Braintech, Inc. (OTCBB: BRHI)

Dear Reader,

Enter the Eye of The Robot, or more appropriately, enter the age of The Eye of the Robot. It's here.

Today's featured profile on Braintech, Inc. ("BRHI") (OTCBB: BRHI), is so futuristic in its application and business plan that I feel compelled to tell you that they have many production installations already, this isn't a "we think we can do this. Let's go public and raise some cash" whim.  Braintech's robotic eye, designed primarily for the automotive industry, could be the most important innovation in that space since Henry Ford launched the assembly line.

Braintech's technology allows robots to SEE what they are doing, to take a greater role in assembly and manufacturing.  And again, this is not theory.  They're doing it.

Already, Braintech has a relationship with a big NYSE listed company to market its wares to the automotive industry from its offices in Detroit as you will read below.

I realize this is fantastic, eye-popping stuff I'm writing here, pardon the pun.  But it's true.  And the future potential applications are simply mind boggling in the areas of security, manufacturing and more as we hope to discuss in future coverage of this company.  As our regular readers know, we do not hype the companies we cover nor project their future performance.  But I will say this without a moment's hesitation, this is one of the most intriguing technologies we've ever covered in StockUpTicks and we are thrilled to bring this story to your technological door.

Please take a moment to read the profile below and to bookmark the stock symbol BRHI on your watch list.
 

About Braintech

Braintech, Inc. ("BRHI") (OTCBB: BRHI), is headquartered in Vancouver, Canada with offices in Detroit, MI and the technology corridor of Northern Virginia.   A public company since 1994, Braintech researches and develops software technologies and products for industry.

Braintech's flagship product, eVisionFactory™, (“eVF™”) is a software application for developing 3D-Machine Vision solutions.  eVF includes Braintech's award winning and patented single camera 3D, (SC3D™) guidance technology that enables a robot to “see.” 
 
 

Braintech is the only VGR software supplier to produce a software application capable of handling the wholesale adoption and high volume demand for VGR systems seen as the next manufacturing wonder machine.

Braintech solved the rapid expansion requirements that a new market demands by exclusively partnering with industrial giant ABB, who has introduced Trueview Vision Guided Robotic Systems featuring eVF.

Trueview has established itself as the “best-of-breed” system with close to 100 systems installed with major automakers and auto-parts suppliers.

"Seeing" Robots are Rapidly Changing the Landscape of Manufacturing Click here to read about how auto parts makers have embraced Vision Guided Robotics into their factories - Manufacturing Automation: June 2005

1. Seeing robots can replace humans operators for many of the difficult to automate operations and eliminate associated costs of wages, injuries and pensions;
2. Seeing robots do not require costly, exact fixturing and eliminate associated capital costs of expensive conveyors, grippers and dunnage.

Source: UN 2004 World Robotics

ABB Business to Rapidly Grow

Braintech is primarily focused on the automotive industry, where the size and potential of the VGR market is most significant. The Company has installed applications currently working on assembly lines, handling literally millions of parts for major automobile manufacturers and supporting industries.  The Company's early VGR successes have been in the materials handling segments, for example making a tangible contribution to the success of the Ford F-150 pickup truck.  Recent orders have brought Braintech's software into new and sizable categories such as transmission assembly; brake parts assembly; handling castings; and car body part handling and sealing.

Braintech realizes sales principally through its strategic Alliance Partnership with ABB, Inc. (NYSE: ABB).  ABB North America, headquartered in the center of the Detroit automotive region, is a leading supplier of robots and robotic automation systems to the automotive, manufacturing and consumer industries.  ABB markets eVF as the integrated software platform for its Trueview™ Vision Guided Robotic System.

Achievements in the automotive business are invoking interest from other market sectors.  Last year BRHI was approached by a government group and successfully responded to that request.  Further and significant interest has convinced management to develop its government business.

• BRHI recently received an order from Battelle Energy Alliance, LLC for the installation of a vision system for Idaho National Engineering and environmental Laboratory.  These first systems are prototypes of a Waste Package Closure System for the Yucca Mountain repository for Spent Nuclear Fuel in Nevada with many similar systems expected.

• BRHI's government growth plan is two pronged and includes product sales as well as consulting engineering services.  This will help build a more balanced revenue/profit model for BRHI.

