Good morning, everybody, and welcome to this presentation of Heliospectra's result for the third quarter of 2020. The presentation will be held by CEO Ali Ahmadian, and my name is Pascal Dettwiler, and I'm an analyst at Västra Hamnen Corporate Finance. We have the pleasure of hosting this web conference today since we're covering Heliospectra with our commissioned research. We will begin with a presentation of the quarter and thereafter follows a Q&A session. Feel free to write in questions during the presentation and Ali will answer them after in the Q&A. Also, we will record this web conference, including the Q&A, and the recording will later be available at Heliospectra's website and also on Västra Hamnen's YouTube channel. With that said, I will give the word to you, Ali.
Thank you very much, Pascal. Good morning, everybody. I'm going to go through a little bit of an introduction to the company, our solution, as well as some of the highlights of basically our quarter three report. Our company founded in 2006 in Sweden with a very strong core value around innovation, expertise, collaboration, quality, sustainability, and passion. If I go through a little bit of our mission and vision, basically, our mission is to redefine the nature's potential. Basically, we are a LED lighting company for horticulture. We are providing solution, combined LED, and also control system for horticulture. We would like to make sure that all of those people and all of those investors and growers, they really get the nature's potential of the seeds that they're growing.
We are doing it through innovation, technology, and also very much of a strategic partnership with our commitment to improving the operational excellence to our growers. Our vision has been feed and heal the world, and because of the passion that we have for sustainable growing and relentless pursuit of the innovation. The company founded in 2006, as I mentioned, more than 14 years ago. We have done 1,000 plus light spectrum tests and did 90 plus in-house research studies. We have offices in Europe, North America, Japan, and U.K. We're listed obviously in Nasdaq First North. We have all of our production, all of our design and development here in Sweden, are focused on intelligent plant growth as well as the expertise that we have is around plant science.
You see today that a lot of LED lighting companies are working around providing solution for horticulture. The differentiation of Heliospectra among others is that first and foremost, we're photobiologists. We are thinking about crop as number one. The expertise and knowledge we gathered over more than a decade is actually differentiating us and our solution from our competitors. There are four basic market segments that we are very much involved in and active in. Number one is actually on the left side is the commercial greenhouses. When you grow tomatoes, cucumber, capsicum, and different type of crops in the greenhouse environment. In greenhouse environment, we look at the light as a supplemental lighting to the sun of obviously the areas in the world that sun is available, we're going to provide them with a different solution than where basically the sunlight is actually lacking.
The second basically in the industry is indoor grow facilities, mainly used for growing medical crops like cannabis. For that, actually, we designed a very particular solution that we can simulate the sun, the natural sun actually for the crops. You're going to get a much higher quality, better yield all year round. The third is vertical farming, which is booming, as you know. Vertical farming is that when you grow crops like leafy greens and also salads in a very much of a stack environment on different type of layers and so on, where you can just actually use and maximize the amount of usage of the area that you have in hand. We have multi-tiers up to 10, 15, 20 tiers of growing crops using our LED technologies.
Last but not least is actually on the research and agriculture technology, where we work and collaborate with universities. We develop actually a particular solution for that particular market, which is we allow the researchers to really define every single spectrum that the sun can create. We have a light with nine wavelengths, and we can actually simulate the sun and do your research, make sure that, and find out that what is the best spectrum for any particular crop. That is exactly how we do our research as well. Our value proposition to our customers and the growers is, of course, number one is increased yield. We have cases that, for example, growing tomato, that we could increase the yield of a tomato using our technology to 110%, 115%, means that more than doubling up.
That is actually achieved by right quantity of light, which is actually what we call light, basically amount of photons that goes to the crop, but also light quality, which is actually the spectrum. For every single crop, we have a specifically tailor-made spectrum that we know that going to feed the crop in the best possible ways. That's why the yield going to increase, so per square meter, our customer can get more crop than before using our solution. We can accelerate the harvest. Basically, as I said, simulate the sun in the best way and just make sure that we can shave off some of the days and weeks and make the product ready for harvest. That also added to the amount of yield that's going to be increased over a period of time. Improved quality is actually our core.
As you see, the picture here is actually very much focused on the crop. We work a lot to work with the top of a spectrum, light quality and light quantity, just making sure that we're going to get the best quality, such as flavor, such as shelf life, such as morphology, plant morphology, how they look like, and so on. Last but not least, which is a very much actually unique value proposition that we have, is actually controlling consistency. We can get the same product all year around with the same shape, same flavor, same sweetness, same color. Also, we can control the consistency of the production.
