WEEBIT NANO LTD — Interim / Quarterly Report 2021

Feb 25, 2021

Appendix 4D Half yearly report

Rules 4.1, 4.3

Appendix 4D

Half yearly report

Introduced 1/1/2003.

Name of Entity	Name of Entity	Weebit Nano Limited	Weebit Nano Limited	Weebit Nano Limited	Weebit Nano Limited	Weebit Nano Limited
ACN		146 455 576
Financial Period Ended		31 DECEMBER 2020
Previous Corresponding Reporting Period		31 DECEMBER 2019
Results for Announcement to the Market
				$		Percentage increase /(decrease) over previous corresponding period
Revenue from ordinary activities				Nil		-
Loss from ordinary activities after tax attributable to members				9,367,308		184.41%
Loss for theperiod attributable to members				9,367,308		184.41%
Dividends (distributions)	Amount per security				Franked amount per security
Final Dividend	Nil				-
Interim Dividend	Nil				-
Previous corresponding period	Nil				-
Record date for determining entitlements to the dividends (if any)			N/A
Brief explanation of any of the figures reported above necessary to enable the figures to be understood: The company is a start-up technology company with no sales and significant research and development costs.

The half-yearly report it is to be read in conjunction with the most recent annual financial report.

• See chapter 19 for defined terms.

Appendix 4D Page 1

1/1/2003

Appendix 4D Half yearly report

Dividends

Dividends
Date the dividend ispayable	N/A
Record date to determine entitlement to the dividend	N/A
Amountper security	Nil
Total dividend	Nil
Amount per security of foreign sourced dividend or distribution	N/A
Details of any dividend reinvestment plans in operation	N/A
The last date for receipt of an election notice for participation in any dividend reinvestment plans	N/A

NTA Backing

NTA Backing
	Current Period	Previous corresponding period
Net tangible asset backing per ordinary security	16.064c	2.701c

Control Gained Over Entities Having Material Effect

Name of entity (orgroupof entities)	Not applicable
Date controlgained	Not applicable
Consolidated profit / (loss) from ordinary activities since the date in the current period on which control was acquired	Not applicable
Profit / (loss) from ordinary activities of the controlled entity (or group of entities) for the whole of theprevious corresponding period	Not applicable -
Loss of Control Gained Over Entities Having Material Effect
Name of entity (or group of entities)	Not applicable
Date control lost	-
Consolidated profit / (loss) from ordinary activities for the currentperiod to the date of loss of control	-
Profit / (loss) from ordinary activities of the controlled entity (or group of entities) while controlled for the whole of the previous corresponding period	-

Details of Associates and Joint Venture Entities

Name of Entity	Percentage Held	Percentage Held	Share of	Net Profit
	Current Period	Previous Period	Current Period	Previous Period
Not applicable	-	-	-	-

Appendix 4D Page 2

Appendix 4D Half yearly report

Audit/Review Status

This report is based on accounts to which one of the following applies: (Tick one)	This report is based on accounts to which one of the following applies: (Tick one)	This report is based on accounts to which one of the following applies: (Tick one)	This report is based on accounts to which one of the following applies: (Tick one)	This report is based on accounts to which one of the following applies: (Tick one)	This report is based on accounts to which one of the following applies: (Tick one)
The accounts have been audited				The accounts have been subject to review	X
The accounts are in the process of being audited or subject to review				The accounts have not yet been audited or reviewed
If the accounts have not yet been audited or subject to review and are likely to be subject to dispute or qualification, a description of the likely dispute or qualification: Not applicable
If the accounts have been audited or subject to review and are subject to dispute or qualification, a description of the dispute or qualification: Not applicable
Attachments Forming Part of Appendix 4D
Attachment #		Details
1		Interim Financial Report
Signed By	(~~Director~~/Company Secretary)
Print Name				Mark Licciardo
Date				26 February2021

Appendix 4D Page 3

INTERIM FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2020

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ACN 146 455 576

WEEBIT NANO LIMITED ACN: 146 455 576

CONTENTS

CORPORATE INFORMATION .................................................................................................................................... 1 DIRECTORS’ REPORT ................................................................................................................................................ 2 AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................. 6 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .................................................................................................................. 7 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION ...................................................................... 8 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ...................................................................... 9 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS .................................................................................10 NOTES TO THE FINANCIAL STATEMENTS ............................................................................................................... 11 DIRECTORS’ DECLARATION .................................................................................................................................... 16 INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS ........................................................................... 17

