Crunchfish AB (publ)

Welcome everyone to Vesta Hamlund, corporate finance and market focus. Today we will dive into the latest update from Carfish. The company has just released its Q2 report for 2025. And I'm standing here with the CEO, Joakim Samuelsson. Very much welcome, Joakim. Yeah, here we go again. And we will discuss the latest events. And I encourage all viewers to participate. Please type in questions and we will address them as we go along. So let's not start with the figures for once and instead focus on the reception of your revised go-to-market strategy. Yeah. The title of the report is that it's working. The new approach is working. Could you just briefly tell us how has the reception from the industry been?

Yes, it's working, and the reception has been overwhelming. We are extremely happy with that. I think we've had a couple of conversations there. The more we've got positive reviews from the market, the more, in a way, bold I've been able to be. Basically saying that how we were selling before, nobody wanted our system. And what I mean with that is that if you're a payment network, You couldn't take our whole system because you are supposed to receive payments, accept payments, and process them. So you don't want to pay for wallets. That's the pain part. But on the other hand, if you are a payment service provider, if we don't have the network with us, they can only take in wallets, but they don't have the acceptance side. But by splitting the product, that was the whole idea of what we talked about three months ago when we stood here. when in splitting the product into two parts a receiving part that we can offer to the networks and then a secure wallet part which is offered to the payment service provider that is serving end users like you and me so we can pay by splitting it it makes the world of difference and it's the whole industry is not foreign to this because this is how say the card network works. Mastercard, Visa, they are the ones who accept payments and process it. But it is the banks that offer our end users the ability to pay on that network. So it's not a strange idea. So when I broke this, I went to Bangkok just a week after when we released the report. The response was overwhelming. I had one night in Bangkok as we thought it was fun to write. arrived in the morning, went to this conference, pitched this idea. But I had so much good conversation and a truckload, as I said to Patrick, of leads coming back. He asked me, do you have any leads coming back? I said, yes, I have a truckload of leads. So overwhelming response from really all parties, really. And it's been really well received. So I'm very happy about that.

Could you just also explain a bit about the actual product and how you go about it? A terminal solution and the service provider wallets? Yeah.

All right. Yeah, well, the network, as I said, what they do as a network, they accept payments. In Swedish, that's the inlösare. They take in payments into their network and they process it. So they need then components to do that. And one component we have in the front then is called a terminal. That could be integrated into the network as part of any payment app. If you can pay online, you have something from the network that the network has put there in order for them to be able to accept an online payment. Into that same environment in India is called the common library. We can put the software which we have, which enables them to also accept our Layer 2 payments. It's another layer. Our type of payments is a Layer 2 payment. So that means anyone who can pay online, at least everybody who's onboarded, they can also receive our Layer 2 payments. That is how we put our terminal into the network. We can also put the terminal into Boss devices, even into car terminals is possible, but that would be gradually to get that into, but a great start is to get it into the common library, because that means that anyone who can pay online can receive offline. On the other hand, On the paying part, this is where you need secure wallets. Because it needs to be a wallet and it needs to be secure. Because if it's not secure, you can sit at home, Martin, and create your own money. That's not too hard to do. You have to be a hacker. I don't know if you are, Martin. But maybe, I'm sure if someone breaks it, then they put it on the internet. This is how you do it. At least on dark web, you can see, oh, this is how I can sort of break the system. So you need a secure wallet so you can't double spend. That's the term used in the industry, meaning that you have money and you spend them, and you spend it again. You double spend. So that needs to be secured. But that part is offered to the payment service providers. That is serving you and me. So what we've done, that's the whole thing we announced in Q1, which has had this great response. We just, the terminals should go to the network. The wallet, the secure wallet, should go to the payment service providers.

And that could be a bank?

That's typically a bank, but it could also be in India, actually, I don't know if you're aware, but they do 20 billion transactions per month, which is huge. I think it's much more than Mastercard does globally. Just in India alone. But the majority of those payments, I think it is probably 80-90%, is not done by banking apps. It's done by Google Pay, PhonePay, MobiQuick, Amazon Pay. They are not banking apps. They are sort of, what's it called in India, third-party application providers. And they always use a bank in order to process those payments. But they prompt banks. for the end user. They have a very nice sort of payment apps where they give a lot of perks in terms of loyalty and things like that. So people like to use those apps. So of these 20 billion transactions, probably 18 billion per month is done by, not the banks, by those third-party applications.

