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June 2024 (Q4 FY24) Activities and Cashflow Report
July 31, 2024
Adisyn Ltd (ASX: AI1) (“Adisyn” or the “Company") is pleased to provide its quarterly report and Appendix 4C cash flow statement for the period ended 30 June 2024, as it continues to build on its unique technology offering and new strategic focus.
HIGHLIGHTS
- Completion of strategic review with outcomes focused on divestment of non-core assets, streamline business with focus on AI and cybersecurity, and targeting business development opportunities in the defence industry supply chain.
- Divestment of VMware cloud assets to Zettagrid to generate up to $1.4m in cash, with $850k received to date.
- Expansion of Adisyn’s Industry Advisory Board with three key appointments, bringing valuable experience in cybersecurity, defence and national security.
- Strategic partnership with Canberra-based group, Phase, strengthening Adisyns defence industry capability.
Post Quarter Highlights
- As announced on 29 July 2024, the Company received firm commitments to raise ~$1.5m via a share placement of 46 million shares at $0.033c per share
For the quarter, the Company reported cash receipts of $1,538,000, following the disposal of its VMware Cloud Platform to Zettagrid Pty Ltd on 1 May 2024. Underlying total revenue for the quarter was $1,138,000, when excluding April 2024 revenue from the VMware Cloud business sold.
During the quarter, the Company focused its attention on new strategic partnerships, expanding its technological capability, and reviewing non-core assets for potential disposal to streamline the business moving forward and provide the Company with the balance sheet strength required to execute on its business development activities.
The Company remains focused on prioritising high growth, high margin sectors to further advance it’s AI enablement and cybersecurity capabilities, including it’s collaboration with leading semiconductor IP business, 2D Generation Ltd, which aims to generate transformational opportunities in the AI space, leveraging Adisyn’s expertise in data centre management, managed IT services, and cybersecurity, alongside 2D Generation’s industry-leading capabilities in developing next-generation AI semiconductor solutions (ASX: 15 July 2024).
Click here for the full ASX Release
This article includes content from Adisyn, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
AI1:AU
31 October
Quarterly Activities/Appendix 5B Cash Flow Report
16 May
Advisory Board Expansion
Adisyn Ltd (ASX: AI1) (“Adisyn” or the “Company") is pleased to announce it has made threeappointments to its Industry Advisory Board (IAB); Mr Oscar Leslie, Mr Jesse Gane and Dr Craig Valli. These appointments complement the appointment of IAB Chair Harry Karelis earlier in the year (ASX: 19 February 2024).
Highlights:
- Expansion of Adisyn’s Industry Advisory Board with three key appointments.
- Appointees bring valuable experience in cybersecurity, defence and national security.
- Brings strong insights into geopolitical trends and access to relevant networks.
- National security-clearances differentiate Adisyn from its peers.
- Continued tangible progress towards positioning Adisyn as the premier, sovereign provider of managed IT services to the defence industry supply chain.
Adisyn’s advisory board serves to expand the Company’s profile, networks and service capabilities in a cost-effective manner. Each IAB member is required to provide their guidance and
recommendations to the Company’s management and board of directors for the activities of the Company which are relevant to the IAB members domain expertise. These appointments also provide the Company with personnel holding national security clearances, potentially opening new opportunities and further differentiating Adisyn from other managed IT services companies in the marketplace.
Mr Oscar Leslie
Oscar has an extensive background in the Australian National Security community and is the Co- Founder and Managing Director of Phase (www.phase.au) with whom Adisyn recently established as a strategic partnership (ASX: 6 May 2024).
Phase is a veteran-founded Australian research, development and commercialisation firm specialising in critical technology for the Defence and National Security community. Since its founding Oscar has led Phase in establishing strategic partnerships across academia, industry and government and supporting the delivery of novel solutions to end users. Oscar brings a capability- first approach to technology, layering a rich operational background in the national security
community with a passion for innovations that aim to change the way front-line personnel operate.
