Hey Folks,
Are we good to proceed with the below? or did we want to reduce it down to a select number of priority questions that we collectively email and if we get the opportunity at the AGM to ask what is outstanding from the list.
Introduction and Background
This AGM is in the context of seriously diminished shareholder confidence in the company as reflected by its share price collapse following the announcements of 17 August and 4 November. The loss of confidence is a direct consequence of:
·poorly communicated strategy
ounannounced adoption of crystalline PCMO and associated risk/benefit assessment
·inconsistent announcements
o“resolvable going forward with no delays to current timelines” becomes “expected out-of-fab date is July 2022”.
otarget market for 4DS technology is Storage Class Memory becomes “there is no established market for Storage Class Memory”
·ongoing timeline blowouts
ocommercial transaction anticipated in 2019 became during 2021 and is now deferred indefinitely
·directors selling shares (and no on market purchases)
·insufficient information for shareholders to ascertain the value of the Company’s technology
oretention(ten years) last reported in 2013, endurance unknown and speed ‘near DRAM’
ocell geometry scale ill-defined
ometrics needed for SCM not stated
oundisclosed JDA with HGST
The shareholder questions collated below are aimed at understanding how much confidence shareholders should have in the Company, its ability to sell its technology and its value. Re-establishing shareholder confidence will require complete transparency and acknowledged accountability. You have a special opportunity now to demonstrate these in abundance by your responses to these questions.
Progress Towards a Commercial Transaction
1.You reported that "4DS Memory had made significant and industry recognizable progress". The recent share price action suggests the opposite. What is the evidence you rely on to justify the assertion that“significant and industry recognizable progress" has in fact been made?
2.In what ways have the results from the Second Platform Lot and Third Non-Platform made 4DS commercial ready?
3.You stated "As there is no established market for Storage Class Memory" which the market interpreted as indicating that there isnomarket for 4DS technology. What is the status of the SCM market and how does this relate to 4DS technology and Intel marketing Intel Optane Memory as Storage Class Memory for Data Center Storage?
4.At last year's AGM a director stated that 4DS technology is already saleable and that 4DS had received much unsolicited interest. Do you support this statement? If not, why not, and what will you do to address this commentary?
5.Given there is no current market for Storage ClassMemory, as stated inthe 4 November technical update, and given Storage class memory is the ultimate purpose and reason for developing 4DSInterface switching ReRAM, does it not make more strategic sense to develop the technology to this point and then wait for the market to develop?
6.4DS Memory may generate revenues by licensing to smaller applications a sis the approach of other emerging memory players like Weebit Nano. Is this a reasonable re-calibration of business strategywhile wewait for a tier 1 business case for SCM that makes 4DS acquisition attractive?
7.Is 2024-2025a realistic estimate for industry adoption of storage class memory?
8.The BOD and Jim Dorrian have communicated the value of 4DS to be 20-30X current value on completion of objectives via interviews. Does the BOD consider the possibility of a higher share price to be a better platform for negotiating a commercial transaction, or does the BOD consider the share price to be irrelevant when determining a sale price for the business?
Progress Toward Technical Goals
9.What were the three most significant outcomes of the Western Digital initiated meeting with 4DS?
10.Please describe the changes and process optimisations required to achieve thedesiredtechnical outcomes in platform lot 3 and then provide evidence for your confidence that you will achieve these outcomes?
11.Adoption of fully crystalline PCMO appears to be a major change in strategic direction, implying a shift from ReRAM towards PRAM technology. What is the business case for this change of direction and why was it not communicated to shareholders?
12.What is the ‘Plan B strategy’ if process optimization fails to resolve the problematic issues arising from use of the crystalline PCMO material?
13.Can you confirm that the Third Non-Platform Lot wafers will be the last of the non-platform wafers?
Communications and Investor Relations
14.Unlike other technology ASX listed stocks 4DS has not promoted the benefits of its technology through industry media. Why has 4DS adopted this approach and how does this benefit shareholders?
15.Given that the NDA with imec precludes provision of timely,quantitative and contextualized performance reporting, please explain how the NDA benefits shareholders?
