- BrainChip (BRN) has entered a put option agreement with global investment group LDA Capital and LDA Capital LLC to receive up to $29 million in equity capital
- Under the facility, the company will withdraw at least $10 million within the first 12 months
- BrainChip will use the funds to support the commercialisation of its Akida technology
- Essentially, the Akida device is designed to work like the human brain and support the growing Edge artificial intelligence (AI) market
- In exchange, BrainChip will issue up to 75 million unlisted options to LDA Capital — 37.5 million will have a 15 cent exercise price, while the other half will be exercised at 20 cents per share
- Additionally, BrainChip will pay a $580,000 commitment fee over two cash instalments
- Company shares are up 9.09 per cent and are trading for 18 cents
BrainChip (BRN) has entered a put option agreement with LDA Capital and LDA Capital LLC to receive up to $29 million in committed equity capital.
BrainChip will control the timing and maximum amount of the drawdown, but this is subject to the company withdrawing at least $10 million within the first 12 months.
The financing facility will strengthen BrainChip’s balance sheet and support the commercialisation of its Akida technology.
Akida addresses a growing market including Smart Home, Smart Transportation, Smart City and Smart Health. The technology is designed to provide a complete ultra-low power and fast artificial intelligence (AI) Edge Network for vision, audio, sense of smell and smart transducer applications.
Essentially, Akida is designed to work like the human brain — it’s flexible in its operation and learning capacity and can efficiently transfer data and power usage.
The Edge AI market is expected to be worth over US$50 billion (roughly A$69.6 billion) by 2025. Positively, the company’s early access program has provided significant insight into its customer’s needs led to further engagements.
“We are pleased to have very high-quality U.S. based institutional investment group as part of our register. As Akida comes to market as both intellectual property and as an integrated circuit provider a partner such as LDA is a key component to support this effort,” CEO Louis DiNardo said.
LDA Capital is a global investment group has executed over 200 transactions that are worth over US$10 billion (roughly A$13.9 billion) across 42 countries.
“We believe BrainChip’s Akida Neuromorphic Processor offers a unique solution to the current limited power budget and processing capabilities of today’s Edge AI technology,” LDA Capital Managing Partner Anthony Romano said.
Accessing funding
BrainChip will access the funds by exercising put options under the agreement. As the company has agreed to draw down $10 million in the first 12 months and up to $29 million in total, it may do so by issuing ordinary shares for subscription to LDA Capital.
BrainChip may issue call notices to LDA Capital, with each call notice being a put option on LDA Capital to subscribe for and pay for the shares on closing.
In exchange, BrainChip will issue up to 75 million unlisted options to LDA Capital — 37.5 million will have a 15 cent exercise price, while the other half will be exercised at 20 cents per share.
Additionally, BrainChip will pay a $580,000 commitment fee over two cash instalments.
Company shares are up 9.09 per cent and are trading for 18 cents each at 11:02 am AEST.