• BRHI has two powerful directors residing in Northern Virginia who are committed to developing strong relations with government and government integrators.

• BRHI sees immediate opportunities to automate material handling of dangerous and heavy objects such as munitions, chemicals, biological agent and nuclear materials.

• BRHI advanced technologies and expertise are applicable to the development of autonomous service robots for the security industry.

Included in BRHI's budget is the cost of a small dedicated group of technologists working on a new product called Cobuss, (see product section for more detail).   Cobuss is designed as a communications support system for industry.  It has been under development for over four years and has entered beta testing with a cross-section of users including ABB and Delphi. 

The Beta test period will continue until BRHI has sufficient user feedback to confirm the marketability of Cobuss. 
 

Investment Highlights

Braintech's Major Priorities are Profitability and Increased Shareholder Value

Braintech adopted a business strategy to develop a new product for a new category.  As evidenced by its past financial performance this requires significant investment without any guarantee of success. 

What is clear is that BRHI business plan is starting to work.  BRHI has achieved the following key factors of success:

1. A proven product
2. Secured a Global Channel Partner
3. Installed “first-orders” systems with most of the world's automakers
4. Repeat orders
5. Increasing Revenues.

Management believes a threshold of customer acceptance has been achieved and that wholesale adoption of this system is possible.  An independent survey suggests that in engine assembly plants alone there are as many as 30,000 potential installations worldwide.  Closer to home, BRHI/ABB anecdotal analysis confirms many 10's of installations per plant.
 

BRHI Ingredient Brand Strategy

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In February of 2004, ABB and Braintech entered into an exclusive channel partnership agreement, (the “Alliance Partnership”).  This Agreement allows ABB to license Braintech technology and software products for integration into ABB VGR systems exclusively for the Automotive Sector.  In addition to supplying vision guided robotic software and technologies to ABB, Braintech provides eVF upgrades for previously installed systems, training seminars for their technical staff and engineering services to assist in the design of vision guided robotic systems.

In May of 2004, ABB and Braintech jointly announced the launch of the “Trueview Vision Guided Robotics System™.”   Trueview™ is positioned as a complete robotic automation solution.
 
 

Through its Alliance Partnership with ABB, eVF is the exclusive ingredient software platform inside the ABB Trueview Vision Guided Robotics System. By virtue of this arrangement, Braintech has successfully established an “Ingredient Brand Marketing Strategy.”

The “Ingredient Brand Strategy” is a proven success method for emerging technology companies.  Examples include Intel chip technology, Microsoft operating systems, GoreTex fabric, and Dolby sound. 

As an emerging technology company with an ingredient brand strategy, the ABB commitment is valuable to Braintech.  The alliance provides Braintech with the support of ABB North America's seventy (70) person Robotic Automation Sales and Marketing Division.  This Division focuses on major manufacturers, Tier and aftermarket segments of the automotive industry. The Division sells, installs and services its Trueview Vision Guided Robotic system, including eVF as the exclusive ingredient software component. 

During the first quarter of 2005, the ABB Partnership Alliance delivered to Braintech the highest number of software and guidance technology orders in the history of the Company.

In January of 2005, ABB initiated an “Introduction of Trueview” sales blitz.  The blitz was specifically designed to heighten awareness and interest of the Trueview brand.  As a result, orders for many different types of Trueview systems, from many different and new customers, from many countries are being processed.   Further, the Partnership Alliance was amended to allow ABB to market Trueview, exclusively powered by Braintech technology, to the countries of the European Economic Union and sub-license Trueview to ABB business partners on a worldwide basis. 
 
 

New BRHI Platforms and Industry Acceptance

The Braintech / ABB Strategic Alliance has succeeded in selling VGR solutions into the automotive industry and as of 2004 the Trueview product set with the eVF software platform and Braintech vision guidance technologies has attained wide industry acceptance.  Currently, eVF-driven Trueview systems handle millions of parts on assembly lines flawlessly.
 
 

For example, Braintech software inside the Trueview system has been installed at Ford Motor Company, General Motors, TI Automotive Group, ZF Batavia, Pullman Industries and a Toyota Group company, among other major manufacturers.

