BRN Discussion Ongoing

[alwaysgreen]

Brainchips play are royalties, not IP licenses. The licenses are just the icing on the cake, when it comes to the financials. So it depends deeply on the kind of license holders, not how many. A big one like Renesas with lots of different businesses can work for hundreds of millions of sold items with Akida IP. That's much more worth than, just for example, Nintendo is selling one million game consoles with Akida IP. I don't think it's time for royalties in 2023, as it needs a long time in advance 'til they got paid. This year will be about hopefully some more licenses and some engineering fees. The interesting years will be 2024/25, when financials start rolling. So still a way to go, this year might not be that easy.
Nerves of steel and patience for all investors, the reward will come.

Sean Hehir said that he would essentially like to be judged on the company's progress at the next AGM.

He also said to watch the financials. Then followed it up with words to the effect that there have been a few extraordinary world economic and political events that will likely delay said progress.

There was also a comment that revenue growth would outpace costs by the end of 2022 but I assume that will be affected also.

What is progress? Partnerships with Edge impulse, ARM, Intel foundry, NVISO etc are fantastic and will definitely lead to revenue. Is this what Sean meant by judging progress at the next AGM? I personally think most shareholders would have taken that line as both new partners, new licenses and hopefully some decent revenue. Still 4 months til the AGM but I fear that the shorters will tear us apart if there is no revenue or cashflow in the upcoming reports.

 

[equanimous]

Well 4 business days this week and 2 the following, and then we'll have our current questions answered.

I think most of us feel that the timing isn't quite right, we are still so far ahead of the curve, products are coming, royalties are coming
but I feel it's definitely not all in synch just yet.

As mentioned before, I wish to hear of more IP signings. The companies we have been engaged with for a number of years now
through our EAP program really need to commit, surely....as the months trundle by I am really having trouble accepting that they
just won't commit, "officially" that is.

Brainchip signs IP Licenses, that's our play.

Have things stalled somewhat? Please put aside all the dots for a moment, please put aside the companies that have "officially"
signed an IP License, we know that they are developing products, that I totally understand, but it's the companies that are seemingly
on the fringe, when do they actually, officially, have to be announced as holding an IP License?

That part has me confused.

Just putting the question out there, I'm backing our company 100% to succeed, is it all about the NDA's???

Or is it simply a case of, our partners have to sell our IP to their customers before they commit to actually developing a product as such?

All's cool, just throwing it out there.

Cheers....Tech

If your confused why not ask the company these questions directly?

No one here knows these answers and having a debate here will further confuse people.

 

[Perhaps]

There was also a comment that revenue growth would outpace costs by the end of 2022 but I assume that will be affected also.

Repeated for many times but wrong. The comment was about the ADDITIONAL costs for new employees covered by the revenue.

 

[Violin1]

Well 4 business days this week and 2 the following, and then we'll have our current questions answered.

I think most of us feel that the timing isn't quite right, we are still so far ahead of the curve, products are coming, royalties are coming
but I feel it's definitely not all in synch just yet.

As mentioned before, I wish to hear of more IP signings. The companies we have been engaged with for a number of years now
through our EAP program really need to commit, surely....as the months trundle by I am really having trouble accepting that they
just won't commit, "officially" that is.

Brainchip signs IP Licenses, that's our play.

Have things stalled somewhat? Please put aside all the dots for a moment, please put aside the companies that have "officially"
signed an IP License, we know that they are developing products, that I totally understand, but it's the companies that are seemingly
on the fringe, when do they actually, officially, have to be announced as holding an IP License?

That part has me confused.

Just putting the question out there, I'm backing our company 100% to succeed, is it all about the NDA's???

Or is it simply a case of, our partners have to sell our IP to their customers before they commit to actually developing a product as such?

All's cool, just throwing it out there.

Cheers....Tech

Agree with your musings @TECH. I think too early for major revenue as yet. We need more licence signings before we have a broad base for revenue. Had quietly hoped we'd see a couple more by now - but I'm not worried given all the positive commentary by some of our partners. The next 4c is an opportunity for us to show support for the company and avoid going ape-shift like some did last time. It's a long game. Patience required. When royalties start they'll likely grow quickly - and we only need $20m or so per annum to get into the black.

