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Dg Innovate Plc LSE:DGI London Ordinary Share GB00BYQD5059 ORD GBP0.001
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DG Innovate PLC Interim Results

30/09/2022 7:02am

UK Regulatory (RNS & others)


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TIDMDGI

RNS Number : 2587B

DG Innovate PLC

30 September 2022

30 September 2022

DG Innovate plc

("DG Innovate ", the "Company", or the "Group")

Interim results for the six months ended 30 June 2022

DG Innovate (LSE: DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, announces 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 GBP4.6 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(c) 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(R) 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."

For further information please contact:

 
 DG Innovate plc                     C/O IFC 
 Peter Tierney 
  Jack Allardyce 
 
 IFC Advisory (Financial PR & IR)    020 3934 6630 
 Tim Metcalfe                        dginnovate@investor-focus.co.uk 
  Zach Cohen 
 
 Grant Thornton UK LLP (Financial 
  Adviser) 
  Samantha Harrison 
  Jamie Barklem 
  Daphne Zhang 
  Ciara Donnelly                     020 7383 5100 
 
 OvalX (Joint Broker)                020 7392 1400 
 Tom Curran 
  Thomas Smith 
 
 WH Ireland (Joint Broker)           020 7220 1666 
 Chris Hardie 
  Megan Liddell 
 

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

About DG Innovate

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

- Enhanced Drive Technology (EDT) - High efficiency, lightweight, cost-effective electric motors and 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.

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

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 GBP4.6 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(c) 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 GBP6,227,231, 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 GBP344,831 of grant income.

Cash flow

As at 30 June 2022 the Group held cash of GBP1,650,352.

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.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHSED 30 JUNE 2022

 
                                                  Six months   Six months     Year ended 
                                                       ended        ended    31 December 
                                         Notes       30 June      30 June 
                                                    2022             2021           2021 
                                                   Unaudited    Unaudited      Unaudited 
                                                         GBP          GBP            GBP 
 Revenue 
 Grant income                                        344,831      675,816        985,623 
 Other income                                          5,307          833          3,037 
 
 Administrative expenses                  3      (1,171,059)    (777,670)    (1,884,976) 
 Loss on investment                                        -     (49,463)       (49,463) 
 Share based payments                              (265,934)            -              - 
                                                ------------  -----------  ------------- 
 Total administrative expenses                   (1,436,993)    (827,133)    (1,934,439) 
 
 
 Operating loss                                  (1,086,855)    (150,484)      (945,779) 
 
 Reverse acquisition expenses                    (5,094,074)            -              - 
 Finance income                                           81            4            230 
 Finance cost                                       (49,855)     (50,676)      (113,134) 
 
 Loss on ordinary activities 
  before taxation                                (6,230,703)    (201,156)    (1,058,683) 
 
 Tax on loss on ordinary activities                    3,472       52,068         52,068 
 
  Loss for the period and total 
   comprehensive loss for period                 (6,227,231)    (149,088)    (1,006,615) 
                                                ============  ===========  ============= 
 
 
 Loss per share (pence) 
 - Basic & diluted                        4           (0.15)       (3.84)        (25.90) 
 
 
 
 

All operating income and operating gains and losses relate to continuing activities.

There was no other comprehensive income for the year (30 June 2021: GBPNil; 31 December 2021: GBPNil).

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHSED 30 JUNE 2022

 
                             Share        Share        Reverse      Share        Retained           Total 
                           Capital      Premium    Acquisition     Option        Earnings 
                                                       Reserve    Reserve 
                               GBP          GBP            GBP        GBP             GBP             GBP 
 As at 1 January 
  2022                   2,029,464            -         67,843          -          87,453       2,184,760 
 Comprehensive 
  income 
  Loss for the period            -            -              -          -     (6,227,231)     (6,227,231) 
 Share based payments            -            -              -    265,934               -         265,934 
                        ----------  -----------  -------------  ---------  --------------  -------------- 
 Total comprehensive 
  loss                           -            -              -    265,934     (6,227,231)     (5,961,297) 
 
