Tag: DGI

DG Innovate plc (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced that the Company has signed a Joint Development Agreement with a tier one commercial vehicle components company, to jointly develop systems for heavy goods vehicles applications utilising DG Innovate’s Pareta® drive technology.

The Pareta® system provides a simpler, lighter and more cost-effective solution, applicable over a range of applications for both new generation electric and hybrid heavy goods vehicles, as well as those continuing to be powered by internal combustion engines.  By applying DG Innovate’s technology utilised in the Company’s Pareta® drives the parties believe leading performance systems can be developed.  Designed to provide redundancy within the system, to be robust, fit in the existing available spaces, and respond rapidly with appropriate force. Inbuilt processing power / intelligence further provides additional functionality making each application a powerful intelligent sub system in its own right.

The Agreement, which includes funding to the Company, covers the first proof of concept stage, that will see prototypes produced in H1 2024, followed by on vehicle trials in H2 2024.

Commenting, Peter Bardenfleth-Hansen, CEO of DG Innovate, said: “This agreement with a global leader in commercial vehicle components highlights the substantial and varied opportunities for the technology behind DGI’s Pareta® drive in a very large market.  I look forward to providing further updates on this project, and more generally, as we leverage DGI’s technology and build a scaled business focused on green technology.”

DG Innovate plc (LON:DGI), the advanced R&D company developing pioneering solutions in sustainable mobility and energy storage, has announced that the China National Intellectual Property Administration has issued DGI’s first-ever Chinese patent, covering its proprietary Pareta^® electric drive system. This grants DGI intellectual property rights for this technology in China, allowing the Company to expand its footprint in the world’s largest market for electric vehicles.

Commenting, Peter Bardenfleth-Hansen, DGI CEO, said: “The grant of a patent from the CNIPA is a significant milestone for DGI. The market for EVs in China is growing at an unprecedented rate and Pareta^® is a unique and transformative solution: it is safe, scalable, and flexible in its applications, with the potential to transform the future of transport in its path towards decarbonisation. Along with our R&D team, I look forward to driving our growth in the region, leveraging the best of British innovation internationally.”

The Pareta^® electric drive system features a parallel and efficient coil system with independent integrated power electronics for each section. The patent specifically relates to a version of the axial flux motor which features a novel winding and magnetic circuit arrangement that keeps costs to a minimum whilst maximising efficiency. DGI Innovate has several other motor-related international patents in process, each with unique winding and magnetic geometries.

For more information on the granted patent please see CNIPA’s Patent No. 113785472A titled ‘Motor/Generator And Motor Drive Circuit’.

DG Innovate plc (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced the completion of the first phase of its project to utilise the Company’s Pareta® e-drive in marine applications.

As previously announced, DG Innovate was awarded grant funding at the beginning of 2023 for a feasibility study into the use of the Company’s Pareta® e-drive for marine operations alongside a partner providing a hydrogen fuel cell power system.  This project has now delivered a fully costed design for an integrated fuel cell and powertrain system using the Company’s technology.  With no gearbox involved the driveline is much more efficient and reliable compared to the current diesel engine / gearbox system, together with offering the benefits of zero emissions.

The system design was overseen and guided by Lloyd’s Register’s risk-based design guidelines and DG Innovate is pleased to report that “Approval in Principle” has now been received from Lloyd’s Register for the Company’s Pareta® e-drive system to be fitted to marine vessels – one of the primary target outcomes from the project.

Utilising DG Innovate’s high efficiency modular drive motor and integrated inverter, the project has defined a system level segmented marinised fuel cell energy supply, feeding a similarly segmented driveline delivering circa 3MW power.  The system is designed to deliver zero-emission power to a ship saving approximately 1700kg of CO₂ equivalent per hour at 3MW as compared to diesel powered vessels.

The primary near term potential market for a circa 3MW system is expected to be power for workboats and crew transfer vessels servicing offshore installations in the North Sea and elsewhere.  Hundreds of such vessels are expected to be commissioned in the UK to service wind farms and other offshore installations.

The next stage of the project, for which the Company expects to receive further grant funding, will lead towards a full demonstration vessel project.

Commenting, Peter Bardenfleth-Hansen, CEO of DG Innovate, said: “As I noted when I was appointed, the technology the DGI team has developed is exceptional.  The marine sector is just one addressable market for DGI’s Enhanced Drive Technology, alongside road transport and other applications that we are also focused on.  The potential demand for zero emission marine vessels is enormous and I believe the enhanced reliability, performance and compact nature of our novel motor technology will be very appealing to marine operators.  We look forward to the next stage of this project.

“We are heavily focussed on leveraging all of DG Innovate’s technology as we seek to build a scaled business focused on green technology and I look forward to providing further updates in due course.”

DG Innovate (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced, inter alia, a board restructuring, including the appointment of three new executive directors with significant experience in the electric vehicle sector, all of whom have held senior roles with Tesla, as detailed below, and a £2.4 million fundraising via the issue of convertible notes.

The new executive management team envisage a dual strategy: to complete the development and commercialisation of the Company’s existing technology and to build a larger business through significant complimentary acquisitions within the wider electric mobility and energy storage spaces.

Highlights

·    Board restructuring including the appointment of a new executive management team comprising Peter Bardenfleth-Hansen as Chief Executive Officer and Christian Eidem and Jochen Rudat as Executive Directors.  All three have significant experience in the electric vehicle and mobility sector, including senior roles with Tesla.

·    Convertible note fundraise of £2.4 million to progress the new executive management team’s plans including the development and commercialisation of the Company’s existing technology.

·    Christian Eidem has acquired a 29.3% stake in the Company through the purchase of shares from existing shareholders in the Company.

·    Options under a new Executive Share Option Scheme have been issued to the incoming directors and the Company’s Chief Technology Officer, Martin Boughtwood, with certain existing options lapsing.

·    Peter Tierney, the Company’s previous Chief Executive Officer has moved to a Non-Executive Director role and Dr Pat Symonds has resigned from his position as a Non-Executive Director.

Commenting, Nick Tulloch, Chairman of DG Innovate, said: “We are delighted to welcome Christian Eidem, Peter Bardenfleth-Hansen and Jochen Rudat to DG Innovate, together with Christian taking a significant stake in the Company.  The new executive management team, with their world-class track record in the electric vehicle and mobility sector, recognise the significant commercial potential in DG Innovate’s technology and the wider opportunity to use DG Innovate as a platform to build a larger company focused on the sector.  The funds raised will help progress these plans and I look forward to an extremely bright future for DG Innovate.

“I would also like to express my gratitude to Peter Tierney for his contribution as CEO and I am delighted that he will continue his involvement in the Company.  My thanks go also to Pat Symonds for his wise counsel to the Company and I wish him well in his future endeavours.  Finally, on behalf of the Board, I would like to express our gratitude to the Deregallera Trust and the other shareholders who have, for the benefit of the Company and wider shareholder base, sacrificed a significant proportion of their holdings to enable the funding and new management team to be put in place.”

Commenting, Peter Bardenfleth-Hansen, incoming CEO of DG Innovate, said: “The technology the DGI team has developed is exceptional.  Jochen, Christian and I have spent a collective 90 years in this industry, and in the last few years have looked at hundreds of different technologies to invest in and commit to across the globe – DGI’s technology was the standout.  We look forward to working with the DGI team, and alongside investment from leading investors we have the opportunity to leverage DGI’s technology and build a scaled business focused on green technology.”

Board Restructuring

The Company is pleased to announce the appointment of Peter Bardenfleth-Hansen as the Company’s new Chief Executive Officer, together with Christian Eidem and Jochen Rudat as Executive Directors.  Mr Bardenfleth-Hansen and Mr Eidem will devote the majority of their working time to the Company.

Peter Bardenfleth-Hansen is a seasoned executive in the electric vehicle and mobility industry. Peter spent almost 10 years at Tesla (Nasdaq: TSLA), during which he held increasingly senior sales roles within the organisation.  His role in drawing attention to Tesla at Copenhagen’s December 2009 Conference on Climate Change, led to him being Tesla’s first hire in Scandinavia, where he successfully led the launch of the Roadster.  He progressed through the ranks at Tesla and ultimately became Nordic Director in 2013, overseeing a team of 160 people, with geographic responsibility for Scandinavia as well as the Nordic and Baltic regions.  In December 2016, Peter became the Director of EMEA business development at Tesla where he oversaw all business expansion throughout Europe, the Middle East and Africa.  In 2015, he was given a 6-month special assignment to Japan where he was tasked with restructuring management.  Peter is now advising on mobility and invests in numerous private mobility companies, including Fenris Motorcycles and Viggo.  He has also been a member of the board of directors of Volta Trucks and Zaptec since October 2020 and has also been the chairman of Viggo since May 2019.

Christian Eidem graduated from the Wharton School of Business, University of Pennsylvania, with a degree in Economics. He is an investor and entrepreneur who started his career as a venture capitalist in Oslo, Norway.  He has created and managed companies in sports and healthcare, including International Sports Management.  He also co-founded Orion Systems and Mylna Gruppen, one of Scandinavia’s leading fitness equipment companies.  Christian holds numerous directorship and board member positions around the world, including as Director of Life Natural, advisor to Tesla Motors and advisor to Orion Systems.  In the past he served as Chairman and co-founder of International Sports Management. He has worked as an advisor to Elon Musk and Tesla.

