THIS ANNOUNCEMENT (THE "ANNOUNCEMENT"), AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN DG INNOVATE PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF DG INNOVATE PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU NO. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED) ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

16 September 2024

DG Innovate plc

("DG Innovate" or the "Company")

Proposed Fundraising of up to £850,000

and

Business Update

DG Innovate plc (LSE: DGI), the advanced research and development company developing pioneering solutions in sustainable mobility and energy storage, announces a proposed Fundraising, comprising a Placing, a Retail Offer and, potentially a Directors' Intended Subscription, to raise up to an aggregate of £850,000 (before expenses) through the issue of new Ordinary Shares, assuming full take-up of the Retail Offer and completion of the Directors' Intended Subscription. The proposed Issue Price is 0.075 pence per Ordinary Share.

Cavendish has acted as sole bookrunner to the Placing.

Transaction Highlights

·      The Company has conditionally raised gross proceeds of £550,000 pursuant to the Placing with new and existing investors.

·      Certain of the Company's management team also intend to subscribe for, in aggregate, £200,000 through the issue of the Directors' Subscription Shares at the Issue Price. As the Company is currently in a closed period under UK MAR until the publication of the 2024 Interim Results, the Directors and senior management are not permitted to deal in the Company's Ordinary Shares until after publication of the 2024 Interim Results (and subject to each not being in possession of any other unpublished price sensitive information at such time).

·      Publication of the 2024 Interim Results is required to take place by 30 September 2024. Assuming the Directors' Intended Subscription proceeds, the Company will apply for admission of the relevant Directors' Subscription Shares to trading on the Main Market separately and to take effect following the admission of the Placing Shares and the Retail Offer Shares.

·    It is proposed that there will be a separate conditional Retail Offer to existing Shareholders via the Bookbuild Platform to raise gross proceeds of up to £100,000 at the Issue Price. A separate announcement will be made shortly by the Company regarding the Retail Offer and its terms.

·      The Issue Price represents a discount of 6.25 per cent. to the closing mid-market price of 0.080 pence per Ordinary Share on 13 September 2024 (being the last business day before the release of this Announcement).

The net proceeds from the Fundraising will be used to:

·      further fund the Company's commercial strategies for e-drives and energy storage;

·      further support the establishment of the joint venture with EVage Automotive Pvt. Limited ("EVage"), as originally announced on 28 March 2024; and

·      provide working capital for the ongoing commercialisation journey and pursuit of sales contracts.  

The net proceeds from the Fundraising will ensure that the Company has sufficient funds for its immediate needs until December 2024. Accordingly, in conjunction with its commercial activities, the Company will continue to seek further funding, in part to facilitate a proposed move to AIM in 2025.

The Company has also agreed to issue a further 28,035,840 Creditor Shares at the Issue Price in order to meet certain liabilities due to a creditor.

The Company has the authority to issue and allot the Placing Shares, Creditor Shares, Retail Offer Shares and Directors' Subscription Shares (should it proceed) pursuant to certain existing shareholder authorities granting such powers to the directors at the Company's Annual General Meeting held on 2 July 2024.

Completion of the Placing, the Retail Offer and Admission is expected to take place on or around 23 September 2024. A further announcement will be made in relation to the Directors' Intended Subscription in due course.

Business Update

The Company is also pleased to provide an update on recent progress across its technical and commercial workstreams:

·      Work continues to conclude the proposed joint venture with Indian electric vehicle manufacturer, EVage, and technical specifications for the first Pareta® motors planned to be produced by the joint venture are now being finalised. The parties continue to target production during 2025.

·      The Company is currently testing a prototype 450kW Pareta® motor ahead of delivery in September 2024 to its collaboration partner Cummins-Meritor, for use in heavy commercial vehicles.

·      Following the delivery of the initial prototype under the joint development agreement for Pareta® drives for novel heavy goods vehicle applications with a tier one commercial vehicle components company, as announced on 19 July 2024, DGI's technical team are supporting testing at the partner's facility, which is progressing in line with expectations.

·      The Company continues to consider M&A opportunities within the e-mobility sector, which could further accelerate its commercialisation strategy.

·      An international grant is being considered for further developments of its ground-breaking research within sustainable battery technology.

Enquiries:

This Announcement is released by DG Innovate plc and contains inside information for the purposes of Article 7 of MAR, and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

Market soundings (as defined in MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR.  This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

For the purposes of MAR, Article 2 of Commission Implementing Regulation (EU) 2016/1055 and the UK version of such implementing regulation (as amended), the person responsible for arranging for the release of this Announcement on behalf of the Company is Jack Allardyce, Chief Executive Officer.

Details of the Placing and the Placing Agreement

Under the terms of a placing agreement entered into today between Cavendish and the Company (the "Placing Agreement"), the Sole Bookrunner has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares to raise £550,000.

Cavendish has conditionally placed the Placing Shares with certain institutional investors at the Placing Price. The Placing is not being underwritten by Cavendish.

The Placing is conditional, inter alia, on:

·      The Placing Agreement not having been terminated in accordance with its terms prior to Admission (as defined below) of the Placing Shares to trading on the Main Market of the London Stock Exchange and admission to the Official List; and

·      Admission becoming effective by no later than 8.00 a.m. on 23 September 2024 or such later time and/or date as the Company and Cavendish may agree (being no later than 8.00 a.m. on 11 October 2024).

