4DS MEMORY LIMITED — AGM Information 2017

Nov 29, 2017

4DS MEMORY LIMITED

ACN 145 590 110

NOTICE OF GENERAL MEETING

A general meeting of the Company will be held at Level 2, 52 Kings Park Road, West Perth WA 6005 on Monday, 8 January 2018 at 10.00 am (AWST)

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

Should you wish to discuss any matter please do not hesitate to contact the Company by telephone on (08) 6377 8043.

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ACN 145 590 110

4DS MEMORY LIMITED

NOTICE OF GENERAL MEETING

Notice is hereby given that a general meeting of Shareholders of 4DS Memory Limited ( Company ) will be held at Level 2, 52 Kings Park Road, West Perth WA 6005 on Monday, 8 January 2018 at 10.00 am (AWST) ( Meeting ).

The Explanatory Memorandum provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders on Saturday, 6 January 2018 at 10.00 am (AWST).

Terms and abbreviations used in this Notice and Explanatory Memorandum are defined in Section 8.

AGENDA

1. Resolution 1 – Ratification of issue of Issued Placement Shares

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution :

"That, for the purposes of Listing Rule 7.4, and for all other purposes, Shareholders approve and ratify the prior issue by the Company of 80,125,000 Shares ( Issued Placement Shares ) each at an issue price of $0.04 on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person who participated in the issue of the Issued Placement Shares and any of their associates.

However, the Company will not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. Resolution 2 – Authority for Mr James Dorrian to participate in the Placement

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution :

"That, for the purpose of Listing Rule 10.11, and for all other purposes, Shareholders approve and authorise Mr James Dorrian (and/or his nominees) to participate in the Placement to the

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extent of up to 6,250,000 Shares ( Director Placement Shares ) each at an issue price of $0.04 on the terms and conditions set out in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by Mr James Dorrian and his nominee/s and any associates of those persons.

However, the Company will not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) it is cast by the Chairman as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. Resolution 3 – Ratification of grant of Adviser Options

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution :

"That, for the purposes of Listing Rule 7.4, and for all other purposes, Shareholders approve and ratify the prior grant by the Company of 5,000,000 Options with an exercise price of $0.07 per Option and an expiry date of 30 June 2020 ( Adviser Options ) to the Lead Manager (or its nominees) on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by the Lead Manager and its nominees, and any of their associates.

However, the Company will not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

4. Resolution 4 – Ratification of grant of Employee Options

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution :

"That, for the purposes of Listing Rule 7.4, and for all other purposes, Shareholders approve and ratify the prior grant by the Company of 28,275,000 Employee Options issued on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by any person who participated in the issue of the Employee Options the subject of this Resolution and any of their associates.

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However, the Company will not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

5. Resolution 5 – Authority to grant Employee Options to Dr Guido Arnout

To consider and, if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 10.11, Chapter 2E of the Corporations Act, and for all other purposes, Shareholders approve and authorise the Directors to grant 14,000,000 Employee Options to Dr Guido Arnout (or his nominees) on the terms and conditions set out in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by Dr Guido Arnout and his nominees, and any of their associates.

However, the Company will not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Dated 15 November 2017

BY ORDER OF THE BOARD

==> picture [47 x 55] intentionally omitted <==

Mr Peter Webse

Company Secretary

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4DS MEMORY LIMITED ACN 145 590 110

EXPLANATORY MEMORANDUM

1. Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Meeting to be held at Level 2, 52 Kings Park Road, West Perth WA 6005 on Monday, 8 January 2018 at 10.00 am (AWST).

This Explanatory Memorandum should be read in conjunction with and forms part of the accompanying Notice. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolutions set out in the Notice.

A Proxy Form is located at the end of the Explanatory Memorandum.

2. Action to be taken by Shareholders

Shareholders should read the Notice and this Explanatory Memorandum carefully before deciding how to vote on each Resolution.

