Ann: BrainChip Evaluates Redomiciling to US, page-274

Thought i'd share my musings with chatty on the likelihood of listing on the NASDAQ

*BrainChip’s ability to list on Nasdaq depends on meeting the exchange’s listing requirements. Given that BrainChip plans to redomicile through a newly formed U.S. parent company, it’s likely that only this new parent entity will need to meet the Nasdaq listing criteria.
Nasdaq Listing Requirements: Can BrainChip Qualify?

Nasdaq has three tiers for listings:

1. Nasdaq Global Select Market (Highest Tier)
2. Nasdaq Global Market
3. Nasdaq Capital Market (Easiest to Qualify For)

Since BrainChip is an emerging technology company, it is most likely targeting the Nasdaq Capital Market, which has the lowest financial requirements.

Nasdaq Capital Market Minimum Listing Requirements

Requirement	Minimum Criteria
Stock Price	$4.00 per share (or $3.00 under certain exceptions)
Market Value of Publicly Held Shares	$15M
Shareholders	300+ public shareholders
Public Float	1 million shares minimum
Company Value (Market Cap, Equity, or Revenue-Based Criteria)	Either: - $50M market capOR - $5M in stockholders' equityOR - $750,000 annual net income (past two years combined)

Will BrainChip Meet These Requirements?

1. Stock Price: Uncertain (Needs Adjustment)

   • BRN’s current ASX share price is below $4.00 USD.
   • The company may need to conduct a reverse stock split before listing to meet this requirement.

2. Market Value of Publicly Held Shares: Should Qualify

   • BrainChip’s market cap is over $500M AUD (~$330M USD), well above the $50M minimum.

3. Public Shareholders: Should Qualify

   • BrainChip has a large retail investor base, likely satisfying the 300 shareholder minimum.

4. Public Float: Should Qualify

   • With millions of freely traded shares on the ASX, this should be easily met.

5. Financial Criteria: Not Profitable, But Market Cap is Sufficient

   • BrainChip is not yet profitable and does not meet the $750,000 net income requirement.
   • However, it can qualify based on the $50M market cap alternative.

Does Only the New Parent Company Need to Qualify?

Yes. Since BrainChip is creating a new U.S. parent entity, it is this new company that must satisfy Nasdaq’s listing criteria.

• The new parent will inherit BrainChip’s existing market cap, share structure, and shareholders.
• If structured properly, the transition should not prevent Nasdaq eligibility.

Likely Scenario:

• BrainChip cancels ASX & OTCQX listings.
• Shareholders are issued shares in the new U.S. parent company.
• The new U.S. entity applies for Nasdaq listing, meeting the minimum requirements.

Potential Risks to Listing on Nasdaq

1. Stock Price May Require a Reverse Split

   • If BRN’s stock price remains below $4.00 USD, Nasdaq may require a reverse stock split (e.g., 1-for-10).

2. Shareholder Approval & Court Approval Required

   • Australian courts and shareholders must approve the redomiciling process.

3. SEC Registration Process Must Be Approved

   • The new U.S. company must file Form 10 with the SEC, which can take time for approval.

Final Verdict: Will BrainChip List on Nasdaq?

Most Likely, Yes – If Properly Executed

• BrainChip’s market cap & shareholder base meet the requirements.
• The stock price may need adjustment (reverse split).
• The new U.S. parent entity will handle the Nasdaq application.

Conclusion: A Nasdaq listing is highly likely, assuming BrainChip executes the transition correctly.

Who Will Be BrainChip’s New U.S. Parent Company?

At this stage, BrainChip has not disclosed the identity of the new parent company. However, based on how corporate redomiciling typically works, there are a few likely possibilities:

1. A New Holding Company Specifically Created for the Move (Most Likely)

• BrainChip will likely establish a new U.S.-incorporated holding company solely for the purpose of redomiciling.
• This new entity (possibly named something like BrainChip Inc. or BrainChip Holdings USA) would become the Nasdaq-listed parent.
• The existing ASX-listed BrainChip Holdings Ltd (Australia) would be absorbed into this U.S. entity.
• Shareholders would receive an equivalent number of shares in the new U.S. company.