Mr Jesse Gane
Jesse is currently a Director of Space, Cyber, and Federal Government Services at Downer Group, managing critical contracts with national responsibilities and fostering strong partnerships between organisations, government entities, and industry partners.
Jesse has a background in the Australian Navy as a submariner with specialist communication and cybersecurity skills. He has demonstrated a commitment to delivering cutting-edge IT solutions in diverse operational landscapes. His efforts in system architecture and product delivery have left an enduring mark on naval operations, earning accolades for his commitment to excellence and innovation.
Jesse has unique insights into the interactions between commerce and government as well as the unique challenges facing small and growing companies seeking to bolster their internal systems.
Dr Craig Valli
Craig has over 35 years’ experience in the computing, information and communication technology industry. He conducts research and consults to industry and government on cybersecurity and digital forensics matters. Along with being the inaugural Director of the Edith Cowan University (ECU) Security Research Institute, he was also the research director and lead academic for the Australian Cyber Security Research Institute that resulted in the AU$140 million Cyber Security Co- operative Research Centre (CSCRC) that is now headquartered at ECU Joondalup Campus. He is a former member of the INTERPOL Cyber Crime Experts Group as well as the INTERPOL Digital Forensics Expert Group. Craig has over 150 peer reviewed academic publications in cybersecurity and digital forensics.
As consideration for their roles and to align the interests of each IAB member with that of shareholders, each appointee will be granted 1,000,000 options with an exercise price of $0.03 and a three year expiry date from the date of issue. These options will vest on the 12 month anniversary of each appointee being appointed to the IAB, and the issue of the options will be subject to shareholder approval at a future shareholder meeting of the Company.
The Company continues to remain focused on preserving it’s cash balance, and no ongoing cash consideration will be payable as consideration for each IAB members duties beyond specific project work (if any), which is subject to agreement between the IAB member and the Company on a case- by-case basis and will be paid at a per diem rate.
Adisyn’s Managing Director, Blake Burton, stated: “We are delighted to have attracted advisors of the calibre of Oscar, Jesse and Craig to our advisory board. We are laser focused on implementing new growth strategies for the Company to deliver an expansion in our sovereign capabilities to small and medium sized businesses interacting with Defence. These appointments sit alongside a series of strategic partnerships to position Adisyn as the go to provider of key services to this segment of the market We look forward to leveraging the combined networks and insights of the IAB to bolster the growth ambitions we have for Adisyn.”
Click here for the full ASX Release
This article includes content from Adisyn, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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10 December
Investor Insight: SaaS Offers Scalable Approach to Accounts Receivable Automation
The software-as-a-service (SaaS) model has emerged as a game-changer in business accounting applications, gaining particular ground in accounts receivable (AR) management.
These cloud-based platforms are revolutionising how businesses handle their cash flow, offering unparalleled flexibility, scalability and seamless integration with existing accounting systems across various sectors.
The shift towards SaaS-based AR solutions is not just a trend but a fundamental change in how businesses approach their financial operations. Understanding how SaaS-based AR solutions can benefit businesses should help investors identify strategic opportunities for investing.
The SaaS advantage in AR management
The inherent characteristics of SaaS platforms make them uniquely positioned for rapid growth and market expansion. These cloud-based solutions offer providers some unique advantages:
- Low incremental costs: Once the core platform is developed, the cost of adding new clients or features is relatively low. This operational leverage allows SaaS companies to scale quickly without a proportional increase in expenses.
- Global reach: Cloud-based solutions can be deployed anywhere with internet access, enabling SaaS providers to enter new markets with minimal physical infrastructure.
- Continuous improvement: The centralised nature of SaaS allows for rapid updates and improvements, ensuring that all clients benefit from the latest features and security enhancements.
- Data-driven insights: By aggregating anonymised data across their client base, SaaS providers can offer benchmarking and industry insights, adding value beyond the core AR functionality.
