WEEBIT NANO LTD — Annual Report 2018

Aug 23, 2018

Appendix 4E - Preliminary Financial Report for the year ended 30 June 2018

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Details of the reporting period and previous reporting period

This report is for the year ended 30 June 2018. The previous corresponding period is the year ended 30 June 2017.

Results for announcement to the market

Results for announcement to the market
	2018	2017
Revenue from ordinary activities	$NIL (100%)	$NIL
Loss from ordinary activities after tax attributable to	down from $21,971,804
members	to $4,301,869 (80%)

Dividends	Amount per security	Amount per security	Franked amount per security
Final dividend	NIL		N/A
Interim dividend	NIL		N/A
Record date for determiningentitlements to the dividend		N/A

Net tangible assets per security with the comparative figure for the previous corresponding period

	30 June 2018	30 June 2017
Net tangible asset backing per share	0.00277 cents	0.00115 cents

Details of entities over which control has been gained or lost during the period

Name of entity	Weebit France(new subsidiaryset up)
Date ofgain of control	1 November 2017
Contribution of entity	(601,858)

Dividend paid or reinvested.

No dividends have been declared or are payable for the year ended 30 June 2018.

Dividend reinvestment plan

No dividend or distribution reinvestment plan was in operation during the period ended 30 June 2018.

Accounting standard for foreign entities

The accounts of foreign entities within the Weebit Group has been prepared in accordance with International Financial Reporting Standards.

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Appendix 4E - Preliminary Financial Report for the year ended 30 June 2018

Status of the audit

The report should be read in conjunction with the preliminary final report. The financial statements in the preliminary final report are in the process of being audited.

Signed on behalf of Weebit Nano Ltd. David Perlmutter Chairman

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Appendix 4E - Preliminary Financial Report for the year ended 30 June 2018

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Preliminary Consolidated Statement of Profit or Loss & Other Comprehensive Income

for the year ended 30 June 2018

In AUD	2018 2017
Research and Development expenses Sales and Marketing expenses General and Administrative expenses Listingexpenses Finance income (costs) Other Income(net) Other Expenses	(1,079,476) (1,033,329) (140,423) (158,845) (3,216,571) (3,611,644) - (17,122,984) 150,266 (45,198) - 196 (15,665)
Loss for theyear before tax	(4,301,869) (21,971,804)
Income Tax Expense	-
Loss after income tax Other Comprehensive Income Foreign currency translation differences for foreign operations	(4,301,869) (21,971,804) (198,039) 40,088
Total Comprehensive Loss for the year	(4,499,908) (21,931,716)
Total Comprehensive Loss attributable to : Owners of theparent entity	(4,499,908) (21,931,716)
Earnings per share for loss attributable to the ordinary equity holders of the Company: Basic and diluted loss per share	(0.003) (0.02)

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Appendix 4E - Preliminary Financial Report for the year ended 30 June 2018

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Preliminary Consolidated Statement of Financial Position

as at 30 June 2018

In AUD	2018 2017
Assets Cash and cash equivalents Trade and other receivables	3,356,748 1,695,088 557,391 79,174
Total current assets	3,914,139 1,774,262
Plant and equipment Long term deposit	35,787 37,873 56,040 9,223
Total non-current assets	91,827 47,096
Total assets	4,005,966 1,821,358
Liabilities Trade and otherpayables	511,602 469,791
Total current liabilities	511,602 469,791
Total liabilities	511,602 469,791
Net assets /(liabilities)	3,494,364 1,351,567
Equity Share capital Reserves Accumulated losses	27,269,973 23,795,057 5,063,577 2,093,827 (28,839,186) (24,537,317)
Total equity	3,494,364 1,351,567

