REG - Tern PLC - Open Offer and Notice of General Meeting

TernAnnouncement

21/04/2026 07:00

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RNS Number : 2107B  Tern PLC  21 April 2026

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED
HEREIN IS RESTRICTED AND FOR INFORMATION PURPOSES ONLY AND IS NOT FOR RELEASE,
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THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR
CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY
PERSON TO PURCHASE AND/OR SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY
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ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE
RELIED ON IN CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF TERN PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 WHICH FORMS PART OF DOMESTIC UK
LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR").

21 April 2026

Tern Plc

("Tern" or the "Company")

Open Offer at 0.60p per Open Offer Share to raise up to £643,609

Notice of General Meeting

Tern Plc (AIM:TERN), the company focused on value creation from Internet of
Things ("IoT") technology businesses, announces an Open Offer to raise up to
£643,609 (before expenses) through the issue of up to 107,268,195 Open Offer
Shares at an Issue Price of 0.60p per Open Offer Share.

Under the Open Offer, all Qualifying Shareholders are entitled to subscribe
for Open Offer Shares at the Issue Price on the basis of:

1 Open Offer Share for every 7 Ordinary Shares held on the Record Date.

The Issue Price of 0.60p per Open Offer Share represents a discount of 20 per
cent. to the closing middle market price of 0.75p for each Ordinary Share on
20 April 2026 (the latest practicable date prior to this announcement).

The Open Offer is conditional upon the passing of the Resolutions at a General
Meeting, details of which are set out below, and admission of the Open Offer
Shares to trading on AIM. Subject to the passing of the Resolutions, it is
expected that Admission will become effective and dealings in the Open Offer
Shares will commence on 11 May 2026. The Open Offer is not underwritten.

The Open Offer Shares will, if issued and fully paid, rank pari passu in all
respects with the Existing Ordinary Shares, including the right to receive all
dividends and other distributions declared, made or paid after the date of
Admission.

The Open Offer is open for acceptance from now until 7 May 2026.  Details of
the Open Offer, together with the Notice of General Meeting, will be set out
in a Circular to be sent to shareholders later today. The Circular sets out
the reasons for and further details of the Open Offer, including its terms and
conditions and risk factors.

Shareholders should note that the effect of the terms of the Open Offer and
the Resolutions is that, to the extent that Open Offer Shares are not taken up
pursuant to Basic Entitlements or the Excess Application Facility, the
Directors will be authorised to utilise any remaining balance of the Ordinary
Shares made available through the Open Offer from time to time at their
discretion, and may allot them to third partes for cash or non-cash
consideration. The Directors may determine to make such allotments for a
variety of reasons, including in order to raise cash for the Company
(including from individual investors or through share offers arranged by
intermediaries), to satisfy debts or other amounts owed by the Company, to
issue warrants or share options or for other corporate or working capital
purposes.

Any such allotments will not be made on terms which are materially more
favourable than those available to Qualifying Shareholders under the Open
Offer, save where required in connection with non-cash consideration.
Furthermore, any such allotments must be made before the conclusion of the
Company's 2026 annual general meeting or, if earlier, 1 July 2026, except that
the Directors would be permitted to complete any allotments pursuant to offers
or agreements made prior to such expiry. However, Shareholders should
appreciate that any such allotment(s) of Ordinary Shares will dilute
Shareholders' interests in the Company and may be made without any further
approval being sought from Shareholders.

Notice of General Meeting

The General Meeting will be held at the offices of Allenby Capital Limited, 5
St. Helen's Place, London EC3A 6AB on 8 May 2026 at 11:00 a.m.

Shareholders should be aware that the Open Offer can only proceed if both of
the Resolutions are passed by Shareholders with the requisite majorities.
Should either of the Resolutions not be passed by Shareholders, the Open Offer
will not proceed, the Directors would not be able to utilise, on the basis to
be described in the Circular, any remaining balance of the Ordinary Shares
made available through the Open Offer and the Company would not receive any
proceeds from the Open Offer Shares or any such remaining balance.

Extracts from the Circular, including the Open Offer's Expected Timetable of
principal events, are set out below in Appendix 1.

The above summary should be read in conjunction with the full text of this
announcement and the Circular. Unless defined otherwise, capitalised terms
used throughout this announcement shall have the meanings given to such terms
in the Definitions section below. References to paragraphs below refer to the
relevant paragraphs of the Circular and references to 'this Document' refer to
the Circular. References to numbered 'Parts' below refer to the relevant parts
of the Circular.

Your attention is drawn to the risk factors set out in Part II of the
Circular. Details of the action to be taken if you wish to subscribe for Open
Offer Shares are provided in Part III of the Circular.

