Open Offer to raise up to £642,486

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 £642,486 (before expenses) through the issue of up to 128,497,293 Open Offer Shares at an Issue Price of 0.50p per Open Offer Share.

1 Open Offer Share for every 5 Ordinary Shares held on the Record Date.

The Issue Price of 0.50p per Open Offer Share represents a discount of 20 per cent. to the closing middle market price of 0.625p for each Ordinary Share on 26 September 2025 (the latest practicable date prior to this announcement).

The Open Offer is only conditional upon the admission of the Open Offer Shares to trading on AIM. It is expected that Admission will become effective and dealings in the Open Offer Shares will commence on 16 October 2025. The Open Offer is not underwritten.

The Open Offer is open for acceptance from now until 14 October 2025. Details of the Open Offer 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.

Notes:

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

Open Offer statistics

Issue Price 0.50 pence Number of Existing Ordinary Shares in issue as at the date of this Document 642,486,466 Basis of the Open Offer 1 Open Offer Share for every 5 Existing Ordinary Shares held Maximum number of Open Offer Shares to be issued pursuant to the Open Offer 128,497,293 Enlarged Share Capital immediately upon Admission of the Open Offer Shares* 770,983,759 Percentage of the Enlarged Share Capital represented by the Open Offer Shares* 16.67 per cent. The gross proceeds from the Open Offer (approximately)* £642,486 ISIN for Existing Ordinary Shares GB00BFPMV798 ISIN for Basic Entitlements GB00BTLP2336 ISIN for Excess Entitlements GB00BTLP2443 Notes:

* assumes full take up of the 128,497,293 Open Offer Shares

Please refer to Appendix 1 below for further information

Appendix 1

Introduction

The Company is proposing to raise up to approximately £642,486 pursuant to the Open Offer. The Open Offer is being made on a pre-emptive basis, allowing all Qualifying Shareholders the opportunity to participate by subscribing for Open Offer Shares at the Issue Price of 0.50 pence per Ordinary Share, pro rata to their holdings of Existing Ordinary Shares. The Open Offer is not underwritten.

Background to and reasons for the Open Offer

As previously announced, the focus of the Board and Tern's executive management is 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, FVRS Limited and Talking Medicines Limited, and many of those held by Sure Valley Ventures Enterprise Capital LP ("SVV2") and Sure Ventures plc, entities in which the Company is invested, continue to make significant progress and the Board believes that several of the Company's portfolio investments are approaching maturity. However, the potential shorter-term exit opportunities that have been presented to Tern in more recent times 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 longer-term value of the holding.

Corporately, the Company is maintaining strict control over operational costs. Following the Board and management restructuring in 2023, the Company's spending on administration costs in 2024 was approximately 30% lower than in 2023, and further savings are being made in the current financial year where appropriate. This has included the recent appointment of Gravita Audit Limited as the Company's new auditor and the additional use of online meetings, digital tools and automation, to reduce spend and improve operational efficiency. However, as an AIM-quoted company, the Company still incurs substantial 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. As at 31 August 2025, the Company's unaudited cash balance was approximately £150,000.

The Company can also be presented, often at relatively short notice, with fundraisings planned by certain of its direct portfolio companies. If it is not possible for Tern to participate in these fundraisings, the Company could find that either, or both, its shareholding in the relevant portfolio company is diluted and their valuation reduces, which is likely to then adversely impact upon the Company and the potential returns that the Board believes are available for Shareholders. In addition, as originally announced on 2 March 2022, Tern has committed to invest up to £5 million in SVV2 over its 10-year life and is required to provide capital to SVV2 from time to time, often at short notice. If Tern was to default on this commitment it could result in the Company forfeiting its holding in SVV2, which would also have an adverse impact upon the Company and the potential returns for Shareholders. The Directors believe that SVV2 provides important portfolio diversification and additional market exposure for Tern and its portfolio companies, providing Shareholders with an indirect participation in a wider range of entrepreneurial technology businesses, including a number focused on artificial intelligence, the potential for income through providing services to their portfolio companies and the potential for more frequent realisations.

Absent suitable exit opportunities, the Company therefore requires additional funding to: (i) maintain the Company's admission to AIM; (ii) potentially participate in fundraisings planned by Tern's direct portfolio companies; (iii) fund its commitment to invest in SVV2; and (iv) prevent the consequent potentially significant reduction in the net asset value of the Company and the returns available to Shareholders, as described above. The Company is therefore proposing the Open Offer, utilising substantially all of the Director's current authority to allot Ordinary Shares without disapplying pre-emption rights, to generate funds to invest further in one or more of Tern's portfolio investments, contribute towards Tern's commitment to invest in SVV2, and for general corporate purposes.

The Open Offer is not being underwritten. If the Open Offer is not fully subscribed, in order to seek to cover the above funding requirements, the Company will investigate alternative funding solutions which may include structures that utilise some or all of the Director's remaining authority to allot Ordinary Shares, debt arrangements and short-term asset disposals. 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 Company's financial health, asset value and long-term growth prospects.

The Open Offer

The Company is proposing to raise up to approximately £642,486 pursuant to the Open Offer. The Issue Price of 0.50 pence per Open Offer Share represents a discount of 20 per cent. to the closing mid-price of 0.625 pence per Ordinary Share on 26 September 2025, the latest practicable date prior to announcing the Open Offer. The Open Offer is being made on a pre-emptive basis, allowing all Qualifying Shareholders the opportunity to participate.

1 Open Offer Share for every 5 Existing Ordinary Shares held

Qualifying Shareholders who do not take up their Basic Entitlements in full will experience a dilution to their interests of approximately 16.67 per cent. following Admission (assuming full subscription under the Open Offer).

Conditions

The Open Offer is conditional, inter alia, upon the Admission of the Open Offer Shares becoming effective by not later than 8:00 a.m. on 16 October 2025 (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 16 October 2025 (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

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 128,497,293 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 128,497,293 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.

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 16 October 2025. 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.

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 30 September 2025. 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 14 October 2025.

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 14 October 2025.

The latest time for applications under the Open Offer to be received is 11:00 a.m. on 14 October 2025. 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.

Directors' interests

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.

Additional information

Definitions