(TheNewswire)
February 1, 2024 – TheNewswire - Toronto, Canada– SPARC AI INC. (CSE:SPAI) (OTC:EGTTF)(Frankfurt:5OV0) (“SPAI” or the “Company”) is pleased to provide an update on operations.
Restructure and Funding:
On August 4, 2023, the Company completed a restructure, and 18,951,061 Shares were cancelled resulting in an issued share capital of just 9,090,536 Shares. As part of the restructure, the Company divested a subsidiary with $1.3 million in liabilities but retained all patents and intellectual property. On December 4, 2023, the Company completed a private placement (oversubscribed) of $371,875. The board supported the private placement by taking 44% of the allocation.
The Company currently has just 12,484,316 shares on issue. The funds raised in the private placement are covering all required development work to embed the Company’s IP into a microchip and all working capital for the next 12 months. Furthermore, the Company plans to submit an R&D refund claim at the end of the year which may extend our funding runway to the middle of 2025. The development work is expected to be completed in the next 90 days marking a significant milestone for the Company as it will have a commercial ready product and can start taking orders and generate revenue.
Development Update:
The Company is working closely with an embedded systems engineering and software company to assist with the development of a mobile application and a microchip with embedded SPARC AI patented code and algorithms. The works are progressing as planned and within budget.
The development team has conducted a thorough examination of the patent, dissecting its methodologies, processes, and technologies. We are also taking the opportunity to update the code base and make our platform more scalable, secure, robust and adding more functionality. A summary of the development work for the past 4 weeks:
Looking ahead, our focus now shifts towards camera integration, mobile app development, integration into microchip and comprehensive integration testing. This phase marks a critical step forward in realizing our objectives and functionality.
Business Model
The Company has completed a detailed review of its business model. Under previous management the business model involved bespoke and customized solutions per client engagement. This resulted in a high cost and long sales lead times. The model was not scalable and resulted in a low margin, low volume revenue model.
The new SPARC AI microchip will allow us to provide a simple plug and play solution to new customers. Customers can plug the chip into their devices or drones, test and launch. SPARC AI plans to charge a fix fee for the microchip and a SaaS recurring monthly fee for the application. We will offer tiered pricing based on the capability and functionality of the chip and application allowing SPARC AI to build a high margin recurring revenue model. For customers that may require additional integration or customization, SPARC AI will refer its development partner to undertake this work. This allows SPARC AI to generate additional revenue without the fixed cost of hiring expensive development teams to remain on standby.
Management is currently building a shortlist of potential clients, distributors and partners in Australia and United States. The Company will be targeting the markets in military, security, surveillance, search and rescue and reconnaissance activities.
Our Market Timing
GPS is operated by the US Space Force and there are currently 31 satellites that run the entire GPS system. To calculate a location, 4 satellites are required with an accuracy between 30 to 500cm. The primary causes of GPS denial include interference, spoofing, signal blockage and GPS constellation failure.
In GPS-denied environments or situations where the GPS signals are not available, SPARC AI can record geospatial data using its proprietary patented algorithms to create new navigation systems and applications. Alternative GPS technologies for identifying locations are complex, expensive, and may provide approximate estimations only which include gravity anomaly, magnetic anomaly, celestial and lidar technologies. They may also require connections to the internet or satellite that result in solutions that are not covert. Further, these systems appear to measure the location of the sensors only, not the location of distant objects at different locations to the sensor.
A report from the Committee on Armed Services, U.S. Senate raise the need to develop GPS alternatives and the Department of Defence is exploring several alternatives. https://www.gao.gov/assets/gao-22-106010.pdf. According to Grand View Research the market size of Global Positioning Systems is US$94 billion.
We are developing the SPARC AI microchip at a time when the military, government and corporates are activity looking for a solution to GPS-denied environments.
The Company looks forward to providing further updates to the market.
For more information contact:
Website: https://www.sparcai.co
Investor Presentation: Click Here
THE CANADIAN SECURITIES EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE. NO SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.
FORWARD LOOKING INFORMATION
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements or information.
The Company provides forward-looking statements for the purpose of conveying information about current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. These risks and uncertainties include but are not limited those identified and reported in the Company’s public filings under the Company’s SEDAR profile at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.
Accordingly, readers should not place undue reliance on the forward-looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors, assumptions and exclusions is not exhaustive.
The forward-looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Canadian Securities Exchange. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
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