BRN Operational Losses And Other Financial Factors Since 2019

[Dave Evans]

Thought I’d start a thread on some of BRN’s financial factors where I can add any info I find relevant away from the discussion thread and personal attacks. Don’t care if no one on the forum reads this one, it’s basically for my own research. I’ll add any good info I pick up and ignore the rest.

Last two days have been good ones for BRN, up to $0.31 (20% and 5%). Could be due to the US averting a shutdown and good inflation results following on from this article on the 11/12/2024

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BRN’s operational losses over the past 5 years (shown below) are over US$100million

2019 were US$11.31million
2020 were US$26.82 million
2021 were US$20.98 million
2022 were US$22.07 million
2023 were US$28.88 million

BRN is looking at another year of operational losses, already over US$11 million in the 2024 Half Yearly Report.

Millions of shares in remunerations going to KMP and share based expenses are costing millions

2019 - US$ 1.63 million
2020 - US$ 1.43 million
2021 - US$ 4.36 million
2022 - US$ 9.14 million
2023 - US$11.35 million

US$20 million is a lot of money in share based expenses for a company with operational losses of over US$100 million in the same period and half a billion market cap valuation seems high considering US $100 million operational losses, share dilution, multiple capital raises and low revenue

The last jump to $0.30c was after news of hearing aid company Starkey using AI but it had nothing to do with BRN and the SP dropped back to $0.23 within two weeks.

Despite what chippers say there’s always plenty of liquidity and plenty of shares on offer.

 

[Dave Evans]

Thanks Diogenese

Hi Dave,

Every quarter there is a great kerfuffle about the financials and 2 recent AGMs have seen attempts to unseat the board, yet you purport to be guided by the financials while asserting that you have not seen any comments on TSEx on the financial performance of the company, and then propose to educate the chippies and techies at the TSEx BRN blog about the financial performance of the company.

If someone has not seen comments here on the financial performance they have not been paying attention.

In assessing a pre-revenue tech company, it is important to take account of the technical and marketing progress of the company as well as its financials. Buying into a pre-revenue tech startup cannot be based on the financials. It can only be based on the perceived market potential.

That can be problematic where there is no established market for the tech. Basically all you have to go on is the company press releases, potential customer reactions, and the assessment of commentators experienced in the field. The comments of ananymous blog posters should be taken heavily salted. By the same token, using financials as the primary assessment tool for pre-revenue startups will always yield the same result, but consistency does not equate to accuracy.

The annual "losses" are investments in the company's future. Most of the money goes on R&D and marketing and the necessary management and support.

Yes, we all expected and/or hoped that the company would be in the black a while ago, but this has been a learning process for us all, including management. The business of IP licensing has a very small customer base, requiring both technical knowhow and deep pockets. Most of the customer base were already committed to 5 year plans or similar for product development, so I was critical of throwing out the Akida 1 SoC baby with the bathwater. But, at that time, I was not aware of the Akida 2/TENNs development, which among other things stymied at least one commercial deal for Akida 1, while at the same time demanding a great deal of development work. This in turn made IP licensing more difficult because we were now, to some extent, selling a pig in a poke as there was no SoC to demonstrate the new technology. [Edit: More recently the company announced a cloud based FPGA in an attempt to overcome this.]

More recently, BRN announced a new software product line. This has a much shorter time to market with a much larger potential customer base and lower barriers to entry, while being flexibly updatable to take account of the rapidly evolving technology. It also dovetailes with the near term development plans for some of our major EAPs, such as those working in the SDV field.

Our tech can be applied to interpret the output of any type of sensor, such as cameras, video, microphones, etc, and it is compatible with all types of processors, including MPU, CPU and GPU. There are several potential customers including UAF, DoE, ESA actively assessing the tech, as well as several commercial partnerships developing products including our tech.

It's always difficult to assess the motivation of a holder who criticizes their own stock holding, especially when the price is rising after an extended price depression.

 

[Dave Evans]

Thanks JDelecto

Regarding the company financials, I'm accustomed to technology companies in the United States operating in the red for several years before they become profitable. BrainChip's choice to use LDA Capital early on to cover operating costs, diluting the value of the stock is annoying at best. I hope the company can live to see a level of profitability and buy back a good portion of those shares.

Full disclosure: I am not a professional investor. I have a technical background and have followed AI technologies since the 90s. I was excited about neuromorphic technology and ran across BrainChip several years ago. Being a fan of the technology, it was serendipitous that shares were selling @ 0.04 USD at the time, so I began converting other shares of stock I had into shares of AZKLF (which was BrainChip's ticker on the OTC Markets at the time). I have a significant long-term holding and with a sense of how long it takes emerging technological paradigms to take hold in the market, my position has been to hold my shares until 2025 and re-evaluate the investment at that time.

