Hello, and welcome to today's webcast presentation, where we have Terranet presenting the Q3 report for 2023. We will first show a highlight video, and then a pre-recorded interview. We'll then do a Q&A after. Welcome to this webcast, where we have Terranet presenting the Q3 report for 2023. We have the CEO, Magnus Andersson, and CFO, Dan Wahrenberg, presenting. Welcome, Magnus and Dan.
Hello, and, welcome. I'm really excited to be talking to you today. And my name is Magnus Andersson. I'm the CEO of Terranet. And today, I'm also very excited to have my colleague here, my new colleague, Dan Wahrenberg, as new CFO in the company. Dan has also been working a lot with stock-listed companies before, so I'm really excited about the future that we're gonna have, together.
Hello, everyone. Very happy to be here, and I'm thrilled to be part of the Terranet team. We're in Stockholm today at Finwire, and we're going to ask us some questions about the market, the Q3, and the plans going forward.
What does the current market for advanced driver assistance systems and autonomous solutions look like?
Yeah, there's a lot of things going on in our industry at the moment, both when it talks about advanced driver assistance systems, so ADAS, and also talking about autonomous vehicles. You've probably seen a lot in the news, especially over in North America, where autonomous vehicles or robotaxis are on the street in more and more cities, but we also have a lot of challenges. The same when it comes to the advanced driver assistance systems, there are also a lot of things being achieved. They're being better and better, but there are also a lot of challenges. If we look at what the market want to achieve, is go to the level three of autonomous in ADAS systems. And what we want to do there is to...
The car is sort of doing more and more things on itself, but the driver needs to be ready to take over, okay? So that's what most common factors want to achieve today, level three. And if we look at that area, there are still many limitations. And if you see, like, in terms of being able to react fast enough, sensing correctness, and these kind of things, there are many challenges, and I think that's where Terranet and the BlincVision product really can add value. Actually, also, if you look at the S&P Mobility Report, it shows that 9% of new car sales in 2035 will be level three and level four. So things are moving, and I think there is a lot of attention on this area.
Lastly, also, if you look at the accidents happening today, if you look at fatal pedestrians accidents, actually 76% of those are happening in darkness. So how about sensors in darkness, or if you take other difficult weather conditions? Yeah, they have problems. And surely you have solutions like LiDAR that works well in darkness, of course, but the other sensors that could have problems in that area. And our solution, it works as well in darkness as in lightness, huh? And I think that's also another area where we can add value, especially to this segment of vulnerable road users, which is our focus. So a lot of opportunities for Terranet and BlincVision in the ADAS field and AD.
During Q3, you released a press release about the roadmap. Could you please elaborate and give us more details about when the product will be on the market?
Yeah. Thank you very much for that question. Roadmap for us is, of course, very important, and that we also share that with our shareholders, where we are and what we are doing. So I'm very happy to talk about that. Yes, we gave an update in a press release on, specifically, the next 6-9 months, what is our plan to achieve, and what we are working on. And I can say that we are according to plan, so all looks good in that sense. And more in specific, what are we actually then doing? Okay.
We are now in the phase preparing for this, what we said in the press release, doing some kind of demo in our lab in the first quarter next year, and then later on, also putting on a vehicle in Q2. So in order to prepare that, we really also need to test our components together, to get them to work together. That's very important, because as you might know, early this year, we committed that we have a successful laser scanner prototype, and that is working very well. But of course, we have other components, like the sensors, like the computing unit, and all the software around it. So that's what we've been sort of working on lately to do that. And if you go into more details there, what it's all about, yes, it is about optimizing the sensor.
Really getting a sensor to work in different conditions and reaching the long range, working very well with their effectivity, okay? In terms of the whole, how a system works together, when you have the laser scanner and then the sensor picking things up, we also need to work with calibrating the sensors, ensuring... Because we have two sensors, right? So they need to be calibrated. We also, when we're having the laser scanner and the sensor picking up, we, as we, you may have noticed earlier, we don't work with point cloud, but we have our trajectories. We're actually looking for splines, okay? So putting that together, looking at coincidence matching, that it all matches together in the right way, that's very important. And coming into triangulation, that's something else that we've been working on, right?