Could you just, you mentioned layer one, and I mean, in the text there's layer two, and could you just explain how does it work with all the Yeah.

Well, if you think of it, the whole payments world is sort of layers. They're always layers upon layers. It's there. And we have also a layer. We have a layer two. We have an add-on layer to the underlying payment system. So there is a payment system. That is, we call that the layer one. That is the underlying payment system. That is to do, in Sweden that would be the SWISH system. It's a layer one system. That's the underlying payment system. And it has its own security protocol in order to process payment on the layer one. is what everybody's used to. So there could be different layer ones? Every single payment system that you know, this could be central bank digital currency systems. So that's also layer one? Yeah. All the underlying payment systems are layer one. They could be of different kinds. They could be stable coins. They could be cryptocurrency. It can be CBDC. It can be a real-time payment system like Swiss or UPI in India. It could be of any kind. Card networks, they are layer one as well. So that's layer one. A layer two system is an add-on system that in order to bring additional features to the underlying layer one system. Like security? Well, like you say, what we bring is resilience. So even if you don't have connectivity, even if, say, something is down temporarily in the backend, you could still pay. So you have resiliency. Right now in Layer 1 system, typically, if there is no connectivity or something is down, you are then denied. You can't do a payment. You are denied. You can't pay. What we bring as a Layer 2 system for, say, a real-time payment system like Swish in Sweden or UPI in India, we bring resilience. India is doing 10,000 transactions per second. If UPI, which it has been during Q2, been down for hours, you can just imagine how many Indians are standing there trying to pay and can't pay. 10,000 per second is some sort of average, really. But it's many Indians. And we saw a big breakdown in Denmark. You heard of the nets breaking down. And they're all over the place, too. Now we have to have resilience. Last year, the Microsoft bike, that they call it, that hit Singapore, one of the most connected societies in the world. And they contacted us. We know we need resilience. We need to do something. This is the banking association. We thought we could have just the happy flow, working when everything works. But it's not enough. I think in an unsecure world, you need resilience. save resilience. And that is one thing we bring. But we bring, as we actually talk about a little bit in this report, other features as well. But resilience, I think, is one of the key ones. And it's a key word in a more unsecure world, as we have currently. In Sweden, we have, for instance, we have our tax on bank ID. With our Layer 2 system, we can make payments without bank ID, obviously, because bank ID, you need online connectivity. We have a security protocol that allows payments to be done without banked ID. So essentially, layer two and layer one, the relationship is this. The layer one is the underlying payment system, has its own security protocol for typically online transactions. The layer two has its own security protocol in order to be able to work without the underlying network. So it has a different security protocol. That's how the layer 2 is set up. And we come with our secure wallet with another security protocol, which needs to be there, because otherwise you can't trust those things in a complete offline mode. So it's a different security protocol. That is what differentiates layer 2 from layer 1.

And as for me as a user, I'm a different layer from layer 2. So layer 2 is where you operate Well, for a user, it should be seamless.

You shouldn't have to care. You should just be able to pay. And then your payment application that you've got from either your bank or a third-party application provider, that should route your payments that right now you don't have connectivity. All right, you pay over layer two. And if you have connectivity... we can actually you can still pay over layer two but you could also use the happy flow of layer one but you shouldn't be you shouldn't the end user shouldn't have to think about it it should just be seamless yeah let's see and regarding your your product or offering is it is it different from before or

Have you added new features or developed a new product? No. So everything that you're offering now is the same?

It's the same. It's very much the same. I think this new go-to-market strategy Before we came with a whole system and we tried to sell it to, say, payment service, probably like a bank. We did that in 2023. We had a successful pilot with HGFC and IDFC under the guidance of RBI. Then we realized it needs to be in the ecosystem as well. So we went to the ecosystem, the MPCIs, and talked to them. And that didn't work either because they don't want to pay for the wallets. But now we are just taking the same system that nobody wanted of those who rose, broken it up in two parts, and we can offer the receiving part to the network, which is what they do. That's their responsibility. And the paying part to the payment service provider. But it's the same product. It's more of a new product packaging. That is what underpins or underlies this new go-to-market strategy. But all our patents still are valid. The product is what it always has been. So there's no extra on that side.

