Earnings call transcript: Weebit Nano Q2 2023 capital raise supports ReRAM focus

Weebit Nano’s recent earnings call highlighted a strategic capital raise, positioning the company to capitalize on the growing demand for ReRAM technology. With no immediate stock price movement, the market’s reaction remains neutral. The company emphasized its unique position as the sole independent ReRAM supplier, aiming to capture the emerging market shift from Flash to ReRAM.

Key Takeaways

• Successful capital raise ensures financial stability for several years.
• ReRAM technology gaining traction over competing non-volatile memory technologies.
• Strategic focus on embedded memory market with major agreements underway.

Company Performance

Weebit Nano reported a strategic realignment towards cost management while securing a capital raise that provides ample financial runway. The company is leveraging its unique ReRAM technology to tap into the growing demand for more efficient and temperature-resistant memory solutions. This aligns with broader industry trends where traditional technologies like Flash are being challenged by newer innovations.

Financial Highlights

• Completed unexpected capital raise.
• Focused on cost management and expense control.
• Equity compensation tied to milestone achievements.

Outlook & Guidance

Weebit Nano is targeting the signing of three end-product customers by the end of 2025. The company anticipates a significant market entry by 2026, driven by advancements in ReRAM technology and ongoing qualification processes with multiple foundries. Future revenue projections indicate a positive trajectory, albeit with minor EPS forecasts for FY2025 and FY2026.

Executive Commentary

CEO Kobi Vortman stated, "We can see the tornado out there," highlighting the potential market opportunity for ReRAM technology. He further emphasized, "The market basically decided it wants ReRAM," underscoring the strategic focus on this emerging technology.

Q&A

During the earnings call, analysts inquired about the competitive advantages of ReRAM over MRAM, ongoing R&D efforts, and market perception challenges. The company clarified no payments were made to foundry partners, maintaining a lean operational approach.

Risks and Challenges

• Potential delays in product development due to ongoing R&D.
• Market perception and valuation challenges.
• Dependence on successful qualification processes with foundries.
• Competitive pressures from other emerging memory technologies.
• Economic uncertainties that could impact customer agreements.

Full transcript - Welbilt Inc (NYSE:WBT) Q2 2025:

Danny, Moderator: Before I hand over to Kobe, just to note that we’ll be having a Q and A session at the end. If you have any questions, please type them into the Q and A box at the bottom of the screen. We’re expecting a lot of questions to come through, so preference will be given to questions with a name attached to them rather than anonymously. I would now like to hand the webinar over to Coby. Please go ahead.

Kobi Vortman, CEO, Weebit Nano: Hi, Danny, and hi, everyone. Good afternoon. I’m glad to have you all join our quarterly meet the CEO. I think, last quarter was really a great quarter. We’ve, you know, we’ve gone through a a tough 2024 as everyone knows.

We’ve been trying to get deals done with with some of these big, big foundries, big IDMs for a long time. It’s been a challenge. And I’d, I’d actually like to before I focus on the last quarter, I’d like to go through a little bit of history and a little bit of of what’s going on and and where the the market is actually. And and many of you know it’s, you know, a long time ago, over fifteen years ago, the market already realized that flash is, is basically going to hit the its limits. And since these technologies take so long to develop, there there were a lot of attempts to develop a replacement for Flash.

And, you know, in those days, there was there was PCM with with different variants of 3 d x point and Optane, and and there was MRAM, and there was CBRAM, and there was, you know, all kinds of technologies and, of course, RIRAM. Over the years, what we saw is 1 by 1, these technologies kind of fell off the table. You know? There’s always someone who’s still trying to make things work. But in general, you know, the the ferroelectric ram, the PCM, and and all the different variants of it, You know, you you today, you might see 1 company trying to still make it work, but it’s not really anything that the market is considering serious.

The 2 last, technology standing were actually MRAM and DRAM. Now MRAM, you know, five years ago, it was already in mass production. It was in a good position. I think the market basically assumed that’s it. We found our winner.

We found the technology that’s, that’s gonna work. But, you know, as they started to manufacture, they realized it’s very expensive, you know, much more expensive than Flash and definitely even more expensive than Rearam. You know, there are all kinds of other issues with it. It uses rare earth materials and and things like that. But I think the key issue came up once these products hit the road and they were used in the in the market.

You know, the m as everyone knows stands for magnetic, and you’d be surprised how many magnetic fields we have around us. So, some of these products ended up failing in the field. And, that, I mean, they they basically had the memory erased by some magnetic field somewhere, and that triggered the big the biggest consumer companies in the world to basically say, hey. Our products are going everywhere. We we really can’t control where they are.

This is a big risk. And they passed a very strong message to the market that they’re not gonna use MRAM. Now the way that this was reflected in the market was just a year and a half ago when TSMC released their NVM roadmap, it was still all MRAM with with reRAM just as a side note. But, it was basically updated, and now their NVM rear AM is NVM roadmap is all rear AM with NVM as a side common. And I think that reflects the whole transition in the market.

You know, we’ve gone a long way, but we finally reached a point, and it’s really last year, that the market understands rear end is really it. It’s not like m MRAM is gonna disappear. MRAM has its place, and people have already invested, and it’s gonna be used. But rear end is is much cheaper. It doesn’t have all of these issues with magnetic fields and and so on.

It has, you know, the long list of advantages that we’ve talked about so many times in power and endurance and and all these other things, and now it’s ready for mass production. TSMC already has it in, in mass production. WeBit has it qualified, both at at Lety, which is basically STMicro wafers, and at SkyWater. We have agreements with, also with DB HiTech. We, you know, we demonstrated it on, GF wafers.

So, you know, the market is is basically waking up and and saying, wow, you know, this is the technology of choice. This is where we’re going. And WED has a good technology. And last year, we also demonstrated it already working at high temperatures, and we demonstrated high endurance and so on. And, you know, everything was basically lining up.