The Circular will be posted to shareholders today and a copy of the Circular
will be shortly available on the Company's website:
https://www.ternplc.com/investors

Enquiries:

 Tern Plc                                           via IFC Advisory

 Jane McCraken (Interim Non-executive Chair)

 Allenby Capital Limited                            Tel: 0203 328 5656

 (Nominated Adviser and Broker)

 Alex Brearley / Ashur Joseph (Corporate Finance)

 Kelly Gardiner (Sales and Corporate Broking)

 IFC Advisory                                       Tel: 0203 934 6632

 (Financial PR and IR)

 Tim Metcalfe

 Graham Herring

 Florence Staton

 

IMPORTANT NOTICES

 

Allenby Capital Limited ("Allenby Capital"), which is authorised and regulated
in the United Kingdom by the Financial Conduct Authority, is acting as
nominated adviser and broker for the Company and no-one else in connection
with the matters referred to in this announcement and will not be responsible
to anyone other than the Company for providing the protections afforded to the
clients of Allenby Capital or for affording advice in relation to the matters
referred to herein. Nothing in this paragraph shall serve to exclude or limit
any responsibilities which Allenby Capital may have under FSMA or the
regulatory regime established thereunder.

This announcement includes "forward-looking statements" which include all
statements other than statements of historical facts, including, without
limitation, those regarding the Company's financial position, business
strategy, plans and objectives of management for future operations, or any
statements preceded by, followed by or that include the words "targets",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"would", "could" or similar expressions or negatives thereof. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors beyond the Company's control that could cause the
actual results, performance or achievements of the Company to be materially
different from future results, performance or achievements expressed or
implied by such forward-looking statements. Such forward-looking statements
are based on numerous assumptions regarding the Company's present and future
business strategies and the environment in which the Company will operate in
the future. These forward-looking statements speak only as at the date of this
announcement. The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's expectations with
regard thereto or any change in events, conditions or circumstances on which
any such statements are based unless required to do so by applicable law,
regulation or the AIM Rules.

Shareholders should not construe the contents of this announcement as legal,
tax or financial advice, and should consult with their own advisers as to the
matters described in it.

 
Expected Timetable of principal events
 
 Record Date for the Open Offer                                                  6:00 p.m. on 20 April 2026
 Announcement of the Open Offer                                                  7:00 a.m. on 21 April 2026
 Existing Ordinary Shares marked "ex" by the London Stock Exchange               21 April 2026
 Posting of Circular and Application Form                                        21 April 2026
 Basic and Excess Entitlements credited to stock accounts in CREST of            22 April 2026
 Qualifying CREST Shareholders
 Recommended latest time for requesting withdrawal of Basic Entitlements and     4:30 p.m. on 29 April 2026
 Excess Entitlements from CREST
 Latest time for depositing Basic Entitlements and/or Excess Entitlements into   3:00 p.m. 30 April 2026
 CREST
 Latest time and date for splitting of Application Forms (to satisfy bona fide   3:00 p.m. on 5 May 2026
 market claims only)
 Latest time and date for receipt of completed Application Forms and payment in  11:00 a.m. on 7 May 2026
 full under the Open Offer or settlement of relevant CREST instruction (as
 appropriate)

 Time and date of General Meeting                                                11:00 a.m. on 8 May 2026
 Expected announcement of results of the General Meeting and Open Offer          8 May 2026
 Expected date for Admission and commencement of dealings of the Open Offer      8:00 a.m. on 11 May 2026
 Shares
 Expected date for the Open Offer Shares to be credited to CREST stock accounts  11 May 2026
 Latest date for dispatch of definitive share certificates for Open Offer        25 May 2026
 Shares

Notes:

(i)    References to times in this Document are to London time (unless
otherwise stated).

(ii)   If any of the above times or dates should change, the revised times
and/or dates will be notified by an announcement to an RIS.

 
Open Offer statistics
 
 Issue Price                                                                     0.60 pence
 Number of Existing Ordinary Shares in issue as at the date of this Document     750,877,367
 Basis of the Open Offer                                                         1 Open Offer Share for every 7 Existing Ordinary Shares held
 Maximum number of Open Offer Shares to be issued pursuant to the Open Offer     107,268,195
 Enlarged Share Capital immediately upon Admission of the Open Offer Shares*     858,145,562
 Percentage of the Enlarged Share Capital represented by the Open Offer Shares*  12.50 per cent.
 The gross proceeds from the Open Offer (approximately)*                         £643,609
 ISIN for Existing Ordinary Shares                                               GB00BFPMV798
 ISIN for Basic Entitlements                                                     GB00BS1L7620
 ISIN for Excess Entitlements                                                    GB00BS1L7C80

Notes:

* assumes full take up of the 107,268,195 Open Offer Shares and the passing of
the Resolutions

 
Please refer to Appendix 1 below for further information
 
Appendix 1
 
The following is an extract from the letter from the Chair set out in the Circular, substantially in the same form.
 
1      Introduction
 

The Company is proposing to raise up to approximately £643,609 pursuant to
the Open Offer. The Open Offer allows all Qualifying Shareholders the
opportunity to participate by subscribing for Open Offer Shares at the Issue
Price of 0.60 pence per Ordinary Share, pro rata to their holdings of Existing
Ordinary Shares. The Open Offer is not underwritten.

 

The Open Offer is conditional, inter alia, on the passing of the Resolutions
by Shareholders at the General Meeting, which is being convened for 11:00 a.m.
on 8 May 2026.