While I managed to acquire a large number of shares initially, I've continued acquiring them, averaging up (unfortunately), especially after the Mercedes announcement at CES 2022. While I'm still in the red on my investment, I've seen patents granted for BrainChip's technology, several partnerships established, a couple of IP sales, and their recent contract with AFRL. Both IP sales were for the AKD1000 1st generation technology, which I maintained was not a failed product and is still relevant.

While Sean Hehir noted in a podcast that the AKD1000 chips were for demonstration purposes, he was 100% correct. BrainChip manufactured those chips to demonstrate the IP on silicon, and its main business focus has been licensing that IP to Tier 3 suppliers who incorporate it into their integrated circuit designs to sell down the chain. MegaChips, for example, has invested quite a bit of money into the IP for one of their custom video processing solutions. One thing we may never know (without someone doing a teardown), is where this IP will be used, and the only evidence of its use will be in the form of revenue received by the company.

I'm still giving 2025 a chance, but the opportunity cost is high thus far. With the portion of the commercial market that BrainChip has been targeting (the low-level suppliers), they can stand to win pretty big if they land the right IP license. There are many applications for neuromorphic hardware with a reduced SWaP-C (size, weight, power, cost) to which BrainChip's IP can adapt. It needs industry adoption, and I think interest is starting to pick up.

In summary, I'm invested based on the technological merits of the product and I am speculating that it will eventually make the company profitable, but like many other technology companies, taking on losses and finding creative ways to raise capital and keep the doors open until either they succeed spectacularly or fail miserably.

I have made a long bet that it would be the former.

 

[DingoBorat]

Haha you must be really worried "Dave" ..

Should call this the thread for shareholders worried about the price going up..

I smell another IP deal coming.

 

[Dave Evans]

Thanks JDelekto

I think the Mercedes announcement, while perceived as a good thing, was an injustice to the long-term holders. The real winners were the traders who took money off the table at its pinnacle, and those buying options when the price declined. I still think that Mercedes may be using Akida's technology. If I remember correctly, it was mentioned that Cerencewas the company behind the voice technology in the concept vehicle that used BrainChip's tech. While BrainChip has been very tight-lipped about its customers, the radio silence Mercedes exhibits may have been due to the fallout of that slip during CES.

I also tend to think that people are now less enthusiastic about the hype and approach any new news that doesn't translate into rivers of revenue with a healthy dose of skepticism. While increasing revenue will pique the interest of those looking at the technicals, I think any announcement from a mainstream technology with a large footprint or association with a significant brand will also be enough to move the needle. At that point, I think demand will start driving the price up again.

It's a waiting game, but I believe BrainChip is in a better position now than five years ago.

 

[Investig8ed]

Thought I’d start a thread on some of BRN’s financial factors where I can add any info I find relevant away from the discussion thread and personal attacks. Don’t care if no one on the forum reads this one, it’s basically for my own research. I’ll add any good info I pick up from from the main thread and ignore the rest.

Last two days have been good ones for BRN, up to $0.31 (20% and 5%). Could be related to the US averting a shutdown and good inflation results but the chippers seem to think it relates directly to BRN.

Might have to start keeping an eye open on macro economics and what’s going on in the markets more broadly, anyway back to BRN

BRN’s operational losses over the past 5 years (shown below) are over US$100million

2019 were US$11.31million
2020 were US$26.82 million
2021 were US$20.98 million
2022 were US$22.07 million
2023 were US$28.88 million

BRN is looking at another year of operational losses, already over US$11 million in the 2024 Half Yearly Report.

Millions of shares in remunerations going to KMP and share based expenses are costing millions

2019 - US$ 1.63 million
2020 - US$ 1.43 million
2021 - US$ 4.36 million
2022 - US$ 9.14 million
2023 - US$11.35 million

US$20 million is a lot of money in share based expenses for a company with operational losses of over US$100 million in the same period and half a billion market cap valuation seems high considering US $100 million operational losses, share dilution, multiple capital raises and low revenue

View attachment 74689

The last jump to $0.30c was after news of hearing aid company Starkey using AI but it had nothing to do with BRN and the SP dropped back to $0.23 within two weeks.

Despite what chippers say there’s always plenty of liquidity and plenty of shares on offer.

