of Things ("IoT") technology businesses, announces that its portfolio company, InVMA Limited, which trades as Konektio ("Konektio") has agreed a £2.5 million equity fundraise, to be completed in two tranches. The first tranche of £1.2 million has completed (the "Konektio First Tranche") and the second tranche of £1.3 million is due for completion in Q4 2023 (the "Konektio Second Tranche").

Tern has invested £100,000 in the Konektio First Tranche, with the remainder provided by Konektio's other institutional shareholders, being Mercia and Foresight. Prior to the Konektio First Tranche, Tern had a shareholding of 39.9% in Konektio with an unaudited book valuation of £1.0 million. Post the Konektio First Tranche, Tern's shareholding in Konektio has reduced to 28% (before any dilution on exercise of any Konektio employee share options) and Tern's shareholding now has an unaudited book valuation, at the Konektio First Tranche price, of £0.9 million.

Including its participation in the Konektio First Tranche, Tern has, to date, invested approximately £2.3 million in Konektio. The pre-new money valuation for the Konektio First Tranche is approximately equivalent to the pre-money valuation for the previous Konektio fundraise announced on 25 April 2023, with Konektio having increased its employee share option pool.

Tern has committed to invest a minimum of £0.28 million in the Konektio Second Tranche, with an option, at its sole discretion, to increase its investment amount up to £0.4 million. The price of the Konektio Second Tranche will be determined as at 30 September 2023 and will be based on the annualised revenues of Konektio at that time, capped at a pre money valuation of £6.0 million. Should Tern not fulfil its commitment to invest a minimum of £0.28 million in the Konektio Second Tranche, 75% of Tern's holding in Konektio will be transferred to a valueless class of Konektio deferred shares.

About Konektio

Konektio provides an Industrial IoT Software as a Service ("SaaS") platform to Original Equipment Manufacturers ("OEMs") and aftermarket customers, as well as the connected product market. The software enables remote asset monitoring and management to drive productivity improvements. Konektio's primary product, AssetMinder, is machine agnostic and allows manufacturers to diagnose issues and proactively prescribe services plans, ultimately reducing downtime and improving operational efficiency. According to the latest filed financial statements for Konektio, for the 12 month period ended 31 December 2021, the business recorded an increase in retained unaudited losses of £0.4 million and at that date had unaudited net assets of approximately £1.8 million.

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