Now the, and we are, you know, if you look at the rear end space during these years, you know, the the other rear end players, if it was the the other smaller companies like Crossbar, Adesto, etcetera, you know, they basically disappeared. If it’s the big players, you know, it’s not a secret that even Intel (NASDAQ:INTC) and Samsung (KS:005930) tried to develop and and ended up giving up. You know, is not an easy technology to develop, and you really, really need a very strong team that will develop it. You need the the strong device guys and process guys and and analog and digital and test and characterization and everything, and you need them all to work very closely together, you need to have a very focused management. That’s where, you know, the Intel and and Samsung guys had their issues.

You really need to have a very focused management that is driving this, that is working together, that is defining what to do with, with, you know, trade offs and and so on. And and Weebit really is, I think, the only company in the world which has all of these things together with that big focus. This is what we do. This is really our big focus. We have, I mentioned it several times.

We have 13 PhDs. Actually, the number is gonna grow soon, focused on developing this technology. And today, we are the only independent supplier of VRAM. So last year and even before that, in in 2023, we were already engaged with so many of these big foundries, big IBMs, and they were evaluating and testing and and, you know, even negotiating deals. But there was always that big concern about it’s a new technology.

It’s a young company. They never showed their technology in mass production. And so everyone everyone stayed on the sidelines. Yeah. It was it was driving me crazy.

You, you would see that, you know, all everyone was asking me, you know, where is the deal? Where is this big deal? You’re saying that you’re talking to all these big guys, and where is that deal? Well, you know, we were and we are continuing to work with these guys, but for them, it was a really big perceived risk, and so they were trying to do everything they could to continue to work with Flash and wait for someone else to make this step. Now we we ended up, you know, with, last quarter, we were, we were I think it was a great quarter for us.

It started with the Semiconductor Australia Conference, which I I really enjoyed going to. You know, it continued with the raise that we did. You know, I have to say an unexpected raise kind of. He wasn’t really planning to do a raise, but when a broker comes and says I have I have all this money underwritten and, you know, at a premium over market, etcetera, I think it was a good raise for us. It really gave us now several more years of quiet so that we can really focus on, on on doing the work.

And, you know, toward at the end of the quarter, as everyone knows, On Semi ended up being the first one to cross the line. They they announced their Trio platform, which is, you know, a very nice advanced technology at 65 nanometer BCD. I mean, they you go back, I don’t remember when exactly, but several months ago, they they had that big announcement. And, they need advanced memory. You know, that’s, when you announce a new platform and everything already moving forward, you don’t go back to to a technology like Flash.

And so, you know, we had talks with them. You know, of course, just like everyone else, they had their concerns, but I think they saw that Weebit has such a strong team, is capable of really resolving any issues that will come up, etcetera. And I’m very glad to say we we signed this agreement, you know, this past month since we signed the agreement has been phenomenal. They are so focused. This is such an impressive company.

They they are taking this project so seriously with so many people involved, and and we’re running forward in parallel with the with the device and the process and and the design side and, the test characterization, everything. You know, we have so many meetings and so many things going on in parallel. It’s been great. And in addition, of course, the impact on the market has been great. We, we, the the the way that the market perceives Weebit now has has really changed.

You know, last week, I I got a phone call from a VP in 1 of the biggest, foundries. You know, I I always call him up. Yes. We have good discussions. Yes.

His team is really interested in our rear ramp. Yes. You know, it’s been more than a year that we’re talking and and analyzing and checking and and they’re hesitating, and suddenly he calls me up and says, Colby, you need to send us a plan. How do we how do we ramp up on re ramp? And, you know, that’s like, wow.

You know? Suddenly, they’re pushing instead of me, you know, or they’re pulling, if you wanna look at it. So it’s it’s that kind of thing. You know? I have so much travel now planned to meet so many of these foundries and IDMs, etcetera.

So the the way that people are looking at Weebit is really changing. People are obviously now someone already took that first step. So it’s not like everyone is rushing and everyone’s now standing in line to sign the agreements, but they’re definitely moving forward, and and things are moving easier. We were at the CES conference in CES is a huge conference. I don’t know if you can imagine a conference where 150000 people, you know, get together in 1 place.

It’s like it’s a whole city just coming together. And we had amazing meetings there with people in the industry. You know, I got to meet, of course, a lot of the On Semi guys there, the CEO of On Semi, etcetera. But, you know, other customers, our potential customers to be exact, we met many many bankers, the leading bankers in the world, were there. There was a lot of excitement around it.

You know, I I had 1 analyst actually last week tell me, you know, for so long, there were so many players in in this emerging, NVM space, and and I’ve been following it for so many years, and suddenly, you know, it’s it’s weebid. You know? It’s, so it’s exciting times. I’m really excited about, Onsemi. They’re an amazing partner.

We’re continuing, of course, the work with DP Hi Tech, and and they are a great partner, and and we really are enjoying the work with them and moving forward. And I think 2025 started with a blast and there’s so much going on. It’s known that my entire compensation equity compensation for this year is tied to closing deals, and I definitely plan not only to achieve my target but to, to even go over it. And I think we, you know, there is a potential for that. We’re very focused on this.

We have the team is all excited and ramped up. So, yeah, I think 2025 is going to be an amazing year. Yeah. So I don’t know. I think at this point, I know many people have questions, and and I’ll open the the floor to questions.

I’ll be glad to answer.

Danny, Moderator: Sure. Thank you, Kobi. We will now move to the q and a session as Kobi said. Look, once again, if you have any questions, type them into the Q and A box at the end of the screen. We do have a healthy number of questions coming through and I will try and ask them all.

A reminder, we will be giving preference to non anonymous type questions. Okay. Kobe, the first question is around GlobalFoundries (NASDAQ:GFS). So can you maybe just give a brief update on Weebit’s dealings with GlobalFoundries?