Jochen Rudat has almost 25 years of experience in the mobility industry.  Following his management role at BMW Switzerland, he joined Tesla in 2009, where he was one of Tesla’s first hires in Europe and was tasked with building Tesla’s business in Europe from the ground up.  During his tenure, Jochen was responsible for the launch of Tesla products in several markets, including Switzerland, Austria, Italy and France. In his last role at Tesla as Director Central Europe, he had responsibility for the entire Central European region, including the key German market.  During his time at Tesla, Jochen also reported directly to Tesla founder, Elon Musk, and was recognised for his significant achievements by being awarded the Key Contributor Award, which only a few high performers received in certain times.  Jochen was also given a special assignment for several months to improve retail operations in China.  In addition to Tesla, Jochen was Chief Sales Officer at the electric luxury brand Automobili Pininfarina, and has worked in different roles for Porsche, Citroen, Kia Motors and BMW. Currently, Jochen consults to several mobility start-ups and is on the advisory board of Silent Yachts, which manufacture solar powered e-boats, Micro Mobility Systems AG, which manufacture light electric vehicles, American Manganese, which is involved in the recycling of lithium ion batteries, Bonnet Ltd., an EV charging start-up, and Carify, a fast-growing Swiss car subscription service.  Jochen is the Head of Sales of Piech Automotive and is also an executive advisor at Vulcan Energie Ressourcen GmbH.

Peter Tierney, the Company’s previous Chief Executive Officer, has moved to a Non-Executive Director role and Dr Pat Symonds has resigned from his position as a Non-Executive Director to focus on his other activities, including his position as Formula One’s Chief Technical Officer. 

The Board of the Company will now comprise: Nicholas Tulloch (Non-Executive Chairman), Peter Bardenfleth-Hansen (Chief Executive Officer), Christian Eidem (Executive Director), Jochen Rudat (Executive Director), Jack Allardyce (Chief Financial Officer), Martin Boughtwood (Chief Technical Officer), Peter Tierney (Non-Executive Director) and Trevor Gabriel (Non-Executive Director).

Convertible Note Fundraise

The Company has raised gross proceeds of £2.4 million through the issue of unsecured convertible notes (“CLNs”) convertible into the Company’s ordinary shares of 0.01 pence at a price of 0.035 pence per share.  The CLNs have been placed by Patronus Partners with new and existing investors in the Company.

The CLNs have no coupon and are convertible (i) after one year, subject to the availability of a valid exemption from the requirement to prepare a prospectus in respect of the Ordinary Shares arising from the conversion; or (ii) following admission of the Company’s ordinary share capital to the AIM Market of the London Stock Exchange.

The proceeds raised through the issue of the CLNs will be used for general corporate purposes, including to progress the testing and commercialisation of the Company’s Pareta® prototype high-performance electric vehicle drive, together with other projects, including the Scale up Readiness Validation of Parallel Motor for Automotive Applications’ (“SUPAR”) project with the UK Government’s Advanced Propulsion Centre as detailed in the Company’s interim results, announced on 28 September 2023.

Director Dealings

In the interest of acquiring a substantial position in the Company’s shares in an expedient manner, Christian Eidem made a proposal to acquire a proportion of the holding of DG Innovate’s largest shareholder, the Deregallera Trust.  The Trust was established by the family of Martin Boughtwood, a director, with the beneficiary being his wife and the trustees being his adult children.  The appointment of the new executive team and funding arrangements were contingent on an agreement being reached between the Mr Eidem and the Trust.  Mr Eidem reached agreement with the Trust to facilitate the overall transaction and shield other shareholders from potentially significant dilution.  Christian Eidem has therefore acquired 2,560,637,110 Ordinary Shares from the Trust, equating to 25% of the Company’s existing issued share capital.

Mr Eidem has also reached agreement with certain other shareholders, including two existing directors of the Company, to acquire an additional 440,000,000 Ordinary Shares at the same price as the transaction with the Trust.  Following these purchases, Mr Eidem’s has a holding in the Company of 3,000,637,110 Ordinary Shares, equating to approximately 29.3% of the Company’s issued share capital.

Further information on these transactions is contained in the disclosure tables below.

Following these transactions the Directors’ holdings of Ordinary Shares are as follows:

Name	Position	Previous Holding	Current Holding	Percentage Holding
Christian Eidem	Executive Director	–	3,000,637,110	29.3%
Jack Allardyce	CFO	6,000,000	–	–
Martin Boughtwood*	CTO	3,026,591,664	465,954,554	4.5%
Trevor Gabriel**	Non-Executive Director	555,561,720	331,561,664	3.2%

*Held by the Deregallera Trust, whose beneficiary is Martin’s wife, Denise Boughtwood

** Held by Disruptech Limited, owned by Trevor Gabriel

Issue of Options

The Company has granted the following options over Ordinary Shares (“Granted Options”) under the terms of its executive share option scheme:

Name	Position	Options exercisable at 0.03p per share	Options exercisable at 0.06p per share
Christian Eidem	Executive Director	2,000,000,000	–
Peter Bardenfleth- Hansen	CEO	1,500,000,000	–
Jochen Rudat	Executive Director	1,500,000,000	–
Martin Boughtwood	CTO	1,000,000,000	1,000,000,000*

* Martin Boughtwood’s second tranche of options will be repriced to 0.03 pence per share subject to the Company entering into contracts within two years worth not less than £2 million for the sale/licencing of its technologies.

The Granted Options vest on a daily basis during the first year, are exercisable immediately upon vesting and have no performance conditions attached other than continued employment by the Company (or other Group company).

Further details are contained in the disclosure tables below.

Lapsing of Existing Options

On 12 October 2022 Peter Tierney was granted 690,790,814 options over Ordinary Shares with an exercise price of 0.1 pence per share.  Mr Tierney has agreed that 425,987,669 of these options will lapse and he therefore now holds options over 264,803,145 Ordinary Shares with an exercise price of 0.1 pence per share, representing approximately 2.6% of the Company’s current issued share capital.

On 12 April 2022 Martin Boughtwood was granted 156,105,002 options over Ordinary Shares with an exercise price of 0.1 pence per share.  Mr Boughtwood has agreed that all of these options will lapse.

Certain other former directors have also agreed that certain options held by them, which in aggregate comprise 599,999,999 options over Ordinary Shares with an exercise price of 0.1 pence per share, will also lapse.

Following the lapsing of these options and the grant of options detailed above, the Company has a total of 8,245,101,307 options outstanding representing approximately 80.5% of the Company’s issued share capital.

Director Salary/Fee Waivers

The existing and continuing directors, detailed below, have for some time deferred the receipt of certain salaries and fees contractually owed to them in order to preserve the Company’s cash resources.  These directors have agreed to waive the amounts owed as set out below:

Name	Unpaid accrued salary / fees to be waived
Nicholas Tulloch	£14,166
Peter Tierney	£90,208
Martin Boughtwood	£90,208
Jack Allardyce	£33,750
Trevor Gabriel	£14,166

Issue of Warrants

The Company has agreed to issue 205,714,286 warrants to Patronus Partners for services provided in connection with the CLN fundraise.  The 205,714,286 warrants give Patronus Partners the right to acquire such number of new Ordinary Shares at an exercise price of 0.035 pence and expire on 11 December 2024 (“Broker Warrants”).  If the Broker Warrants were ultimately to be exercised in full, it would result in the issue of 205,714,286 new Ordinary Shares raising a further £72,000 for the development of the Company’s business.

DG Innovate plc (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced the Company’s unaudited interim results for the six months ended 30 June 2023.

Chairman’s Report

The first half of 2023 saw progress on all fronts, as we continued with the development of our electric mobility and energy storage technologies and progressed our commercial opportunities, both with existing and new partners. Our shareholders again demonstrated their support despite challenging market conditions via a £418,000 subscription in January, which allowed us to continue work on our various projects and efforts to commercialise our ground-breaking IP.

Post-period end, we completed a further £517,000 placing on 19 July, which has allowed the team to continue development of our technologies. Testing of our Pareta® high-performance electric vehicle drive is ongoing, and work continues on our Scale up Readiness Validation of Parallel Motor for Automotive Applications’ (“SUPAR”) project with the UK Government’s Advanced Propulsion Centre. As outlined in the technology roadmap in the Company’s Strategic Update announced on 11 October 2022 we plan to move into pilot manufacturing and volume supply in due course.

Most recently, the team exhibited our integrated Pareta® drives at CENEX-LCV 2023, the UK’s premier exhibition and conference devoted to low-carbon vehicle and fuel cell technologies. This marked the unveiling of our innovative e-axle for buses and other heavy vehicles, borne out of our ongoing collaboration with BRIST Axle Systems S.r.l. We also demonstrated our Pareta® fleet monitoring and tracking system for the first time alongside our driving simulation software, and have been extremely enthused by the response of existing and potential new partners.

