Brn - brainchip holdings

[moka]

Motley Fool article out yesterday, pushing the bear case.

https://www.fool.com.au/2023/02/14/brainchip-shares-the-bull-and-bear-case/

BrainChip shares: The bull and bear case

Bull case

Another thing that bulls will highlight is Brainchip’s inclusion in the Arm AI partner program. This is an ecosystem of hardware and software specialists enabling developers to deliver the next generation of AI solutions. Think of it as a Bunnings store and developers can browse the shelves and pick out the bits of technology they want for whatever they’re building.

The company also has a strategic partnership with MegaChips, which is a leading provider of chip solutions. It plans to leverage and licence Brainchip’s Akida intellectual property to provide U.S. customers with applications across a wide variety of applications, such as consumer tech, telecom/network, industrial, and automotive.

Bear case for Brainchip shares

Where do I begin? Brainchip shares are not new to the Australian share market. The company has been around a long time and has a history of releasing hugely promising announcements that ultimately go nowhere.

In fact, given that Brainchip’s technology is out there in the world, it begs the question why a company like IBM would not just acquire Brainchip if it felt that its technology was going to change the game.

In FY 2022, IBM spent US$6.6 billion (A$9.5 billion) on research and development activities. It was also sitting on a cash balance of US$8.8 billion (A$12.6 billion) at the end of December. This means it could snap up Brainchip many times over and still have plenty of cash leftover. This could be interpreted as a sign that Akida is not seen as a threat in the industry.

Another key part of the bear case is that despite Brainchip shares crashing over the last 12 months, the company still has a $1 billion market capitalisation. That’s also despite the company generating less cash receipts than some city cafes during the last couple of quarters and management stating that it was experiencing the “greatest amount of sales activity and engagement” in its history. Maybe they should open up a café at Brainchip HQ.

Final word

The odds certainly are stacked again Brainchip and its market capitalisation implies huge future sales growth.

[moka]

Annual Report out Friday

https://stocknessmonster.com/announc...asx-2A1433201/ Annual Report

The Group made a net loss after income tax for the year ended 31 December 2022 of $22,087,670 (2021: $20,981,309).
Revenues for the year ended 31 December 2022 of $5,071,252 increased 219% from $1,588,483 in 2021.
Total operating expenses for the year ended 31 December 2022 of $27,015,834 increased 27% from $21,234,175 incurred in the year ended 31 December 2021.

Antonio J. Viana Chair

“2022 was a year of commercial expansion with new sales leadership and rapidly expanding geographical coverage. Our sales engagements have never been higher than they are today. Clearly, we expect significant growth in engagements from this point forward. To further support the commercial effort, BrainChip has established and refined a critical ecosystem program for the enablement of BrainChip-based designs. As a technology company looking to become a standard in the AI space, broad ecosystem support is critical for our customers, and it remains a huge area of focus and investment.

However, the global shift to AI as a new standard with a focus on in-device, edge computing will bring increased opportunity for BrainChip. We look to leverage upon this as we position AkidaTM to become an integral part of edge AI solutions.”

Sean F Hehir CEO

“On the commercial front, BrainChip has deepened relationships existing customers and grown the pool of prospective customers being evaluated. The semiconductor design and development processes are long, and selection of design components (IP) takes time. The addition of new sales leadership and expansion of worldwide sales and field engineers has catalyzed sales opportunities and technology evaluations.

Also, Renesas, one of our early licensees, has announced that they are taping out a chip that will be available in 2023 for IoT and edge devices.

Ecosystem integration and partnerships are critical to semiconductor technology integration. Partner development and vertical product integration is a fundamental element of the commercialization strategy presented at last year’s Annual General Meeting.
In this year, we have added key partners including Arm, SiFive, Intel Foundries, Edge Impulse, NVISO and Prophesee, making the selection and integration of AkidaTM easier and standardized.”

https://stocknessmonster.com/announc...asx-2A1433200/ Appendix 4G and Corporate Governance Statement
https://stocknessmonster.com/announc...asx-2A1433200/ Appendix 4E

[moka]

Announcement last Monday 6th March. BrainChip Introduces Second-Generation Akida Platform.

The sp was up 8.5c, 16.7% to 59.5c on that Monday on 28m. Short sales that day were 4.87m, 17%. The sp has drifted lower since then and closed today at 50c, down 2.5c on 11m.

