At time of writing, the share price of BrainChip Holdings Ltd [ASX:BRN] is down 4.35%, trading at 8.8 cents.
It has been a tough 12 months for the stock with the share losing 56% of its value:
In a double announcement today, BrainChip updated investors on a disputed invoice and a licensing agreement with Gaming Partners International Corporation (GPI) [NASDAQ:GPIC].
Disputed invoice with SN Tech
As per the announcement:
‘In September 2018 BrainChip invoiced SN Tech US$609,251 for a deployment at the Lockport School District in New York state in accordance with a June 2018 License Agreement. SN Tech subsequently disputed the invoice and the Company pursued a preliminary audit of SN Tech’s books and records as proscribed in the License Agreement.’
The company is now following up on the invoice by pursuing a Freedom of Information Act request to the Lockport School District — with the company expecting further insight on the deal as a result.
Licensing agreement with GPI
Also released today was an announcement pertaining to a deal with GPI. As it states:
‘In January 2018 BrainChip and GPI announced a global licensing and development agreement to develop technology in support of GPI’s advanced ATS™, an automated table solution built to collect and analyze data in real-time.’
In terms of money made from the arrangement, BrainChip revealed the following:
‘A license fee of US$500,000 was paid in full in September 2018. An engineering fee of US$100,000 has also been paid in full and the companies have agreed to further engineering fees associated with ongoing enhancements and additional scope of work.’
What are BrainChip’s prospects?
Artificial intelligence is certainly the future, and BrainChip will be looking to leverage its solutions in an expanding market.
It is estimated that the artificial intelligence acceleration chipset marketplace (which BrainChip operates in) is expected to surpass $60 billion by 2025.
BrainChip is in a unique position in the market as it is lays claim to being the leading neuromorphic computing company.
For the layman, BrainChip’s business revolves around hardware-based artificial intelligence solutions that consume less power than other AI solutions.
Neural networks (NN) simulate the activity of the brain and allow users to understand complex relationships between inputs and outputs as well as find patterns in data.
Applications for BrainChip’s product include surveillance, gaming, cybersecurity, autonomous vehicles and drones.
Currently, the company has 35 fulltime employees and two fulltime contractors in sales and marketing.
While still in the early stages of its development and a cash balance of almost US$10 million, the company will likely be looking for a greater volume of licensing agreements from its 500-plus leads.
For Money Morning