At the beginning of the period, and alongside our fundraising, Sir Stephen Dalton and Andrew Boughtwood stepped down as Non-Executive Directors to reduce the Company’s ongoing costs and ensure that the Company’s board is of an appropriate size and composition for its current stage of development. We remain extremely grateful for their contributions to the Company.

We look forward to updating shareholders further in due course.

Nick Tulloch

Non-Executive Chairman

28 September 2023

Financial Review

For the six months to 30 June 2023, the Group recorded a loss before tax of £1,908,253 (30 June 2022: £6,516,795; 31 December 2022: £7,868,376). There was revenue of £30,240 (30 June 2022: £Nil; 31 December 2022: £4,280) together with £399,641 (30 June 2022: £344,831; 31 December 2022: £433,989) of grant income in the period.

Cash flow

As at 30 June 2023 the Group held cash of £159,958 (30 June 2022: £1,650,352; 31 December 2022: £234,990) in the bank account. The Company raised £418,000 in January, also as stated above, after the period end the Company raised £517,000 through placing of new shares.

R&D repayment of £92,578 was received during the period for the tax credit claim for the year ended 31 March 2023, while an R&D tax credit of £92,697 for the period ended 31 December 2023 was in trade receivables at the period end and was received in August.

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;

· 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.

DG Innovate (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced that the Company will be showcasing a comprehensive package of products and solutions for designers, manufacturers and operators of electric vehicles (“EVs”) at CENEX-LCV 2023, the UK’s premier exhibition and conference devoted to low-carbon vehicle and fuel cell technologies.  CENEX-LCV 2023 is being held on 6 and 7 September 2023 at UTAC Millbrook, near Bedford, UK.

DG Innovate will be highlighting its E-Axle for buses and other heavy vehicles, which has been developed in collaboration with BRIST Axle Systems S.r.l.  This is a complete assembly with the Company’s fully integrated Pareta^® motor and drive.  It is a plug-and-play solution for axles with up to 13 tonne ratings and is suitable for both retrofit and new build applications.  A key benefit is that the integrated design frees up more space for batteries, allowing vehicles to achieve greater range.

Also on show for the first time will be DG Innovate’s Pareta^® fleet monitoring and tracking system, which provides powerful cloud-based tools for EV fleet management.  The system continually shows the location of all vehicles in the fleet on a map-based display, and, simply by tapping the relevant vehicle icon, the user can instantly call up performance data and energy level.  Data is also stored for later analysis to allow comparisons between vehicles and between drivers.

Another innovation on the DG Innovate stand at CENEX-LCV 2023 will be a software package that simulates EVs and allows them to be virtually driven over user-defined terrain so that the performance of various drive options can be evaluated and compared.  At the exhibition, this software has been partnered with a driving station to provide live demonstrations.

To complement its new introductions, DG Innovate is showing motors and inverters from its Pareta^® range.  These use a unique segmented architecture that splits the inverter and the torque producing elements into multiple segments.  This provides numerous benefits, including improved efficiency, enhanced thermal characteristics, operation from safer low voltage supplies and class-leading mass and volumetric power density.  In addition, Pareta^® drives offer unmatched fault resilience as, if a segment fails, the drive continues to operate normally except for a slight reduction in maximum torque.

DG Innovate (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced that the Company and Peterhouse Capital Limited have  conditionally raised gross proceeds of £517,000 through the issue of 1,034,000,000 new ordinary shares at 0.05 pence per share, 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

DG Innovate presently has 9,208,548,440 ordinary shares of 0.1 pence each in issue. 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

DG Innovate 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, 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 DG Innovate 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

Publication of Notice of AGM	22 June 2023
Latest time and date for return of Form of Proxy for AGM	17 July 2023
AGM	19 July 2023
Announcement of the result of the AGM	19 July 2023
Record Date and final date for trading in Existing Ordinary Shares	19 July 2023
Expected date of Admission of the New Ordinary Shares arising from the Capital Reorganisation	20 July 2023
Expected date of Admission of the Placing Shares	21 July 2023
Despatch of definitive share certificates in respect of the New Ordinary Shares and Placing Shares to be held in certificated form, if applicable	4 August 2023

DG Innovate (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced the Company’s audited results for the year ended 31 December 2022.

Highlights

•	Completion of acquisition of Deregallera Holdings Ltd and £4.6 million fundraise in April 2022
•	Appointment of Peter Tierney as CEO in July 2022
•	Award of £600,000 in grant funding from APC for the SUPAR project in September 2022
•	Strategic update and publication of commercial roadmaps for EDT and EBT in October 2022
•	Post year end subscription and broker option to raise total of £418,000 in January 2023
•	Post year end Collaboration Framework Agreement with axle suppliers BRIST and BASE in February 2023

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.

Chairman’s Statement

In April 2022, DG Innovate Plc (“the Company”) successfully completed the acquisition of Deregallera Holdings Ltd (previously DG Innovate Ltd) (“DHL”) which, together with an accompanying fundraise provided by existing shareholders, provided the enlarged group (“the Group”, or “DGI”) with a platform to develop DGI’s Enhanced Drive and Enhanced Battery Technologies (EDT and EBT) towards commercialisation. The Company changed its name to DG Innovate Plc to reflect the new group structure at completion.

In May 2022 the Company was delighted to announce the appointment of Peter Tierney as its new CEO. Peter took up his position on 1 July 2022, with his predecessor Christopher Theis stepping down at the same time. Peter brings a wealth of experience in building successful engineering businesses and achieving significant returns for investors.

During the following months we continued to make significant progress, including initial testing of our prototype 250kW Pareta® drives, the award of £600,000 in funding from the APC towards our SUPAR project and positive test results from our hard carbon anode material. Following an initial period of evaluation while working with the team at our premises in Caerphilly, in October 2022 Peter laid out his vision for the business in the form of commercialisation roadmaps for both EDT and EBT.

Post year end

In January 2023 we successfully raised an additional £418,000 through a subscription and broker option, in order to continue the development of our technologies. We were especially grateful for the support and faith of shareholders against a particularly difficult market backdrop at the time. I would also like to extend my thanks to Andrew Boughtwood and Sir Stephen Dalton, who stepped down from the Board at this time, for their contributions.

In February 2023 we were delighted to announce the signing of a Collaboration Framework Agreement with tier one commercial and off-highway vehicle axle suppliers, BRIST and BASE. This will see us work together to develop and integrate DGI’s innovative Pareta® motor technology into our partners’ range of axles, accelerate our joint activities in the retrofit and conversion market, and ultimately assemble a full electric drivetrain offering in the UK. This is a particularly exciting development, opening up a number or commercial opportunities with two very credible industry partners, and what we hope is the beginning of a long and very fruitful relationship for all parties. It is also complementary to our other existing relationships, which we hope to convert into commercial opportunities.

Outlook

On the ground, the hard work continues for both our electric drive and energy storage teams. For the former, our SUPAR, MTorX and Marine projects are underway, and we hope to test the next design iteration of our 250kW/400kW Pareta® electric drive in Q2 2023, in collaboration with Meritor. In terms of the latter, our Cap-Size feasibility study is ongoing, as is scale up and testing of our proprietary hard carbon anode materials, as we continue to work towards full-scale commercial production.

I would like to offer my sincere thanks to our shareholders for their continued support. 2022 was a transformation year for DGI and we are excited for what lies ahead over the coming months and years.

Nicholas Tulloch

Non-Executive Chairman

27 April 2023

Operational Review

On 8 April 2022, the Company changed its name to DG Innovate Plc.  It is domiciled and its principal place of business is in the United Kingdom and is subject to the City Code.

The Company was admitted to the Official List by way of a Standard Listing and to trading on the London Stock Exchange’s Main Market for listed securities on 30 March 2017.

During the year under review the Company was initially a cash shell, with its shares suspended from trading pending the completion of the all-share acquisition of DHL, the details of which had been laid out in a binding Sale and Purchase Agreement signed on 12 August 2021. During the period prior to the completion of the acquisition, the Company did not trade and its expenses related to deal costs, professional and associated expenses related to advisory and consultancy fees, and general administration expenses.

On 8 April 2022 the Company completed the acquisition of DHL, being renamed DG Innovate Plc. It concurrently raised £4.6m via a subscription and the exercise of existing warrants, to cover the costs associated with the transaction, settle historical debts and provide working capital for the enlarged group. Its subsequent primary business has been a continuation of the advanced research and development work historically undertaken by the acquired companies, with management now seeking to commercialise the nascent technologies being developed.

The period post completion involved the ongoing research and development projects across the Group’s electric drive and energy storage division. These included the ongoing Pareta® project to develop an integrated electric drive for bus and truck applications in collaboration with Meritor, with prototype drives continuing to be tested and a new design iteration expected to be completed in the coming weeks. In addition, the Group was awarded and commenced the SUPAR (‘Scale up Readiness Validation of Parallel Motor for Automotive Applications’) project, which will establish a pilot production facility to assemble drives, the MTorX project, which is exploring the potential of a motor design with no permanent magnet, and a feasibility study into a larger 3MW Pareta® e-drive for marine operations. While scale-up and testing of the Company’s hard carbon anode material continued, the £160,000 Cap-Size project also commenced, which will deliver a feasibility study on manufacturing the material at scale in the UK.

