TIDMDGI
RNS Number : 4735N
DG Innovate PLC
23 January 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO
ANY PERSON LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS
UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014
WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 ("UK MAR"). IN ADDITION, MARKET SOUNDINGS
WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS
ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF
SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT,
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION
OF INSIDE INFORMATION.
THE COMMUNICATION OF THIS ANNOUNCEMENT AND ANY OTHER DOCUMENTS
OR MATERIALS RELATING TO THE BROKER OPTION AS A FINANCIAL PROMOTION
IS ONLY BEING MADE TO, AND MAY ONLY BE ACTED UPON BY, THOSE PERSONS
IN THE UNITED KINGDOM FALLING WITHIN ARTICLE 43 OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS
AMED (WHICH INCLUDES AN EXISTING MEMBER OF DG INNOVATE PLC). ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THE BROKER OPTION
RELATES IS AVAILABLE ONLY TO SUCH PERSONS AND WILL BE ENGAGED IN
ONLY WITH SUCH PERSONS. THIS ANNOUNCEMENT IS FOR INFORMATIONAL
PURPOSES ONLY, AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR
INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO
PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES OF DG INNOVATE PLC.
23 January 2023
DG Innovate plc
("DG Innovate" or the "Company")
Subscription to raise GBP400,000 and Broker Option
Technology Update, Board Changes, Variation of Warrant Terms
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 a subscription to raise gross proceeds of GBP400,000 (the
"Fundraise"), a broker option to enable existing shareholders to
participate in the fundraise for up to an additional GBP100,000
(the "Broker Option"), and to provide an update on the Company's
development and commercialisation strategy for its suite of
technologies, together with announcing certain other corporate
matters.
Highlights
-- Subscription raising gross proceeds of GBP400,000 through the
issue of new ordinary shares at 0.12 pence per share (the "Issue
Price"), a premium of approximately 14.3 per cent. to the
mid-market closing price on the London Stock Exchange of 0.105
pence per ordinary share on 20 January 2023
-- The Broker Option to raise up to an additional GBP100,000 at
the Issue Price from existing shareholders
-- Participants in the Fundraise and the Broker Option will be
issued with one warrant for every new ordinary share subscribed for
with an exercise price of 0.18 pence per ordinary share. These
warrants will be exercisable for two years from Admission ("New
Warrants")
-- The funds raised will primarily be used to provide additional
funding for the Company's commercialisation strategy for its
Enhanced Drive Technology and Enhanced Battery Technology. Further
significant progress has been made in both areas over recent
weeks
-- The terms of the Company's existing warrants in issue have
been varied so that they now have an exercise price of 0.25 pence
and are exercisable until 7 April 2024
-- In order to reduce the Company's ongoing costs and to ensure
that the Company's board is of an appropriate size and composition
for its current stage of development, Sir Stephen Dalton and Andrew
Boughtwood have both stepped down as Non-Executive Directors of the
Company with immediate effect
Commenting, Peter Tierney, Chief Executive Officer of DG
Innovate, said: "As set out in October last year we have a clear
roadmap to commercialisation for both our electric mobility and
energy storage technologies. Our goal is to ensure our world-class
technology is appropriately exploited and brought to commercial
scale production as quickly as possible. The proceeds of the
Fundraise will provide the funding for the next stage of our plan
as we continue to develop our technology and advance commercial
discussions, both with our existing collaboration partners and
other potential launch customers.
"This is an exciting time for DG Innovate and I look forward to
making further announcements as we continue to progress. I would
also like to take this opportunity to thank Sir Stephen and Andrew
for their contribution to the Company and wish them well for the
future."
Details of the Subscription
The Company has raised gross proceeds of GBP400,000 through a
subscription for 333,333,333 new ordinary shares of 0.001 pence in
the capital of the Company (the "New Ordinary Shares") at a price
of 0.12 pence per share. The New Ordinary Shares will represent
approximately 3.6 per cent. of the Company's enlarged issued share
capital. The Issue price represents a premium of approximately 14.3
per cent. to the mid-market closing price on the London Stock
Exchange of 0.105 pence per ordinary share on 20 January 2023,
being the latest practicable business day prior to the publication
of this announcement.
The net proceeds of the Fundraise will be used by the Company to
further advance its Enhanced Drive Technology and Enhanced Battery
Technology as it seeks to bring these technologies to commercial
scale production. In particular, the proceeds of the Fundraise are
expected to allow certain milestones to be met in H1 2023 and the
future funding needs of the Company will be reviewed towards the
end of H1 2023 in light of the progress made and other sources of
funding, such as grants, received by, and available to, the
Company.
In addition, participants in the Fundraise will be issued with
one warrant for every New Ordinary Share subscribed for with an
exercise price of 0.18 pence per warrant. These warrants will be
exercisable for two years from Admission ("New Warrants").