Let's be kind to Tony everyone!
Akida ballista

 

[TECH]

Brainchips play are royalties, not IP licenses. The licenses are just the icing on the cake, when it comes to the financials. So it depends deeply on the kind of license holders, not how many. A big one like Renesas with lots of different businesses can work for hundreds of millions of sold items with Akida IP. That's much more worth than, just for example, Nintendo is selling one million game consoles with Akida IP. I don't think it's time for royalties in 2023, as it needs a long time in advance 'til they got paid. This year will be about hopefully some more licenses and some engineering fees. The interesting years will be 2024/25, when financials start rolling. So still a way to go, this year might not be that easy.
Nerves of steel and patience for all investors, the reward will come.

IP Licenses are Brainchips play first and foremost, as without them being signed there is no royalty stream..end of story.

We are all aware or should be that the royalty stream is where the real revenue is long term, I also only mentioned our EAP customers, as in
at least 8 Tier 1 companies, not small fry, why won't they commit do you think?

"This year will be about hopefully some more licenses and some engineering fees", that's exactly what I am referring to, I appreciate
your view, but you appear to have got caught up on my word "play"

"Brainchips play are royalties, not IP licenses." We are following the ARM business model as a supplier of IP, that's our "initial play"

I do agree with your view on the other matters that you raised, cheers.

Tech

 

[BaconLover]

IP Licenses are Brainchips play first and foremost, as without them being signed there is no royalty stream..end of story.

We are all aware or should be that the royalty stream is where the real revenue is long term, I also only mentioned our EAP customers, as in
at least 8 Tier 1 companies, not small fry, why won't they commit do you think?

"This year will be about hopefully some more licenses and some engineering fees", that's exactly what I am referring to, I appreciate
your view, but you appear to have got caught up on my word "play"

"Brainchips play are royalties, not IP licenses." We are following the ARM business model as a supplier of IP, that's our "initial play"

I do agree with your view on the other matters that you raised, cheers.

Tech

Agreed.

Not sure how we would get Royalties without IP licenses

People are waiting for royalties from Renesas because they've signed the dotted line.

 

[Iseki]

Agreed.

Not sure how we would get Royalties without IP licenses

People are waiting for royalties from Renesas because they've signed the dotted line.

TBH for us to get royalties first a person needs to go into a shop and buy something manufactured by a client of renesas.

I suppose it's quite possible that any company could sign a license agreement with BRN, and that company ask any of the fabless designers (arm, Megachips, renesas, Socionext) to design a microcontroller containing Akida IP, and this wouldn't need to be announced as untill a final product is manufactured there is nothing material. In this case the royalty payment would not be through the renesas or megachips agreement, but directly with BRN.

Or is this wrong?

 

[Mccabe84]

TBH for us to get royalties first a person needs to go into a shop and buy something manufactured by a client of renesas.

I suppose it's quite possible that any company could sign a license agreement with BRN, and that company ask any of the fabless designers (arm, Megachips, renesas, Socionext) to design a microcontroller containing Akida IP, and this wouldn't need to be announced as untill a final product is manufactured there is nothing material. In this case the royalty payment would not be through the renesas or megachips agreement, but directly with BRN.

Or is this wrong?

Would this be similar to all the Partnerships being announced on social media but not the asx ?

 

[Shadow59]

IP Licenses are Brainchips play first and foremost, as without them being signed there is no royalty stream..end of story.

We are all aware or should be that the royalty stream is where the real revenue is long term, I also only mentioned our EAP customers, as in
at least 8 Tier 1 companies, not small fry, why won't they commit do you think?

"This year will be about hopefully some more licenses and some engineering fees", that's exactly what I am referring to, I appreciate
your view, but you appear to have got caught up on my word "play"

"Brainchips play are royalties, not IP licenses." We are following the ARM business model as a supplier of IP, that's our "initial play"

I do agree with your view on the other matters that you raised, cheers.

Tech

I think something that is missed along the way is that we have agreements with Renesas and Megachips.
Our EAP's may well be signing (I would think most likely) with these companies. We may never see any of them sign an IP licence with BRN!
We may know nothing until royalties start coming in!
I vaguely remember (not quoting) Sean Hehir saying something about watching for income rather than anything else.

 

[TECH]

If your confused why not ask the company these questions directly?

No one here knows these answers and having a debate here will further confuse people.

Thanks for your solid input.