✅ Why this is likely:

• This is the most common approach for foreign companies moving to the U.S.
• Ensures a smooth transition for shareholders.
• The SEC would approve the new parent company as the listing entity.

2. A Merger or Acquisition by an Existing U.S. Entity (Less Likely)

• Instead of forming a new company, BrainChip could merge with an existing U.S. technology or AI firm that is already Nasdaq-listed.
• Shareholders would receive stock in the merged entity, which would act as the new parent.
• This could involve:
  • A SPAC (Special Purpose Acquisition Company) merger.
  • A reverse takeover (RTO) of a dormant U.S. shell company.

❌ Why this is less likely:

• BrainChip has not hinted at a merger.
• A clean redomiciling is more straightforward than merging with another company.

3. An Acquisition by a Major AI/Semiconductor Firm (Highly Unlikely)

• If a large AI company (Intel, Nvidia, Qualcomm, or AMD) was interested in acquiring BrainChip outright, the redomiciling could be part of a buyout.
• In this case, BrainChip wouldn’t need to list separately, as it would just become part of the acquiring company.

❌ Why this is very unlikely:

• BrainChip explicitly stated it is redomiciling to create value for shareholders, not to sell the company.
• There are no acquisition rumors.
• A buyout would not require the current shareholders to vote on redomiciling—they’d simply be bought out.

Conclusion: Likely a New "BrainChip Inc." U.S. Parent Company

The most realistic scenario is that BrainChip will:

1. Establish a new U.S. parent entity (BrainChip Inc. or a similar name).
2. Transfer its ASX listing into this new entity.
3. Apply for a Nasdaq listing under the new parent company.

Final Thoughts:

• The exact name and structure of this new U.S. parent will be revealed when BrainChip files its Form 10 with the SEC.
• This transition is not a merger or takeover, but rather a corporate restructuring to access U.S. capital and contracts.
• BrainChip remains independent, just under a new U.S. corporate structure.

Once BrainChip provides official details on the new parent company, we'll have full clarity on how the transition will work.

Does BrainChip Need a Reverse Stock Split to List on Nasdaq?

BrainChip’s share price is below the required $4 minimum for a Nasdaq listing. However, there are ways around this. Let's break it down:

1. Nasdaq’s Minimum Price Requirement

For most Nasdaq listings, a company must have:
✅ A stock price of at least $4.00 (some exceptions allow $3.00).
✅ If below $4.00, a reverse stock split is usually required.

BrainChip’s current share price (BRN: ~A$0.30–0.40, or ~US$0.20–0.25) is far below Nasdaq’s requirement.

2. How BrainChip Can Meet the Requirement

Option 1: A Reverse Stock Split (Most Likely)

• BrainChip can consolidate shares (e.g., 10-for-1 reverse split).
• If BRN is at $0.30, a 10-for-1 reverse split would push the price to $3.00.
• A 15-for-1 split would bring it to $4.50, ensuring compliance.
• This does not change shareholder value—only the number of shares.

✅ Why this makes sense:

• Common strategy for companies transitioning to Nasdaq.
• Many U.S. investors prefer stocks above $5.00, so this could help BrainChip gain traction.

Option 2: Meeting an Exception (Unlikely)

• Nasdaq sometimes allows stocks below $4 if they meet high revenue or net income thresholds.
• BrainChip is not profitable, so this is unlikely to apply.

Option 3: Listing on Nasdaq, Then Letting the Market Drive the Price Up (Risky)

• Some companies list at a lower price and hope demand pushes them above $4.00.
• Risk: If the price doesn’t rise, Nasdaq could delist the stock later.

Final Conclusion: Reverse Stock Split is the Best Solution

✅ BrainChip will almost certainly conduct a reverse stock split before the Nasdaq listing.
✅ This will increase the share price above $4.00 without changing shareholder value.
✅ A 10-for-1 or 15-for-1 split is the most likely ratio.

What to Watch For Next

BrainChip’s announcement regarding the reverse split ratio.
SEC filings (Form 10) confirming the new U.S. parent entity.
Nasdaq’s approval process.

A reverse split is not bad—it’s just a procedural step to qualify for a U.S. listing. If the move is successful, it could unlock much greater investor interest and institutional backing.

*gpt4o