The Company has also agreed to issue 17,500,000 ordinary shares
in the Company ("Fee Shares") and 20,000,000 warrants to an adviser
to the Company for services provided in connection with the
Fundraise. The 20,000,000 warrants provide the holder the right to
acquire such number of new ordinary shares at an exercise price of
0.18 pence, which expire two years from Admission ("Broker
Warrants").
If the New Warrants and Broker Warrants were ultimately to be
exercised in full, it would result in the issue of 353,333,333 new
ordinary shares raising a further GBP636,000 for the development of
the Company's business.
Broker Option
To provide existing Company shareholders ("Existing
Shareholders") with an opportunity to participate in the Fundraise
on the same basis as other investors, WH Ireland Limited ("WH
Ireland") has launched a Broker Option under which WH Ireland will,
as agent for the Company, invite subscriptions for an additional
83,333,333 New Ordinary Shares and associated 83,333,333 New
Warrants to raise up to GBP100,000 at the Issue Price.
Existing Shareholders who hold shares in the Company and are on
the register of members as at the close of business on 20 January
2023, will be given a right to participate in the Broker Option and
all orders from such Existing Shareholders will be accepted and
processed by WH Ireland, subject to scale-back in the event of
over-subscription under the Broker Option. The Broker Option has
not been underwritten. The Broker Option opens immediately
following this announcement and will close at 4.30 p.m. GMT on 30
January 2023.
There is no obligation on WH Ireland to exercise the Broker
Option or to seek to procure subscribers for the Broker Option. WH
Ireland may also, subject to prior consent of the Company, allocate
new shares after the time of any initial allocation to any person
submitting a bid after that time.
The Broker Option Shares are not being made available to the
public and none of the Broker Option Shares are being offered or
sold in any jurisdiction where it would be unlawful to do so. No
prospectus will be issued in connection with the Broker Option.
Interested Existing Shareholders who wish to register their
interest in participating in the Broker Option should do so through
their nominated broker, who can contact Melvyn Brown of WH Ireland
via telephone on 020 7220 1666 or melvyn.brown@whirelandcm.com .
Existing Shareholders should communicate their interest via their
stockbroker as WH Ireland is unable to take orders from individual
private investors.
A further announcement will be made following the end of the
period during which the Broker Option is open.
Technology Update
Enhanced Drive Technology
As previously announced, the Company is working in collaboration
with Meritor, the US-headquartered global commercial vehicle
components company, to deliver a scalable 250kW/400kW format of the
Company's Pareta(R) electric drive platform, aimed at bus and HGV
applications. The advanced prototypes produced have demonstrated
good performance to date versus existing electric motor systems
from global motor manufacturers, and cycle testing and optimisation
continues. Work on the next design iterations is now underway, with
the Company targeting delivery in Q2 2023. This is intended to
prove the viability of DG Innovate's commercial proposition to
potential customers.
Following the successful completion of this stage, the Company
intends to undertake a phase of pilot manufacturing and industrial
engineering. This work will be part-funded by the 'Scale up
Readiness Validation of Parallel Motor for Automotive Applications'
("SUPAR") project, which was awarded by the UK Government's
Advanced Propulsion Centre ("APC"), as announced on 9 September
2022. Completion of the associated pilot facility is targeted for
2024.
The Company has also been awarded funding for, and has commenced
work on, the MTorX project, which is exploring the potential of a
motor design with no permanent magnet. Magnet supply chains are
currently a significant issue for global motor manufacturing, with
a magnetless design capable of comparable performance to
traditional technologies expected to be of significant interest to
OEMs.
In addition, DG Innovate was recently awarded grant funding for
a feasibility study into a larger 3MW Pareta(R) e-drive for marine
operations, with work on this study now underway. The Company
believes the enhanced reliability, performance and compact nature
of its novel motor technology would be very appealing to marine
operators.
DG Innovate's long-term relationship with the UK Ministry of
Defence also continues to develop positively.
The Company continues to explore multiple potential routes to
market for its Enhanced Drive Technology, and in addition to
ongoing commercial discussions with its existing collaboration
partners, it has recently entered into positive dialogue with new
potential customers and partners concerning both product supply and
partnerships. These include another Tier 1 supplier to the global
commercial vehicle sector and a number of systems integration
companies.
Enhanced Battery Technology
Development of the Company's proprietary hard carbon anode
materials continues. DG Innovate's anode materials are produced
from a sustainable bio waste product and are specifically developed
for use in sodium-ion batteries. As previously noted, sodium-ion
batteries offer an attractive sustainable alternative to
lithium-ion, using more abundant materials, with lower carbon
footprints and less environmental impact from extraction.
The previously announced Cap-Size project, which is to carry out
a feasibility study for the evaluation of manufacturing the
Company's sodium-ion anode material at scale in the UK, is
underway. In addition, DG Innovate's anode material passed a
significant scale-up milestone this month when it was successfully
used on the industrial scale coater at the Company's cell
manufacturing partner. This key milestone serves as a
proof-of-principle for coating on 'Giga-factory' lines and is a
significant step towards full-scale commercial production.