 Transactions 
  with owners 
 Share issue             5,397,451   26,987,256   (26,576,428)          -               -       5,808,279 
 Share issue             1,415,800    3,036,806              -          -               -       4,452,606 
 
 As at 30 June 
  2022                   8,842,715   30,024,062   (26,508,585)    265,934     (6,139,778)       6,484,348 
                        ----------  -----------  -------------  ---------  --------------  -------------- 
 
 
                             Share         Share        Reverse      Share        Retained           Total 
                           Capital       Premium    Acquisition     Option        Earnings 
                                                        Reserve    Reserve 
                               GBP           GBP            GBP        GBP             GBP             GBP 
 As at 1 January 
  2021                      14,613     2,082,694              -          -       1,094,068       3,191,375 
 Comprehensive 
  income 
  Loss for the period            -             -              -          -     (1,006,615)     (1,006,615) 
 Total comprehensive 
  loss                           -             -              -          -     (1,006,615)     (1,006,615) 
 
 Reverse acquisition      (14,613)   (2,082,694)      2,097,307          -               -               - 
 Parent Company 
  equity                 2,029,464             -    (2,029,464)          -               -               - 
 
 As at 31 December 
  2021                   2,029,464             -         67,843          -          87,453       2,184,760 
                        ----------  ------------  -------------  ---------  --------------  -------------- 
 
 
                             Share         Share        Reverse      Share      Retained         Total 
                           Capital       Premium    Acquisition     Option      Earnings 
                                                        Reserve    Reserve 
                               GBP           GBP            GBP        GBP           GBP           GBP 
 As at 1 January 
  2021                      14,613     2,082,694              -          -     1,094,068     3,191,375 
 Comprehensive 
  income 
  Loss for the period            -             -              -          -     (149,088)     (149,088) 
 Total comprehensive 
  loss                           -             -              -          -     (149,088)     (149,088) 
 
 Reverse acquisition      (14,613)   (2,082,694)      2,097,307          -             -             - 
 Parent Company 
  equity                 2,029,464             -    (2,029,464)          -             -             - 
 
 As at 30 June 
  2021                   2,029,464             -         67,843          -       944,980     3,042,287 
                        ----------  ------------  -------------  ---------  ------------  ------------ 
 

The Share Capital represents the nominal value of the equity shares. The Share Premium represents the amount subscribed for share capital, in excess of the nominal amount, less costs directly relating to the issue of shares.

The Share option reserve represents share-based payments which represents the cumulative fair value of options and warrants granted.

Reverse acquisition reserve was created due to the reverse acquisition of DGI.

CONSOLIDATED statement of financial position

FOR THE SIX MONTHSED 30 JUNE 2022

 
                                                      As at         As at          As at 
                                                         30            30    31 December 
                                       Notes           June          June 
                                                       2022          2021           2021 
                                                  Unaudited     Unaudited      Unaudited 
                                                        GBP           GBP            GBP 
 
 ASSETS 
 Fixed assets                           5           868,540       528,701        859,651 
 Intangible asset                       6         4,171,835     3,666,811      3,459,484 
 
 Current assets 
 Trade and other receivables            7           969,736       235,178        164,082 
 Cash and cash equivalents                        1,650,352       138,502         57,455 
                                              -------------  ------------  ------------- 
                                                  2,620,088       373,680        221,537 
 LIABILITIES 
 Current liabilities 
 Trade and other payables               8         (620,032)   (1,151,483)    (1,151,615) 
                                              -------------  ------------  ------------- 
 Net Current Assets/(Liabilities)                 2,000,056     (777,803)      (930,078) 
                                              -------------  ------------  ------------- 
 
 NON CURRENT LIABILITIES                9         (556,082)     (375,422)    (1,204,297) 
                                                  (556,082)     (375,422)    (1,204,297) 
 
