Ann: 4DS Technical Update, page-189

I think this announcement kinda reflects why my "sentiment" has been set to hold for a while now. As others have mentioned before there is a lot of confirmation bias on this forum which has been part of my learning journey (i most certainly have been part of this as i am an optimist).

I will however have a go at being super critical. No one likes to see a 20% down day but here we are.

1) Cash on hand.

We all know that there is limited cash in the tank to take us beyond 2021 without making us liable for an ASX de-listing. I believe the minimum is atleast 2 quarters of financing to remain listed. Within this framework and historical timelines I suggest expecting Platform Lot 3 results by late Q1 i.e. late February / March.

Drs. Wilbert made the following comment:


In my view it has certainly not been timely and within budget is questionable because from the last quarterly we definitely need an injection of funding and this is largely why the share price fell today. As per below, we have sufficient funding till the end of May approximately.

I suspect the capital raise will be around the 12-14c mark. Note: We have a large number of options that could be exercised by those with deeper pockets than myself.

2) Technology

• Technology seems to be improving but also a technical issue in developing the Platform Lot 2 that was supposed to operate as a functional megabit array.

• Previous announcement detail the nature of the Platform Lot (e.g. control logic necessary to read and write bytes etc.). However, the announcement for Platform Lot 3 does not have any of this detail and a vague reference to "brings us closer to demonstrating its [Company's] ReRam technology in a functional megabit memory macro".
• This begs the question will there be more Platform Lots? Or will Platform Lot 3 be the functioning megabit memory??

3) Technical update with HGST (WDC)

• I suspect, as others have already outlined, that within a Joint Venture agreement any technical updates would be part of the standard operating procedure. I imagine a technical review was conducted in the past where HGST / WDC provided input into the process parameters and condiitions for manufacturing some of the previous lots of non-Platform and Platform wafers.

Conclusion:

I am disappointed as I am sure many of us LTHs are with the blowout of our 2021 deadline. I probably won't be investing further and look to further diversify my porfolio into other investments. I will be keeping any eye out for a capital raise but unless it is super attractive and we get some clear transparency on timelines / objectives / updates will likely pass up on the opportunity.

From a WDC point of view and this is something I have covered before - there are strongly focussed on paying down their debt (related to acquisition of SanDisk) which I believe someone posted recently is just under $9b in non-current liabilities. At the same time, they continue to have an eye out for potential acquisitions to enhance their portfolio of assets and / or technologies. Naturally, they are our likely acquirers but will be competing with others who have deeper pockets (and cash on hand).