So picking all this up in the right order, in the right way. And so far, it looks very good. And after this, then we will also connect it to our AI Perception Stack. And that has been a parallel work, that we've been working on a model to train and starting to sort of recognize one of the road users, right? And now that we get the other parts of the system connected, we can connect up the AI part and getting the full systems working. So that is more in specific what we are working on in detail. But again, it's all according to plan, and as we committed in press release, that's our goals that we plan to achieve.
You recently announced that you got Vinnova funding to develop new testing methods with AstaZero. Can you tell us more about this?
Yeah, we're very proud to get the trust from Vinnova. It's not really about the size of the funding in this aspect, actually. It's more about what we're gonna do with it, right? What's happening there, it's a project that we're gonna evaluate some testing methods, how actually to show, end of the day, the advancements and advantages with our BlincVision product. To show that there actually are technologies on the market that can achieve what maybe people didn't think is possible before, in terms of how fast you can detect something, and also do it in an accurate way. In this project, we will work with AstaZero. AstaZero is owned by the Swedish government, RISE entity, and it's a big testing track outside Gothenburg.
A very impressive facility, a lot of outdoor usage, but also an indoor hall on 700 meters. It's quite amazing. When we do this product with them, we also have the Swedish Traffic Administration involved as well. What we will do in the first case is to show new testing methods. Why do we do this? Known in the automotive sector is Euro NCAP. Euro NCAP is a rating system which is very important, actually, for car buyers who go out to buy a car and say, "Is this car safe or not?" So everyone want to achieve five stars, huh? Every manufacturer. So of course, for auto manufacturers, it's also very important.
Euro NCAP, though, if you look at the rating system, you can see that the current system today, the levels to achieve maximum rating is very low. Actually, if you use the state-of-the-art ADAS systems today, like LiDAR, radar, and cameras, you achieve five stars. And of course, if everyone can achieve five stars, it's not really meaningful to have a system, right? A rating system. So Euro NCAP is looking at making these requirements or levels to achieve five stars much harder, okay? So they have a revision coming out in 2026, so they're looking at how much should they make it stricter and harder. But then, except knowing what's out on the market today, they of course want to see what's coming, what is possible to achieve.
So for us to work with them and show what BlincVision can achieve is very important. And what we did, actually, we presented a report where we can see that current rating is here, existing system market is here, but this is what we potentially can achieve. And Euro NCAP is really excited and really interested in that, so they will be part of this project as well. So this is extremely interesting for us. Then, moving on, now I talk about new testing methods, but we also applied for additional funding to actually do next year, when we have our demo, as I said earlier, and on the cars.
We actually also can test that on a real testing track and show it to not only testing and rating institutes, but potentially also to car manufacturers and Tier 1 suppliers. So it all hangs together, so to speak, right? So very exciting. And in terms of also, maybe I forgot to mention earlier when I spoke about our product development, in terms of the sensors, we also, of course, have own sensors, but we've also done a lot of visibility studies on what other sensors is out there, and what can we use to achieve what we want? And aga in, our unique selling point is being the fastest sensor in the world, and also accurate. So we also have some alternatives on sensors that we are working up in the lab as well to achieve what we need to achieve.
Very exciting times, and actually, the first test on AstaZero has already taken place, so this is not future. Actually, it's all already in progress, so very exciting.
Terranet has licenses to keep patents that are required for developing BlincVision. Can you please give us an update on this subject?
Oh, yes. We just completed a review of licenses to patents. Things are now looking good. The analysis shows no risk on our side. The result shows no dependency for our BlincVision solution. It's very important for us to protect the uniqueness of our BlincVision solution. We will continue to patent our development to make sure we have the best possible protection going forward.
What are Terranet's upcoming financial activities, and how do you plan to raise capital?
Yeah, so the first step is the warrant has maturity now in November, so there will be a subscription period from November 27 through December 11. Later on in June, we have the TO7 upcoming. And it's the board and the management will be working continuously on the financing issues for the company, and we have a plan that we'll execute accordingly.
