THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION IN IT, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, NEW ZEALAND, SINGAPORE OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("EUWA")) ("UK MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED WITHIN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED UNDER UK MAR). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION, WHICH IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

9 March 2023

EnSilica plc

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

£2.0 million raised in a conditional Placing and Subscription

and

Retail Offer to raise up to £0.5 million

EnSilica (AIM:ENSI), a leading mixed signal chip maker, is pleased to announce that it has conditionally raised £2.0 million (before expenses) by way of a placing and subscription (the "Placing" and the "Subscription" respectively) of a total of 2,857,143 new ordinary shares of 0.1p each in the Company ("Ordinary Shares") at a price of 70 pence per new Ordinary Share (the "Issue Price").

Retail Offer

In addition to the Placing and the Subscription, the Company announces that it will today be launching a separate conditional retail offer via the BookBuild Platform to raise up to £0.5 million (before expenses) at the Issue Price (the "Retail Offer", and together with the Placing and the Subscription, the "Fundraise"). This is to provide existing UK retail shareholders in the Company an opportunity to participate in the Fundraise. A separate announcement will be made shortly by the Company regarding the Retail Offer and its terms. Those investors who subscribe for new Ordinary Shares pursuant to the Retail Offer (the "Retail Offer Shares") will do so pursuant to the terms and conditions of the Retail Offer contained in that announcement. The Retail Offer is not subject to any minimum fundraising and will be open only to existing shareholders of the Company within the United Kingdom. The Retail Offer will be conditional on completion of the Placing and Subscription.

Allenby Capital Limited ("Allenby Capital") is acting as sole broker in connection with the Placing and will act as the retail offer coordinator in connection with the Retail Offer.

Key Highlights and Rationale

·    The net proceeds of the Fundraise will be used to support the Company in responding to additional sector and contract momentum, which has exceeded original estimates and includes:

o a €5 million contract to develop a novel chip to address the next generation of mass market satellite broadband user terminals;

o  a significant supply contract with a leading European industrial OEM worth in excess of US$30 million; and

o  a US$3.6 million contract with a major automotive Tier 1 company.

·    The Company will seek to capitalise on the strong market fundamentals by leveraging equity capital to execute on its sizable business pipeline, strengthen its balance sheet and build on the significant growth momentum experienced since its successful IPO on AIM in May 2022. 

·   Management is currently pursuing an estimated pipeline of c.£250 million of additional sales opportunities and potential new contracts and which represent a further testament to the quality of EnSilica's business output and its growing reputation in the international chip sector.

Ian Lankshear, Chief Executive Officer of EnSilica plc, commented:

"We are delighted to have received support for our fundraise from both new and existing shareholders, which further endorses the quality of our core business and growth strategy. This injection of fresh capital will not only support the delivery of our current pipeline but reinforces our financial growth platform in anticipation of our exciting journey ahead. 

We continue to trade in line with market expectations and I look forward to updating shareholders on our progress over the course of the year, as we continue to deliver high-quality solutions for our broad customer base and expand our global market reach."

Further details of the Fundraise are set out further below.

For further information please contact:

About EnSilica

EnSilica is a leading fabless design house focused on custom ASIC design and supply for OEMs and system houses, as well as IC design services for companies with their own design teams. The Company has world-class expertise in supplying custom RF, mmWave, mixed signal and digital ICs to its international customers in the automotive, industrial, healthcare and communications markets. The Company also offers a broad portfolio of core IP covering cryptography, radar, and communications systems. EnSilica has a track record in delivering high quality solutions to demanding industry standards. The Company is headquartered near Oxford, UK and has design centres across the UK and in India and Brazil.

Background to the Fundraise and use of proceeds

As part of EnSilica's admission to trading on AIM on 24 May 2022 ("IPO"), EnSilica raised £6 million through a placing and subscription of 12,000,000 Ordinary Shares at a price of 50p per share, the net proceeds of which enabled EnSilica to support its immediate growth requirements. Since then, EnSilica has announced a significant supply contract with a leading European industrial OEM worth in excess of US$30 million and, more recently, has announced two new contracts with existing European customers: i) a contract with a major automotive Tier 1 company, for a combined total of US$3.6 million; and ii) on 17 February 2023, a €5 million contract 75% funded by the European Space Agency for the development of a chip for satellite broadband user terminals.

Notwithstanding EnSilica remaining sufficiently funded, including being able to service its existing near-term order book, the directors of EnSilica (the "Directors" or the "Board") continue to see increasing new business opportunities and continued growth in the semiconductor sector. The current sales pipeline of opportunities and potential contracts stands at an estimated c.£250 million, following a review by EnSilica's management to focus on projects which meet the Company's criteria, and the Directors believe this pipeline remains a strong endorsement of the quality of EnSilica's business output and its growing reputation in the chip sector. This pipeline consists of several opportunities at different stages of tender, evaluation and pre-contract discussion.

As a result of all this, it has become apparent to the Board that the anticipated timeline of potential new contracts has accelerated ahead of that envisaged at the time of the IPO, as well as there being an increased amount of new business opportunities to pursue. Therefore, the new business momentum has accelerated EnSilica's short to medium-term capital requirements. The Board considers it to be in the Company's shareholders' best interests to exploit the strong market fundamentals by accessing equity capital through the Fundraise, to provide additional working capital to capitalise on the significant growth momentum being experienced by the Company.

The Fundraise will also strengthen the Company's balance sheet and help provide some resilience against potential supply constraints. Although chip supply chain shortages have eased over the last six months, the Board believes that the security of semiconductor supply remains a primary concern for major OEMs and governments. The Board remains acutely mindful of the ongoing challenges associated with managing global supply chains, and the potential impact of current geopolitical instability on the wider silicon manufacturing industry. As such, the Company is positioning itself as a key partner in fledgling European semiconductor alliances and supply chain initiatives.