WEEBIT NANO LIMITED ACN: 146 455 576

CORPORATE INFORMATION

DIRECTORS:

David Perlmutter Chairman

Jacob Hanoch Managing Director and CEO

REGISTERED & PRINCIPAL OFFICE:

Level 7, 330 Collins Street MELBOURNE VIC 3000 Telephone: + 61 3 8689 9997 Facsimile: + 61 3 9602 4709

POSTAL ADDRESS:

Fred Bart Non-Executive Director

Atiq Raza Non-Executive Director

Ashley Krongold Non-Executive Director

Yoav Nissan-Cohen Executive Director

JOINT COMPANY SECRETARIES: Mark Licciardo Priyamvada Rasal (appointed 23 January 2020)

Level 7, 330 Collins Street MELBOURNE VIC 3000

WEBSITE:

www.weebit-nano.com

HOME STOCK EXCHANGE:

Australian Securities Exchange Limited Level 40, Central Park 152-158 St Georges Terrace PERTH WA 6000

ASX CODE:

WBT

SHARE REGISTRY:

AUDITORS:

Nexia Perth Audit Services Pty Ltd Level 3 88 William Street PERTH WA 6000

Computershare Investor Services Pty Ltd 452 Johnston Street ABBOTSFORD VIC 3067

SOLICITORS - SYDNEY:

King & Wood Mallesons Level 61 Governor Phillip Tower 1 Farrer Place Sydney NSW 2000

BANKERS:

Westpac Banking Corporation 108 Stirling Highway NEDLANDS WA 6009

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WEEBIT NANO LIMITED ACN: 146 455 576

DIRECTORS’ REPORT

Your Directors have pleasure in submitting their report on Weebit Nano Limited (“the Company”) and its subsidiaries (“the Group”), for the half year ended 31 December 2020. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

Directors

The names and details of Directors in office at any time during the period were:

David Perlmutter Non-Executive Chairman Jacob Hanoch Managing Director and CEO Yoav Nissan Cohen Executive Director Ashley Krongold Non-Executive Director Fred Bart Non-Executive Director Atiq Raza Non-Executive Director

Directors have been in office since the date of appointment to the date of this report unless otherwise stated.

Principal Activities

Weebit Nano Ltd (“WBT” or the “Company”) develops a next generation Non-Volatile Memory using a Resistive RAM (ReRAM) technology based on Silicon Oxide (SiOx).

On 24 November 2017 Weebit Nano Israel, a wholly owned subsidiary, incorporated a 100% held R&D subsidiary in France- Weebit Nano France.

Review of Operations

The net loss attributable to members of the Company for the half year ended 31 December 2020 was $9,367,308 (H1 FY20: $3,293,618). The increase in net loss compared to the prior corresponding period reflects an increase in research and development costs due to the Company’s accelerated development process and progress towards first commercialisation.

Additionally, in the prior period, a $1,539,676 research and development incentive refund was received by Weebit Nano SARL (France). The refund was offset against prior’s year research and development costs. This year’s refund was received earlier and was included in the year ended 30 June 2020 financials.

Weebit Nano significantly progressed its growth strategy over the six months ended 31 December 2020, achieving all key milestones previously set for the half year, and also bringing forward future development milestones following the successful capital raisings undertaken.

Completed stabilisation process

Weebit Nano continued to improve its silicon oxide (SiOx) ReRAM technology alongside the Company’s long-term development partner CEA-Leti. In October 2020, Weebit Nano successfully verified that its production process is repeatable and consistent as part of the technology stabilisation process and is now ready to begin the transfer of its technology to a production fab.

Conducted at Leti’s development facilities, the stabilisation process significantly improved the quality of Weebit Nano’s memory functionality, bringing the level of functional cells to over 99 per cent – a key requirement when moving to production and in line with industry production standards.

During the stabilisation process, Weebit Nano also increased the wafer-to-wafer and die-to-die uniformity and ensured batch-to-batch repeatability. These critical improvements were required before Weebit Nano could commence manufacturing its technology in a production fab.

