Shares in micro-cap tech business XPED Ltd (ASX: XPE) jumped around 24% to 7.8 cents today after the business announced it has commenced collaboration on a technology development project with Chinese company Telink.
Xped says that it has developed some revolutionary technology that will allow anyone using their smartphone to connect and control other everyday electronic devices via the Internet of Things.
It has named the technology Automated Discovery Remote Control (ADRC) and wants to license it to be integrated into third party products. The 'ADRC hub' is described as "essentially software" that could be deployed in a number of ways to help connect devices to the Internet via what the company also describes as its "near field communication" technology.
The Internet of Things is often touted as the next great technological trend (after cloud computing) for investors to make big profits from and there may indeed be some truth in this theory.
This may also explain why Xped has a wide following of retail shareholders who are hoping to strike it rich by speculating on its shares and money-making potential. Another reason for the evangelical-like belief of some in Xped's potential may be the success of ASX-listed Altium Limited (ASX: ALU).
Altium provides the software required to manufacture the printed circuit boards needed to connect devices to the Internet of Things and has been enjoying strong global sales and profit growth with a rosy outlook. It is leveraged to the growth of the Internet of Things and now boasts a market value around $823 million.
However, Xped remains at the speculative end of the market with a value around $77 million according to Commsec and not a single dollar earned in revenue as yet. That's no surprise given it has yet to commercialise any products, although today's news of a deal with Telink to use its ADRC technology in Telink's Internet of Things ready electronic chips is a step in the right direction.
For the nine months ending March 31 2016 Xped lost $1.84 million in operating cash flows, with $8.96 million cash in hand at the end of the period.
It raised $8.02 million through the issue of shares over the period and investors might want to consider how long that cash balance can last before the company will need to bring in some revenues or find more capital.
