The Brainchip Holdings Ltd (ASX: BRN) share price is trading higher today after the artificial intelligence company delivered its full-year results this morning.
Reporting a loss, Brainchip advised it expects this will be the year its technology is validated as it penetrates the artificial intelligence market.
Brainchip's FY19 results
Brainchip reported a net loss after income tax of US$11.31 million for the year ended 31 December 2019, down on 2018's US$16.52 million loss. Revenues for the year were US$75,574, down 92% from US$947,989 for the same period a year ago. The decrease was largely attributable to revenues recognised in the prior year from the agreement with Gaming Partners International Corporation (GPI).
Total operating expenses for 2019 came to US$11 million. Research and development (R&D) expenses of US$4.51 million comprised employee, contractor, and other R&D costs, alongside amortisation of capitalised R&D intangible assets.
Selling and marketing expenses of US$1.06 million were incurred, a 28% decrease on the prior year, reflecting management's decision to reduce headcount and related expenditure in Q2 2019.
General and administration expenses decreased 9% to US$3.8 million in 2019. This reflected lower employee expenses as a result of the reduction in salaries of key management in early 2019, offset by the employment of a VP of Finance. A reduction in legal and other professional consulting fees was recorded in line with 2019's cost-cutting efforts. Software expenses increased due to the implementation of a flank accounting software system.
At 31 December 2019, Brainchip had consolidated net assets of US$9.1 million, marginally up from US$8.88 million at the end of 2018. This included cash and cash equivalents of US$7.62 million.
Business progress
Through 2019, Brainchip progressed the design and development of the Akida System-on-Chip in preparation for manufacturing. Brainchip is actively marketing the Akida intellectual property to manufacturers of end products in the artificial intelligence market.
In February, Brainchip received EAR99 classification from the US Government for its Akida Neuromorphic System-on-Chip, the Akida Software Development Environment, and related technologies.
Brainchip is in the process of engagement with potential customers and defining appropriate industry benchmarks. The company notes that test results indicate Akida's performance in terms of power consumption and performance is excellent.
Target customers in a variety of markets can integrate the Akida intellectual property or device into their equipment to implement Existing Deep Neural Networks or a Native Spiking Network. Either way, the solution offers ultra-low power, optimised memory usage, and low cost.
Brainchip expects 2020 will be a year of validation of its technology and penetration of the AI Edge market. In anticipation, Brainchip has expanded its sales and marketing resources to take advantage of first mover and competitive advantages.
