4DS MEMORY LIMITED - Interim / Quarterly Report 2023

4DS Memory Limited Appendix 4D Half-year report

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1. Company details

Name of entity: 4DS Memory Limited ACN: 145 590 110 Reporting period: For the half-year ended 31 December 2022 Previous period: For the half-year ended 31 December 2021

2. Results for announcement to the market

2. Results for announcement to the market
			$
Loss from ordinary activities after tax attributable to the owners of 4DS
Memory Limited	down	7.0% to	(2,848,733)
Loss for the half-year attributable to the owners of 4DS Memory Limited	down	7.0% to	(2,848,733)
		31 December	31 December
		2022	2021
		Cents	Cents
Basic earnings per share		(0.19)	(0.23)
Diluted earnings per share		(0.19)	(0.23)

Dividends

There were no dividends paid, recommended or declared during the current financial period.

Comments

The loss for the Group after providing for income tax amounted to $2,848,733 (31 December 2021: $3,063,514).

3. Net tangible assets

Net tangible assets per ordinary security	Reporting period Cents 0.21	Previous period Cents 0.37

4. Dividends

Current period

There were no dividends paid, recommended or declared during the current financial period.

Previous period

There were no dividends paid, recommended or declared during the previous financial period.

5. Audit qualification or review

This report is based on the consolidated financial statements for the half-year ended 31 December 2022 which has been reviewed by PKF Perth.

6. Attachments

The Interim Report of 4DS Memory Limited for the half-year ended 31 December 2022 is attached.

4DS Memory Limited Appendix 4D Half-year report

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This information should be read in conjunction with the 2022 Annual Report.

Additional information supporting the Appendix 4D disclosure requirements can be found in the Director's Report and the consolidated financial statements for the half-year ended 31 December 2022.

7. Signed

Signed _________

Date: 27 February 2023

David McAuliffe Interim Executive Chairman

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4DS Memory Limited ACN 145 590 110

Interim Report - 31 December 2022

4DS Memory Limited Directors' report 31 December 2022

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The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of 4DS Memory Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2022.

Board of Directors

The following persons were directors of 4DS Memory Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

Mr. David McAuliffe Executive Director Executive Interim Chairman from 13 February 2023 Mr. Howard Digby Non-Executive Director Dr. Guido Arnout Non-Executive Director Drs. Wilbert van den Hoek Executive Chairman from 16 August 2022 to 13 February 2023 (Formerly Non-Executive Chairman)

Board changes

On 15 August 2022, Mr. Kenneth Hurley resigned as Managing Director and CEO of the Company. On 16 August 2022, Drs. Wilbert van den Hoek transitioned from Non-Executive Chairman to Executive Chairman.

Executive changes

On 5 October 2022, Mr. Ting Yen was appointed as Chief Technology Officer of the Company.

Review of operations

Financial Review

The loss for the Group after providing for income tax amounted to $2,848,733 (31 December 2021: $3,063,514)

Operating Review

On 16 August 2022, the Company announced that the Third Platform Lot has successfully arrived at its facilities in Fremont, California and that extensive internal testing has successfully demonstrated that the reference memory cells on the Third Platform Lot perform similarly to the identical reference structures on the Third Non-Platform Lot, indicating that the Lot has been manufactured properly. However, testing of the cells used in the imec megabit memory array showed unexpected problems with scaling the memory cell to small dimensions suitable for Storage Class Memory potential applications and a root cause analysis was to be undertaken.

On 5 October 2022 the Company announced it had completed the root cause analysis and has identified the modified etch process as the most likely cause of the poor electrical performance of the memory cells used in the imec megabit memory array. The Company believes that the etch process had induced damaged to the crystallinity of 4DS PCMO layer resulting in the write voltage needed to program the cell exceeding the write voltage that the circuitry of the imec megabit memory array could provide. As a result, the Company will focus on further optimizing the etch process to ensure both residue free etching and no crystalline damage to 4DS PCMO layer.

On 23 November 2022 the Company announced the granting of its 33[rd] USA patent and advised that there is one patent application pending.

On 7 December 2023 the Company entered into fourth amendment to continue collaboration on the project with imec. The manufacturing of the Fourth Platform Lot will commence during quarter 1 2023 with the delivery to the Company expected at the end of quarter 2 2023.