I have asked those questions and they don't know either, so I'll wait for the upcoming AGM to direct those questions directly to Sean.

We all (assume) would like to know, wouldn't we?

How much is a IP License fee....5 million USD? I've forgotten.

 

[VictorG]

TBH for us to get royalties first a person needs to go into a shop and buy something manufactured by a client of renesas.

I suppose it's quite possible that any company could sign a license agreement with BRN, and that company ask any of the fabless designers (arm, Megachips, renesas, Socionext) to design a microcontroller containing Akida IP, and this wouldn't need to be announced as untill a final product is manufactured there is nothing material. In this case the royalty payment would not be through the renesas or megachips agreement, but directly with BRN.

Or is this wrong?

BRN IP royalties should only be paid at the point of chip production by BRN partners and Licensees.
BRN clients are not consumers.

 

[thelittleshort]

The companies we have been engaged with for a number of years now through our EAP program really need to commit, surely…

Surely more companies have joined the EAP programme and we are not solely relying on the original tranche. I do not believe management would be that complacent

Be great to know how many original companies are still actively involved and also how many there are now in total

 

[JK200SX]

I think something that is missed along the way is that we have agreements with Renesas and Megachips.
Our EAP's may well be signing (I would think most likely) with these companies. We may never see any of them sign an IP licence with BRN!
We may know nothing until royalties start coming in!
I vaguely remember (not quoting) Sean Hehir saying something about watching for income rather than anything else.

"We may know nothing until royalties start coming in!"

When Royalties start coming in, how would we know which product has AKIDA in it?

 

[TopCat]

Seems the Government ( this is from an Australian Government site, not sure of U.S ) can use our IP without any licensing for defence purposes. I’m definitely no expert though.

Government use of your IP​

In rare cases, the Government may need to use your IP. Under the 'Crown use' provisions in the Patents Act 1990 and Designs Act 2003, the Australian Government and state or territory governments can:

• Use your patent or design right without permission
• Sell products produced under the 'Crown use' provisions.

Invoking crown use is very rare, however, it may be used in national emergencies or for defence purposes.

If the Government exercises this power, they must:

• Inform you of the use of your IP as soon as possible
• Supply information you reasonably require, unless contrary to public interest
• Reimburse you for the use of your IP.

If you believe the Government hasn't used your IP appropriately, you can apply to the Federal Court of Australia or a state or territory Supreme Court to challenge the use of your IP right.

 

[Shadow59]

"We may know nothing until royalties start coming in!"

When Royalties start coming in, how would we know which product has AKIDA in it?

Good question

 

[Stable Genius]

Thanks for your solid input.

I have asked those questions and they don't know either, so I'll wait for the upcoming AGM to direct those questions directly to Sean.

We all (assume) would like to know, wouldn't we?

How much is a IP License fee....5 million USD? I've forgotten.

I would think the signing fee is variable and the nitty gritty detail of their agreements would be commercial in confidence. The contracts would be negotiated depending on no. of nodes used; e.g. Renesas licences 2 nodes. I think there was also a factor of how many different “Devices’ you would use it in; e.g. widget vs phone, vs EV vs smart speaker. I don’t think it is a licence once, put in every device arrangement. You might need multiple licences to put it in multiple different devices.

The price of IP varied depending on what it could do. In this case the uniqueness, first to market, best in class, power saving advantage etc would all work in Brainchip’s favour when negotiating a price. In saying that you could hold out for a top dollar price and end up with royalties of nil because you couldn’t work out a deal that is cost effective for the manufacturer.

I haven’t looked it up and but I recall AM or PVDM during an interview indicating a chip (back when that was an option) was going to be around US $25. A chip would have had all 64 nodes. Therefore 2 nodes would be much cheaper, possibly less than a $1 but I couldn’t begin to put an accurate price on it.

Renesas sells millions and millions of microprocessors and is in the top 5 manufacturers in the world. My recollection is the device including Akida will be available mid year so I would expect royalties to come in after that. It’s not long to wait!

It’s a bit dated but here’s some figures from Renesas:

https://www.renesas.com/us/en/document/ppt/business-breakdown

It’s been discussed numerous times but the contract can be anything lawful both companies agree to. E.g. royalties might not be paid until units are made and sold. But the good news is that once revenue does start coming in it should then continue for many years to come. Over time and multiple customers the revenue flow will build as per Brainchips 2021 conceptual revenue chart from their AGM. They are following their plan.