 

To the extent that the Open Offer is not fully subscribed, and subject to the
passing of the Resolutions, the Directors will be authorised, as further
explained below, to utilise any remaining balance of the Ordinary Shares made
available through the Open Offer from time to time at their discretion, and
may allot them to third partes for cash or non-cash consideration. The
Directors may determine to make such allotments for a variety of reasons,
including in order to raise cash for the Company (including from individual
investors or through share offers arranged by intermediaries), to satisfy
debts or other amounts owed by the Company, to issue warrants or share options
or for other corporate or working capital purposes.

 

Shareholders should also be aware that the Open Offer can only proceed if both
of the Resolutions are passed by Shareholders with the requisite majorities.
Should either of the Resolutions not be passed by Shareholders, the Open Offer
will not proceed, the Directors would not be able to utilise, on the basis
described in this Circular, any remaining balance of the Ordinary Shares made
available through the Open Offer and the Company would not receive any
proceeds from the Open Offer Shares or any such remaining balance.

 

The purpose of this Document is to set out the background to, and reasons for,
the Open Offer and to provide Qualifying Shareholders with details of its
terms and conditions.

 

2      Background to and reasons for the Open Offer

 

The focus of the Board and Tern's executive management remains on realisations
and specifically seeking to maximise the value that can be realised from
Tern's portfolio companies and investments through successful exits from its
investments at the appropriate time, ultimately seeking strong returns for
Shareholders.

 

The Board believes that while the global macroeconomic backdrop continues to
be challenging for early-stage technology businesses, the Company's current
direct portfolio companies, Device Authority Limited ("Device Authority"),
FVRS Limited and Talking Medicines Limited ("Talking Medicines"), continue to
make progress and the Board believes they are approaching the stage where it
would be appropriate for Tern to exit the investments in due course. However,
the potential shorter-term exit opportunities that have been presented to Tern
have been limited and, if and when available, the Directors believe these are
not likely to be in the best interests of Shareholders, being likely to be at
a significant discount to the current carrying value of the relevant holding
and the Directors' current expectations of the medium-term value of the
holding.

 

Against this background, the Company continues to seek the views of
Shareholders, including through Robert (Rob) Stevens as an adviser to the
Company on Shareholder relations, which has provided valuable insight and
input regarding Shareholders' views on the Company's strategy.

 

It is clear to the Board that Tern's corporate costs must be kept to a minimum
in order to allow the largest possible proportion of the Company's limited
capital resources to be deployed to seek to maximise the value achievable from
Tern's direct portfolio companies. Therefore, as announced on 9 October 2025,
additional material cost reductions were implemented, together with seeking to
align incentives with Shareholders.

 

In parallel with cost cutting measures, as announced on 28 November 2025, the
Company exited its long-term funding obligation to Sure Valley Ventures
Enterprise Capital Fund LP ("SVV2"), having sought relief from future capital
calls.  Tern is currently in discussions with the General Partner of SVV2 to
resolve the quantum and, if applicable, timing of payment of any outstanding
liability due from Tern to SVV2.

 

However, despite the cost reduction measures undertaken, as an AIM-quoted
company, the Company still incurs material professional fees and costs, both
associated with maintaining its status as a publicly traded company and with
maintaining its portfolio, many of which are largely fixed.

 

Subject to audit, during the year ended 31 December 2025, approximately £1.0
million was used in the Company's operations and approximately £0.5 million
was deployed within its existing portfolio, through equity and loan
investments.

 

As previously outlined, venture financing has tightened, and syndicates now
routinely link continuing investor participation to anti‑dilution or reset
terms that can be punitive for non‑participants. Against this background,
Tern's venture capital partners in its direct portfolio companies are seeking
to use 'pay-to-play' structures which mean that if Tern cannot participate to
the best extent that Tern's overall funding position will permit and on the
required timeline, the Company's investment positions risk being severely
diluted or possibly even eliminated, which would materially reduce the value
previously built and any future exit proceeds available for distribution to
shareholders.

In the absence of suitable exit opportunities, the Company therefore requires
additional funding to: (i) maintain the Company's admission to AIM; (ii)
participate in future fundraisings that are expected to be conducted by Tern's
direct portfolio companies; and (iii) seek to prevent or limit the consequent
potentially significant reduction in the net asset value of the Company from
Tern not participating in future fundraisings by Tern's direct portfolio
companies.

 

The Company is therefore proposing the Open Offer as an appropriate funding
mechanism to provide a contribution to such funding needs and gives all
Qualifying Shareholders the opportunity to back Tern on the same terms and to
subscribe for Excess Shares if available.

The proceeds of the Open Offer and subsequently any proceeds realisable from
the allotment of any Ordinary Shares not subscribed under the Open Offer are
intended to be used, in priority order, to:

 

1.    Enable Tern, subject to the level of proceeds raised, to participate
to its fullest possible allocation in a proposed short‑term convertible loan
note fundraising by Device Authority. The Board believes that the ability to
participate in this fundraising is important to seeking to preserve the value
of Tern's holding in Device Authority, particularly in the event of a future
exit. Participation in this proposed fundraising was previously disclosed as
an intended use of proceeds in the Company's last open offer; however, the
proceeds raised at that time were insufficient for Tern to participate to its
full allocation and no investment has yet been made.