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Preliminary Consolidated Statement of Changes in Equity

for the year ended 30 June 2018

		Foreign currency translation
	Issued Capital	differences for foreign	Options Reserve	Accumulated Losses	Total Equity
In AUD		operations
Total equityat 1 July2017	23,795,057	(21,030)	2,114,857	(24,537,317)	1,351,567
Net loss for theperiod	-	-	-	(4,301,869)	(4,301,869)
Other comprehensive income	-	(198,039)	-	-	(198,039)
Total comprehensive loss for theperiod	-	(198,039)	-	(4,301,869)	(4,499,908)
	-
Transactions with equity holders :
Share Capital new subsidiary	158	-	-	-	158
Contributions of capital	2,500,000	-	-	-	2,500,000
Net of capital raisingcosts:
Capital raisingcosts	(347,420)	-	-	-	(347,420)
(Share based costs)	(1,695,000)	-	-	-	(1,695,000)
Exercise of options	3,017,178	-	-	-	3,017,178
Share-based payments	-	-	3,167,789	-	3,167,789
Total equity at 30 June 2018	27,269,973	(219,069)	5,282,646	(28,839,186)	3,494,364

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		Foreign currency
		translation
		differences for foreign
In AUD	Issued Capital	operations	Options Reserve	Accumulated Losses	Total Equity
Total equityat 1 July2016	15,604,203	-	1,323,290	(17,219,366)	(291,873)
Net loss for theperiod	-	-	-	(21,971,804)	(21,971,804)
Foreign currencytranslation differences	-	40,088	-	-	40,088
Total comprehensive loss for theperiod	-	40,088	-	(21,971,804)	(21,931,716)
Transactions with equity holders :
Reverse Acquisition
Reversal of pre-acquisition net assets of Radar
Iron Limited(Note 3)	(15,604,203)	-	(1,323,290)	17,323,838	396,345
Effective consideration(Note 3)	16,726,638	-	-	-	16,726,638
Retained earnings and share capital of Weebit
Nano Israel	2,591,302	(61,118)	-	(2,669,985)	(139,801)
Shares Issued During the Year
Contributions of capital (net of capital raising
costs)	4,477,117	-	-	-	4,477,117
Share-basedpayments	-	-	2,114,857	-	2,114,857
Total equity at 30 June 2017	23,795,057	(21,030)	2,114,857	(24,537,317)	1,351,567

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Preliminary Consolidated Statement of Cash Flows

for the year ended 30 June 2018

In AUD	2018 2017
Cashflowsfrom operating activities Interestpaid Payments to suppliers and employees	(4,531) (3,454,282) (3,063,758)
Net cash used in operating activities	(3,454,282) (3,068,289)
Cashflowsfrom investing activities Payments for fixed assets Decrease in deposits and restricted cash Proceeds from sale of prospectus & exploration rights	(6,923) (8,589) (46,817) 2,205 - 100,000
Net cash provided by investing activities	(53,740) 93,616
Cash flows from financing activities Proceeds from issues of shares Proceeds from conversion of options Capital raising costs Proceeds from convertible notes	2,500,000 1,425,400 3,017,178 75,000 (347,496) (640,283) - -
Net cashprovided by financing activities	5,169,682 860,117
Cash acquired as part of the reverse acquisition Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of theperiod	- 211,075 1,661,660 (2,114,556) 1,695,088 3,598,569
Cash and cash equivalents at the end of the year	3,356,748 1,695,088

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1. Reporting Entity

Weebit Nano Ltd (the “Company”) is a company domiciled in Australia. The preliminary consolidated financial statements of the Company as at and for the year ended 30 June 2018 comprise the Company and its subsidiaries (collectively referred to as the “Group”).

2. Basis of Preparation

(a) Statement of compliance

The preliminary consolidated financial statements has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 . The preliminary consolidated financial statements comply with International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board.

(b) Basis of measurement

The preliminary consolidated financial statements have been prepared under the historical cost convention.

(c) Functional and presentation currency

The functional currency of Weebit Nano Ltd (Israel) is US dollars and the functional currency of Weebit

Nano Ltd is Australian Dollars. The functional currency of Weebit France is Euro Dollars. The presentation currency of the Group is Australian Dollars.