2.1 Proxies

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a 'proxy') to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions thereon. Lodgment of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

Please note that:

• (a) a member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy;

• (b) a proxy need not be a member of the Company; and

• (c) a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

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2.2 Voting Prohibition by Proxy Holders

In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote on the basis of that appointment on Resolutions 4 and 5 if:

• (a) the person is either:

• (i) a member of the Key Management Personnel of the Company; or

• (ii) a Closely Related Party of such a member, and

• (b) the appointment does not specify the way the proxy is to vote on Resolutions 4 and 5,

however, the prohibition does not apply if:

• (c) the proxy is the Chair; and

• (d) the appointment expressly authorises the Chair to exercise the proxy even if Resolutions 4 and 5 are connected directly or indirectly with remuneration of a member of the Key Management Personnel of the Company.

3. Resolution 1 – Ratification of issue of Issued Placement Shares

3.1 General

As announced to ASX on 3 November 2017, the Company has completed a $3.45 million capital raising through a placement of 86,250,000 Shares at an issue price of $0.04 per Share ( Placement ). Just prior to the issue of the Shares under the Placement, the Company determined to issue an additional 125,000 Shares under the Placement, such that the Placement is comprised of:

• (a) 80,125,000 Shares were issued to professional and sophisticated investors on 10 November 2017 (the Issued Placement Shares); and

• (b) 6,250,000 Shares to be issued to Director Mr James Dorrian (and/or his nominees) subject to Shareholder approval (the Director Placement Shares). See Section 4 for further details.

As noted in the Company’s announcement of 3 November 2017, the issue price under the Placement represented a 9% discount to the volume weighted average price for Shares for the 5 days up to and including Tuesday, 31 October 2017 of $0.0437 (being the last trading day prior to the Company going into trading halt pending the announcement of the Placement).

The Placement was significantly oversubscribed and the proceeds raised will be used to fund the Company’s ongoing development activities relating to its Interface Switching ReRAM Storage Class Memory technology and also to achieve key strategic and technical milestones.

The Issued Placement Shares were issued within the Company’s 15% annual limit permitted by Listing Rule 7.1 without the need for Shareholder approval.

Listing Rule 7.1 provides that a company must not (subject to specified exceptions), without the approval of shareholders, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

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Listing Rule 7.4 provides that where a company in general meeting ratifies a previous issue of securities made pursuant to Listing Rule 7.1, provided that the previous issue did not breach Listing Rule 7.1, the issue of those securities will be deemed to have been with shareholder approval for the purpose of Listing Rule 7.1.

Resolution 1 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Issued Placement Shares.

By ratifying this issue (and the other issues of Shares and Options proposed to be approved and ratified by Shareholders at the Meeting the subject of this Notice), the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in Listing Rule 7.1 during the next 12 months, without the requirement to obtain prior Shareholder approval.

Resolution 1 is an ordinary resolution.

3.2 Specific Information Required by Listing Rule 7.5

The following information is provided for the purposes of Listing Rule 7.5:

• (a) The Issued Placement Shares (comprising 80,125,000 Shares) were issued by the Company on 10 November 2017.

• (b) The Issued Placement Shares were issued at an issue price of $0.04 each.

• (c) The Issued Placement Shares are fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company.

• (d) The Issued Placement Shares were issued to professional and sophisticated investors who are not related parties of the Company.

• (e) The funds raised from the issue of the Issued Placement Shares will be applied to fund the Company’s ongoing development activities relating to its Interface Switching ReRAM Storage Class Memory technology and also to achieve key strategic and technical milestones.

• (f) A voting exclusion statement is included in the Notice.

4. Resolution 2 – Authority for Mr James Dorrian to participate in the Placement

4.1 Background

As noted in the Company’s announcement of 3 November 2017, Director Mr James Dorrian has committed to invest $250,000 of the Placement total, subject to Shareholder approval.

Further details of the Placement are set out in Section 3.

Listing Rule 10.11 provides that a company must not (subject to specified exceptions) issue or agree to issue equity securities to a related party without the approval of shareholders. Mr Dorrian is a related party of the Company by virtue of being a Director. Therefore, approval is required under Listing Rule 10.11 for the issue of 6,250,000 Shares (the Director Placement Shares) to be issued to Director Mr James Dorrian (and/or his nominees) at an issue price of $0.04 per Share.

