RE:RE:MD&A out Friday After hours ***My Favorite page GO NXO GO!!!
Management’s Discussion and Analysis March 31, 2021 3 In July 2020, NexOptic announced that it was chosen to join the NVIDIA Partner Network as a Preferred Partner to leverage the edge AI advantages of their NVIDIA® Jetson™ platform with next-generation Aliis™ offerings. Since then, and with the assistance of NVIDIA’s engineers, Aliis™ has been integrated into NVIDIA’s Jetson™ platform, and NexOptic continues to optimize and expand its supported feature sets for Jetson™. In the second quarter of fiscal 2020, NexOptic reported that Qualcomm, Inc. (“Qualcomm”) selected Aliis™ to be part of its Qualcomm® Platform Solutions Ecosystem in order to optimize Aliis™ into select Qualcomm® Snapdragon™ mobile platforms. Since then, NexOptic successfully integrated Aliis™ into their chipsets and continues to optimize the expanding capabilities of Aliis™ into them. NexOptic continuously expands Aliis’s Al capabilities and anticipates that they will be engineered into current and future semiconductor offerings by NVIDIA, Qualcomm and Arm in the future. NexOptic continues to work closely with all of its partner companies. In all instances (NVIDIA, Qualcomm and Arm), each original equipment manufacturer (“OEM”) retains control over the choice to license Aliis™ directly from NexOptic with optimized versions of Aliis™, this significantly reduces their integration costs and allows them immediate Aliis™ access. First NexOptic Commercial Agreement for Aliis™ On April 7, 2021, NexOptic announced that it had entered into an exclusive agreement with Pristine Surgical LLC of Manchester, New Hampshire to deploy Aliis™ into Pristine’s single-use endoscopic visualization platform. Pristine Surgical is a single-use surgical visualization company dedicated to improving patient care, safety and efficacy. The endoscopic market stands at 25 million endoscopic (arthroscopy and laparoscopy) procedures performed worldwide each year. Pristine’s platform combines high-performance digital image sensors, advanced high-brightness LEDs and powerful graphics processing hardware and software with Pristine Connect, a cloud-based SaaS platform which makes the full surgical episode more efficient for patient, surgeon and surgery center. Pristine’s single-use design eliminates the risks posed by cross-contamination, reduces sterilization and maintenance costs and provides consistently clear images. Headquartered in Manchester, N.H., Pristine Surgical is led by an experienced management team, a seven-person board of managers and a 10-person medical advisory board. Further Commercial Viability Potential of Aliis™ NexOptic’s AI presents an opportunity to be successfully applied to imaging verticals and industries. Imaging and AI both remain rapidly growing industries. With integration into several high volume, globally recognized chipsets now complete, and with anticipated continued joint marketing initiatives by NexOptic’s chipset partners, the opportunity for additional commercial transactions including with leading global OEM customers continues to increase. NexOptic is discussing opportunities with third parties. Advanced dialogues with these third parties, including with other leading semiconductor companies and a variety of OEM’s, continue. Patent Focus NexOptic is taking constructive steps to create a patent estate around Aliis™ and remains patent pending on multiple other fronts with ongoing processes for even more patent applications surrounding Aliis™ in the near future. In May, 2021 the United States Patent and Trademark Office issued a patent Notice of Allowance for an important NexOptic patent covering low light technology foundational to Aliis™. Once issued, it will provide key intellectual property protection for NexOptic’s disruptive AI for all levels of imaging including but not limited to, video and data compression. A Notice of Allowance is an indication that the invention qualifies for a patent and that administrative and other steps are required prior to its issuance. An invention is still considered “patent pending” until the final patent has been issued. In the 3rd quarter 2020, NexOptic was patent pending on a new AI that transforms Image Signal Processors (“ISP”) technology. Engineered into Aliis™, the neural ISP technology is now available to OEM customers through NexOptic’s aforementioned strategic partnerships. Image signal processors are a traditional technology that manipulate images from raw data into the precise and coherent imagery viewers are accustomed to seeing. They are increasingly also being used for new application paths in robotics, smart cities, industrial automation, automotive, healthcare and beyond. Korean Subsidiary Since September, 2020 NexOptic has operated a Korean office (Seoul) for regional sales & marketing, and customer account management as well as for technology development guidance including siliconization of Aliis™ algorithms – embedding AI directly onto a chip – for sales into entirely new market verticals. Regionally, South Korea, Taiwan and China represent the global hub of siliconized semiconductor supply chains. and software engineer support.