2.    Participate in an expected short-term convertible loan note fundraise
by Talking Medicines, where the Board believes such participation is crucial
to seeking to preserve the value of Tern's holding in Talking Medicines,
especially upon a future exit of this investment; and

3.    Maintain the costs of Company's admission to AIM and cover its
corporate overheads.

 

The Board unanimously believes the Open Offer is in the best interests of
Shareholders. Your participation should make a contribution to helping protect
existing value, preserving exit potential, and supporting Tern's direct
portfolio companies, especially Device Authority and Talking Medicines,
through capital‑intensive, pay-to-play phases, that could otherwise
significantly impact the Company's equity positions and future returns for
Shareholders, especially upon expected potential future exits. The Directors
strongly encourage all Qualifying Shareholders to participate in the Open
Offer.

 

As at 31 March 2026, the Company's unaudited cash balance was approximately
£128,000.  In order to meet all of Tern's stated funding objectives
described above and ongoing working capital needs, in the absence of a
material exit of a portfolio company holding or a material asset sale, it is
anticipated that the Company will be required to raise further funds in
addition to the net proceeds of the Open Offer within the next 12 months.

 

The Open Offer is not being underwritten. In order to cover the Company's
short-term funding and working capital adequacy requirements, including the
costs of maintaining the Company's Admission to AIM, the Company will likely
be required to progress alternative funding solutions if the Open Offer is not
fully subscribed.

 

The Company's current portfolio of investments had an unaudited value of
approximately £9.8 million as at 30 June 2025, the substantial majority of
which is invested in private companies, although the Company's holding of
177,050 shares in Sure Ventures plc ("Sure Ventures"), which is listed on the
Specialist Fund Segment of the London Stock Exchange, had an unaudited value
of approximately £61,968 at the closing bid price of the Sure Ventures shares
on 20 April 2026, the last practical date prior to the publication of this
Document.

 

Should funding be required on an urgent basis and in the absence of other
funding options, as an investing company, the Board is confident that the
Company would have several options within the portfolio to be able to conduct
short-term asset disposals in order to provide capital to cover the Company's
working capital needs for the coming months from the date of this Document.
However, the Directors believe that if this had to be performed on an urgent
basis, then it could only be achieved at a very substantial discount to the
current carrying value of the relevant holdings and the Directors' current
expectations of the longer-term value of these holdings. Therefore, the
Directors believe such short-term asset disposals would not be in the best
interests of Shareholders.

 

Subject to the passing of the Resolutions and to the extent that Open Offer
Shares are not taken up pursuant to Basic Entitlements or the Excess
Application Facility, such shares may from time to time be allotted at the
discretion of the Directors, including to third parties for cash or non-cash
consideration. Any such allotments will not be made on terms which are
materially more favourable than those available to Qualifying Shareholders
under the Open Offer, save where required in connection with non-cash
consideration. Furthermore, any such allotments must be made before the
conclusion of the Company's 2026 annual general meeting or, if earlier, 1 July
2026, except that the Directors would be permitted to complete any allotments
pursuant to offers or agreements made prior to such expiry.

 

Other alternatives to meet the Company's short-term working capital and
funding needs may include debt arrangements, which the Company has utilised
from time to time historically. These alternatives may be more costly, more
dilutive to Shareholders, or less certain in outcome. Shareholders are
therefore strongly encouraged to consider the strategic importance of the Open
Offer in supporting the costs of the Company's continuing Admission to AIM,
financial health, asset value and medium to long-term portfolio prospects.

 

Shareholders should therefore note that the effect of the terms of the Open
Offer and the Resolutions is that, to the extent that Open Offer Shares are
not taken up pursuant to Basic Entitlements or the Excess Application
Facility, the Directors will be authorised to utilise any remaining balance of
the Ordinary Shares made available through the Open Offer from time to time at
their discretion, and may allot them to third partes for cash or non-cash
consideration. The Directors may determine to make such allotments for a
variety of reasons, including in order to raise cash for the Company
(including from individual investors or through share offers arranged by
intermediaries), to satisfy debts or other amounts owed by the Company, to
issue warrants or share options or for other corporate or working capital
purposes.

 

Any such allotments will not be made on terms which are materially more
favourable than those available to Qualifying Shareholders under the Open
Offer, save where required in connection with non-cash consideration.
Furthermore, any such allotments must be made before the conclusion of the
Company's 2026 annual general meeting or, if earlier, 1 July 2026, except that
the Directors would be permitted to complete any allotments pursuant to offers
or agreements made prior to such expiry. However, Shareholders should
appreciate that any such allotment(s) of Ordinary Shares will dilute
Shareholders' interests in the Company and may be made without any further
approval being sought from Shareholders.

 

Shareholders should also be aware that the Open Offer can only proceed if both
of the Resolutions are passed by Shareholders with the requisite majorities.
Should either of the Resolutions not be passed by Shareholders, the Open Offer
will not proceed, the Directors would not be able to utilise, on the basis
described in this Circular, any remaining balance of the Ordinary Shares made
available through the Open Offer and the Company would not receive any
proceeds from the Open Offer Shares or any such remaining balance.