I see. In the Q2 report, you state that the NPCI has adopted your approach. Is this a done deal?

Yes, it's a done deal that they have taken the approach. We were, as the only actually third-party vendor, we were part of a kickoff meeting, which was two days ago, where they had invited the, say, leading banks for this story or this new architecture and told them about that this is now what's going to happen. We were there. What is still missing is MPCI They are talking to us. We have said you could use for free our formats, our standard that we have. I shouldn't call it a standard. Our formats. And that means how do we communicate offline between a wallet and another wallet or a wallet and a terminal? And how do we communicate to the backend? Everything is there. Everything is working. And we have quite a feature-rich set of functionality. You can use all that. We have given them both a technical proposal and a commercial proposal saying zero cost for you. But right now is the discussion, would they like to take that on or would they rather say we want to either develop something on our own or maybe with our help develop something which is a bit different from us so they don't see it in favoring us as one vendor. But we are certainly far ahead into it. So what they've taken on is the approach. yes with this split of that that they should have the receiving component in the network and wallets is the responsibility of the payment service provider they're bought into that that's a dumb deal but then right now is the discussion is how to do it but they have called us for a meeting uh either next week or the week after for a kickoff meeting for doing pilots uh so we we are we're moving we're moving towards that right now. But right now, they haven't responded yet to our commercial proposal. But we put the bar low because we're saying, you have it for free.

Could the agreement with IDFC First Bank be part of this pilot testing or is it just a separate agreement?

Oh, it would definitely be. IDFC was certainly there at that meeting. IDFC is 100% behind us. They were present at this meeting. So IDFC have already agreed with us. They would like to be, because they have already our wallets. That's on the other side. So IDFC is 100% behind this.

So how would you go about with the IDFC First Bank now then? We negotiated some terms in the agreement?

Well, we have already, as you remember, in 2023, we did this pilot together with IDFC and ACFC. We got IDFC as a customer. That was in June 2023. It was a two-year deal, and that's actually expired in June. They've been a bit slow, and that's simply because I think of administration. But they have already now decided to... Renew. Okay. So they have renewed, and they will pay us more money now, and we will revenue recognize that over another 24 months. Okay. So we will take it in piecemeal. But that's already – we've got the money now, but we will revenue right now. That is already a done deal. And what we are hoping for is that the difference between what happened in 2020 or where we were in 2023 is that there we didn't have the network with us. Now the network is behind this. So this means that IDFC to scale up, add more users, because now we have the network. The solution that they implemented has been this telecom solution, where they connect from a secure wallet to their own backend. This is the telecom solution, and they can do that on their own, but they couldn't do any proximity payments to someone else. But now when the network is there, everybody can receive our Layer 2 with a restored terminal. They can pay it to anyone. That means that this could go

or Android system? Was that connected with their own? I don't know if they sold it a year ago.

Oh, yeah, yeah. I know what you said. It took them some time in order to have this telecom solution with SMS approved. But what we're talking about now is less of a telecom solution where they connect from a wallet to their backend. Now we're talking about a full offline solution in Layer 2 where they pay from their wallet either to the terminal, which is in the common library, or to another bank's wallet. So you don't have that issue? No, that was more of a link to SMS, but right now the focus is more on full proximity for IDC as well. I see.

And how would you price your solution? Networks?

