Vela Technologies Regulatory News (VELA)

19 May 2022

Vela Technologies PLC

("Vela" or "the Company")

Update re. investment in EnSilica

The Board of Vela (AIM:VELA), an AIM-quoted investing company focused on early-stage and pre-IPO disruptive technology investments, notes the announcement made today by EnSilica PLC ("EnSilica") regarding EnSilica's intention to seek admission of its shares to trading on AIM.

As announced on 17 January 2022, Vela invested £750,000 in EnSilica in the form of convertible loan notes ("the Loan Notes") as part of a pre-IPO funding round. The Loan Notes and interest accrued since the investment was made automatically convert on an IPO of EnSilica into new ordinary shares in EnSilica at a 12 per cent. discount to the price at which such shares are subscribed in the IPO.

It is anticipated that on Admission, Vela will be interested in 1,764,788 ordinary shares in EnSilica representing 2.3 per cent. of the issued share capital.

An extract from the announcement issued by EnSilica is set out below. The full announcement can be found here: https://www.londonstockexchange.com/news-article/market-news/placing-and-proposed-admission-to-trading-on-aim/15460179

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About Vela Technologies 

Vela Technologies plc (AIM: VELA) is an investing company focused on early stage and pre-IPO long term disruptive technology investments. Vela's investee companies have either developed ways of utilising technology or are developing technology with a view to disrupting the businesses or sector in which they operate. Vela Technologies will also invest in already-listed companies where valuations offer additional opportunities.

Extract

19 May 2022

EnSilica plc

("EnSilica", the "Company" or the "Group")

Placing and Proposed Admission to trading on AIM

EnSilica, a leading designer and supplier of mixed signal ASICs (Application Specific Integrated Circuit), is pleased to announce its proposed admission to trading on the AIM market of the London Stock Exchange. Dealings on AIM are expected to commence at 8.00 a.m. on 24 May 2022, under the ticker ENSI and ISIN GB00BN7F1618 ("Admission"). Allenby Capital is acting as Nominated Adviser and Sole Broker to the Company and the placing.

In connection with Admission, EnSilica has raised £6 million through a placing and subscription of 12,000,000 Ordinary Shares at a price of 50p per share and will have a market capitalisation of approximately £37.6 million at the Placing Price.

EnSilica provides an end-to-end service for the design and supply of mixed signal ASICs, outsourcing certain elements such as the wafer fabrication of the manufacturing and packaging to third parties - otherwise known as a Fabless Semiconductor Model.

ASICs are Integrated Circuits or semiconductor chips developed for a particular use or product rather than for general purpose usage. ASICs help differentiate products through optimised hardware making products smaller, faster, lower power, and/or more secure and can provide novel functionality, improve supply chain security and protect products from being copied. The Company has expertise in designing complex mixed signal ASICs, which combine digital and analogue functions onto a single chip.

EnSilica has a broad international customer base. EnSilica's customers range from global corporations and original equipment manufacturers ("OEMs") to technology start-ups, including automotive Tier 1 suppliers, industrial enterprises, large software companies and service providers developing proprietary hardware. EnSilica is an approved supplier to some of the world's largest automotive and industrial OEMs and Tier 1 suppliers.

The Directors believe that the Group has reached a stage in its development where it will benefit from a quotation on AIM and that, as well as providing the Company with the net proceeds of the Fundraising, this will:

· enhance both transparency and international profile of EnSilica with existing and potential customers;

· allow the Company to access equity capital creating flexibility to fund growth and support potential M&A opportunities;

· enable EnSilica to attract, recruit and retain key employees who may be further incentivised through share option schemes ; and

· create a platform for existing shareholders to participate in the future growth of the Company.

Key business strengths include:

· Global business with c. 120 employees

- EnSilica is headquartered in Oxfordshire and has additional design centres in Wokingham, Sheffield, Bangalore, India and Porto Alegre in Brazil.

- The senior management team has in-depth experience covering commercial, design engineering, IP licensing, fabless production, quality assurance and operations.

· ASICs market forecasted to grow 8.2 per cent. through to 2026 and reach US$27.6 billion

- ASIC benefits include: i) smaller size; ii) lower power consumption; iii) greater functionality; iv) improved data security - less exposed to hackers; v) enhanced IP security - harder to copy than a product populated with off-the-shelf components; and vi) supply chain resilience due to reduced risk of components reaching end of life

· ASICs Design and Supply model - higher margin, longer term revenue streams

- Customers pay an upfront fee towards the cost of design, tooling and test development of the ASIC and then purchase the finished ASICs from EnSilica or pay a royalty on production of devices

- Significant revenues to EnSilica could occur when chip production is underway, which can be 2 to 5 years from project initiation

· Increased investment into IP portfolio

- IP reduces the time to market of developing an ASIC as well as providing an additional licensing revenue stream

· Automotive and Satellite user terminals - both key target markets

- Integrated circuits content per car are expected to increase from US$380 in 2017 to more than US$590 in 2025, leading to the automotive semiconductor segment TAM (total addressable market) growing from US$37.9 billion in 2020 to an estimated US$113.9 billion in 2030

- In 2018 EnSilica was awarded a €2 million project from the UK Space Agency to develop an RF Integrated Circuit, 75 per cent. funded by the agency.

- In addition, EnSilica was recently selected by AST SpaceMobile Inc (NASDAQ: ASTS) to develop their next generation ASIC for use in the company's planned space-based cellular broadband network.

· Three ASICs now in supply phase and pipeline at an all-time high

- Three ASICs have now been released for production with anticipated long-term supply revenue

- A further three chips are now in the design phase

- EnSilica is currently working on costings with potential customers for several further potential design and supply projects

Ian Lankshear, Chief Executive Officer of EnSilica commented:

"We are delighted to be floating EnSilica on AIM and believe this represents a major endorsement of our business. Our quoted status will provide an ideal platform from which to accelerate a number of growth initiatives which will ultimately further expand both market reach and customer footprint.

Having developed a reputation of excellence and innovation over the past 21 years, we firmly believe our mixed signal and RF design and supply capabilities are ideally placed to further capitalise on the significant demand for ASICs across our key markets.

We are excited by the numerous opportunities that being a quoted company will bring and we look forward to further developing EnSilica over the coming years."