THAL Thalassa Holdings Limited

Thalassa Holdings Ltd

Thalassa Holdings Ltd

(Reuters: THAL.L, Bloomberg: THAL:LN)

("Thalassa", "THAL" or the "Company")

Letter re DG Innovate plc (‘DGI’)

Thalassa wishes to make public the following letter sent to the Board of DG Innovate plc (‘DGI’) earlier this week, which sought to engage with DGI to explore possible ways of delivering value, liquidity and a credible long-term strategy for all DGI stakeholders, including, but not limited to, making an offer to purchase DGI’s operating subsidiaries and/or assets. Thalassa is very disappointed not to have received a response, especially given the 99% decline in DGI share price since its decision to de-list that was announced on 31 December 2024.

Thalassa considers any proposal that might offer demonstrable value accretion and provide liquidity to DGI shareholders should be considered by the DGI Board as potentially being in their own shareholders’ best interest.

Letter:

The Board of Directors (the ‘Board’)

Re: DG Innovate Plc (the ‘Company’)

We write as a shareholder of the Company holding 50,000,000 ordinary shares.

With reference to the Company’s RNS announcement dated 10 December 2024, the Company states that the successful conditional placing would raise £500,000 and which “will ensure that the Company has sufficient funds for its immediate needs until early February 2025”.

Despite the placing, the Company’s further RNS announcement a mere three weeks later, 31 December 2024, states, “there has been and remains a broad lack of demand for exposure to companies at DGI's current stage of development within the UK's traditional institutional investor base”. It continues, “The DGI Directors do not foresee any obvious near-term catalysts likely to change this backdrop and have therefore concluded that the costs, regulatory requirements and additional administrative burden associated with maintaining the Company's listing are now, in their opinion, completely disproportionate to the benefits.”

The Company is now set to cancel its listing on 31 January 2025.

We note that since the Company’s announcement of 31 December 2024, there has been no further update on the company’s solvency or fund-raising status.

With this in mind, as a shareholder, we require that the Board provides immediate answers to the following questions:

1. Given our concerns and the lack of public disclosure, we can only conclude that the Company is operating in the “Twilight Zone” if it is not already insolvent. Please advise?

2. Alternatively, the Company has already reached agreement on funding, post delisting, or reached conditional terms for funding, which in either event would require disclosure. We request immediate clarity?

Further, in the company’s RNS announcement of 31 December 2024, the Company states: “Furthermore, current discussions with potential investors who could substantially invest in DGI were it no longer listed has given the Directors confidence that this provides the best available route to significant funding”. Again, we request answers to these further questions:

3. Has the Company concluded any future funding arrangements or agreements in principle?

4. If any such arrangements or agreements on potential investment exist, why has the Company not announced these? In this connection why has the Company not announced the terms and conditions of the potential funding from the Investment Fund for Wales?

5. We have been advised that the Investment Fund for Wales will not invest in a ‘plc’, however, even if this in indeed the case, why then has the Company not set up a holding structure to allow investors to invest in selective unquoted investee companies? We are very familiar with control issues, which can be addressed by the issuance of Convertible Preference shares which can only be converted in the event that the conversion does not trigger a breach of covenants.

If the Company has not made any announcements in respect of future funding because of there being no arrangements or agreements in place, the Company must be, or must imminently be, insolvent. Please advise?

Further, we are aware of the large volume of transactions in the Company’s shares recently and note the absence of published TR1s. Please explain why?

Whilst we, as a shareholder, might consider potential proposals in respect of a potential approach, the Company’s lack of clear financial disclosure make formulation of an unconditional proposal completely impossible.

Given the clear time sensitivity of the matters raised in this letter, the imminent de-listing on Friday 31 January 2025 and the apparent parlous financial standing of the Company, we request that answers to the above questions be provided by email no later than 4pm on Wednesday 29 January 2025.

Yours etc.

END

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