BrainChip's A$25 Million Equity Raise: What Investors Need to Know
BRN (BRN) Share Update July 2024 Thursday 25th
BrainChip Announces A$25 Million Equity Raise
BrainChip Holdings Ltd (ASX: BRN) has announced a significant equity raise of A$25 million, consisting of a fully underwritten placement and share sale. This move aims to bolster the company's financial position and support its ongoing technological advancements.
Instant Summary:
- A$22 million capital raising through a fully underwritten placement and share sale.
- A$3 million Share Purchase Plan (SPP) for eligible shareholders.
- Offer price set at A$0.193 per share, a discount to recent trading prices.
- Proceeds to fund the commercialisation of Akida 2.0 and development of new products.
- Unified Capital Partners Pty Ltd acting as sole lead manager and underwriter.
Equity Raise Overview
BrainChip Holdings Ltd has announced a fully underwritten A$22 million capital raising, comprising a A$20 million placement and a A$2 million share sale. The placement involves issuing approximately 103.2 million new shares, representing about 5.6% of existing shares. The share sale will transfer 10.1 million existing shares from LDA Capital.
The offer price for both the placement and share sale is set at A$0.193 per share, which is a 3.5% discount to the last closing price of A$0.20 per share on 22 July 2024. Additionally, this price represents a 4.5% discount to the 5-day VWAP and a 4.0% discount to the 10-day VWAP up to the same date.
Use of Proceeds
The funds raised will primarily support the commercialisation of BrainChip's Akida 2.0 technology platform and the development of new products incorporating the TENNs algorithm. Other uses include ongoing research and development, payment of obligations to LDA Capital, and additional working capital.
Share Purchase Plan (SPP)
In addition to the placement and share sale, BrainChip is offering a non-underwritten SPP to eligible shareholders to raise up to A$3 million. Shareholders will be able to apply for up to A$30,000 of new shares at the offer price.
Timeline
The key dates for the placement and SPP are as follows:
- Trading halt: 23 July 2024
- Bookbuild opens: 23 July 2024
- Bookbuild closes: 24 July 2024
- SPP record date: 24 July 2024
- Transaction completion announcement: 25 July 2024
- Settlement of placement shares: 31 July 2024
- Allotment of placement shares: 1 August 2024
- SPP opens: 1 August 2024
- SPP closes: 15 August 2024
- SPP results announcement: 19 August 2024
- Allotment of SPP shares: 22 August 2024
- Normal trading of SPP shares: 23 August 2024
This equity raise is expected to strengthen BrainChip's financial position and support its technological advancements. The discounted offer price may initially put downward pressure on the stock, but the long-term benefits of the raised funds could enhance investor confidence and drive future growth.
Investor Reaction:
Analysts have noted the strategic importance of this equity raise for BrainChip's continued innovation and market expansion. Investor reactions have been mixed, with some expressing optimism about the company's future prospects, while others are cautious about the immediate dilution of shares.
Conclusion:
Investors should closely monitor BrainChip's progress in commercialising its Akida 2.0 platform and developing new products. The successful execution of these initiatives will be crucial for the company's long-term growth and stock performance. Participating in the SPP could offer a valuable opportunity for shareholders to increase their holdings at a discounted price.