The Company announced the appointment of Peter Tierney as CEO in May 2022, with Mr Tierney taking up his post on 1 July 2022. His predecessor, Christopher Theis, left the Company on the same date. Following a strategic review of both DGI’s operations and technology, the Group announced a strategic update in October, targeting commercial sales of Pareta® during 2025 and the monetisation of EBT, either through manufacturing or licensing, within a 42-month timescale. The potential for aftermarket conversion revenues was also identified, and an ongoing focus on targeting commercial supply agreements through discussions with existing and new partners was highlighted.

Since the year end, in January 2023 the Company raised £418,000 through a subscription and broker option, to cover ongoing project costs and working capital. Then in February 2023, the Group announced a Collaboration Framework Agreement with tier one commercial vehicle and off-highway axle suppliers, BASE and BRIST. The agreement will see the parties develop and integrate DGI’s Pareta® technology into the current range of BRIST and BASE axles to provide a turnkey offering, focused on commercial vehicles, buses, coaches, military and specialty vehicle axles globally. It also envisages the provision of the Group’s existing vehicle control and torque vectoring system to the partners, a collaborative drive to increase joint activities in the retrofit and conversion market, DGI providing UK presence for sales and customer support and the establishment of assembly operations in the UK.

Financial Review

The financial performance and position of the Group during the year ended 31 December 2022 reflects the Group’s ongoing focus on the development of its electric drive and energy storage technologies, with the aim of progressing towards commercialisation. Nominal revenues were attributable to ongoing work for the UK Government, with the Group’s activities funded by a combination of new equity capital and new and existing grant awards. Increased general and administrative costs were incurred due to the enlarged group structure and corporate costs post the acquisition of DHL, with substantial one-off expenses associated with the reverse takeover process also impacting the P&L.

The Group’s consolidated accounts presented in the financial statements and associated notes within this report, and summarised here, are prepared under reverse acquisition accounting rules. As such, consolidated figures represent the enlarged Group from completion of the reverse takeover in April 2022 to 31 December 2022, and the DG Innovate companies acquired prior to this date (including for the comparable 2021 financial year).

Trading performance

The Group remained pre-revenue during the year, except for a small contribution from work for the UK Government. The Group made an operating loss of £2,615,534 (2021: £587,235). This was primarily due to increased administration expenses of £2,715,557 (2021: £1,529,089) and a share-based payment charge of £338,864 (2021: £Nil), which were somewhat offset by grant income of £433,989 (2021: £938,818).

A one-off reverse acquisition expense of £5,094,074 (2021: £Nil) was recognised, relating to the fair value of the Company at the time of completing the acquisition of DHL, under reverse acquisition accounting. Further detail is contained in note 26 of the Consolidated Financial Statements contained within this report.

Net finance costs of £67,873 (2021: £112,903) were predominantly due to interest on shareholder and CBILS loans, with the former settled on completion of the reverse takeover. The Group received R&D tax claims, resulting in a positive tax credit of £188,864 for the year (2021: £55,273). As the business is currently loss making, there is no corporation tax payable on earnings.

For the year ended 31 December 2022, the Group made a net loss of £7,679,512 (2021: £644,865). The basic and diluted loss per share for the year was 0.11 pence (2021: 0.04 pence).

Financial position

As at 31 December 2022, the Group’s non-current assets amounted to £5,298,683 (2021: £4,999,456), including intangible assets of £4,573,592 (2021: £4,139,805) and property, plant and equipment of £725,091 (2021: £859,651).

Intangible assets increased by £433,787 during the year (2021: £436,650), due to the capitalisation of internally generated development costs.

Non-current liabilities were £495,860 (2021: £1,148,103), including lease liabilities of £237,182 (2021: £256,803) and loans of £234,653 (2021: £880,675).

Group net current assets at year-end were £618,313 (2021: (£1,150,495)).

Cash movement

Group cash and equivalents at 31 December 2022 was £234,990 (2021: £57,454). Net cash outflow from operating activities for the Group during the year was £2,392,663 (2021: £501,906), and cash outflow from investments was £1,010,477 (2021: (£1,287,718). On 8 April 2022, the Group raised £4.6 million (before expenses) through the exercise of shareholder warrants and a subscription for new ordinary shares.

Post year end, in January 2023, the Group raised a further £418,000 through a subscription and broker option. These funds were raised to cover the costs of the DGI acquisition and to fund the ongoing development of the Company’s technologies towards commercialisation.

Key Performance Indicators

During the year, the Group progressed from being a cash shell targeting acquisitions to an advanced research and development company which is seeking to pursue commercial activities, alongside continuing to expand its intellectual property portfolio and technology offering. As noted in the Chairman’s Statement and Operational Review, the period post completion of the RTO was focused on the hiring of our CEO Peter Tierney, his subsequent review of the business and developing a strategy to deliver value for shareholders. Given this period of transition, we believe the nature and stage of the business will change significantly over the coming months and years, and the manner in which we measure our performance will also need to develop to remain fit for purpose.

While we present KPIs showing the progress we continue to make on our ongoing research and development work below, we have begun to identify a number of additional financial and non-financial key performance indicators, for both the near and longer term, to monitor progress on our technology commercialisation efforts and ramp up in trading. These will begin to be introduced over the coming financial year as well as subsequent periods, to ensure that the business is performing or to signal any problems which may be arising. These will include financial KPIs such as order book, sales revenue and volumes, which will be key to long-term, sustainable organic growth. Technical KPIs will benchmark motor, inverter and material performance, and patents filed/granted, whilst operational KPIs will include engineering hours worked, completed units produced and employee headcount. The Directors believe these will provide strong indications of the Group’s ability to secure a long-term sustainable competitive advantage.

Key Performance Indicator	2022	2021	Change (%)
Patents held	10	10	0%
Projects completed	3	3	0%
Grant funding received	433,989	938,818	(54%)

The grant award of £600,000 from APC for the SUPAR project in 2022 will be received in 2023 and 2024.

There were seven Innovate UK funded projects being undertaken in 2021, four of which completed during that year, with three which continued into 2022. Another three new grant funded projects commenced in 2022, although no grant payments were received during the year in relation to these new projects. Therefore, there was a significant reduction in grant income in 2022.

Directors’ Report

The Directors present their report and financial statements for the year ended 31 December 2022.

Directors and Directors’ interests

The Directors at the date of these financial statements who served during the period and their interest in the ordinary shares of the Group are as follows:

	31 December 2022	31 December 2021
	Number of Ordinary Shares	Number of Ordinary Shares
C. Theis*	60,995,589	60,995,589
B. Fitzpatrick**	57,336,875	57,336,875
J. Allardyce	6,000,000	6,000,000
M. Boughtwood***	3,026,591,664	–
T. Gabriel ****	555,561,720	–
A. Boughtwood	75,758,416	–

* 60,995,500 Ordinary Shares are held in Mr. Theis’ self-invested pension plan administered by Hargreaves Lansdown.

** Mr. Fitzpatrick has an indirect interest in 6,015,000 Ordinary Shares which are registered in the name of Ocean Park Developments Limited, a company of which he is the holder of 100% of the issued share capital and a further indirect interest in 9,610,000 Ordinary Shares which are registered in the name of Pondermatters Limited, a company of which he is the holder of 10% of the issued share capital. 6,000,000 Ordinary shares are registered to Alexander Fitzpatrick (Brent Fitzpatrick’s son).

*** 3,026,591,664 Ordinary Shares are held by Deregallera Trust and its beneficiary is Martin’s wife, Denise Boughtwood.

**** 555,561,720 Ordinary Shares are held by Disruptech Limited owned by Trevor Gabriel.

Major interests in ordinary shares

Save for the interests of the Directors, as at 24 April 2023 being the latest practicable date prior to the publication of this Annual Report, the Group has identified the following holdings of Ordinary Shares which represent more than 3 per cent. of its issued share capital:

Shareholder	Number of Shares	% of issued share capital
Deregallera Trust	3,026,591,664	32.87%
The Bank of New York (Nominees)	636,399,327	6.91%
Disruptech Limited	555,561,720	6.03%
JIM Nominees Limited	467,213,562	5.07%
David Williams	436,280,093	4.74%
Cantor Fitzgerald Europe	386,666,666	4.20%
ISI Nominees Limited	384,647,257	4.18%

Results

The Group’s loss for the year to 31 December 2022 amounted to £7,679,512 (2021: £644,865).

Managing business risk

The Board constantly monitors the operational and financial aspects of the Group’s activities and is responsible for the implementation and ongoing review of business risks that could affect the Group. Duties in relation to risk management that are conducted by the Directors include but are not limited to:

– Initiate action to prevent or reduce the adverse effects of risk

– Control further treatment of risks until the level of risk becomes acceptable

– Identify and record any problems relating to the management of risk

– Initiate, recommend or provide solutions through designated channels

– Verify the implementation of solutions

– Communicate and consult internally and externally as appropriate

The Board has carried out a review of the effectiveness of the Group’s risk management and internal controls systems, including financial, operational and compliance controls as is appropriate at this early stage of the Group’s business.