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The Company considers that Mr Dorrian’s participation in the Placement is on arm’s length terms because he is participating in the Placement on the same terms as the unrelated participants in the Placement who received the Issued Placement Shares, and the terms of the Placement, and in particular the issue price, were determined in consultation with the Lead Manager. Accordingly, the Company has determined that it is not necessary to seek Shareholder approval for the issue of the Director Placement Shares to Mr Dorrian pursuant to Chapter 2E of the Corporations Act.

Resolution 2 seeks Shareholder approval pursuant to Listing Rule 10.11 for the issue of the Director Placement Shares to Mr Dorrian. If approval is given under Listing Rule 10.11, Shareholder approval is not required under Listing Rule 7.1. Accordingly, Shareholder approval of the issue of the Director Placement Shares means that their issue will not reduce the Company's 15% placement capacity under Listing Rule 7.1.

Resolution 2 is an ordinary resolution.

4.2 Specific information required by Listing Rule 10.13

For the purposes of Listing Rule 10.13, information regarding the issue of the Director Placement Shares is provided as follows:

• (a) The maximum number of Shares to be issued to Mr Dorrian (and/or his nominees) is 6,250,000 Shares.

• (b) The Company will issue the Director Placement Shares no later than one month after the date of the Meeting (or such longer period as ASX may in its discretion allow).

• (c) Mr Dorrian is a related party of the Company by virtue of being a Director.

• (d) The Director Placement Shares will be issued at an issue price of $0.04 per Share.

• (e) The Director Placement Shares will comprise fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company.

• (f) The funds raised from the issue of the Issued Placement Shares will be applied to fund the Company’s ongoing development activities relating to its Interface Switching ReRAM Storage Class Memory technology and also to achieve key strategic and technical milestones.

• (g) A voting exclusion statement is included in the Notice.

5. Resolution 3 – Ratification of grant of Adviser Options

5.1 General

As noted in the Company’s announcement of 3 November 2017, the Company agreed to grant 5,000,000 unlisted Options exercisable at $0.07 each, expiring on 30 June 2020 ( Adviser Options ) Mac Equity Partners ( Lead Manager ) who acted as the lead manager and bookrunner to the Placement.

The Company granted the Adviser Options to the Lead Manager (and/or its nominees) on 10 November 2017.

The Company granted the Adviser Options within the Company’s 15% annual limit permitted by Listing Rule 7.1 without the need for Shareholder approval.

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A summary of Listing Rules 7.1 and 7.4 is provided in Section 3.1. Resolution 3 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the grant of the above Adviser Options. By ratifying this issue (and the other issues of Shares and Options proposed to be ratified by Shareholders at the Meeting the subject of this Notice), the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in Listing Rule 7.1 during the next 12 months, without the requirement to obtain prior Shareholder approval.

Resolution 3 is an ordinary resolution.

5.2 Specific Information Required by Listing Rule 7.5

For the purposes of Listing Rule 7.5 information regarding Resolution 3 is provided as follows:

• (a) The 5,000,000 Adviser Options were granted by the Company on 10 November 2017.

• (b) The Adviser Options were granted for nil cash consideration as part of the fees for acting as lead manager and bookrunner to the Placement. Accordingly, no funds were raised from the grant of the Adviser Options.

• (c) The Adviser Options are exercisable at $0.07 each on or before 30 June 2020. The other terms of the Adviser Options are set out in Schedule 1. Shares issued on exercise of the Adviser Options are fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company.

• (d) The Adviser Options were granted to the Lead Manager (or its nominees), each of whom is not a related party of the Company.

• (e) A voting exclusion statement is included in the Notice.

6. Resolution 4 – Ratification of grant of Employee Options

6.1 General

As announced to the market on 30 October 2017, the Company has:

• (a) issued 28,275,000 Employee Options as incentives to its US based employees and consultants; and

• (b) agreed, subject to Shareholder approval, to issue a further 14,000,000 Employee Options to Managing Director, Dr Guido Arnout (or his nominees). The Employee Options to be granted to Dr Arnout are dealt with under Resolution 5 (see Section 7 for further details).

The Employee Options are exercisable at $0.042 each, and expire on 27 October 2022. 30% of the Employee Options vested on grant, and the remainder at a rate of 10% per quarter.