 

3      The Open Offer

 

The Company is proposing to raise up to approximately £643,609 pursuant to
the Open Offer. The Issue Price of 0.60 pence per Open Offer Share represents
a discount of 20 per cent. to the closing mid-price of 0.75 pence per Ordinary
Share on 20 April 2026, the latest practicable date prior to announcing the
Open Offer. The Open Offer allows all Qualifying Shareholders the opportunity
to participate on the same terms. The Issue Price was determined by the Board
to be at an appropriate discount to the closing mid-price of an Ordinary Share
on 20 April 2026, after consideration of market and trading conditions, and
consultation with the Company's advisers.

 

The Open Offer provides Qualifying Shareholders with the opportunity to apply
to acquire Open Offer Shares at the Issue Price pro rata to their holdings of
Existing Ordinary Shares as at the Record Date on the following basis:

 

1 Open Offer Share for every 7 Existing Ordinary Shares held

 

Entitlements to apply to acquire Open Offer Shares will be rounded down to the
nearest whole number and any fractional entitlement to Open Offer Shares will
be aggregated under the Excess Application Facility.

 

Valid applications by Qualifying Shareholders will be satisfied in full up to
their Basic Entitlements as shown on the Application Form. Applicants can
apply for less or more than their entitlements under the Open Offer but the
Company cannot guarantee that any application for Excess Shares under the
Excess Application Facility will be satisfied as this will depend in part on
the extent to which other Qualifying Shareholders apply for less than or more
than their own Basic Entitlements. The Company may satisfy valid applications
for Excess Shares of applicants in whole or in part but reserves the right not
to satisfy any excess above any Basic Entitlement. Applications made under the
Excess Application Facility will be scaled back pro rata to the number of
Excess Shares applied for by Qualifying Shareholders under the Excess
Application Facility if applications are received from Qualifying Shareholders
for more than the available number of Excess Shares.

 

Qualifying Shareholders who do not take up their Basic Entitlements in full
will experience a dilution to their interests of approximately 12.50 per cent.
following Admission (assuming full subscription under the Open Offer).

 

Qualifying Shareholders with fewer than 7 Existing Ordinary Shares will not be
able to apply for Open Offer Shares.

 

The Open Offer Shares will, if issued and fully paid, rank pari passu in all
respects with the Existing Ordinary Shares, including the right to receive all
dividends and other distributions declared, made or paid after the date of
Admission.

 

Conditions

The Open Offer is conditional, inter alia, upon the passing of the Resolutions
at the General Meeting and Admission of the Open Offer Shares becoming
effective by not later than 8:00 a.m. on 11 May 2026 (or such later time
and/or date as the Company may determine, being not later than the Long Stop
Date).

 

If conditions are not satisfied and Admission does not occur by 8:00 a.m. on
11 May 2026 (or by 8:00 a.m. on the Long Stop Date), the Open Offer will not
proceed and any applications made by Qualifying Shareholders will be rejected.
In such circumstances, application monies will be returned (at the applicant's
sole risk), without payment of interest, as soon as practicable thereafter.
Revocation of applications for Open Offer Shares cannot occur after dealings
have begun.

 

Excess applications

The Open Offer is structured to allow Qualifying Shareholders to subscribe for
Open Offer Shares at the Issue Price pro rata to their existing holdings of
Ordinary Shares on the Record Date.

Qualifying Shareholders may also make applications in excess of their Basic
Entitlements. To the extent that Basic Entitlements are not subscribed by
Qualifying Shareholders, such Open Offer Shares will be available to satisfy
such excess applications, subject always to a maximum of 107,268,195 Open
Offer Shares in aggregate and provided that no Qualifying Shareholder shall be
entitled to subscribe for Open Offer Shares if it would bring their aggregate
interest in the share capital of the Company to more than the Aggregate Limit.
To the extent that applications are received in respect of an aggregate of
more than 107,268,195 Open Offer Shares and/or would result in a Qualifying
Shareholder having an aggregate interest in the share capital of the Company
which would exceed the Aggregate Limit, excess applications will be scaled
back pro rata to the number of Excess Shares applied for by Qualifying
Shareholders under the Excess Application Facility.

 

Qualifying Shareholders should note that the Open Offer is not a rights issue.

 

Qualifying non-CREST Shareholders should be aware that the Application Form is
not a negotiable document and cannot be traded. Qualifying Shareholders should
also be aware that, in the Open Offer, unlike in a rights issue, any
entitlements to Open Offer Shares not applied for or not taken up will not be
sold or otherwise realised for the benefit of Qualifying Shareholders who do
not apply under the Open Offer. Accordingly, Qualifying Shareholders who do
not take up their entitlements will not receive any compensation for dilution
arising from the Open Offer.

 

However, the Directors reserve the right, subject to the passing of the
Resolutions and applicable law, to utilise, on the basis set out elsewhere in
this Circular, any remaining balance of the Ordinary Shares made available
through the Open Offer from time to time at their discretion, and may allot
them to third parties for cash or non-cash consideration. The Directors may
determine to make such allotments for a variety of reasons, including in order
to raise cash for the Company (including from individual investors or through
share offers arranged by intermediaries), to satisfy debts or other amounts
owed by the Company, to issue warrants or share options or for other corporate
or working capital purposes.

 

Settlement and dealings

Application will be made to the London Stock Exchange for the Open Offer
Shares to be admitted to trading on AIM. It is expected that Admission will
become effective and that dealings in the Open Offer Shares will commence at
8:00 a.m. on 11 May 2026. Further information in respect of settlement and
dealings in the Open Offer Shares is set out in paragraph 9 of Part III of
this Document.