• 2 -

WEEBIT NANO LIMITED ACN: 146 455 576

DIRECTORS’ REPORT

Review of Operations (continues):

Broadened strategic partnership with development partner, CEA-Leti

In November 2020, Weebit Nano broadened its strategic partnership with French development partner CEA-Leti to incorporate additional technical development. Under the expanded partnership, the joint Weebit Nano-Leti team is:

• further refining the efficiency and robustness of Weebit Nano’s SiOx ReRAM technology

• enhancing the capability of the memory module for the embedded market

• progressing development work integrating Leti’s proprietary selector with Weebit Nano’s ReRAM.

The enhanced memory module will better address customer needs, meet production levels and significantly increase its attractiveness to potential customers. It will also be one of the first in the world to be integrated into a sub-system consisting of a processor, Static Random-Access Memory (SRAM), the ReRAM array and peripherals.

Strengthened senior management team

During the December-half, Weebit Nano strengthened its senior management team with key appointments as the Company moves closer to commercialisation:

• Ilan Sever was appointed Vice President Research & Development

• Eran Briman was appointed Vice President Marketing & Business Development

• In January, Ishai Naveh also joined the Company as Chief Technology Officer.

Ilan, Eran and Ishai are highly credentialed semiconductor industry specialists with a combined 80 years’ experience in this industry, and specifically in the memory domain. Their expertise adds to Weebit Nano’s existing capabilities at Board and management level, as Weebit Nano prepares for productisation and moves closer to first commercialisation.

5 new patents filed to protect IP

Weebit Nano continues to protect its intellectual property, filing five new patents during the December-half. Three of these are joint patents with Weebit Nano’s research partner CEA-Leti, relating to ReRAM optimisation and multi-level storage in ReRAM (for Which Weebit has exclusive rights to commercialisation). Weebit Nano’s two patents define a novel selector suitable for embedded ReRAM memory applications using standard Silicon On Insulator (SOI) low-voltage transistors, reducing the size of the selector and enabling production of smaller, lowercost embedded memory modules.

Significantly strengthened balance sheet

Weebit Nano completed a very strongly supported and oversubscribed $15 million Placement and Share Purchase Plan (SPP) during the December-half. In addition, a further $2.5 million in cash was added following shareholder approval of the June 2020 Placement and SPP. In addition, a further $1.1 million was raised from the exercise of some of the Company’s listed options.

The capital raised enables Weebit Nano to fast-track its technical activities, including:

• the transfer to a production fab

• initiating the shift to 300nm/28nm technology in the embedded memory market

• continuing to improve its ReRAM technology

• developing the next generation of the neuromorphic dem

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WEEBIT NANO LIMITED ACN: 146 455 576

DIRECTORS’ REPORT

Review of Operations (continues):

The funds will also be used to support Weebit Nano’s commercialisation initiatives, including:

• further strengthening its sales team

• increasing marketing activities in the embedded memory market

• establishing partnership programs within the standalone segment.

Well placed to accelerate development of “selector” for the standalone memory market

The strengthened balance sheet is enabling Weebit Nano to accelerate development of the ‘selector’ for the standalone memory market. Beyond the current goal of demonstrating an operating ReRAM and selector bit by Q3 FY21, the Company is now targeting a working array by Q1 FY22.

Navigating through COVID-19 market challenges

Despite the travel restrictions imposed by COVID-19, Weebit Nano continues to progress its growth strategy. While Company management has not been able to travel to meet potential partners, and its engineers can’t work on-site with partner engineers in their labs, Weebit Nano is communicating with multiple production fabs, product companies and potential partners worldwide, discussing different types of potential commercial agreements, and Weebit Nano expects to progress with at least one of them over the coming months.

Almost all of the Company’s Israeli team have now received both doses of the COVID-19 vaccine and are able to immediately return to a more normal operating rhythm and engagement with potential customers and partners once travel restrictions are lifted.

COVID-19 has impacted the semiconductor industry, which is now experiencing significant over-demand. Production fabs are struggling to meet this demand and this is impacting many sectors. For example, automotive manufacturers have been announcing delivery delays as new cars often include over 100 semiconductor components and supply of those components has been disrupted. Weebit Nano is progressing its discussions with production fabs on technology transfer, despite these manufacturing pressures, and finding creative solutions enabling it to proceed.

Other notable activities during the reporting

Weebit Nano jointly presented the use of its ReRAM in brain-inspired artificial intelligence applications at two international industry conferences – IEEE International Conference on Artificial Intelligence Circuits, and Systems and the Symposia on VLSI Technology and Circuits.