As part of the reverse takeover of DHL the Group’s Financial Position and Prospects Procedures Board Memorandum (FPPP) and all internal policies were overhauled. This was to ensure that they remained appropriate for the enlarged Group. These documents lay out all controls and procedures relating to finance, reporting, systems & IT, disclosures and corporate governance.

Taxation status

DG Innovate was not a close company within the provisions of the Corporation Tax Act 2010 and this position has not changed since the end of the financial period.

Future developments

Information about the future plans of the Group is covered in the Strategic Report.

Dividends

The Directors do not recommend the payment of a dividend (2021: £Nil).

Capital structure

The Group’s issued share capital consists of Ordinary Shares (100% of total share capital).

The ordinary shares shall confer upon the holders the right to receive dividends and other distributions and participate in the income or profits of the Company.

Financial instruments

Details of the use of financial instruments by the Group are contained in note 23.

Environmental Reporting

Under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, we are mandated to disclose our UK energy use and associated greenhouse gas (GHG) emissions. Specifically, and as a minimum, we are required to report those GHG emissions relating to natural gas, electricity and transport fuel, as well as an intensity ratio, under the Streamlined Energy and Carbon Reporting (SECR) Regulations.

Emissions data

The Group’s Scope 1 and Scope 2 emissions are limited to those associated with business travel and electricity consumption at the premises in Caerphilly.

Standard conversion rates used in this report were obtained from the UK Government. The energy data used in this report relates to invoiced consumption against specific meter points for the specified period and has been qualified by the suppliers of the invoices. Transport and supplementary fuel data was provided directly by the Company, together with the selected intensity ratio metric and the supporting intensity ratio data.

Summary of usage

The Group’s Scope 1 and Scope 2 Emissions are summarised in the table below.

	DG Innovate Plckg CO2e	Subsidiary Companieskg CO2e	Totalkg CO2e
Scope 1 – Business Travel	1,873	1,266	3,139
Scope 2 – Energy Usage*	–	26,377	26,377
Total	1,873	27,643	29,516

*provider SSE Energy Supply Limited

The Group has taken steps to improve its CO₂ emissions as follows:

– Installation of EV charging points at the company premises for use with the company vehicles which are now electric.  The electricity is generated onsite from the solar panels.

– A review of the buildings energy rating has been carried out and improvements are being made to the air conditioning and heating systems, ensuring that the building is only heated when it is occupied, thus saving energy.

– We have reorganised our office space to reduced energy consumption for heating and lighting. 

Donations

There were no charitable or political donations during the current period or prior year.

Post balance sheet events

Post balance sheet events are discussed in the Chairman’s Statement on page 3 and in note 28.

Going concern

The financial statements have been prepared on the assumption that the Group will continue as a going concern. Under this assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. In assessing whether the going concern assumption is appropriate, the Directors take into account all available information for the foreseeable future, in particular for the twelve months from the date of approval of the financial statements.

The Directors consider the use of the going concern assumption to be appropriate.  At the latest reported date of 31 December 2022, the Group had cash and cash equivalents totalling £234,990 and net current assets of £618,313. 

On 8 April 2022, the Group successfully raised £4.6 million (before expenses) through the exercise of shareholder warrants and a subscription for new ordinary shares. Post period end, in January 2023, the Group raised a further £418,000 through a subscription and broker option. These funds were raised to cover the costs of the DHL acquisition and to fund the ongoing development of the Group’s technologies towards commercialisation.

Significant progress is being made, with a final design iteration of the Group’s Pareta® drive due to be tested during Q2 2023, in collaboration with major Tier 1 axle supplier Meritor. In addition, the Group announced in February 2023 that it had signed a Collaboration Framework Agreement with Tier 1 axle suppliers BRIST and BASE, representing DGI’s first commercial partnership. The parties will work together to develop and integrate Pareta® into the current range of BRIST and BASE axles to provide a turnkey offering for commercial and military vehicles globally. Furthermore, DGI will provide BRIST and BASE its existing vehicle control and torque vectoring system to allow the partners to accelerate the penetration of the product in the market sectors identified, the parties will work together to accelerate activities in the retrofit and conversion market and DGI will provide UK ‘in country’ presence for sales and customer support. Ultimately, the intention is for DGI to assemble BRIST and BASE axles within the UK in due course, with the partners to support the establishment of operations when demand requires. As our first “commercial” agreement we believe this has scope to result in significant revenues across a number of different business models. The Group also continues its work with the UK Ministry of Defence.

In line with all pre-revenue companies, further funding will be required as the Group moves through the development phase.  The Board have considered a number of detailed cashflow scenarios and have identified a further funding requirement from mid-2023. As this falls within 12 months of the date of this report, a material uncertainty exists in relation to the ability of the Group to continue as a going concern.

The Directors would note that the previous fundraises in March 2021, April 2022 and January 2023 were predominantly made up of the same small group of investors, who remain supportive of the Group’s strategy. The Directors therefore believe that a further equity fundraise would be well supported. The Directors have also progressed discussions with lenders regarding debt facilities, should it achieve material customer orders post-testing. Taking this into account, the Directors have formed the opinion that there are adequate arrangements in place to enable the settlement of their financial commitments as and when they fall due.

For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.  While there are inherent uncertainties in relation to future events and ultimately no certainty over the outcome of matters described above, in the opinion of the Directors, the newly formed group will be a going concern for the next 12 months.

Research and Development

DG Innovate is focusing on advanced research and development of sustainable and environmentally considerate improvements to electric mobility and energy storage, Enhanced Drive Technology and Enhanced Battery Technology

Enhanced Drive Technology

The Group’s electric drive technology platform, Pareta® consists of a motor, high power inverter and control electronics, with a novel ‘multi motor/inverter’ architecture and a number of fundamental and patent pending innovations.  This technology has been developed over a number of years via the Group’s ongoing work to build ultra-high performance and durable electric drives for the UK Ministry of Defence, with the resulting product family currently in its third iteration.

The Pareta® platform has most recently been extended to deliver its associated performance and durability parameters at a competitive cost point for volume manufacture for commercial electric vehicles, initially for the Company’s collaboration partner Meritor, the US-headquartered global commercial vehicle components company.  The advanced prototypes produced in a scalable 250kW/400kW format, aimed at bus and HGV applications, have already shown good performance versus electric motor systems from global motor manufacturers.

To develop this new offering from its current advanced prototype phase to final product release and volume manufacture, the Group plans to take a staged approach.  Having successfully produced an advanced prototype design, work is now ongoing to progress to a final design prototype.

The Group is undertaking a phase of preparing for pilot manufacturing with the financial support from the UK Government’s Advanced Propulsion Centre (“APC”) through their Scale-up Readiness Validation competition, part of the Automotive Transformation fund, in parallel with completing the final design prototype.  Further prototypes will be followed, enabling the design to be optimised, particularly regarding performance and costings, in order to progress to the production stage.

The Group has also commenced a feasibility project under the competition of “Clean Maritime Demonstration Competition Round 2 – Feasibility”, to define an innovative multi parallel design for 3 MW marinised fuel cell systems encompassing highly redundant end-to-end whole-ship energy efficiency design and integration. Enabled by novel motor, drives, and power electronics, the modular marinised fuel cell system will deliver more than 3 MW power.

Enhanced Battery Technology

The Group’s proprietary energy storage technology encompasses a family of hard carbon anode materials produced from a sustainable bio waste product, specifically developed for use in sodium-ion batteries, with potential applications in existing lithium-ion battery production.  Sodium-ion batteries offer an attractive alternative to lithium-ion batteries, using materials that are more abundant, with lower carbon footprints, and which circumvent natural resource constraints involved in the production of lithium-ion batteries.

The Group believes that its battery partners consider the Group’s technology to be a disruptive alternative in their aspiration to reduce dependency on hydrocarbon-derived anodes for both sodium and lithium-ion battery technologies.  The Group’s hard carbon anode materials have already demonstrated commercially attractive performance characteristics, particularly enabling significant energy densities, in line with the best performing sodium-ion batteries currently available, in battery cells manufactured at a small scale in the Group’s own facility.

Further scale up of material production will involve an iteration of process engineering to maintain the desired performance and material characteristics in high volume.  Additionally, integrating the material into commercial scale battery cell production will require a parallel process of optimising cell design and large-scale production engineering.

The Group intends to primarily pursue a licensing model to bring its battery technology to the market, through licensing to sodium-ion battery manufacturers, with the potential for in-house material production should that prove commercially attractive.  Whilst there is currently limited volume sodium-ion battery manufacture worldwide, a number of large global battery manufacturers have recently announced plans to establish substantial sodium-ion battery manufacturing capabilities.  As global sodium-ion battery production increases in the coming years, the Group believes there will be a substantial addressable market for its technology.

