Tern : 21 December 2016 Issue of equity

21 December 2016

Tern plc ("Tern" or "the Company") Issue of Equity

Tern plc announces that it is issuing 3,400,000 Ordinary shares of 0.02p pursuant to the conversion of a loan note.

The loan notes concerned were part of loan notes amounting in total to £50,000 held by a former director. As disclosed in note 18 of the 2015 Report and Acccounts, the treatment of the loan notes were subject of a dispute when the former director left the Company. This dispute has now been resolved. The outcome is that £42,500 of the loan notes are converted at a conversion price of 1.25p in accordance with the original terms of the loan notes, with the balance of £7,500 being redeemed for cash.

Application has been made for the 3,400,000 new ordinary shares to be admitted to AIM and it is expected that admission will take place and trading in the new ordinary shares will commence on by 29 December 2016.

Following Admission of the new ordinary shares, the enlarged issued share capital of Tern will be 118,511,443 Ordinary Shares of 0.02p each. The Company does not hold any shares in Treasury. The above figure may be used by shareholders as the denominator for the calculations to determine if they are required to notify their interest in, or a change to their interest in the Company, under the Disclosure Guidance and Transparency Rules.

Enquiries: Tern plc

Angus Forrest / Al Sisto

Tel: [phone]

WH Ireland (NOMAD and broker) Mike Coe / Ed Allsopp Peterhouse Corporate Finance

(Joint broker)

Lucy Williams / Duncan Vasey

Whitman Howard

(Joint broker)

Nick Lovering / Francis North

Tel: [phone]

Tel: [phone]

Tel: [phone]

About Tern:

Tern Plc acquires and invests in privately owned companies with IP, established products and customer bases. Its investment strategy is focused on taking an active role in its investee companies in order to improve the business model, accelerate growth, expand the business globally, and identify exit opportunities.