Proposed Acquisition of 2D Generation and Capital Raise

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.

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