All unvested Employee Options will expire on termination of employment for any reason whatsoever, unless the Board determines otherwise (in its absolute discretion) based on the relevant employee’s performance during the term and the circumstances of the termination, in which case the Employee Options will continue to vest in accordance with the vesting schedule and expire on the expiry date referred to above.

In certain circumstances, unvested Employee Options may become vested on the occurrence of certain change of control type events more fully described in Schedule 2 (subject to Board discretion in some cases).

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The full terms and conditions of the Employee Options are set out in Schedule 2.

All of the Employee Options (other than the Employee Options to be granted to Dr Arnout under Resolution 5) were issued within the Company’s 15% annual limit permitted under Listing Rule 7.1, without the need for Shareholder approval.

A summary of Listing Rules 7.1 and 7.4 is provided in Section 3.1. Resolution 4 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the grant of the Employee Options (other than the Employee Options to be granted to Dr Arnout under Resolution 5). By ratifying this issue (and the other issues of Shares and Options proposed to be ratified and approved by Shareholders at the Meeting the subject of this Notice), the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in Listing Rule 7.1 during the next 12 months, without the requirement to obtain prior Shareholder approval.

Resolution 4 is an ordinary resolution.

6.2 Specific Information Required by Listing Rule 7.5

For the purposes of Listing Rule 7.5 information regarding Resolution 4 is provided as follows:

• (a) 28,275,000 Employee Options were granted by the Company on 30 October 2017. This does not include the Employee Options to be granted to Dr Arnout under Resolution 5.

• (b) The Employee Options were issued for nil cash consideration as an incentive and as consideration for services to the Company, therefore no funds were raised from the issue.

• (c) The Employee Options are exercisable at $0.042 each on or before 27 October 2022. The vesting dates and treatment of the Employee Options on cessation of employment or a change of control are summarised in Section 6.1. Shares issued on exercise of the Employee Options will be fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company. The full terms and conditions of the Employee Options are set out in Schedule 2.

• (d) The Employee Options were issued to employees and consultants of the Company, none of which is a related party of the Company.

• (e) A voting exclusion statement is included in the Notice.

7. Resolution 5 – Authority to grant Employee Options to Dr Guido Arnout

7.1 General

As announced to the market on 30 October 2017, the Company has agreed, subject to obtaining Shareholder approval, to grant 14,000,000 Employee Options to Managing Director, Dr Guido Arnout (or his nominees).

The Employee Options will be granted for nil cash consideration. The Employee Options will be exercisable at $0.042 each, on or before 27 October 2022. 30% of the Employee Options vested on grant, and the remainder at a rate of 10% per quarter.

All unvested Employee Options will expire on termination of employment for any reason whatsoever, unless the Board determines otherwise (in its absolute discretion) based on

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Dr Arnout’s performance during the term and the circumstances of the termination, in which case the Employee Options will continue to vest in accordance with the vesting schedule and expire on the expiry date referred to above.

In certain circumstances, unvested Employee Options may become vested on the occurrence of certain change of control type events more fully described in Schedule 2 (subject to Board discretion in some cases).

The full terms and conditions of the Employee Options are set out in Schedule 2.

In the Company’s present circumstances, the Board considers that the incentive to Dr Arnout that will be represented by the grant of these Employee Options is a cost effective and efficient award for the Company to make to appropriately incentivise his continued performance, as opposed to alternative forms of incentive, such as payment of cash compensation, and are consistent with the strategic goals and targets of the Company.

The Board considers that the experience of Dr Arnout greatly assists the development of the Company. As such, the Board believes that the number of Employee Options to be granted to Dr Arnout is commensurate with his value to the Company and is consistent with remuneration and incentivisation standards in the industry and sector in which the Company operates.

7.2 Chapter 2E of the Corporations Act and ASX Listing Rule 10.11

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The grant of Employee constitutes giving a financial benefit and Dr Arnout is a related party of the Company by virtue of being a Director.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

As the grant of the Employee Options involves the issue of securities to a related party of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies.

It is the view of the Directors that the exceptions set out in sections 210 to 216 of the Corporations Act and ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of the Employee Options to Dr Arnout.

