4DS MEMORY LIMITED — Interim / Quarterly Report 2020

Oct 28, 2019

4DS Memory Limited | ABN 43 145 590 110 Level 2, 50 Kings Park Road, West Perth WA 6005 PO Box 271, West Perth WA 6872

+61 8 6377 8043 | david@4dsmemory.com | www.4dsmemory.com

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ASX RELEASE

29 October 2019

Appendix 4C and Company Update

4DS Memory Limited (ASX:4DS) ( 4DS or the Company ) is pleased to provide its Quarterly Report for the quarter ended 30 September 2019 ( Q3 ), along with a Company update.

Placement and Share Purchase Plan (SPP)

During Q3, the Company successfully completed a Placement and SPP to raise $A3.25 million and $A0.75 million respectively. Both the Placement and SPP shares were issued at $A0.05 per share. As at the end of Q3, the Company had cash on hand of A$4.6 million.

22[nd] Patent Granted in the USA

On 14 August, the Company announced the granting of its 22[nd] patent in the USA: “Resistive Memory Device Having a Retention Layer”.

This 22[nd] patent relates generally to the Company’s in-house developed and fully-owned Interface Switching ReRAM technology and specifically to its operation as high-speed Storage Class Memory (in this regard, see also the Company’s ASX announcement dated 13 June 2017 – “4DS ReRAM Reaches Read Speed Comparable to DRAM”).

In addition to the 22 granted USA patents, 4DS has filed 8 USA patent applications, and is currently drafting another 3 patent applications to protect its stream of innovations and to strengthen its intellectual property portfolio in the area of Interface Switching ReRAM for Storage Class Memory comparable to DRAM.

4DS Progressing to imec’s Megabit Memory Platform

On 3 October, the Company gave an extensive update of the progress it had made during the quarter with its development partner, imec. Please refer to that announcement for full details.

Following the analysis of the results of Lot 4, 4DS and imec have agreed to advance to the next development stage, being the integration of 4DS’ memory technology with imec’s megabit platform. This platform is a proven CMOS megabit test vehicle fabricated on 300mm wafers on which the 4DS memory cells can be placed and function. It will enable 4DS to demonstrate the true potential of its Interface Switching ReRAM technology for Storage Class Memory. The integration will be undertaken in back-end-of-line (BEOL) processes, which is the latter stage of the chip manufacturing process.

4DS and imec have commenced planning for the initial phase of the integration of 4DS’ memory with imec’s megabit platform. The Company will produce its initial lot of 300mm wafers during Q4 of 2019. The integration includes continuous monitoring and analysis of speed, endurance, retention and yield (in that order of importance).

The integration will extend into calendar year 2020, beyond the existing term of the collaboration agreement between 4DS and imec (31 December 2019).

4DS is currently in discussions with imec regarding the terms of an extension to the collaboration agreement between the parties, and the Company expects to finalise and agree the terms of the extension in the coming weeks.

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4DS Memory Limited | ABN 43 145 590 110 Level 2, 50 Kings Park Road, West Perth WA 6005 PO Box 271, West Perth WA 6872 +61 8 6377 8043 | david@4dsmemory.com | www.4dsmemory.com

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Invited to, and attended, imec conference on ReRAM and MRAM

Chief Executive Officer and Managing Director, Dr Guido Arnout, attended the invitation only “9[th] International Workshop on RRAM/MRAM” organised by imec and Stanford University that was held at imec’s facilities on 17 and 18 October 2019.

Dr Arnout commented "Attendance at the workshop reaffirmed our long term belief that 4DS' Interface Switching ReRAM is unique in the ReRAM field. Our goal to develop Storage Class Memory close to DRAM remains an industry priority.”

ENDS

Contact information

Investors: David McAuliffe 4DS Memory +61 408 994 313 david@4dsmemory.com

About 4DS

4DS Memory Limited (ASX: 4DS), with facilities located in Silicon Valley, is a semiconductor development company of non-volatile memory technology, pioneering Interface Switching ReRAM for next generation gigabyte storage in mobile and cloud. Established in 2007, 4DS owns a patented IP portfolio, comprising 22 USA patents granted and 11 patent applications pending and or being filed, which has been developed in-house to create high-density Storage Class Memory. 4DS has a joint development agreement with Western Digital subsidiary HGST, a global storage leader, which accelerates the evolution of 4DS’ technology. 4DS also collaborates with imec, a worldleading research and innovation hub in nanoelectronics and digital technologies. The combination of imec’s widely acclaimed leadership in microchip technology and profound software and information and communication technology expertise makes them unique.