16.From a shareholder’s perspective, 4DS habitually presents announcements on the ASX with little to no quantitative or contextual information. This makes it impossible to determine what actual progress is being made. The qualitative and frustratingly vague Technical Announcements confuse shareholders because contextually cannot be assessed. Will 4DS commit to ensuring that all future announcements include contextualized metrics and measurable performance milestones to ensure that both market and share holders are accurately informed? If not, why not?
17.4DS stated that the second platform lot demonstrated scalability of its memory cell to the smallest geometries on imec’s memory platform. Has 4DS achieved sub 28nm, sub 14nm or sub 10nm cell geometry? This information is criticalfor shareholder’s abilityto understand the value of the technology developed.
18.In a2013 presentation 4DS stated that its memory device had achieved retention of 10 years at 85 degrees C. More recently various ASX announcements stated, "best retention ever recorded by the company". Does "best retention ever recorded" mean better retention than reported in 2013?
19.4DS stated that it has boosted read speed by approximately one order of magnitude. Please describe how this relates to specifications needed to meet SCM requirements and explain how this improvement affects the value of 4DS technology.
20.Does 4DS care about the share price? If not, why not? If yes,what actions will you take to restore market and shareholder confidence lost by total breach of the 2021 commitment to deliver a commercial transaction and/or megabit chip?
21.Can theExecutive Investor Relations explain why he should be re-elected to this board given the under-performance noted by retail SH in his roleof IR?The director has failed to respond most of the times to even the most basic of SH enquiries over the years andisappears to be responsible for some of the most unprofessional and amateurish yet seen posted on the ASX
22.ASX continual disclosure requirements (3.1 to 3.1b, guidance note 8- points 4.20 to 4.22) require a listed entity to disclose information that may have a material effect on the value of its securities. Case law demonstrates that this requirement must prevail over any NDA agreements. 4DS technology performance metrics and strategic pivots should not have been withheld from the market because of NDA agreements.Can you now commit to timely announcements of any achievements, events or actions that affect the value of 4DS technology, alter the Company's research strategy, affect progress toward or achievement of milestones or change the timeline to a commercial transaction? If not, why not?
Relationship with Western Digital
23.What is the scope of Western Digital’s role in the Joint Development Agreement and what material benefits does this role provide 4DS and its shareholders?
24.Has Western Digital defined a conditional set of parameters which, if met, would allow it to pursue a commercial transaction with 4DS? Ifnot, what is stopping Western Digital from making a commercial transaction with 4DS?
25.4DS stated that it continues to improve its test capability.Please explain why this is the case and why we are notinsteadleveraging Western Digital or imec's test capabilities to extract additional endurance information from the Third Non-Platform Lot.
Relationship with imec
26.Can you please confirm that during the period of the suspension, imec wanted to discontinue the collaboration agreement and 4DS had to give them increased fees and a royalty in order to win imec’s further support?
27.Under what circumstances do you see the royalty claim being initiated with imec, given the development steps and agreement timeline with imec?
Technical Parameters for Commercialisation
28.4DS stated that it identified a potential modest degradation of endurance with the one order of magnitude boost in read speed. Company testing has shown that endurance of these improved cells was several orders of magnitude better than NAND. However, the announcement implied that this is not good enough. Please explain why the degraded endurance is not good enough and tell us how much better than NAND our memory endurance must be to be acceptable for thenascent SCM market?
29.Can 4DS today challenge Intel Optane Technology and commercially market its technology withcurrent metrics?
30.Development can continue forever but shareholders want a clear time frame for when 4DS expect to wrap this up. Now that the timeline has yet again been pushed out, on this occasion by 9 to 12 months, what assurances can 4DS give shareholders that we are actually ticking the boxes that lead to a commercially viable megabit chip? When will 4DS wrap this up?
31.Assessment of our cash balance indicates that we are in for another Capital Raise. Will 4DS be seeking a premium value or a value that reflects the sales pool bonus? If not, how do you convince shareholders to see value in 4DS technology after the major drop in share price all the while current and former executives are seen reducing their portfolio coupled with the absence of on market purchases?
(20min delay)