BRN (ASX) RT presentation, 12 Oct 2021

Originally posted by Fact Finder: ↑

Of course you will be because you have no idea about how the LDA Capital agreement works.

Probably pointless to explain but here goes:

1. LDA Capital are not holding any Brainchip shares from this present extension of the agreement.

2. Before 28.2.22 Brainchip will issue sufficient shares to LDA Capital to sell on market to gross $5.3 million dollars. Brainchip will receive 90% of the $5.3 million and LDA Capital will receive 10% of the $5.3 million. Any shares that do not need to be sold will be either held in trust by LDA Capital for the next agreed put option exercise or returned to Brainchip (at Brainchip's discretion) as they have remained throughout this process Brainchip shares not LDA Capitals

3. Before 31.12.22 Brainchip will issue sufficient shares to LDA Capital to sell on market to gross $15 million dollars. Brainchip will receive 91.5% of the $15 million and LDA Capital will receive 8.5% of the $15 million. Any shares that do not need to be sold will be either held in trust by LDA Capital for the next agreed put option exercise or they will be returned to Brainchip (at Brainchip's discretion) as they have remained throughout this process Brainchip shares not LDA Capitals

4. Before 31.12.23 Brainchip will issue sufficient shares to LDA Capital to sell on market to gross $15 million dollars. Brainchip will receive 91.5% of the $15 million and LDA Capital will receive 8.5% of the $15 million. Any shares that do not need to be sold will be either held in trust by LDA Capital for the next agreed put option exercise or they will be returned to Brainchip (at Brainchip's discretion) as they have remained throughout this process Brainchip shares not LDA Capitals

5. The above are the minimum calls under the agreement which must be made by Brainchip under the put option. They total $35 million dollars. The total extended agreement is $65 million which means that should Brainchip wish to do so it can call via a put option during the agreement period up to a further $30 million on the same terms as set out above in 3. and or 4.

6. Any or all of these 2. 3. 4. 5. calls on the put option will be notified at the time via the ASX. The higher the market price of Brainchip shares the less shares they need to issue to LDA Capital. In simple terms if the price is $1.00 per share they will only need to issue 5.3 million shares to achieve $5.3 million.

As I stated yesterday LDA Capital unlike the first time around did not get any up front shares either as a fee in lieu of cash or as options so they have no shares to sell other than the above which remain Brainchip shares throughout the process. Unless LDA Capital now come on market and buy more Brainchip shares which is not their business model they have no shares to sell on market. The price of Brainchip shares is irrelevant to LDA Capital as they get the same money regardless under the deal it is in effect a fixed price agreement from their perspective.

On any view LDA Capital have significantly discounted the present deal to Brainchip over the original deal to get Brainchip's further business.

I invite you to copy my post and send it to Tony Dawe at Brainchip and ask him if what I have stated is correct.

My opinion only DYOR
FF

AKIDA BALLISTA

Expand

Not bad FF,

Query on point 5 though. I think you need to include the earlier sums from the original agreement as well as the $5.3M you highlighted. Should read something like this.

Original agreement: $29M available with a minimum $10M draw down.
1st Amendment : $45M available with a minimum $20M draw down.
2nd Amendment : $65M available with a minimum $50M draw down.

Yes, LDA have offered a better rate but our obligation is increasing as the funding gets higher. Regardless of how much revenue comes in and how strong the balance sheet is, BRN must make the calls you outlined.

No.	Vol.	Price($)
3	38000	18.0¢

No.

Vol.

Price($)

38000

18.0¢

Price($)	Vol.	No.
18.5¢	775285	12

Price($)

Vol.

No.

18.5¢

775285

No.	Vol.	Price($)
3	38000	0.180
20	1159723	0.175
31	959035	0.170
40	851584	0.165
56	1373392	0.160

No.

Vol.

Price($)

38000

0.180

1159723

0.175

959035

0.170

851584

0.165

1373392

0.160

Price($)	Vol.	No.
0.185	775285	12
0.190	1066179	23
0.195	886526	13
0.200	825383	31
0.205	831497	14

Price($)

Vol.

No.

0.185

775285

0.190

1066179

0.195

886526

0.200

825383

0.205

831497

(20min delay)
Last 18.5¢		Change 0.015(8.82%)		Mkt cap ! $362.4M

Open	High	Low	Value	Volume
17.0¢	18.5¢	16.5¢	$1.123M	6.408M

RT presentation, 12 Oct 2021, page-51

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RT presentation, 12 Oct 2021, page-51

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