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.

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