Long term valuation, page-41

Good evening from Germany,

Long term valuation (7+ years) based on a purely theoretical subjectivelyinterpreted scenario with several assumptions:

1.) 5 applications/productswere chosen to be included in the consideration.

2.) Apotential Brainchip market share / pick rate of 20%.

3.) Thenumber of IPs/chips per application in the automotive industry is 10 pieces,for the rest 1 piece.

4.) Aprofit of $10 per IP/chip is expected.

5.) The PEfactor for company valuation is assumed to be 20.

6.) Calculationbased on 1.7B shares outstanding.

Calculation:

I haveattached a summary as a screenshot. Ihave put sources for the annual sales figures at the end of the text.

Automotivemarket:

About 66million cars are sold annually. We got here by Mercedes a first impressionwhich applications can be covered by AKIDA. I expect speech recognition, facerecognition and processing of information for autonomous driving. Certainly,there are significantly more applications in the automotive sector, but thisshould serve as a starting point. The estimated 10 IPs/chips per car are alsochosen relatively cautiously here. Accordingly, the potential is (66 M * 20% *10 units) a total of 132 million units per year.

Smartphones:

In myopinion a potential link to one major smartphone supplier would be a milestone.Approximately 1.5 billion cell phones are sold worldwide in a year. With anestimated market share of 20%, I calculate a potential of 300 million unitssold per year here, assuming one IP/chip per phone.

Refrigerators/ washing machines:

Dot joiningto LG + Peter's article (what to expect from the AI market in 2022) + thepublished Youtube videos by Brainchip make me include these two applications.Historical sales volumes of 236 million (fridges) and 170 million (washingmachines) lead to a potential annual volume of 47.2 million (fridges) and 34million units (washing machines) at 20% market share and one IP/chip perapplication.

SmartSpeaker:

The voicerecognition function seems to work, according to Mercedes. Furthermore, aconnection to Amazon/Apple seems to be an option in my opinion. With 166million units sold per year, a 20% market share for Brainchip results in apotential annual volume of 33.2 million units.

Totalunits / a

In total,we thus get an estimated potential of (132+300+47+34+33) approx. 546 millionunits per year.

The high-volumedemand quantities are met via IP, so I don't assume large material/productioncosts, etc. I have in mind 95% margin for an IP sale. The potential profit perunit is therefore assumed to be $10.

Profit/ a

Multipliedby the assumed 546 million units sold per year, we arrive at $5464 million in profit($5.464 billion).

MC

Multipliedby a PE factor of 20, we get a company valuation (MC) of just over $109 billion.

SP

This inturn corresponds to a share price of more than $64, based on 1.7B sharesoutstanding.

Additionalpotential applications/products/industries

In additionto this, there is an almost infinite number of other options that couldpotentially drive revenue growth for Brainchip. Here is just a small excerpt:

· Health- hand held devices

· TVs(215 million units 2021)

· Desktop/ Notebook (341 million units 2021)

· Headphones

· Smartglasses

· Cybersecurity

· Maintenance(Construction, Cars, etc.)

· SmartCity

· Powerconsumption optimization for server

· Drones

· Military

· NASA

· Smartrobotic

· Severalindustry applications

· Thingswe have absolutely no idea of that they will ever exist

· etc.

Sourcesof sales figures:

•Global car sales 2010-2021 | Statista

•Smartphone sales worldwide | Statista

•Global: refrigerator sales 2012-2025 | Statista

Alexa, tell me about the smartspeaker market in 2021 | S&P Global Market Intelligence (spglobal.com)

• Washing machines & dryers unitsales worldwide 2013-2025 | Statista

•Global TV shipments 2015-2021 | Statista

Canalys Newsroom - GlobalPC shipments pass 340 million in 2021 and 2022 is setto be even stronger

In the caseof Statista sources, data may not be visible without payment. A Google searchwill confirm the figures given relatively quickly.

I am ananonymous poster. DYOR. No financial advice.

FKE