Tern PLC: FundamentalVR Series A Funding Round

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

30 October2019

Tern Plc ('Tern' or the 'Company')

FundamentalVR Series A Funding Round

Tern Plc (AIM: TERN), the investment company specialising in the Internet of Things ('IoT'), is pleased to announce that FVRVS Limited ('FundamentalVR'), a leading virtual reality('VR')training and data analysis technology platformand one of Tern's existing portfolio companies, has closed a £4.3 millionSeries A funding round, including a £0.5 million convertible loan note conversion,with a post-money valuation of £11.3 million. This funding round allows for further investment into FundamentalVR'sFundamental Surgery education platform, the first surgical simulation software system to deploy HapticVR(TM),combining VR with cutting-edge haptics (the sense of touch).

The implicit price of the syndicated funding representsa 27% uplift on the investment of £1.9 million made by the Company in FundamentalVRin May and October 2018. Following the funding round, Tern's shareholding in FundamentalVR will be 26.9% with a valuation of £3.0 million,representing a fair value increase of £0.6 million.

The funding roundwas led by Downing Ventures,with participation from Epic Private Equity and BrighteyesVentures. Leading medical institutions also participated in the funding round,including Mayo Clinic, one of America's leading centresof medical excellence, and Sana Kliniken, one of Europe's leading medical organisations and the thirdlargest hospital organisationin Germany, which is a strong endorsement of the quality of FundamentalVR'soffering.

In conjunction withthis funding round, Tern has converted, at a 20% discount to the current fundraising price, £0.5 millionof convertible loan notes advanced to FundamentalVR(plus interest).Tern provided these bridging loans to FundamentalVR between April and September2019.

Based on FundamentalVR'slatest statutory accounts for the year ended 31 December 2018, FundamentalVRhad net assets of £817,952 at that date and incurred a loss for the year of £2,040,368.

Tern CEO, Al Sisto, said, 'We identified early on that FundamentalVR's team was developing aplatform that wasvery special. A training and data analysis offering which couldrevolutionise theskills development of surgical practice, while at the same time creating a database of significant importanceto the industry. We are delighted that the value and relevance of this exciting business and its entire staff has been recognised by this outstanding syndicate of new investorswe helped solidify.'

'This is an important milestonefor FundamentalVRand itepitomisesTern's strategy to invest ingreat teams and ideas, not only through the provision of capital,but also with active support and advicefor the benefit of our shareholders. Changing the approach to learning and deploying new procedures and products in the world of healthcare is of critical importance for everyone's future and FundamentalVRis leading the way. We look forward to announcing furtherimportantdevelopments from the company.'

**ENDS**

Enquiries

Tern plc Al Sisto, CEO Sarah Payne, Finance Director	Via Newgate Communications
Allenby Capital Limited (Nomad and Joint broker) David Worlidge/Alex Brearley	Tel: [phone]
Whitman Howard (Joint broker) Nick Lovering/Christopher Furness	Tel: [phone]
Newgate Communications PR Elisabeth Cowell/Megan Kovach	Tel: [phone]