PATH.L Regulatory News (PATH)

13 August 2021

Path Investments plc("Path" or the "Company")

Proposed Acquisition of DG Innovate Limited

and

Suspension of Listing

Path Investments plc (TIDM: PATH), is pleased to announce that it has entered into a conditional sale and purchase agreement (the "Agreement") to acquire the entire issued share capital of DG Innovate Ltd ("DG Innovate") (the "Proposed Transaction").

Highlights

· Conditional agreement to acquire DG Innovate for £32 million to be satisfied by the issue of 5,342,051,305 Path Ordinary Shares of £0.001 each ("Path Shares") at an issue price of 0.6 pence per Path Share.

· DG Innovate is an advanced research and development company focusing on novel electric motor technologies and energy storage solutions.

· The Proposed Transaction is subject to the approval of Path's independent shareholders and waiver of Rule 9 of the Takeover Code by the Takeover Panel.

· The Proposed Transaction constitutes a reverse takeover under the Listing Rules as it will result in a fundamental change in the business of the Company.

· The Company has requested from the FCA the suspension of the Company's listing on the Standard Segment of the Official List, and from trading on the Main Market of the London Stock Exchange from 7.30am today pending the publication of a prospectus and the application by the Company to have its enlarged share capital listed on the Standard Segment of the Official List and admitted to trading on the Main Market.

· Path is providing a secured loan facility to DG Innovate of up to £600,000 and an initial £300,000 has been provided on signing of the Agreement.

DG Innovate

DG Innovate is a research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, focusing on the use of abundant materials and best engineering and scientific practices. The business was founded in 2009 by Martin Boughtwood, an engineer and inventor with over 40 years' experience. It is intended that Martin will join the board as Chief Technology Officer of the Company on completion of the Proposed Transaction.

DG Innovate is currently developing products alongside major manufacturers across the transportation and energy sectors, research institutions and the UK's Ministry of Defence ("MOD") and has filed over 20 patents worldwide in the last five years.

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) - ultra high efficiency, lightweight, cost-effective electric motors and electronics; and

• Enhanced Battery Technology (EBT) -fully-recyclable, sodium-ion batteries utilising abundant materials, and offering comparable or greater energy density to incumbent battery technologies at lower cost and environmental impact.

DG Innovate is working with a number of potential customers across the transportation and energy sectors, including the MOD, a global Tier 1 commercial vehicle supplier and a major consumer automotive OEM.

To date, DG Innovate has raised funding from private investors, the UK Government, the Welsh Development Agency and through competitive grant awards under the Innovate UK Faraday Challenge. The Proposed Acquisition is intended to provide DG Innovate with a more robust capital structure, access to the public equity markets and an enhanced leadership team as it seeks to move into product commercialisation in the short-to-medium term.

Further information on DG Innovate may be found at: https://www.dginnovate.com.

Principal Terms of the Proposed Transaction

Path has agreed to acquire the total issued share capital of DG Innovate for a consideration of £32 million, to be satisfied by the issue of 5,342,051,305 new Path Shares at an issue price of 0.6 pence per Path Share.

Completion of the Proposed Transaction is subject to conditions, including the approval of Path shareholders at a general meeting to be convened in due course and the publication of a prospectus by Path prepared in accordance with the Prospectus Regulation Rules made under section 73A of the Financial Services and Markets Act 2000 (as amended) and approved by the UK Financial Conduct Authority ("FCA") under section 87A of Financial Services and Markets Act 2000 (as amended). Following publication of the prospectus, the Board expects Path's ordinary shares to be readmitted to the Standard Segment of the Official List maintained by the FCA and readmitted to trading on the Main Market of the London Stock Exchange. The Agreement includes a long stop date for the satisfaction of all conditions of 31 October 2021.

The Agreement also contains warranties between the parties customary for a transaction of this nature.

Temporary Suspension

The Proposed Transaction is classified as a reverse takeover in accordance with the FCA's Listing Rules. Accordingly, the Company has requested the suspension of the Company's listing on the Standard Segment of the Official List and from trading on the Main Market of the London Stock Exchange be suspended with effect from 7:30am today pending the publication of a prospectus and the application by the Company to have its enlarged share capital listed on the Standard Segment of the Official List and admitted to trading on the Main Market.

The parties intend to proceed as quickly as possible with the Proposed Transaction. However, there can be no certainty that the Proposed Transaction will be successfully completed. If the Proposed Acquisition does not complete for any reason, it is expected that the suspension of the Company's listing will be lifted subject to FCA approval and trading in the Path Shares will recommence.

The Company will make further announcements in due course, as appropriate.

Commenting, Christopher Theis CEO of Path, said: "We are delighted to have agreed the terms for the acquisition of DG Innovate. DG Innovate is at the forefront of motor drive technology for electric vehicles, with its innovative technology, together with offering, through its sodium-ion battery technology, a potentially cleaner and cheaper alternative to incumbent technologies.

"We believe that DG Innovate's technology and IP portfolio, targeted at current market technology's shortcomings, coupled with its strong commercial relationships, high calibre technical staff and near-term commercialisation opportunities make it the ideal target for Path.

"We are currently working hard to complete the required prospectus and look forward to making further announcements as matters progress."

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU No. 596/2014) which is part of UK law by virtue of the European Union (withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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