 

Overseas Shareholders

Certain Overseas Shareholders may not be permitted to subscribe for Open Offer
Shares pursuant to the Open Offer and should refer to paragraphs 6 and 7 of
Part III of this Document. Persons who have a registered address in or who are
located and/or resident in or are citizens of, in each case, a country other
than the United Kingdom should consult their professional advisers as to
whether they require any governmental or other consents or need to observe any
other formalities to enable them to acquire or subscribe for any Open Offer
Shares. Any person with a registered address in or who are located in and/or
resident in or are citizens of, in each case, a Restricted Jurisdiction who
obtains a copy of this Document or an Application Form is required to
disregard them, except with the consent of the Company.

 

CREST instructions

Application has been made for the Basic Entitlements and the Excess
Entitlements for Qualifying CREST Shareholders to be admitted to CREST. It is
expected that the Basic Entitlements and the Excess Entitlements will be
enabled for settlement through the CREST system as soon as practicable on 22
April 2026. Applications through the CREST system may only be made by the
Qualifying Shareholder originally entitled or by a person entitled by virtue
of a bona fide market claim.

 

Qualifying non-CREST Shareholders will receive a personalised Application Form
which gives details of their Basic Entitlement under the Open Offer (as shown
by the number of the Open Offer Shares allocated to them) with this Document.
If they wish to apply for Open Offer Shares under the Open Offer, they should
complete the accompanying Application Form in accordance with the procedure
for application set out in the Circular and on the Application Form itself.
The completed Application Form, accompanied by full payment, should be
returned by post or by hand (during normal business hours only) to Share
Registrars Limited so as to arrive as soon as possible and in any event no
later than 11:00 a.m. on 7 May 2026.

 

Qualifying CREST Shareholders, will receive no Application Form with the
Circular but will receive a credit to their appropriate stock account in CREST
in respect of their Basic Entitlement and if appropriate their Excess
Entitlement. They should refer to the procedure for application set out in
Part III of this Document. The relevant CREST instruction must have settled by
no later than 11:00 a.m. on 7 May 2026.

 

The latest time for applications under the Open Offer to be received is 11:00
a.m. on 7 May 2026. The procedure for application and payment depends on
whether, at the time at which application and payment is made, a Qualifying
Shareholder has an Application Form in respect of their Basic Entitlement or
have their Basic Entitlement credited to their stock account in CREST.

 

If you are in any doubt as to what action you should take, you should
immediately seek your own personal financial advice from your stockbroker,
bank manager, solicitor, accountant or other independent professional adviser
duly authorised under the Financial Services and Markets Act 2000 (as amended)
if you are resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.

 

4.            Directors' interests

The Directors intend to take their full entitlement under the Open Offer(1).
The interests of the Directors in the Ordinary Shares (i) as at the date of
this Document and (ii) immediately following the issue of the Open Offer
Shares, are as shown below.

 

 Directors       No. of Ordinary Shares currently held  % of Existing Ordinary Shares  No. of Ordinary Shares held on Admission(1)  % of the Enlarged Share Capital
 Jane McCracken  -                                      -                              -                                            -
 Iain Ross       1,843,808                              0.24                           2,107,209                                    0.24

Notes:

1      Assuming that the Directors take their full entitlement in the
Open Offer, but do not receive any Excess Entitlement, and subject to the
Directors not having any restrictions on taking up entitlements under the Open
Offer under the Market Abuse Regulation or the AIM Rules. This also assumes
full take up of the 107,268,195 Open Offer Shares and the passing of the
Resolutions.

 

5.            PDMR and other participation in the Open Offer

Albert Sisto, the non-board CEO of Tern, a person discharging managerial
responsibilities ("PDMR"), intends to subscribe for Open Offer Shares in
excess of his qualifying Basic Entitlement, taking into account Mr Sisto has a
primary residency and tax status in the United States of America and as such
only a proportion of his holding of Existing Ordinary Shares qualify for the
purposes of the Open Offer.

 

6.            General Meeting

The Notice of General Meeting is set out in Part V of this Document.

 

A Form of Proxy for use by the Shareholders in connection with the General
Meeting has been sent to Shareholders with this Document.

The Resolutions to be proposed at the General Meeting are, in summary, as
follows:

 

Resolution 1 - Authority to Allot Shares (Ordinary Resolution)

This resolution seeks to grant the Directors authority, pursuant to section
551 of the Companies Act, to allot up to 107,268,195 new Ordinary Shares. This
authority will expire at the conclusion of the Company's 2026 annual general
meeting or, if earlier, on 1 July 2026, unless renewed, and will permit the
Directors to complete any allotments pursuant to offers or agreements made
prior to its expiry.

 

Resolution 2 - Disapplication of Pre-emption Rights (Special Resolution)

Conditional upon the passing of Resolution 1, this resolution seeks to empower
the Directors, pursuant to section 571 of the Companies Act, to allot equity
securities for cash on a non pre-emptive basis up to the same limit of
107,268,195 new Ordinary Shares, including in connection with the Open Offer
and other purposes described in the Circular. This authority will expire at
the conclusion of the 2026 annual general meeting or, if earlier, on 1 July
2026, unless renewed, and will allow the Directors to complete allotments
under existing agreements entered into prior to expiry.

