4DS MEMORY LIMITED — Interim / Quarterly Report 2022

Jul 27, 2022

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

28 July 2022

QUARTERLY ACTIVITY REPORT AND APPENDIX 4C

4DS Memory Limited (ASX:4DS) ( 4DS ) (the Company ), is pleased to provide its Quarterly Activity Report and Appendix 4C for the Quarter ended 30 June 2022.

4DS Technical Update

On 11 April 2022 the Company provided a Technical Update.

Successful mask modification and optimisation

The Company stated it had been working very closely with imec during the First Quarter of 2022 to address a number of technical issues. Together imec and 4DS undertook a memory stack etch mask change and further performed etch process optimisation, to resolve the etch residue problem that resulted in the partial failure of the Second Platform Lot as announced on 17 August 2021. Please see 4 November 2021 announcement for more details. Final verification of the efficacy of these process improvements requires electrical testing, which can only be performed on the Third Platform Lot.

This mask change and process improvements have dramatically increased the likelihood that the Third Platform Lot will be successfully processed. As a result, the Company and imec jointly decided to implement these improvements and continue to process the Third Platform Lot, which was put on hold prior to reaching the etch process.

Third Platform Lot manufacture

Following the successful completion of this significant technical work, the manufacturing of the Third Platform Lot utilising imec’s megabit memory platform with transistors continued during the June Quarter. The Company stated it would provide a further update to investors on the implementation of these process improvements for the Third Platform Lot by the end of April 2022.

On 29 April 2022 4DS advised shareholders that additional characterisation of the short loop wafers confirmed the decision to release the improved etch process. The Third Platform Lot was scheduled to be processed with this improved etch process and this improved etch process step was completed by mid-May 2022.

Recently the Third Platform Lot wafers were successfully manufactured and are undergoing initial testing at imec prior to being dispatched to 4DS facilities in Fremont, California. The Company will update shareholders in due course regarding successful arrival and commencement of testing at 4DS.

HGST Renewal

On 19 May 2022 the Company announced that HGST, a subsidiary of Western Digital Corporation, signed the 9[th] consecutive twelve (12) month renewal of its joint development agreement (JDA) with 4DS ahead of the 20 June 2022 renewal date.

General Meeting

On 26 May 2022 the Company held a General Meeting to obtain shareholder approval for the issuance of 30 million options to CEO Mr Kenneth Hurley. Details with regard to the terms and conditions of the options can be found in the Notice of Meeting lodged with the ASX on 22 April 2022.

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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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Option Exercise

During the quarter Chairman Drs Wilbert van den Hoek and Non-Executive Director Dr Guido Arnout exercised options along with various other options holders. The total options exercised during June 2022 was 27,210,000, bringing in a total of AUS$1,178,960 into the Company accounts.

Post 30 June 2022 an additional 2,275,000 were exercised and brought in an additional AUS$95,550 into the Company’s accounts.

COVID-19 Update

Currently, there are no COVID related restrictions significantly affecting the Company’s operations in the USA or Belgium. All 4DS employees are fully vaccinated.

Financial Review

As of 30 June 2022, the Company held cash of $5.234 million, compared to $5.583 million as of 31 March 2022. Net cash of $1.391 million was used in operating activities during the quarter, compared to $1.636 million in the March quarter. The main difference when compared to the previous quarter was a reduction in the amount paid to imec due to a variation in the timing of payments to imec in the March quarter.

Listing Rule 4.7.C

In item 6 of the Appendix 4C cash flow report for the quarter, payments to related parties of approximately $219k represents salaries paid to the new CEO, the former CEO, the Executive Director, the payment of Director’s fees to Non-Executive Directors and superannuation (where applicable).

Investor Hub

The Company has now launched an interactive Investor Hub. If you have any questions on this announcement or any past 4DS announcements, check out our Interactive Announcements. Like, comment, ask a question and view video summaries on important announcements. Shareholders can link through to the Investor Hub via: announcements.4dsmemory.com

ENDS

Authorised for release by the Board.

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 32 USA patents granted (of which 4 have expired) and 1 patent application, which have 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

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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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leader, which accelerates the evolution of 4DS’ technology. 4DS also collaborates with imec, a world-leading 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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Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

4DS MEMORY LIMITED (4DS) ABN Quarter ended (“current quarter”) 43 145 590 110 30 June 2022

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 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) production (d) staff costs (e) 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 Other Income 1.9 Net cash from / (used in) operating activities	- (1,194) (4) - (76) (116) - 2 (3) - - -	- (4,539) (21) - (287) (543) - 5 (17) - 10 15
	(1,391)	(5,377)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) entities (b) businesses (c) property, plant and equipment (d) investments (e) intellectual property (f) other non-current assets	- - - - - -	- - (246) - - -

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
2.2 Proceeds from disposal of: (a) entities (b) businesses (c) property, plant and equipment (d) investments (e) intellectual property (f) 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 / (used in) investing activities		- - - - - - - - -	- - - - - - - - -
		-	(246)
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings (Refer 7.6) 3.6 Repayment of borrowings (Insurance Premium) 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other – principal elements of lease payments 3.10 Net cash from / (used in) financing activities		- - 1,104 (1) - (36) (2) - (31)	5,952 - 1,320 (444) - (122) (7) - (124)
		1,034	6,575
4. 4.1 4.2 4.3	Net increase / (decrease) in cash and cash equivalents for the period Cash and cash equivalents at beginning of period Net cash from / (used in) operating activities (item 1.9 above) Net cash from / (used in) investing activities (item 2.6 above)	5,583 (1,391) -	4,299 (5,377) (246)

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
4.4 4.5 4.6	Net cash from / (used in) financing activities (item 3.10 above) Effect of movement in exchange rates on cash held Cash and cash equivalents at end of period	1,034 8	6,575 (17)
		5,234	5,234
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)		5,234 - - -	5,583 - - -
		5,234	5,583
6. Payments to related parties of the entity and their associates 6.1 Aggregate amount of payments to related parties and their associates included in item 1 6.2 Aggregate amount of payments to related parties and their associates included in item 2
			Current quarter $A'000
			219
			-

Fees paid to CEO ($126k), Executive Director ($60k) and Non-Executive Directors ($33k).

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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

	7. Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 7.1 Loan facilities - - 7.2 Credit standby arrangements - - 7.3 Other (Insurance Premium Funding) - - 7.4 Total financing facilities - - 7.5 Unused financing facilities available at quarter end - 7.6 Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-
		-	-
			-
-

-

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5	Net cash from / (used in) operating activities (item 1.9) Cash and cash equivalents at quarter end (item 4.6) Unused finance facilities available at quarter end (item 7.5) Total available funding (Item 8.2 + item 8.3) Estimated quarters of funding available (item 8.4 divided by item 8.1)	(1,391) 5,234 - 5,234
		3.76
	Note: if the entity has reported positive net operating cash flows in item 1.9, answer item 8.5 as “N/A”. Otherwise a figure for the estimated quarters of funding available must be included in item 8.5.
8.6	If item 8.5 is less than 2 quarters, please provide answers to the following questions: 8.6.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?
	Answer: N/A
	8.6.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer: N/A
	8.6.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?
	Answer: N/A
	Note: where item 8.5 is less than 2 quarters. All of questions 8.6.1, 8.6.2 and 8.6.3 above must be answered.

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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

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.

Date: ................................................................................... 28 July 2022

Authorised by: ................................................................................... The Board of Directors of 4DS Memory Limited (Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow 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 cash flow 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. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 4C (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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