Short Term Trading Weekend Lounge: 4-6 Jan, page-35

Doing some further digging into 4DS over the weekend after taking a few nice trades out of it during the week and holding a few for longer term. Have to say I'm impressed with the way the company presents. 

Starting with the cash flows, the company are running on fumes in the wage and admin column with cash burn heavily weighted towards R&D. After the recent raise they have funding based on current spend for another 4-5 quarters which should see them through to their stated goal of being acquired. 

To get an idea it's worth comparing the last quarterly from 4DS and WBT, 2 companies in a similar field but with vastly different resource allocation. 

WBT ~85% of shareholders funds go to staff and admin costs, 5% goes to R&D

$4DS 9% of shareholders funds go to staff and admin costs, 86% goes to R&D. I know where I prefer to see my dollar spent. 

As per the attached interview 4DS are have proven the technology and are now at the stage of proving up the manufacturing process. This in essence is about finding the right order of known manufacturing steps so while it may take several iterations I would view this stage as relatively low risk, time being the primary unknown. 

Jim Dorrian who speaks in the interview has been there done that in terms of successful start ups and exits as a founder of Arbor Software sold to Oracle for ~$4 billion 2007 and Bill Me Later sold to PayPal for ~$1 billion 2008. Jim then got on board 4DS and has made it clear that he see's 4DS being bigger

The other key thing as with any tech play is that the IP is in order, 4DS to date have 20 patents granted and 3 under application for their Storage Class Memory tech. Further IP protection would be anticipated for the manufacturing process once fully defined. On the manufacturing front they have engaged IMEC, the world-leading research and innovation hub in nanoelectronics and digital technologies.

https://www.copyright link/leadership/entrepreneur/jim-dorrian-silicon-valley-veteran-on-taking-4ds-to-the-asx-20160927-grp9ee

do not advertise external links.au/companies/news/173422/4ds-memory-targeting-billion-dollar-market-with-memory-technology-173422.html

From my research over the weekend I feel that this is a genuine company with a genuine capacity to become a takeover target at a significant premium over the next 12 months, as such my trade entry will become a partial hold. 

Happy to hear any criticism that may help me to understand short comings that others may see with the company as at this stage it looks like it's basically all roses.