Issue of Talking Medicines Convertible Loan Notes

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 been issued with approximately £230,000 of new unsecured convertible loan notes (the "CLNs") by Talking Medicines Limited ("Talking Medicines") in return for Tern having agreed to cancel existing short-term loans aggregating to approximately £180,000 provided by Tern to Talking Medicines during 2024 and 2025.

The CLNs carry an interest rate of 10 per cent. per annum and the CLN's principal amount and accrued interest are convertible on either an exit or a fundraising of at least £2 million undertaken by Talking Medicines, in both cases at a 20 per cent discount to the exit or fundraising price. If neither an exit nor a relevant fundraising has taken place, the CLNs will mature on 21 November 2029, in line with the approximately £0.3 million of convertible loan notes that the Company already holds in Talking Medicines.

As at 30 June 2025, the date of Tern's last published book valuation, Tern's equity and convertible loan note holding in Talking Medicines had a total unaudited book value of £2.1 million. Following the issue of the CLN, 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 total convertible loan note holding of approximately £0.52 million.

Talking Medicines is in the process of raising up to £1.0 million of new funding from new and existing investors through the issue of CLNs on the same terms.

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 over US$23bn healthcare advertising market (Research and Markets, Healthcare Advertising Market Report 2025), 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.

Based on Talking Medicines' latest statutory accounts for the year ended 31 December 2024, as at that date it had net liabilities of approximately £1.4 million and incurred a loss for the year of approximately £0.51 million. Given the historic nature of these figures, Tern does not consider this to be representative of the current business, trading performance and prospects of Talking Medicines.