These efficiencies translate into a compelling value proposition for businesses of all sizes. Small companies gain access to enterprise-grade AR capabilities, while large corporations benefit from the agility and innovation typically associated with smaller, more nimble operations.
Traditional AR processes are often labor-intensive, prone to errors and lack the agility required in today's fast-paced business environment. SaaS solutions address these pain points by offering cloud-based platforms that automate and streamline AR workflows. These systems provide real-time visibility into cash flow, reduce manual data entry and accelerate the collection process.
The adoption of SaaS in AR management is not just about technological advancement; it's a strategic move that aligns with the broader digital transformation initiatives of modern enterprises. A report from BetterCloud projects SaaS will comprise 85 percent of all business software by 2025, underscoring the pivotal role these solutions play in shaping the future of financial operations.
The SaaS model for AR management introduces innovative revenue structures that benefit both the service providers and their clients. Two common approaches stand out:
- License-based fees for enterprise clients: This model involves charging a recurring fee based on the scale and complexity of the client's operations. It provides a predictable revenue stream for the SaaS provider while offering clients a clear cost structure tied to their usage.
- Revenue-sharing models: Particularly popular in sectors with large transaction volumes, such as education or e-commerce, this revenue-share model aligns the SaaS provider's success with that of their clients. By taking a small percentage of the transactions processed, the provider is incentivised to improve collection rates and efficiency.
These revenue models ensure a steady, recurring income for SaaS providers, creating a foundation for sustainable growth. For clients, they offer the flexibility to scale their AR management capabilities without significant upfront investments.
IODM: A case study in AR automation success
IODM (ASX:IOD) has emerged as a compelling player in the cloud-based accounts receivable management sector, offering a unique value proposition that sets it apart in the financial technology landscape. IODM's platform stands out for its ability to automate cash collection processes, particularly for medium to large enterprises grappling with complex billing cycles.
At the core of IODM's offering is its seamless integration capability with major ERP systems such as Oracle, SAP, Microsoft Dynamics and Xero. This integration is crucial for businesses looking to enhance their cash flow management and optimise working capital without overhauling their existing financial infrastructure.
IODM has carved out a notable niche in the education sector, with its solutions currently utilised by 10 universities in the United Kingdom. This foothold in the education market showcases the platform's versatility and its ability to address the unique challenges faced by institutions managing intricate billing systems for a diverse, often international, student body.
Financial performance and growth strategy
The company's financial trajectory is noteworthy, with reported cash receipts of AU$2.05 million for the fiscal year 2024, marking a substantial 70 percent increase from the previous year. This growth underscores the effectiveness of IODM's revenue model, which cleverly combines revenue sharing and license fees, providing a stable and scalable income stream.
IODM's strategic partnerships play a pivotal role in its market expansion and service enhancement. Collaborations with Convera for the education sector and Corpay for enterprise clients not only reinforce its market position but also facilitate growth without the need for extensive in-house sales teams. These partnerships are particularly crucial as IODM sets its sights on expanding into North America, Asia and other European markets, targeting the rising number of international students and the accompanying financial complexities.
Investor takeaway
As we look to the future, the role of SaaS in AR management is set to expand further. Emerging technologies like artificial intelligence and blockchain are poised to enhance the capabilities of these platforms, offering even greater automation, security and predictive analytics.
For investors, IODM presents an intriguing opportunity in the burgeoning fintech sector. The success of companies like IODM points to a broader trend: businesses are increasingly recognising the value of specialised SaaS solutions in managing critical financial processes. As this trend continues, expect to see further innovation in pricing models, integration capabilities and value-added services.
This INNSpired article is sponsored by IODM (ASX:IOD).This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by IODM in order to help investors learn more about the company. IODM is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with IODM and seek advice from a qualified investment advisor.
