BrainChip Holdings Limited (ASX:BRN) President and CEO Louis DiNardo discusses Akida development, AI Edge markets, the Akida early access program, and provides an update on finances.
Thank you very much, and I hope everyone can hear me. There may be a little bit of latency given all of the virtual content that's being transmitted around, but it is, I believe, 9am in Sydney. This original slide says “AEST”. That should really be daylight time for you folks. It's about ten slides. And, as Clive said, probably about 20 or 25 minutes. And, as typical, I will try to answer the questions that I've received by email throughout the presentation. And of course, you can always follow up and send me follow-up emails.
I tried and was unable, but you will certainly soon see a nice little video. We've got a very short video. Then we have a longer video which will be hitting our website very quickly, probably within the next day or so with respect to the short video. But it really focuses on neuromorphic computing at the edge, which I think all of our investors, shareholders, all of our constituents know that's really where our focus is.
So I'm going to move forward. I hope this works. Just a short agenda for today, I'm going to talk about our product development, about the AI Edge market in general, as well as customers and applications, the early access program and our partners who have joined that program. A quick update on finance, although our 4C will be coming out later in the month -- I think just at the end of October. As well as a little bit of public relations and investor communications commentary.
This one gets a little bit dense, so pardon me if I have to look into the screen a little bit, but the Akida development has gone exceptionally well. Validation, as we mentioned in a prior press release, validation of the functional blocks of Akida is complete.
Fundamentally, all of the blocks are working exceptionally well. So, we have the neural fabric, we have all of the interfaces. We are now running neural networks on the neural fabric, which is a great step forward. So it's internal today, but we also, as I'll talk about in a moment, we have our early access partners with their networks, which will soon be working with evaluation boards. They're now certainly working with the Akida Development Environment. Software development is a very, very big part of what's necessary for us to have a very commercially successful product. The neural fabric -- we’ll call it runtime application -- it's under test right now, and it basically allows us to go through any one of the interfaces, whether it's PCIE, USB, the JTAG interface, the UART interface. Whatever interface that we want to get in and out of the device, there's a runtime application that's under test, as well as the device drivers. We did announce recently that we have a team that we're assembling in Hyderabad, India, which is developing the software for the device drivers.
The EAP customer engagements, we're helping them port their networks to the Akida neural fabric. And as I said, validation is complete. We're running neural networks. They will develop their own networks. In some cases with the EAP customers, we'll help them develop their networks. And we have enough working parts and boards from our multi-project wafer to satisfy all of our EAP customer engagements, so not an issue there.
We are working on the production tooling and subsequently the device manufacturing. That will be done with Socionext. It will be done at TSMC. So the design, we'll hand off to Socionext. They'll do the place and route, they'll cut the mask sets or they'll transfer the files, I should say, what we call a tape out, to TSMC. We'll be doing production development early in the first quarter of 2021. As I said, the RTL or the design package is being prepared pretty much as we speak.
Let me see if I can move the slide forward. When we talk about the AI Edge market customers and applications, Tractica has reported, and this was actually in 2019, that between now and 2025, the AI Edge market, not just the AI market in general, but the AI Edge market will grow to something over US$50 billion. Our focus has been from inception and I think some of the language maybe has matured a little bit, but it's smart transportation, smart home, smart health, and smart industrial IoT.
When we talk about smart transportation, we've talked many, many times about autonomous vehicles, advanced driver assistance systems in vehicles. Peter is living in Perth now. He's managing our research centre there, and there are a great deal of opportunities in smart transportation that are outside of automobiles. We have announced certainly that we're working closely with the Ford Motor Company, we're working closely with Valeo out of Paris. Actually, the facility we work with is out of Stuttgart. But Peter's working on things like vibration analysis, what's going on in railroad systems, preventive maintenance for railroads. Preventative maintenance could be for aerospace and other space flight applications that we'll talk about in a moment.
Smart home, smart health, our ability to recognize volatile organic compounds when we exhale, whether it's for infectious diseases such as COVID-19, H1N1, it could be early diagnosis of certain types of cancers.
So smart home, smart health, smart transportation, and of course, the smart industrial IoT space, which kind of transcends a little bit of each of the transportation, home, and health industries.
So, when we talk about the early access program -- and there's been a lot of questions. I'm going to try to answer questions here as I go through this short presentation -- but the early access program, we now have engagements with folks in the aerospace industry, and that would be autonomous and unmanned aircraft as well as satellite and space flight. In the storage industry, very large scale storage. These are household names that everyone would know. Diagnostics and preventative maintenance for those storage systems. As well as the automotive industry, which we have announced a couple of engagements there, but primarily LiDAR and imaging.
So the early access program, I think there's been a number of questions. How many folks are in the early access program? How many NDAs do we have? I could say that well in excess of 100 non-disclosure agreements are in place. The early access program, we're being a bit selective. Frankly, we have resources that are very valuable, and we've announced folks in the aerospace industry. We've announced folks in the automotive industry. And there are engagements in the storage industry as well. So the early access program has actually been very... It's been quite successful. And I think it's giving us cycles of learning, and it's giving us an opportunity to engage with tier one manufacturers in all of these particular spaces, as well as the potential for others.