My view is that even if there is no revenue for the next 2 quarters but it kicks in later in the year for me it doesn’t matter. My expectation is that the SP from now will double or triple by the end of the year so 200-300 % is far superior what I would get from the banks!

If for example Qualcomm did use Akida (to complement Prophesee) instead of their current technology in the Snapdragon 8 Gen 2 then that forecast would get blown out of the water!

 

[Xray1]

Thanks for your solid input.

I have asked those questions and they don't know either, so I'll wait for the upcoming AGM to direct those questions directly to Sean.

We all (assume) would like to know, wouldn't we?

How much is a IP License fee....5 million USD? I've forgotten.

Going way back in time ...... and to the best of my recall, I was under the impression, that the IP Lic Fees were confidential so that the BRN was able to charge individual customers accordingly and confidentially, so that there wasn't going to be a set IP price out there in the market place. It was also mooted, that Royalities would also be formalised with the Co if they proceeded with incorporating Akida tech' in product to be produced. I also do recall however some saying way back at the other site that won't be named here, that the Renesas IP was $1 Mill US and I think the Co, also charged out a service engineering costs that were about the $50K US mark as a sweetener ......

Once again this is just my poor memory recall from way back.

On a side note, I hope that we all do get a great surprise with upward revenue trend in this 4C.

 

[Gazzafish]

I would expect royalties would get paid from megachips (or similar) upon informing BRN how many IP devices they would like to put Akida in. I would not think that BRN would link a royalty payment to an actual device being sold to an end consumer. If for instance megachips overpriced the final product and didn’t sell any, this would be a megachips issue and not a BRN problem as such as it would be 100% outside of BRN’s influence. Just my thoughts….

 

[alwaysgreen]

So now that we are a partner of Intel Foundry and ARM, how does it work if say Lenovo want to add Akida to one of their chips for their upcoming laptop range?

Does Intel just add it to their chip run for Lenovo, Lenovo pays them royalties and Intel pays Brainchip? Is there a license fee associated (Intel to Brainchip, Lenovo to Brainchip etc)?

Sorry, I did try and DYOR on it but I couldn't find any solid information.

 

[alwaysgreen]

I would think the signing fee is variable and the nitty gritty detail of their agreements would be commercial in confidence. The contracts would be negotiated depending on no. of nodes used; e.g. Renesas licences 2 nodes. I think there was also a factor of how many different “Devices’ you would use it in; e.g. widget vs phone, vs EV vs smart speaker. I don’t think it is a licence once, put in every device arrangement. You might need multiple licences to put it in multiple different devices.

The price of IP varied depending on what it could do. In this case the uniqueness, first to market, best in class, power saving advantage etc would all work in Brainchip’s favour when negotiating a price. In saying that you could hold out for a top dollar price and end up with royalties of nil because you couldn’t work out a deal that is cost effective for the manufacturer.

I haven’t looked it up and but I recall AM or PVDM during an interview indicating a chip (back when that was an option) was going to be around US $25. A chip would have had all 64 nodes. Therefore 2 nodes would be much cheaper, possibly less than a $1 but I couldn’t begin to put an accurate price on it.

Renesas sells millions and millions of microprocessors and is in the top 5 manufacturers in the world. My recollection is the device including Akida will be available mid year so I would expect royalties to come in after that. It’s not long to wait!

It’s a bit dated but here’s some figures from Renesas:

https://www.renesas.com/us/en/document/ppt/business-breakdown

It’s been discussed numerous times but the contract can be anything lawful both companies agree to. E.g. royalties might not be paid until units are made and sold. But the good news is that once revenue does start coming in it should then continue for many years to come. Over time and multiple customers the revenue flow will build as per Brainchips 2021 conceptual revenue chart from their AGM. They are following their plan.

View attachment 27751


My view is that even if there is no revenue for the next 2 quarters but it kicks in later in the year for me it doesn’t matter. My expectation is that the SP from now will double or triple by the end of the year so 200-300 % is far superior what I would get from the banks!

If for example Qualcomm did use Akida (to complement Prophesee) instead of their current technology in the Snapdragon 8 Gen 2 then that forecast would get blown out of the water!