Ann: Appendix 4C and Quarterly Activities Report, page-49

Here is a detailed summary of the BrainChip Holdings Ltd (ASX: BRN) Quarterly Activities Report and Appendix 4C for the period ending September 30, 2024:

Operational Highlights:

1. Customer Engagements and AI Projects:

   • BrainChip advanced several customer engagements during the quarter.
   • The company signed two significant agreements, worth €190,000, with Frontgrade Gaisler and Airbus Defence and Space for space-related AI projects. These projects are driven by the European Space Agency's interest in low-power neuromorphic edge-AI technology for future missions, including those to the moon.

2. Leadership Changes:

   • Steven Brightfield joined as the new Chief Marketing Officer (CMO) with a strong background in AI and semiconductor sectors, aiming to develop strategies for BrainChip's new TENNs product.
   • Co-founder Anil Mankar announced his retirement by the end of 2024, transitioning to an advisory role until then.
   • Dr. Jonathon Tapson was appointed Vice President of Engineering to succeed Mankar.

3. Scientific Advisory Board (SAB) Update:

   • The SAB was restructured with Peter van der Made, Dr. Jason K. Eshraghian, and Dr. André van Schaik joining as members.
   • SAB focuses on guiding BrainChip's scientific goals and R&D initiatives, under the leadership of CTO Dr. Tony Lewis.

4. Capital Raising:

   • In July 2024, BrainChip raised A$25 million through a combination of:
     • A A$20 million placement to institutional investors.
     • A$2 million through LDA Capital.
     • A$0.63 million from a non-underwritten share purchase plan (SPP) for existing shareholders.

Financial Performance:

1. Cash Position:

   • BrainChip closed the quarter with a cash balance of US$25.6 million, a significant increase from US$10.9 million in the prior quarter.

2. Cash Flows:

   • Operating Activities: Net operating cash outflows were US$3.4 million, a slight improvement from the prior quarter’s US$3.9 million.
   • Customer Receipts: Cash inflow from customers was modest at US$0.04 million, reflecting BrainChip's long sales cycles.
   • R&D and Staff Costs: Total expenses included US$1.7 million for R&D and US$705,000 in staff costs.
   • Financing Activities: The company raised US$17.2 million during the quarter, driven by equity placements and SPP proceeds.

3. Foreign Exchange Impact:

   • BrainChip reported US$0.89 million in unrealized foreign exchange gains due to favorable exchange rate movements, and plans to convert AUD holdings into USD.

4. Available Funding:

   • BrainChip has sufficient funds to sustain operations for the next 7.7 quarters based on its current cash burn rate and available financing facilities.

Company Outlook and Focus:

• BrainChip aims to continue commercializing Akida 2.0 technology and developing its new TENNs products.
• With expanded leadership and strengthened partnerships, BrainChip is optimistic about future growth despite the challenging sales cycles.