Vysarn Limited Plans Issuance of Up to 4.76 Million Deferred Shares Valued at AUD 5 Million for WellTech Acquisition

Strategic Purpose of Deferred Share Consideration in WellTech Acquisition

Vysarn Limited's decision to issue deferred consideration shares as part of the WellTech acquisition reflects a performance-based transaction structure. This approach aligns the interests of both parties by linking share issuance to WellTech achieving predetermined EBITDA targets within a 12-month earn-out period. Deferred consideration shares offer transaction flexibility while safeguarding shareholder value by ensuring performance milestones are met before full consideration is delivered.

This method is common in corporate acquisitions where post-acquisition performance validation is critical. By tying share issuance to financial metrics, Vysarn incentivizes WellTech's operational success within its portfolio and provides investors with transparency on the acquired asset's performance prior to finalizing share capital commitments.

Details of Proposed Share Issuance and Valuation

The company intends to issue up to 4,761,905 ordinary fully paid shares valued at approximately AUD 5 million, contingent on WellTech meeting EBITDA targets during the 12-month earn-out. While the exact EBITDA targets and share issuance formula were not disclosed, the valuation implies an issuance price near AUD 1.05 per share based on the stated consideration value.

The newly issued shares will rank equally with existing ordinary shares, ensuring no preferential rights. This standard practice in acquisition-related placements maintains consistency across Vysarn's share capital structure.

Compliance with ASX Listing Rules and Shareholder Approval

Vysarn confirmed that the proposed issuance fits within its existing 15% placement capacity under ASX Listing Rule 7.1, thus no additional shareholder approval is required. This facilitates a streamlined process without the need for shareholder meetings or votes, enabling timely execution subject to performance conditions.

The company also clarified that no shares will be issued under the additional 10% placement capacity of Listing Rule 7.1A, reflecting a conservative approach aligned with shareholder interests. Further transaction details were provided in a separate company update dated 28 July 2026.

Voluntary Escrow and Trading Restrictions

The deferred shares will be subject to a 12-month voluntary escrow starting from the issue date on 1 October 2027, restricting transfer or sale during this period. This lock-up aligns with the earn-out timeline, ensuring shares remain held throughout the integration phase and protecting market stability.

The escrow arrangement prevents premature selling by WellTech stakeholders and mitigates share price volatility. Vysarn has established compliance measures to ensure adherence to relevant Corporations Act provisions regarding securities transfer restrictions.

Issuance Costs and Administrative Details

Vysarn will incur standard ASX share issue fees managed through its share registry, though specific amounts were not disclosed. No lead manager, broker, or underwriting arrangements are involved, indicating the company will internally handle the issuance, avoiding brokerage or advisory fees.

Context of WellTech Acquisition and Integration Timeline

This share issuance forms part of the consideration for Vysarn's strategic acquisition of WellTech, representing a significant addition to its portfolio. While total acquisition price and detailed operational information were not disclosed, the AUD 5 million deferred consideration highlights WellTech's material value. The earn-out period begins upon acquisition completion, anticipated before the 1 October 2027 issuance date, allowing a full operational cycle prior to share issuance.

Investors seeking detailed information on the acquisition strategy and EBITDA targets should refer to the 28 July 2026 company update.

Impact on Share Capital and Potential Dilution

The issuance of up to 4,761,905 shares will increase Vysarn's issued capital by that amount, subject to WellTech meeting EBITDA targets. The maximum dilution is capped at this number, though exact percentage impact was not disclosed. Utilizing the existing 15% placement capacity indicates prior capital management planning by the board.

If performance targets are not met, share issuance may be reduced or avoided, mitigating dilution effects.

Dividend Policy and Shareholder Returns

Vysarn confirmed no changes to its dividend or distribution policy will result from this share issuance. This suggests the WellTech acquisition and deferred consideration shares are not expected to materially affect capital allocation or shareholder returns. Income-focused investors can anticipate consistent dividend policies pre- and post-acquisition.

Future financial results and operational integration outcomes should be monitored for any impact on distributions.

Timeline and Conditions for Share Issuance

The share issuance is scheduled for 1 October 2027, marking a key milestone for the acquisition. No outstanding external approvals were disclosed, implying readiness to proceed once performance conditions are met.

The issuance depends on WellTech achieving EBITDA targets during the 12-month earn-out, determining the final number of shares issued. The 12-month escrow period will last until approximately 1 October 2028, restricting trading of these shares until then. Investors should follow Vysarn's regular disclosures for updates on WellTech's performance relative to earn-out targets.