 NET ASSETS                                       6,484,349     3,042,287      2,184,760 
                                              =============  ============  ============= 
 
   SHAREHOLDERS' EQUITY 
 Called up share capital               10         8,842,715     2,029,464      2,029,464 
 Share premium account                           30,024,062             -              - 
 Share option reserve                               265,934             -              - 
 Reverse acquisition reserve                   (26,508,585)        67,843         67,843 
 Retained earnings                              (6,139,778)       944,980         87,453 
                                              -------------  ------------  ------------- 
 TOTAL EQUITY                                     6,484,349     3,042,287      2,184,760 
                                              =============  ============  ============= 
 
 

CONSOLIDATED statement of cash flows

FOR THE SIX MONTHSED 30 JUNE 2022

 
                                             Six months    Six months     Year ended 
                                             to 30 June    to 30 June    31 December 
                                                   2022          2021           2021 
                                              Unaudited     Unaudited      Unaudited 
                                                    GBP           GBP            GBP 
 Operating loss                             (1,086,855)     (149,088)    (1,006,615) 
 (Increase)/Decrease in debtors               (805,654)        31,382        102,252 
 Increase in creditors                           28,109        80,252        425,198 
 Amortisation                                   207,328       212,326        419,653 
 Depreciation                                    95,170        48,505        104,577 
 Disposal of asset                                    -        50,151         50,151 
 Share based payments                           265,934             -              - 
                                           ------------  ------------  ------------- 
 Net cash generated from/(used 
  in) operating activities                  (1,295,968)       273,528         95,216 
                                           ------------  ------------  ------------- 
 
 
 Cash flows from investing activities 
 Purchase of fixed assets                     (104,059)       (4,082)      (391,104) 
 Purchase of intangible fixed assets          (919,679)     (505,416)      (505,416) 
 Interest received                                   81             4            230 
                                           ------------  ------------  ------------- 
 Net cash used in investing activities      (1,023,657)     (509,494)      (896,290) 
                                           ------------  ------------  ------------- 
 
 Cash flows from financing activities 
 Issue of share capital                       5,210,661             -              - 
 Decrease in borrowings                     (1,298,139)             -        (5,939) 
 Refund of shareholders funds                         -             -      (110,000) 
 Increase in loans                                    -             -        600,000 
 Net cash generated from financing 
  activities                                  3,912,522             -        484,061 
 
 Net increase/(decrease) in cash 
  and cash equivalents                        1,592,897     (235,966)      (317,013) 
 Cash and cash equivalents at beginning 
  of period                                      57,455       374,468        374,468 
                                           ------------  ------------  ------------- 
 Cash and cash equivalents at end 
  of period                                   1,650,352       138,502         57,455 
                                           ============  ============  ============= 
 
 
 
 

CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2022

   1.         GENERAL INFORMATION 

DG Innovate Plc is a public limited company incorporated in the United Kingdom, registered under company number 04006413. The address of the registered office is 15 Victoria Mews, Millfield Road, Cottingley Business Park, Bingley, West Yorkshire, BD16 1PY. At the start of the period under review the Company was a cash shell whose strategy was to deliver material acquisitions in the energy sector. In April 2022 the Company completed the acquisition of DGI, becoming an advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage.

The consolidated financial information represents the results of DG Innovate Plc and its subsidiaries (together referred to as Group).

On 8 April 2022, Path Investments Plc changed its name to DG Innovate Plc following the acquisition of Deregallera Holdings Ltd (formerly DG Innovate Limited) ("DGI").

   2.         ACCOUNTING POLICIES 
   2.1          Basis of preparation 

The condensed consolidated interim financial statements are presented in UK Sterling and all values are rounded to the nearest pound except where indicated otherwise.

The condensed consolidated interim financial statements have been prepared under the historical cost convention or fair value where appropriate.