  Initial product installations were achieved in the materials handling area, with Trueview systems handling such applications as engine head decking, rough engine block casting and axle knuckle manipulation, among others.  Of significance is the recent expansion of Trueview into two new manufacturing sectors:

• The Body-in-White category, via an order from a major North American automaker for 16 Trueview systems that will operate inside the manufacturer's body shop, making 

ABB robots capable of locating and de-racking car body panels for assembly and processing. 

• Transmission Operations, whereby Trueview Systems are being installed within the transmission assembly lines of a major North American automaker, and the transmission assembly line of a non-automobile manufacturer.

These new category entries highlight the adaptive, flexible nature of the Braintech eVF software platform and its proprietary vision guidance technologies.  The ability to quickly adapt an automated assemble line to a new task has direct impact on the ROI a manufacturer realizes from the plant and the ultimate profitability of the business.  Braintech has a name for this capability – “Adaptive Automation.”  Thus, Trueview delivers on the promise of adaptive automation, providing major benefits to end-users across the automotive industry. 
 

Trueview Vision Guided Robotic Systems:

• BRHI provides ABB with a best-of-breed software application used to build VGR solutions.  This is not what a customer buys.  A customer buys a system that includes: a robot and its controller; a special end-of-arm tool, (i.e. a gripper); special lighting; cables, harnesses; cameras; computer; communications; conveyors; fencing; etc.  If any part of this system fails, then the whole system fails.
• Trueview is ABB’s commitment to test, standardize, certify and guarantee the reliability of each installed system.
• Recently, ABB and Braintech have started the integration of eVF with ABB's new intelligent controller, the IRC5.  This integration initiative will place Trueview far ahead of the capabilities of its competitors.

Braintech's business objective is to establish the eVisionFactory software platform and the guidance technology products as the vital ingredients for automated robotic applications worldwide. The Company believes that as market acceptance continues to accelerate, the ABB Alliance will become more powerful and the momentum built can result in dominance of the Vision Guided Robotics sector of manufacturing.

 The ABB / Braintech Alliance Agreement calls for an initial total of 200 Trueview Systems to be installed over a two year period, a sales total that would result in Braintech operating profitably.  The Company believes that demand will continue to be strong in areas that it's VGR solutions have been proven, and that new areas of opportunity are available as new systems applications are developed. The number of materials handling and body-in-white systems in place will increase, while other high potential applications such as arc welding and vision inspection will find inroads into the manufacturing processes. 

Growth will therefore result from two revenue streams:  First, licensing of eVF software platforms for inclusion in Vision Guided Robotics solutions (new and retro-fits). Second, upgrades and service/technology support for previously installed systems.  With regard to this area, Braintech is in the beta-testing phase of its COBUSS product, an internet-based diagnostic and repair program that has the potential to drastically reduce service and repair costs associated with factory down-time and man-hours. 

The robotic automation market size offers Braintech real potential to meet its expansion objectives. According to the Robotic Industry Association (RIA), North American manufacturing companies purchased 14,838 robots in 2004, an increase of 20% over 2003. Further, the distribution of sales endorses the focus Braintech has on the automotive category, with 9,496 or 64% of all robots purchases made by the automotive industry.  In total, the RIA estimates that more than 144,000 robots are in use in North America today, a substantial number of which are strong candidates for retrofitting with Vision Guided solutions.

Substantial numbers of applications outside the North American automotive category exist.  For all categories of robotics, whether automotive or other areas of manufacturing, international geographies present significant potential as well – particularly Europe and Asia.  Braintech is not precluded from establishing other licensing alliances with other robot or robotic solutions organizations.

From the standpoint of protecting Braintech's competitive market advantages, thereby enhancing the value of Braintech to ABB and securing licensing revenue streams over the long term, Braintech has adopted a comprehensive IP strategy.  Through aggressive defensive postures designed to secure patents on Methods, Applications and Systems, Braintech believes it is highly capable of defending its patents.
 