 

6.            Additional information

Your attention is drawn to the risk factors set out in Part II of this
Document. Shareholders are advised to read the whole of this Document and not
rely solely on the summary information presented in this letter.

 

Details of the action to be taken if you wish to subscribe for Open Offer
Shares are provided in Part III of this Document.

 

A Form of Proxy for use in connection with the General Meeting is enclosed
with this Document.

 

Shareholders can register their vote(s) for the General Meeting either:

·    by visiting www.shareregistrars.uk.com, clicking on the "Proxy Vote"
button and then following the on-screen instructions; or

·    by post or by hand to Share Registrars Limited, 3 The Millennium
Centre, Crosby Way, Farnham, Surrey GU9 7XX using the proxy form accompanying
this notice; or

·    in the case of CREST members, by utilising the CREST electronic proxy
appointment service as soon as possible and, in any event, not later than
11.00 a.m. on 6 May 2026, being 48 hours (excluding non-business days) before
the time of the General Meeting.

 

Whether or not you intend to be present at the General Meeting, you are
requested to register your vote in advance as set out above. The completion
and return of the Form of Proxy will not preclude you from attending the
General Meeting and voting in person should you subsequently wish to do so.

 

Shareholders are reminded that, if their Ordinary Shares are held in the name
of a nominee, only that nominee or its duly appointed proxy can be counted in
the quorum at the General Meeting.

 

7.            Directors' Recommendation

The Directors believe the Open Offer is as an appropriate funding mechanism to
provide a contribution to the Company's funding needs and is structured to
provide Qualifying Shareholders with the opportunity to participate pro rata
to their holdings of Existing Ordinary Shares.

 

To the extent that Open Offer Shares are not taken up pursuant to Basic
Entitlements or the Excess Application Facility, the Directors may, subject to
the passing of the Resolutions and in accordance with applicable law and
market practice, allot such Open Offer Shares to investors (including by way
of a placing or subscription of new Ordinary Shares for cash or, where
appropriate, as consideration for investments or other transactions) or
otherwise on the basis set out elsewhere in this Circular. Any proceeds of
such allotment will, where applicable, be retained for the benefit of the
Company. Any such allotment will not be made on terms which are materially
more favourable than those available to Qualifying Shareholders under the Open
Offer, save where required in connection with non-cash consideration.

 

The Directors consider that the Open Offer and the Resolutions to be proposed
at the General Meeting are in the best interests of the Company and its
shareholders as a whole. The authorities sought will provide the Company with
the appropriate flexibility to allot new Ordinary Shares and, where
appropriate, to do so for cash on a non pre-emptive basis in connection with
the Open Offer and other corporate purposes described in this Circular.
Accordingly, the Directors unanimously recommend that shareholders vote in
favour of the Resolutions, as they intend to do in respect of their own
beneficial shareholdings.

 

In this regard, Shareholders should be aware that the Open Offer can only
proceed if both of the Resolutions are passed by Shareholders with the
requisite majorities. Should either of the Resolutions not be passed by
Shareholders, the Open Offer will not proceed, the Directors would not be able
to utilise, on the basis described in this Circular, any remaining balance of
the Ordinary Shares made available through the Open Offer and the Company
would not receive any proceeds from the Open Offer Shares or any such
remaining balance.

 

Definitions
 
 "Admission"                          admission of the Open Offer Shares to trading on AIM becoming effective in
                                      accordance with the AIM Rules

 "Affiliates"                         any person that directly, or indirectly through one or more

                                      intermediaries, controls or is controlled by, or is under common control with,
                                      the person specified

 "Aggregate Limit"                    a restriction on any Shareholder acquiring any Open Offer Shares which would,
                                      when aggregated with any interest in the Existing Ordinary Shares held by such
                                      Shareholder, result in such Shareholder holding an interest in the Ordinary
                                      Shares which (when taken together with Ordinary Shares in which persons acting
                                      in concert with him are interested) carry 30.0 per cent. or more of the voting
                                      rights of the Company

 "AIM"                                the market of that name operated by the London Stock Exchange

 "AIM Application"                    the application to the London Stock Exchange for Admission as required by Rule
                                      29 of the AIM Rules

 "AIM Rules"                          the AIM Rules for Companies as published by the London Stock Exchange from
                                      time to time

 "Allenby Capital"                    Allenby Capital Limited, nominated adviser and broker to Tern

 "Application Form"                   the application form accompanying this Document to be used by Qualifying
                                      Non-CREST Shareholders in connection with the Open Offer

 "Basic Entitlement(s)"               the number of Open Offer Shares which Qualifying Shareholders are entitled to
                                      subscribe for at the Issue Price pro rata to their holding of Existing
                                      Ordinary Shares held at the Record Date pursuant to the Open Offer as
                                      described in Part III of the Circular

 "Business Day"                       a day (excluding Saturdays and Sundays, or public holidays in England and
                                      Wales) on which banks generally are open for business in London for the
                                      transaction of normal business

 "Circular" or "Document"             this circular issued by the Company on 21 April 2026