Kobi Vortman, CEO, Weebit Nano: GF is, you know, is an interesting case. We, on the 1 hand, we manufactured, as everyone knows, we manufactured our rear ram on their 22 nanometer wafers. We’re continuing by the way to to manufacture there and and to test and and improve the technology. In parallel, and I think everyone knows already in 2023 they announced that in the beginning they acquired what was left of Adesto’s CBRAM technology and there has been a pressure internally in GF to try to develop preRAM on their own. So it’s kind of, you know, going in both directions.

I think, you know, at this point, Weebit has a lot of potential with a lot of, a lot of foundries and IDMs. GF is 1 of them. You know, the others are very focused on working with Weebit. With GF, it’s not really clear where this is heading. So, you know, we’re we’re continuing to manufacture there, but, I have yeah.

I admit my disappointment that, you know, they are still trying to to develop their own version, and and we’ll see what happens there. I don’t know where it’s going to go.

Danny, Moderator: Okay. The next question is is about the recent capital raise. So, Toby, you’ve now secured enough liquidity for a few years of runway following that capital raise. What continues to drive you and the leadership team, and what keeps you motivated?

Kobi Vortman, CEO, Weebit Nano: Oh, wow. I am I’ve never been so full of energy. I think it’s, you know, this is the point in time when you look forward and it’s just amazing. I mean, I couldn’t have dreamt of of such a situation. There’s this huge vacuum out there.

The market basically decided it wants rear end. Rear end is the future. Yes. A lot of people are still hesitating. This is a very conservative, industry, believe it or not, because of the huge amounts of investment.

So companies invest billions in building these fabs and and in everything, and and so much is at stake. You know? Even the Trio platform, when you think about it, they when they made the announcement, you know, they they kinda said in their announcement that it’s, you know, it’s a trillion dollar, type of project for for on semi. And, you know, so it’s, people are are are not rushing through, but at the end of the day, there’s this huge vacuum. Everyone knows they want to reRAM.

They need reRAM. Everyone knows they’re gonna be using reRAM. And Weebit right now is the only independent supplier of reRAM. And because it takes so long to develop reRAM, you can look around and see that, I mean, I basically cannot see any, any other company, independent company that is going to have RearRam anytime soon. You know, someone might have it.

It’s it might be in stealth mode or whatever. It’s very hard to keep these things as a secret. So right now, we really needs to rush in and go and take as much as it can of this vacuum. You know, the the nature does not support vacuum. Where wherever there’s vacuum, it has to be filled.

And we are now so totally focused on we have to fill this vacuum. You know? There is there is so much. There are so many of these big foundries, big IDMs, these product companies that need a solution. And we have it, and and it’s just, you know, we need to overcome this inherent, you know, resistance of people being afraid of working with a younger company, with a new technology, etcetera.

But as we break this down, as we we, you know, we now have on DBH, we have on semi, we’ll sign 1 or 2 others, I believe that that level of resistance will fall. And I mentioned in a couple of meetings, the book, Inside the Tornado or I’m sorry. Crossing the Chasm. That’s the first book in the series. You know, it’s it’s a great book that I recommend people to read.

It basically talks about how young companies that develop new technologies evolve, and I’m gonna, skip a lot of it, but, you know, there’s the phase where you have this crazy idea for a new technology and you’re developing and this and then you finally have it ready and you wanna go out and sell it and you find out that there’s this huge chasm and and all of the customers are on the other side. And, you know, you go and you eventually manage to cross this chasm and you’re coming out the other side. And in the beginning, you enter what’s called the bowling alley. You have, you basically managed to find 1 company that already really needs this technology and and, you know, sees that the potential benefits are so much higher than the perceived risk, and they, you know, they move forward with you. And, you know, so you you have this DB HiTech, you have On Semi that realize just the huge potential of this technology and and that it is something that they should go with.

And and so, you know, the first pin drops 2 more 2 pins behind it, and then those drop the 3 pins behind them and so on. So the book describes it in a nice way. You know, once you have a few pins falling down and, you’re starting to make that progress, there’s, you know, what people call today FOMO, and suddenly everyone is there like, oh my god, you know, my competitors have it. Everyone’s moving forward with it, and I’m gonna be left behind. And suddenly, you go into the phase which is called inside the tornado.

And, you know, suddenly, everyone wants the technology. Now I’ve been fortunate enough to be inside the tornado twice in my life. It is the most amazing feeling. It is the unbelievable what happens when suddenly you’re swamped with people calling you up and wanting the technology and and, you know, everything just starts growing so fast. Now we are I can see that tornado out there.

I can see the tornado out there, you know, could be 2026 or so. You know, this year is still gonna be a very hard year of of going through that bowling alley of getting, you know, a few more pins knocked down, and and we’re making great progress. And and, you know, the on semi announcement already changed the whole atmosphere around we did. And and we’re gonna get into that tornado, and and that’s, I mean, just waiting for that not waiting. I mean, pushing for that to happen and running forward towards that tornado is is really what’s driving me, and it is so exciting.

And I think the whole team feels that, the team is working around the clock now. It’s it’s amazing the amount of travel that I have planned in the next couple of months. You know, I’m hardly gonna be at home. My my wife is going crazy, but I mean, that’s that’s part of, you know, starting to move in that direction. It’s, it’s amazing.

Danny, Moderator: Fantastic. Okay. The next question is around the size of the memory arrays. It’s a rather long question, so I’ll just truncate it. So basically, what the question is, and I’ll I’ll put a context around it.

So many devices on the planet need much more than 1 MB or 8 megabytes of n b NVM. Has we produced a memory array bigger than the 1 MB?

Kobi Vortman, CEO, Weebit Nano: So there’s, we need to make a clear distinction between the embedded memory space and the discrete memory space. You’re absolutely right. You know, on the discrete side, we’re using so much memory and and, you know, AI and the huge data centers and whatever they they need, giga, terra, and and beyond. But in the embedded space, actually even 1 megabit is considered a lot. A lot of the devices need two fifty six kilo or or five twelve kilo.

