Partial sale of Device Authority holding

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 sold part of its shareholding in Device Authority Limited ("Device Authority") for a total cash consideration of £233,000. As a consequence, Tern's holding in Device Authority has reduced from 31.7% to 30.0% (before any dilution on the exercise of share options and the expected closing of Tranche Two ("Tranche Two") of the Device Authority Fundraising announced on 27 December 2023).

This sale of equity in Device Authority equated to approximately 5.3% of Tern's holding in Device Authority and has been undertaken at the same price as the Device Authority Fundraising announced by the Company on 27 December 2023 (the "Device Authority Fundraising Issue Price"). The buyer of Tern's equity in Device Authority is an independent family office who are not currently a shareholder in Device Authority and not related to Tern. The proceeds of this disposal will be used to invest further in one or more of Tern's portfolio companies and for general corporate purposes.

Tern's reduced holding of 30.0% in Device Authority (before any dilution on exercise of share options and the expected closing of Tranche Two) has an unaudited book valuation of approximately US$5.4 million (approximately £4.2 million) at the valuation implied by the Device Authority Fundraising Issue Price.

The remaining Tranche Two of the Device Authority Fundraising of US$3.3 million, by Ten Eleven Ventures remains, as previously announced, to be completed on or prior to 30 September 2024. On completion of Tranche Two, by Ten Eleven Ventures, Tern will hold 25.3% of Device Authority's equity (before any dilution on exercise of share options), which would be valued at approximately US$5.4 million (approximately £4.2 million) at the valuation implied by the Device Authority Fundraising Issue Price.

Unless otherwise stated, defined terms should be given the meaning given to them in the Company's announcement made on 27 December 2023.

Commenting Ian Ritchie, Chairman of Tern, said: "Following the failure to pass the resolution required to issue new ordinary shares disapplying statutory pre-emption rights at the recent Annual General Meeting, the Tern board has been investigating ways to appropriately raise funds to protect Tern's position in, and progress, Tern's portfolio companies, whilst also providing Tern with funding as an AIM company. The sale of a modest proportion of our holding in Device Authority, at no discount to the value that Device Authority raised funds in December 2023, is, I believe, appropriate to meet the Company's immediate requirements. We will continue to explore the best way to maximise shareholder value and I look forward to providing updates on our portfolio companies in due course."

Based on Device Authority's latest statutory accounts for the year ended 31 December 2023, as at that date it had net assets of £11,024,568 and incurred a profit for the year of £4,303,751. Given the statutory nature of these figures Tern does not consider this profit to be representative of the current business and trading performance of Device Authority.