The results for the six months to 30 June 2022 have been prepared on the basis of the accounting policies set out in the company's 2021 annual report and accounts along with standards which have become effective after 31 December 2021. The interim accounts do not constitute statutory accounts as defined by section 434 of the Companies Act 2006. The auditor has reported on the 2021 accounts of DG Innovate PLC and the report was unqualified and did not contain a statement under section 498(2) of (3) of the Companies Act 2006 and the 2021 report and accounts have been filed with the registrar of companies. Under reverse acquisition accounting the comparatives comprise details of the group prior to the reverse takeover and as a result these figures are not audited.

During the period, there have been no changes in the nature of the related party transactions from those described in the Company's 2021 accounts.

   2.2          Responsibility statement 

The directors confirm that these condensed interim financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the United Kingdom and as issued by the IASB and that the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely;

a) An indication of the important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

b) Material related party transactions in the first six months and any material changes in related party transactions described in the last annual report.

2.3 Segmental reporting

   a.        Primary segment - business 

The Group has only one business segment, which is development of technology.

   b.        Secondary segment - geographical 

The Group's loss for the period was derived wholly from activities undertaken in the United Kingdom. The Group's net assets are located entirely in the United Kingdom.

2.4 Reverse acquisition

On 8 April 2022, the Company acquired DGI via a reverse takeover which resulted in the Company becoming the ultimate holding company of the Group. The transaction was accounted for as a reverse acquisition since it did not meet the definition of a business combination under IFRS 3. In accordance with IFRS 2, a share-based payment expense equal to the deemed cost of the acquisition less the fair value of the net assets of the Company at acquisition was recognised. The comparatives within the consolidated statement of financial position, the consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cashflow statement represent that of the legal subsidiary and accounting acquirer, DGI. In the consolidated statement of financial position, the share capital and premium as at 31 December 2021 is that of the Company (DG Innovate plc) with the reverse acquisition reserve representing the difference between the deemed cost of the acquisition and the net assets of the Company as at 7 April 2022. The consolidated statement of comprehensive income for the period represents the results of both DG Innovate Plc and DGI. For more details on the key terms of the reverse takeover, see note 13.

   3.         ADMINISTRATIVE EXPENSES 
 
                                   Six months    Six months     Year ended 
                                   to 30 June    to 30 June    31 December 
                                         2022          2021           2021 
                                    Unaudited     Unaudited      Unaudited 
                                          GBP           GBP            GBP 
 Directors remuneration               486,241        79,364        160,008 
 Other administrative expenses        684,818       698,306      1,724,968 
                                 ------------  ------------  ------------- 
                                    1,171,059       777,670      1,884,976 
                                 ------------  ------------  ------------- 
 
   4.         LOSS PER SHARE 

The calculation of the basic and diluted loss per share is based on the loss on ordinary activities after taxation of and on the weighted average number of ordinary shares in issue.

There was no dilutive effect from the share options or convertible loan notes outstanding during the period.

In order to calculate the diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares according to IAS33. Dilutive potential ordinary shares include convertible loan notes and share options granted to Directors and consultants where the exercise price (adjusted according to IAS33) is less than the average market price of the Company's ordinary shares during the period.

The weighted average number of shares is calculated using the number of DGI plc shares owned by the accounting acquirer DGI pre and post the reverse takeover on 8 April 2022.

 
                                          Six months    Six months     Year ended 
                                          to 30 June    to 30 June    31 December 
                                                2022          2021           2021 
                                           Unaudited     Unaudited      Unaudited 
                                                 GBP           GBP            GBP 
 Net loss for the period                 (6,227,231)     (149,088)    (1,006,615) 
                                      --------------  ------------  ------------- 
 
 The weighted average number 
  of shares in the period were: 
 
 Basic and dilutive ordinary 
  shares                               4,105,884,193     3,886,287      3,886,287 
                                      --------------  ------------  ------------- 
 
