BRN Discussion Ongoing

[HopalongPetrovski]

Hi Manny,

Good summary,

I think that the switch to IP-only (stop me if you've heard this before ...) set commercialization back by 2+ years by shrinking the potential market and raising the barriers to entry, as well as by jettisoning the first-to-market advantage which could have built brand recognition. That said, there were financial constraints.

So now we've restored the SoC product line and software product line, and we are seeing some green shoots, but the competition is closing in. Fortunately, perhaps serendipitously, TENNs arrived. It was in gestation even as we threw out the bathtub and contents.

I think Sean's confidence in closing deals this year is the bedrock of the suggested rehoming to US. Clearly this could not be contemplated at the current SP. The fact that he has mentioned the move out loud is an indicator of this confidence.

It was always contemplated that we would list in the US, but as a dual listing. Sole listing will complicate matters for superannuation SHs. As court approval is required, perhaps the court could impose a condition the the company make an equivalent number of US shares available for those with super shares. Class action anyone ... ? (Full disclosure - I don't have super shares).

I do, (hold BRN in my retail super) and paid 62 cents each for them, at the time.
I also hold many more outside of super for which I now feel grateful.
It will be a blow to me if I have to sell them at anything less than purchase price because of a redomicile, but at the moment, that is the situation with my particular fund.
Other funds will have varying arrangements, but this is my situation.
Not looking for violins or sympathy, just stating a part of the way my reality will be affected.
And think many other's will likely be in the same boat.
This is just a side show to the main event, but I hope that the BOD are aware of these implications for some of us holder's and will factor us into their decision making.

 

[Zedjack33]

I do, (hold BRN in my retail super) and paid 62 cents each for them, at the time.
I also hold many more outside of super for which I now feel grateful.
It will be a blow to me if I have to sell them at anything less than purchase price because of a redomicile, but at the moment, that is the situation with my particular fund.
Other funds will have varying arrangements, but this is my situation.
Not looking for violins or sympathy, just stating a part of the way my reality will be affected.
And think many other's will likely be in the same boat.
This is just a side show to the main event, but I hope that the BOD are aware of these implications for some of us holder's and will factor us into their decision making.

Same boat.

 

[Space Cadet]

I do, (hold BRN in my retail super) and paid 62 cents each for them, at the time.
I also hold many more outside of super for which I now feel grateful.
It will be a blow to me if I have to sell them at anything less than purchase price because of a redomicile, but at the moment, that is the situation with my particular fund.
Other funds will have varying arrangements, but this is my situation.
Not looking for violins or sympathy, just stating a part of the way my reality will be affected.
And think many other's will likely be in the same boat.
This is just a side show to the main event, but I hope that the BOD are aware of these implications for some of us holder's and will factor us into their decision making.

I would be very interested to know how shares are held by retail/industry funds. I think it would be quite high. The trouble is we don't have a vote. I would be surprised if it wasn't north of 50 million.

SC

 

[MDhere]

I do, (hold BRN in my retail super) and paid 62 cents each for them, at the time.
I also hold many more outside of super for which I now feel grateful.
It will be a blow to me if I have to sell them at anything less than purchase price because of a redomicile, but at the moment, that is the situation with my particular fund.
Other funds will have varying arrangements, but this is my situation.
Not looking for violins or sympathy, just stating a part of the way my reality will be affected.
And think many other's will likely be in the same boat.
This is just a side show to the main event, but I hope that the BOD are aware of these implications for some of us holder's and will factor us into their decision making.

here here, getting into the asx300 assisted many to own brn shares in their super so I am sure that the board will take note of this fact and have a rabbit or a ton of rabbits in their hats to help any transition into the u.s market be actually in the interest of the current shareholder as they so state.

Don't get me wrong, I am all for the transition to the u.s. market but it needs to be a bloody good and proper deal for the current loyal shareholders including those myself, you and other that have shares tied up in superfunds.

If by the time this all happens and the shareprice is back to mercedes days then it would be easier to sell those shares and feel ok about it all. And then buy back in the u.s. market.

Sure needs to be lucrative as Brainchip board did a lot of marketing push to have fund managers come on board in the first place.