Brainchip is the 8th most shorted stock on the ASX with 126,692,571 shares shorted or 7.170%, so I expect the sp to go lower. Last Monday it was 15th most shorted with 118,815,976 or 6.615%.

https://stocknessmonster.com/announcements/brn.asx-2A1435369/

• New generation of Akida allows designers and developers to incorporate features that were not possible before
• Adds capabilities that are critically needed in industrial, automotive, digital health,smart home and smart city applications

Sean Hehir, BrainChip CEO said, “Our customers wanted us to enable expanded predictive intelligence, target tracking, object detection, scene segmentation, and advanced vision capabilities. This new generation of Akida allows designers and developers to do things that were not possible before on an Edge device. By inferring and learning from raw sensor data, we take a substantial step toward a cloudless Edge AI experience. With this launch, we have significantly extended our competitive advantage in neuromorphic AI.”

Mr Hehir added, “The development of the second generation of Akida was strongly influenced by our customers’ feedback and driven by our extensive market engagement.We have recently expanded our sales organisation to become truly global and we are focused on executing more IP licence agreements and generating revenue growth overcoming years.

[moka]

Closed at 40.5c down 1.5c, on 20.5m, high 41.5c, low 35c on Friday, so the trend is still down. 13^th most shorted stock on ASX with 128.7m shorted = 7.23%.

Quarterly report to 31 March out - with disappointing revenue of only $40,000.
Capital call notice to LDA Capital Limited - A$12,232,543 was received from LDA Capital upon the issue of 20,756,540 shares.
The recently ended Quarter amplified the execution of the Company’s commercialisation for our AkidaTM neuromorphic IP by adding critical talent in Japan and Germany.
The Company ended the March 2023 Quarter with US$17.7M in cash compared to US$23.1M in the prior quarter. It should be noted that the A$12.2M cash received from LDA Capital will be reflected in the Appendix 4C for the next quarter.
BrainChip reported net operating cash outflows of US$6.3M vs.US$1.9M in the prior quarter.

https://stocknessmonster.com/announc...asx-2A1446088/
https://stocknessmonster.com/announc...asx-2A1446119/ Top 20 Holdings

[moka]

Episode 1 — BrainChip Quarterly Investor Podcast Q1 2023. BrainChip’s CEO Sean Hehir and Director of Global Investor Relations Tony Dawe.

https://www.youtube.com/watch?v=uURpjIhc1l4

1:16 Aikido 1.0 was and is a world-class leader in terms of its technology leadership however it was very narrowly focused and the focus was the places where good enough solutions exist in the market so to displace them was a significant lift, so we beat them on performance we beat them on power we beat them on e-supportability but existing solutions were there in place.

1:43 what Akida 2.0 does for us is a couple really important things it allows us to address a much larger set of use cases in the market so it's easier to use, bigger use cases, bigger models in places where the competition is not so well entrenched.

3:39 Forbes business Insight recently talked about a 1.2 trillion dollar AIoT Revenue by the year 2030. We're going to address that market

5:01 we expect Akida 2.0 to be fully commercially available by the end of the year

11:02 Can you provide some guidance on when they can expect to see brain chip generating revenues - it's very hard to say when exactly a customer will make a decision… so really I can't give you that forecast

14:37 economic headwinds - there's no question this is a tough economic environment in Tech what we have seen is not a lot of cancellations but more things taking a little bit longer I can give one example where that I know where they have put a project on hold where we actually won the engagement but in the end the board of that company decided not to spend the money to build a chip.

[moka]

AGM on Tuesday 23^rd May. The good, the bad and the ugly. Making progress with commercialisation but generating even enough revenue to cover costs is still to come.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02668656-2A1450681?access_token=83ff96335c2d45a094df02a206a 39ff4

Chairman’s address - the past 12-15 months, the post Covid-era if you will allow me to call it, has been the most challenging for tech in general. More challenging than the dragging years of the mid 90s, the dot-com bust of 2001, and the slowdown of 2007/2008.
Let me be clear, nobody at BrainChip is happy or content with our current position.
We haven’t hit any significant stride yet with respect to revenue. No one is satisfied, and no one should be. However, there is plenty to be positive and optimistic about.
BrainChip has done more in the past 12 months to strengthen its development, market position and talent than it has since its inception.

The trick for many companies comes when the move from technology to product takes place. In the past, BrainChip frankly hasn’t gotten this right. We haven’t had a product that can see its way into end production systems. Additionally, we haven’t had a product that forces the market to move toward us.

The reality is that the market is still in the discovery and embryonic stage with respect to edge-based AI. Unfortunately, Brainchip historically hasn’t executed with respect to an appropriate product mix to accelerate the market.
.. there is work that still needs to be done to make BrainChip a success. I am not ignorant tothe shareholders that have been on board for a long time.
…the trajectory we are currently on is the most promising since BrainChip's inception.

Chief Executive Officer’s Address
…. one of the worst technology economies I have ever seen in my in entire technology career, with virtually all sectors, and specifically the semiconductor sector, seeing a slowing of orders, increased layoffs, and increased tendency for customers to slow down important future technology decisions.