 Basic and dilutive earnings/(loss) 
  per share (pence)                           (0.15)        (3.84)        (25.90) 
                                      --------------  ------------  ------------- 
 
   5.         FIXED ASSETS 
 
                                   Fixtures   Motor Vehicles        Total 
                                          & 
                                  Equipment 
                                        GBP              GBP          GBP 
 
 Cost 
 At 1 January 2022                2,137,062                -    2,137,062 
 Additions                           18,305           85,754      104,059 
 
  At 30 June 2022                 2,155,367           85,754    2,241,121 
 
 
 Depreciation 
 Depreciation at 1 January 
  2022                            1,277,411                -    1,277,411 
 Charge in the period                70,318           24,852       95,170 
 
 Depreciation at 30 June 2022     1,347,729           24,852    1,372,581 
 
 
 Carrying value 
 At 30 June 2022                    807,638           60,902      868,540 
 At 31 December 2021                859,651                -      859,651 
 At 30 June 2021                    528,701                -      528,701 
 
 
   6.         intangible ASSETS 
 
                                        IPR &        Total 
                                      Patents 
                                          GBP          GBP 
 
 Cost 
 At 1 January 2022                  5,669,081    5,669,081 
 Additions                            919,679      919,679 
 
  At 30 June 2022                   6,588,760    6,588,760 
 
 
 Amortisation 
 Amortisation at 1 January 2022     2,209,597    2,209,597 
 Charge in the period                 207,328      207,328 
 
 Amortisation at 30 June 2022       2,416,925    2,416,925 
 
 
 Carrying value 
 At 30 June 2022                    4,171,835    4,171,835 
 At 31 December 2021                3,459,484    3,459,484 
 At 30 June 2021                    3,666,811    3,666,811 
 

On 8 April 2022 the Company completed the reverse takeover and acquired 100% of the ordinary share capital of Deregallera Holdings Ltd, a company incorporated in England and Wales.

No impairment has been accounted for this interim period. An impairment review will be carried out at the year-end.

   7.         TRade and other RECEIVABLES 
 
                                     As at 30    As at 30    As at 31 
                                         June        June    December 
                                         2022        2021        2021 
                                    Unaudited   Unaudited   Unaudited 
                                          GBP         GBP         GBP 
 
 Prepayments                           30,518      28,679      30,607 
 Other taxes and social security      429,096      71,266      85,270 
 Other debtors                        510,122     135,233      48,205 
                                      969,736     235,178     164,082 
                                   ----------  ----------  ---------- 
 

Also included in other debtors are amounts repayable of GBP355,610 (30 June 2021: GBPNil; 31 December 2021: GBPnil) by certain Directors in respect of incorrectly awarded bonuses.

Other taxes and social security comprise the tax suffered on the bonuses noted above and VAT repayable.

   8.         TRade and other payables 
 
                                     As at 30    As at 30    As at 31 
                                         June        June    December 
                                         2022        2021        2021 
                                    Unaudited   Unaudited   Unaudited 
                                          GBP         GBP         GBP 
 
 Trade payables                       412,954     497,490     384,265 
 Accruals and deferred income          46,134       2,500       2,500 
 Other taxes and social security       32,111           -           - 
 Loans                                 79,233     651,493     715,250 
 Leases                                49,600           -      49,600 
                                   ----------  ----------  ---------- 
                                      620,032   1,151,483   1,151,615 
                                   ----------  ----------  ---------- 
 
   9.         non current liabilities 
 
                     As at 30    As at 30    As at 31 
                         June        June    December 
                         2022        2021        2021 
                    Unaudited   Unaudited   Unaudited 
                          GBP         GBP         GBP 
 
 Loans                228,121     307,353     880,675 
 Leases               247,235           -     256,803 
 Other creditors       80,726      68,069      66,819 
                   ----------  ----------  ---------- 
                      556,082     375,422   1,204,297 
                   ----------  ----------  ---------- 
 
