On more than one occasion the CEO of Brainchip has stated to shareholders in presentations during the second half of 2020 that the company was very close to announcing its first commercial engagement and that this announcement may come late 2020 but certainly early 2021. Well to the amazement of shareholders as Christmas descended and the markets started to wind down the CEO was true to his word as a trading halt was called on the 22 December, 2020 and by after the close of trade on 23 December, 2020 the CEO and the Board of Brainchip released two announcements. The first was confirmation that Brainchip had been awarded a sole source contract with NASA for the AKIDA early access development kit.The second and pivotal announcement was that the first Intellectual Property licence had been entered with Renesas with the CEO commenting: “This is an exciting and significant milestone in obtaining the Company’s first IP licensing agreement. Furthermore, this is a market validation of our technology”The salient terms of this agreement as announced are: Aliso Viejo, Calif. – 23 December 2020 – BrainChip Holdings Ltd (ASX: BRN), a leading provider of ultra-low power, high-performance AI technology, today announced the signing of an intellectual property license agreement with Renesas Electronics America Inc., a subsidiary of Japan-based Renesas Electronics Corp., a tier-one semiconductor manufacturer that specializes in microcontroller and automotive SoC products. The unconditional agreement provides for: • a single-use, royalty-bearing, worldwide IP design license for the rights to use the Akida™ IP in the customer’s SoC products, which continues while the customer continues to use the Akida IP in its products. The parties agreed to customary termination terms; • BrainChip to provide implementation support services (at an agreed fee to cover costs) aimed at facilitating the customer’s adoption and commercialization of the Akida-licensed product during the first year of the license agreement. • The agreement provides for various payment terms including the payment of ongoing royalties based on the volume of units sold, commencing at certain agreed volume threshold and the net sale price of the customer’s products. The royalties remain in effect throughout the life of the licensed product. • Brainchip to provide software maintenance services, which attract a separate fee if the customer elects to continue to use these services after the first two years of the agreement.So after this announcement the next trading day being 24 December, 2020 trading resumed and the market closed early because it was Christmas Eve. The next chapter in the Brainchip story will now unfold with expectations of further IP agreements, mass production of the AKD1000 and many exciting new ventures being anticipated. The rest of the Brainchip story is likely to be written in front of an increasingly attentive market both here in Australia and around the world and is likely not to require someone to put it in writing as AKIDA technology becomes ubiquitous both on Earth and in Space.
BRN Price at posting:
42.0¢ Sentiment: Hold Disclosure: Held
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