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BrainChip (ASX:BRN) - Chief Executive Officer, Louis DiNardo
Chief Executive Officer, Louis DiNardo
Source: The Market Herald
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  • Brainchip shares have retreated after its annual report revealed FY20 had been a costly but proactive period for the artificial intelligence developer
  • The ASX-lister racked up a net loss after income tax of US$26.8 million (roughly A$34.1 million), more than double that of the previous year
  • Brainchip attributes this to a US$15.6 million (roughly A$19.2 million) equity financing agreement, which provided a significant cash boost for the company but also triggered a significant non-cash accounting loss
  • In terms of operations, the company received its first intellectual property licence order and flagged a 2021 estimate for a production version of its neural chip technology
  • Brainchip shares are off 4.72 per cent on the market, trading at 50.5 cents

Brainchip (BRN) shares have retreated after its annual report revealed FY20 had been a proactive but costly period for the artificial intelligence developer.

While the enterprise made strides in the intellectual property and development aspects of its Akida neural technologies over the interval, it racked up a net loss after income tax of US$26.8 million (roughly A$34.1 million).

It more than doubles the US$11.3 million (about A$14.4 million) loss it incurred in 2019.

BRN explained the loss was attributable primarily to an equity financing agreement made with U.S. investment firm LDA Capital, which allowed BRN to raise US$15.1 million (roughly A$19.2 million) but was in turn treated as a US$15.6 million (about A$19.9 million) non-cash accounting loss.

The arrangement made for a significant cash injection for Brainchip, which looks to close the year with roughly US$19.1 million (approximately A$24.4 million) in cash and equivalents.

Operating expenses across the board including research and development, employee and marketing were all higher, with the exception of general & administrative, which were trimmed in light of the pandemic.

Revenues for the year ended December 31 grew by 60 per cent, but still remain in their infancy while the company gears up for production, increasing from US$75,574 (roughly A$96,117.72) in 2019 to US$120,829 (about A$153,674.65).

Based on the progress made in 2020, however, the company says it expects to begin manufacturing production devices in 2021, while intellectual property licences remain a key focus.

During the year, Brianchip commenced preparations for a production version of the chip following the success of the Multi-ProjectWafer and Early Access Program and also received its first intellectual property licence order.

Its Akida early access evaluation kit was also sent off for testing at NASA to assess the technology for use in programs with a neuromorphic processor that meets spaceflight requirements.

In its message to shareholders, BRN advised it would not provide a quantitative or qualitative estimate of the pandemic’s impact on the group at present.

Brainchip shares are off 4.72 per cent on the market, trading at 50.5 cents at 12:42 pm AEDT.

BRN by the numbers
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