EUR 57.00 For Business Accounts Only

Tern Plc*

Tern has announced a small placing, a new investment and the intention to raise new funds for Device Authority. Given uncertainty around this we are putting our recommendation and price target under review. Clearly a successful fund raise for DA at a $36m would see an increase the NAV. Once this deal is closed we will have a clearer view of any upside.

Tern has announced a fundraising of c£600k by the issue of c9.1 million new ordinary shares at an issue price of 6.6p. This is a 30% discount to NAV and 20% discount to the closing price on friday. The Company will use the proceeds of the Fundraising to make a new investment in InVMA Limited, an established IoT implementation business.

Separately Device Authority has signed a term sheet with US Capital Partners to raise new equity through a private placement offering. The minimum subscription from the private placement will be $2.5 million. The fundraising is expected to be at a premoney valuation to Device Authority of $36m, or $0.75 per share, up from $23m or $0.47 at the last equity issue. A successful close at this higher price would on our estimates increase the Tern NAV from 9.4p to c11p to 12.p per share depending on level of dilution for Tern.