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Flamingo Ai’s (ASX:FGO) share price down 25pc despite meeting targets and receiving patent

Technology
ASX:FGO
30 January 2020 14:45 (AEST)

Software company Flamingo Ai (FGO), has seen its share price drop significantly despite providing a positive update for the December 2019 quarter.

In its previous quarterly update, the company marked the end of last year as the target for a production release of its Intelligent Knowledge Sharing Hub. This meant a product needed to be designed, developed and then launched within 10 weeks.

This Software-as-a-Service (SaaS) product is an efficient tool which “supercharges your organisation’s performance by retrieving and providing the right answers at the right time to staff across your enterprise.”

Although focused on the financial services industry, the product is suited for various industries and businesses of any size.

Flamingo Ai met its target and now the platform is active in both Australian and American regions.

Companies such as HSBC Bank, Nationwide Insurance and Church Mutual have utilised the Intelligent Knowledge Sharing Hub and have been actively engaged with design, testing and feedback.

Further good news for the artificial intelligence company came on January 15 when it was granted an Australian patent for its Semi-supervised Question Answering Machine.

This technology boasts a mix between supervised and unsupervised machine learning to provide answers that can be accessed collectively.

Unsupervised learning is a machine learning technique, where the technology doesn’t need to be supervised. Instead, the model needs to work on its own to discover information.

Supervised learning can be related to classroom learning. You train the machine using data which is well “labeled” and then it will already have the correct answers tagged.

Being granted a patent for this technology means the Intellectual Property (IP) of the company’s Intelligent Knowledge Hub is protected. This then increases FGO’s competitive advantage.

While it’s been granted in Australia, the patent is currently waiting on examination in the States.

Flamingo Ai signed a services agreement and pilot contract with an Australian financial servicer to trial the Intelligent Knowledge Sharing Hub. This client will deploy the company’s machine learning product for an initial six month period, starting from this month.

During the quarter, the AI company worked on its market strategy. The result of this was a growth in the sales pipeline and progressing clients through various stages.

To help educate its community on machine learning, the company participated in events, podcasts and government advisory groups.

Financially, Flamingo Ai are regularly reviewing its costs and operating expenses. The net operating cash burn reduced to $1.060 million due to this review and the improved receipts from customers.

The company’s reported cash balance was $2.675 million at the end of the quarter, compared to $3.756 million for the previous quarter.

So far, estimated cash outflows for this current quarter sits at $780,000.

Overall, Flamingo Ai is confident in its strategy as the Artificial Intelligence software market continues to experience significant growth.

Unfortunately, the positive news doesn’t reflect its share price as the company is 25 per cent in the red and trading at 0.2 cents each at 11:30 am AEDT.

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