Placement and Issue of Securities

On 8 July 2022, the Company issued 2,275,000 ordinary shares following the exercise of $0.042 unlisted options to raise $95,550.
On 15 August 2022, 30,000,000 unlisted options excisable at $0.063 expiring 14 March 2027 issued to Mr. Kenneth Hurley lapsed as the conditions incapable of being satisfied.
On 22 August 2022, 5,000,000 unlisted options excisable at $0.10 expiring 31 May 2027 issued to U.S employee lapsed as the conditions incapable of being satisfied.
On 27 October 2022, 500,000 unlisted options excisable at $0.042 expired.
On 19 December 2022, the Company issued 21,500,000 incentive options exercisable at $0.037 expiring 19 December 2027 to management and consultant.

4DS Memory Limited Directors' report 31 December 2022

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Significant changes in the state of affairs

There were no significant changes in the state of affairs of the Group during the financial half-year.

Matters subsequent to the end of the financial half-year

On 13 February 2023, Drs. van den Hoek ceased to be Executive Chairman and 6 million options lapsed as a result of his resignation along with his entitlement to 38.5% of the Sales Incentive Pool.

On 13 February 2023, Mr. McAuliffe was appointed as Interim Executive Chairman whilst the Company undertakes a search for a USA based Chairman.

On 27 February 2023, 4DS announced it has undertaken a number of optimization changes which are currently being incorporated into the schedule for manufacturing of the Fourth Platform Lot at imec.

During the same period the Company has significantly enhanced its test capabilities and re-tested the Third Platform Lot in preparation for the Fourth Platform Lot.

The Company is pleased to report that it has now achieved cell operation in the megabit memory array of the Third Platform Lot utilising the improved test capabilities. This allows further exploration of optimized programming conditions with the access transistors and write circuitry of imec’s megabit memory platform.

These results indicate that the 4DS Interface Switching ReRAM cells are potentially more likely to be compatible with imec’s megabit memory platform which de-risks the testing of the Fourth Platform Lot expected to be received by 4DS in late Q2 2023 as previously guided.

No matter or circumstance has arisen since 31 December 2022 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' report.

This report is made in accordance with a resolution of Directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

On behalf of the directors

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_________ David McAuliffe Interim Executive Chairman

27 February 2023

PKF Perth

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AUDITOR’S INDEPENDENCE DECLARATION

TO THE DIRECTORS OF 4DS MEMORY LIMITED

In relation to our review of the financial report of 4DS Memory Limited for the half year ended 31 December 2022, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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PKF PERTH

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SIMON FERMANIS SENIOR PARTNER

27 FEBRUARY 2023 WEST PERTH, WESTERN AUSTRALIA

Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872

T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au

PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

4DS Memory Limited Contents 31 December 2022

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Consolidated statement of profit or loss and other comprehensive income ........................................................................... 5 Consolidated statement of financial position .......................................................................................................................... 6 Consolidated statement of changes in equity ......................................................................................................................... 7 Consolidated statement of cash flows .................................................................................................................................... 8 Notes to the consolidated financial statements ...................................................................................................................... 9 Directors' declaration ............................................................................................................................................................ 15 Independent auditor's review report to the members of 4DS Memory Limited..................................................................... 16

General information

The financial statements cover 4DS Memory Limited as a Group consisting of 4DS Memory Limited and the entities it controlled at the end of, or during, the half-year. The financial statements are presented in Australian dollars, which is 4DS Memory Limited's functional and presentation currency.

4DS Memory Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business are:

Registered office Principal place of business Level 2, 50 Kings Park Road, 3155 Skyway Court West Perth WA 6005 Fremont CA 94539 AUSTRALIA USA

A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of Directors, on 27 February 2023.

4DS Memory Limited Consolidated statement of profit or loss and other comprehensive income For the half-year ended 31 December 2022

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Other Income Interest Income Expenses Compliance and regulatory expense Corporate and administration expense Depreciation expense Directors and employee expense Impairment of assets Interest expense Research expense Share based payments Other expenses Unrealised / realised foreign exchange Operating loss Interest on lease liabilities Loss before income tax expense Income tax expense Loss after income tax expense for the half-year attributable to the owners of 4DS Memory Limited Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation Other comprehensive income for the half-year, net of tax Total comprehensive income for the half-year attributable to the owners of 4DS Memory Limited Basic earnings per share Diluted earnings per share	31 December 2022 $ - 14,223 (66,550) (279,377) (116,179) (180,639) - - (1,603,400) (506,858) (98,561) (4,603)	31 December 2021 $ 23,645 1,224 (79,573) (160,424) (110,984) (149,872) (130,438) (6,158) (1,936,339) (411,544) (104,524) 10,682 (3,054,305) (9,209) (3,063,514) - (3,063,514) 14,075 14,075 (3,049,439) Cents (0.23) (0.23)
	(2,841,944) (6,789)
	(2,848,733) -
	(2,848,733) (12,427)
	(12,427)
	(2,861,160)
	Cents (0.19) (0.19)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