 

[Space Cadet]

here here, getting into the asx300 assisted many to own brn shares in their super so I am sure that the board will take note of this fact and have a rabbit or a ton of rabbits in their hats to help any transition into the u.s market be actually in the interest of the current shareholder as they so state.

Don't get me wrong, I am all for the transition to the u.s. market but it needs to be a bloody good and proper deal for the current loyal shareholders including those myself, you and other that have shares tied up in superfunds.

If by the time this all happens and the shareprice is back to mercedes days then it would be easier to sell those shares and feel ok about it all. And then buy back in the u.s. market.

Sure needs to be lucrative as Brainchip board did a lot of marketing push to have fund managers come on board in the first place.

Actually I'm not convinced they will give a shit unless they feel they have left themselves open legally. IMO they will make a decision that benefits the company and the majority of shareholders. I certainly hope if they do relist that shareholders are given at least 6 months notice. It takes sometime to set up a self managed super fund, sell the shares and re-buy, not to mension the cost.

SC

 

[Galaxycar]

You are delirious if you think for one minute the BOD give a flying rats cracker that you have shares in your super and would have to sell them cheaper than what you brought them for.Did they give a fat cracker when they sold 50million share to the shorters to raise money, pushing the shareprice down and shareholders further into the red, letting them out of their shorts to make millions in profit, under the guise of sophisticated investors. There is your answer. They sold shareholders out
The only hope you will have is if ASIC knock the proposal back.

 

[Diogenese]

I do, (hold BRN in my retail super) and paid 62 cents each for them, at the time.
I also hold many more outside of super for which I now feel grateful.
It will be a blow to me if I have to sell them at anything less than purchase price because of a redomicile, but at the moment, that is the situation with my particular fund.
Other funds will have varying arrangements, but this is my situation.
Not looking for violins or sympathy, just stating a part of the way my reality will be affected.
And think many other's will likely be in the same boat.
This is just a side show to the main event, but I hope that the BOD are aware of these implications for some of us holder's and will factor us into their decision making.

Hi Hoppy,

My thinking was that an escrow trust fund could be into which the super shares could be transferred before rehousing. These shares would then be converted to US shares on rehousing. I guess this fund would need to be arranged so that each individual shareholder controls a pro rata proportion of the converted shares, subject to the legislative limitations of super shares for each individual. This would allow individuals to trade their shares within the escrow fund, and to withdraw their shares from the fund when legislatively permissible.

So basically the escrow fund acts as an Australian super fund in which the individuals have control of their contributions within the fund. Maybe there is already an Australian superfund which could serve this purpose?

Or maybe the company could set up such an Australian super fund?

 

[Getupthere]

Hi Manny,

Good summary,

I think that the switch to IP-only (stop me if you've heard this before ...) set commercialization back by 2+ years by shrinking the potential market and raising the barriers to entry, as well as by jettisoning the first-to-market advantage which could have built brand recognition. That said, there were financial constraints.

So now we've restored the SoC product line and software product line, and we are seeing some green shoots, but the competition is closing in. Fortunately, perhaps serendipitously, TENNs arrived. It was in gestation even as we threw out the bathtub and contents.

I think Sean's confidence in closing deals this year is the bedrock of the suggested rehoming to US. Clearly this could not be contemplated at the current SP. The fact that he has mentioned the move out loud is an indicator of this confidence.

It was always contemplated that we would list in the US, but as a dual listing. Sole listing will complicate matters for superannuation SHs. As court approval is required, perhaps the court could impose a condition the the company make an equivalent number of US shares available for those with super shares. Class action anyone ... ? (Full disclosure - I don't have super shares).

Completely agree… we definitely lost over 2 years by pivoting to an IP only model. Trying to emulate ARM might’ve seemed like a smart shortcut, but we weren’t at that level yet. We should’ve stayed the course with both chip sales and IP licensing in parallel.

The appeal of high-margin IP revenue is understandable, but it puts you at the mercy of someone else’s roadmap, leaving you in limbo, with no control over timing or traction. That shift cost us first-mover advantage and a chance to build real market recognition when it mattered.

It was also a misstep not to tape out 2.0 ourselves. That was another example of taking the easy route..banking on someone else to do the heavy lifting.
The excuse that we didn’t want to compete with potential customers was, frankly, BS.