This is something we've come to, that if we go to a network and we get them behind us do this integration, put the terminal into their common library, and they will have to have a gateway in the backend. Because the terminal needs to talk to something in the backend. We've said we do that for free. So there's no commercial They are charged for the network provider. For the network provider, yeah. And there are many network providers. MPCI is sort of one. This is where we want it to be for free. Where we want to monetize, where we need to have revenues, is from the payment service provider on the issuing side, the ones that provide you and me with wallets. There we could have the model that we have with IDFC, that we have a charge, which is a per annum charge. It's a low charge, but it's a per annum charge per user per annum. Or alternatively, we can look at revenue sharing models. So it doesn't have to be a fee for the payment service provider. One example, one easy example would be to say that they are able to charge the end user. a small amount per annum, we could share that. That means that the bank would actually make as much money as we for implementing the solution. So it's not a cost for the bank. It could be a revenue sharing. But there are other ways to do revenue sharing as well. So we are, I think the baseline structure we have is the model we have with IDFC, which is sort of roughly one Swedish krona per annum, per user. But with IDFC, they have said to us they want a pricing model after 20 million users. That gives us 20 million krona, which covers our cost with one customer. This is the fantastic upside we have potentially in our company. And what we have always wanted is that the network can accept our type of payments. And we are there now. This is the dumb deal. Right now, we are talking about, are they going to use our formats, use that as a standard for them, or are they actually... coming up with something on their own. We don't really care. We would like them to use ours because we don't have to adapt to any standard then because our format will be the standard. But if they choose, it's not a big deal because there's two reasons for this. It's not hard for us. It's just a translation from what we do to their format. That's one. The other thing is that we have patterns. So patents protects us really well here because what they have agreed to, this done deal, is the approach of reserve, pay, and settle, which is sort of fundamentally patented by us. So they would be hard for European, American, and a lot of payments are coming from those areas. Because we have a U.S. patent, because we have a European patent, also now validated, that will happen also in Q2, Certainly the European one. That means that a European player in this reserve pay and settle approach cannot offer that anywhere in the world, including India. So that means that we cut out. Well, I would say they can offer it, but we would ask for a royalty then. That's what you can do. So if any bank would choose a competing solution from jurisdictions where we have patents, we will ask that bank that they have to pay as a royalty because they are not allowed to use that according to patent rules. Even if we don't have the Indian patent yet, the Indian patent, if we get that, that will give us then even more strength in India. From Indian competition? From any competition in India. Any competition. Right now we can exclude competition from US and European players, which is good because there are some of our closest competitors are from those jurisdictions.

Speaking of other regions, I mean, India is your main focus at the moment, but this approach must have been well received in In different parts of the world? Yeah.

Well, I would say that this is... Now, when we have this new approach, that we have this turnaround that we talked about in Q1, as I said, it had an overwhelming response. And we've been talking to other... I've had big countries as well. We're talking on a national level, just like we talk national level in India. Big countries as well, who see the opportunity that they can nationally... make their networks resilient. Then they leave it to the market to sort out getting wallets to the payment service provider. We could be one provider, but it could be others as well. And they like that idea because we are not – it's not everywhere in the world. We have one major country in Africa. We don't have a patent there. We will exclude European and American because we can do that thanks to our patents in those jurisdictions. Otherwise, from other jurisdictions, we could have competition. I would be fine with that. But what we can help them with is to put in our system into the network. We do it for free. You can have our format as your standard. You can have a flying start. You can do it quickly. And then they open the market for healthy competition on the wallet side. They like that. We're not locking them in.

So, speaking of competition, are there any other players with a similar approach or something?

I would say the reserve pay and settle that we have always had as our approach is the major competition has been with hardware. secure elements, solutions on that. They've been saying, because they've been thinking of offline as something, it needs to be, you know, absolutely fort-knock security. Only hardware, they claim, I would argue with that, but they claim only hardware can do that, because their model has been, okay, I have something I can spend now. and it has to be so secure, and you can pay to me, and I can pay it forward. And their whole model is that you can just fund your wallet with some money. You can pay it, and you can pay it, and you can pay it, and then whoever receives that EMDR can defund. So it is a flow where you fund your wallet. Even in offline mode, you move it. And for that reason, they say it needs to be Fort Knox security. What we are arguing is, with our reserve pay and settle is that it has to be a settlement step. Every single transaction needs to be replayed online in order to not contaminate the core ledger in the layer one system. And I was very pleased that Bank of Canada, who is actually quite knowledgeable, they have been looking into this, they are recommending an approach from MIT, the Digital Currency Initiative, DCI, from MIT. It's called two-phase commit, open CBDC two-phase commit. It means that you do a transaction between wallets. That is the first phase. Then, before you commit... This to the core ledger, you need to validate this online. But that means that you need this layer two approach because you do something first on the second layer. And then before you put it on the core ledger, you really need to validate it. this is sort of what we have patented, this approach. And this is now what even Bank of Canada came out with. This was just in a month ago, stating that, and I think I have a link for that somewhere in the report. But it's really good for us that the industry is now And I'm happy about that. They are validating the approach that we've been taking. The IMF report, the International Monetary Fund, there came a report in, that was just early August. They say hardware-based solutions are not scalable. It's a challenge to scale them. And it is. And we've been saying it all along. We can work on hardware, but we choose not to because it doesn't scale. We have chosen to take a virtual secure element in software. It has that isolation secure wallet that you need, but fantastically, it scales. Anywhere an app could go, this can go as well. Not at all the case with a hardware-based solution. So we've been on the forefront for this all along. Everybody else has been talking hardware. We've been saying, no, no, no, it could be a virtual secure element. I think we are – I was happy that the IMF report – This is quite a heavy body. This is an international monetary fund, and this report goes to all central banks in the world who are looking at CBDC projects and so on. Having now that, in black and white, hardware-based solutions are very challenging to scale. We've been saying that for years. We are the only one who has a viable, secure, and scalable solution. If you look at our reports, we've been talking, but we've been a little bit alone saying this. Now we have the International Monetary Fund saying that. And then, as I said, the Reserve Pay and Settle, Bank of Canada, MIT, there's so much validation happening right now. And the Central Bank Standards Organization, They are advising to a lot of central bankers. They are seeing the problem that the central bankers are having, not having implementable solutions. They can do pilots on one phone or something, but who cares? Because it needs to be something that scales to the population. They have different phone models, and that's why I think we haven't seen any... major success with CBDC systems. They are 100% on our side that, thank you, Crunchfish, you seem to have something which is a light in the tunnel.

