Terranet AB

Hi and welcome to Terranet's Q1 presentation of 2024. With me today is Terranet's CEO Magnus Andersson and CTO Pierre Ekvall. We're now going to show a highlight video from the quarter as well as a longer lab demonstration video. Then we will go over to some questions about the quarter.

During the last quarter we have been working hard on product improvements and last week we finished our Q1 demo and internal full end-to-end system testing of our BlinkVision system in an in-lab environment. We have finished the scheduled activities according to plan. During this week we have analyzed the test results and we're very happy with the findings.

We are in a very exciting phase right now where we are evaluating our blink vision system outdoors. We want to gather as much data in different weather conditions and scenarios to be able to analyze the results and evaluate our blink vision system. We have created an extensive test plan based on the Euro NCAP scenarios for vulnerable road users. The test plan includes both indoors and outdoors measurements to be able to compare how the sunlight affects our system.

I'm responsible for integrating our AI system into an embedded system, as well as in the lab testing our complete blink vision system from end to end. We've done a lot of tests inside and we've done some tests outside, seeing how it reacts in different sunlight conditions, if we have clouds, if it's direct sunlight or if it's indirect sunlight.

Beside total system concept demo, one of our primary focuses were also to verify the system edge case performance and in particular the resilience to strong sunlight. Something that is known to present challenges to any optical sensor based solution.

We are also evaluating the system with different field of views, different laser powers and also different reflectivity of the objects. Another very important measurement is the end-to-end latency for the complete system, where we measure if a pedestrian is half visible in the field of view until we send the brake signal.

I'm today very pleased to say that we, with the testing done so far, see no major impact on system performance, even in very strong sunlight, proving the robustness of the system concept. Furthermore, we have of course focused on detailed evaluation of the latency of the system, as this is our core unique selling point. And so far, we are well within the boundaries to be many times faster than anything else on the market, proving that we are developing a truly disruptive and groundbreaking product. Apart from system robustness and latency, operational range is also a parameter that we are focusing on as it has a direct impact on the speeds we can operate within. Here we have gathered a very good data based on different operating scenarios and setups that will be key for our planned further optimization of the system. Now when we enter the next phase of development, target the in-vehicle, integration and demo by end of Q2. Overall, I'm extremely proud of the Terranet team's tremendous dedication, focus and execution during the last quarter. And we're already very anxious to complete the obligatory house cleaning and minor bug fixing phase during the first half of April, to then refocus our full attention to work on the in-vehicle demo planned for end of Q2. Looking forward to keeping you posted on the continuous progress.

Welcome to the interview section of Terranet's Q1 webcast. As earlier mentioned, with me today is Terranet's CEO, Magnus Andersson, and CTO, Pierre Ekvall. Pierre and Magnus, you just completed a successful lab demonstration. Can you tell us why this was an important milestone?

Yeah, the lab demonstration was a great success. It was crucial as it validates BlinkVision's end-to-end functionality and provides essential input data for our continued product development. its success paves the way for the upcoming car testing and real-world validation.

It's also, of course, strengthening our discussions with our potential partners and customers, and also then accelerate our commercial process.

I understand. Pierre, what can we expect from the vehicle demonstration at the end of Q2?

In the upcoming vehicle demo we'll mark a significant milestone for Tenet as we integrate BlinkVision into a vehicle for testing on a test track to validate in-vehicle end-to-end latency as well as the system accuracy. So we will continue with this and while we're doing that we'll keep you continuously updated of course on the progress and look forward to sharing more details during the quarter.

Okay and what role will AstraZero play in the vehicle demonstration?

ASTACERO will be a very important integral part of our testing and demonstration process. The test track supplies the infrastructure needed to be able to test our technology in a state-of-the-art environment.

And also ASTACERO, as owned by the Swedish government entity RISE, it's a very important partner to us to work with. And also to see how good are other ADAS and AD solutions on a testing track to also see how can BlinkVision add value, for example, in very complex traffic scenarios. Secondly to that, also, of course, our close discussions with Urancap. Urancap, who's working on the revision for 2026 and 2029, and looking at what current technologies can do today and what potentially solutions like Blank Vision can add value. So your end cap is a very important part in this as well.

I understand. And Magnus, will the results from the vehicle demonstration lead to a partnership?

I mean, all the partners that we are talking to, potential tier one suppliers or OEM automotive manufacturers, They all want to see the product live in the real environment, so to say. So having a demo prototype is, of course, very important. And also, secondly, to put it on a vehicle, see it's moving, right? And I think that would accelerate and help us to then potentially sign an agreement with a potential partner or customer during this year, as planned.

Magnus, do you have plans for additional recruitments?

Yeah, we always look for talented people. And yes, we have some ongoing recruitments, both on the technical side, but also on the business development side. And we also actually signed a few people recently, and we are interviewing many more. So yeah, a lot of focus on recruitment. I understand.

Magnus, you were recently in Singapore, and later both of you in Italy with Business Sweden. What did you learn there?

