Its a bit like the question "How long is a piece of string?". The best i can offer is from the recent Shaw & Partners update, which provided a projection of sales for FY2018 of $10.2mil, with a Dec 2018 target price of $0.80c. Refer the following extract -
* A significant upfront and royalty stream is expected. The patent Lumileds has applied for may not be approved. It is a narrow general application patent relating to methods for using RPCVD, but it could be used to enhance Lumileds power at the bargaining table when the two parties finalise the licensing of RPCVD. Industry royalty rates on end product sales are typically mid-single digit depending on how meaningfully a technology enhances sales and margins. RPCVD looks as though it will deliver significant sales and efficiency gains. Based on this and Osram statements that every 1% improvement in brightness leads to a 3-5% margin improvement, we expect BLG will be looking for a royalty closer to double digits.
Imo, its hard to put a number on a single contract value, without even knowing what the contract is for - whilst we know Lumileds are very keen and have sought patent protection, we still don't know specifically what the RPCVD process is going to be used for. However, i would think that once one contract is signed, more shall quickly follow as 'FOMO' kicks in.
Like me, you'll just have to wait for more info......
Happy New Year to all.
BLG Price at posting:
39.0¢ Sentiment: Buy Disclosure: Held
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