When we look at kind of a quick finance update, our cash balance at the end of the September quarter -- or subsequent to the September quarter because we had some cash inflows since the end of the September quarter -- was about US$17.6 million.
Easily covers our costs. We're still running at roughly kind of the US$2 million a quarter in expense. The production mask set and tooling will be a capital expense that will incur some time, probably in the fourth quarter. But that will be on the order of about a million, maybe a million two or a million three. So it doesn't move the needle that much. We continue to maintain cost controls. Some of that is voluntary or self-imposed, and some of that really is with respect to limited travel because of the COVID pandemic. It's been very difficult to travel, whether we're leaving the US and we're going to Europe, or we're leaving the US and we're going to Australia, or we're going to South America, wherever our customers are. So, the cost controls are well in place.
We've been very, very lucky. Fortunate, I should say, maybe not lucky, but fortunate that we have not had any incidents of COVID outbreak in our employee workforce. So we have, as I think all of you know, we have a substantial part of our workforce in Southern California, just outside of Newport Beach in Aliso Viejo. We have a substantial part of our workforce in Toulouse, France. Everybody's healthy and taking all of the precautions that are necessary so that they can get into the office or the lab and take care of what they need to do, but stay safe at the same time.
As I mentioned, capital expense in the fourth quarter will be about US$1.3 million to develop that production mask set. There has been a number of questions about why do a production mask set. Our multi-project wafer was very successful. As I mentioned, it certainly services our early access customers, our early access partners, but it is important, particularly when you're dealing with folks in the aerospace industry or the automotive industry, even in the smart health industry, as well as smart home, frankly, that we have a production mask set. That we have the full qualification package. Which includes all of the environmental testing that's necessary. So we have to do burn in. We have to take several units from different steps in the wafer manufacturing process. We have to do a burn in over a certain number of hours and provide qualification data so that our potential customers are very comfortable that they're getting a reliable product.
Move on. So, a little bit about public relations and investor communication. We have, I think, really stepped up our game. We have a very, very fine team in southern California that's managing our social media. That includes LinkedIn, Twitter. We have well over 1,000 followers on LinkedIn. We have well over 1,000 followers on Twitter as well.
Our website, I think we've done a good job of improving the website so it really reflects the kind of composition and tenor of the company. You'll see some continued improvements, including the videos that I mentioned, which they're just too dense to try and provide here on a webcast.
We get a great deal of trade press coverage. I'm sure that each of you probably see all of that trade press coverage as well as financial press coverage.
ASX announcements, very judicious about ASX announcements, kind of the restrictions around what's material and what's not is something that weighs on whether we do an ASX announcement or put something out in the trade press or in the financial press. I do a lot of interviews. Peter does some interviews. Anil does some interviews as well.
And we did announce in the quarterly update, which we published yesterday, that we will be doing monthly podcasts. I think it's important. These kind of quarterly updates, they're great, but I don't think it's frequent enough, we don't think it's frequent enough to keep our shareholders, kind of the investors who are interested in the company, have been very, very loyal and long-term investors. We don't think that a quarterly update is necessarily frequently enough. So we will be doing podcasts on a very regular basis, the first Tuesday of each month on a go-forward basis. Some of that will be updates on product development. Some of that will be invited guests from industry. Some of that will be invited guests from the editorial community. But I think that our shareholders or constituents generally, I think will find that the podcasts provide a little bit more of a frequent communication, which we believe is important.
So as I mentioned, I'm just going to cover here very quickly... I get a lot of questions, we get a lot of questions about how many non-disclosure agreements. I can tell you it's well north of 100 nondisclosure agreements. In many respects, that is to our benefit, and we insist on those non-disclosure agreements because we're going to disclose, as we have technical dialogue, we're going to disclose things that maybe aren't covered by patent protection. They’re trade secrets that otherwise would not be in the public domain.
Early access programs and customers, as I mentioned, covers three or four major industries right now, and we're being very selective about those that we engage with.
Cash inflows, a good deal of it has come from the financing that we did with LDA, as well as stock option transactions that have also provided cash inflows. So we're in a very, very healthy position with respect to our cash.
And product development, I touched on, which is at this juncture, we have evaluation boards. We have early access partners that we will be shipping those evaluation boards to. We'll be dishing off or handing off the final design to Socionext, who will work with TSMC, manage the back end for us so that we have really production silicon, rather than something that came off of the multi-project wafer.
It's a little uncomfortable that I can't take questions live, but we're about 20 minutes or so in. Certainly, if there are any other questions that I haven't addressed or haven't touched on here, send them to us. And we will be very responsive.
Clive and the folks at FNN, thank you for your support. And to all of our stakeholders, our shareholders, as well as customers, potential customers, thank you for your support as well.