Weebit already has an array of 8 megabit, which is very impressive and and people are very impressed by it. We showed it last year at the Embedded World Conference, and and there was a lot of excitement around it. Most of the requests that we are getting are below, the megabit level or at the megabit level, let’s say. And and we’re feeling very good with it. We can go and develop even larger arrays.

And some people are have been asking us about larger arrays. So I won’t be surprised if we go ahead and with 1 of these, people, end up developing something bigger. But the at the in the embedded space, megabit is already considered a large array and and, something that, most people are very happy with.

Danny, Moderator: Yep. Okay. Very good. The next question is around remuneration, specifically yours, Kobi. So can you confirm that your salary bonus this year is conditional on on a number of signings by fiscal year or calendar

Kobi Vortman, CEO, Weebit Nano: year? So, my salary consists of 3 parts. There’s there’s the base salary. There’s the what we call STI, which is target based bonus, and there’s the equity part. Target (NYSE:TGT) based quote, bonus assets.

Right now, we work on on a calendar year. It’s just so much easier. That’s how the industry works, so we we just need to work with the industry. So, my targets, are calendar year, and, we just actually the board is, as we speak, the board is discussing my targets for 2025 and and closing those. And, so that’s that’s in terms of the target based.

And by the way, the the vast majority of my my compensation is target based and equity based, which, you know, is intended to motivate me to meet these targets and and to want the share price to go up, etcetera, etcetera. The equity, as the shareholders know, is tied this time a % of it, which is, by the way, I have to say, it’s very, very unusual to have such a situation where the equity is tied to, to milestones, not to mention to a % of it. But the board knowing that everyone is so anxious to see deals signed, you know, we had a discussion, and I I volunteered to actually have my equity compensation for the calendar year ’25 be tied to closing deals, and and I definitely intend to meet that target. And and as I said, I actually want to overachieve that target. I think we can.

Danny, Moderator: Okay. The next question, we might turn to your end customers, maybe a couple of questions on your end customers. So one one investor is asking 3 end product customers by the end of 02/25 calendar year. Doesn’t sound like too many.

Kobi Vortman, CEO, Weebit Nano: You need to remember that these end customers need a fab to manufacture in, and, that’s the big challenge. Actually, for me, the the toughest and most difficult challenge of them all is these product companies. You know, they they will not really move forward without a fab where they can manufacture. Unfortunately, as I think everyone knows, SkyWater has made a strategic decision to focus on their r and d services. If you look at their, if you look at their quarterly report, you’ll see that by now, they already got up to a point where 90% of their revenues are from r and d services and not from Foundry.

It’s their decision, very disappointing on my side. So getting a customer to to manufacture in SkyWater is a huge challenge. I’m not saying that we won’t have it, and we are working on trying to get customers also for SkyWater, but it’s very hard to to actually get someone over there right now with, you know, the the current, focus of SkyWater. DB Hi Tech, we are working on qualifying this year. We have wafers from DB Hi Tech, that we are testing now.

You know, we’ll need to get to the point where we can actually start a qualification, and then do the qualification. And as everyone knows, we’re talking about many months of putting the the chips in ovens, etcetera, etcetera. So, again, most customers will not want to engage with us before we are actually qualified or very close to qualification. So the target of getting product companies is the most difficult 1 that I have right now on the list both in my, you know, target based bonus and with my equities. But we will we I, you know, I I wanna make it clear when I have a target, I achieve it.

I I focus on it, and and I will make it happen, and and we will we we will get product companies, onboard and and working. You know? That, of course, On Semi is is great because it’s an IBM (NYSE:IBM), so I really believe that we’ll have a product. I you know, we’re we’re trying to work with them now on defining a product that will use our rear end. So, you know, I hope to have that as as a first product, but we still have 2 others that we really need to work on.

And and again, my goal is to overachieve.

Danny, Moderator: Yep. So I’ll ask the end customer question another way because it’s follow ups come through. So if the future is reRAM, Kobi, end customers haven’t signed up yet to get a first mover advantage, but it sounds like some of them have gone through TSMC. So why can’t you get the signatures?

Kobi Vortman, CEO, Weebit Nano: Well, so first of all, we need the fabs. I think that’s something that I already answered. And, you know, even TSMC, you know, look at the ramp up of free RAM. In the beginning, everyone is hesitant. Everyone is is, you know, moving a little slower.

But, you know, we’ve had we’ve had and we are having and we’re going to have a lot of meetings with product companies. I mean, just yesterday, I think the company had 1 or 2 meetings with product companies. Next (LON:NXT) week, I’m gonna be meeting some CEOs, and and next week, the next couple of weeks, I’m gonna have several meetings with potential product companies. It’s it’s happening all the time now and and more and more so actually. Again, the the On Semi announcement really triggered.

And by the way, On Semi, while it’s an IDM, it does give some foundry services. And, we are also engaged with people that are, interested in, I mean, maybe manufacturing at Onsemi.

Danny, Moderator: Yep. Speaking of Onsemi, we’ll ask a couple of questions around Onsemi. First one is, which particular product line has been decided with us Onsemi?

Kobi Vortman, CEO, Weebit Nano: It’s under discussion and it’s not public information, so I can’t really go into that. I I will make a com a general comment, you know, and and it this is just really a general comment and not an indication of the product, but On Semi is well known for 2 main application areas. They are well known for power management, and they’re well known in the automotive space. I think the key the key reasons for them to engage with Weebit were that they saw that we are very strong in both of these domains and give them strong advantages. And, you know, so that’s, that was 1 of the if if people ask why did Onsemi make that step forward, it’s because on the power management, and we’ve been talking a lot about power management recently.

That’s kind of the really low hanging fruit where we have so many advantages with with Rear Am that it’s, it’s really compelling for people to move forward. And then the fact that we, we demonstrated that we can work at a 50 degrees, which is really the the main requirement for automotive. You know, these 2 things together, I I believe, if you ask me, I believe that those were the main considerations of Onsemi when they decided to move forward.

