Equity Raise Overview

BrainChip Limited (ASX: $BRN) has announced an equity raise of up to A$25 million through a fully underwritten institutional placement, existing share sale, and share purchase plan (SPP). The raise includes A$5.5 million from LDA share subscription that closed in Jul-24. The funds raised will primarily support the ongoing commercialisation of Akida 2.0 technology and the development, productization, and commercialization of the new TENNs product, representing the next expansion in BrainChip's product portfolio.

Key Risks and Use of Funds

There are several key risks associated with an investment in BrainChip, including the risk of delays in product development and introduction, sales and marketing, customer adoption, funding, protection of ownership of technology and intellectual property, reputational damage, customer and supply contracts, and potential obsolescence of BrainChip's technology. The use of funds from the equity raise will primarily focus on supporting the commercialisation of Akida 2.0 technology and the development of the new TENNs product. Additionally, non-deal related use of funds includes accelerating the development of TENNs technology, developing an Akida 2.0 derivative to support Large Language Models (LLM) on edge devices, and ongoing investment in research & development to analyze new and emerging technology opportunities for novel edge AI applications and product roadmap expansion.

Outlook and International Offer Restrictions

The equity raise of up to A$25 million will provide BrainChip with the necessary capital to advance its commercialization efforts and expand its product portfolio. However, potential investors should consider the key risks associated with an investment in BrainChip, including delays in product development, sales and marketing, customer adoption, funding, and protection of intellectual property. The company's focus on the commercialisation of Akida 2.0 technology and the development of the new TENNs product reflects its commitment to advancing its position in the field of neuromorphic technology. Additionally, international offer restrictions apply, with specific limitations in Hong Kong, New Zealand, Singapore, and the United States.