DG Innovate plc (LON: DGI), the advanced research and development company developing pioneering solutions in sustainable mobility and energy storage, has announced 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Shares until after publication of the 2024 Interim Results (and subject to each not being in possession of any other unpublished price sensitive information at such time).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
DG Innovate 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.