The net proceeds of the Retail Offer, which is for up to an additional £0.5 million before expenses, will be deployed for the same purposes as outlined above.

Details of the Placing and the Subscription

The Placing of 2,785,714 new Ordinary Shares (the "Placing Shares") and the Subscription of 71,429 new Ordinary Shares (the "Subscription Shares") at the Issue Price has conditionally raised £2.0 million before expenses for the Company.

The Placing Shares and the Subscription Shares (as well as the Retail Offer Shares) will be issued on a non-pre-emptive basis pursuant to the authorities granted to the Board at the Company's annual general meeting held on 24 November 2022. 

When issued, the Placing Shares and the Subscription Shares will represent 3.66 per cent of the enlarged share capital of the Company (excluding any Retail Offer Shares issued on Retail Admission (as defined below)) and will rank pari passu with the existing Ordinary Shares in the Company.

The Company and Allenby Capital have entered into a placing agreement pursuant to which Allenby Capital has, subject to certain conditions, procured subscribers for the Placing Shares at the Issue Price (the "Placing Agreement"). The Placing Agreement contains provisions entitling Allenby Capital to terminate the Placing (and the arrangements associated with it), at any time prior to  Admission (as defined below) in certain circumstances, including in the event of a material breach of the warranties given in the Placing Agreement, the failure of the Company to comply with its obligations under the Placing Agreement, the occurrence of a force majeureevent or a material adverse change affecting the financial position or business or prospects of the Company. If this right is exercised, the Placing, the Subscription and the Retail Offer will not proceed and any monies that have been received in respect of the Placing will be returned to the applicants without interest and Admission will not occur. The Company has agreed to pay Allenby Capital a placing commission and all other costs and expenses of, or in connection with, the Placing and the Retail Offer. The Subscription is subject to terms and conditions agreed between the Company and each of the subscribers for the Subscription Shares and is conditional, inter alia, on Admission. Neither the Placing, the Subscription nor the Retail Offer are being underwritten by Allenby Capital or any other person.

Completion of the Retail Offer is conditional upon, inter alia, completion of the Placing and the Subscription. However, completion of the Placing and the Subscription is not conditional on the completion of the Retail Offer and there is no minimum fundraising for the Retail Offer. The Retail Offer is available only to existing shareholders of the Company within the United Kingdom.

Admission to AIM

Application has been made to London Stock Exchange plc for the Placing Shares and the Subscription Shares to be admitted to trading on AIM ("Admission"). It is currently anticipated that Admission will become effective and that dealings in the Placing Shares and the Subscription Shares will commence on AIM at 8.00 a.m. on or around 14 March 2023.

Application will be made to London Stock Exchange plc for the Retail Offer Shares to be admitted to trading on AIM ("Retail Admission"). It is currently anticipated that the Retail Offer will be closed at 17:00 on 13 March 2023 and that Retail Admission will become effective and that dealings in the Retail Offer Shares will commence on AIM at 8.00 a.m. on or around 15 March 2023.

Change to significant holding in the Company

As a result of the issue of the Placing Shares and the Subscription Shares, the shareholding of Ian Lankshear, CEO of the Company, will be diluted on Admission to approximately 20.54 per cent. (the number of Ordinary Shares he holds will remain the same at 16,040,358).

Total voting rights

On Admission, the Company will have 78,088,952 ordinary shares of 0.1p each in issue, each with one voting right.  There are no shares held in treasury. Therefore, the Company's total number of ordinary shares in issue and voting rights will be 78,088,952 and this figure may be used by shareholders from Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

A further announcement will be made in relation to the total voting rights in the Company's share capital following Retail Admission.

IMPORTANT NOTICES

Notice to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended and as this is applied in the United Kingdom ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II and Regulation (EU) No 600/2014 of the European Parliament, as they form part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of retail investors who do not need a guaranteed income or capital protection and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). The Ordinary Shares are not appropriate for a target market of investors whose objectives include no capital loss.  Notwithstanding the Target Market Assessment, distributors should note that: the price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital projection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Fundraise. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Allenby Capital will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Ordinary Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the shares and determining appropriate distribution channels.

Forward Looking Statements

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not facts. They appear in a number of places throughout this announcement and include statements regarding the Directors' beliefs or current expectations. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Investors should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

Notice to overseas persons

This announcement does not constitute, or form part of, a prospectus relating to the Company, nor does it constitute or contain any invitation or offer to any person, or any public offer, to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as an inducement to enter into any contract or commitment with the Company.

This announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any jurisdiction into which the publication or distribution would be unlawful. This announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in  Australia, Canada, Japan, New Zealand, the Republic of South Africa or any jurisdiction in which such offer or solicitation would be unlawful or require preparation of any prospectus or other offer documentation or would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.  Persons into whose possession this announcement comes are required by the Company to inform themselves about, and to observe, such restrictions.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America.  This announcement is not an offer of securities for sale into the United States.  The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration.  No public offering of securities is being made in the United States.

General

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) or any previous announcement made by the Company is incorporated into, or forms part of, this announcement.

Allenby Capital, which is authorised and regulated by the FCA in the United Kingdom, is acting as Nominated Adviser and Broker to the Company in connection with the Placing. Allenby Capital will not be responsible to any person other than the Company for providing the protections afforded to clients of Allenby Capital or for providing advice to any other person in connection with the Fundraise or the Retail Offer. Allenby Capital has not authorised the contents of, or any part of, this announcement, and no liability whatsoever is accepted by Allenby Capital for the accuracy of any information or opinions contained in this announcement or for the omission of any material information, save that nothing shall limit the liability of Allenby Capital for its own fraud.