Weebit Nano was also added to the S&P Dow Jones ASX AII Technology Index in December 2020. This is a direct result of the Company’s significant operational progress over the first half financial year, that has significantly increased its market capitalisation and trading liquidity

• 4 -

WEEBIT NANO LIMITED ACN: 146 455 576

DIRECTORS’ REPORT

Subsequent Events

On January 2021 the Company announced the appointment of a non-volatile memory veteran Mr. Ishai Naveh as Chief Technology Officer (CTO).

After the period end the following options and performance rights were exercised:

• A total of 3,553,172 listed options were exercised at an exercise price of $0.45 per option. This resulted in the issue of 2,666,918 shares.

• A total of 203,750 unlisted options were exercised at an exercise price of $1.7175 per option. This resulted in the issue of 223,750 shares.

• A total of 180,000 unlisted options were exercised at an exercise price of $1.3125 per option. This resulted in the issue of 180,000 shares.

• A total of 180,000 unlisted options were exercised at an exercise price of $1.53125 per option. This resulted in the issue of 180,000 shares.

• A total of 70,313 unlisted options were exercised at an exercise price of $0.54 per option. This resulted in the issue of 70,313 shares.

• A total of 60,000 unlisted options were exercised at an exercise price of $0.4468 per option. This resulted in the issue of 60,000 shares.

• A total of 52,500 unlisted options were exercised at an exercise price of $0.4286 per option. This resulted in the issue of 52,500 shares.

• A total of 31,250 unlisted options were exercised at an exercise price of $0.74 per option. This resulted in the issue of 31,250 shares.

• A total of 113,000 performance rights were converted a nil value which resulted in the issue of 113,000 shares.

Auditor’s Independence Declaration

The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 for the half year ended 31 December 2020 has been received and can be found on page 5.

Signed in accordance with a resolution of the Directors made pursuant to Section 306(3) of the Corporations Act 2001 .

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David Perlmutter Chairman Hod Hasharon, Israel 25 February 2021

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Lead auditor’s independence declaration under section 307C of the Corporations Act 2001

To the directors of Weebit Nano Limited

I declare that, to the best of my knowledge and belief, in relation to the review for the half-year ended 31 December 2020 there have been:

• (i) no contraventions of the auditors independence requirements as set out in the Corporations Act 2001 in relation to the review; and

• (ii) no contraventions of any applicable code of professional conduct in relation to the review.

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Nexia Perth Audit Services Pty Ltd

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M. Janse Van Nieuwenhuizen Director

Perth, 25 February 2021

6

WEEBIT NANO LIMITED ACN: 146 455 576

Condensed Consolidated Statement of Profit or Loss and Other Com rehensive Income p

For the half year ended 31 December 2020

Note Research and Development expenses (net) 2 Sales and Marketing expenses General and Administrative expenses Loss from operations for the period Financial income (expenses) Loss before tax for the period Income tax expense Net loss for the period Other comprehensive income Foreign currency translation differences for foreign operations Total comprehensive loss for the period Total comprehensive loss for the period Basic and diluted loss per share - cents per share	Consolidated 31 December 2020 $ Consolidated 31 December 2019 $ (4,887,565) (996,696) (458,661) (165,187) (2,096,140) (2,070,164)
	(7,442,366) (3,232,047) (1,924,942) (61,571)
	(9,367,308) (3,293,618) - -
	(9,367,308) (3,293,618) 2,128,516 52,107
	(7,238,792) (3,241,511)
	(7,238,792) (3,241,511) (0.091) (0.048)

The above Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

• 7 -

WEEBIT NANO LIMITED ACN: 146 455 576

Condensed Consolidated Statement of Financial Position

As at 31 December 2020

		Consolidated	Consolidated
		31 December 2020	30 June 2020
	Note	$	$
ASSETS
Current assets
Cash and cash equivalents		18,855,714	4,115,275
Trade and other Receivables		883,200	199,593
Total current assets		19,738,914	4,314,868
Non-current assets
Long term deposit		12,902	13,506
Right of use assets		57,523	113,914
Plant and equipment		62,032	65,905
Total non-current assets		132,457	193,325
TOTAL ASSETS		19,871,371	4,508,193
LIABILITIES
Current liabilities
Trade and other payables		1,085,294	1,041,342
Lease liabilities		41,347	99,894
Total current liabilities		1,126,641	1,141,236
Non-current liabilities
Lease liabilities		23,374	24,445
Total non-current liabilities		23,374	24,445
TOTAL LIABILITIES		1,150,015	1,165,681
NET ASSETS		18,721,356	3,342,512
EQUITY
Issued capital	3	56,761,405	36,133,657
Reserves		10,881,705	6,763,301
Accumulated losses		(48,921,754)	(39,554,446)
TOTAL EQUITY		18,721,356	3,342,512

