The revised terms specifically relate to the post acquisition capital structure of Aziana and certain legal and taxation definitions.
- Aziana will create a new Delaware incorporated subsidiary that will merge with the Delaware incorporated BrainChip to minimise any un-intended taxation consequences for BrainChip shareholders;
- The parties have agreed to a fixed capital structure for the transaction as opposed to a percentage equitable interest formula. This formalises the final capital structure of the post-merger company. BrainChip shareholders as "vendors" will now receive a fixed number of shares under the proposed transaction; and
- Should the proposed merger close, the previously proposed issue of "Performance Shares" to certain BrainChip vendors will be replaced with "Performance Rights" to be issued to certain members of the BrainChip management team.
While the amendments have resulted in some time delay, the transaction remains valid and on-track for completion in August 2015.
Aziana capital structure
Following the acquisition Aziana will have around 563 million shares on issue.
The shares to be issued under the proposed equity raising (a gross $A4M being 20,000,000 shares to 40,000,000 shares at $0.20 and $0.10 respectively) and conversion of the previously announced convertible loan from Metals X (12,500,000 shares) will then be added.
Last month, Aziana's two largest shareholders agreed to underwrite $4 million of a share placement, fulfilling any capital raising hurdles associated with the proposed BrainChip acquisition.
Metals X Limited (ASX:MLX), a $600 million market cap with a 13.73% stake in Aziana, has agreed to underwrite $3.5 million while UK-based family office D'Yquem Investments has agreed to underwrite A$0.5 million.
BrainChip is rapidly progress work on Milestone 2, a hardware version of Milestone 1, which has been designed with collaboration and input from potential technology partners that will show the scalability of the technology in a hardware form.
Spiking Neuron Adaptive Processor (NYSE:SNAP) technology inventor Peter van der Made has already produced a prototype in hardware that will form the basis for the next hardware generation.
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