(d) Financial Position

The preliminary consolidated financial statements has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The Group has incurred an operating loss after tax for the year ended 30 June 2018 of $4,301,869, (2017- Loss of $21,971,804 out of which $17,122,984 representing a share based payments for the cost of listing), reported a net working capital surplus of $3,402,537 (2017- $1,304,471) at that date and reported net cash outflows from operating activities of $3,454,282 (2017- $3,068,289). As at 30 June 2018 the Group had cash on hand of $3,356,748 (2017: $1,695,088). The loss reflects the research and development activities of the group as well as administration costs.

The Company, as is common with technology companies in the early development stage, will need to raise further capital. However it has sufficient cash to fund its mandatory obligations for a period of 12 months from the date of this report. Based on the above facts the directors’ consider the going concern basis of preparation to be appropriate.

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3. Reverse Acquisition

On 1 August 2016 Radar Iron Ltd (now Weebit Nano Ltd), the legal parent entity acquired 100% of the issued shares of Weebit Nano Ltd (Israel), an Israel registered entity. Weebit was founded in Israel in 2014 to develop a memory and semiconductor technology invented by Professor James Tour of Rice University in Houston,Texas,(a world renowned leader in the field of materials engineering and nanotechnology ) that has the potential to develop semiconductor memory elements that are to become cheaper, faster, more reliable and more energy efficient than the existing flash technology. Weebit expects to commercialize this technology, Resistive Random Access Memory (“ReRAM”) is an emerging technology that combines the advantages of both RAM and Flash.

Under the terms of the transaction Radar Iron issued 732,695,455 shares to the shareholders of Weebit Nano Ltd, resulting in Weebit Nano acquiring 68% of the legal parent entity’s issued capital. Notwithstanding that the transaction took the format of a reverse acquisition as described in AASB 3 Business Combinations, the transaction was not deemed a business combination on the basis that Radar Iron did not meet the definition of a business as noted in that standard AASB 3 Business Combinations.

The Group applied, by analogy, the guidance in AASB 3 on reverse acquisitions, resulting in Weebit Nano Ltd (Israel), (the non-listed operating entity) being identified as the accounting acquirer and Radar Iron Limited (now Weebit Nano Ltd) (the listed non-operating entity) being identified as the accounting acquiree. As the transaction is not within the scope of AASB 3, the transaction was treated as a share-based payment transaction accounted for in accordance with AASB 2 Share-based payment.

The Group consequently recognised a share-based payment of $17,122,984 in its statement of comprehensive income, representing the cost of the listing. The cost is calculated as the difference in the fair value of the shares deemed to have been issued by Weebit Nano Israel (the non-listed entity) and the fair value of the accounting acquiree‘s identifiable net liabilities.

In accordance with AASB 3 the consideration transferred by the accounting acquirer for its interest in the accounting acquiree is based on the number of the equity instruments the legal subsidiary would have to issue to the owners of the legal parent to give the same percentage equity interest in the combined entity that results from the reverse acquisition.

AASB 3 states that the consideration transferred in a business combination shall be measured at the fair value. AASB3 states that the fair value transferred should be based on the most reliable measure. The fair value of the shares of consideration transferred were valued by reference to the ASX listed quoted price of the shares of Weebit Nano Ltd (formerly Radar Iron Ltd).

The cost is calculated as the difference in the fair value of the shares deemed to have been issued by Weebit Nano Israel. (the non-listed entity) and the fair value of the accounting acquiree‘s (Radar Iron Ltd) identifiable net liabilities.

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Assets acquired and liabilities assumed on the date of acquisition:

Details of the acquisition are as follows:

etails of the acquisition are as follows:
Cash and cash equivalents Trade and other receivables Share application funds Trade and other payables Fair value of net liabilities on date of acquisition Share-based payment for listing services Acquisition date fair value of the total consideration transferred	Fair Value $ 5,036,930 118,953 (5,042,400) (509,829)
	(396,346) 17,122,984
	16,726,638

The impact of the reverse acquisition on the primary statements is as follows:

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