The next milestone on DG Innovate's development pathway is now
expected to be a scale-up to produce 40Ah cells in a format that
serves plug-In hybrid electric vehicles, as the Company builds the
business case for full scale anode manufacture in the UK. In
parallel, the EU passed a law in December 2022 stating that all
battery manufacturers must now publish a full carbon footprint
analysis of their whole supply chain, including manufacture of
active anode and cathode materials, before allowing the sale of
cells. The Company believe this further strengthens the appeal of
DG Innovate's low carbon footprint sustainable anode
Commercial discussions continue with potential customers and
partners regarding the Company's anode material. Subject to a
successful conclusion to the Company's scale-up activities, DG
Innovate is continuing to evaluate in-house material production as
a route to market. However, the Company still intends to primarily
pursue a licensing model.
Board Changes
In order to reduce the Company's ongoing costs and to ensure
that the Company's board is of an appropriate size and composition
for its current stage of development, Sir Stephen Dalton and Andrew
Boughtwood have both stepped down as Non-Executive Directors of the
Company with immediate effect.
Following these resignations, the Company's board comprises
Nicholas Tulloch (Non-Executive Chairman), Peter Tierney (Chief
Executive Officer), John (Jack) Allardyce (Chief Financial
Officer), Martin Boughtwood (Chief Technical Officer), Patrick
(Pat) Symonds (Non-Executive Director) and Trevor Gabriel
(Non-Executive Director).
The remaining members of the board would like to thank Sir
Stephen and Andrew for their contributions to the Company and wish
them well in their future endeavours.
Director Remuneration
In order to reduce the cash outflow from the Company, the
Directors have, since July 2022 only taken 75% of their salary
and/or fee entitlements in cash. The remaining 25% of the
Directors' entitlements are being accrued by the Company and will
be settled in cash or through the issue of new ordinary shares in
the Company, at such time and in such manner as the Company's
Remuneration Committee determines to be appropriate. The unpaid and
accrued Directors' fees for Sir Stephen Dalton and Andrew
Boughtwood are expected to be settled in cash shortly following
their resignation from the Company.
Additionally, the Company's Remuneration Committee are in
discussions with the CEO, Peter Tierney, regarding increasing the
exercise price of his options to acquire 690,790,814 new ordinary
shares in the Company from 0.10 pence, as announced on 13 October
2022, to further demonstrate, at Mr Tierney's request, his
commitment to delivering value for, and to be in alignment with,
shareholders. A further announcement will be made regarding this in
due course, as appropriate.
Variation of Existing Warrant Terms
The Company currently has 790,000,000 warrants in issue
affording the holder the right to acquire one new ordinary share in
DG Innovate at an exercise price of 0.50 pence per share until 8
April 2023 and 645,640,300 warrants in issue affording the holder
the right to acquire one new ordinary share in DG Innovate at an
exercise price of 1 pence per share until 7 April 2023 (together
the "Existing Warrants"). The Company announces that it has agreed
with the Warrant holders that the terms of the Existing Warrants
will be varied such that they will all now have an exercise price
of 0.25 pence and the expiry date is now 7 April 2024.
If the above mentioned Existing Warrants were ultimately to be
exercised in full, it would result in the issue of 1,435,640,300
new ordinary shares at 0.25 pence per share raising a further
GBP3,589,101 for the development of the Company's business.
Admission and Total Voting Rights
Application will be made for the 333,333,333 New Ordinary Shares
and 17,500,000 Fee Shares to be admitted to the Official List of
the FCA and to trading on the Main Market of the London Stock
Exchange ("Admission"). It is expected that Admission will become
effective and that unconditional dealings will commence on the
London Stock Exchange at 8.00 a.m. on 30 January 2023.
Following Admission of the New Ordinary Shares and the Fee
Shares, the total number of Ordinary Shares in issue will be
9,193,548,440, each with one voting right. The Company does not
hold any rights in treasury. The total voting rights figure is
therefore 9,193,548,440 and can be used by shareholders as the
denominator for the calculations by which they will determine
whether they are required to notify their interest in, or a change
of their interest in, the Company under the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority.
For further information please contact:
DG Innovate plc C/O IFC
Peter Tierney, CEO
Jack Allardyce, CFO
IFC Advisory (Financial PR & IR) 020 3934 6630
Tim Metcalfe
Zach Cohen
Grant Thornton UK LLP (Financial Adviser)
Samantha Harrison
Jamie Barklem
Ciara Donnelly 020 7383 5100
OvalX (Joint Broker) 020 7392 1400
Tom Curran
Thomas Smith
WH Ireland (Joint Broker) 020 7220 1666
Chris Hardie
Megan Liddell
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
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