Archer Materials : Quarterly Activity Report & Appendix 4C

For personal use only

Corporate	Archer Materials Limited (ACN: 123 993 233)
Quarterly Report	Lot Fourteen, Frome Road, Adelaide SA 5000
	www.archerx.com.au
ASX Announcement (ASX:AXE)	26 July 2022

Fourth Quarter Activities Report and Appendix 4C

For the three months ending 30 June 2022

Significant Activities

• The Company is well capitalised with approximately $26.4 million cash and no debt.
• Archer expands on its 12CQ quantum chip technology patent protection in the US, China, South Korea, and Japan, and Europe, with a patent grant in Australia.
• Complex nanodevices fabricated in first step towards qubit readout. The nanodevices will be used to perform quantum measurements that fundamentally link to qubit operation.
• The Company continued its focus on developing advanced semiconductor design, fabrication, and prototyping, by achieving 15 nanometre feature size fabrication.
• Archer actively and regularly pursuing exposure to global industry participants in the US relevant to quantum computing and lab-on-a-chip biochip technology.

Archer Materials Limited ("Archer", the "Company", "ASX:AXE") is pleased to provide its Quarterly Activities Report and Appendix 4C for the three months ending 30 June 2022 ("Quarter").

Commenting on fourth quarter activities, Greg English, Executive Chairman of Archer, said, "The granting of the Australian Patent provides Archer with exclusive and legally enforceable commercial rights to the 12CQ chip invention in Australia. Patent approval is essential as it effectively protects the 12CQ chip technology and prevents others from copying, making, or selling our devices in Australia".

"Control and readout devices are required to set Archer's 12CQ qubit and read the qubit stored on the carbon nanosphere. During the Quarter, we successfully fabricated nanodevices that will allow probing of quantum behaviour in the 12CQ qubit material. The nanodevice fabrication is the first step towards the readout of quantum states."

"In April, we announced progress with the Company's biochip through the fabrication of 15 nanometre (nm) size biochip features. The achievement of 15 nm feature size represents a minimum threshold of what is required for the development of Archer's biosensor technology and paves the way toward Archer's goal of miniaturisation below 10 nm."

"Prior to COVID restrictions, Archer board and management regularly held meetings with shareholders. The easing of COVID restrictions during the Quarter allowed the Company to recommence shareholder meetings. The shareholder events were held in Adelaide, Melbourne and Sydney and were well attended."

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For personal use only

Corporate	Archer Materials Limited (ACN: 123 993 233)
Quarterly Report	Lot Fourteen, Frome Road, Adelaide SA 5000
	www.archerx.com.au

Quarterly Activities to 30 June 2022

Archer is a technology company that operates within the semiconductor industry. The Company is developing advanced semiconductor devices, including chips relevant to quantum computing and medical diagnostics. The Company is progressing the development of its 12CQ quantum computing qubit processor chip ("12CQ chip") and 'lab-on-a-chip' biochip technology ("biochip").

Technology development and commercialisation activities

12CQ Chip

Archer's 12CQ chip is a world-first qubit processor technology the Company is developing that would allow for mobile quantum computing powered devices. Archer has now successfully fabricated nanodevices that will allow probing of quantum behaviour in its qubit material that is of fundamental importance to the 12CQ chip technology operation (Image 1).

Significant innovation is required to produce the nanodevices. The nanodevice fabrication reported (ASX ann. 20 June 2022) is the first step towards the readout of quantum states from

few and single qubits used in Archer's 12CQ technology.

Nanofabrication was performed using state-of-the-art lithography and specialised software, to obtain feature sizes compatible with a few to single qubits. The fabrication process is repeatable and reproducible at scale, solving challenges related to complex nanodevice proximity effects and the on-chip integration of micron and nanometre size features.

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For personal use only

Corporate	Archer Materials Limited (ACN: 123 993 233)
Quarterly Report	Lot Fourteen, Frome Road, Adelaide SA 5000
	www.archerx.com.au

During the Quarter, the Company expanded on its 12CQ chip technology patent protection in the US, China, South Korea, Japan, and Europe with an Australian patent grant (Patent No. 2016363118) (Exhibit 1) (ASX ann. 23 May 2022).