Approval pursuant to ASX Listing Rule 7.1 is not required for the grant of the Employee Options as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the grant of Employee Options will not be included in the use of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

Resolution 5 is an ordinary resolution.

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7.3 Specific information required under Listing Rule 10.13 and section 219 of the Corporations Act

For the purposes of Listing Rule 10.13 and section 219 of the Corporations Act, information regarding the Employee Options to be granted under Resolution 5 is provided as follows:

• (a) The Employee Options will be granted to Dr Guido Arnout and/or his nominees.

• (b) The maximum number of Employee Options the Company will grant to Dr Arnout (or his nominees) pursuant to Resolutions 5 is 14,000,000 Employee Options.

• (c) The Employee Options will be granted no later than one month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules).

• (d) The Employee Options will be granted for nil consideration as they are being issued as incentive based remuneration. Accordingly, no funds will be raised from the issue of the Employee Options.

• (e) Dr Arnout is a related party of the Company by virtue of being a Director.

• (f) The Employee Options are exercisable at $0.042 each on or before 27 October 2022. The vesting dates and treatment of the Employee Options on cessation of employment or a change of control are summarised in Section 7.1. Shares issued on exercise of the Employee Options will be fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company. The full terms and conditions of the Employee Options are set out in Schedule 2.

• (g) A voting exclusion statement is included in the Notice.

• (h) If all of the Employee Options granted under Resolution 5 are exercised it may result in a dilution of all other Shareholders’ holdings in the Company by 0.46% based on the Shares currently on issue (assuming no Options other than the Employee Options to be granted under Resolution 5 are exercised).

• (i) Dr Arnout receives the amount of US$240,000 per annum as Directors' fees and has received the amount of AUD$526,506 since his appointment as a Director on 7 December 2015.

• (j) As at the date of this Notice, Dr Arnout has an interest in the following Securities of the Company:

• (i) 1,315,841 Shares;

• (ii) a further 603,101 Shares (escrowed until 17 December 2017); and

• (iii) 36,458,333 unlisted Options exercisable at $0.02 each on or before 30 June 2020 (escrowed until 17 December 2017).

• (k) On the basis of the assumptions below, the Company has determined the technical value of the Employee Options to be granted under Resolution 5 to be as follows:

• (i) Value of each Employee Option: $0.0564; and

• (ii) Total Value of Employee Options: $789,600.

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The value may go up or down after that date as it will depend on the future price of a Share. Black & Scholes methodology has been used, together with the following assumptions:

• (i) the market price per Share as at the valuation date of 8 November 2017 is $0.063;

• (ii) the exercise price of the Employee Options is $0.042;

• (iii) the Employee Options will expire on 27 October 2022;

• (iv) the price volatility of the Shares is approximately 135%;

• (v) the risk-free interest rate is 2.12%; and

• (vi) dividends are unlikely to be paid during the life of the Employee Options.

• (l) The market price of Shares would normally determine whether or not the Employee Options will be exercises. If the Employee Options are exercised at a price that is lower than the price at which Shares are trading on ASX, there may be a perceived cost to the Company.

• (m) Historical share price information for the 12 months prior to the date of this Notice is as follows:

as follows:
	Price	Date
Highest	$0.068	7 November 2017
Lowest	$0.02	28 April 2017
Last	$0.044	14 November 2017

(n) As Shareholder approval is sought under Listing Rule 10.11, approval under Listing Rule 7.1 is not required.

• (o) Other than Dr Arnout, no Director has a personal interest in the outcome of Resolution 5.

• (p) All of the Directors (other than Dr Arnout) recommend that Shareholders vote in favour of Resolution 5 as the Employee Options will provide a key component of the incentive portion of Dr Arnout’s remuneration in order to retain his services. Dr Arnout has an interest in the outcome of Resolution 5 and therefore believes it inappropriate to make a recommendation.

• (q) In forming their recommendations, the Directors (other than Dr Arnout) considered the experience of the other Directors, the current market price of Shares, the current market practices (based on a review of publicly available information relating to the remuneration structures of several of its ASX listed peer companies) when determining the number of Employee Options to be granted as well as the exercise price, expiry date and vesting conditions of those Employee Options.

