Insplorion AB (publ)

Welcome to this presentation for the Q3 report for Explorion. And we have with us Explorion's CEO, Johan Rask. So I'll hand it over to you, Johan, to present what's in the Q3 report here. And then we'll also have a question time at the end, so feel free to ask questions in the chat along the way here, so we'll take them at the end with Johan.

Thank you so much, Aron, and welcome everyone. And as I said, it's free to ask questions, so just shoot. I have a few slides, no long-term presentation, but we'll go through them, I think, and then, as I said, questions and discussion in the way you want. Here are some important comments from Q3. What can I say? In terms of revenue, on net revenue, we landed roughly in parity with the first nine months of 2023. But a good cost control has led to an improved result, but above all also an improved cash flow for the period. So almost 5.5 million better cash flows for the first nine months of the year compared to the previous year, which has been conscious. By the start of September 30, we had more than SEK 1 million. We have come back to a number of events during the quarter, especially those of commercial nature, but we can still comment that during the period we carried out a company submission where we took in a total of SEK 20.6 million.

Let's move on to the businesses.

So quite a lot of exciting and fun things during the period. If you look at the sales side, we have sold one or more sensors to no less than six different customers during the period. And it has been partly NPS P1 that has been our prototype, which we have had sales in the market for almost a year. There we did two sales, one to the packaging industry. where you want to detect hydrogen in your process. We could also present our first order to Japan to a supplier that serves automotive with test operations. In addition, we have also sold a number of NPS P2s, even though this product is not yet ATEX certified. We have several different customers, including those called ICE, Internal Combustion Engines, where you want to use hydrogen. the sensor within the energy area, where you can also look at the combustion of hydrogen. One customer works with produced hydrogen with the help of electrolysis. You can look at the safety there. Another company wants to detect hydrogen in environments where there are a lot of other gases present, including natural gas. Then it is very important with the specificity. So we are very happy about it. In addition to this, we could present a letter of intent with Saab. where we will cooperate in applications in general for flights, but in particular we will respond to a large project request within flight and gas safety from one of the major airline companies out there in the world. So it will be very exciting. In addition to this, and as we mentioned earlier, We have communicated with Saab about a Vinnova project of 3.7 million, where we are just looking at demonstrating the fiber optic part of our technology together with Saab's ability and using this innovation detection. We have also written a letter of intent with a company called Hydra Specma. They are specialists in connecting so-called fittings to different types of systems. They have a lot of customers within the automotive industry, where you also look at hydrogen. And in the long run, we see the possibility of being able to offer our sensors to their customers, but with their connections, which is also very exciting. I just want to recap a little bit, why do customers come to us? Because it is very often the case that customers come to us before we even come to us. And that brings us back to our advantages. We are very specific about food waste. It sounds obvious, but it is not obvious. It is the smallest molecule that exists, as I said, and it is not very suitable to measure. The other piece is speed. We are incredibly fast with our technology. On the sensor relevance level, we have measured 0.3 seconds response time, which is extremely fast if you look at what is out there. Another advantage is that we do not need oxygen to work, which means that we can work in environments where we want to reduce oxygen levels in one way or another. In this way, we increase safety, but we still want to measure if it leaks. Our technology is optically based, which means that we can have an optical reading. This also means that we can separate the sensor from the electronics, which can have a safety aspect in itself. But above all, and this is perhaps extra important in the flight, we can read our sensors at a distance with the help of fiber optics, which is very exciting. If we look forward, our priorities are fixed, as we have communicated. It sells commercial prototypes of NPS P1 and now also NPS P2 for various tests, pilot projects, validation, what can now be, and we of course pay quite well for our sensors even in the prototype phase. It can be different applications, leak detection, safety or process monitoring, if you in one way or another want to measure hydrogen, you may have which happens in many industrial cases, that you want to switch from removing natural gas, which is used in many processes, to using green hydrogen gas, and in this way get a reduced carbon dioxide footprint. Then you are faced with the problem that it is difficult to measure. And you often find us there. The second major priority is to launch NPS P2 in the ATEX version here now under Q1. The third priority is two-part. It is partnership. And it is partnership for market roll-out of NPS P2, but also cooperation for development within specific applications or segments. And I would like to clarify that it is profitable cooperation. It is not cooperation where we go in and spend money to develop something, but it should be profitable cooperation for us. Det var egentligen lite kort, Adam, om Q3, vägen framåt, var vi står. Jag tar jättegärna emot frågor.

Stort tack för den presentationen, Johan. Som Johan nämnde så är det bara att skriva frågor i chatten under tiden. Under tiden vi väntar på det så har jag en fråga till dig, Johan. Through your extensive collaboration with SAV, it feels like you have built a position for the aviation industry. How do you see the potential of Inspilorion in the aviation industry?

Very big. We are very confident that our technology and our advantages, both in terms of speed, specificity and optical capability, is one of the few, possibly the only, that can solve de säkerhetsfrågor som man har när det kommer till vätgas och flyg. För det är säkerhet naturligtvis alltid viktigt, men det är ännu viktigare på saker och ting som har faktiskt lyft från marken. Så jag ser det som väldigt stor potential. Självklart kommer det ta tid för den marknaden att utvecklas, men vi ser att på den resan så kommer det finnas med till stora och lönsamma utvecklingsprojekt, till exempel tillsammans med SAAB, som vi nu har ingått ett LOI med.

