TLDR: Medical AI specialist DEEPNOID has launched a 27 billion won rights offering to shareholders, aiming to bolster its medical and security AI businesses and enhance IT infrastructure. The move, which involves issuing over 6.8 million new shares, led to a 13.87% drop in its KOSDAQ stock price due to investor concerns over share dilution. The company plans to allocate the majority of funds to personnel, marketing, and permit costs, with a portion dedicated to GPU server expansion.
DEEPNOID, a prominent medical artificial intelligence (AI) specialist, has announced a significant financial initiative, launching a rights offering valued at 27 billion won (approximately 20 million USD) to its shareholders. This strategic move, disclosed after the close of the regular trading session on the previous day, aims to secure capital for the aggressive expansion of its medical AI and security AI businesses, alongside critical advancements in its information technology (IT) infrastructure.
The rights offering marks DEEPNOID’s first such endeavor in approximately two years, following a successful 22.6 billion won rights offering in October 2023. Under the current plan, the company intends to issue 6,835,444 new shares, which will first be allocated to existing shareholders. Any forfeited shares will then be offered to general investors through a public offering. The issuance ratio relative to existing shares stands at 30.33%, with Korea Investment & Securities serving as the lead underwriter.
The allocation of the newly raised funds is detailed: 21 billion won is earmarked for personnel, marketing expenses, and permit costs associated with its medical and security AI ventures. The remaining 6 billion won will be invested in expanding its graphics processing unit (GPU) servers and storage, crucial components for advanced AI operations. This investment underscores the company’s commitment to enhancing its computational capabilities to support its growing AI solutions.
However, the announcement was met with a negative reaction in the market. DEEPNOID’s shares on the KOSDAQ market experienced a sharp decline of 13.87% (795 won), trading at 4,935 won at 10:55 a.m. on the day of the news. This downturn is largely attributed to investor concerns regarding the potential dilution of share value as the number of outstanding shares increases.
Notably, DEEPNOID has faced scrutiny in the past regarding fund allocation. In its 2023 rights offering, the company had initially designated a portion of the 22.59 billion won raised as facility funds but later reallocated some to organizational operating expenses and sales expenses after adjusting business and sales strategies. This history may contribute to current investor apprehension.
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DEEPNOID is recognized for its innovative AI solutions in healthcare, including the AI-based chest X-ray diagnostic support solution, M4CXR, and services like DEEP:NEURO for brain MRA and DEEP:LUNG for lung disease. DEEP:NEURO has even been selected as an innovative medical device eligible for insurance coverage. The company also extends its AI expertise to industrial applications with solutions such as Skymaru:Security and DEEP:Security. With a reported revenue of 10.8 billion KRW last year, DEEPNOID continues to emphasize optimizing AI inference costs and leveraging advanced technologies like Neural Processing Units (NPUs) to enhance its services and market potential. The company’s M4CXR recently received the “Best Oral Presentation-Magna Cum Laude” at the European Society of Thoracic Imaging (ESTI) 2025 for its generative AI-based chest X-ray draft report generation, highlighting its leadership in medical AI innovation.