The above Condensed Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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WEEBIT NANO LIMITED ACN: 146 455 576

Condensed Consolidated Statement

of Chan es in E uit g q y

For the half year ended 31 December 2020

	Issued Foreign currency translation differences for foreign operations Option Accumulated Total Note Capital Reserve Losses Equity 2020 CONSOLIDATED $ $ $ $ $ Total equityat 1 July2020 36,133,657 (875,708) 7,639,009(39,554,446) 3,342,512 Net loss for the period - - - (9,367,308) (9,367,308) Other comprehensive income - 2,128,516 - - 2,128,516 Total comprehensive income / (loss) for the period - 2,128,516 - (9,305,655) (7,238,792) Transactions with equity holders: Contributions of capital 3 21,888,241 - - - 21,888,241 Capital raising costs 3 (2,425,803) - - - (2,425,803) Exercise of options 3 1,165,310 - - - 1,165,310 Share-basedpayments 6 - - 1,989,888 - 1,989,888 Total equity at 31 December 2020 56,761,405 1,252,808 9,628,897 (48,921,754) 18,721,356	Issued Foreign currency translation differences for foreign operations Option Accumulated Total Note Capital Reserve Losses Equity 2020 CONSOLIDATED $ $ $ $ $ Total equityat 1 July2020 36,133,657 (875,708) 7,639,009(39,554,446) 3,342,512 Net loss for the period - - - (9,367,308) (9,367,308) Other comprehensive income - 2,128,516 - - 2,128,516 Total comprehensive income / (loss) for the period - 2,128,516 - (9,305,655) (7,238,792) Transactions with equity holders: Contributions of capital 3 21,888,241 - - - 21,888,241 Capital raising costs 3 (2,425,803) - - - (2,425,803) Exercise of options 3 1,165,310 - - - 1,165,310 Share-basedpayments 6 - - 1,989,888 - 1,989,888 Total equity at 31 December 2020 56,761,405 1,252,808 9,628,897 (48,921,754) 18,721,356
		Total equityat 1 July2019 31,552,035 (590,694) 6,176,083(35,532,989) 1,604,435
		Net loss for the period - - - (3,293,618) (3,293,618) Other comprehensive income - 52,107 - - 52,107 Total comprehensive income / (loss) for the period - 52,107 - (3,293,618) (3,241,511) Transactions with equity holders: Shares issued during the year: Contributions of capital 3,138,232 - - - 3,138,232 Capital raising costs (459,000) - - - (459,000) Share-basedpayments 50,000 - 851,146 - 901,146
		Total equity at 31 December 2019 34,281,267 (538,587) 7,027,229 (38,826,607) 1,943,302

The above Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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WEEBIT NANO LIMITED ACN: 146 455 576

Condensed Consolidated Statement of Cash Flows

For the half year ended 31 December 2020

Note Cash flows from operating activities Payments to suppliers and employees Interest paid Net cash used in operating activities Cash flows from investing activities Payments for fixed assets Investments in deposits and restricted cash Net cash used in investing activities Cash flows from financing activities Proceeds from the issue of shares 3 Capital raising costs 3 Proceeds from exercise of options Repayment of lease liabilities Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	Consolidated 31 December 2020 $ Consolidated 31 December 2019 $ (6,738,823) (2,215,157) (68) (9,151) (6,738,891) (2,224,308)
	(3,119) (12,544) 604 (409)
	(2,515) (12,953)
	21,888,241 3,138,232 (1,517,803) (459,000) 1,165,311 - (53,904) (41,858)
	21,481,844 2,637,374
	14,740,440 400,113 4,115,275 1,670,912
	18,855,714 2,071,025

The above Condensed Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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WEEBIT NANO LIMITED ACN: 146 455 576

Notes to the Financial Statements

NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity

Weebit Nano Limited (the “Company”) is a company domiciled in Australia. The consolidated interim financial report of the Group as at and for the half year ended 31 December 2020 comprises the Company and its subsidiaries – Weebit Nano Israel and Weebit Nano France, together referred to as the Group.