Danny, Moderator: That segues beautifully into the next question, Kobi. So, on semi holds the number 1 market position in auto sensors, you mentioned that was 1 of their 2 major areas being autos. Apart from power management and the 150 degrees, what are the competitive advantages of reRAM that make it so applicable to autos specifically?

Kobi Vortman, CEO, Weebit Nano: So to autos, it’s really the the power more than anything else. I’m sorry, the the temperature more than anything else. And and by the way, we have people asking us about even higher than a 50 degrees. We have people asking us about 175 and so on, which is really extreme already. I wanna make it clear there’s really not a lot going on above 150, but we, you know, we basically showed the simulations and the analysis that we can achieve even a 75.

And, you know, what by the way, once you go above a 50, you stop talking about ten years or or this. You you start talking about usage profile and and how long does it have to stay at that high temperature and things like that. You know, a small anecdote, we had a a mining company that needs chips in their drills, and those drills get really hot. And they said, you know, we we need something that can operate at at very high temperatures, but, you know, it it doesn’t have to be for years, you know, even a day or or hours would be good enough, you know, we will replace it. So, you know, you get to that point, but the temperature is a key criteria in the automotive space.

On semi, you know, with their sensors and so on, they need that. And they also, as I mentioned, the the power management side of things and the fact that with rear end, you can have a 1 chip solution instead of a 2 chip solution, which is much more efficient and much lower cost, etcetera. I think those were the main criteria.

Danny, Moderator: Yeah. Okay. There is a follow-up question also on on semi. Okay. So post the on semi announcement, why do you believe the market reacted so poorly?

Do you think the market expected large revenue streams as part of the announcement?

Kobi Vortman, CEO, Weebit Nano: Well, the the market in general and the Australian market specifically is is something that I never managed to predict, and it doesn’t stop to, even more than surprise, you know, astonish me. I don’t know what the right word is, but I I just remain in awe sometimes. I I really don’t know, you know, the considerations and and what drives the market and what makes people, you know, decide to buy or sell. We, you know in these kinds of deals, you can’t and you don’t want to, and I don’t think the shareholders want us to give a lot of, the the commercial terms. You know, at the end of the day, we, you know, we I think it’s a great deal for Weebid.

I think, we have good terms. People will see during the year, as as the year progresses, you know, the cash flow, the revenue, etcetera, implications of this deal. And, you know, so people will will realize that it might be that p you know, there because we didn’t announce commercial terms, people thought that this might not be a significant deal or anything like that. I don’t know. You know, you you have these situations.

I mean, on semi, let’s let’s face it. These big guys don’t even like to have the press release. You know? The fact that we actually had a press release is already a big achievement, and and, you know, a big success. Going into commercial terms is something that is just not done in in these kinds of announcements.

You know, I I’ve, you know, throughout my, let’s say, in in on the sales side, over thirty years already, I’ve never done a press release where there were commercial terms in it. Doesn’t make any sense, and I think the people who would be hurt most of it would be the shareholders because once you announce commercial terms, you basically put a glass ceiling on your head and no other customer will ever agree to pay anything above that. They’ll all use that as the starting point for negotiations. So, you know, it doesn’t make any sense. So I think, I don’t know why, the market reacted this way.

Maybe because the share price already went up quite a bit before that. Maybe the market anticipated it. I don’t know. But, you know, Webin is going forward. There will be, you know, the the the cash coming in.

There will be the revenue coming in. There will be. People will see the impact of this deal. I I believe that I I’m a long term person. You know?

I don’t believe in in the one day type of things, and people will see the impact. They’ll see the additional deals that are gonna happen. Hopefully, the market will reflect it.

Danny, Moderator: Absolutely.

Kobi Vortman, CEO, Weebit Nano: By the way, I I wanna comment on something. I saw this ridiculous comment somewhere, and I just have to comment on this. And by the way, it happened to me with DB HiTech as well. So, you know, I had someone ask me after the DB HiTech deal, so how much did we pay DB HiTech to close the deal? And now I saw a comment.

Again, I can’t believe the ridiculous comment of so we’ve been probably paid On Semi to do the deal. So I just wanna make it extremely clear. You know, On Semi, DB Hi Tech, they are the customers. We’re the vendors selling to them. It doesn’t make any sense anywhere in any form for us to pay them anything.

I can’t even believe people think that we actually paid anyone for something like that. So I just wanna make it extremely clear. You know, these are commercial deals where Weebit is the vendor. They are the customer. We’re selling them, or or licensing our technology to them, and and that’s it.

You know, Weebit does not play any any kinds of of absurd things like that. I I you know? And and maybe people thought that, oh, Weebit is using SkyWater as a you know, to do some r and d things. So I think I mentioned in the past that we have 2 separate agreements with SkyWater. One is a foundry and 1 is an R and D center, which is a unique situation.

Other foundries are just foundries. SkyWater for some reason decided to focus on giving R and D services. WeBid is very happy as an R and D customer of SkyWater. Weebid is using SkyWater, I can even say intensively, as an R and D center. They complement Letty very well.

You know, you could say that the r side is done at Lettie, the d side is done at SkyWater, but that’s a unique type of agreement. So we have with SkyWater, we have an agreement as a foundry and then a separate agreement as as an R and D customer. DBAH on semi, they, you know, they don’t do R and D services, and and we, you know, we have just simple straightforward agreements with them as foundries. And I wanted to be very clear, you know, we we didn’t do any any funny funny games there.

Danny, Moderator: Yep. No. That’s crystal clear, I think, Kobi. Just speaking about, DB Hi Tech, we do have 3 or 4 questions on DB Hi Tech, but I’m gonna put them into 1 or maybe 2 because they’re all asking pretty much the same thing. So the target for qualification for DBH was June 2025.

Is is that target now sometime in 02/25?