You recently announced that your CTO and Terranet has mutually agreed to part ways. Will this have any impact on the release of your product?
Yeah, thank you very much for asking that question. Yes, it's correct, we mutually agreed to part ways. It will not impact our product development plan and our roadmap. We will still keep that plan, and we're still going to achieve what we'd said. On the opposite, actually, our plan is actually to increase the speed of product development and the launch of BlincVision. Also, in terms of the CTO position, we already started a recruitment process, and we have a few good candidates already. And it will be someone coming also in from the automotive sector with a lot of experience from the sector, but also have experience from launching products like BlincVision, so it's very important for us.
How are you further strengthening Terranet's competence and team?
Yeah, except working on the CTO replacement, and actually, we also are continuing to further strengthen the technical team with different competence in our development team, right? But we also have another very exciting recruitment process in progress, and that's within business development and product marketing, you can say. It's of course very important for us to know what automotive manufacturers, the OEM, wants from us, and also how to integrate it in the most easiest way, so for example, also working together with Tier 1 suppliers. So therefore, strengthening that part of our organization, we know some of it information already, but it's very important information, so strengthening that part of our organization is very important.
So we're recruiting a business development person who's been in that market sector before and know how to do this job. So that's very important for. And actually, part of that also is if we're now actually creating the world's fastest sensor solution and accurate, also looking at what other use cases are there for that outside the automotive sector. And automotive sector is our main focus, but this sensor solution might be able to use in many other sectors, so that's also very interesting to look at on vehicles, of course, but yes. And also in terms of other competencies we add to Terranet, we are also looking at strengthening it on other areas in our company, on more senior level, to ensure we get the BlincVision product out in the market as soon as possible.
So all in all, we're putting a new management team together. I think that's very important when we're going now into the next phase of Terranet and BlincVision, actually starting to prepare for the market launch. So very exciting.
What comes next from Terranet during Q4?
Yeah, so our main focus on our product development is, of course, to get the demo ready in Q1, so preparing for the final parts of that in Q4, very important. And also we are preparing to also put on a vehicle next year as well. And then number two, preparing to actually sign the partnerships with automotive manufacturers and Tier 1 suppliers. So these are the two main focuses for us, which is very important also in quarter four. Thank you very much for listening today.
Okay, thank you very much for that highlight video and interview that we did. So we'll jump into the Q&A section, and we'll start with the first one. Why are you spending money and effort on Euro NCAP rating methods?
As I mentioned earlier, I think that both consumers and automotive manufacturers are very much looking at Euro NCAP to see what ratings they can achieve and what's out there. Therefore, for us to be involved in that is important. And secondly, also, to show everyone that what we're all talking about, being the world's fastest sensor solution and accurate as well, to really prove that in professional rating methods, I think that's very interesting and important to show that. So that's why we're working with Euro NCAP, but also not only them, but other sort of entities like AstaZero or the Swedish Road Administration as well.
How do accidents with self-driving cars in the U.S. affect Terranet's product development?
Yeah, it's, of course, very sad to read about these accidents and people getting hurt and cars not working the way they should. I think this is just proving the need of more and new sensor solutions. So we think that in this autonomous or robotics area is that we really can help avoiding this kind of accidents. So one, it's just proving the importance of new sensor solutions. Two, it's also proving the need for solutions like BlincVision. So yeah, sad to hear, but also I think that's where Terranet and BlincVision really can make a difference.
Take the next question here. As shareholders, we can guess that Nihat was let go due to failure to achieve time scales. However, some of us, being technical people, we know that losing a key person will only exaggerate delays. Please, can you elaborate on how losing Nihat brings us closer, not further to realizing our objectives?
Mm-hmm. Mm-hmm. Yeah, I think that Nihat, as I said, we agreed mutual to part ways. Is of course something that has happened in the company. But I think in terms of where we are, it's not bad at all. We've done. Nihat done some work, and we've done some a lot of work on terms of research and looking at building the perfect solution, but now it's really time to shift focus and really launch a product, huh? So for us, recruiting a new CTO, we have experience on launching products out in the market and accelerating this process, I think is a good timing for that. And I think also we are working a lot intensively on product roadmaps and detailed plans.