Statement of Compliance

The consolidated interim financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 . Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting . The interim financial report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Group as in a full financial report.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2020 and any public announcements made by Weebit Nano Ltd during the half year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of new and amended standards as set out below.

This consolidated interim financial report was approved by the Board of Directors on 25 February 2021.

Basis of Preparation

The interim financial report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Financial Position

The financial report 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 reported a net loss for the period of $9,367,308 (2019: $3,293,618) and a cash outflow from operating activities of $6,738,891 (2019: $2,224,308). The Group had a net working capital surplus of $18,612,273 (June 2020: $3,173,632) including cash of $18,855,714 at 31 December 2020 (June 2020: $4,115,275). The loss mainly reflects the research and development activities of the Group.

Based on a cash flow forecast prepared by management, the Group’s working capital surplus at 31 December 2020 and the Group’s ability to raise funds and to reduce costs if necessary, the Directors consider the going concern basis of preparation to be appropriate.

Significant Accounting Judgements and Key Estimates

The preparation of interim financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

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WEEBIT NANO LIMITED ACN: 146 455 576

Notes to the Financial Statements

In preparing this half year report, the significant judgements made by management in applying the Group’s and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report for the year ended 30 June 2020.

NOTE 2 – RESEARCH AND DEVELOPMENT EXPENSES (NET)

Research and development expenses Research tax credit incentive refund*	31 December 2020 $ 31 December 2019 $ 4,887,565 2,536,372 - (1,539,676)
	4,887,565 996,696

* Research and Development grants (incentive refunds) are recognised as and when the receipts are virtually certain. The refund in respect of 2018 R&D costs was recognized in the 6 months period ended December 31, 2019. The refund in respect of 2019 R&D costs was recognized in June 30, 2020 annual report.

NOTE 3 – ISSUED CAPITAL

CONSOLIDATED AND PARENT ENTITY (a) Issued and Paid Up Capital Fully paid ordinary shares (b) Movements in fully paid shares on issue Balance at the start of the period Shares issued in the period: Capital Raising (a) Options and performance rights converted to shares Shares granted in lieu of services rendered (b) Capital Raisings Costs Balance at end of period	December 2020 No. December 2020 $ June 2020 No. June 2020 $ 116,541,625 56,761,405 80,388,947 36,133,657
	80,388,947 36,133,657 63,648,648 31,552,035 33,545,099 21,888,241 15,918,699 5,340,000 2,607,579 1,165,310 693,350 - - - 128,250 50,000 - (2,425,803) - (808,378)
	116,541,625 56,761,405 80,388,947 36,133,657

(a) During the period, the Company raised a total amount of $21,288,241 by means of private placements and a share purchase plan.

The cost of the fund raising totaled $2,425,803. $908,000 of this related to share based payments for 11,350,000 listed options granted to brokers and advisors.

• 12 -

WEEBIT NANO LIMITED ACN: 146 455 576

Notes to the Financial Statements

NOTE 4 – RELATED PARTY TRANSACTIONS

• A. As part of the shares issued during the period, 767,857 shares and 767,857 listed options were issued to directors of the Company who participated in the fund raising at $0.28 per share. Total directors’ participation in the fund raising amounted to $215,000.

• B. Refer to Note 6 for share options and performance rights granted to directors and key management personnel.

NOTE 5 – SEGMENT REPORTING

Description of segments

As at 31 December 2020, the Group only had one operating segment namely memory and semiconductor technology development.

• 13 -

WEEBIT NANO LIMITED ACN: 146 455 576

Notes to the Financial Statements

NOTE 6 – SHARE BASED PAYMENTS

Share-based payment transactions

The Company has completed the following share-based payment transactions:

Expense of options granted in previous periods (i.e. expensed over the vesting period) 500,000 options granted to Chairman 900,000 options granted to CEO 860,000 options granted to directors 200,000 options granted to advisors 450,000 options granted to employees 64,000 performance rights granted to an employee 128,000 performance rights granted to a director 3,175,354 options granted to employees 550,000 options granted to directors 500,000 options granted to Chairman 900,000 options granted to CEO

Options 31 December 2020 $ Options 31 December 2019 $ 440,477 675,760 - 22,966 - 47,245 - 46,486 - 7,369 - 28,544 - 6,226 - 16,550 398,354 - 79,587 - 72,352 - 130,234 -

1,121,004 851,146

During the half year ended 31 December 2020 the Company issued the following unlisted options:

