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.

1 February 2024

Tern Plc

("Tern" or the "Company")

Talking Medicines Fundraise

Tern Plc (AIM:TERN), the investment company specialising in supporting high growth, early-stage, disruptive Internet of Things ("IoT") technology businesses, announces that Talking Medicines Limited ("Talking Medicines"), a company in which Tern holds 23.8% of the equity, has undertaken a fundraising round, securing £440,000 in new investment via the issue of unsecured convertible loan notes (the "Talking Medicines Fundraise") from Tern and other existing Talking Medicines shareholders.

Highlights

· Talking Medicines has raised a total of £440,000 via the issue of unsecured convertible loan notes (the "2024 CLNs") to Tern and other existing Talking Medicines shareholders

· Tern has subscribed for £100,000 of the 2024 CLNs

· The Talking Medicines Fundraise is intended to provide Talking Medicines with further funding to enable it to grow in line with its strategy, in particular by expanding its US activities

· With the completion of the Talking Medicines Fundraise, Tern will continue to hold approximately 23.8% of Talking Medicines' equity, valued at approximately £1.8 million as at 30 June 2023, the date of Tern's last published unaudited book valuation, together with a total of £0.3 million of convertible loan notes in Talking Medicines

Commenting Ian Ritchie, Chairman of Tern, said:

"We are very happy to rapidly deploy some of the proceeds from the recent Tern fundraise to provide additional growth capital to Talking Medicines. Talking Medicines is an award-winning data sciences business that is rapidly gaining commercial traction. This Talking Medicines funding round is designed to enable their small, but highly qualified, team to accelerate the growth of the business as they seek further customers for their artificial intelligence based platform, Drug-GPT?, that uses curated large language models to provide real-world insights about the lived experience, opinions, and sentiment of patients and healthcare providers for pharmaceutical companies. We will also continue to provide our hands on support to the Talking Medicines team and I look forward to updating on their further progress in due course."

Talking Medicines Fundraise

The 2024 CLNs are unsecured, have a term of two years and accrue annual interest of 10% which shall be rolled up. The 2024 CLNs' principal amount and accrued interest will convert into new equity in Talking Medicines when an equity fundraise takes place (subject to a minimum of £1m being raised) (a "Qualifying Fundraise") or upon an exit, at a discount of 20% to the lowest Qualifying Fundraise or exit price. In the absence of a Qualifying Fundraise or an exit, upon maturity the 2024 CLNs will convert into new equity in Talking Medicines, at the lowest price paid by the investors in the most recent previous funding round. The 2024 CLNs are also capable of being agreed to be repaid in full by Talking Medicines (together with all accrued unpaid interest) at any time prior to maturity.

Tern, alongside others, has previously provided funding to Talking Medicines by subscribing for convertible loan notes issued by Talking Medicines. Tern has previously provided £0.2 million of unsecured convertible loan note funding to Talking Medicines, on similar terms to the 2024 CLNs, with these convertible loan notes maturing on 12 April 2025.

Prior to the Talking Medicines Fundraise, Tern had a holding of 23.8% in Talking Medicines' equity, plus a convertible loan note holding in Talking Medicines of £0.2 million. As at 30 June 2023, the date of Tern's last published book valuation, the equity and convertible loan note holding had a total unaudited book value of £2.0 million. Following the Talking Medicines Fundraise Tern's equity holding in Talking Medicines will be unchanged and Tern will continue to hold approximately 23.8% of Talking Medicines' equity, but now with an increased convertible loan note holding of £0.3 million.

Further information on Talking Medicines

Talking Medicines uses Advanced Data Science and Artificial Intelligence to empower healthcare advertising agencies, enabling them to consistently win and retain their Pharma clients whilst achieving improved productivity, with swift project delivery. Talking Medicines is seeking to revolutionise the US$30bn spent on healthcare marketing, through unlocking strategic intelligence within conversational data. Talking Medicines empowers customers to gain strategic advantages in analysis, measurement, and enhanced brand equity through structuring conversational data.

Talking Medicines is particularly focused on scaling its presence in the US, having built out its sales operations in 2023 in New Jersey, New York City, and Philadelphia. Significant customer wins include onboarding eight new global healthcare advertising agencies who in turn have full coverage of the top 20 global pharmaceutical companies.

Based on Talking Medicines' latest statutory accounts for the year ended 31 December 2022, as at that date it had net assets of approximately £0.36 million and incurred a loss for the year of approximately £1.29 million. Given the historic nature of these figures Tern does not consider this to be representative of the current business and trading performance of Talking Medicines.

Enquiries