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22 June 2023

DG Innovate plc

("DG Innovate" or the "Company")

Conditional Placing to raise £517,000

Proposed Capital Reorganisation

Notice of AGM

DG Innovate (LSE: DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, is pleased to announce that the Company and Peterhouse Capital Limited have  conditionally raised gross proceeds of £517,000 (the "Placing") through the issue of 1,034,000,000 new ordinary shares at 0.05 pence per share (the "Issue Price"), subject to the passing of capital reorganisation resolutions at the Company's Annual General Meeting ("AGM") as detailed below. The Placing represents the maximum number of ordinary shares the Company can currently issue without the publication of a prospectus. Peterhouse Capital Limited has been appointed as joint broker to the Company.

The funds raised will primarily be used to fund the Company's ongoing commercialisation strategy for its Enhanced Drive Technology and Enhanced Battery Technology. The SUPAR, MTorX and Marine projects are progressing well, and testing of the next design iteration of the 250kW/400kW Pareta® electric drive is expected imminently. In parallel, the Company is working to capitalise on various commercial opportunities alongside its partners, including tier one commercial and off-highway vehicle axle suppliers, BRIST and BASE.

Proposed Capital Reorganisation

The Company presently has 9,208,548,440 ordinary shares of 0.1 pence each in issue ("Existing Ordinary Shares"). The mid-market price of the Existing Ordinary Shares as at 21 June 2023 (being the latest practicable date prior to publication of this announcement) is 0.065 pence. As the Company is not permitted by law to issue shares at an issue price which is below their nominal value, it is unable, in the present climate, to raise money by way of a fresh issue of new ordinary shares of 0.1 pence each due to the fact that the market price of the ordinary shares is below their nominal value.

Therefore, in order to enable the Company to issue shares in connection with the Placing, at an issue price which exceeds their nominal value, shareholder approval is being sought at the AGM to complete a subdivision of the ordinary share capital of the Company (the "Capital Reorganisation").  Subject to shareholder approval at the AGM, each of the Existing Ordinary Shares will be subdivided into one new ordinary share of 0.01 pence each in the capital of the Company ("New Ordinary Shares") and one deferred share of 0.09 pence each in the capital of the Company to create a differential between the nominal value of the ordinary shares and their market price to facilitate future share issues.

To give effect to the Capital Reorganisation the Company's Articles of Association will need to be amended to make changes to allow the creation of the deferred shares. These amendments will also require shareholders' approval at the AGM.

As a consequence of, and immediately following, the Capital Reorganisation becoming effective each shareholder's holding of New Ordinary Shares will be the same as the number of existing ordinary shares held by them. Excluding the impact of the Placing, each shareholder's proportionate interest in the Company's issued ordinary share capital will, and thus the aggregate value of their holding should, remain unchanged as a result of the Capital Reorganisation.

The New Ordinary Shares will have the same rights as those currently accruing to the existing ordinary shares in issue under the Articles of Association of the Company, including those relating to voting and entitlement to dividends.

Details of the Placing

The Company has conditionally raised gross proceeds of £517,000 through a placing for 1,034,000,000 new ordinary shares at a price of 0.05 pence per share (the "Placing Shares"), subject to the Capital Reorganisation resolutions being passed at the AGM.  The Placing Shares would represent approximately 10.1 per cent. of the Company's then enlarged issued share capital and are the maximum number of ordinary shares that the Company can currently issue without the publication of a prospectus.  The Issue Price represents a discount of approximately 23 per cent. to the mid-market closing price on the London Stock Exchange of 0.065 pence per ordinary share on 21 June 2023, being the latest practicable business day prior to the publication of this announcement.

If the Capital Reorganisation Resolutions are passed, the Placing Shares are expected to be issued shortly after the AGM and admitted to trading on the Main Market.

The Company has also agreed to issue 51,700,000 warrants to Peterhouse Capital Limited and other advisers to the Company for services provided in connection with the Placing.  The 51,700,000 warrants provide the holder the right to acquire such number of new ordinary shares at an exercise price of 0.05 pence, which expire one year from Admission ("Broker Warrants").  If the Broker Warrants were ultimately to be exercised in full, it would result in the issue of 51,700,000 new ordinary shares raising a further £25,850 for the development of the Company's business.

Notice of AGM

The AGM of the Company will be held on 19 July 2023 at 11.00 a.m. at the offices of Fasken Martineau LLP, 100 Liverpool Street, London, EC2M 2AT.  The Notice of AGM is being posted to shareholders today and will be available on the Company's website:

https://www.dgiplc.com/investors

Expected Timetable of Principle Events

For further information please contact:

About DG Innovate

DG Innovate is an advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, using abundant materials and the best engineering and scientific practices. DG Innovate is currently developing its products alongside a number of major manufacturers across the transportation and energy sectors, research institutions and the UK Government, and has filed 18 patents worldwide. DG Innovate's current research and development activities are broadly split into two areas, focusing on novel electric motor technologies and energy storage solutions. Its two main products are:

- Enhanced Drive Technology (EDT) - High efficiency, cost-effective electric motors + power electronics; and

- Enhanced Battery Technology (EBT) - Sodium-ion batteries offering a sustainable energy storage solution at similar/greater energy density to incumbent technologies at a lower cost, increased safety with lower environmental footprint.

Further information may be found at: https://www.dgiplc.com