Date of Grant	Grantee	Number of options	Exercise price $	Vesting Conditions	Expiry date	Under- lying share price $	Share price volatility	Risk free interest rate	Fair Value $
13/09/2020	Employee	1,587,677	0.286	*	12/09/2030	0.87	87.73%- 90.09%	0.33%- 0.95%	0.75
24/11/2020	Employee	1,587,677	0.286	*	23/11/2030	2.26	87.73%- 90.09%	0.33%- 0.95%	2.10
17/11/2020	Director	100,000	0.823	*	17/09/2030	2.29	87.73%- 90.09%	0.33%- 0.95%	2.09
17/11/2020	Director	100,000	0.823	*	17/09/2030	2.29	87.73%- 90.09%	0.33%- 0.95%	2.09
17/11/2020	Director	100,000	0.823	*	17/09/2030	2.29	87.73%- 90.09%	0.33%- 0.95%	2.09
17/11/2020	Director	250,000	0.823	*	17/09/2030	2.29	87.73%- 90.09%	0.33%- 0.95%	2.09
17/11/2020	Chairman	500,000	0.823	*	17/09/2030	2.29	87.73%- 90.09%	0.33%- 0.95%	2.09
17/11/2020	CEO	900,000	0.823	*	17/09/2030	2.29	87.73%- 90.09%	0.33%- 0.95%	2.09

• 25% shall vest upon the completion of the first 12-month period following the grant and then 6.25% shall vest every 3 months thereafter.

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WEEBIT NANO LIMITED ACN: 146 455 576

Notes to the Financial Statements

NOTE 7 – SUBSEQUENT EVENTS

On January 2021 the Company announced the appointment of a non-volatile memory veteran Mr. Ishai Naveh as Chief Technology Officer (CTO).

After period end the following options and performance rights were exercised:

• A total of 3,553,172 listed options were exercised at an exercise price of $0.45 per option. This resulted in the issue of 2,666,918 shares.

• A total of 203,750 unlisted options were exercised at an exercise price of $1.7175 per option. This resulted in the issue of 223,750 shares.

• A total of 180,000 unlisted options were exercised at an exercise price of $1.3125 per option. This resulted in the issue of 180,000 shares.

• A total of 180,000 unlisted options were exercised at an exercise price of $1.53125 per option. This resulted in the issue of 180,000 shares.

• A total of 70,313 unlisted options were exercised at an exercise price of $0.54 per option. This resulted in the issue of 70,313 shares.

• A total of 60,000 unlisted options were exercised at an exercise price of $0.4468 per option. This resulted in the issue of 60,000 shares.

• A total of 52,500 unlisted options were exercised at an exercise price of $0.4286 per option. This resulted in the issue of 52,500 shares.

• A total of 31,250 unlisted options were exercised at an exercise price of $0.74 per option. This resulted in the issue of 31,250 shares.

• A total of 113,000 performance rights were converted at nil value which resulted in the issue of 113,000 shares.

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WEEBIT NANO LIMITED ACN: 146 455 576

Directors’ Declaration

In the opinion of the directors:

The condensed interim financial statements and notes thereto are in accordance with the Corporations Act 2001 including:

• complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its performance for the half year period then ended.

There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is signed in accordance with a resolution of the Board of Directors.

On behalf of the Board

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Jacob Hanoch Director Israel

25 February 2021

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Independent Auditor’s Review Report to the members of Weebit Nano Limited

Report on the Interim Financial Report

Conclusion

We have reviewed the accompanying interim financial report of Weebit Nano Limited (the Company) and its controlled entities (the Group), which comprises the condensed consolidated statement of financial position as at 31 December 2020, the condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of accounting policies, other explanatory notes, and the directors’ declaration of the Group comprising the Company and the entities it controlled at the half-year end or from time to time during the interim period.

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the the interim financial report of Weebit Nano Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its performance for the half-year ended on that date; and

• (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

Directors’ Responsibility for the Interim Financial Report

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

Auditor’s Responsibility

Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (ASRE 2410), in order to state whether, on the basis of the procedures described, anything has come to our attention that causes us to believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 31 December 2020 and its performance for the period ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

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As the auditor of Weebit Nano Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of an interim 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.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Weebit Nano Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

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Nexia Perth Audit Services Pty Ltd

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M. Janse Van Nieuwenhuizen Director

Perth, 25 February 2021

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