During this interesting period, our company has been on a large transformation from a creator of promising technology to a supplier of enterprise-ready products supported by a robust commercial organization and focus.

We are in the right market and BrainChip’s technology and IP product are positioned to scale with the market opportunity.

… the many partner announcements and amplification of our presence in the market. On the ecosystem front, we solidified our framework of Technology, Enablement, and Integrators. Since our last AGM we added new partners such as Intel Foundry, Prophesee, AI Labs, Edge Impulse, Emotions 3d, and Teksun. These partnerships enhance our ecosystems, allowing our potential customers to have confidence that our technology can be deployed in multiple foundries, workloads are easily ported, and key semiconductor enablers work better with Akida.

We have just completed the tape out of another chip, the Akida 1500, in the MCU-friendly 22nm process technology. We’ve received our first samples and will begin building different demonstration boards and modules for use by our sales prospects immediately. Most importantly, in March of this year, we told the world about our second generations of Akida.

We also now further understand the length and complexity of an AI IP sales cycle; it is long, but we are on paths with several leading prospects. Even during this challenging economic environment, world class companies still innovate to exit the down cycle with solid plans for the future and while engagements are not closing at the pace we desire, it is important to note that we are not losing to others - it’s just taking longer.

…. consistent feedback from virtually all engagements, which was while Akida 1.0 was, and is, at leadership levels of performance and power, the addressable number of uses cases was arguably narrow and targeted in places where existing “good enough” solutions were already in place. We simply were not going to be successful with the Version 1 product. This direct customer feedback is what drove our push to the 2nd generation Akida. At its simplest level, Akida 2.0 now allows BrainChip to address many more industry use cases, which means we can now address many more prospects.

We are in an industry where change is constant, and the pace is accelerating. … AI is becoming the standard compute model and is now mainstream. We are doing the right things; the market is coming, and I am confident that substantial sustainable revenues will occur.

[moka]

At the AGM 52.57% of shareholders voted against Adoption of Remuneration Report.
· Remuneration Report did not pass and company receives first strike

The two-strike rule. This rule gives shareholders the power to spill the board if they are not happy with the remuneration report. That is, ELIGIBLE shareholders have the power to ‘fire’ or relieve directors of their board positions.

https://cdn-api.markitdigital.com/ap...df02a206a39ff4
BrainChip – Results of Annual General Meeting held on 23 May 2023

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02668759-2A1450729?access_token=83ff96335c2d45a094df02a206a 39ff4

BrainChip Responds to AGM Remuneration Report Resolution Results
• Remuneration Report did not pass and company receives first strike

https://www.youtube.com/watch?v=KLdT9VqYQxQ

CPA Two-Strike Rule - The Australian Corporations Act was amended in 2011 to give shareholders some power over executive remuneration. This is done in terms of the two-strike rule. This rule gives shareholders the power to spill the board if they are not happy with the remuneration report. That is, ELIGIBLE shareholders have the power to ‘fire’ or relieve directors of their board positions.

https://www.asx.com.au/documents/res...wo-strikes.pdf

[moka]

There was a pump and dump in the days leading up to the AGM. It happened last year too. And around the quarterly report. The day of the quarterly report Friday 28 April the low was 35c and it closed at 42c. So traders and shorters making lots of money and long term holders seeing their investment drop in price. On 23/5 the day of the AGM there were 2.7m short sales, over 10% of turnover. BRN 16^th most shorted stock with 6.76% shorted. On Mar 14^th it peaked at 7.75% shorted, so shorts slowly decreasing.

Thursday 18/5 closed at 43c up 2c, 4.9%
Friday 19/5 closed at 47c up 4c, 9.5%
Mon 22/5 closed at 51c up 4c, 8.5%, with a high of 52c
Tues 23 AGM day closed at 42c down 9c, 17.6% on 24.5m turnover
Wed 24/5 closed 40.5, dn 1.5c

[Aotea]

Am still a believer in the technology just not sure if this team can deliver. Pleased to be free carried but not pleased with what i put my initial capital into...

[moka]

Am still a believer in the technology just not sure if this team can deliver. Pleased to be free carried but not pleased with what i put my initial capital into...

I have held for seven years, and so when they started talking recently about how big the market will be in another seven years in 2030 I was disappointed because years ago they were talking about how big the market would be in 2023. I am retired now so in seven years I may be the richest person on the rest home. At times I feel like selling and just not bothering, but then I would be really annoyed if I wasn’t holding and it really took off. And I think it will have exponential, hockey stick growth but maybe not for another year, or two or three or five. However AI stocks are the hot stocks now thanks to ChatGPT so hopefully it will help the BRN share price. If markets really are forward looking then we should see an improvement in the share price.