4DS Memory Limited Consolidated statement of financial position As at 31 December 2022

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Note Assets Current assets Cash and cash equivalents Trade and other receivables Other assets 2 Total current assets Non-current assets Property, plant and equipment Right-of-use assets Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 3 Lease liabilities Provision of annual leaves Total current liabilities Non-current liabilities Lease liabilities Total non-current liabilities Total liabilities Net assets Equity Issued Capital 5 Reserves 6 Accumulated losses Total equity	31 December 2022 $ 3,359,457 10,297 152,104	30 June 2022 $ 5,234,447 14,056 55,205 5,303,708 257,001 151,646 408,647 5,712,355 84,945 120,313 32,778 238,036 51,987 51,987 290,023 5,422,332 54,840,272 5,611,267 (55,029,207) 5,422,332
	3,521,858
	188,805 99,202
	288,007
	3,809,865
	502,272 115,627 35,278
	653,177
	-
	-
	653,177
	3,156,688
	54,928,929 5,631,737 (57,403,978)
	3,156,688

The above consolidated statement of financial position should be read in conjunction with the accompanying notes

4DS Memory Limited Consolidated statement of changes in equity For the half-year ended 31 December 2022

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Issued capital $ 47,925,285 - -	Share-based payment reserves $ 4,339,238 - -	Foreign exchange reserves $ (12,957) - 14,075	Accumulated losses $ (48,307,509) (3,063,514) -	Total equity $ 3,944,057 (3,063,514) 14,075
- 5,440,700 - 47,309 -	- 96,021 411,544 - (10,381)	14,075 - - - -	(3,063,514) - - - 10,381	(3,049,439) 5,536,721 411,544 47,309 -
53,413,294	4,836,422	1,118	(51,360,642)	6,890,192
Issued capital $ 54,840,272 - -	Share-based payment reserves $ 5,605,124 - -	Foreign exchange reserves $ 6,143 - (12,427)	Accumulated losses $ (55,029,207) (2,848,733) -	Total equity $ 5,422,332 (2,848,733) (12,427)
- (6,897) - 95,554 - -	- - 506,858 - (473,961) -	(12,427) - - - - -	(2,848,733) - - - 17,711 456,251	(2,861,160) (6,897) 506,858 95,554 (456,250) 456,251
54,928,929	5,638,021	(6,284)	(57,403,978)	3,156,688

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

4DS Memory Limited Consolidated statement of cash flows For the half-year ended 31 December 2022

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Note Cash flows from operating activities Payments to suppliers and employees Payments for research expense Payments for business development Interest received Interest paid Other income Net cash used in operating activities Cash flows from investing activities Purchase of fixed assets Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares 5 Proceeds from exercise of options Payment of capital raising costs Principal elements of lease payments Repayment to lender (insurance premium) Interest paid to lender (insurance premium) Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial half-year	31 December 2022 $ (644,201) (1,166,248) (78,748)	31 December 2021 $ (436,767) (1,910,998) (10,391) (2,358,156) 1,224 (10,441) 23,646 (2,343,727) (233,450) (233,450) 5,985,930 47,309 (384,713) (59,011) (49,360) (1,232) 5,538,923 2,961,746 4,298,794 (89) 7,260,451
	(1,889,197) 14,223 (6,789) -
	(1,881,763)
	-
	-
	- 95,554 (16,703) (66,324) - -
	12,527
	(1,869,236) 5,234,447 (5,754)
	3,359,457

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

4DS Memory Limited Notes to the consolidated financial statements 31 December 2022

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Note 1. Significant accounting policies

Basis of preparation

These general purpose financial statements for the interim half-year reporting period ended 31 December 2022 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2022 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

Going Concern

The consolidated financial statements have been prepared on going concern basis. In arriving at this position, the directors have had regard to the fact that the Company has, or in the directors’ opinion will have access to, sufficient cash to fund administrative and other committed expenditure for a period of not less than 12 months from the date of this report.