And they're going to help us. This is the organization you became sponsored for.

Yes, that's also happening to you, too. And it's sort of a press organization. Well, if you think of it, ISO typically sets standards. And they set standards in all areas. Everybody heard of ISO standards. But it's worked quite slowly. I think before they have agreed to who's going to be on some standards body here, this is a private initiative, which they've seen that the central bankers, they actually need help with standardization. And one reason is for interoperability. And also, what is best in class? What sort of solution should they have? They need help. They are a bit confused because they've been told stories of the hardware-selling companies, which hasn't been great, I think. And now I think they are a little bit, well, what should we do? So they are trying to put up new standards in the market, and this would help a lot. But it's a private standards organization, but they are getting momentum. And I think they will move much faster than the, say, global ICE organization. So that's why we choose to join them.

And also in this perspective, how does the RBI address these issues compared to, for instance, ESP?

Well, RBI understands that RBI, I think, implementation-wise, RBI relies on their sister organization. Well, it's a body that RBI has created. few years back, MPCI. So MPCI would front. They are the mother of all networks. The MPCI operates them. And they have been asked by RBI also to operate the CBDC initiative, the digital roofing. But RBI oversees everything. I think this is also from MPCI. A software-based solution is a must. Indian has so much fragmentation when it comes to device models. I think it's a non-starter. The hardware companies hasn't played their play there. But the good thing here, if you think of it, right now, they are smart. If they don't have to pay anything as a CBDC provider to get the ability of the network to receive, they pay nothing. Then it's going to be up to the market on the payment service providers to get wallets. What did ECB do? Well, they put a big project and they're taking European tax money and they're going to buy wallets. They've said they're going to spend 220 to 660 million euros to buy wallets. But they're the only one in the world who have actually committed that kind of money. What they can do instead, instead of going for this hardware-based solution that they are dreaming about, which I think will be challenging, to say the least. They can get our system for free. Everybody can receive in Europe. And then let the deployment be for the payment service. They are the ones who get wallets. And we have already shown this for ECB. Hang on. We have already shown this for the digital euro. We were part as the pioneers in Q1. We implemented it into the digital euro system. We've already done that. They have invited us in, I think it is the 26th of September, for a session where they will present some of the best ideas that they had for what's called conditional payments. And Martin, what is a conditional payment? Well, it is an online payment, typically. But in order for it to settle, conditions have to be met. And in order to automatically be able to settle, they need to reserve. If you want to do your conditional payments, they need to reserve your money. Because otherwise, they can't trust that the money will be there when they're going to settle. So what is this? It's reserve, pay, and settle. That's our approach. It's just that we have applied conditional payments to offline payments. They have thought of it as online, but we have extended it for offline as well. So if they now, we show it already, they have an easy way out to actually show they can have resilience on the digital euro system with us, instead of hoping that they can have scalability and spending all this money on wallets that they shouldn't pay for.

But do you think the ECB would anticipate RBI to implement there? And PCI accept your solution and get it rolling? Not if. They have accepted it. Yeah, they have accepted it. And do you think the ECB will wait to see and see? No.