The Group commenced a feasibility study under Innovate UK’s competition “Automotive Transformation Fund Feasibility Studies: Round 3” for the evaluation of manufacturing its sodium-ion anode material at scale in the UK, in particular to enable the Company to refine its economic and technology model out to 10,000 tonnes-per-annum production of the Company’s hard anode material.

Statement of Directors’ responsibilities

The Directors are responsible for preparing the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared financial statements in accordance with UK-adopted International Accounting Standards (‘IAS’). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and Group and of the Statement of Comprehensive Income of the Group for that year.

In preparing those financial statements, the Directors are required to:

– select suitable accounting policies and then apply them consistently;

– make judgements and estimates that are reasonable and prudent;

– state whether they have been prepared in accordance with UK-adopted IASs, subject to any material departures disclosed and explained in the financial statements; and

– prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and Group will continue in business.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company and Group transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Group’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Group’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors’ responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:

– the Group financial statements have been prepared in accordance with UK-adopted International Accounting Standards (IASs) and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group.

– The annual report includes a fair review of the development and performance of the business and financial position of the Group together with a description of the principal risks and uncertainties that they face.

The Directors’ Report was approved by the board of Directors and signed on its behalf by:

Peter Tierney

Chief Executive Officer

27 April 2023

DG Innovate (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced an update on the progress of the Company’s collaboration with tier one commercial vehicle and off-highway axle and transmission suppliers, BRIST Axle System S.r.l. (“BRIST”) and BASE Studio Arge ve Teknoloji Sanayi A.S. (“BASE”), as announced on 23 February 2023.

Following the signing of the Collaboration Framework Agreement in February the parties have now agreed a detailed plan to develop a series of commercial offerings, incorporating DG Innovate’s technology. The objective of the collaboration is to establish a significant position in the growing commercial vehicle electric drivetrain market, targeting both new OEM and aftermarket conversion opportunities.

These offerings are planned to comprise:

Remote Mount Motors

This relatively simple and straightforward solution for the retrofit market will comprise a remote mounted motor, converting an existing diesel powered bus or commercial vehicle to an electric powertrain.  With this solution DG Innovate’s integrated Pareta® motor/inverter would be mounted underneath the vehicle in the chassis and connected via a driveshaft to the axle differential.  The Company believes its Pareta® motor technology can readily be used as a remote mounted solution in many retrofit applications, both for vehicles incorporating BRIST or BASE axles and those from third parties.

Integrated E Axle

The integrated E-Axle will be a complete assembly where the Pareta® motor and drive assembly is mounted in a fully integrated manner within a BRIST axle. The integrated E-Axle will be a key joint development and integration project for the parties to ensure the axle will be a ‘plug and play’ assembly for axles up to 13 ton rating.

This product will target the retrofit bus market initially whilst in parallel be offered to Bus OEM’s for new vehicle build. This newly designed integrated axle will not only release space to accommodate more battery capacity within the existing chassis, but being designed as a drop in replacement axle, it can be readily and cost effectively fitted, giving significant additional usable life extension to vehicles, along with a reduction in energy cost.

The integrated E-Axle is expected to have additional future applications, including light commercial vehicles, and vocational vehicles.

Independent Corner Drive Axle

This solution will see each wheel driven independently using the Company’s electric drive technology.  Applicable to a range of 2 and 4 wheel drive commercial vehicles, this offering will be particularly attractive for 2, 4, 6 or 8 wheel drive military applications and will build on the Company’s existing work in this area.

Commenting, Peter Tierney, Chief Executive Officer of DG Innovate, said: “Our collaboration with BRIST and BASE is already accelerating DG Innovate’s transition to becoming a full-scale commercial supplier.  Since signing the Collaboration Framework Agreement at the end of February we have been working hard with BRIST and BASE to formulate an appropriate product strategy to ensure we both maximise the market opportunity and can achieve commercial revenues as soon as possible.  Leveraging our partners’ already significant industry presence we are jointly developing new solutions that are targeted at readily accessible and existing market demand.  We believe this will provide the most rapid route to market for our technology and I look forward to providing further updates on this collaboration, and on our other areas of focus, in due course as matters progress.”

Commenting, Remzi Oduncu, Founding & Managing Partner of BASE, said: “With DG Innovate we have now put in place our initial product roadmap. We clearly see that both DG Innovate and BASE have similar disruptive capabilities complementary to each other: A dynamic and agile approach to support end users in providing a differentiated solution which is both technically advanced and also commercially attractive.”

Commenting, Ahmet Hacıyunus, Founding & Managing Partner of BRIST, said: “The exciting technology and agile innovation capability of DG Innovate matches well with our modular axle and transmission portfolio. This collaboration and the product roadmap enhances our value proposition to grow our share in the UK bus market. We have a clear intent to grow in the UK market and DG Innovate collaboration is a critical pillar in this ambition.”

DG Innovate plc (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced that the Company has signed a Collaboration Framework Agreement with tier one commercial vehicle and off-highway axle suppliers, BRIST Axle System S.r.l. and BASE Studio Arge ve Teknoloji Sanayi A.S. The Agreement reflects the desire of all three parties to collaborate, in order to establish a significant position in the growing heavy vehicle electric drivetrain market. A particular focus of the Agreement involves the electrification of BRIST and BASE’s existing axle ranges, using DG Innovate’s electric drive motors and associated control systems.

BRIST, based in Italy, is a full system supplier of axles, both rigid and independent suspension, and transmissions for vans, trucks and buses.  Its products include transmissions for use with electric motors that can be tailored for use with DG Innovate’s Pareta® range.  Further information on BRIST may be found at: https://bristaxle.com

BASE, headquartered in Turkey, designs, engineers and manufactures heavy-duty and off-highway vehicle products, including independent suspension drive axles, rigid drive axles, transfer cases and complete 4×4 rolling chassis systems equipped with its own axles and transfer cases. Further information on BASE may be found at: https://basestudio.com.tr

The key focus areas for the collaboration under the Agreement will be as follows:

·    The collaboration will develop and integrate DG Innovate’s innovative Pareta® motor technology into the current range of BRIST and BASE axles to provide a turnkey offering, with focus on commercial vehicles, buses, coaches, military and specialty vehicle axles globally.

·    DG Innovate will provide BRIST and BASE its existing vehicle control and torque vectoring system which will allow the partners to accelerate the penetration of the product in the market sectors identified.

·    All three partners will use their collective expertise to accelerate activities in the retrofit and conversion market from diesel power to full electric drivetrain systems on commercial vehicles, buses, coaches, military and specialty vehicles.

·    DG Innovate will provide UK ‘in country’ presence for sales and customer support.

·    DG Innovate to assemble BRIST and BASE axles within the UK in due course, with the partners to support the establishment of operations within the UK when volumes and subsequent commercial benefits are appropriate.

Commenting, Remzi Oduncu, Co-founder and Managing Partner of BRIST and BASE, said: “We are very pleased to have signed this agreement and are excited to be working with DG Innovate.  Both BRIST and BASE are at the forefront of technical innovation with a rapidly growing market presence. We believe that by collaborating with DG Innovate we can generate significant new opportunities for all parties in our chosen sectors.”

Commenting, Peter Tierney, Chief Executive Officer of DG Innovate, said: “We are delighted to have signed this collaboration with BRIST and BASE, which is intended to accelerate DG Innovate’s transition to becoming a full-scale commercial supplier. Both have a significant existing market presence in our key target areas of heavy commercial and speciality vehicles, including military.  The collaboration is expected to provide DG Innovate with an accelerated route to market for our Enhanced Drive Technology, together with the ability to offer a much broader product offering, encompassing full drivetrain systems. These systems will be applicable both for new vehicles and in the retrofit market.

“This collaboration is complimentary to other relationships we already have and I look forward to providing further updates in due course as matters progress.”

DG Innovate (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has announced a subscription to raise gross proceeds of £400,000, a broker option to enable existing shareholders to participate in the fundraise for up to an additional £100,000, 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 £400,000 through the issue of new ordinary shares at 0.12 pence per share, 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 £100,000 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

·    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 £400,000 through a subscription for 333,333,333 new ordinary shares of 0.001 pence in the capital of the Company 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.

The Company has also agreed to issue 17,500,000 ordinary shares in the Company 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.

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 £636,000 for the development of the Company’s business.

Broker Option

To provide existing Company shareholders with an opportunity to participate in the Fundraise on the same basis as other investors, WH Ireland Limited 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 £100,000 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 [email protected]. 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® 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® 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.  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 £3,589,101 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.

DG Innovate plc (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, has provided an update on the Company’s development and commercialisation strategy for its suite of technologies.