Kobi Vortman, CEO, Weebit Nano: I, you know, I yeah. I think right now I’m saying sometime in ’25 just because, you know, we these things are very tough and, we have, we have the the first wafers that came out. Actually, we have very good results on these first wafers. The tests are looking good, and we were working very closely with, with DB HiTech to push this forward. So, I mean, I I believe the the qualification will be definitely before the end of the qual before the end of the calendar year, I’m sorry.

But I just I think that putting a specific target right now, will not serve us, will not serve anything. So we are focused on finishing it as soon as possible, and, I just it’s hard to say right now when when exactly it’ll happen. So, we’re saying 2025, but the goal is definitely not the and and to try to get it done much before that.

Danny, Moderator: And maybe a follow on from that and looking a bit more long term. So how long after qualification do you think it will take to close the first customer agreement?

Kobi Vortman, CEO, Weebit Nano: Oh, that’s, that’s the billion dollar question. Right? We are engaged today with customers that are interested in manufacturing at DB Hi Tech. We even know that DB Hi Tech salespeople have already talked to customers about, Weebit. So, you know, this is happening.

The the product companies, you know, obviously, they wanna see more progress, and and they, I mean, they ideally would like to see qualification before they, they engaged. By the way, that’s 1 of the reasons why I really wanna finish the qualification, ahead of the end of the year is so that we have enough time after that to close agreements with the product companies going back to the previous question on product companies. So my goal is to finish the qualification definitely before the end of this year so that we have enough time to close product company agreements as well at DB HiTech. We do want to close agreements with product companies even before qualification is is done. You know, these are very tough things to predict.

You know, we’re doing our best. That’s what I can say.

Danny, Moderator: Yep. No. Thank you. There’s a few questions also around the discrete selector development. So again, I’ll just, collect them into the 1 question.

So can you maybe just give an update on the progress with regards to the development of a selector for discrete memory?

Kobi Vortman, CEO, Weebit Nano: Yeah. So Weebit is working on this. There’s always some work in the background. I have intentionally put it as low priority right now. We have so much going on on the embedded side.

And, I believe that, you know, in the embedded space, we have this huge potential. I talked about this big vacuum that that’s formed in the market. You know, we have so many of these big foundries and IDMs and product companies, and everyone is wanting rear end. You know, it’s kind of the thing that everyone knows they need it, they want it, and they’re just hesitating. We need to push them over the line.

I really want the team to be totally focused on, let’s fill this vacuum, let’s rush in in there and get it, get to that tornado, and really grow, I think that’s the number 1 priority for Weebit. We are working, by the way, there are several projects that are always being dealt with in the background, you know things like, the discrete, that’s 1 example. We have other projects, you know, neuromorphic and people know that that’s always in there in the background, and we are working with research institutes on these things. So Weebit is now big enough that it can afford to have a a small side activity on some of these strategic things for the future. But at the end of the day, I have limited resources, and I’m sure that the shareholders want to see the revenue ramp from the embedded and and getting these big deals done.

So, that’s really the big focus right now with Weebit.

Danny, Moderator: Okay. You touched on SkyWater. There is 1 or 2 questions on SkyWater. Again, I’ll merge them. So can you maybe just talk to the progress towards signing customers at SkyWater?

Kobi Vortman, CEO, Weebit Nano: So, as I mentioned, there’s a strategic decision at SkyWater to basically move to be an r and d center. And again, 90% of their revenues now are already there. I I remember last year, I was talking about 75%, and I think you can see, the the big focus they have and how they’re shifting the revenue from the foundry service. Now it’s it’s the the almost all of it is coming from r and d. So they are lacking some basic elements in their foundry, that we we’ve brought, and and I mentioned it in the past, we’ve brought some big name product companies.

I I think I I said in the past names that people in the street in Australia would even recognize. We brought big companies to SkyWater to, who wanted to manufacture there with our rear end. But they were lacking, you know, some basic elements. It just ended up not working out. The whole thing fell apart, unfortunately, to my very, very big disappointment.

But that’s you know, every company gets to define their own strategy and their own priorities. I haven’t given up. I haven’t given up, and we are looking for company we are talking to companies that potentially can manufacture at SkyWater despite all the limitations. And, you know, right now, I mean, right now, the the place where we’re qualified is SkyWater, I need to bring in 3 product companies. Right?

I need to try to make it work also at SkyWater. So we’re we haven’t given up on it, but it is a huge challenge because they’re lacking some very basic, elements in their library, that companies look at it and say we can’t manufacture there the, you know, there’s basic IP that’s missing.

Danny, Moderator: Okay. Before I go to the next question, Coby, just a note to all the participants on the call, we’ve got about fifteen minutes to go. We still got about 10 questions to get through, so we probably can’t accept any more questions unless they’re very important. Okay. The next question, Coby, is around MRAM.

So it’s known that MRAM has some better performance characteristics than MRAM, but TSMC has now adopted MRAM. What’s your ratio split between MRAM and MRAM?

Kobi Vortman, CEO, Weebit Nano: So MRAM has 2 advantages today. 1 is it’s just more mature. You know, it’s already in mass production. It’s already out there. It’s running and, you know, obviously that’s an advantage.

The second advantage is the endurance. MRAM manages to achieve higher endurance, and some applications require that. So, you know, MRAM has its place. It’s not going to disappear. By the way, you know, in this industry, you always have all kinds of, technologies that are used for niche needs that have some unique advantages.

Like, a lot of people are still using rotating disks in the data centers and even magnetic tapes, as NVM memory. I don’t know to to predict right now what part MRAM will have. I personally you know, I’m tainted, but I personally believe MRAM will, over the years, shrink the the the MRAM market share will shrink to to specific applications and specific things. The the numbers that analysts are bringing out are constantly changing also, and and I don’t I haven’t really seen a good analysis of it yet, but it is very clear now that, the big focus, you know, once TSMC moved all of its focus or the vast majority of its focus to, rear end, Weebit is here pushing it. You can see that GF is trying to make, you know, for the for some reason, they decided to to try to make their own version, and and, you know, we’ll see where that goes.