 "Companies Act"                      Companies Act 2006 (as amended)
 "Company" or "Tern"                  Tern plc, a public limited company incorporated and registered in England and
                                      Wales with registered no. 5131386

 "CREST"                              the relevant system (as defined in the Uncertificated Securities Regulations
                                      2001) for the paperless settlement of trades and the holding of uncertificated
                                      securities operated by Euroclear

 "Directors" or "Board"               the directors of the Company

 "EEA"                                the European Economic Area

 "Enlarged Share Capital"             the issued ordinary share capital of the Company following the issue of the
                                      Open Offer Shares
 "Euroclear"                          Euroclear UK & International Limited, the operator of CREST

 "Excess Application Facility"        the arrangement provided to Qualifying Shareholders to apply for Excess Shares
                                      in excess of their Basic Entitlements accordance with the terms and conditions
                                      of the Open Offer to be set out in Part III of this Document

 "Excess Entitlements"                in respect of each Qualifying Shareholder, the entitlement (in addition to his
                                      Basic Entitlement) to apply for Excess Shares pursuant to the Excess
                                      Application Facility, which is conditional on him taking up his Basic
                                      Entitlements in accordance with the terms and conditions set out in Part III
                                      of this Document

 "Excess Shares"                      Open Offer Shares which are not taken up by Qualifying Shareholders pursuant
                                      to their Basic Entitlements and which are offered to Qualifying Shareholders
                                      under the Excess Application

                                      Facility

 "Existing Ordinary Shares"           the 750,877,367 Ordinary Shares in issue as at the date of this Document

 "FCA"                                the Financial Conduct Authority in its capacity as the competent authority for
                                      the purposes of Part VI of FSMA

 "FSMA"                               the Financial Services and Markets Act of 2000 (as amended)

 "General Meeting"                    the general meeting of the Company convened for 11:00 on 8 May 2026 at which
                                      the Resolutions will be proposed, notice of which is set out at the end of
                                      this Document

 "HMRC"                               HM Revenue & Customs in the UK

 "Issue Price"                        0.60 pence per Open Offer Share

 "IoT"                                the Internet of Things

 "London Stock Exchange"              London Stock Exchange plc

 "Long Stop Date"                     29 May 2026

 "Market Abuse Regulation"            the Market Abuse Regulation (2014/596/EU) as retained in UK law pursuant,
                                      inter alia, to the European Union (Withdrawal) Act 2018 (as amended) and the
                                      Market Abuse (Amendment) (EU Exit) Regulations 2019 (as amended)

 "Notice of General Meeting"          the notice of the General Meeting, which is set out at the end of this
                                      Document

 "Open Offer"                         the conditional invitation to be made by the Company to Qualifying
                                      Shareholders to subscribe for Open Offer Shares at the Issue Price, in
                                      accordance with the terms to be set out in the Circular and in, where
                                      relevant, the Application Form

 "Open Offer Shares"                  the up to 107,268,195 Ordinary Shares to be issued pursuant to the Open Offer

 "Ordinary Shares" or "Tern Shares"   the ordinary shares of £0.0002 each in the capital of the Company

 "POATR"                              the Public Offers and Admissions to Trading Regulations 2024

 "PRM"                                the Prospectus Rules: Admission to Trading on a Regulated Market sourcebook
                                      made by the FCA

 "Overseas Shareholders"              Shareholders who have a registered address in or who are located and/or
                                      resident in or are citizens of, in each case, a country other than the United
                                      Kingdom

 "Qualifying CREST Shareholders"      Qualifying Shareholders whose Existing Ordinary Shares on the register of
                                      members of the Company on the Record Date are held in uncertificated form on
                                      CREST

 "Qualifying Non-CREST Shareholders"  Qualifying Shareholders whose Existing Ordinary Shares on the register of
                                      members of the Company on the Record Date are held in certificated form

 "Qualifying Shareholders"            Shareholders whose names appear on the register of members of the Company on
                                      the Record Date as holders of Existing Ordinary Shares and who are eligible to
                                      be offered Open Offer Shares under the Open Offer in accordance with the terms
                                      and conditions to be set out in Part III of this Document

 "Record Date"                        6:00 p.m. on 20 April 2026

 "Receiving Agent"                    Share Registrars Limited

 "Regulatory Information Service"     any of the services set out on the list maintained by the London Stock
                                      Exchange as set out in the AIM Rules

 "Regulation S"                       Regulation S under the Securities Act

 "Resolutions"                        the resolutions to be proposed at the General Meeting and set out in the
                                      Notice of General Meeting

 "Restricted Jurisdictions"           United States, Canada, Australia, Japan, New Zealand or the Republic of South
                                      Africa and any other jurisdiction where the extension or the availability of
                                      the Open Offer would breach any applicable law or regulation

 "Securities Act"                     the US Securities Act of 1933 (as amended)

 "Shareholder(s)"                     the shareholders of the Company from time to time, each a "Shareholder"

 "Sterling"                           British pounds sterling, the official currency of the United Kingdom

 "UK" or "United Kingdom"             United Kingdom of Great Britain and Northern Ireland

 "United States" or "US"              the United States of America, its territories and possessions, any state of
                                      the United States of America and the District of Columbia

 

 

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