BRN Discussion Ongoing

[Pappagallo]

What stood out to me the most in this interview was the Royalty. 3,4,5
$ per royalty! Not 50c! I don’t know if this is news to all you guys but I have never heard that been stated before.

That is massive! For every million chips sold with Akida IP equals 3,4,5 million $

Let’s take Mercedes as an example. Let’s say they sell 1 milk cars with Akida inside. Is it just one chip per car? I doubt it. I believe now that Mercedes’ knows the powerful solution they have they will utilise if for way more than keyword spotting. So let’s say 3 chips just as an example. That’s 3million chips and and with a margin of 3-5$ royalties that’s 9-15 mill revenue from one costumer.

Now I don’t know how many cars Mercedes’ is projected to sell but you get the idea here

Now when we understand the impact of Royalties, let’s add the iceberg of partnerships, vendors and costumers and it will have an explosive growth in sales as predicted not too long ago

No I think you’ve misunderstood Sean’s example here. It’s not $3-$5 per royalty, it’s relative to every $1 paid for the licence fee. So for example if a company paid a $1 million licence fee upfront we would expect to see $3-$5 million in subsequent royalties.

Essentially he’s just pointing out that the licence fee is the entree and the royalties are the main course.

 

[Slymeat]

Congratulations on buying more shares, I'm just wondering how IP royalties will work,is it by each product being sold with Akida in it or something else

The short answer is yes-royalties will be per product.

Sean Hehir speaks precisely to this at 11m:15s in the Stocks Down Under Interview. I have teed up this location in the link below.

Stocks Down Under interview with Sean Hehir, teed up to discussing revenue

It is common knowledge that BrainChip will be following ARM’s approach, so that means both licensing fees to use the technology and per-chip revenue. But Sean refers to the later as per-product! A distinction that probably includes consideration of how much of the Akida IP is employed in each individual product.

I expect licensing will be paid directly to BrainChip. Sean states this is a significant payment that can be for one or for many developments.

Per product royalties will most likely be passed through by ARM or Renaissance, or whoever else makes and sells the products that incorporate Akida IP.

To summarise what Sean said:
Licensing payments are up front, and significant.

Royalties are delayed - products need to be developed and then sold before royalties come through.

The beauty of this model is that royalties come with zero COGS (Costs Of Goods Sold), and can come through for years in the future. While ever the products including Akida IP are being produced and sold.

And interestingly, Sean indicated that he expects royalties to create revenue that is multiples of the significant up-front licensing fee. That’s cool.

And for those who prefer pictures, it will be something like the following.

 

[dippY22]

There was some short lived hand wringing a few screens back between a couple of posters about putting more announcements on the ASX to get the word out about Brainchips ongoing progress and success even if not tied to (immediate) revenue. I think the stock holders who want to see this announcement activity have their heart in the right place, but those who believe this to be the wrong strategy with ASX "feel good" announcements are being more prudent with their opinion and I side with them.

I along with Sean Hehir and most of you believe Brainchip needs to get the word out about our technology and selling our story to the world and marketing the Brainchip story is one of Mr. Hehir's stated priorities.

But I am also conflicted as to who exactly Sean needs to get the word out to. He cannot mean the semiconducter industry because based on the quote below taken from the AGM, everyone in that space now knows about Brainchip.

Sean's quote (sorry if not verbatim)
"I can assure you that the semiconductor industry is very aware of us after last week".

So, ... who do we need to get the word out to if not the semiconductor industry who apparently are now very aware of us? I'm not sure.

In the U.S. markets trading in the ADR shares which were made available primarily for institutional investors has been all but nonexistent.

Perhaps the institutional investor is who needs to be woken up to our story, at least in the U.S. I don't know. Any other thoughts or ideas about who Sean wants to promote the Brainchip story to???

 

[DingoBorat]

Hence my preface with....still a little grey.

I get what you are saying and my view is it's not entirely about SP nor implied BRN is not compliant.

As you pointed out the SP moved on Merc info and everyone damned the Co for no official Ann...go figure

It's about informing the mkt through official channels where the option exists.

So if they sought guidance why not put the examples of media releases re ARM, Merc, Nviso, SiFive to the ASX and get a ruling if a non sensitive Ann would be acceptable also in those cases?

They would have their ruling, be compliant and not have to take the path of least resistance via media.

The ASX are a bunch of lazy, stuck up stiffs..
I'm pretty sure they don't want 2000+ companies, sending in requests to check their announcements..

They have previously stated, that they just don't have the time or funding available, to do their job, unless prodded..

There are plenty, who would be giving them a prod too, if we announced something, without real substance.

You also have to consider how big we are, already, on the ASX..
Comsecs most traded (by value?) stock?

I'd like to see more company announcements and a higher share price too..
But, I want the ones with meat and gravy.

They are the only ones, that will give a genuine share price break out and not just a trading opportunity..