So there’s, I I think reRAM will will clearly take, the majority of the market. How big that majority will be, I personally think it will be a large majority, but I think the jury is still out.

Danny, Moderator: Okay. There’s a follow-up question on discrete. So, Kobi, is there still an intention is there still an intention of developing a smaller discrete RIRAM module that doesn’t require a selector?

Kobi Vortman, CEO, Weebit Nano: So let me correct that question and and use the right terminology. In reRAM, you have to have a selector. What we are trying to do is replace the transistor with a smaller selector. So, that is the goal of our discrete project. You know, the the the rear end memory bit itself is very small.

And because every bit needs a selector and today we use a transistor as a selector, that’s what makes it bigger and that’s what makes it not so, ideal for discrete memories. So the VRAM itself is good. We need to find a better selector which will enable us to put, you know, the gigabits and and so on on, on a chip, and and that’s what we’re focused on. So, yes, we are looking for ways to have a smaller selector. This is a huge challenge.

It is a very big challenge. You know, much bigger companies than Weebit have tried to find smaller selectors, more efficient selectors, and and and, you know, and failed. There were big projects of very big companies to do it. Having said that, we’ve been up to now managed to show that it can succeed even where the very big guys didn’t, and and we’re gonna be focused on it. And we it’s gonna take us you know, it’s this is a a long project.

This is a project of years. The day that we do it, it’s gonna be, oh my god, you know, because then, it really will open up an even bigger market. You know, we’re working on it. We will eventually, we’ll find a good selector. And and by the way, we’ve of course, as you can imagine, we’ve been looking at different types of selectors, and we’ve been playing with this and going from 1 type to another and and improving different things.

So there’s there’s r and d work going on, a lot of exploration, and it’s it’s gonna take us some more time. It’s not a one or two year project. It’s a it’s a long term project. There is that work. Again, it’s it’s low priority in the background.

I want the team to focus on, you know, this embedded opportunity now is a once in a lifetime thing, and and this huge vacuum that formed is is amazing. We need to capitalize on that.

Danny, Moderator: Okay. The next question is around reRAM and the use in products. So a while ago, Kobi, you talked about Apple (NASDAQ:AAPL). Well, you mentioned Apple using reRAM in 1 of their new iPhones. Are you aware of any other products in the market that are using reRAM?

Kobi Vortman, CEO, Weebit Nano: We are aware. You know, some of them made it public. I think I I mentioned, Nuvoton, announced, I think it was 08/ ago that they have a new microcontroller that has rear RAM in it. They did a lot of, a lot of marketing around the advantages of VRAM in their MCU. I think that the interesting point that I, that I would like to point out here if I’m talking about it is, Novotone is actually the owner of the technology that, UMC is using.

UMC qualified, a rear ramp technology, and theoretically has it available. I’m not aware of any UMC rear ram. And by the way, Novotone themselves use TSMC for this MCU. So, so there was, Novotone announced that, Infineon (OTC:IFNNY) a few years ago already announced that all of the future automotive products, automotive chips that they do will have VRAM in them. So there have been some announcements, around this.

It’s it’s ramping up. It’s still, you know, the the usage of VRAM is very initial. The ramp up of these things, take time, but, but it’s definitely, it’s definitely happening.

Danny, Moderator: Okay. A devil’s advocate question, from a pretty tough investor here. So let’s say worst case scenario, Kobi, you have no signings this year. At what point would you look start looking at cost cutting?

Kobi Vortman, CEO, Weebit Nano: So let’s start off with the fact that Weebid is extremely conscious of of cash and of budget. Last year, because things took longer, you know, I was really hoping that we’d manage to sign a big agreement earlier. You know, as as we saw that things are delayed, we were already cost cutting and we were saving budget. I think the board was quite impressed by how much below the planned budget we actually were in 2024 because I I don’t hire people before I know that I have the customer. We we need a team for every fab, and, you know, there’s a very delicate balancing act between being ready.

So when you sign an agreement with the fab, you have the whole team up and running and ready and everything, and, you know, not hiring people and then finding out that the agreement is pushed out three, four, six months, whatever, and and you have a team sitting there idle. So we are extremely conscious, about budget. We every every PO, I can tell you just yesterday, there was a request for a PO for $2,000 that, you know, we looked at it and we said, yeah, it’s nice. It makes sense, but, no, we’re not gonna I’m not gonna sign it. We’re not gonna do it, because we we question every expense.

The money that we have is money that we got from shareholders. It’s not my money. It’s the shareholders’ money. They gave it to me in order to achieve a certain goal, in order to give them the maximum return. And and we are very, very cautious even in you know, when we do travel.

I keep asking, you know, how can we cut down the costs of the travel? How can we, you know, save money? You know, either find cheaper flights or or, you know, lower cost hotels and and so on. It’s all the time in our minds. It’s not something that I need to wait for not having a deal done in order to think about it.

Danny, Moderator: Great. We’ve got a few more questions to get through, so the timing’s pretty good. We’ll maybe talk a little bit some financial markets questions. Now it’s pretty clear the Australian market doesn’t appear to understand the microchip industry properly. Would you be contemplating or considering moving to the Nasdaq where it’s very much likely you would get a much higher valuation?

Kobi Vortman, CEO, Weebit Nano: Well, as I often joke, if I would get $1 for every time I’m asked that question, I I would never have to raise money. You know? It’s, it’s a type of question that I I’m asked all the time. And I’ll tell you honestly, I mean, yes, the natural place for Weebid is Nasdaq. You know, that’s kind of everyone tells me, what are you doing in Australia?