Means that the time that our customer dealing with a high demand in the market, we can make sure that we can grow the crops in a way that we can actually provide products for that particular demand. Basically, we can push the gas pedal and put a brake on the production as the demand is needed in the market. That is actually the value proposition for Heliospectra, which is combination of light control as well as the technical service that we're providing. In this picture, in a very brief way, just schematic of the greenhouse. You see on the right side is a schematic of the greenhouse, and you can see our light is hanging there. We have four categories of products or four product families, MITRA, ELIXIA, DYNA, and SIERA, each for different purposes. MITRA and ELIXIA are very much used in the commercial greenhouses.
DYNA is for research, and SIERA is used for vertical farming, which is actually schematic of vertical farming is here. We have a light control system called helioCORE, which is combination with this sensor technology and the box that's over there. We can actually control the amount of light and make sure that we don't over-light or under-light the crop. It's basically designed on the philosophy of the Swedish word lagom. We make sure that we get just exactly what crop need, no more, no less. By that, we're going to even save further electricity, but also making sure that all the nutrition and also all the photons that the crop need is actually sent to them and the crop can receive all of those photons.
Last but not least is actually our expert solution, especially products, which is our service product called helioCARE, is actually this gentleman here. Basically what we do is that we are working with our clients and with our customers, making sure that they get optimized production method using our solution. With that, actually, we are offering that as a service to majority of our growers, and it's quite a popular solution that we're offering. Just very much of a quick look. This is actually our products. These are the LED light MITRA, designed for large greenhouses. Very powerful light. This is actually one of the most powerful light. We have tailor-made a spectrum for different type of crops, being it cannabis, tomato, cucumber, basil. That is a light that is actually designed for such a purpose. We have ELIXIA, which is a variable spectrum.
With ELIXIA, we can actually simulate the light. It has four channels, four different type of a spectrum, red, blue, far-red, and white, where we can just actually simulate the sun in the morning, in noon, and in evening. We have a product family, Sierra, which is designed for vertical farming solutions. It is a very slick design and doesn't take so much space and just provide just enough photons that is needed for different type of crops. Also DYNA, which is our research product, basically the nine different channels, and basically, it works in the research environment as well as making sure that we can simulate different type of a spectrum of the sun going forward.
On the crop control, which is our helioCORE, what we do is that we can forecast production, we can predict yield, maximize growth, optimize light zones, and grouping of the different type of lights. Especially when you're dealing with greenhouses with a 5,000, 10,000 installation, it is extremely important we can get a control over those 5,000, 10,000 instrument that is hanging there. You can further save money. LED itself save money by saving electricity, but with helioCORE, we can even further save money by just bringing enough light that is needed for the crop. Of course, we can monitor the growth facility. On the helioCARE, we do light planning, make sure that our customers get the right amount of light in the right place in their facility. We have on-site services.
We do trials, so we make sure that actually, especially when the growers, before building a project, so for example, if they want to grow a specific crop, we make sure that we do the trial for them, tailor-make the spectrum, and make sure that they get the right product. We do cultivation training, as I mentioned. Basically use our labs for some sort of simulation for the customers. The demand for cultivation and sustainable production is there. There is a driving coming from this need for sustainable solutions everywhere. We would like to have a produced crop with less amount of electricity. Population is growing. In just 2050, the world population going to grow another 70%, and that population need to be fed.
You need to have a more smart way of growing, basically, crops. There is a dynamic in the growing cannabis market, medical cannabis, especially in North America and Europe, and now we see that also in other places in the world. There is a demand for a solution for growing the crop in a controlled environment, and of course, urbanization. No longer are we going to ship goods from rural area to the urban area, because probably in 2050, 70% of the population are going to live in the urban area, so we better produce the crop closer where it's going to be consumed. The map here actually shows our footprint of our customers today. Talking a little bit about the quarter three highlights, obviously, we faced COVID-19 situation and pandemic.
The first and foremost for us was very important to ensure our employees feel secure and safe in the work environment. We already, since three months ago, back on track with 100% in selling and going back on the road, working with customers. We were one of the first companies already in March that started to engage our customers with webinars, and that actually led to the 1,500 new leads and almost half a million people reach out to these webinars and our outreach and all of those and digital marketing that we did. That is actually so far how we work with COVID-19, but also, we took the opportunity to look at what is needed for going forward.
Also we know that the sale's going to be delayed, although we have a drop in sales because of the COVID-19, also we see that the interest is still rising with our customers. We keep them warm. We have a hand-holding process with all of them, making sure that once they are feeling secure about their CapEx investment, we are there for them, and they can just invest with us. Some of the strategy we took to just adapt to the new situation was we narrow our focus to the key markets. We make sure that those key markets are going to get the extra attention. The key markets are the markets we see that they have the highest growth and highest possibility of growing and also growing crops. We optimize our operation cost for this quarter.
