FundamentalVR Fund Raise

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.

31 May 2022

Tern Plc

("Tern" or the "Company")

FundamentalVR Fund Raise

Tern Plc (AIM:TERN), the company focused on value creation from Internet of Things ("IoT") technology businesses, is pleased to announce that FVRVS Limited ("FundamentalVR"), has undertaken a Series B fund raising round, securing £7 million in new equity investment (the "FundamentalVR Series B") from existing investors and a new institutional investor, at a valuation uplift of 77% from the previous book valuation of Tern's holding.

Highlights

· FundamentalVR has raised a total of £7 million in a Series B fund raising from existing investors and a new institutional investor, with an additional £1.2 million of convertible loan notes being converted

· Tern has converted approximately £570,000 in loan notes and accrued interest it held in FundamentalVR into equity, in line with the terms of these loan notes, but will invest no new money in the FundamentalVR Series B

· The FundamentalVR Series B is intended to provide FundamentalVR with funding to enable to grow in line with its strategy, including expanding its US activities

· With the completion of the £7 million FundamentalVR Series B, including the conversion of Tern's loan notes to equity, Tern will hold 20.0% of FundamentalVR's equity, valued at £6.3 million at the valuation implied by the FundamentalVR Series B price

FundamentalVR Fund Raise

Prior to the FundamentalVR Series B, Tern had a holding of 26.9% in FundamentalVR, plus a loan convertible into FundamentalVR equity of £530,000 and accrued interest of £39,932. As at 31 December 2021, the date of Tern's last published book valuation, this holding had an audited book value of £3.6 million. 

Following the FundamentalVR Series B funding of £7 million, the conversion of Tern's £0.53 million of loan notes and the conversion of £0.63 million of loan notes held by other investors, FundamentalVR is now valued in total at approximately £23 million on a pre-money basis and Tern now has a holding of 20.0% in FundamentalVR (before any dilution on exercise of any future FundamentalVR employee share options), with an unaudited book valuation of £6.3 million, representing a 77% uplift on the 31 December 2021 book value of Tern's holding.

Further information on FundamentalVR

FundamentalVR delivers virtual reality haptic 'flight simulators' for surgery creating a safe, measurable and repeatable space to refine skills. FundamentalVR's goal is to transform the way surgeons prepare, practice, and refine their skills. It has built an immersive, surgical simulation application platform, Fundamental Surgery, to provide medical professionals with the opportunity to rehearse, practice, and test themselves within a safe, controllable space that is as close to real-life as possible.

According to the latest filed financial statements for FundamentalVR, for the 12 month period ended 31 December 2020, the business recorded an increase in retained unaudited losses of £2.12 million and at that date had unaudited net assets of approximately £1.27 million. Given the historic nature of these figures Tern does not consider this to be representative of the current business and trading performance of FundamentalVR.

Further information on FundamentalVR may be found at: https://www.fundamentalvr.com

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