Nobody knows semiconductor there. We are in Australia today. The Australian market, let’s face it, it’s, you know, people know that I have my issues with some of the regulation and so on, and I’ve been having, I had meetings with the ASX, We’ve been talking to the ASX about it and so on. But at the end of the day, we’ve been raised, I believe, close to a hundred and 50,000,000 Aussie dollars on the ASX. It’s not like the ASX is bad to us.

I love my shareholders. I think we have an amazing, amazing group of shareholders. I love the interaction with the shareholders and and, you know, the fact that I I can talk to them and and so many of them have been so loyal and and stuck around with Weebid for for so many years. So to be honest, I don’t have a strong motivation to to just say, oh, you know, this is crazy. I I can’t stand this anymore.

I have to go to Nasdaq. You know, if and when and whatever, you know, this issue will come up, the board will be discussing it. It’s not something that at this point right now, it’s it’s burning or a burning issue or something that I I have to deal with now.

Danny, Moderator: Do you think you’re a takeover target?

Kobi Vortman, CEO, Weebit Nano: In this industry, everyone’s a takeover target. If you if you read the press, Intel is a takeover target right now, so I’m glad to be in the camp of Intel. No. But seriously, that’s how this industry works. The big guys are constantly monitoring the small guys.

They’re constantly looking at how they develop. And as the smaller guys grow, the big guys, you know, they constantly have these discussions of, you know, if and who we want to take over or even more like who we wanna take over, and there’s always acquisitions. I said it many times. I am totally focused on making Weebit a big company, a successful company. That is my sole goal.

From my experience, and and you can tell I’ve been around for a while, and and my, my experience has been with start ups. Most of my career has been with start ups. The moment that a CEO starts thinking about acquisition, you know, being acquired and so on, that’s when the company starts going down. So I’m definitely this is not something that I am, you know, wasting any time on. I want Weeba to be big and strong so that the day that someone gives us an offer, I can say no if it’s not a good 1.

Danny, Moderator: Absolutely. Final financial markets questions. And if we’ve got time, just a couple of follow ups to some answers you gave earlier, so we’d be very quick. So the final financial markets question is you met some analysts earlier this year, with a view to potentially covering Webit. Can you maybe give some update in terms of those brokers and where they’re at?

Kobi Vortman, CEO, Weebit Nano: Well, first of all, I wanna thank, I wanna thank MST, and I wanna thank, UCP for, you know, initiating coverage, you know, beyond, of course, Pitt Street that has been doing it for a long time. But, MST really took the ball and and and ran forward with this and and has been pushing it with their customers and, UCP. I mean, they did the raise based on the, the analysis that they did. They, once the analysis was out, they they had calls with institutions. That’s how they they got the money for the raise.

Right? So, I’ve made it clear that, you know, I’m I’m tired of having, you know, brokers promise, you know, to to work with us, to give coverage, etcetera. They they end up doing the raise, and then they disappear somewhere. And, you know, so I, my focus will be in the future, you know, if and when we do raises, to focus on people who give us coverage, who are serious about WeBits. I’m very glad, by the way, I don’t know if people noticed, but, Macquarie in in 2 different reports recently mentioned Weebit.

Not they weren’t reports focused on Weebit, but they mentioned Weebit. So I think we’re we’re starting to see, you know, analysts even in Australia now, more focused and and looking at to cover Weebit. Obviously, gonna be very glad to work with any analyst that wants to cover us. And, you know, hopefully, we’ll get more and more coverage now.

Danny, Moderator: 2 clarifications, Kavy, before we finish. Okay. The first one is around, the on semi qualification. So will they make their first set of chipsets specifically designed for the product in qualification?

Kobi Vortman, CEO, Weebit Nano: I think that’s, all of that is work that we’re doing with them now. Obviously, the I I think the the smartest thing, and and this is the direction that we’re trying to go in, is that the module that will qualify the first module that will qualify will actually be the module that will be used in the first product. It it just makes sense for, both for Weebit and for On Semi. So that’s kind of the direction that we’re going, going in. Again, we’re we’re defining also what that product, target product would be, etcetera.

So this is all stuff that’s being defined now. Okay.

Danny, Moderator: And the final clarification going back to the discrete selector, is it a smaller discrete module that uses transistors?

Kobi Vortman, CEO, Weebit Nano: No. You that that’s almost a contradiction in the statement. You know, the the challenge that we have, you know, without going too much into technology, the challenge is that every bit needs a selector. The selector needs to supply a certain current and voltage and so on, and the levels of current and voltage that the rear end needs are such that we are using transistors which are at a certain size and those transistors are, you know, relatively bigger for for the discrete market. Now it’s true that it is possible to do some discrete chips also with the current transistors, and I mentioned that in the past, and it’s not something that we’ve dropped.

There is a potential that we might have, you know, some discrete solution that is based on on the transistors. We can be competitive even with the current transistor in some specific applications and and domains. But for the vast majority of the discrete market, there needs to be a smaller selector, and it it will not be a a transistor. So, yeah, we’re we’re working on, I guess, all of the above, but all of it is right now in in lower priority, and we’ll, I I I would focus right now really on on the embedded side in in in the near future in 2526. The big progress of Weebid, the big growth in, in cash flow, in revenues, in in deals is gonna come from, from the embedded side.

Danny, Moderator: Yep. That’s a great way to finish, I think. So that concludes the q and a session. I wanna thank all the participants for the healthy number of questions and the quality of them. Very, very well done.

I will now hand back to Kobi for any closing remarks.

Kobi Vortman, CEO, Weebit Nano: Well, thanks, Danny, for holding this session. Thanks to all of the shareholders that attended. Just like I said in the beginning, I think we’re we’re looking at a a really exciting year ahead of us, ’25 and and then ’26. We have a unique opportunity. We’re gonna be filling this back, and we’re gonna be signing some additional deals.

The market is gonna see, you know, the ramping of of revenues and cash and so on. And, you know, I I really hope to see the markets also react to it, you know. So, thanks everyone, and and let’s have a let’s have a great 25.

Danny, Moderator: Thank you.

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