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10 November
New Generation Atomic Layer Deposition Machine Procured
Specialty semiconductor equipment to accelerate the development of 2D Generation’s next generation chip technology.
Adisyn Ltd (ASX: AI1) (“Adisyn” or the “Company”) is pleased to announce that 2D Generation Ltd (“2DG”) has ordered a highly specialised semiconductor manufacturing system called an Atomic Layer Deposition Machine (“ALD”).
Highlights:
- 2D Generation has ordered highly specialised Atomic Layer Deposition (“ALD”) machine from Beneq
- Beneq is a global leader in ALD equipment with customers spanning the semiconductor and electronics industries
- New generation ALD to complement 2D Generation’s current ALD and accelerate the development of its semiconductor technologies including the graphene coated interconnect
- Installation expected in 5-6 months
- 2D Generation’s semiconductor IP is a critical advancement in semiconductor technology that will enable the next generation of generative AI and semiconductor solutions for data centres and beyond
- Work will continue with 2D Generation’s current equipment
- Adisyn will leverage 2D Generation’s innovative semiconductor solution to generate opportunities in AI1’s target markets including defence applications, data centres and cybersecurity
AI1 entered into a binding Share Purchase Agreement to acquire 2DG, a semiconductor IP business, as announced on 4 November 2024. The companies continue to work together to identify significant opportunities to leverage 2D Generation’s semiconductor solutions and industry relationships to enhance AI1’s offering in its target markets. In furthering that goal, 2DG has ordered a speciality ALD from leading manufacturer Beneq, utilising funds provided by AI1. The companies have entered into a material loan agreement on terms outlined in Annexure A (Loan Agreement Terms).
Atomic Layer Deposition Machine
An ALD machine is utilised in the semiconductor industry to deposit extremely thin layers (down to the atomic layer) of material on to chips. They are found in most semiconductor fabs around the globe.
2DG has ordered an ALD with specific benefits including:
- Liquid source precursor compatible
- Ozone source (O3) compatible
- Reaction chamber for 200 mm wafers, with substrate adapter for 100/150 mm wafers
- Plasma option, deposition temperature up to 400 degrees °C
These features will enable 2DG to achieve a high level of product readiness.
Figure 1. Indicative Beneq ALD System
Beneq is the home of the ALD. In 1984, Beneq established the world’s first industrial production using ALD. Today, Beneq lead the market with products for R&D, semiconductor device fabrication, 3D and batch production, ultra-fast spatial ALD, and roll-to-roll ALD.
Paul Rich, 2DG’s Technology Lead, says“we have spent months specifying the perfect ALD system for our requirements. We canvassed all the major suppliers and decided that Beneq was best positioned to deliver the system that meets our complex technology requirements. I have spent my career working within thin film deposition to advance semiconductor technology and I am confident that with this ALD we will be able to accelerate development towards a commercially viable product that the industry needs. We are continuing development efforts with existing equipment to be ready for the new ALD installation so that we can hit the ground running.”
Paul Rich has more than 35 years of experience in the semiconductor industry. Paul was the Vice President for Technology and Engineering at SPTS Technologies which is owned by KLA Corporation (NASDAQ:KLAC, US$91B market cap), where he managed the product development team until December 2022. SPTS develops and manufactures advanced wafer processing solutions for the world's leading semiconductor and microelectronic device manufacturers. Paul graduated from Bath University in 1987 with a B.Sc in Physics. He has published numerous technical articles and has several patents relating to plasma processing.
Click here for the full ASX Release
This article includes content from Adisyn, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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03 November
Binding Agreement to Acquire 2D Generation
Adisyn Ltd (ASX: AI1) (“Adisyn” or the “Company”) is pleased to announce, further to its previous announcement on 23 October 2024, that it has now entered into a binding Share Purchase Agreement (“SPA”) to acquire 100% of the issued share capital of 2D Generation Ltd (“2DG or 2D Generation”) (“Acquisition”).