For more information, please visit www.4dsmemory.com.

Disclaimer

This release contains certain forward looking statements that are based on the Company’s management’s beliefs, assumptions and expectations and on information currently available to management. Such forward looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results or performance of 4DS to be materially different from the results or performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the political and economic environment in which 4DS will operate in the future, which are subject to change without notice. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward looking statements or other forecast. To the full extent permitted by law, 4DS and its directors, officers, employees, advisers, agents and intermediaries disclaim any obligation or undertaking to release any updates or revisions to information to reflect any change in any of the information contained in this release (including, but not limited to, any assumptions or expectations set out in the release).

You should not place undue reliance on these forward- looking statements. Except as required by law or regulation (including the ASX Listing Rules) we undertake no obligation to update these forward- looking statements.

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

+Rule 4.7B

Appendix 4C

Quarterly report for entities subject to Listing Rule 4.7B

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16

Name of entity

4DS MEMORY LIMITED (4DS)

ABN

43 145 590 100

Quarter ended (“current quarter”)

30 September 2019

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) research and development (b) business development (c) advertising and marketing (d) leased assets (e) staff and board remuneration (f) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Insurance claim 1.9 Net cash (used in) operating activities	- (988) (41) - - (55) (282) - 5 - - - 22	- (988) (41) - - (55) (282) - 5 - - - 22
	(1,339)	(1,339)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) businesses (see item 10) (c) investments (d) intellectual property (e) other non-current assets	- - - - -	- - - - -

• See chapter 19 for defined terms

1 September 2016

Page 1

Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
2.2 Proceeds from disposal of: (a) property, plant and equipment (b) businesses (see item 10) (c) investments - shares (d) intellectual property (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from investing activities	- - - - - - - -	- - - - - - - -
	-	-
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	4,000 - 38 (285) - - - - -	4,000 - 38 (285) - - - - -
	3,753	3,753
4. Net increase/(decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of quarter/year to date 4.2 Net cash (used in) operating activities (item 1.9 above) 4.3 Net cash (used in) investing activities (item 2.6 above) 4.4 Net cash from financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of quarter	2,168 (1,339) - 3,753 23	2,168 (1,339) - 3,753 23
	4,605	4,605

• See chapter 19 for defined terms

1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	4,605 - - -	2,168 - - -
	4,605	2,168

6.	Payments to directors of the entity and their associates	Current quarter
		$A'000
6.1	Aggregate amount of payments to these parties included in item 1.2	162
6.2	Aggregate amount of cash flow from loans to these parties included	-
	in item 2.3
6.3	Include below any explanation necessary to understand the transactions included in items 6.1
	and 6.2

Salaries paid to CEO/Managing Director and Executive Director.

7. Payments to related entities of the entity and their associates 7.1 Aggregate amount of payments to these parties included in item 1.2 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3	Current quarter $A'000
	-
	-

• 7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

None

• See chapter 19 for defined terms 1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

8. Financing facilities available Add notes as necessary for an understanding of the position 8.1 Loan facilities 8.2 Credit standby arrangements 8.3 Other (please specify)	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
	-	-
	-	-
	-	-

• 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

None

9. Estimated cash outflows for next quarter	$A’000
9.1 Research and development 9.2 Product manufacturing and operating costs 9.3 Business development 9.4 Leased assets 9.5 Staff board remuneration 9.6 Administration and corporate costs 9.7 Other 9.8 Total estimated cash outflows	931 - 28 - 172 135 -
	1,266

10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above)	Acquisitions	Disposals
10.1 Name of entity	-	-
10.2 Place of incorporation or registration	-	-
10.3 Consideration for acquisition or disposal	-	-
10.4 Total net assets	-	-
10.5 Nature of business	-	-

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here: ............................................................ (Company secretary)

Date: ............................................. 29 October 2019

Print name: ......................................................... Peter Webse

• See chapter 19 for defined terms

1 September 2016

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Appendix 4C Quarterly report for entities subject to Listing Rule 4.7B

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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