If you’re not prepared to back your own tech and lead from the front, why should anyone else?

 

[Galaxycar]

The minute the proposal to move to a USA bourse is put forward by the board of directors to be voted upon by shareholders. The shorters will be all over Brainchip shares they will push this down as hard and fast as they can and will short the absolute crap out of Brn shares knowing that those who have to sell their shares from their super are trapped and like sharks they will feast and will high five brainchips managements all the way to thier select investor meetings they hold. I personally prey we don’t go down that track because between now and the decision our shareprice is going knowwhere. We are gunna all be handed our arses.

 

[Fullmoonfever]

Worth a read on redomiciling and maybe a question to super funds if they allow holding and/or trading of CDI's on ASX against US entity.

It could be an option that the way is to list new entity in US, buyout ASX BRN, create a new ASX listed entity to hold CDI's (against US entity) for existing SH's that have swapped their original BRN shares.

Still call Australia home? Achieving an outbound redomicile

Many growth-stage companies – particularly in the technology and resources sectors – have contemplated changing their jurisdiction of incorporation from…

jws.com.au

25 January 2024

Still call Australia home? Achieving an outbound redomicile​

Dr Pamela Hanrahan, Kate Naude
Share

Many growth-stage companies – particularly in the technology and resources sectors – have contemplated changing their jurisdiction of incorporation from Australia to elsewhere. Usually, the strategy arises in the context of a step-up in the company’s scale of operations and/or funding requirements, or when a significant opportunity to expand the business offshore presents itself (for example through an acquisition).
Outbound redomiciling – that is, changing from a company incorporated in Australia to one incorporated overseas – is sometimes viewed as complicated, but can be a fairly smooth process, particularly where there is a sound business case for it that resonates well with shareholders. Redomiciling often accompanies a decision to list (or dual-list with ASX) on an overseas exchange, but there can be reasons to consider it pre-float. We have recently noticed that more clients are coming to us with an interest in exploring it.

Why do it?​

There are a range of reasons why an Australian company might want to redomicile. Four stand out. The first is where the company’s operations have moved offshore (or will need to if the company is to continue to grow) and an ongoing connection with Australia no longer makes sense. The second is the perception that redomiciling can help with access to deeper capital markets or markets where the company’s valuation and prospects are better understood, particularly in industries such as healthcare and tech. The third is that it can facilitate transactions or assist with attracting staff in the destination jurisdiction where equity is offered as part of the consideration, from scrip-for-scrip takeover offers to employee incentive schemes. The fourth, which can be more controversial, is where the destination jurisdiction’s taxation, regulatory, corporate, or securities laws are more favourable to the company’s business.

How is it done?​

Some jurisdictions have special rules allowing a company to change its country of incorporation while maintaining its legal identity. These include Canada, Singapore, New Zealand, Switzerland, Luxembourg, Jersey and some US states. In 2021-22, the UK Government consulted on a proposal to introduce a similar regime for redomiciliation, but has not progressed it. Australia does not.
Australian public companies looking to redomicile do so via a transaction known as a ‘top hat’ scheme of arrangement. This transaction involves incorporating a new corporation in the destination jurisdiction, which will acquire the Australian company from its current shareholders. The scheme can only go ahead with the approval of the Court and the Australian company’s shareholders. On completion, as consideration for the acquisition, the Australian company’s shareholders receive shares in the new foreign corporation.
Members’ schemes of arrangement are a well-established procedure for corporate reorganisations in Australia, but they can be complicated to implement and require the assistance of specialist corporate lawyers and tax advisers. Once the company’s board decides to pursue a redomiciliation, the first task is to prepare a scheme implementation agreement which documents the scheme process and then put together detailed disclosure for shareholders in the form of a ‘scheme booklet’ that includes an independent expert’s report and is reviewed by ASIC.