Highlights

Enhanced Drive Technology (EDT)

·    Further significant progress made with the development of the Company’s Pareta® electric drive platform in conjunction with its partners, the UK Ministry of Defence and Meritor

·    Successful development of the advanced prototype Pareta® concluded and as planned the focus is now on testing to develop a final design prototype

·    Clear staged roadmap set out for the Company to enter Pareta® pilot production in 2024 and full scale commercial sales targeted for Q1 2025

·    Ongoing commercial discussions with collaboration partners and other potential end users in a variety of markets, with plans to roll out the Pareta® product suite more widely

·    Significant revenue opportunity within aftermarket integration services identified, with a targeted acquisition strategy being adopted both to accelerate growth and complement the existing product offering

Enhanced Battery Technology (EBT)

·  DG Innovate’s hard carbon anode materials have demonstrated commercially attractive performance characteristics, in line with the best performing sodium-ion batteries currently available

·  DG Innovate is working with a number of battery manufacturers to enable further cell manufacturing development to be carried out in collaboration with them

·    The Company is planning to increase the scale of its in-house material production capability

·    The Company has recently won an Innovate UK grant of £170,000 to carry out a feasibility study for the evaluation of manufacturing its sodium-ion anode material at scale in the UK

·    The Company intends to primarily pursue a licensing model to bring its battery technology to the market

Enhanced Drive Technology

The Company’s electric drive technology platform, Pareta® consists of a motor, high power inverter and control electronics, with a novel ‘multi motor/inverter’ architecture and a number of fundamental and patent pending innovations.  This technology has been developed over a number of years via the Company’s ongoing work to build ultra high performance and durable electric drives for the UK Ministry of Defence, with the resulting product family currently in its third iteration.

The Pareta® platform has most recently been extended to deliver its associated performance and durability parameters at a competitive cost point for volume manufacture for commercial electric vehicles, initially for the Company’s collaboration partner Meritor, the US-headquartered global commercial vehicle components company.  The advanced prototypes produced in a scalable 250kW/400kW format, aimed at bus and HGV applications, have already shown good performance versus electric motor systems from global motor manufacturers.

To develop this new offering from its current advanced prototype phase to final product release and volume manufacture, the Company plans to take a staged approach.  Having successfully produced an advanced prototype design, work is now ongoing to progress to a final design prototype.

As previously announced, testing of the 250kW Pareta® prototype drive is ongoing.  Performance results to date are encouraging, and in line with concept expectations.  The current cycle testing programme is expected to continue to the end of Q4 2022.  Further cycle testing, including in the 400kW configuration, is then expected to be undertaken to establish and validate endurance requirements.

Following the successful completion of the final design prototype stage the Company intends to undertake a phase of pilot manufacturing and industrial engineering.  Whilst the current version is already well developed, further prototypes will enable the design to be optimised, particularly regarding performance and costings, in order to progress to the pre-production stage.

As announced on 9 September 2022, the Company has been awarded funding from the UK Government’s Advanced Propulsion Centre (“APC”) through their Scale-up Readiness Validation competition, part of the Automotive Transformation fund.  The APC funding of approximately £600,000 will cover circa 50% of the eligible costs of the Company’s ‘Scale up Readiness Validation of Parallel Motor for Automotive Applications’ (“SUPAR”) project.  The SUPAR project, which will involve the establishment of a pilot production facility, is designed to optimise Pareta® to enable the most appropriate cost of production using lean manufacturing techniques, enabling substantial upscaling to commercial scale production and demonstrating the attractiveness of Pareta® drives to commercial partners.

The pilot manufacturing will be carried out in parallel with continued Pareta® development.  The pilot facility, when fully developed, is expected to have a capacity of approximately 2,500 Pareta® units per annum and be revenue generating for the Company.  The planning phase for the pilot facility is underway and the Company expects to start ordering longer lead time items and site preparations later in Q4 2022 and into Q1 2023.  The target is for the facility to be completed early in 2024.

Once the pilot plant has been established, the Company intends to carry out a period of industrial engineering on the pilot production line during 2024.  Following industrial engineering and with the achievement of a final commercial scale ready Pareta® design, the Company is currently targeting full scale commercial sales by Q1 2025.  As noted, the latest Pareta® drives have been designed from the outset to be compatible with volume manufacture.

The Company is exploring multiple potential routes to market and continues to progress commercial discussions with its existing collaboration partners and other potential launch customers.  The Company is encouraged by the progress of discussions to date and is confident that this will translate into commercial supply agreements in due course.

The Company believes that Pareta® can address requirements within multiple electric vehicle segments and potentially additional stationary applications.  Pareta® has been designed to be scalable to a range of vehicle sizes, from e-bike size to large marine drives.  To date the Company’s focus has been on the military, heavy goods vehicle and bus segments and these are expected to remain a priority given the Pareta® units inherent suitability for these applications and the shorter expected timescales for these sectors to adopt new technology.

Following completion of the pilot scale production programme and in order to accelerate the Company’s ability to secure commercial scale sales, the current intention is for the Company to commence development of a volume manufacturing facility with a capacity to produce approximately 10,000 Pareta® units per annum.  Commissioning of such a facility is targeted for 2025, at a capital cost currently estimated to be approximately £5 million, with the potential for this to be funded through loans, further grant funding and/or investment from a commercial partner.  Additionally, the Company sees the potential for commercial agreements in the form of licenced manufacture, joint ventures or further direct supply agreements in order to increase the volume of units produced and sold.

In addition to demand from OEMs, the Company views the aftermarket as a substantial opportunity for sales.  With an increasing number of emissions regulations being introduced and the long useful life of heavy vehicles and buses, the Company expects there to be an increasing demand for aftermarket electric vehicle conversions.  The Company would expect to service this demand from in-house manufactured units, with the Company also providing integration expertise and services.

In order to develop a full-service capability within the electric vehicle drive market, particularly to enable aftermarket integration, the Company is considering appropriate acquisitions and intends to take advantage of any compelling opportunities presented.  The Company intends to fund these acquisitions through a combination of equity and debt depending on the nature of the acquisition.

Enhanced Battery Technology

The Company’s proprietary energy storage technology encompasses a family of hard carbon anode materials produced from a sustainable bio waste product, specifically developed for use in sodium-ion batteries, with potential applications in existing lithium-ion battery production.  Sodium-ion batteries offer an attractive alternative to lithium-ion batteries, using materials that are more abundant, with lower carbon footprints, and which circumvent natural resource constraints involved in the production of lithium-ion batteries.

DG Innovate believes that its battery partners consider the Company’s technology to be a disruptive alternative in their aspiration to reduce dependency on hydrocarbon-derived anodes for both sodium and lithium-ion battery technologies.  The Company’s hard carbon anode materials have already demonstrated commercially attractive performance characteristics, particularly enabling significant energy densities, in line with the best performing sodium-ion batteries currently available, in battery cells manufactured at a small scale in the Company’s own facility.

Further scale up of material production will involve an iteration of process engineering to maintain the desired performance and material characteristics in high volume.  Additionally, integrating the material into commercial scale battery cell production will require a parallel process of optimising cell design and large scale production engineering.

The Company intends to primarily pursue a licensing model to bring its battery technology to the market, through licensing to sodium-ion battery manufacturers, with the potential for in-house material production should that prove commercially attractive.  Whilst there is currently limited volume sodium-ion battery manufacture worldwide, a number of large global battery manufacturers have recently announced plans to establish substantial sodium-ion battery manufacturing capabilities.  As global sodium-ion battery production increases in the coming years, the Company believes there will be a substantial addressable market for its technology.

DG Innovate is already working with a number of battery manufacturers and arrangements are being made to supply them with small sample batches of material for further testing and to enable further cell manufacturing development to be carried out in collaboration with them.  In parallel, the Company is planning to increase the scale of its in-house material production capability.

The Company has recently won an Innovate UK grant of £170,000 to carry out a feasibility study for the evaluation of manufacturing its sodium-ion anode material at scale in the UK, in particular to enable the Company to refine its economic and technology model out to 10,000 tonnes-per-annum production of the Company’s hard anode material.

Due to the stage of development of the sodium-ion battery industry and the complexities of cell manufacturing scale-up, the Company currently expects that moving from the current pilot manufacturing phase to ‘giga-scale’ manufacturing will take around 42 months from now, although there is the potential for earlier deployment both in existing lithium-ion battery manufacture, and sodium-ion battery manufacturing should commercial scale be developed sooner.

Commenting, Peter Tierney, Chief Executive Officer of DG Innovate, said: “Since I joined DG Innovate at the beginning of July, we have been reviewing the Company’s strategy in order to ensure that our world class technology is appropriately exploited and brought to commercial scale production as quickly as possible.  As set out today, we have a clear roadmap to commercialisation for both our electric mobility and energy storage technologies to take advantage of the numerous market opportunities we are seeing. 

“This is a very exciting stage of development for the Company as we progress the significant potential of our proven suite of new and disruptive technologies.  I believe that with this clear strategy and route to market for its technology, DG Innovate has a very bright future.  I look forward to providing further updates as we progress.”

Investor Webinar

DG Innovate’s management will be hosting an online presentation and Q&A session at 5.30 p.m. BST on Tuesday 18 October 2022.  This session is open to all existing and prospective shareholders.  Those who wish to attend should register via the following link where they will be provided with access details:

https://us02web.zoom.us/webinar/register/WN_nPBNMLtIQqe7cXNWAUcV3w

Participants will have the opportunity to submit questions during the session, but questions are welcomed in advance and may be submitted to: [email protected].