   10.       SHARE Capital 
 
 
                                             Unaudited     Unaudited 
 Allotted, called up and                            No           GBP 
  fully paid 
                                              Ordinary      Ordinary 
                                             Shares of     Shares of 
                                             0.1p each     0.1p each 
 
 At 1 January 2021 (unaudited)             202,610,469       202,611 
 Issued in period                        1,826,853,333     1,826,853 
 
   At 31 December 2021 (unaudited)       2,029,463,802     2,029,464 
                                      ----------------  ------------ 
 
 At 1 January 2022                       2,029,463,802     2,029,464 
 Issued in period                        6,813,251,305     6,813,251 
                                      ----------------  ------------ 
 
   At 30 June 2022 (unaudited)           8,842,715,107     8,842,715 
                                      ----------------  ------------ 
 
   11.       share options and warrants 

Movement in the number of options and warrants outstanding and their related weighted average exercise price, since 31 December 2021 are as follows:

 
                                     At 30 June 2022                                 At 31 December 2021 
                                                                                        & 30 June 2021 
                          Number of        Weighted average exercise       Number of   Weighted average exercise price 
                          Options &                  price per share       Options &                         per share 
                           Warrants                                         Warrants 
 At 1 January         2,983,297,500                             2.5p      73,787,500                              3.0p 
 Granted              1,109,783,754                             0.1p   2,910,110,000                              0.1p 
 Exercised            (830,800,000)                             0.1p               -                                 - 
 Expired or waived     (40,000,000)                             0.1p       (600,000)                              280p 
-------------------  --------------  -------------------------------  --------------  -------------------------------- 
 At period end        3,222,281,254                             0.1p   2,983,297,500                              2.5p 
-------------------  --------------  -------------------------------  --------------  -------------------------------- 
 

The following share options have been granted by the Company and are outstanding as at the period end of 30 June 2022:

 
 Date                 Number       Granted   Exercised        Lapsed/          Number    Weighted   Expiry 
  of grant       of ordinary        during    during           waived     of ordinary     average    date 
                shares under        period    period           during    shares under    exercise 
                   option at                                   period       option at       price 
                   1 January                                                  30 June 
                        2022                                                     2022 
 30/03/2017        4,000,000             -           -              -       4,000,000        0.1p   29/03/2027 
 30/03/2017        5,875,000             -           -              -       5,875,000          1p   29/03/2027 
 30/03/2017        2,937,500             -           -              -       2,937,500          2p   29/03/2027 
 08/10/2020       60,375,000             -           -              -      60,375,000        0.1p   07/10/2030 
 18/03/2021    1,289,310,000             -           -   (40,000,000)   1,249,310,000        0.1p   18/03/2031 
 13/04/2022                -   439,383,754           -              -     439,383,754        0.1p   13/04/2032 
 Total         1,362,497,500   439,383,754           -   (40,000,000)   1,761,881,254        0.1p 
------------  --------------  ------------  ----------  -------------  --------------  ----------  ----------- 
 

All options outstanding at the year end are exercisable at that date.

The following warrants have been granted by the Company:

 
 Date          Number                Granted   Exercised         Lapsed   Number             Weighted   Exercise 
  of grant      of warrants           during    during period    during    of warrants        average    date 
                at                    period                     period    at 31 December    exercise 
                1 January                                                  2021                 price 
                2022 
 18/03/2021      830,800,000               -    (830,800,000)         -                 -       0.25p   18/03/2026 
 18/03/2021      790,000,000               -                -         -       790,000,000        0.5p   18/03/2026 
 08/04/2022                -     670,400,000                -         -       670,400,000       0.25p   08/04/2032 
------------  --------------  --------------  ---------------  --------  ----------------  ----------  ----------- 
 Total         1,620,800,000   1,620,800,000    (830,800,000)         -     1,460,400,000      0.375p 
------------  --------------  --------------  ---------------  --------  ----------------  ----------  ----------- 
 