The next step is an application to either the Federal Court or a State Supreme Court for orders convening a general meeting to vote on the scheme. If the scheme is approved by 75 per cent of the votes cast at the general meeting and more than 50 per cent in number of the company’s shareholders voting on the resolution (in person or by proxy), it comes back to the Court for a second hearing. If the Court also approves the scheme, the scheme binds all shareholders, even those who voted against it.
Tax class rulings for existing shareholders who are exchanging their shares and to amend options and existing employee awards will often be required. It is also recommended to obtain advice to ensure the new corporation is no longer considered a resident of Australia for tax purposes.
Once the scheme is implemented, the new corporation will operate subject to the laws of the destination jurisdiction and, if the new company is migrating to a foreign securities exchange (or the group will be dual-listed on ASX and a foreign exchange), the listing rules of the foreign exchange. This will affect shareholder rights and protections (including in any future change of control transactions), officers’ duties and liabilities, corporate governance arrangements and norms, and corporate reporting and disclosure obligations. The company’s board, management and shareholders need to be clear about how their position will change.

How common is it?​

Large redomiciliation transactions like James Hardie (to the Netherlands and subsequently to Ireland) and Amcor (to Jersey) are relatively rare. But a steady stream of smaller listed entities have recently made the trip. Over the last five years, these include Surf Lake Holdings, Tamboran Resources, Incannex Healthcare, Controlled Thermal Resources, American Pacific Borates, Piedmont Lithium and Avita Medical (all to the US), Pensana Metals and Tronox (to the UK), Boart Longyear and GetSwift (to Canada) and Petronor E&P Ltd (to Norway). Of those, Piedmont Lithium, Tamboran Resources, Avita Medical and Boart Longyear maintained their ASX listing with CDIs still on issue. While harder to track, there have also been a number of recent redomiciles of Australian proprietary companies including Saluda Medical and SEA Electric.
Redomiciling is a significant decision, but for the right company it can unlock important opportunities for growth.

 

[manny100]

One thing someone at the AGM should ask is managements definition of the word bookings, The statement that we expect higher bookings in 2025.
Think shareholders should know it does,nt mean,IP Licences, Revenue,Sales,Contracts. It means at trade shows talking to parties that’s it, that is what we pay them there generous bonuses for, the same shit they have done the last six years all talk no action. All these partnerships are a way of hiding the fact nobody wants to buy a IP Licence and pay upfront we are giving our IP away in the hope it may result in a saleable item. If it’s not the case then where the fuck is all the revenue from all the items we are supposedly using it in space. Glad I brought a engineering business not!

That would have to be the most ridiculous post ever on the TSE.
It's generally best to do some research before making negative comments.
It's no secret that bookings are engagements that result in a revenue generating commercial agreement. Iron clad revenue.
Note the agreement may involve immediate revenue but it will 100% generate revenue.
The iron clad agreement may also be subject to an NDA.
This includes royalty generating IP sales, chip sales, SBIR contract wins.
It does not include research or ecosystem partnerships which come with the potential for future revenue - these are however client validation events which are important.
Sean said in the quarterly that he was confident that we will close substantially more bookings this year.
For short term incentive payments, the minimum threshold has been raised to 80% of target and maximum 120% for 2025.
Note that Short term incentives are paid in cash.
Also, Full commercialization did not commence until January 2022 less than 3 and a half years ago not 6 years as you suggest.
Do some research and check the News release from January 2022.
When you make negative comments without having researched the topic it takes away your credibility.
Every reason for holders to be confident.

 

[manny100]

I do, (hold BRN in my retail super) and paid 62 cents each for them, at the time.
I also hold many more outside of super for which I now feel grateful.
It will be a blow to me if I have to sell them at anything less than purchase price because of a redomicile, but at the moment, that is the situation with my particular fund.
Other funds will have varying arrangements, but this is my situation.
Not looking for violins or sympathy, just stating a part of the way my reality will be affected.
And think many other's will likely be in the same boat.
This is just a side show to the main event, but I hope that the BOD are aware of these implications for some of us holder's and will factor us into their decision making.

IMO there is no way the BOD will hold a meeting unless it knows it will get 75% of the vote to get a yes.
The current BOD will only get one chance at it.
To do that we will need to see some decent bookings closed, ie revenue on the way in. See Sean's Quarterly Bookings closure comments.
I have a few in super as well but way more in personal accounts.