Acquisition to capture enormous opportunities with 2D Generation’s semiconductor technology and the Connecting Chips European Union Joint Undertaking, which includes partners NVIDIA, Valeo, and Applied Materials.
Highlights:
- Adisyn has entered into a binding agreement to acquire 100% of semiconductor IP business, 2D Generation
- Adisyn will leverage 2D Generation’s innovative semiconductor solution to generate opportunities in AI1’s target markets including defence applications, data centres and cybersecurity
- 2D Generation’s semiconductor IP is a critical advancement in semiconductor technology that will enable the next generation of generative AI and semiconductor solutions for data centres and beyond
- The semiconductor market is thriving as the data and computing power required for generative AI continues to grow exponentially – with the acquisition of 2D Generation, Adisyn will be well positioned to benefit from this significant technological opportunity
- 2D Generation is a partner in the EU's Connecting Chips Joint Undertaking with research and innovation partners including NVIDIA, IMEC, Valeo, Applied Minerals, NXP, and Unity
- Completion of the previously announced $3m (before costs) capital raise
AI1 entered into a Collaboration Agreement with 2DG, a semiconductor IP business, as announced on 15 July 2024. The companies have since continued to work together and identified significant opportunities to leverage 2D Generation’s semiconductor solutions and industry relationships to enhance AI1’s offering in its target markets, as well as leverage each other’s business partners to improve market penetration.
Adisyn is delighted to advise that the companies have reached binding terms for AI1 to acquire 100% of the issued share capital of 2D Generation Ltd. The key terms of the Acquisition are included in Annexure A of this announcement (Share Purchase Agreement Terms). Completion of the Acquisition remains subject to satisfaction of various Conditions Precedent outlined in Annexure A.
The Acquisition is a critical move forward for AI1's services businesses for data centres, managed IT, cybersecurity, and generative AI. The Acquisition allows AI1 and 2DG to focus on developing capital- light semiconductor IP solutions for the data centre, cybersecurity, and managed IT business segments rather than competing in the high-capital expenditure (capex) infrastructure space. Based on the Terms of the Acquisition, Adisyn will be able to progress the development and commercialisation of 2D Generation’s unique Intellectual Property (IP).
2DG is a partner in the European Union's Joint Undertaking, ConnectingChips, which has been specifically formed and funded to fast-track the next generation of semiconductor chips to cope with generative AI's ever-expanding processing requirements, need for speed, and lower power consumption. 2D Generation’s solution has the potential to substantially improve the efficiency of data centres and generative AI solutions, as well a range of other real-world technological applications. It is generally accepted that the current generation of AI chips will reach their useful limits by 2030 or sooner.
Capital Raise
As announced on 23 October 2024, the Company has received firm commitments to raise $3 million (before costs) for an equity capital placement, which was subject to the entering into the SPA which has now been satisfied (“Capital Raise”). The placement raised $3,000,000 (before costs) through the issue of 60,000,000 Shares at an issue price of $0.05 each (Placement Shares) together with 1 free attaching Option (exercisable at $0.075 within 3 years of Issue) for every 4 Shares subscribed for and issued, representing 15,000,000 Options (Placement Options).
The Placement Shares will be issued utilising the Company’s existing placement capacity under Listing Rules 7.1 (36,351,000 Shares) and 7.1A (23,649,000 Shares), and will rank pari passu with existing AI1 shares on issue. Allotment of the Placement Shares is expected to occur on or around 6 November 2024. The 15,000,000 Placement Options will be issued subject to shareholder approval.
Background to 2D Generation’s Solution
2DG have developed a patented solution allowing graphene coating at sub-300 degrees centigrade, an achievement that has never been successfully completed prior to 2DG. This opens the door to the next generation of semiconductors capable of further miniaturisation, lower power consumption, less heat and greater computational power.
2D Generation’s innovative technology centres around the aim of improving the performance and capabilities of the interconnect.
