Terranet AB – Interim report 1 January 2021 – 30 September 2021

Third quarter

1 July – 30 September 2021
Revenue amounted to SEK 616 thousand (0)
Operating profit/loss amounted to SEK -6,616 thousand (-6,681)
Net profit/loss for the period amounted to SEK -7,637 thousand (-7,342)
Cash flow from operating activities amounted to SEK -8,681 thousand (-5,216) The group’s cash and cash equivalents amounted to SEK 73,012 thousand (20 717) Diluted and undiluted earnings per share amounted to SEK -0.03 (-0.05)
During the quarter, proceeds from the issue amounting to MSEK 37.9 were received upon exercise of warrants for the subscription of shares.

Interim Report

1 January – 30 September 2021

• Revenue amounted to SEK 1,208 thousand (715)
• Operating profit/loss amounted to SEK -24,998 thousand (-22,236)
• Net profit/loss for the period amounted to SEK -27,112 thousand (-25,358)
• Cash flow from operating activities amounted to SEK -32,007 thousand (-23,382) • Diluted and undiluted earnings per share amounted to SEK -0.11 (-0.23)
• In Q1, proceeds from the issue amounting to MSEK 36.4 were received upon exercise of warrants for the subscription of shares.
• An investment of MSEK 32.4 was made in holoride and loans were taken to fund the investment in the second quarter

Comments from the CEO

The third quarter has been an exceptionally intense period for Terranet during this second year of the pandemic. Significant events during the period include the recruitment of Nihat Kücük (previously Head of Navigation at Daimler), who stepped in as the new CTO at the end of June. Nihat will lead the transition from a technology-driven organisation towards a more outward-looking product unit with a focus on new customer-tailored functionalities and applications in the area of active safety that can be distributed on a volume market as early as 2022.

At the beginning of July, the company delivered and invoiced the purchase order that Mercedes-Benz placed at the beginning of the year at the Startup Autobahn event.

For the second time this year, Terranet was hand-picked by Mercedes-Benz to participate at the Startup Autobahn at the end of July. Terranet was nominated and won the award for best presentation. Terranet demonstrated its technology in a specially adapted garage environment in Stuttgart, where the Daimler Group’s COO Markus Schäfer was in attendance. The demo showcased the next iteration of the object detection software, VoxelFlow in a Mercedes-Benz Maybach (S-Class Sedan). In preparation for the event, stringent field tests and functional testing were carried out throughout the early summer on the motorway in Ljungbyhed in Skåne (formerly F5), with a test rig that included the laser scanner and event cameras.

The company has entered into an important change process, including restructuring and new recruitment, which will shift operations towards a more product- and customer-centric organisational structure. The company has also opened a new office in Obertürkheim in Stuttgart, which offers larger, more suitable premises in the heart of the European automotive industry. The office features a permanent VoxelFlow showroom (product exhibition), which will be ready for customer presentations starting in November.

In August, Terranet received a suborder of MSEK 1.6 from holoride. The project aims to build a common product and user interface for VoxelFlow with augmented reality and in-car entertainment. The project focuses in particular on how data and safety-critical information generated by VoxelFlow can be reused by holoride. The deal is part of the partnership solidified earlier this year, whereby Terranet, as lead investor, partnered with Audi to invest MEUR 3.2 in holoride (corresponding to an ownership interest of approximately 11%).

During the period, the company saw yet another standard-breaking method patent published for its VoxelFlow technology, which is now capable of higher precision and image resolution in object detection and collision warning. Terranet has reached a couple of important milestones during the period. First, we have achieved the integrated auto-calibration of VoxelFlow, and second, the form factor has been scaled down, as the hardware has been reduced from three cameras to two.

In the fourth quarter, Terranet announced a new cooperation agreement with NEVS (New Electricity Vehicle of Sweden). Terranet has long been in communication with NEVS (formerly Saab Automobile in Trollhättan), a company that develops

electric cars and self-driving vehicles. The cooperation agreement concerns the joint marketing of full self-driving systems to major global customers in the mobility sector, public transport, controlled test environments and amusement parks. Holoride is also included in the agreement with the aim of marketing a complete solution with a focus on vehicle safety and the user experience for passengers in autonomous vehicles.

The company is entering a period ripe with opportunity in a segment that is characterised by strong growth. In the quarters and years ahead, the company will focus on intensifying its efforts to demo its VoxelFlow technology for market leaders in the automotive industry as well as the design and distribution of its first product in micro-mobility.

On 6 December, Terranet will hold a physical and digital capital market day at Gamla Posthuset in Stockholm together with Mangold Fondkommission, which offers financial services to companies, institutions, and private individuals. Most of our closest partners will be in attendance. I wish to sincerely thank all of our partners and collaborative partners for their continued trust in Terranet.

Pär-Olof Johannesson

CEO Terranet

Find full report here: https://terranet.se/en/reports/

Capital Markets Day
On the 6th of December Terranet welcomes you to an exclusive day where you will be exposed to some of the avant garde brains in the Terranet ecosystem and the global automotive industry. Monday December 6th at 10:00 am to 02:00 pm. Address to: 7A Posthuset, Vasagatan 28, 111 20 Stockholm Sweden

Please ensure you reserve your seat for the event in Stockholm here, only limited seats available: https://bit.ly/3mflryl

Each presentation will be broadcasted and distributed live digitally. Sign up here: https://bit.ly/3B308UP

About Terranet
Terranet AB (Nasdaq: TERRNT-B). With a vision to save lives Terranet designs and develops a new class for vision-based sensor systems, used for road safety. It markets and delivers a software stack with features available across vehicle platforms and car models. The technology was handpicked and showcased twice at Startup Autobahn in 2021. The company is located in Lund and Stuttgart. Terranet AB (publ) is listed on the Nasdaq First North Premier Growth Market. Discover more about Terranet: www.terranet.se/en/. You can now subscribe to Terranet’s newsletter, sign up at: www.terranet.se/en/ir-2/

For more information:
Michaela Berglund
Executive VP

+ 46 703 370 346

This information is such that Terranet AB is required to make public in accordance with the EU’s Market Abuse Regulation (MAR). The information was made public by the Company’s contact person above on November 19, 2021 at 8.00 am CET.

Certified Adviser: Mangold Fondkommission AB, 08-503 015 50, ca@mangold.se