I don't know what the ECB will do. I can't speculate. But I do think that if we get India, half of the world's real-time payments, this is sort of UPI type of payments, switch payments, half of that volume happens in India. India is on the forefront. You know, if we can make it in India with this approach, I think that will give echo anywhere in the world because a lot of people are looking at the tremendous success of India in payments. I think ECB will look as well. But the good thing part is that we have already shown it with our approach. And one thing ECB hasn't, I think, understood yet is that they can have it for free. And that will be an interesting one, because we're quite willing. But one thing that also has happened, I don't think Patrick wrote about that when we talked about what we do, but a major German organization has approached us. They even came with a delegation during July. They are close to the Bundesbank. And they are also understanding that the approach of hardware and complete offline solution and all that sort of security is not a good approach. So that organization gives us and they will definitely, they want to help us, not just in Europe or in Germany, but also elsewhere. That is a very promising offer because it would be fantastic if we can crack the European market as well. But we have a chance. We've already shown it. 26th of September, I'm in Milan, I think it is, at an ECB organized event to show this pioneering solution for conditional payments.

Interesting. Let's return for a little bit to India. Let's go to India again. Again. I thought we just left India. But we're back. Now, we've got a question that we touched.

patent yeah in India yes well we we have we have everything we have all our patents we always want to nationalize them in India we have about 15 unique innovations in this area the two first ones that we first entered into the Indian patent system. Because what we do, let's take a step back. We apply for a patent. We typically apply in Sweden. Then after 12 months, we can apply for what's called an international patent application, PCT. There are about 200 countries in the world, or a bit less like that, but something like that, who have all agreed that if you apply for PCT, an international patent, then you could wait in our country until it had gone 30 months, two and a half years after your initial application before you have to nationalize. So the international patent application provides you with 18 months before you have to decide whether you want to take this one to our country. So it gives us a little bit of time. Everything we have done, we always include India for nationalization. The two first ones that we had was our original one from January 2020. but also something from early 2021, they have been, we got responses back and we have, they've called us for what's called, you typically have some writing back and forth, but then in order to settle things, they typically, well, sometimes they invite for a hearing. In Swedish, muntlig förhandling. This is where you actually, in order to go a bit quicker, you sit and discuss. You understand what they're saying, and we can clarify them instead of having back and forth in writing. We have been called for two of those in early August. One was, unfortunately, one was late July. But that was canceled because he said he's on leave, which we thought was weird. But we realized he's probably on sick leave. That one has to be rescheduled for a later date, but it could have just been sick leave. Everybody can get sick, so no worries. That will come. This is the one where we have a patent in the U.S., in Europe. That's the one we will, and I think you have a good chance to get that in India as well. There is another one which was scheduled for a week later. This is our interoperability patent. That one went ahead. It was a good discussion. We have already responded with his remarks and I expect a happy outcome quite soon. But it's now back in their court. We have given them sort of what we heard from what they would like to grant us patent on and what we didn't. And we're quite happy with that scope of that patent. So we're hoping for that the first one will be granted. This will be our first Indian patent then. But we have another So we have really, our approach, the reason we can have so many innovations here is that we've been unique. You can't patent something that anyone else has thought of, but we've been unique. So we are providing a lot of IP here, and we all have protected it in key markets. Europe, US, India typically, Brazil, some of the big markets.

Thank you for clarifying. And I encourage all viewers to keep sending in questions, and we will address them as we go along. You mentioned in the report a pilot project. with the RBI regarding offline payments with the digital rupee. Yes. With a couple of banks. Could you tell us? Well, this is this project with MPCI. So there's not only IDFC First Bank. No, no, no.

We have already... RBI is actually... Well, the piloting banks who wants to do... Now, offline payments with a digital rupee. We have already IDFC in our court. They have our solution. They've paid for it and everything. But we have opened up discussions with other piloting banks. And that's been actually advised by – some have been advised by MPCIs telling talk to Crunchfish. But also RBI have been saying, well, Crunchy is part of this, you can talk to Crunchy. So we've been referred to. And Gagan, our colleague who was at this meeting in Mumbai the other day at the MPCI, he had pre-meetings with the participating banks that came to this meeting as well. So, yes, it's beyond just IDFC. It is with other banks as well.

And you mentioned actually one or two early implementations that you expect. Yeah, shortly. And are they the same size as IDFC?