 

[manny100]

Hi Manny,

Good summary,

I think that the switch to IP-only (stop me if you've heard this before ...) set commercialization back by 2+ years by shrinking the potential market and raising the barriers to entry, as well as by jettisoning the first-to-market advantage which could have built brand recognition. That said, there were financial constraints.

So now we've restored the SoC product line and software product line, and we are seeing some green shoots, but the competition is closing in. Fortunately, perhaps serendipitously, TENNs arrived. It was in gestation even as we threw out the bathtub and contents.

I think Sean's confidence in closing deals this year is the bedrock of the suggested rehoming to US. Clearly this could not be contemplated at the current SP. The fact that he has mentioned the move out loud is an indicator of this confidence.

It was always contemplated that we would list in the US, but as a dual listing. Sole listing will complicate matters for superannuation SHs. As court approval is required, perhaps the court could impose a condition the the company make an equivalent number of US shares available for those with super shares. Class action anyone ... ? (Full disclosure - I don't have super shares).

I guess the problem the BOD had and still have is that with SOCs there would be no funds for constant new chip production.
It's cheaper just to upgrade GEN2 and pass the cost on.
I guess Pico which runs off TENNs type State Space algos will have a longer shelf life. Tony

 

[Bravo]

IMO there is no way the BOD will hold a meeting unless it knows it will get 75% of the vote to get a yes.
The current BOD will only get one chance at it.
To do that we will need to see some decent bookings closed, ie revenue on the way in. See Sean's Quarterly Bookings closure comments.
I have a few in super as well but way more in personal accounts.

Hi Manny,
Why do you think the BOD needed to mention the possibility of redomiciling so far in advance?
I mean, we aren't exactly excelling in bringing in meaningful revenue or capturing any major leads or licences ATM, so why do you think they needed to bring up the possibility of redomiciling before the AGM?
It's not as though we were all required to vote for it at this AGM, was it?
I just don't understand why they announced it when they did.
Why didn't they wait until there was more positive news to report (i.e. like new licenses being signed etc?), in which case the announcement would have elicited a much more positive response from shareholders????

 

[Kingkong2015]

To be honest, I’m not entirely satisfied with Sean’s performance. However, I must acknowledge that he has contributed some valuable work.



Many people are unaware of the process involved in generating royalty payments. First, BrainChip must form partnerships with clients so they can validate our technology. Once validation is successful, the next—and more challenging—step is for the client to evaluate whether their product can achieve sufficient sales volume. Without a large enough production run, the cost of integrating our SoC becomes prohibitive. Typically, a minimum of 100,000 units is required to make it viable.



If the client is confident in both our technology and their product’s market potential, they will proceed to sign a licensing agreement for BrainChip’s IP. After signing, it generally takes 6 to 12 months to bring the final product to market.



That’s why we should always view new validation partnerships as a positive sign.



In my opinion, companies like MegaChips, Renesas, and Front Gaisler all have strong potential to generate millions in revenue this year or next. I also have a strong feeling that we might land a major deal this year. We’re building momentum—especially in the space-edge LLM segment—which is showing great promise.

 

[Kingkong2015]

Another major challenge we were facing is that we were using an SNN (Spiking Neural Network) model. While SNNs are excellent for low-power consumption, their current ecosystem is still quite limited. At the moment, we’re primarily relying on CNNs and TENNS for image, video, voice, and data processing.


However, by introducing state-of-space models like Mamba into Akida, we can enable LLMs to run on the edge. This is a SIGNIFICANT breakthrough—it means our models can be integrated into AI agent workflows, allowing them to perform a wide range of advanced AI tasks that are in high demand across the market.

ChatGPT and similar LLMs are built on Transformer architecture, which is highly resource-intensive. Due to its significant CPU/GPU and memory requirements, it’s simply not feasible to run Transformer-based models on edge devices.


State-of-space models like Mamba, on the other hand, offer a smarter and more efficient alternative. They achieve impressive results without being resource-hungry. Ask any data scientist you know—they’d be thrilled to see LLMs running on edge devices. This AKIDA capability would empower them to deploy AI agent workflows that can perform almost any task they need, all powered by something as small as a size 5 battery.