DG Innovate plc (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, has announced the Company’s unaudited interim results for the six months ended 30 June 2022.

DG Innovate was previously Path Investments plc and the results cover both the period prior to the Company’s acquisition of Deregallera Holdings Ltd (formerly DG Innovate Limited) (“DGI”) on 8 April 2022, when the Company was an investment company, and post the consolidation of DGI from 8 April 2022.

Highlights

•	Successful completion of the acquisition of DGI and accompanying funding, raising £4.6 million in gross proceeds in April 2022
•	Commencement of an acceleration programme to advance commercial progress with the Company’s suite of electric mobility and storage technologies
•	Funding secured from the Ford Low Carbon Vehicle Transformation Fund to support the Company’s ongoing electric motor development programme being carried out in conjunction with global heavy vehicle components supplier, Meritor

Post Period Highlights

•	Appointment of Peter Tierney as the Company’s new Chief Executive Officer from 1 July 2022
•	Testing of 250kW Pareta© high-performance electric vehicle drive underway with further cycle testing ongoing
•	Collaborative commercial dialogue continues to gather momentum with key partners and launch customers
•	UK Government Advanced Propulsion Centre funding secured for the Company’s SUPAR pilot production project, designed to optimise the Pareta® high performance electric vehicle drives to enable substantial upscaling to commercial scale production
•	Hard carbon anode material testing underway with positive initial results

Commenting Nick Tulloch, Non-Executive Chairman of DG Innovate said: “The first half of 2022 was transformational for the Company, as we completed the reverse takeover of DGI to become DG Innovate plc. Since the completion of the reverse takeover significant progress has been made and post-period end, Peter Tierney was appointed as our new CEO. We believe Peter’s significant experience in operating and developing growth-orientated service and manufacturing businesses makes him the ideal candidate to lead the Company as we seek to commercialise our exciting suite of electric mobility and storage technologies, evolving into a differentiated supplier to a number of industry sectors. We look forward to providing further updates in due course.”

Chairman’s Report

The period under review was transformational for the Company, as we published our prospectus and completed the reverse takeover of DGI, becoming DG Innovate plc in the process. We continue to believe that DGI’s IP and the quality of the team offers exciting growth opportunities in the electric mobility and energy storage sectors and remain committed to DGI’s ethos of developing sustainable and environmentally considerate technologies.

We were also delighted with the support of new and existing shareholders in raising £4.6 million and to strengthen our Board through the appointments of a number of new non-executive directors. Their varied but very relevant experience across sectors and disciplines will be put to excellent use as DGI seeks to commercialise its technologies and widen its opportunity set.

Post-period, we announced the appointment of Peter Tierney as our new CEO. We believe Peter’s significant experience in operating and developing growth-orientated service and manufacturing businesses makes him the ideal candidate to lead the Company as we seek to commercialise our exciting suite of electric mobility and storage technologies, evolving into a differentiated supplier to a number of industry sectors.

As subsequently announced, the testing of our 250kw Pareta^© high-performance electric vehicle drive is underway, we have been fortunate to attract financial support from the UK Government’s Advanced Propulsion Centre for our Scale up Readiness Validation of Parallel Motor for Automotive Applications’ (“SUPAR”) project and work continues on our sustainable hard carbon anode material.

We look forward to providing further updates in due course.

Nick Tulloch

Non-Executive Chairman

30 September 2022

Financial Review

For the six months to 30 June 2022, the Group recorded a loss before tax of £6,227,231, of which 5,094,074 was an exceptional charge relating to the reverse takeover of DGI. There was negligible revenue in the period other than £344,831 of grant income.

Cash flow

As at 30 June 2022 the Group held cash of £1,650,352.

Chief Executive Remuneration

The Company’s announcement on 16 May 2022 detailing the appointment of Peter Tierney as the Company’s new Chief Executive Officer stated, inter alia, that It had been agreed by the Company and Mr Tierney, at his election and request, that for the months of July, August and September 2022 his monthly salary value, would be paid to him in the equivalent value of shares in the Company, based on the closing offer price of the Company’s shares, on the last business day of each relevant month.  Given the relatively depressed price of the Company’s shares on the London Stock Exchange over this period Mr Tierney has agreed with the Company to instead take his remuneration in cash to avoid unnecessary dilutive share issuance at this time.

DG Innovate plc (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, has announced that the Company, through its subsidiary, Deregallera Limited, has been awarded funding from the UK Government’s Advanced Propulsion Centre through their Scale-up Readiness Validation competition, part of the Automotive Transformation fund.

The APC funding of approximately £600,000 will cover 50% of the eligible costs of the Company’s ‘Scale up Readiness Validation of Parallel Motor for Automotive Applications’ (“SUPAR”) project.  The SUPAR project is designed to optimise DG Innovate’s Pareta® high performance electric vehicle drives to enable the most appropriate cost of production using lean manufacturing techniques, enabling substantial upscaling to commercial scale production.  

The SUPAR project will involve the establishment of a pilot production facility, with particular attention to efficient manufacturing cell layout and the use of the latest lean manufacturing techniques.  This pilot production will be validated by the Company producing a quantity of its Pareta® units to provide scalable production viability, so that progressive upscaling to commercial scale production can be confidently undertaken.

Commenting, Peter Tierney, Chief Executive Officer of DG Innovate, said: “The SUPAR pilot production project is a strategically significant development for DG Innovate as we move from being a high technology motor designer to a full-scale provider in the supply chain for electric vehicle motors.  This is a critical building block in the progressive development and scaling up of DG Innovate’s Enhanced Drive technology as we look to become a supplier of choice for differentiated electric vehicle solutions.  I look forward to providing further updates as we progress.”

DG Innovate plc (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, has provided an update on the accelerated commercialisation programme for its suite of technologies.

Highlights

–     Testing of 250kW Pareta^© high-performance electric vehicle drive underway

–     Initial performance results in line with expectations

–     Cycle testing ongoing for a further two months

–     Collaborative commercial dialogue continues to gather momentum with key partners and launch customers

–     Hard carbon anode material testing underway with positive initial results

Pareta^© integrated e-drive testing

Testing of the Company’s 250kW Pareta^© high-performance electric vehicle drive is now underway. Initial performance results are encouraging, and in line with concept expectations. Cycle testing is expected to continue for a further two months, with results to be reported in due course. The Pareta^© High Efficiency Parallel Motor for Automotive Application project, being undertaken by a consortium including the Company and Meritor Electric Powertrain Systems UK Ltd (a subsidiary of US-headquartered global commercial vehicle components company, Meritor Inc), is therefore progressing positively in line with its targeted key milestones for new product development. The Company also continues to progress commercial discussions with its collaborative partners and potential launch customers.

Energy storage progress

The initial formulation and testing of a hard carbon anode material from a sustainable bio waste product has advanced to the point of benchmark testing, with good initial results.  Plans are now being formulated to supply small batch samples of material to key battery partners who consider this to be a potentially disruptive alternative in the aspiration to reduce dependency on hydrocarbon-derived anodes for both sodium and lithium-ion technologies.

Commenting, Peter Tierney, Chief Executive Officer of DG Innovate, said: “We are very encouraged by recent progress, both with our Pareta^© e-drive and enhanced battery technology. This is a very exciting stage of the Company’s evolution and development towards becoming a supplier of choice for differentiated electric vehicle and energy storage solutions to various key market sectors, including automotive applications both commercial and military. I look forward to providing further updates as we progress.”

DG Innovate plc (LON:DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, has announced certain changes to the Company’s Board of Directors.

As announced on 16 May 2022, Peter Tierney has joined the Company today as its new Chief Executive Officer.

Peter is an experienced Chief Executive with over 30 years’ experience in operating and developing growth orientated service and manufacturing businesses.  He was until recently Chairman and Chief Executive officer of Lewmar Marine Limited, a private equity backed international marine manufacturing and distribution business. Peter was initially appointed to lead the turnaround of Lewmar Marine in 2008, quickly returning the business to profit and implementing a successful growth strategy that led to sales doubling, before the business was sold to a US trade buyer in 2019, generating a significant return for its private equity backers.  Prior to joining Lewmar Marine, Peter was Chief Executive Officer of Vector Aerospace, based in Canada, an aerospace maintenance and operating business, between 2003 and 2008.  He has also held senior roles at a number of other engineering businesses in the UK and North America and has a degree in mechanical engineering, together with a master’s degree in business.

Upon Peter Tierney’s appointment, it was previously proposed that Christopher Theis, the Company’s former Chief Executive Officer, would assume the role of Chairman.  However, Mr Theis has decided not to take up this position but remains a director of the Company. The Board recognises Mr Theis’ contribution as Chief Executive Officer during his tenure which saw the acquisition of Deregallera Holdings Limited (formerly named DG Innovate Limited) and the re-admission of the Company’s shares to trading on the London Stock Exchange.

Nicholas Tulloch, Non-Executive Chairman, will no longer be leaving the Company, as proposed in the announcement on 16 May 2022, and will remain as DG Innovate’s Non-Executive Chairman.