Email update reply from BRN investor relations

From: Ken Scarince Sent: Tuesday, 6 October 2020, 11:54:09 am AEDTSubject: RE: BrainChip LDA Capital Financing Facility Agreement Particulars

Hi

Thanks for your email and your well-wishes. So far we’re all safe on this end and I hope you are the same there. I’ve heard life in Australia has returned to normal these days and we are all very envious here!

You have good timing on your LDA question. Today is the closing day of the first put (yesterday in Australia). We will receive the final closing amount tomorrow which will simply be the 35M shares multiplied by 90% of the 30 day VWAP ended on 05-October. We have our own estimate but we’ll need to see what LDA determines that to be. I believe our CEO, Lou DiNardo, will then release an ASX Announcement on that.

You asked a very interesting question on the mechanics of the deal. LDA has the right to do whatever they want to do with the shares but they are obligated to purchase them from us and pay us. At this point, they have not purchased them yet but since they sold the shares on the open market already, they must purchase them from us after the pricing period closes, which was yesterday (in Australia). They do have the right to not sell up to 50% of them and to give them back to us after the pricing period is over rather than purchasing them from us but they are obligated to purchase any shares that they sold to the market. Let me know if that made sense.

I did speak to Peter about your request and he is going to prepare something that can be shared with the market. They are doing some really interesting stuff there that mostly involves big data analysis which of course is a strength of AI. We hope that this really picks up once Akida is available for commercial use. I will remind him to think about sharing some of his work. Thanks again, [email protected]>@brainchip.com>