We've built it and they will come

Anyone looking at the current share price gyrations, with concern (other than a missed trading opportunity) isn't looking at the big picture..

 

[TheFunkMachine]

No I think you’ve misunderstood Sean’s example here. It’s not $3-$5 per royalty, it’s relative to every $1 paid for the licence fee. So for example if a company paid a $1 million licence fee upfront we would expect to see $3-$5 million in subsequent royalties.

Essentially he’s just pointing out that the licence fee is the entree and the royalties are the main course.

Yes, you are right. I listens to it again and understood it the way you explained it this time around.

Disregard my previous example.

 

[Diogenese]

I’m sure someone has answered you already. But it works in this way. iP is bought from Brainchip. Let’s say This licence cost 2 million. Now that company have Brainchips technology to their disposal and can implement the IP into their own chips.

Royalties are payed out to brainchip for every chip that has Akida IP. So if a product has more than one chip then there will be royalty paid for every chip.

Please correct me if I am wrong, but this is how I understand it

On another subject does anyone have a thought or two about how our growing partnership stable will result in revenue for Brainchip? I don't, so I am looking for some education on how these revenue streams may be constructed.

If we are partners with Edge Impulse, ARM, Nviso, SiFive, etc.... how might future revenue be obtained from these relationships? Does it happen because the aforementioned companies buy I.P. licenses from Brainchip? Or does it happen because customers of theirs buy I.P. licenses from them, and Brainchip gets a small slice of their revenue, and if so, how is that figured?

For example, if ARM's licensees reported shipments of say 7 billion ARM-based chips, and "xxx"% of those are wanting cloudless edge compute technolgy and ARM's solution is to incorporate Akida into those customers processors, what does that mean for Brainchip? Does Brainchip obtain an I.P. contract from ARM's customer or does ARM buy an I.P. contract with Brainchip?

Does a customer of say, SiFive or Nviso, who needs their onboard processors to work when passing through tunnels need to buy an I.P. contract with Brainchip, or....?

It hurts my head to consider the myriad ways Brainchip can leverage these growing partnerships into revenue. And I can't figure out if there is a "one size fits all" roadmap. Can you say, "Complex sales" with an emphasis on COMPLEX???

Anyone have some thoughts or ideas?

Regards, dippY
Click to expand...

Here is my understanding of how royalties are calculated, from a couple of days ago:

• Tuesday at 12:26 AM
• Add bookmark
• #13,576

Hi dippY22,

I think that royalties, and hence BRN's income, are calculated by the number of Akida NPU nodes that are used.

Now each use may attract a different royalty rate depending on various different factors, such as the actual number of items produced., eg $A per item for the first 1000000 items, $B for the next 1000000 and so on, where A>B.

Both the royalties and the initial sign-on licence fee will also be a matter for negotiation and hence commercial-in-confidence.

With @zeeb0t 's rider:

Opinions and research expressed are my own as an unlicensed individual. External links are not endorsed. Do your own research or consult a licensed financial adviser

 

[newpunta]

Yes - sending the ASX a critical email is a good way to get your own back - p!ssing into the wind.

iS JUST an expression I use ........ didn't mean I am going to send them an email, have more important tings to do.
No pissing on forums please, even if it gets WinDy

 

[Slymeat]

Question for somebody to answer that is bugging me:

If our sales model is now focusing on IP rather than the chip itself, how do we realise the massive power savings when the IP is at the mercy of the host chip design power level?

I believe that’s where the “spiking” comes into its own. Consuming next to no power unless an event results in a spike.

Every other aspect of a design may very well be power hungry, but the Akida IP part will not be. So if the design has the power hungry side in a sleep mode, woken/alerted by a spike, the power consumption should be reduced. This is in fact how interrupt driven systems work. Your keyboard works this way and consumes next to no power unless a key is pressed.

The challenge is to reduce the effort to drive the interrupt, and learn from experiences. That is where Akida comes in.

I also suppose the area of making the design more power efficient is where the BrainChip support team, Akida refSOC and Akida Enablement Platforms come in to play to help designers employ Akida where it can best help. Be that accelerating AI or reducing power consumption.

 

[Bravo]

There was some short lived hand wringing a few screens back between a couple of posters about putting more announcements on the ASX to get the word out about Brainchips ongoing progress and success even if not tied to (immediate) revenue. I think the stock holders who want to see this announcement activity have their heart in the right place, but those who believe this to be the wrong strategy with ASX "feel good" announcements are being more prudent with their opinion and I side with them.

I along with Sean Hehir and most of you believe Brainchip needs to get the word out about our technology and selling our story to the world and marketing the Brainchip story is one of Mr. Hehir's stated priorities.

But I am also conflicted as to who exactly Sean needs to get the word out to. He cannot mean the semiconducter industry because based on the quote below taken from the AGM, everyone in that space now knows about Brainchip.