As you may know, we added another resource, a team lead from automotive industry earlier after summer. So we are very intensively working on plans. So I think this shift from Nihat, I think we have a plan that we're following. We also believe that we are on track on that plan. So I think more than ever, we have control over the situation, I would say.
Given the depressed share price, how will TN approach imminent funding rounds? Surely at the current price, the imminent TO6 round will not raise sufficient funds.
Yeah, thank you for the question. We understand the concern. We're, of course, following the share price, in fact, obviously, when we forecast the liquidity, the board and the management team are working closely together in order to secure sufficient funding. As we expressed in our Q3 report, it's our view that it will be possible to continue financing the company going forward.
Thank you. We'll take the next question here. This is a very worrying time for Terranet shareholders. Many of us, myself included, are looking at the significant nominal losses. Can you say something to allay our fears that will, that all will come good at Terranet?
Yeah, okay. Thank you very much for that question. I understand the concerns. Unfortunately, the stock market is what it is at the moment. Many companies are struggling with the share price. Well, I think, and for the history of Terranet, it is what it is. I've been here now for a little bit more than one year, and I look very brightly on the future. I think, Terranet, we've done a lot of good work, a lot of good technical work, and we are now really starting to put things together. So I think 2024 for us is gonna be a very exciting year.
Thank you. We'll take the next question here. What is left to do before you can show a prototype of the BlincVision in a lab environment?
Yeah, as I mentioned earlier, we are putting all the pieces together in the lab and testing them together. And when you do that, of course, things will happen, challenges. But I think we are all on top of that. And as I said, we are putting now the Laser Scanner together with the sensors, together with our software stack. We work on the Coincidence Matching, solving some things there. Putting the Triangulation together, adding our AI Perception Stack on top of that to get the whole system flow working, detecting something, seeing what it is, and where it's going, yeah? And really fast, and of course, very accurate. So but it's all looking good and according to plan, so very exciting times.
When is a market launch possible for BlincVision?
Yeah, okay. So the steps where we are, if you're talking about the roadmap and market launch, right? The first thing now is to show the product in a lab, a demo, that it works, okay? And of course, I've been talking to many Tier 1 suppliers, many OEM automotive manufacturers, and they all want to come and see the product, okay? So once they come and see it in reality, then we take the next step, okay? And start partnering and preparing for a market launch, okay? In terms of how long time that will take, it's very hard to say, because as you know, the automotive sector is in a transformation phase. So you can look historically, how long time does it take to launch product in the automotive sector.
I think that timescale is definitely changing in the future. I think it's gonna go much faster. Secondly, as well, when I speak to OEM and Tier 1 suppliers, they actually are quite different. Some are followers, some are fast movers, so it also depends on who you start working with. But I believe if we can create something really unique in the industry, and we have the regulations following and things, I think things can move fairly fast.
Can you give us an update on the possible collaborations for BlincVision?
Yeah, I guess what you're referring to is partnerships with Tier 1 suppliers and OEMs. I mean, as I said, we know there is a handful of big Tier 1 suppliers in the world, and we are talking to all of them. There are many, many automotive manufacturers on different continents, and we're also talking to OEMs on different continents. So I cannot mention anyone specific at now, but I just saying that we talking to many of them, and some of them we have more intense discussions, some we have earlier discussions. So it differs, but they are very interested.
Okay. Thank you very much, Magnus and Dan, for answering our questions and showing us the pre-recorded interview and the highlights of the Q3. And, thank you to everyone who followed along, Terranet, for this presentation, and I hope you have a great rest of the day. Until next time, thank you very much and goodbye.
Yeah, thank you, from me here at Terranet as well, and please stay up to date with us. We are very active on LinkedIn, but also, of course, read our press releases and news updates. You can also send us questions on email, on investorrelations@terranet.se. So thank you for tuning in, and have a wonderful day, everyone. Bye-bye.