BrainChip Holdings has announced the expiration of its LDA Put Option Agreement, effective 30 June 2026, marking the definitive conclusion of a flexible capital management facility that had been available to the company during the agreement’s term. The expiration removes a strategic tool the company had utilised for capital management flexibility, though the final settlement obligations have been resolved through collateral shares rather than cash drawdowns from company reserves.
The agreement included provisions requiring payment of a failure fee upon certain specified contractual events, with BrainChip owing A$1.0 million upon the facility’s expiration. Rather than drawing down this amount from cash reserves, the company satisfied the obligation through collateral shares held by LDA pursuant to the agreement terms. LDA sold approximately 6.96 million BrainChip shares to generate the required A$1.0 million in gross proceeds, fully discharging the failure fee obligation without requiring BrainChip to deploy its own capital resources. This approach preserved company liquidity while completing all contractual obligations relating to the failure fee.
The more significant consideration for investors lies in the disposition of the remaining collateral position. Following the failure fee settlement, approximately 6.0 million BrainChip shares remain held by LDA and are expected to be liquidated over the coming several weeks. LDA has advised it intends to sell these shares in an orderly manner designed to minimise market disruption, though investors should prepare for potential selling pressure in the near term. The proceeds from this secondary liquidation will be returned to BrainChip less LDA’s standard 8.5% fee, representing a net cash benefit to the company once the process reaches completion. The timing and execution of this share disposal could meaningfully influence near-term share price movements.
The expiration of the LDA facility represents a notable transition in BrainChip’s capital management framework. While the company no longer has access to this particular financing option, management has successfully avoided cash outflows by resolving all failure fee obligations through existing collateral shares. Investors should monitor the completion of the remaining 6.0 million share liquidation, expected over the next several weeks, and track the net proceeds ultimately remitted to BrainChip. The company has committed to providing a comprehensive market update upon completion of the share sale and receipt of proceeds. This announcement is classified as price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About BrainChip Holdings Limited (ASX: BRN)
BrainChip is an Australian technology company that develops neuromorphic artificial intelligence hardware and software solutions for edge computing applications. The company’s core products include the Akida neuromorphic processor, which mimics the human brain’s neural architecture to deliver ultra-low power AI processing, and MetaTF software for developing and training neural networks. BrainChip serves markets in North America, Europe, Asia, and the Middle East, targeting applications in security, surveillance, autonomous vehicles, and industrial automation.
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