In April 2022 the Company raised (before expenses) GBP2,550,000 by way of a subscription for 510,000,000 new ordinary shares at a price of 0.5 pence each. Further, the Company raised an additional GBP2,077,000 following the irrevocable exercise of 830,800,000 Warrants (0.25p). Participants in the Fundraise were issued warrants and the company allotted a total of 670,400,000 Warrants (1p) on the basis that: (i) one Warrant (1p) was issued to each Subscriber for every two Subscription Shares issued to each Subscriber, resulting in the issue of 255,000,000 Warrants (1p); and (ii) one Warrant (1p) will be issued to each holder of Warrants (0.25p) for every two Warrants (0.25p) exercised pursuant to the Warrant Exercise Notices, which resulted in the issue of 415,400,000 Warrants (1p).

The fair value of equity settled share options and warrants granted is estimated at the date of grant using a Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model:

 
                           Warrants   Options     Options      Options     Options 
------------------------  ---------  ----------  -----------  ----------  ---------- 
 Date of grant             26 Feb     08 Apr        18 Mar     18 Mar      18 Oct 
                            2021       2022         2021        2021        2020 
  Expected volatility       31%        31%           31%        31%         50% 
  Expected life             5 years    10 years      2 years    10 years    10 years 
  Risk-free interest        2.00%      2.00%         2.00%      2.00%       2.50% 
   rate 
  Expected dividend         -          -             -          -           - 
   yield 
  Possibility               -          -             -          -           - 
   of ceasing employment 
   before vesting 
  Fair value per            -          -            -           -           - 
   option/warrant 
 
 
                            0.001p     0.19p         0.10p      0.15p       0.6p 
------------------------  ---------  ----------  -----------  ----------  ---------- 
 
 

The expense recognised by the Group for share based payments during the period ended 30 June 2022 GBP265,934 was (30 June 2021: GBPnil; 31 December 2021: GBPnil).

The average volatility is used in determining the share based payment expense to be recognised in the period. This was calculated by reference to the standard deviation of the share price over the preceding 12-month period.

   12.       related party transactions 

Share Options

The following share options were held by the directors during the year:

 
 Director          Date of grant         Held at   Surrendered       Granted         Held at   Exercise 
                                       1 January    during the    during the         30 June      price 
                                            2022          year        Period            2021 
---------------  ---------------  --------------  ------------  ------------  --------------  --------- 
 C Theis              08/10/2020      42,500,000             -             -      42,500,000   GBP0.001 
                      18/03/2021     739,520,000             -             -     739,520,000   GBP0.001 
                      13/04/2022               -             -    78,052,051      78,052,051   GBP0.001 
 N Fitzpatrick        18/03/2021     162,820,000             -             -     162,820,000   GBP0.001 
 J Allardyce          18/03/2021      62,500,000             -             -      62,500,000   GBP0.001 
                      13/04/2022               -             -   156,105,002     156,105,002   GBP0.001 
 M Boughtwood         13/04/2022               -                 156,105,002     156,105,002   GBP0.001 
                                  --------------  ------------  ------------  -------------- 
 Total                             1,007,340,000             -   390,262,055   1,397,602,052 
                                  --------------  ------------  ------------  -------------- 
 

Transaction with related party

During the period Gareth Boughtwood (son of Martin Boughtwood, a director in the Group) was paid GBP5,000 (30 June 2021: GBPNil; 31 December 2021: GBPNil) in respect of IT services.

Other debtors

Included in other debtors are balances due from the following Directors who served in the period, in respect of bonuses incorrectly awarded during the period and deemed to be held in trust. Chris Theis GBP137,369 (30 June 2021: GBPNil; 31 December 2021: GBPNil), Brent Fitzpatrick GBP83,005 (30 June 2021: GBPNil; 31 December 2021: GBPNil) Jack Allardyce GBP96,268 (30 June 2021: GBPNil; 31 December 2021: GBPNil), Nicholas Tulloch GBP38,968 (30 June 2021: GBPNil; 31 December 2021: GBPNil).

