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.

8 November 2023

Tern Plc

("Tern" or the "Company")

Konektio? update

Further to the Company's announcement on 26 May 2023, Tern Plc (AIM:TERN), the investment company specialising in supporting high growth, early-stage, disruptive Internet of Things ("IoT") technology businesses, announces that it has decided not to invest further in its portfolio company, InVMA Limited, which trades as KonektioTM ("Konektio").

Tern announced on 26 May 2023 that Konektio had agreed a £2.5 million equity fundraise, to be completed in two tranches. The first tranche of £1.2 million (the "Konektio First Tranche") completed in May 2023 and the second tranche of £1.3 million (the "Konektio Second Tranche") is due for completion in Q4 2023. Following Tern's investment in the Konektio First Tranche of £100,000, Tern's shareholding in Konektio reduced to 28% (before any dilution on exercise of any Konektio employee share options) and Tern's shareholding had an unaudited book valuation of £0.9 million.

Tern announced on 26 May 2023 that it had committed to invest a minimum of £0.28 million in the Konektio Second Tranche, with an option, at Tern's sole discretion, to increase its investment amount up to £0.4 million. However, given the business performance of Konektio and, in particular, Konektio's monthly recurring revenue growth not having met Tern's expectations, Tern has decided not to invest in the Konektio Second Tranche. As announced on 26 May 2023, 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, which is now anticipated to take effect in due course.

Tern's percentage holding in Konektio and its unaudited book valuation will be determined when, and if, Konektio completes the Konektio Second Tranche and Tern will provide an update in relation to this at the appropriate time.

Tern does not, at this time, envisage providing any more funding to Konektio and the Company will look to realise value from its remaining holding in Konektio in due course.

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, AssetMinderTM, 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 2022, the business recorded an increase in retained unaudited losses of approximately £2 million and at that date had an unaudited deficit of shareholders' funds of approximately £0.3 million.

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