Yeah, Singapore is a quite interesting place. Over the years, it's actually been some kind of center for testing autonomous vehicles. So a lot of work has been done there and a lot of experiences. So it was very interesting to go there and see what they learned. And also for us in the future, when we need to do more of these projects, where to go, okay? And of course, for the whole Asian market, Singapore is a very interesting place. Then also going on these kind of trips with Business Sweden and other and being out in the market is also look for new use cases. Even if our focus is automotive, there are many other areas where people are interested to use our product. So that was very interesting. And I mean, also another thing that we saw, especially when I was in Italy, also seeing that the T2 suppliers like software providers, taking a bigger, bigger part in the automotive space. So, of course, we're also trying to partner up with them in different ways.

And I can, of course, only speak for the VTM fair in Turin, but definitely a good place to meet up. And it resulted in very valuable discussions with both OEMs as well as tier one suppliers on in-depth product requirements.

Interesting. So what other potential use cases looks promising to you?

I mean, our focus, as I said before, is definitely automotive, right? And ADAS and AD, both for personal vehicles, but also for commercial vehicles like trucks and other types. But what we see is there is potential outside that in, for example, mining, in agriculture, in logistics. If you think about ports or airports, there's a lot of potential for ADAS solution, but also for autonomous vehicles. So that's very interesting for us. But again, the focus is automotive, and now also the focus is to get the product out on the market.

Yeah, I can only second what Magnus just said. So many interesting use cases exist, although we, of course, evaluate alternative use cases all the time. Our current primary focus is on perfecting the system for AD&ADAS applications.

I understand. Magnus, what upcoming financial activities do shareholders need to be aware of and why?

Yeah, we work on the finances all the time and the board has a big focus on that. And what we have at the moment is the warrant program TO7, where the measuring period is now in the first half of May. And then the subscription period is from 20th of May up to 3rd of June. So that's, of course, a very interesting activity. Later on in the year, we also have a T08 coming up in December. And provided a favorable outcome of the T07 and T08, we see that we will have funding all the way into 2025.

I understand that was the interview section. So we're now going over to the questions from the webcast. How are you going to sell BlinkVision? You're talking about deals, contracts, but how is the deals going to pay off?

Yeah, if we take, for example, I'm talking about automotive, right? We're working closely with OEMs, but then of course, tier one suppliers have a big role to play, okay? Because the tier one suppliers is usually the one who's integrating the product into the sort of final product set into a volume car. So we will work very close with tier one suppliers to develop and to deliver into the automotive manufacturers. In terms of financing, it doesn't really affect our liquidity, meaning that Our cash flow forecast is the same. Our going concern and how much money we have to do BlinkVision and deliver BlinkVision to the market is still the same. So no impact on that side.

I understand. We got a question here about the AI-based model that you are developing. Could you tell us more about that?

Yeah, sure. Absolutely. An important differentiating factor there is that the software itself will be AI trained, and we're using AI to train the software, to develop the software. But the software itself, when it's running in a real life environment, in a vehicle, will not be an AI software. So it means it will not evolve while you're running it in a vehicle, in a product. And that's a very important differentiating factor for the automotive industry, because it's very hard to verify a software that's constantly changing. So we're using AI to train and develop the models. And then once it's developed, it's then pushed into a fixed state and run on the target hardware. So that's how we use the AI part of our software development.

Okay. What is the purpose of the Euro NCAP discussions and how will it benefit Terranet?

Urancap, as you may know, they have what they call Vision 2030, right? And of course, safety is what they work on, right? And saving lives and saving more lives is their interest and it's our interest. So it makes sense for us to discuss with them. Secondly, in terms of technology side, they are very interested. They know what you can do with existing ADAS technologies and what they can achieve. but they also see the potential with a low-license system like BlinkVision, and what can potentially be achieved with that. So therefore, the rating methods, what traffic scenarios they actually are evaluating, will change, and we will upgrade that for the coming revisions, now first revision 26 and 29. So we have a very good discussion with Urancap and give them as much input as we can.

Cool. We've got a question here about the financial situation. We briefly talked about it, but what's the current financial situation and how do you plan on spending your money going forward?

As I mentioned before, our board is continuously working on financing. We have a TO7 now in May, we have a TO8 in December, and with February outcome, as I said, then it will take us to 2025. And how we will spend our money, of course, it's all on BlinkVision. It's all on getting the BlinkVision out on the market. So that's where we spend our money.

We've got a question here about your personal investments in Ternet. Will you increase those?

I would love to do that every day, right? But I also have my income and my expenses in my private situation But, of course, I will invest in Telenet as much as I can. And I believe in the company. Otherwise, I would not be sitting here and running it.

Yeah. And as some of you might know, I recently invested. And I'm, of course, looking forward to do further investments along the line as well. But when that will be is something that I'll need to come back.

I understand. I'm checking here if we get some more questions, but it looks like that was all the questions we had at the moment. So thank you, Magnus and Pierre. And Magnus, I give the word back to you.

Thank you very much. And thank you for very, very interesting questions. And thank you all for joining today. Thank you for following Terranet and your interest in us. You can follow us more, of course, looking at our website and our press releases, and also follow us on LinkedIn, social media. And if you have any questions, please feel free to email us on investorrelations at terranet.se. So stay in touch. Thank you very much for today.

Thank you.

See you.