Statement re Additional Investment in Cryptosoft

30 March 2015

Tern Plc

(AIM: TERN)

Further investment in Cryptosoft

Tern Plc ("Tern" or "the Company"), the AIM quoted investment company specialising in the cloud and mobile technology sectors, is pleased to announce that it has agreed to provide up to an additional £400,000 investment in its existing investee company, Cryptosoft Limited ("Cryptosoft").  The increased investment will be made through a combination of a subscription of £10,000 for a further 10,000 "A" Ordinary Shares of £1 to be issued at par and a £390,000 loan facility. The investment is in addition to the £300,000 already announced and is being made in order to assist Cryptosoft with its growth plans.

Following the subscription Tern Plc will continue to own 100% of the A Shares in Cryptosoft, with Cryptosoft's management owning all of the 150 B Ordinary Shares in issue.  Tern will therefore own approximately 98.6% of the aggregate "A" and "B" shares in issue.  In the event of a sale of Cryptosoft, the holders of the A shares will be entitled to 75% and the holders of the B Shares to 25% respectively of the net proceeds.

The key terms of the loan agreement are;

• Secured by a first charge over all the assets of Cryptosoft
• Cryptosoft will pay Tern a £25,000 arrangement fee
• The Board of Cryptosoft will be able to draw down the loan in instalments of £50,000
• Interest will be charged at 5% on outstanding amounts,
• The loan is repayable, in instalments, by 31 December 2017 and the outstanding loan balance is convertible at any time at the request of Tern,

            into A Shares to be issued at par
             
If the facility is drawn down in full, Tern's investment in Cryptosoft will amount to a total of  £700,000.

The loan is considered a related party transaction in view of Tern's majority shareholding in Cryptosoft. The Directors have therefore consulted with Tern's Nominated Adviser, WH Ireland, and consider the terms of the loan to be fair and reasonable insofar as the shareholders of the Company are concerned.

Jon Penney, Chief Technical Officer and Founder of Cryptosoft, said "This facility will enable us to build the salesforce, improve our web presence, and extend our capabilities to exploit opportunities in the UK and North America and achieve our ambitious growth plans."

Enquiries

Tern plc                                                                                  Tel: [phone]
Al Sisto

WH Ireland                                                                            Tel: [phone]
John Wakefield

Peterhouse Corporate Finance (Joint broker)                  Tel. [phone]

Lucy Williams / Duncan Vasey

Tern Plc acquires and invests in privately owned companies with self-owned 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.

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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Tern Plc via Globenewswire

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