BrainChip’s vertiginous rise from 3 cents to 90 cents over the last year has left its own chief executive scratching his head.

Lou DiNardo the Brainchip CEO said the company is targeting commercialisation of its neural network processor by 2021. Rick Stevens
Shareholder fans
After listing in 2015, BrainChip earned just $US13,397 in revenue from customers in financial 2020 and $US66,635 in financial 2019. And for financial 2020, it posted a loss of $US6.86 million, with shares on issue growing to 1.56 billion by August 8, on top of 221.2 million unquoted securities.
Institutional shareholders include Regal Funds Management, Thorney Opportunities, and Metals X Ltd.
“It would not be a surprise to see BrainChip come onto the radar of the major players in the global chip industry.”
Alex Waislitz, Thorney
“Thorney has followed BrainChip for some time and we invested when the market cap was well below $100 million,” Alex Waislitz the founder of Thorney Investments said. “The recent spectacular share price gains have seen it now become one of the largest holdings by value in our Thorney Technologies LIC.”
According to Bloomberg data, beneficial interests in Western Australian tin miner Metals X still account for 3.7 per cent of BrainChip’s share register. This is after BrainChip executed a backdoor listing out of Aziana, who’s major shareholder was Metals X. The miner underwriting $3.5 million of a $4 million capital raising to fund the BrainChip acquisition.
Metals X is still BrainChip’s fourth-largest shareholder behind the company’s founder Peter Van Der Made, Robert Mitro, and Regal.
The artificially intelligent chip maker’s story is also extremely popular among retail investors, some who’ve entered the sharemarket for the first time in 2020, as government stimulus payments and lockdowns encourage speculation.
Stock-tipping forums for less-sophisticated retail investors such as HotCopper and Facebook’s ASX Stock Tip Group also readily discuss the business.
Mr DiNardo acknowledged WA investors remained on the register as a result of the backdoor listing, but didn’t think Perth-based HotCopper or its investor relations partner Advisir, which typically offers to invest between $50,000 to $200,000 in capital raisings in exchange for marketing services, were shareholders.
The company is also due to join the S&P/ASX Technology Index on September 21 in a move Mr DiNardo suggested has brought the company to the attention of more institutional investors.
Road ahead
This year BrainChip has announced research partnerships with Ford Motor Company, Magik Eye, Valeo, and Vorago, which Mr DiNardo said helped explain its rising popularity with retail investors.
After four of five years of development the CEO said BrainChip’s ready to commercially manufacture its chip on behalf of customers in heavy industries such as automobiles, surveillance, or space.
Mr DiNardo stated investors could expect “significant” revenue in 2021, although declined to guide to any approximate dollar values. “Significant depends on your viewpoint, but certainly by the second half of the year it should be significant and we’ll be kind of weaning ourselves into it early in the year,” he said.
On August 13, BrainChip entered into an agreement with private US funder LDA Capital to draw up to another $29 million in funding in exchange for issuing LDA 75 million unlisted options, with 37.5 million exercisable at 15¢ and 37.5 million exercisable at 20¢ to expire August 13, 2023. The deal includes a minimum $10 million drawdown commitment within the first 12 months.
As at June 30, BrainChip had just US$5.3 million cash on hand.
Billionaire investor and significant shareholder Mr Waislitz suggested BrainChip, if successful, could become a takeover target for giant semi-conductor players that includes the likes of Intel, Nvidia and Micron.
“BrainChips market capitalisation has gone from minnow to unicorn status in rapid time, so there are now huge expectations in front of it,” he said.
“The onus is now very much on the company to deliver substantial revenue from the deals it has announced. If it can live up to this promise, it would not be a surprise to see BrainChip come onto the radar of the major players in the global chip industry. We are watching it closely.”