Obviously, we're doing the rights issuance right now to secure our strategic investment because it is important that we be healthy and good today, but also, we would like to make sure that we are going to be healthy and good in the next five to 10 years. This is the financial highlights. You can see it in the report. Also talking about the rights issuance, which subscription period would be from November 5th to November 19th. We are raising or making rights issuance of SEK 50.6 million, and 40% of that would be focused on development of our helioCORE and also our patented product biosensor. We're going to spend on developing those products.
The 35% of that is going to go to our strategic expansion throughout Europe because traditionally, Europe was a bit behind in the sense of adopting new technology, that North America has been always faster in adopting new technology. Now it's time we see that the market is maturing, and we are ready to expand in Europe. Basically, the rest of the 25% is just reinforce our company's financial position during this situation. On top of that, we do also around 32.7 million SEK warrants, which is actually half of that going to spend, which is actually, this is basically in a year from now. The 50% of that is going to be spent on the product development that is needed for 2022, 2023, and also building a reseller network across the world. This is my last slide, basically talking about our owners.
We are very happy to just have very much of a commitment from the main owners of the company for the long term in the company. We have Weland Värdepapper AB, and also Weland Stål AB as the main owner, and we have ADMA, then we have Midroc. The four first owners, they own 62% of the company, give and take. The rest is, of course, free-floating in the markets and we can trade. That was the presentation, a little bit about Heliospectra. You can see that we have an office in Gothenburg, Sweden. We have an office in Toronto, Canada, one in Chicago, U.S., and also we opened an office last year in Tokyo, Japan. We are working a satellite mode in U.K. as well. I would like to welcome any question that you might have.
Thank you for the presentation, Ali. As Ali said, feel free to ask questions now. You can write them in. If you look at your toolbar, you have something called Questions, and you can just write them there, and I will make sure that Ali can answer your questions. As for now, we don't have any questions yet, I have a few questions of my own I can start with.
Yeah.
You mentioned in the report that you're back and you're selling with full force again at 100%. We're reading now in the newspapers there is a second wave of COVID, and there's a lot of new restriction being in place, especially in Europe and in various places in the world. What I'm wondering, you also mentioned that you had reshaped and resized the organization, would you say that you're better prepared at this stage for another lockdown than you were in the beginning of the year?
Yeah, we can say that. We are not just prepared for the lockdown situation, but also we are prepared for the rebound, especially when this COVID-19 is actually contained. We are very much ready for that situation that we're going to see that the customers are actually traveling is going to be open and all of those. Between August and October, there was a window that the lockdowns were minimized, and that is the time that our sales team became very much on the road, and they spent time with customers. It is not just also on a face-to-face meeting. We did a lot on the digital marketing, and also we did a lot through our webinars and also different types of conferences that we arranged for different groups of growers.
With that, even right now, we are absolutely more ready because actually we are quite warmed with doing all of this. The more lockdown, we know that how we can just reach out to our customer. Our customer, we build some sort of loyalty with them. We are continuously working with them, even considering the lockdown. Actually, in a way, we become better because our time and those 10%, 15% of the time that a salesperson need to spend on the airplanes or road to just meet the customer, those 10%, 15% is now spent on actually meeting with customers. In that sense, actually, we are much more effective.
Okay. We have two questions from the audience.
The first one is, while looking at the market, do you consider the demand to be pent up or reduced during COVID-19?
That's a very good question. It depends. We see that there is a lot of demand on the food side, like when they want to grow crops. That's very much simple because of the logistics is not as efficient as before. Majority of the countries, we see that they're looking at having the local food grown in those countries or in that particular location. For the food, we see actually quite a rise up in basically the demand for solutions like Heliospectra is offering. On the medical side, the situation is a bit different. The steady growth of the medical cannabis market is still seen. We don't see any kind of a slowdown on the kind of ambitions, but we see a slowdown on the CapEx investment.
Majority of investors are sitting on their money to see that how the situation going to be contained, and then they're going to do the CapEx investment. It's actually dependent on the crop is going to be, we see a different type of dynamic.
Okay. We also have another question. What is the status on the big order in Australia on SEK 70 million?
Yeah, as I mentioned in the report, the customer did their financial part, and they've raised money and everything. Unfortunately, we hit COVID, and with COVID, the kind of location in Australia that this plant is going to be built, which is Victoria, is actually now 100% lockdown. We are still in the constant communication with customer. We are having a weekly and monthly meeting with them, and also their investment company. The situation is that the greenhouse builders, they cannot travel to Australia to build a greenhouse, the glasshouse that is needed for basically hanging our light and hanging our solution over there. We are still waiting to see that how the situation with the COVID going to be contained, and then after that, we have a much more projection about the timing of that project.
