Brainchip Holdings Limited (ASX BRN) released an investor presentation today and announced a successful institutional capital raising. The BRN share price fell 12.64% to $0.076 off the back of the news.
Brainchip Holdings said it will issue 112.7 million new fully paid ordinary shares to sophisticated and professional investors at an issue price of $0.06 per new share following the successful completion of a 1 for 4 accelerated non-renounceable entitlement offer of new fully paid shares.
The shares were issued at a substantial discount of 36% to the last traded price on June 24. The company’s shares were halted effective June 25 through June 26.
About Brainchip Holdings
Brainchip Holdings Limited (ASX BRN) is a leader in neuromorphic computing, a branch of artificial intelligence (AI) that simulates the functionality of the human neuron. The company has developed a revolutionary spiking neural network (SNN) technology, a type of neuromorphic computing that learns autonomously, evolves and associates information just like the human brain.
Its BrainChip Studio and BrainChip Accelerator system aids law enforcement and intelligence organizations to rapidly search vast amounts of video footage and identify objects or faces.
Its Akida Neuromorphic System-on-Chip (NSoC) is the first in a new breed of neuromorphic computing chips that put artificial intelligence at the edge and the enterprise.
The Artificial Intelligence Acceleration chipset market is estimated to be over US$60 billion by 2025 (Source: Tractica, 2018)
Brainchip capital dilution
Brainship said in its investor presentation that it proposed raising funds totalling $10.3 million of which $6 million would be applied to the near term development of the Akida Neuromorphic System-on-Chip including manufacture with Socionext.
The company is planning for the general availability of Akida by 2020. It has agreed with Socionext (A combination of the former Fujitsu and Panasonic System-on-Chip (SoC) businesses) for the design, development, and introduction of Akida. According to IHS, Socionext is the world’s second largest Application Specific Integrated Circuit (ASIC) design and development house. Wafers will be provided by Taiwan Semiconductor Manufacturing Corporation (TSMC), a world leader in semiconductor technology and wafer fabrication.
The balance of $4.3 million of issue proceeds would be used for working capital purposes and for the costs of the issue.
In a separate announcement, the company said it had successfully completed the institutional component of the offer and raised $6.7 million. The offer was oversubscribed.
The retail component of the offer will open on July 3, 2019.
What is Akida?
Brainship’s Akida is a complete artificial intelligence (AI) network for Edge applications. It features on-chip training, inference and continuous learning.
In Edge AI, the AI algorithms are processed locally on a hardware device, without requiring any connection. It uses data that is generated from the device and processes it to give real-time insights in less than a few milliseconds.
“AI at the Edge” is a high-volume, high-growth market,” the company said in its presentation. “Intelligence is provided and analytics are performed at the point of acquiring data rather than data being transferred to a central processing core in a data center or in the cloud for analysis and action.”
The edge computing market is expected to value at USD 3.24 billion by the year 2025.
Applications of AI Edge include surveillance, robotics, drones, Internet of Things (IoT), cybersecurity and advanced driver assistance systems (ADAS).
The BRN share price has fallen sharply to $0.076 from the 52-week high of $0.20.
Currently, its valuation compares favourably with the sector.
Though the BRN share price has reflected the recent capital dilution, the interest from sophisticated investors in the institutional portion of the issue shows promise of the company and its product. The company is also a technological leader in its field of AI.
The outlook for the company may, therefore, be considered as positive.
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