@Dave Evens
I can see your concerns about the extra SOI and the cash burn BRN have produced over the last 5 years.
Is there a better way to fund this company until we become successful.
Or is PVDM reason for keeping it out of venture capital nonsense.

 

[DingoBorat]

This guy is so happy about BrainChip's performance today and how much his 160000 shares have increased in value, that he's decided to start a new thread on "our" operational losses, on New Years Eve!

Dude I can smell the fear on you "Dave".


Tell you what, I do think the big boys were rattled today, when the second surge happened and all the "walls" which were put up, were gladly gobbled up, by who knows who..

That's the Big Question.

Where did the insatiable hunger for BrainChip stock come from?

It is not just better maket conditions, as you alluded to, in my humble opinion.

 

[Dave Evans]

Thanks @rgupta

Dave you have fair points, but there are a few questions here

Regarding expenses per year I assume brainchip is operating at the least expensive company as compared to peers. When you are trying to engage 60-70 ecosystem partners, have a new technology. Most of the technology companies either sell products or technology which can go well with an existing technologies, that is why their time to market is very short. Brainchip is trying to change the entire market and that is why it is taking a lot longer. You can see brainchip is touching all sectors and all the segments of market, working on a global scale etc. I donot say it will succeed but expenses wise it is one of the lowest spender in the similarly field.

Yes product to market is very long and it always happen with new technologies and you not have to beat the existing technologies, but the market power and politics of those big companies.

Right now space looks very attractive for brainchip and as on date we are moving ahead much faster than any other new technology.

We are getting noticed in defence as well.

If we can get some consumer goods sector, I assume thearket cap is too low for such a technology.

End of the day only time will tell where we will be but early results are looking promising.

 

[Dave Evans]

@Dave Evens
I can see your concerns about the extra SOI and the cash burn BRN have produced over the last 5 years.
Is there a better way to fund this company until we become successful.
Or is PVDM reason for keeping it out of venture capital nonsense.

Thanks mate, obviously it’s the CFO and BOD’s decision how to fund the company and each shareholder has their own view.

All I’m doing now is waiting for the quarterly due in the next two weeks or so and the Annual Report in February and I’ll assess the financials for myself.

I’ve got an idea of the mentality on the main thread and I’m happy staying here in this thread where I can post on the financials and anything else I find relevant and avoid getting into unnecessary retaliations.

 

[Dave Evans]

Thanks to the ignore button I can just focus on the financials which are the most relevant aspect to me when it comes to companies. Also prevents getting involved in personal grievances

 

[IloveLamp]

 

[Pom down under]

So are you trying to tell us something we already don’t know, so thanks for your advice I’ve just increased my sell order for $7 to $15

 

[Ethinvestor]

I think he is just a young guy who didn’t realised in the beginning that there is much more seasoned investors here and now he just can’t let it go… so better not even comment.. waste of time even reading it…

 

[Doz]

 

[manny100]

Most great companies start off as specs and those that buy early make a fortune.
Quote from Wiki on NVIDIA.
" The sense of extreme desperation around Nvidia during this difficult era of its early history gave rise to "the unofficial company motto": "Our company is thirty days from going out of business".[34] Huang routinely began presentations to Nvidia staff with those words for many years.[34]"
........................ and NVIDIA SOI = " According to NVIDIA 's latest financial reports and stock price the company's current number of shares outstanding is 24,533,000,000."
We have a paltry circa 2 bill.

 

[IloveLamp]

View attachment 74722

 

[Guzzi62]

The last 6–7 posts were quite good.

I won't be reading any more posts on this tread.

DE goes on ignore, not wasting any time reading your posts about operating expenses, that you call losses?

Dude really? It not losses, but money spent on devolvement- university programs and interactions with potential customers. To do that you need people and those people expect to be paid. In order to lure the best talent, you need to give them an attractive package, even before the company is profitable.
That's all I have to say about that!

Over and out!

 

[Dave Evans]

Thanks to the ignore button I can just focus on the financials which are the most relevant aspect to me when it comes to companies. Also prevents getting involved in personal grievances

I’m equally as happy when people put me on ignore as when I put other people on ignore, saves a lot of unnecessary nonsense getting posted and I only have to read comments relevant to BRN written by intelligent investors.

Wannabe bullies, pack mentality and petty tyrants often try to act tough on forums, possibly as a result of not spending time in the real world. Regulations for online forums provide ignore and block options that act in a similar as fly spray so people can read the information they choose, which on this thread will be BRN’s financials.

I’m even interested to see the comparison between Nvidia and BRN, only at this stage I don’t believe you can make a comparison between the two