• (r) Other than the information above and otherwise in this Explanatory Memorandum, the Company believes that there is no other information that would be reasonably required by Shareholders to pass Resolution 5.

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8. Definitions

$ , AUD or A$ means Australian dollars, being the currency used in Australia.

Adviser Options has the meaning in Resolution 3.

Issued Placement Shares has the meaning in Resolution 1.

Lead Manager has the meaning in Section 5.1.

Listing Rules means the listing rules of ASX.

ASX means ASX Limited (ACN 008 624 691) and, where the context permits, the Australian Securities Exchange operated by ASX.

AWST means Australian Western Standard Time, being the time in Perth, Western Australia.

Board means the board of Directors of the Company.

Meeting has the meaning in the introductory paragraph of the Notice.

Notice means this notice of Meeting.

Option means an option to acquire an unissued Share.

Placement has the meaning in Section 3.1.

Business Day means a day on which banks are open for business in Perth, WA, Australia excluding a Saturday, Sunday or public holiday.

Chairman means the person appointed to chair the Meeting.

Company means 4DS Memory Limited (ACN 145 590 110).

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Director Placement Shares has the meaning in Resolution 2.

Employee Options means an Option granted on the terms and conditions set out in Schedule 2.

Proxy Form means the proxy form attached to this Notice.

Resolution means a resolution contained in this Notice.

Section means a section contained in this Explanatory Memorandum.

Schedule means a Schedule to this Explanatory Memorandum.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a shareholder of the Company.

In this Notice, words importing the singular include the plural and vice versa.

Explanatory Memorandum means the explanatory memorandum attached to this Notice.

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Schedule 1 – Terms and Conditions of Adviser Options

1. Entitlement

Each Adviser Option ( Option ) entitles the holder to subscribe for one Share upon exercise of the Option.

2.

Exercise Price and Expiry Date

The Options have an exercise price of $0.07 ( Exercise Price ) and an expiry date of 30 June 2020 ( Expiry Date ).

3.

Exercise Period

The Options are exercisable at any time on or prior to 5.00pm (Perth time) on the Expiry Date.

4.

Notice of Exercise

The Options may be exercised by notice in writing to the Company ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised. Any Notice of Exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

5. Shares issued on exercise

• Shares issued on exercise of the Options will rank equally with the then shares of the Company.

6.

Quotation of Shares on exercise

Application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

7.

Timing of issue of Shares

After an Option is validly exercised, the Company must, within, 15 Business Days of the notice of exercise and receipt of cleared funds equal to the sum payable on the exercise of the Option:

• (a) issue the Share; and

• (b) do all such acts, matters and things to obtain the grant of official quotation of the Share on ASX no later than 5 Business Days after issuing the Shares.

8. Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will give holders of the Options notice of the proposed issue prior to the date for determining entitlements to participate in any such issue.

9.

Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment):

• (a) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue; and

• (b) no change will be made to the Exercise Price.

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10. Adjustment for entitlement issue

If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:

- New exercise price = O - E[P (S+D)]

N+1

Where:

• O = the old Exercise Price of the Option.

• E = the number of underlying Shares into which one Option is exercisable.

• P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

• S = the subscription price of a Share under the pro rata issue.

• D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).

• N = the number of Shares with rights or entitlements that must be held to receive a right to one Share.

11.

Adjustments for reorganisation

If there is any reconstruction of the issued share capital of the Company, the rights of the Optionholders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction.

12. Options not quoted

The Company will not apply to ASX for quotation of the Options.

13. Options transferable

The Options are transferable.

14. Lodgement Instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's share registry

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Schedule 2 – Terms and Conditions of Employee Options

1. Entitlement

Each Employee Option ( Option ) entitles the holder to subscribe for one Share upon exercise of the Option.

2.

Exercise Price and Expiry Date

The Options have an exercise of $0.042 ( Exercise Price ) and an expiry date of 27 October 2022 ( Expiry Date ).

3. Vesting Dates

The Options will vest on the following dates (each a Vesting Date ):

• (i) 30% of the Options: the date the Options are granted;

• (ii) 10% of the Options: 27 January 2018;

• (iii) 10% of the Options: 27 April 2018;

• (iv) 10% of the Options: 27 July 2018;

• (v) 10% of the Options: 27 October 2018;

• (vi) 10% of the Options: 27 January 2019;

• (vii) 10% of the Options: 27 April 2019; and

• (viii) 10% of the Options: 27 July 2019.