The granting of the Australian Patent represents a significant early-stage milestone in Archer's development of the 12CQ chip and provides Archer with exclusive and legally enforceable commercial rights to the 12CQ chip invention in Australia. The protection provided by the Australian patent system gives Archer the right to stop others from manufacturing, using and/or selling the 12CQ chip technology invention in Australia, and is required for any possible future Australian commercialisation operations.

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For personal use only

Corporate	Archer Materials Limited (ACN: 123 993 233)
Quarterly Report	Lot Fourteen, Frome Road, Adelaide SA 5000
	www.archerx.com.au

Archer's Biochip

Archer's biochip is a unique graphene-based technology that the Company is developing to enable the complex detection of some of the world's most deadly communicable diseases. Archer is currently focused on micro- and nano-fabrication of the biochip device components and combining these components with biologically relevant reactions to detect diseases. Archer owns 100% of the biochip technology intellectual property (Exhibit 1).

Archer has now successfully fabricated 15 nm features reproducibly and reliably by developing and implementing several advanced lithographic processes (Image 2). Archer has achieved miniaturisation from 200 nm down to 15 nm by developing several advanced lithography processes. The achievement of 15 nm paves the way to miniaturisation below 10 nm. The aim of developing sub-10 nm size biochip features representing the current 'best-in-class' in the semiconductor industry

The work is a significant technical achievement as the advanced lithography semiconductor fabrication processes are complex, requiring precision engineering to reach lateral control over a feature size of 15 nm (corresponding in this work to approximately 100 atoms). The significant reduction of feature size would potentially allow for billions of sensors on Archer's biochip.

Miniaturisation of device components is an incremental process with each reduction in feature size requiring new and optimised lithography processes of increasing complexity. The extreme miniaturisation would give Archer greater flexibility and higher integration density in its lithographic processes for the design and fabrication of its technology.

Archer's biochip design principles include the micro- and nano-fabrication of integrated sensing

devices in regions of a chip that work alongside other fabricated functional regions on the same chip to process, detect and analyse biological specimens.

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For personal use only

Corporate	Archer Materials Limited (ACN: 123 993 233)
Quarterly Report	Lot Fourteen, Frome Road, Adelaide SA 5000
	www.archerx.com.au

Advanced lithography processes performed in a semiconductor foundry are required to fabricate and integrate various features as part of a nanoelectronic device and the work done by Archer to fabricate 15 nm biochip features is an important step in the potential future operation of Archer's biochip.

Commercial agreements

During the Quarter, the Company concluded participation in the IBM Startup Program ("Program") which is designed to foster the quantum computing startup community through access to the IBM Quantum Network. During the past 12 months, Archer has made considerable progress in developing our 12CQ chip and as a result the Company is viewed as a genuine quantum hardware company rather than a "startup" company.

Archer has moved beyond (i.e. graduated) the Program however, the Company will continue to access IBM's quantum computing expertise and resources and open-source Qiskit software and developer tools. The Company is in discussions with IBM about participation in other programs and will announce the outcomes of these discussions in due course.

During the quarter, the Company concluded its participation in the Graphene Enabled Industry Transformation Hub with the University of Adelaide ("Graphene Hub"). Archer joined the Graphene Hub over four years ago to investigate opportunities for the manufacture of graphene from the Campoona graphite project. The Graphene Hub project has completed meaning that Archer is no longer a part of the Graphene Hub.

Financial update

The Company's cash balance at the end of the Quarter was $26,464,000.

The Company holds 1,633,944 shares (post share consolidation on a 1 for 4 basis in May 2022) in Canadian Stock Exchange listed Volatus Capital Corp (CSE:VC) and 11,571,119 shares in ASX listed ChemX Materials Ltd (ASX:CMX). Subsequent to the end of the quarter the Company acquired 2,892,780 quoted options in CMX, being the Company's full entitlement pursuant to the CMX Entitlement Issue Prospectus dated 30 May 2022 (Loyalty Options Offer).

Archer's accompanying Appendix 4C cashflow report for the quarter includes $94,000 at item 6.1, relating to executive and non-executive director fees paid as salaries and wages.

Corporate

Issued Capital

Date	Shares	Options
Start of Quarter	247,567,207	35,750,000
New issues during Quarter	900,000 (1)	Nil
Options Exercised/forfeited during Quarter	Nil	900,000 (1)
End of Quarter	248,467,207	34,850,000
Date of this Report	248,467,207	34,850,000

1. Exercise of unlisted options, exercisable at $0.1511 by 31 March 2023.

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