Sean's quote (sorry if not verbatim)
"I can assure you that the semiconductor industry is very aware of us after last week".

So, ... who do we need to get the word out to if not the semiconductor industry who apparently are now very aware of us? I'm not sure.

In the U.S. markets trading in the ADR shares which were made available primarily for institutional investors has been all but nonexistent.

Perhaps the institutional investor is who needs to be woken up to our story, at least in the U.S. I don't know. Any other thoughts or ideas about who Sean wants to promote the Brainchip story to???

Hi Dipp, the way I see it is that the potential applications for Akida are ’limitless’- NASA‘s wording not mine. So, in this sense getting the word out, involves getting it out to virtually every industry in the world, not just the semiconductor industry per se.

 

[Sirod69]

Î haven´t read all posts yet, since yesterday, but without looking if still posted..

Infineon, BrainChip, Daimler, Volkswagen - High-tech stocks at their best!

The global automotive business is operating according to new laws. That is because e-mobility is a done deal, and if politicians' pronouncements are anything to go by, combustion engines will be history from 2030. As a result, the prerequisites for the industry are also changing because...

news.financial

it is so sweet to read Brainchip between Daimler Volkswagen and Infineon

 

[Deleted member 118]

Maybe our SP that is being manipulated down by someone is them trying to stop us joining the asx 200, as that would surely see a large increase to our SP and force whoever it is to pay a lot more for what they want.

 

[Mugen74]

 

[Techinvestor17]

I have a great deal of respect for you as a poster FF, and have followed you for a number of years. In this case I believe you are incorrect. Many companies release ASX announcements regarding new partnerships, a simple search on HC will validate this. It came out of Seans mouth yesterday that they were doing the minimum to satisfy ASX regulations, it was also stated that the SP will do, what it will do.

As I said previously, most of what transpired yesterday was highly positive, I just took issue with this statement.

Of course I understand that these partnerships will eventually lead to revenue, At no point have I ever said anything to the contrary. My issue at the moment is the diminishing SP, and the companies blatant disregard to do anything about it. Something I’ve also posted about previously.

Cheers,
Mark

With all due respect what do you actually think the company can do about it?

 

[Techinvestor17]

Maybe our SP that is being manipulated down by someone is them trying to stop us joining the asx 200, as that would surely see a large increase to our SP and force whoever it is to pay a lot more for what they want.

Have been thinking the same thing, the June quarter rebalance comes out in a few weeks

 

[VictorG]

Now that yesterday is behind us and the dust has settled, I look forward to this new day with anticipation of a significant rebound in share price. I'm buying more at these levels and expecting 5%+ improvement by close of business Friday.

Good luck to all and keep your focus on the prize, it's bigger than the horizon and close than you think.

 

[SharesForBrekky]

Maybe our SP that is being manipulated down by someone is them trying to stop us joining the asx 200, as that would surely see a large increase to our SP and force whoever it is to pay a lot more for what they want.

Yeah, I think you've got a point there.

The big institutions who are currently invested in Brainchip are doing what they can now to push the price up and down in order to accumulate more, because they know if other big institutions start getting on board via for example the ASX200, they'll no longer have as much power to do what they want with the SP.

I guess the fun and games here will always be around as Brainchip continues to get noticed by the bigger fish and the current big fish know they only have a limited time to take control in order to accumulate.

 

[Deleted member 118]

With all due respect what do you actually think the company can do about it?

The company to me has seen to have taken a different route in announcements since they have a product in hand and Sean has been at the helm, which is a complete contrast to Louis approach to shareholders and even then it was few and far between announcements, but if your a medium to long term holder this shouldn’t be an issue, unless you had a short term plan and was hoping the SP was much higher by now.

 

[MDhere]

i want one

 

[Quiltman]

Yeah, I think you've got a point there.

The big institutions who are currently invested in Brainchip are doing what they can now to push the price up and down in order to accumulate more, because they know if other big institutions start getting on board via for example the ASX200, they'll no longer have as much power to do what they want with the SP.

I guess the fun and games here will always be around as Brainchip continues to get noticed by the bigger fish and the current big fish know they only have a limited time to take control in order to accumulate.

Yep. I agree.
Added again yesterday.
I don't have a very sophisticated strategy here.
Buy the dips ( 15% or so down from top ), when I can afford it.
Time. Use time to my advantage. Who am I to argue with Michael Dell. 75% of data to be processed at the edge by 2025.
I'm a relative newbie ... first buy in early 2019 ... gee, I'm already half way there timewise , 2019 - 2025.
So we will be a major player at the edge where 75% of data is processed. Time will fly. I can wait and enjoy the ride !

 

[MDhere]

morning fellow brners, I was told by a Brainchip exec that a vehicle has as many as 300 chips!

Does anyone know what that could be in calculations of royalties in relation to ip licence within these x number of cars?

@Esq.111 i think u have a good calculator or anyone else please care to help me out in my fogged brain