Terranet AB

Hi and welcome to Redeye. My name is Erik Rolander and I will be moderating this presentation. We have with us Lars Lindell, CEO of Terranet, who will hold a presentation of the company's third quarter that came here early this morning. We will start with a presentation and then we will do some questions and answers. You can send your questions to the form on the website. We have already received a lot of questions that we will try to keep up with afterwards, but please continue to send them during Lars' presentation so we can see what we can do. And with that I hand over to you Lars.

Thank you Erik. As I said, my name is Lars Lindell and I have been the CEO of Terranet since March this year. We are going to do an introduction of the company here and since it is the first time I think we actually present Terranet on Redice and go through what we do. And then a little about the Q3 report and then Q&As. OMOS is a Lunda company. We are 26 employees and consultants. The company was founded in 2007 and came to Nasdaq First North in 2017. What I'm going to talk about here is next-generation anti-collision technology, because that's what we're developing. Just some data from the World Health Organization. Every year, about 1.2 million people die in traffic all over the world. And more than somewhere between 20 and 50 million people are injured. So it's very big numbers and it's at a cost to society of about 8 billion dollars per day, which is terrible numbers, I have to say. And more than 50 percent of those who are injured or die are what we call vulnerable road users. That is, people who are not sitting in the car, like the guy on the car driving a skateboard or a scooter. The reason for this is that our technology aims to make traffic safer for vulnerable road users. Why doesn't the system of today always work? Why don't they work the way they should? First of all, things happen very quickly. They are not reaction fast enough. They are disturbed by light conditions. Just as people can be blinded by sunlight, so can the camera system. Traffic situations can be very complex and complex so that the computer cannot interpret what is happening. Then there are system limitations and of course they are not fast enough. Then there are false interventions. False interventions are what we call ghost brakes. Some people are irritated by these ghost brakes. brakes that happen without actually being needed. What they do then is that they turn off their ADAS system and when they are off, they naturally do not work at all. The car industry is driven by laws and regulations, but also recommendations. We are an active member of an organization called Verdas, which makes test cases and recommendations for Euro NCAP. Right now we have a project called Vardas 2, which makes recommendations for Euro NCAP 2026. Then Vardas 3 will come and work with Euro NCAP 2029. Vardas is sponsored by Vinnova. We collaborate with many car manufacturers such as Volvo and Toyota, but also insurance companies that are popular with me. The way we contribute is to be engineers and help to calculate things. What is it that you aim for when you do this job? It is exactly what does not work so well in ADAS today. to protect vulnerable road users. You want to reduce the reaction time. You want to have better performance in tough climate conditions. And you want to be able to cope with more and more complex traffic situations. That's what you're working on in Vardas and hopefully it will come into Euro NCAP. With stricter rules, hopefully the number of accidents will decrease. What are we developing? First of all, we aim for our system to be able to react ten times faster than today's system or up to ten times faster. We have a laser scanner that scans in front of the car. There we develop both hardware and software. Then what bounces comes back to what is called an event-based camera. I will tell you a little more about what is special about them. We have two of them. We buy the cameras, but we make software for them. Then we also make software that we call our perception stack. This is where the analysis itself takes place and we assume that it will be on the car's own data system. So what makes us unique? First of all, we work with short distances because in urban environments, cars should not drive so fast. We work up to 70 km per hour and with that we only need to scan 35 meters in front of the car. One of the advantages is that since we do not scan longer, we reduce the information. This means that you can process the data faster. Then we work with these event-oriented cameras and what is unique about them is that they do not take photographs, but the idea is that they should act as an eye, which means that as soon as a contrast change occurs, it is sent to our system in real time and is always asynchronous. This means that we get much smaller data and it goes much faster. By limiting the amount of data and having a system that reacts immediately, we know that we can react much faster. These two chambers put together their two images in one to reduce the noise and then classify which object it is. Is it something you should stop for or not? Is it a child coming out on stage? When we have analyzed, we have a picture in 3D where we know what the object is, but we also know in what direction it goes and we know with what speed. At the same time, we know how fast the car drives and we know in what direction the car drives. Then we can recommend to the car to do something and it can be to brake. What we are working with is sensor technology. The first application that we have built a evaluation kit for is for the car industry. But as a sensor technology, it can of course be used for many different things. We will work with other industries and other use cases than just the car industry. We see it as a very good sensor technology and we want to find applications where it can be added. A little about the Q3 report. We have built something we call an MVP, Minimum Variable Product, and it is an evaluation kit. When this is well integrated into a car, it will not be a box on the roof as shown in the picture. It will be integrated into the car. But this is a valuation equipment that we want the customers to evaluate. In the quarter, we carried out our first evaluation with an industrial partner. It was the most important thing during the quarter. Right now, we participate a lot in different types of industry events. We are trying to transition the organization to be much more forward-looking. and work much more with business development. In the end, we now have an MVP where we can prove the technology. Now it's about commercializing it. We have been at Auto AI in Berlin, we have been at Traffic Safety Days in Gothenburg, we have been at Mobility X Lab and recently we were at XCAMP in Gothenburg, which is Volvo AB's innovation hub. We have signed several valuation agreements and we are now trying to sign as many as possible. When we have an agreement signed, it is then about planning where to send the equipment, the engineers who will help and then the customer must also plan to accept this and be able to evaluate it. We also work a lot with patenting our technology. We have done that since the change of year and after the end of the quarter we have gotten more patents. Now that we have put hardware design on the MVP, it is a very good time for us to patent the unique things we have invented. We have also published a plan for 2026. The reason we do this is that last year we published a plan for 2025 that the shareholders have been able to follow. Since we did it last year, we did not want to break the pattern. But 2026 will be very much about business development and valuations. Write valuation agreements and carry out valuations. In the end, we believe that the way to commercialize the product It will not happen if a customer has not been evaluated. We will continue to look at building solutions for other industries. This is something we have talked about for a while but have not really come to terms with due to the focus on our MVP. And then of course we will continue to make patents and protect our technology. A little about our financial figures. We are a pre-revenue company, so we have no income. We made a loss of about 9.5 million SEK and we had a negative cash flow of 9.3 million SEK. At the end of the quarter, we had about 10 million SEK in cash. Relatively predictable figures. Det var faktiskt sista sliden så Q&A Erik.

Thank you so much for that Lars. Very exciting to have you here for the first time. You were on our Autotech in Gothenburg a few weeks ago, so for those who haven't seen it, I recommend you go in and take a look. You talked a little more about the industry and I also had a couple of colleagues with you there who talked about the whole thing. But I think we'll start by going through a lot of questions that I had here and then a lot of them have come in from the web as well. But if we talk a little about the fact that you have now launched the MVP, what you mentioned about the evaluation agreements, which will then give some feedback, so to speak, and the first feedback that has come, if you can just explain the steps that are actually all the way from having signed an evaluation agreement to potentially in the future when you are in cars on the road, what are the different steps there?