Money-wise, IDFC is Mickey Mouse. They have just, again, what they are renewing now and what we had was just 100,000 users. And that's because, again, This is only for a pilot, and it's only for, in a way, without having the network behind us. We hope to scale this up with more size when, for the first time, we have now the network with us. So we're hoping for bigger size. But, again, it could start with that. They say, well, let's start with 100,000 users, and then we will start there. But I think the potential, when we now have the network behind us that they have agreed to this approach, the potential is for a much more accelerated scale-up than otherwise.

So, and also in the report, you have... quite an extensive comparison between payment systems, such as the EMD Co. and real-time payments on mobile devices. You have a table where you list and check boxes. Do you see them as competitors or potential clients?

Well, I would say that what we show there is really that we did a quite a detailed analysis of how is the system to implement, how is it security, and what is the overall design of the system. And we're comparing it with real-time payment systems, as you say, like Switch, UBI, who tend not to be online at all. They have very low resilience. It only works when everything works. But then we also looked at EMVCO, as you said. This is mobile card payments and also smart card payments. But we also looked at CBDC systems. This is on the right of our column. And I put ourselves as the number four column. Simply to, you can easily look at sort of head-to-head comparisons. We are a layer two. All these systems are layer one. So we could complement any of those systems with our Layer 2 approach. I would say maybe not with a smart card, because that is more of a form factor. But it was interesting to put that in as well. But we could be, for SWISH, for UPI, we could be that resilience factor for them. For a CBDC system that they have already done, they have done the Layer 1, the underlying payment system. They have that in India. but they need security in order to then process offline. We could be that secure wallet as a layer two to that. And because typically that wouldn't really be there. Certainly not if they do it in hardware. It will be there as a security, but it won't be there for scalability. And then they are looking for, they need something like us. So we've done this comparison. So short answer to your question, Any of those systems are underlying systems which we could complement with our Layer 2 system. Because we have decided not to become an underlying payment system ourselves. We always see ourselves as a complement to whatever payment system there are. And we're giving four examples. But there could be others. It could be crypto systems. It could be stable coins. It could be mobile operator systems. Networks as well. There are many kinds of networks. We are a layer two potential for any of those. And we can bring them working together as well, which is really interesting about that. I'm sure people will hear more about that. The hottest thing right now in the payments industry is to connect networks over stablecoin. That is happening right now. Stablecoin becomes the bridge between different payment networks. What we do is that we can bridge as well, but we can do it in the front end, between wallets. They bring things together in the back end. We are an interoperable solution with patents for that in the front end. So we're not just about resilience. We're also about interoperability and a whole lot of other things. But I think these two are actually key. And I'm sure I'll talk about that in some of my conferences that I'm heading to during this autumn. Yeah.

Let's go. First of all, the company will require new funding by the end of 2025. If we don't get revenue. If we don't get revenue. Yeah, yeah. That still is. We certainly haven't given up that idea. But how will you structure such a fund if that will be... Yeah, we have...

We have proposals on the table right now. We had a board meeting, as we always have, before the report. We discussed various routes forward. We have prioritized what we want to do. And what we've said, and it was funny because I had a lunch talk two weeks ago, and I think I was absolutely clear that the last thing we want to do is to go to the stock market and ask our shareholders for more money as a rights issue. But still, someone told us that on our discussion on the forum, everybody believes that we will do that. I thought we were abundantly clear that we don't want that. I still want to say that. That's certainly what we said at the board meeting. That's what we want to avoid. So we're looking at alternatives. We do not want to do a straight rights issue. Last year, we were... pursuing an opportunity we believed in, but we suspect it was a fraud, and we came into almost like a, we just had to take whatever we could, because we were running out of money. But that was, yeah, very unfortunate that we had to wait that long. This year we have started earlier, and we have proposals on the table, we are evaluating them, and we're going to discuss with them, but... Not at all are we discussing a rice issue. I don't know if I can make myself more clear than this, but this is not on the table. We are looking for other solutions. Absolutely. Pretty clear, I'd say. I'm not sure if this will be adhered or listened to.

Anyway, looking at the Q2 figures, we saw that external costs were a bit higher than in Q1. and above all expectations. What was behind it?