André, you were talking about Atex certification here as well, and it's starting to get close to Q1 here now. You have been working on the certification for a while, or preparing for the certification for a while now. Would you like to give a little more report on the work with the certification and what you think will happen when you get the certification in place?

Yes, it will of course open up for relatively larger volume sales. There are very many customers, there are customers who do not need Atex so that you want to test and evaluate such things. We focus on a lot of customers who simply want to see Atex before placing larger orders. So it's an important piece, very important. We will launch MPS P2 under Q1. in the coming quarter. It is clear that there is a lot of work that goes into it, but it is simple things like the entire supply chain, make sure that we have the right suppliers in place, that they can deliver, that the price level is right, the quality is right. There are many things that of course go into it and that we have evaluated along the way here too. I feel more comfortable that we should be able to launch it in Q1.

And it is also the new pension that was done here during the quarter. And I suspect that it is your new job in the team, of course. But I also understood that the salary was a little lower than you had thought from the beginning. How secure is it now that you achieve your goals despite the slightly lower salary that came in here?

Det är klart att det hade varit bättre förutsättningar naturligtvis om man hade fått fulltecknat, men våra strategier, våra prioriteringar ryms inom den här emissionen. Not least also against the background that I mentioned earlier, it is always important to keep the money, but we have also improved our cash flow, so we have a lower burn than we have had before. So there is room to execute on our strategy and enter partnerships, launch the product and move forward to create value.

We have received some questions in the chat regarding the stock market and the stock exchange rate. We don't need to go into the exact wording here, but what are your thoughts on the stock exchange rate now and in the future, Johan?

Yes, that's a great question. As CEO, it's not really my role to comment on the stock exchange rate. I drew myself a pro rata in this round, which is about 200,000 kronor, which is of course a reasonable sum for me as well. I would not draw that if I did not think that there was a good potential for withdrawal. Then the price on an share is set between buyers and sellers and the company is not really involved in that transaction. But we are fully focused on creating value for our customers,

so that it can also be valuable to our shareholders, including undersigned.

Also a question more focused on sales here in the near future. How do you see the opportunities to get started here in the next six months?

We have sales and we see a lot of interest and we have many dialogues. Exactly when larger orders come, it's hard to say, of course, Vi ser ett väldigt gott intresse och tittar framåt så tycker jag man ska fortsätta förvänta sig att vi gör fler affärer, större affärer och ingår partnerskap.

Bra, och vad är dina, eller enligt dig Johan, de mest spännande utsikterna för Husborgen och vätskapsmarknaden i helhet som man ska ta fasta på i tiden framöver?

Yes, that's a very good question. I think we're really starting from ourselves here. As I said, to continue to do business, continue to deliver to customers, continue to create value, engage in partnerships. Above all, launch NPS P2 and have it ATEX certified. Important points. A lot is happening in the world. It's easy to get stuck in the media surveillance locally, if you like. But if you look somewhere out there, then only between May 2023 and May 2024, there will be 50% more waste gas projects around the world than there were in the corresponding period before. So a lot is happening out there. Many of the projects will of course not reach full level, but it is also part of that we are actually doing this green transition. So there is a lot of effort. And we see through all the inquiries we get from potential customers and partners that there is still a great interest here.

Thank you very much, Johan.

Thank you for your time and for starting this conversation.

Johan, can I get in here? Yes. I have a statement, it's too long to write. I'm an shareholder in the company. If you look at the history, in five years, 96% down. ... ... ... ... ... The money you have invested will probably be enough in half a year or so. The growth options that are also related to the shares, or the units that have been issued, if the share prices are at these levels, it will be a joke money that will come in. New emissions will be needed, and then you aim for lower and lower rates. Stupet är nära, helt enkelt, så som utvecklingen har varit. Det är ändå aktiemarknaden som gör det för att ni ska kunna driva verksamheten vidare. Ett bolag som inte tjänar några pengar lever ju på att sälja en historia. You have to have a story, a dream to deliver. You have failed at that. It doesn't matter how exciting the business is. But look at the graph. It points straight down. You have to shake it up a bit. Maybe change the advisor, talk to someone else and do something so that you can have a dream to sell so that new shareholders come in. Otherwise you have one ear and then it's KK 12 months later. Are you with me on what I mean? It sounds very sarcastic, but it's actually the truth. It's hard to deny that.

I absolutely hear what you say. I'm also in the same boat as a shareholder. And as I said, it's really hard to comment on the stock exchange rate in itself, because I'm not involved in setting any stock exchange rate. No, you're not. I'm not involved. But I'll just add what you're saying. I can say that we have actually changed advisors very recently here to RedEye. Also those who did the corporate emissions. So that we are working on and our focus is above all to create value that becomes visible. and that it becomes visible in such a way that our shareholders, both old and new, see that value and are ready to pay for it.

So you mean that everyone is satisfied? I didn't say that. Okay.

Thank you for your participation both in the chat and live here. And again, thank you, Johan, for this talk.

Stort tack, ha det gott och trevlig helg allihopa!