As at 31 December 2022, the net assets of the Group totalled $3,156,688 (2022: $5,422,332) and cash on hand totalled

$3,359,457 (2022: $5,234,447).

The Group’s ability to continue as a going concern and meet its debts and future commitments as and when they fall due is dependent on the Company’s ability to raise sufficient working capital to ensure the continued implementation of the Group’s business plan.

In the event that the Group does not achieve the above actions, there exists a material uncertainty as to whether the Group will be able to continue as a going concern and realise its assets and extinguish its liabilities in the normal course of business.

New and amended standards adopted by the Group

The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the policies stated below.

Estimates and judgements

When preparing the interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal to the estimated results.

The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty, were the same as those applied in the Group’s last annual financial statements for the year ended 30 June 2022.

The Group has considered the implications of new or amended Accounting Standards which have become applicable for the current annual financial reporting half-year beginning on or after 1 July 2022. It has been determined by the Group that there is no impact, material or otherwise, of the new or amended Accounting Standards and therefore no changes to Group accounting policies. No retrospective change in accounting policy of material reclassification has occurred during the halfyear.

New Accounting Standards and Interpretations not yet mandatory or early adopted

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods, some of which are relevant to the Group. The Group has decided not to early adopt any of these new and amended pronouncements. The Group is currently in the process of assessing the following new and amended Accounting Standards and Interpretations:

4DS Memory Limited Notes to the consolidated financial statements 31 December 2022

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Note 1. Significant accounting policies (continued)

New Pronouncement Effective Date Application AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018 – 2020 and Other_Amendments_ 01/01/2022 All entities AASB 2021-7a Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections [general editorials] 01/01/2022 All entities AASB 2020-1 Amendments to Australian Accounting Standards – Classification of liabilities as Current or Non-current, AASB 2020-6 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current – Deferral of Effective Date 01/01/2023 All entities AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction 01/01/2023 All entities AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates 01/01/2023 All entities Note 2. Other assets 31 December 2022 $ Prepayments 147,206 Other current assets 4,898 152,104 Note 3. Trade and other payables 31 December 2022 $ Trade payables 374,537 Other payables 127,735 502,272	New Pronouncement Effective Date Application AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018 – 2020 and Other_Amendments_ 01/01/2022 All entities AASB 2021-7a Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections [general editorials] 01/01/2022 All entities AASB 2020-1 Amendments to Australian Accounting Standards – Classification of liabilities as Current or Non-current, AASB 2020-6 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current – Deferral of Effective Date 01/01/2023 All entities AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction 01/01/2023 All entities AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates 01/01/2023 All entities Note 2. Other assets 31 December 2022 $ Prepayments 147,206 Other current assets 4,898 152,104 Note 3. Trade and other payables 31 December 2022 $ Trade payables 374,537 Other payables 127,735 502,272	30 June 2022 $ 50,339 4,866
	152,104	55,205
	31 December 2022 $ 374,537 127,735	30 June 2022 $ 29,149 55,796
	502,272	84,945

Note 2. Other assets

Note 3. Trade and other payables

The Company entered into fourth amendment to continue collaboration on the project with imec. At the period-end of 31 December 2022, 97% of trade payables were amounts owed to imec under the arrangement.

The directors consider that the carrying amount of trade and other payables approximates their fair values.

4DS Memory Limited Notes to the consolidated financial statements 31 December 2022

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Note 4. Share-based payments

The following share-based payment arrangements were entered into during the half-year ended 31 December 2022:

On 19 December 2022, the Company issued 21,500,000 incentive options to management and consultant. The options are exercisable at $0.037 each and expire on 19 December 2027.

For the options granted during the current financial half-year, the valuation model inputs used to determine the fair value at the grant date, are as follows:

		Share price	Exercise	Expected	Risk-free	Fair value
Grant date	Expiry date	at grant date	price	volatility	interest rate	at grant date
16/12/2022	19/12/2027	$0.033	$0.037	95.00%	3.08%	$0.0237

For the period ended 31 December 2022 a share-based payment of $506,858 (31 December 2021: $411,544) was recognised as an expense in the profit or loss statement, the amount was inclusive of $486,528 vesting expense, from options issued in a prior period.