BRHI Products and Descriptions

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eVisionFactory™ (eVF™) – a software standard for managing the VGR application life cycle 
Drawing on extensive experience in Vision-Guided Robotics (VGR), Braintech engineers designed, developed, and then commercially launched a software platform for robotics solution development and support called eVisionFactory™ (eVF™).  eVF was built from the ground up as a device-independent Universal Develop, Run, and Support (UDRS) system dedicated to VGR. 

eVF is the backbone of Braintech's VGR solutions.  For more details, please read the eVF brochure, or download the eVF white paper or follow the links below. 

eVF™ Built to Serve Vision-Guided Robotics 
Vision-guided robotics systems require the coordination of several complex subsystems, each performing a distinct task of their own. eVF's COM-based architecture manages image acquisition, image pre-processing, pattern recognition, feature detection, camera and robot calibration, part pose estimation, communication, and robotics. To find out how, read our eVF Architecture white paper.

eVF's Automatic Calibration: AutoCal 3D™ 
The development of automatic calibration technology by Braintech engineers represents a significant milestone in the evolution of vision-guided robotics. In all other robotics systems, calibration requires skilled technicians and downtime anywhere from 20 minutes to five hours. AutoCal completes the process flawlessly in seconds, while eliminating the possibility of human error. Read the AutoCal-3D™ white paper for details. 

Electronic Support: the "e" in "eVF" 
Braintech's VGR systems operate in some of the most demanding manufacturing facilities in the world, where downtime has an enormous impact on profitability. To ensure immediate, personal, hands-on support anywhere in the world, Braintech has developed Cobuss™, a revolutionary product that enables remote support technicians to take direct control of vision-guided robotics (or indeed any software product) via the Internet. Cobuss is integrated into eVF under OEM license from Braintech, and to independent software vendors. Learn more about Braintech's electronic support strategy.

Vision Science: the "V" in "eVF" 
Braintech is the technology leader in 3D vision systems for industrial robotics. Using stereo vision, 3D laser triangulation, visual servoing, and Braintech's patented Single-Camera 3D™ (SC3D™) system, eVF enables robots to locate and manipulate loose parts for precision manufacturing. Read more about eVF's Vision Science. 

A Factory-Tested Software Factory: the "F" in "eVF" 
eVF is a Windows™-based VGR development environment tested and proven through years of real-world application in the factory environment. Read more about the eVF Software Factory. 

Braintech is pleased to announce the beta release of a revolutionary new product: the Community of Businesses Using Support Systems, or Cobuss™.  Cobuss is a Web-based technical support tool built on top of a breakthrough community-based, peer-to-peer telecommunications and software architecture. 

Cobuss enables immediate multi-party communication and collaboration on issue resolution. If required, Cobuss also allows remote support personnel to see what an operator is seeing on computer screens on site, and, subject to operator authorization, to take hands-on remote control of factory floor systems. This level of connectivity is achieved transparently over existing networks, while observing and preserving all incumbent network security policies. 

In environments such as precision automotive manufacturing, where downtime can cost as much as $20,000 per minute, getting "all hands on deck" quickly and effectively can have an enormous impact on profitability. Cobuss is not a "call the front end and escalate" hierarchical support tool. It's an immediate online community created the instant issues arise, resting atop our proprietary LinkAll™ secure B2B communications technology.

Cobuss leverages the collective wisdom of a support community 
On the understanding that in manufacturing there is always a working collective of stakeholders with a vested interest in reducing downtime - and that many heads are better than one! - Cobuss permits a community of support personnel, operators, and managers to collaborate in real time to resolve a shop-floor issue. 

Every support incident is unique. Cobuss gives the support community the flexibility to work through the most convenient communications channels, from text chat to remote monitoring to remote control. The system also enables instant remote verification and update of the supported software product to make sure systems are always up to date. 

Cobuss promotes organizational learning 
Through Cobuss Incidents History, a record of all past incidents for a given system is stored and made accessible to members of an exclusive, predefined support community. By recording and sharing status reports, supporting documents, and incident details, and most of all by enabling collaborative problem solving, Cobuss builds collective knowledge within the organization. 

Because it engages stakeholders in real-time collective issue resolution, Cobuss provides the added benefit of relevant, just-in-time, on-the-job training. It empowers organizations to tap into expertise that might otherwise have been inaccessible or under-used, and shares the experience of expert personnel across the entire community. 

Cobuss uses open technology standards 
Security, scalability, and ease of deployment are key considerations for industrial IT departments. By building Cobuss to open technology standards, Braintech not only ensures easy implementation without special training, but easy integration into existing network security standards, policies, and procedures. 