4.

Acceleration

• (a) If, in the opinion of the Board:

• (i) the Company enters into a scheme of arrangement with its members or any class thereof pursuant to section 411 of the Corporations Act;

• (ii) a Takeover Period commences; or

• (iii) a person or a group of associated persons having a relevant interest in, subsequent to the grant of the Options, sufficient Shares to give it or them the ability in general meeting to replace all or a majority of the Board in circumstances where such ability was not already held by a person associated with such person or group of associated persons,

(or the Board forms the view that one of those events is likely to occur) then the Board may declare an Option to be free of any conditions of exercise and/or vesting. Options which are so declared may be exercised at any time before they expire.

• (b) An Optionholder may not assign or transfer Options except during a Takeover Period, in which case the Options may only be transferred by the Optionholder to the bidder or its nominees in accordance with the Corporations Act.

• (c) For the purposes of this item 4, a Takeover Period means in relation to a takeover bid in respect of Shares, the period referred to in section 624 of the Corporations Act, provided that where a takeover bid is publicly announced prior to the service of a bidder's statement on the Company in relation to that takeover bid, the takeover period shall be deemed to have commenced at the time of that announcement.

• (d) If any person or corporation having a relevant interest in not less than 90% of the Shares of the Company issues a notice of meeting convening a meeting of shareholders in order to enter into a scheme of arrangement (pursuant to the provisions of the Corporations Act) which, if implemented would result in a person or corporation having a relevant interest in not less than

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90% of the Shares, the Options will be free of any conditions of exercise and/or vesting and may be exercised at any time before they expire.

5. Exercise Period

• (a) The Options will expire on the date which is the first to occur of:

• (i) the Expiry Date; or

• (ii) if paragraph (b) applies, the date of termination of the employment.

• (b) All unvested Options will expire on termination of the employment for any reason whatsoever, unless the Board makes a determination (in its absolute discretion) that:

• (i) the employee's performance during the term; and

• (ii) the circumstances of the termination of the employment,

are such that this paragraph (b) should not apply and the unvested Options should expire on the Expiry Date.

• (c) An Option may only be exercised at any time after the applicable Vesting Date and prior to the date that the Option expires under paragraph (a) above.

6. Notice of Exercise

• (a) The Options may be exercised by notice in writing to the Company ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised. Any Notice of Exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt of the Notice of Exercise together with the full amount of the Exercise Price in cleared funds.

• (b) The Options may only be exercised in multiples of 1,000 on each occasion.

7. Shares issued on exercise

Shares issued on exercise of the Options will rank equally with the then shares of the Company.

8.

Quotation of Shares on exercise

Application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

9.

Timing of issue of Shares

After an Option is validly exercised, the Company must, within, 15 Business Days of the notice of exercise and receipt of cleared funds equal to the sum payable on the exercise of the Option:

• (a) issue the Share; and

• (b) do all such acts, matters and things to obtain the grant of official quotation of the Share on ASX no later than 5 Business Days after issuing the Shares.

10. Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will give holders of the Options notice of the proposed issue prior to the date for determining entitlements to participate in any such issue.

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11. Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment):

• (a) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue; and

• (b) no change will be made to the Exercise Price.

12. Adjustment for entitlement issue

If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:

- New exercise price = O – E[P (S+D)]

N+1

Where:

• O = the old Exercise Price of the Option.

• E = the number of underlying Shares into which one Option is exercisable.

• P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

• S = the subscription price of a Share under the pro rata issue.

• D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).

• N = the number of Shares with rights or entitlements that must be held to receive a right to one Share.

13.

Adjustments for reorganisation

If there is any reorganisation of the issued share capital of the Company, the rights of the Optionholder may be varied to comply with the Listing Rules which apply to the reorganisation at the time of the reorganisation.

14. Options not quoted

The Company will not apply to ASX for quotation of the Options.

15. Options not transferable

The Options are not transferable.

16. Lodgement Instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's share registry.

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