Note 5. Issued Capital

31 December 2022 Shares 1,479,765,442 -	30 June 2022 Shares 1,477,490,442 -	30 June 2022 Shares 1,477,490,442 -	31 December 2022 $ 57,788,929 (2,860,000)	30 June 2022 $ 57,693,375 (2,853,103)
1,479,765,442	1,477,490,442		54,928,929	54,840,272
Date 1 July 2021 2 Dec 2021 20 Dec 2021 8 June 2022 16 June 2022 30 June 2022 30 June 2022 30 June 2022 Date 1 July 2022 8 July 2022 31 December 2022		Shares Issue price 1,320,948,441 52,083,334 $0.048 72,916,667 $0.048 1,040,000 $0.052 1,170,000 $0.064 29,332,000 $0.042 1,477,490,442 Shares Issue price 1,477,490,442 2,275,000 $0.042 1,479,765,442		$ 47,925,286 2,500,000 3,500,000 54,080 74,880 1,231,944 (445,918)
				54,840,272
				$ 54,840,272 95,554 (6,897)
				54,928,929

Movements in ordinary share capital

4DS Memory Limited Notes to the consolidated financial statements 31 December 2022

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Note 5. Issued Capital (continued)

Movements in options

Details Date Balance 1 July 2021 Options exercised, employee options Options expired/forfeited Amortisation of newly issued share-based payment, employee options Amortisation of previously issued new options Share based payment, advisor options Balance 30 June 2022 Details Date Balance 1 July 2022 Options exercised, employee options Options cancelled, ex-director options Options cancelled, employee options Options expired Amortisation of previously issued employee options Amortisation of newly issued share-based payment, employee options Balance 31 December 2022	Options 80,487,000 (31,542,000) (260,000) 45,500,000 - 5,000,000	$ 4,339,238 - (10,381) 514,301 665,945 96,021
	99,185,000	5,605,124
	Options 99,185,000 (2,275,000) (30,000,000) (5,000,000) (500,000) - 21,500,000	$ 5,605,124 - (429,995) (26,256) (17,710) 486,528 20,330
	82,910,000	5,638,021

Note 6. Reserves

Note 6. Reserves
Foreign currency reserve Share-based payments reserve	31 December 2022 $ (6,284) 5,638,021	30 June 2022 $ 6,143 5,605,124
	5,631,737	5,611,267

Foreign currency reserve

The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations.

Share-based payments reserve

The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration, and other parties as part of their compensation for services.

4DS Memory Limited Notes to the consolidated financial statements 31 December 2022

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Note 6. Reserves (continued)

Movements in reserves

Movements in each class of reserve during the current and previous financial half-year are set out below:

Balance at 1 July 2021 Share based payment - employee options Options lapsed/cancelled Foreign currency translation Balance at 30 June 2022 Foreign currency translation Share based payment - employee options Options lapsed/cancelled Balance at 31 December 2022	Share based payment reserve $ 4,339,239 1,276,266 (10,381) -	Foreign exchange translation reserve $ (12,957) - - 19,100	Total $ 4,326,282 1,276,266 (10,381) 19,100 5,611,267 (12,427) 506,858 (473,961) 5,631,737
	5,605,124 - 506,858 (473,961)	6,143 (12,427) - -
	5,638,021	(6,284)

Note 7. Key management personnel disclosures

Remuneration arrangements of key management personnel are disclosed in the annual financial report. From 16 August 2022, Drs. Wilbert van den Hoek transitioned from a non-Executive Chairman to Executive Chairman and his remuneration has increased from $50,000 p.a. to $150,000 p.a. There have been no further changes to remuneration arrangements for the period ended 31 December 2022.

Note 8. Commitments and Contingent

imec commitment

During the period, the Company entered and finalised terms for the fourth amendment with imec to continue their collaboration on the project, and therefore to extend the Agreement until mid-2023 to add extra activities, with a total consideration of EUR 903,000 to be made within the next six months. Of which, first milestone invoice of EUR 225,750 was recorded in trade payables in Note 3 and the remaining payments of EUR 677,250 to be made.

Sales Bonus Pool commitment

With the departure of the prior Managing Director and CEO on 15 August 2022, his entitlement to receive proportion of the Sales Bonus Pool lapsed.

On 19 December 2022, Drs. Wilbert van den Hoek's entitlement to the Sales Bonus Pool increased from 25% to 38.5% which subsequently lapsed due to his departure.