Built on Web Services technology, Cobuss features a small-footprint, platform-independent deployment that can benefit from existing Web Services infrastructure and training at most organizations. The Cobuss architecture does not rely on specifics of the software product it supports, and thus can easily be repurposed to support other software products (besides eVisionFactory) over existing infrastructure. Cobuss is now available for OEM licensing to support any and all software products 

Cobuss is secure 
Cobuss does not require a non-standard, custom infrastructure (such as ISDN lines or VPNs) or third-party routing, and does not require security compromises, such as opening extra ports on firewalls. It uses standard Web protocols through secure ports, standard security protocols (Kerberos, SPKM, SSL, and others), and benefits from the sophisticated Web Services (WS) Security model adopted by Microsoft, IBM, and Verisign. 

The Cobuss support community is predefined to consist exclusively of stakeholders in the uptime of a given system or systems. Communications and information sharing on any given issue are secure and restricted to community members only. 

While Cobuss allows remote support personnel to take direct control of robotic equipment even through existing firewalls, all support calls must be initiated by the customer outbound from the site, and all remote monitoring and control requests must be sanctioned by local personnel before activation. 

Cobuss is the product of years of dedicated research 
Drawing on extensive support experience in the most demanding manufacturing environments, Braintech more than three years ago created the specifications for a powerful new tool to enable immediate hands-on support and community issue resolution. We then invested thousands of hours of dedicated R&D into its development. 

The result is Cobuss™ - a new paradigm in collaborative remote support for hardware or software products in any industry, and a proud milestone in Braintech's corporate development. 

Cobuss is available now 
Cobuss is a reliable, proven support solution that in pre-release has exceeded expectations in real-world situations at beta sites in some of North America's largest auto manufacturers. 
 

eVisionFactory, eVF, SC3D, Xi2D, DD3D, SR3D are trademarks of Braintech, Inc. and its subsidiaries.
Trueview is a trademark of ABB, Inc. and its subsidiaries.

• Cobuss press release Braintech Unveils Cobuss™
• For information about licensing Cobuss™, please contact sales@braintech.com

Recent News From Braintech

Press Release 
Source: Braintech Inc
Tuesday July 5, 8:00 am ET

VANCOUVER, British Columbia, July 5, 2005 (PRIMEZONE) -- Braintech, Inc. (OTC BB:BRHI.OB - News), a leading provider of vision guided robotic, ("VGR") software solutions, announced today that it will be exhibiting at the 2005 International Robots & Vision Show, September 27-29th at the Rosemont Convention Centre in Rosemont, Illinois.

To read the entire news release - Here is the link

VANCOUVER, British Columbia--(BUSINESS WIRE)--June 1, 2005--Braintech, Inc. (OTCBB:BRHI - News), a leading provider of vision guided robotic software, announced today that it has received a purchase order from ABB for two (2) eVisionFactory(TM) (eVF) built solutions. eVF is the ingredient software platform inside ABB's TrueView(TM) Vision Guided Robotic System.

The order from ABB is for a North American Automaker, and represents its fourth application of the technology into transmission operations. This continues to validate the industry's expanding utilization of TrueView Vision Guided Robotic Systems and underscores the value of the ABB / Braintech strategic alliance.

ABB, Inc. (NYSE:ABB - News) of Auburn Hills, Michigan and Braintech operate together under a strategic alliance whereby ABB uses Braintech's vision guidance technology to power its TrueView Vision Guided Robotic System. 

To read the entire news release - Here is the link

Press Release 
Source: Braintech, Inc.
Tuesday May 31, 8:01 am ET

VANCOUVER, British Columbia--(BUSINESS WIRE)--May 31, 2005--Braintech, Inc. (OTCBB: BRHI - News), a leading provider of vision-guided robotic software, announced today that it has received a purchase order from ABB for five (5) eVisionFactory(TM) (eVF) built solutions. eVF is the ingredient software platform inside ABB's TrueView(TM) Vision Guided Robotic System.

The order from ABB is the first order for a North American plant of a major Japanese Automaker. The five (5) systems ordered will be used with five (5) different parts. This further validates the industry's expanding utilization of TrueView Vision Guided Robotic Systems and underscores the value of the ABB / Braintech strategic alliance. 

To read the entire news release - Here is the link
 

Financial Highlights

BRHI vs.XCI Sector Comparative Returns

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