Hi Folks,
I have updated and believe its good to submit to Peter.
Please review and advise if anything anything needs to be added or amended.
Plan to email at 1PM AEDT.
.
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Introduction & background
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Does the Board now realise and accept that the most recent companyannouncement, released on 4th November, was poorly worded tosay the least, was excessively negative and has resulted in a major loss ofconfidence in both the Board and the Company more broadly by many existingshareholders and the wider market, leading to the exit of many long-termshareholders and a resulting calamitous circa 55% fall in the share price?
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Why did no-one realise this was inevitable prior to releasing theannouncement as it was worded and amend it to make it less obviously damaging?
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The recent loss of confidence is, in many shareholders view, a directconsequence of:
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· Poorly communicated strategy
· Unannounced adoption of crystalline PCMO andassociated risk/benefit assessment
· Inconsistent and poorly worded market announcements
· Unnecessary statement: “there is no establishedmarket for Storage Class Memory”
· Ongoing timeline blowouts
· Commercial transaction anticipated during 2021 nowappears deferred indefinitely
· Directors selling shares (and no on-marketpurchases)
· Insufficient technical information for shareholdersto ascertain the possible value of the Company’s technology
· Retention (ten years) last reported in 2013,endurance unknown and speed ‘near DRAM’ also unknown
· Cell geometry scale ill-defined
· Metrics needed for SCM not stated
· Undisclosed JDA with HGST
· Unknown industry recognisable progress
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Themultiple questions collated below have been sourced from many shareholders andare aimed at trying to understand how much confidence shareholders should havein the Company and its ability to sell / commercialise its technology.
!Re-establishing shareholder confidence will require greater transparencygoing forwards, significantly improved communications and acknowledgedaccountability. Many shareholders believe you have a special opportunity inthis AGM to demonstrate this to us in abundance by your responses to thesequestions.
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Communications and Investor Relations
1. ASX continual disclosure requirements (3.1 to3.1b, guidance note 8- points 4.20 to 4.22) require a listed entity to discloseinformation that may have a material effect on the value of its securities.Case law demonstrates that this requirement must prevail over any NDAagreements. 4DS technology performance metrics and strategic pivots should nothave been withheld from the market because of NDA agreements. Can you nowcommit to timely announcements of any achievements, events or actions thataffect the value of 4DS technology, alter the Company's research strategy,affect progress toward or achievement of milestones or change the timeline to acommercial transaction? If not, why not?
!2. Unlikeother ASX listed technology stocks, 4DS in recent years has not made any effortto promote the benefits of its technology through industry media. Why has 4DSadopted this approach – in contrast to earlier years - and how does thisbenefit shareholders?
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3. Through the Stocks Down Under media outlet, Dr Willbert van denHoek acknowledged shareholders were confused with development targets set by4DS. Confusion became more apparent to shareholders when Dr Willbert van denHoek announced for the first time that 4DS is targeting to replace DRAM. Whatactions will 4DS take to no longer confuse its shareholders and why was thisinformation to have 4DS technology replace DRAM not announced years earlier?
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!Progress Towards a Commercial Transaction
4. In what ways does 4DS plan to convince the industry to replace DRAMwith its technology while reports from imec have endurance being several ordersof magnitude lower than DRAM?
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5. You stated "asthere is no established market for Storage Class Memory", which the marketinterpreted – rightly or wrongly - as indicating that there is no market for 4DS technology. What is yourview on the status of the SCM market and how does this relate to 4DS and forexample Intel actively commercially marketing Optane PMem for Data Centres?Does 4DS consider 2024-2025 a realistic estimate for wider industryadoption of storage class memory?
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6. State the value proposition behind the company's target toreplace DRAM and why it believes it will be successful in commercialising it'stechnology over other industry players such as Intel Optane Persistent Memory"PMem".
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7. 4DS Memory could generaterevenues by licensing to smaller applications - as is the approach of otheremerging memory players like Weebit Nano – doesthe company see this as a reasonable re-calibration of businessstrategy whilst we wait for a Tier 1 business case for SCM that makes a 4DSacquisition attractive?
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Progress Toward Technical Goals
8. What were the most significant outcomes of the Western Digitalinitiated meeting with 4DS in September of this year?
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9. Please describe the changes and process optimisations that arerequired to achieve the desired technical outcomes in Platform Lot 3 and then explain why you are confident thatyou will achieve these outcomes?
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10. Adoption of fully crystalline PCMO appears tobe a major change in strategic direction, implying a shift from ReRAM towardsPRAM technology. What is the business case for this change of direction and whywas it not communicated to shareholders?
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11. What is the ‘Plan B strategy’ if processoptimisation fails to resolve the problematic issues arising from use of thecrystalline PCMO material?
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12. 4DS stated that the Second Platform Lot demonstratedscalability of its memory cell to the smallest geometries on imec’s memoryplatform. Has 4DS achieved sub 28nm, sub 14nm or sub 10nm cell geometry? Thisinformation is critical for shareholders ability to understand the potential value of the technology being developed. If4DS will not release this information to shareholders, then please explain tous why it is not in our best interests.
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13. 4DS stated that it has boosted read speed by one order ofmagnitude. Please describe how this relates to specifications needed to replaceDRAM and explain how this improvement affects the value of 4DS technology.
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14. In a 2013 presentation 4DS stated that itsmemory device had achieved endurance greater than 10^9. More recently variousASX announcements stated, "best endurance data recorded - two to threetimes better" ever recorded by the company". Does "bestendurance ever recorded" mean better endurance than reported in 2013?
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15. Does the company view the Yield and Retention beingachieved in recent iterations as sufficient to enable commercialisation or doesthis still need to be improved post Third Platform Lot?
!!Relationship with Western Digital
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16. Has Western Digital defined a conditional set of technical parameters to 4DS which, if met, would potentially encourage it to pursue a commercialtransaction with us?
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17. 4DS stated that it continues to improve its test capability.Please explain why this is the case and why we are not instead leveraging Western Digital or imec'stest capabilities to extract additional endurance and retention informationfrom the Third Non-Platform Lot.
!!Technical Parameters for Commercialisation
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18. 4DS in its most recent announcement statedthat it identified a potential modest degradation of endurance with a one orderof magnitude boost in read speed. Company testing has shown that endurance ofthese improved cells was several orders of magnitude better than NAND. However,the announcement implied that this is not good enough.
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Pleaseexplain why the degraded endurance is not good enough and tell us how muchbetter than NAND our memory endurance must be to replace DRAM?
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19. Development of technology cancontinue forever but shareholders would like aclearer timeframe as to when 4DS expects to achieve a satisfactorilyworking Mb chip. Now that the timelinehas, yet again, been pushed out, on this occasion by minimum 9to 12 months, what assurances can 4DS give shareholders that we are actuallyticking the boxes that will lead to acommercially viable Mb chip? When do 4DS believe they will be ableto wrapthis up?
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!Financial
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20. Assessment of our cash balance suggests that we are likely to require another CapitalRaise. If this is the case,will 4DS be seeking a premium value or a value that reflects the sales poolbonus? If not, how do you convince shareholders to see value after the recent major drop in share price all the while bothcurrent and former executives are seen to be reducing their portfolio coupled with the absence of any on-market purchases?
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