Yeah, I think the biggest... If you compare Q2 2024 to Q2 2025, you can see a big drop. But you're absolutely right that I think the numbers came in 800,000 higher in other external costs in Q2 compared to Q1. And I... I didn't know why actually. You found this that it was, so I had to ask my CFO about that. And he said, well, it's actually a, most of it, 250,000 is that it was a cost that actually belonged to Q1. We didn't record it in Q1 properly, so it came into Q2 instead. So the difference is not $800,000. The difference is more like $300,000. And we typically have a little bit higher cost in Q2. We have some more high legal costs because of our annual report we're meeting. So I think it's actually nothing out of the ordinary. But the right numbers, we had already closed our books for Q1, but that should actually be 250 higher and 250 lower than for Q2. So we had to take it sort of in Q2 as we didn't have it. And it's because of our Indian subsidiary. There was something that wasn't picked up until in April. This is what happened, really. So more of a one-time thing. Well, it was more of an accounting issue than anything. It has nothing to do with that we have increased really costs out of the ordinary. Same thing.

Yeah. And talking about costs, personnel costs were slightly lower. Personnel, yeah. Personnel. Is this the level we can expect going forward?

Well, yes, I would say. Again, you can see a huge drop compared to personnel in 2024 Q2. And that's because we don't have the gesture side anymore. Most of the effect for that has been happening here. But there were still some costs from gesture side in Q2 numbers. So I don't expect it to be in the short term higher. Obviously, if we were to accelerate, we have more funding or whatever, right? But right now we keep our, as we've always done, we'd be very prudent with our cost and we'll continue with that. So I would say yes, unless we accelerate with more sales and marketing costs.

Yeah, thank you. Are there any more questions from the audience? I don't think so. So let's wrap things up, I think. So finally, could you list the top five activities for Crownfish during the rest of 2025? Or if you don't come up with five, you can... Yeah, well...

Again, keep an eye on us on India. What we're doing there is great. We've got... MPCI has taken to heart. We've written a white paper together with them. I can comment on that. It was a great idea of the CEO of MPCI to just do a white paper. Right now, I don't. They may publish it someday. They may not. But it has been circulated with RBI. It's been circulated internally with MPCI. I think he got our idea already in May. But not everybody else got it. He's a very smart man. But I'm sure they've used the white paper in order to get consensus that this is the way we want to go. So the white paper has, in a way, played a very important role. Whether they want to put it out, I don't know. But I think we should be happy that it has had this effect, that it's a done deal, that they will go for this approach that we came with in May. But follow India. This will be key. Another thing to look out for is, I think, it's going to be interesting, the other big project is Europe for ECB. I think that's up for, yeah, we are certainly there as an outsider. coming with our approach with conditional payments. And I'm not sure where we'll end up, but I think we have a very compelling story. We will give ECB and European taxpayers a free solution, which should rather be paid by sort of participating banks processing digital Europe. They should get their wallets. I think that's a very interesting project. We have very interesting discussions going on as well in other markets, major markets. Don't be surprised if there will be announcements around that. We have also discussions with global organizations, again, that is getting – I'm having a – with a global payments organization. We're actually supposed to happen sort of a week ago, but they pushed it to early September. But this is sort of with – I met them in Bangkok. they love the what they heard and say we have to do a partnership and we want to do a technical detail that's going to happen how early in september so doing things on global network level uh is you know keep an eye out for that and we will be busy that there will be a lot of things happening uh we you know i had one night in bangkok uh it was a fantastic success we're gonna do i think five conferences to repeat the same, we will get the word out. It will have ripple effects, and we're very excited about the future. The thing we need to solve, which I think everybody from who's been burned by a rights issue, that we all of a sudden we say, oh, it's going to be a rights issue. It won't be, but I think the we are taking this very seriously that we need to solve the financing. We understand. Just like you say, worst case scenario. What we want to do is to secure a longer runway. Right now, worst case, we have to the end of the year, which is not too long. But we have started earlier. We started already actually in Q2 to look at alternatives. We have them on the table. We discussed it yesterday. And we want to go ahead with that. And this is to extend the runway. Because we firmly believe that we have a winner here. But we just have to secure enough financing so the revenue will come in so we will become cash flow positive and not having to worry about financing as we always have had during our whole life as a company.

I see.

Was that right?

I think it was fine. I think it was fine. Good job. Thank you. Thank you all for watching. Don't forget to subscribe to our channel and you will not miss the next update from companies like Cornfish. So thanks again. Thank you, Martin. Thank you. See you.