All I can say in the short is that that project is pretty much alive and that we are in a very good conversation. As soon as this situation with pandemic resolve, I think the project going to start. It's a little bit of uncertainty due to the COVID situation.
Of course. Another question is, could you elaborate a little further on the strategic decision of establishing a reseller network?
Absolutely. If you look at Europe, we have like a 600, 700 million population here. There are different languages, a different way of working. We see that actually today our solution is very much ready to use. We kind of created a whole control and a lighting solution so smart that actually can be sold by the reseller. We would like to expand to those markets. One way, of course, is that to just have build our own team in those markets. Our strategy is more towards building our technical service team in those markets to support the resellers. The resellers become the way to just approach the customers based on the relationship they have built over decades with those customers locally.
They're very much local approach, but we are supporting those with our technical services, making sure that there is a confidence also with the resellers when they reach out to the customers.
Okay, thank you. One more question here in Swedish, I'll translate it. What are your thoughts around stores like ICA and Coop, food stores that are beginning to look into system for growing food of their own?
Yeah, exactly. Of course, there's a niche with ICA, Coop, and even if you go out to U.S. and North America, Whole Foods and all of those, you can see that there's solution that are very much automized and you can grow it. Our focus is actually on the main horticulture market. We did not actually intentionally try to explore such a market. Of course, we have a solution for that market, but we are looking for actually larger installation where actually the customer can see the value of Heliospectra solution. For us, intentionally and consciously, we did not prioritize those small installations, like in the retailers, at least for now.
Okay. A question from me is, you wrote that you had an increase in prospective customers during the pandemic.
That's correct.
Is there any way you could specify or elaborate what kind of product range that is of the most interest and maybe what sort of customers that is included in this customer segment?
The customer, we break down our customer base into eight different kinds of customers. If you start from the medical, we have indoor medical and also growing the greenhouse. In indoor, we have single tier, multi tiers, even in that category, we have a type of a production that they have a different vegetative room and flowering room, we have also basically full cycle growing. We have leafy greens in the greenhouse. We have vertical farmers. We have actually wine crops, tomato, and cucumber, as well as research. What we have done is that, as I said, we were very much in the beginning of the pandemic, even before all the lockdowns, we actually foresee that such a thing is coming. we started planning our webinars and a lot of educational webinars we did.
We had actually a hit rate that was very much industry record. For example, some of our webinars on vertical farming, we had up to 700 people participating in those webinars. With that, actually, we created a trust and loyalty with those participants. Some of those actually turned to potential prospective customer that we need to actually start working. There were a lot of investors also in those calls that they want to invest in the vertical farming because of the dynamic that is created in pandemic. Now we are trying to guide them through what they should do, where they should invest, and what type of solution they need. That is how actually we created our outreach with our customers.
Okay. Thank you. That is all the questions I had, and there seems to be no further questions in the chat either. With that, I'd like to thank you, Ali, for coming here and presenting for us and answering the questions.
Absolutely.
Well, actually, we have one more question.
Okay
take it.
Yes.
From the order intake of SEK 10 million, how big part is new customers? Has the office in Japan contributed to new deals?
Yeah, that's a good question. The first part of the question, I think in the SEK 10 million this quarter, the majority of that, I would say 90% of the new customers, if not all. Yes, there are a little bit of a repetitive order, but we have 90% of the new customers. Our office in Japan is actually pretty active in a sense of not just on the selling. We had actually projects for the first time, actually, a non-Chinese company we sold to China out of our office in Japan. Also, with our expertise in Japan, we could actually working a lot with our product developments, making sure that we can develop a product that is actually demanded for such a market. When it comes to vertical farming and indoor growing facilities, Japan is actually a country that everybody look up to.
They've been doing it for over a couple of decades. We are trying to transfer that knowledge also into our basic design and everything that we do in Sweden, making sure that we're going to optimize our products, but also tailor-made our product for such a market. Japan is very much of a strategic. We opened that due to the strategic reason, not just for sales, but also to make sure that we are on the front line when it comes to our product development.
Thank you for that. Now we have no more questions. I'd like to thank you again, Ali. I'd like to thank everybody.
Thank you.
that attended this meeting and asked good questions. As I said earlier, this recording will be uploaded to Heliospectra's website and also to our YouTube channel.
Very good.
With that said, I wish you all a good day, and thank you for attending.
Have a good one. Bye bye.
You too. Bye.