The Placing Agreement contains customary warranties given by the Company to Cavendish as to matters in relation to, inter alia, the accuracy of information in this Announcement and other matters relating to DG Innovate and its business. In addition, the Company has provided a customary indemnity to Cavendish in respect of liabilities arising out of or in connection with the Placing.

Cavendish is entitled to terminate the Placing Agreement in certain circumstances prior to Admission, including where any of the warranties are found not to be true or accurate or were misleading in any respect, the failure of the Company to comply in any material respect with any of its obligations under the Placing Agreement, the occurrence of certain force majeure events or a material adverse change in the business of the Company or in financial or trading position or prospects of the Company.

Details of the Retail Offer

The Retail Offer aims to provide existing retail Shareholders in the Company an opportunity to participate in the Fundraise. A separate announcement will be made shortly by the Company regarding the Retail Offer and its terms. Those investors who subscribe for Retail Offer Shares pursuant to the Retail Offer will do so pursuant to the terms and conditions of the Retail Offer contained in that announcement. For the avoidance of doubt, the Retail Offer is not part of the Placing or the Directors' Intended Subscription.

The Retail Offer will be open to Retail Investors in the United Kingdom at 9.20 a.m. on 16 September 2024 and is expected to close at 4.30 p.m. on 17 September 2024. Investors should note that financial intermediaries may have earlier closing times. The Retail Offer may close early if it is oversubscribed.

Admission, Settlement, Dealings and Total Voting Rights

Application will be made for admission of 733,333,334 Placing Shares and 28,035,840 Creditor Shares, together with the Retail Offer Shares, to the Official List and to trading on the Main Market.

It is expected that that Admission will take place on or around 8.00 a.m. on 23 September 2024 and that dealings in the Placing Shares and the Retail Offer Shares will commence at the same time.

A further announcement will be released in due course in connection with admission to the Official List and to trading on the Main Market of any Directors' Subscription Shares.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

2024

The Company and Cavendish reserve the right to alter the dates and times referred to above. If any of the dates and times referred to above are altered by the Company, the revised dates and times will be announced through a Regulatory Information Service without delay. 

All references to time in this Announcement are to London time, unless otherwise stated.

FUNDRAISING STATISTICS

(i)       Assuming the Retail Offer is subscribed for in full, and that no other Ordinary Shares are issued following the date of this Announcement prior to Admission.

(ii)      Includes 357,142 Ordinary Shares that are held in treasury

DEFINITIONS

The following definitions apply throughout this Announcement, unless the context otherwise requires:

IMPORTANT NOTICES

The distribution of this Announcement and any other documentation associated with the Placing into jurisdictions other than the United Kingdom may be restricted by law.  Persons into whose possession these documents come should inform themselves about and observe any such restrictions.  Any failure to comply with these restrictions may constitute a violation of the securities laws or regulations of any such jurisdiction.  In particular, such documents should not be distributed, forwarded to or transmitted, directly or indirectly, in whole or in part, in, into or from the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where to do so may constitute a violation of the securities laws or regulations of any such jurisdiction (each a "Restricted Jurisdiction").

This Announcement is not an offer of securities for sale into the United States.  The Placing Shares have not been and will not be registered under the US Securities Act 1933 as amended (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and, accordingly, may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the Placing Shares in the United States.

The Placing Shares are being offered and sold only in "offshore transactions" outside the US in reliance on, and in accordance with, Regulation S under the US Securities Act.  The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the US or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Placing Shares or the accuracy or adequacy of this Announcement. 

This Announcement is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in any jurisdiction and should not be relied upon in connection with any decision to subscribe for or acquire any of the Placing Shares (as the case may be).  In particular, this Announcement does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States.

This Announcement has been issued by, and is the sole responsibility of, the Company. No person has been authorised to give any information or to make any representations other than those contained in this Announcement and, if given or made, such information or representations must not be relied on as having been authorised by the Company or Cavendish. Subject to the Listing Rules of the FCA, the issue of this Announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this Announcement or that the information contained in it is correct at any subsequent date.

Cavendish, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any matters referred to in this Announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on Cavendish  by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Cavendish does not accept any responsibility whatsoever for the contents of this Announcement, and makes no representation or warranty, express or implied, for the contents of this Announcement, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the Placing Shares or the Placing, and nothing in this Announcement is or shall be relied upon as, a promise or representation in this respect whether as to the past or future. Cavendish accordingly disclaims to the fullest extent permitted by law all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this Announcement or any such statement.

No statement in this Announcement is intended to be a profit forecast or profit estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share of the Company.

This Announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this Announcement and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this Announcement are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by applicable law or regulation, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this Announcement that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this Announcement.

Information to Distributors

UK product governance

Solely for the purposes of the product governance requirements contained within of Chapter 3 of the FCA Handbook Production Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors (for the purposes of UK Product Governance Requirements) should note that: (a) the price of the Placing Shares may decline and investors could lose all or part of their investment; (b) the Placing Shares offer no guaranteed income and no capital protection; and (c) an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Cavendish will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapter 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this Announcement.

Certain figures contained in this Announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this Announcement may not conform exactly with the total figure given.