   13.       Reverse Acquisition 

On 8 April 2022 the Company announced the completion of the reverse acquisition of Deregallera Holdings Ltd (formerly DG Innovate Limited) ("DGI") for an initial consideration of GBP32.4 million satisfied by the issue to the DGI Shareholders of 5,397,451,305 Initial Consideration Shares at a deemed issue price of 0.6 pence per Ordinary Share.

Further conditional deferred consideration of up to GBP5.4 million, to be satisfied by the issue of up to 895,610,844 Deferred Consideration Shares on the first anniversary of completion, will become payable should DGI sign one or more supply agreements for the provision of their motor technology with certain defined customers prior to this date with a combined potential value of GBP5.0 million or more.

On acquisition, the assets, liabilities and contingent liabilities of subsidiaries are measured at their fair values at the date of acquisition. Any excess cost of acquisition over net fair values of the identifiable assets, liabilities and contingent liabilities acquired is recognised as an expense under IFRS 2 equity settled transactions. Any deficiency of the cost of acquisition below the net fair values of the identifiable assets, liabilities and contingent liabilities acquired is credited to the Statement of Comprehensive Income in the year of acquisition.

Due to the Company being a non-operating entity which was not classified as a business under IFRS 3 Business Combinations ("IFRS 3"), the transaction does not fall under the scope of this standard and is not a business combination but an equity-settled transaction which should be accounted for in accordance with IFRS 2 Share-based Payment ("IFRS 2"). However, the IFRS 3 guidance on reverse acquisitions should still be followed, under which despite the Company being the legal acquirer of DGI, it should be considered the acquiree for accounting purposes.

Accordingly the following accounting treatment has been applied in respect of the reverse acquisition:

   1.     DGI was the deemed accounting acquirer. 

2. The presentation of the consolidated financial statements of the legal parent (DG Innovate Plc) is a continuation of the accounting acquirer's financial statements.

3. Consolidated financial statements for the period ended 30 June 2022 for the Group present the results of DGI from 1 January 2022 to 7 April 2022 and the enlarged group thereafter. The comparative results for the period ended 30 June 2021 and 31 December 2021 represent those of the DGI business, prior to the reverse takeover.

4. The equity structure appearing in the Group financial statements reflects the equity structure of the legal parent (DG Innovate Plc), including the shares issued and shares to be issued under the share for share exchange to effect the business combination.

5. The retained earnings and other equity balances recognised in the Group financial statements reflect the retained earnings and other equity balances of the DGI business immediately before the business combination and includes that of the group after the reverse takeover on 8 April 2022.

6. The reverse acquisition reserve relates to adjustments in respect of 4 and 5 above for the reverse acquisition between DG Innovate Plc and DGI.

As the accounting acquirer (DGI) is deemed to have acquired the shares of the Company, the fair value of the shares of the Company should be used to measure the consideration paid. This is calculated as the number of DGI plc shares multiplied by the quoted market price of DGI plc (Path Investments plc at the time). The consideration is then split into net assets acquired, with the difference representing the cost to DGI for obtaining a listing. This difference has been expensed within "reverse acquisition expenses" in accordance with IFRS 2.

Details of the fair value of the acquisition are as follows:

 
                            Fair Value of assets acquired 
                                                      GBP 
 Cash & Cash equivalents                           41,088 
 Loans                                            911,934 
 Fixed assets                                      82,546 
 Trade payables                                 (552,590) 
 Other payables                                  (97,500) 
 Net assets acquired                              385,748 
 
 Listing expense                                5,094,074 
 
 Consideration                                  5,479,552 
 
 

The Listing Expense is attributable to the difference between the net assets acquired and the fair value of the Company on the 7 April 2022.

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END

IR UKRARUOUKUUR

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September 30, 2022 02:02 ET (06:02 GMT)

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