- An interconnect in a semiconductor refers to the conductive pathways that connect different components or regions within an integrated circuit (IC).
- These interconnects are crucial for the functionality of the IC as they facilitate the flow of electrical signals between transistors, capacitors, resistors, and other elements on the chip.
- Interconnects can be made of various materials, typically metals like aluminium or copper, and they can be implemented in different layers within the semiconductor structure.
The interconnect field has emerged as a critical technological barrier hindering industry progress. Overcoming this challenge is perceived as the "Holy Grail" within the industry, promising accelerated rates and continued miniaturisation. Industry giants recognise that the entity with a viable solution stands to gain a substantial competitive advantage.
Despite large scale investment from major companies such as ASM International NV (ASMI), Tokyo Electron Limited (TEL), Lam Research Corporation and Veeco Instruments, a significant breakthrough in this domain is still elusive.
Enter 2D Generation. With its groundbreaking innovation enabling in-situ ALD graphene deposition on the interconnect at below 300 degrees Celsius. An achievement that has never been done successfully prior to 2DG. This focus on graphene integration sets 2D Generation apart, presenting a disruptive technology that has the potential to reshape the landscape of semiconductor manufacturing.
2D Generation has demonstrated the deposition of graphene using an Atomic Layer Deposition (ALD) machine. This technological breakthrough holds the potential to revolutionise production devices, enabling faster and more advanced chip manufacturing compared to competitors.
2D Generation is continuing to develop the technology with the aim of commercialising via licences with one or multiple major semiconductor manufacturers. In doing so, the developed technologies will aim to align with AI1’s dual track strategy of AI enablement and advanced data centre and cyber security solutions including:
1. Innovative AI Chips: The partnership will focus on creating intellectual property for electronic photonic power and systems on chips (SoC) and their integration into systems in package (SiP) modules.
2. High-Performance Computing: Applications will target AI, data centres, high-performance computing, and other digital industries, including cybersecurity.
3. Environmental Impact: Addressing the scalability limitations and massive energy demands of semiconductors to reduce societal and environmental costs.
Click here for the full ASX Release
This article includes content from Adisyn, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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31 October
Adisyn Ltd (ASX: AI1) – Trading Halt
Description
The securities of Adisyn Ltd (‘AI1’) will be placed in trading halt at the request of AI1, pending it releasing an announcement. Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Monday, 4 November 2024 or when the announcement is released to the market.
ASX Compliance
Click here for the full ASX Release
This article includes content from Adisyn, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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23 October
Adisyn Ltd (ASX: AI1) – Reinstatement to Quotation
Description
The suspension of trading in the securities of Adisyn Ltd (‘AI1’) will be lifted immediately following the release by AI1 of an announcement.
ASX Compliance
Click here for the full ASX Release
This article includes content from Adisyn, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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23 October
Proposed Acquisition of 2D Generation and Capital Raise
The progression of the collaboration to bring forward enormous opportunities with 2D Generation and the Connecting Chips European Union Joint Undertaking, which includes partners NVIDIA, Valeo, and Applied Materials.
Adisyn Ltd (ASX: AI1) (“Adisyn” or the “Company”) is pleased to announce the proposed acquisition of 100% of the issued share capital of 2D Generation Ltd (“2DG”) (“Proposed Acquisition”) and associated capital raise (“Capital Raise”).
