London-listed Seeing Machines (AIM:SEE ) has completed its first licence deal with a major Automotive Tier 1 partner for its driver monitoring system technology worth an initial US$5m with ongoing volume based royalty payments.
The technology provider said the deal had been entered into under the terms of a ‘pre-existing non-exclusive collaboration agreement’ in order to supply its DMS systems to an ongoing automotive program.
Under the deal, the company will receive a non-refundable pre-production license fee of $5m before 30 June 2020 alongside future volume based royalty payments for the program.
“This approach to doing business is key to long-term sustainability and appropriate management of our balance sheet especially in businesses where revenue tends to be longtail in nature,” said Paul McGlone, Chief Executive of Seeing Machines.
Shares in Seeing Machines closed at 1.725p on Tuesday afternoon.
Seeing Machines added that it will retain all intellectual property rights associated with its DMS technology licensed to the counterparty.
The Australian-based firm previously told investors in March that it had put in place several contingency plans and cost containment initiatives to mitigate the impact of the coronavirus outbreak on its business.
It said that whilst the short to medium-term outlook remained ‘uncertain’, there was ‘positive momentum’ across all transport sectors with the group having had ‘significant confirmed order books for both its fleet and automotive divisions.’
As at 31 December 2019, Seeing Machines has reported a net cash of A$47.3m up from $26.9m in the comparative 2018 period.
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