 

[manny100]

Hi Manny,
Why do you think the BOD needed to mention the possibility of redomiciling so far in advance?
I mean, we aren't exactly excelling in bringing in meaningful revenue or capturing any major leads or licences ATM, so why do you think they needed to bring up the possibility of redomiciling before the AGM?
It's not as though we were all required to vote for it at this AGM, was it?
I just don't understand why they announced it when they did.
Why didn't they wait until there was more positive news to report (i.e. like new licenses being signed etc?), in which case the announcement would have elicited a much more positive response from shareholders????

Not sure but IMO it was a strategic move.
Those buying in after the redomicile ann are more likely to vote yes. There will be plenty of votes there..That is a strategic move.
We get it that AKIDA is not an 'add in or screw on' to boost performance. It's a new way of doing things and a lot just do not understand that it's going to take time.
The understanding issue was raised in the redomicile ann in relation to value.
I think it comes down to the BOD considering the company will do better in the US both in terms of value and performance..
A lot of notice certainly gives those with negative views a chance to plan an out and clean the register up a bit.
Some may feel a loss of control if there us a move to the US even though they are positive holders . They may vote no so give them time to plan an out..

 

[Guzzi62]

Hi Manny,
Why do you think the BOD needed to mention the possibility of redomiciling so far in advance?
I mean, we aren't exactly excelling in bringing in meaningful revenue or capturing any major leads or licences ATM, so why do you think they needed to bring up the possibility of redomiciling before the AGM?
It's not as though we were all required to vote for it at this AGM, was it?
I just don't understand why they announced it when they did.
Why didn't they wait until there was more positive news to report (i.e. like new licenses being signed etc?), in which case the announcement would have elicited a much more positive response from shareholders????

There can be several reasons.

1: Checking the lay of the land, let it sink in that they want to move.

2: They are having a session about it next week, so people can prepare the questions they might have.

3: They are very confident the SP will be at/over 4US$ by the end of the year?? Nvidia signing a big deal should do it, or Apple?? Yes, wish thinking maybe, but they were talking (Last AGM) about a major deal could make us profitable overnight, it's about time.
Ohh boy, I wish they would announce that just before the AGM and all BOD haters over at the crapper and here will be speechless.

 

[Fullmoonfever]

New repository set up yesterday on GitHub by NeuroSyd with the title:

Akida-Seizure.

Nothing added as yet but you'd suspect given what they do at the facility it would be our Akida they either been or will be playing with.

NeuroSyd

NeuroSyd has 37 repositories available. Follow their code on GitHub.

github.com

NeuroSyd Research Laboratory

NeuroSyd Research Laboratory at the Faculty of Engineering, The University of Sydney, is where emerging paradigms in computing, data science, neuro/bio-engineering and nanotechnology collide. NeuroSyd research is highly multidisciplinary and span over a wide range of fields from Device to Data,

sites.google.com

Omid Kavehei

The University of Sydney - Cited by 6,679 - nanoelectronics - medical electronics - affective computing - learning machines - integrated circuit design

scholar.google.com

 

[manny100]

Another major challenge we were facing is that we were using an SNN (Spiking Neural Network) model. While SNNs are excellent for low-power consumption, their current ecosystem is still quite limited. At the moment, we’re primarily relying on CNNs and TENNS for image, video, voice, and data processing.


However, by introducing state-of-space models like Mamba into Akida, we can enable LLMs to run on the edge. This is a SIGNIFICANT breakthrough—it means our models can be integrated into AI agent workflows, allowing them to perform a wide range of advanced AI tasks that are in high demand across the market.

ChatGPT and similar LLMs are built on Transformer architecture, which is highly resource-intensive. Due to its significant CPU/GPU and memory requirements, it’s simply not feasible to run Transformer-based models on edge devices.


State-of-space models like Mamba, on the other hand, offer a smarter and more efficient alternative. They achieve impressive results without being resource-hungry. Ask any data scientist you know—they’d be thrilled to see LLMs running on edge devices. This AKIDA capability would empower them to deploy AI agent workflows that can perform almost any task they need, all powered by something as small as a size 5 battery.

Great post. Pico runs on State Space models. Huge possibilities for Pico or a Pico plus given the importance of chip size.