Highlights:
- Adisyn has entered into formal negotiations to acquire 100% of semiconductor IP business, 2D Generation
- Adisyn will leverage 2D Generation’s innovative semiconductor solution to generate opportunities in AI1’s target markets including defence applications, data centres and cybersecurity
- 2D Generation’s semiconductor IP is a critical advancement in semiconductor technology that will enable the next generation of generative AI and semiconductor solutions for data centres and beyond
- The semiconductor market is thriving as the data and computing power required for generative AI continues to grow exponentially – with the acquisition of 2D Generation, Adisyn will be well positioned to benefit from this significant technological opportunity
- 2D Generation is a partner in the EU's Connecting Chips Joint Undertaking with research and innovation partners including NVIDIA, IMEC, Valeo, Applied Minerals, NXP, and Unity
- Firm commitments received to raise $3m (before costs), subject to execution of the Proposed Acquisition Agreement
AI1 entered into a Collaboration Agreement with 2DG, a semiconductor IP business, as announced on 15 July 2024. The companies have since continued to work together and identified significant opportunities to leverage 2D Generation’s semiconductor solutions and industry relationships to enhance AI1’s offering in its target markets, as well as leverage each other’s business partners to improve market penetration.
Adisyn is delighted to advise that the companies have reached indicative terms for AI1 to acquire 100% of the issued share capital of 2D Generation Ltd which they will now look to finalise into a legally binding agreement. The Company and 2DG are working towards finalising and executing a binding share purchase agreement (SPA), which is expected to be executed within 3 weeks of todays announcement. The key indicative terms of the Proposed Acquisition are included in Annexure A of this announcement (Indicative Terms). Should the companies execute a binding Share Purchase Agreement, settlement of the Proposed Acquisition will still remain subject to satisfaction of various Conditions Precedent outlined in Annexure A.
The Proposed Acquisition is a critical move forward for AI1's ever-expanding services businesses for data centres, managed IT, cybersecurity, and generative AI. The Proposed Acquisition will allow AI1 and 2DG to focus on developing capital-light semiconductor IP solutions for the data centre, cybersecurity, and managed IT business segments rather than competing in the high-capital expenditure (capex) infrastructure space. Based on the Indicative Terms of the Proposed Acquisition, Adisyn will be able to control the process in the development of 2D Generation’s unique Intellectual Property (IP) and maintain full ownership of the developed IP.
2DG is a partner in the European Union's Joint Undertaking, ConnectingChips, which has been specifically formed and funded to fast-track the next generation of semiconductor chips to cope with generative AI's ever-expanding processing requirements, need for speed, and lower power consumption. 2D Generation’s solution has the potential to substantially improve the efficiency of data centres and generative AI solutions, as well a range of other real-world technological applications. It is generally accepted that the current generation of AI chips will reach their useful limits by 2030 or sooner.
This announcement should be read in conjunction with the Indicative Terms. The Company is optimistic about concluding the SPA and the Proposed Acquisition. However, the Indicative Terms remain subject to negotiation by the parties and the execution of the SPA for the Proposed Acquisition. Completion under the SPA will be subject to a number of conditions, including due diligence, as set out in Annexure A. No binding agreement has been reached at this time and there is no certainty that the Proposed Acquisition will eventuate. The Indicative Terms (and this announcement) is preliminary, incomplete and non-binding and does not constitute a commitment to proceed with the Proposed Acquisition.
Capital Raise
The Company has received firm commitments from new and existing sophisticated investors to raise $3 million via an equity capital placement, which is subject to the entering into of the formal share purchase agreement for the Proposed Acquisition. The Capital Raise will raise $3,000,000 (before costs) through the issue of 60,000,000 Shares at an issue price of $0.05 each (Placement Shares) together with 1 free attaching Option (exercisable at $0.075 within 3 years of Issue) for every 4 Shares subscribed for and issued, representing 15,000,000 Options (Placement Options).
The price for the Placement Shares represents an 9% discount to the Company’s last closing price, and a 6% premium to the Company’s 5 day VWAP. Completion of the Capital Raise is subject to finalising and executing the binding SPA for the Proposed Acquisition. The Placement Shares will be issued utilising the Company’s existing placement capacity under Listing Rules 7.1 and 7.1A. The 15,000,000 Placement Options will be issued subject to shareholder approval.
Click here for the full ASX Release
This article includes content from Adisyn, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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