There have been no other significant changes in commitments and contingent since the last reporting date.

4DS Memory Limited Notes to the consolidated financial statements 31 December 2022

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Note 9. Events after the reporting period

On 13 February 2023, Drs. van den Hoek ceased to be Executive Chairman and 6 million options lapsed as a result of his resignation along with his entitlement to 38.5% of the Sales Incentive Pool.

On 13 February 2023, Mr. McAuliffe was appointed as Interim Executive Chairman whilst the Company undertakes a search for a USA based Chairman.

On 27 February 2023, 4DS announced it has undertaken a number of optimization changes which are currently being incorporated into the schedule for manufacturing of the Fourth Platform Lot at imec.

During the same period the Company has significantly enhanced its test capabilities and re-tested the Third Platform Lot in preparation for the Fourth Platform Lot.

4DS Memory Limited Directors' declaration 31 December 2022

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In the Directors' opinion:

the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 31 December 2022 and of its performance for the financial half-year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of Directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

On behalf of the Directors

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_________ David McAuliffe Interim Executive Chairman

27 February 2023

PKF Perth

INDEPENDENT AUDITOR’S REVIEW REPORT

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TO THE MEMBERS OF 4DS MEMORY LIMITED

Report on the Interim Financial Report

Conclusion

We have reviewed the half-year financial report of 4DS Memory Limited (the company) and controlled entities (consolidated entity) which comprises the consolidated statement of financial position as at 31 December 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at 31 December 2022, or during the half year.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of 4DS Memory Limited is not in accordance with the Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2022 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Basis for Conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity. Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report.

Material uncertainty - Going Concern

Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicates that the consolidated entity incurred a loss of $(2,848,733) (2021: $(3,063,514)) and operating cash outflows of $(1,881,763) (2021: $(2,343,727)) during the half-year 31 December 2022. This condition, along with other matters as set out in note 1, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

The financial report of the consolidated entity does not include any adjustments in relation to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as going concern.

Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872

T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

PKF Perth

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Independence

We are independent of the company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Directors’ Responsibility for the Interim Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with the Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine is necessary to enable the preparation of the halfyear financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibilities for the Review of the Financial Report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2022 and its performance for the half year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporation Regulations 2001.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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PKF PERTH

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SIMON FERMANIS SENIOR PARTNER

27 FEBRUARY 2023 WEST PERTH, WESTERN AUSTRALIA

AI assistant

4DS MEMORY LIMITED — Interim / Quarterly Report 2023

64258_rns_2023-02-26_a6da1e8d-e180-4e0f-96c7-c797701cdf09.pdf

1. Company details

2. Results for announcement to the market

Dividends

Comments

3. Net tangible assets

4. Dividends

Current period

Previous period

5. Audit qualification or review

6. Attachments

7. Signed

Board of Directors

Board changes

Executive changes

Review of operations

Financial Review

Operating Review

Placement and Issue of Securities

Significant changes in the state of affairs

Matters subsequent to the end of the financial half-year

Auditor's independence declaration

AUDITOR’S INDEPENDENCE DECLARATION

General information

4DS Memory Limited Consolidated statement of profit or loss and other comprehensive income For the half-year ended 31 December 2022

4DS Memory Limited Consolidated statement of changes in equity For the half-year ended 31 December 2022

Note 1. Significant accounting policies

Basis of preparation

Going Concern

Estimates and judgements

4DS Memory Limited Notes to the consolidated financial statements 31 December 2022

Note 1. Significant accounting policies (continued)

Note 2. Other assets

Note 3. Trade and other payables

Note 4. Share-based payments

Note 5. Issued Capital

Note 5. Issued Capital (continued)

Note 6. Reserves

Foreign currency reserve

Share-based payments reserve

Note 6. Reserves (continued)

Movements in reserves

Note 7. Key management personnel disclosures

Note 8. Commitments and Contingent

imec commitment

Sales Bonus Pool commitment

Note 9. Events after the reporting period

PKF Perth

INDEPENDENT AUDITOR’S REVIEW REPORT

Report on the Interim Financial Report

Conclusion

Basis for Conclusion

Material uncertainty - Going Concern

Independence

Directors’ Responsibility for the Interim Financial Report

Auditor’s Responsibilities for the Review of the Financial Report

More from 4DS MEMORY LIMITED

4DS MEMORY LIMITED Interim / Quarterly Report 2023