Slide 1: Financial Results Briefing Material FY2022 Q3
Financial Results Briefing Material FY2022 Q3 (ended Sep 30th, 2022) Neural Pocket Inc. Nov 11th, 2022 Translation of original Japanese version Copyright © Neural Pocket Inc. All Rights Reserved. 1
Slide 2: Key highlights for FY2022 Q3
Key highlights for FY2022 Q3 (ended Sep.) Net sales Quarterly financials +141% growth turned Black Q1-Q3 cumulative net sales EBITDA & Net Income YoY growth Overseas Post M&A expansion Synergy creation Launched smart city biz in SE Continued growth of Neural Asia with Thailand entry Marketing post F
Slide 3: AI Industry Trend and Company Advantage; FY2022 Q3 Highlights; Service Progress
• AI Industry Trend and Company Advantage • FY2022 Q3 Highlights • Service Progress Copyright © Neural Pocket Inc. All Rights Reserved. 3
Slide 4: AI industry expected to grow to overwhelming market size
AI industry is expected to grow to an overwhelming market size compared to other growth areas Global market size comparison (Billion USD) +1,718 2021 2030 1,812 +640 +553 679 702 +78 82 149 94 3 39 Web 3.0 Metaverse SaaS AI Emergen Research*1 Grand View Research*2 Allied Market Research*3 Grand View
Slide 5: AI industry shifting from selling AI tech to AI-enabled services
The AI industry is shifting from selling “AI tech itself“ to selling “AI- enabled services” AI tech provider：Selling AI itself Catering to the needs of individual companies, providing customized Project commission AI tech Sales of AI Revenue technology from clients experiments licenses share AI serv
Slide 6: AI technology is evolving along with the industry's growth
AI technology is evolving along with the industry’s growth Cloud AI Edge AI Conventional approach Our approach Original data (video, etc.) before AI analysis Metadata after AI analysis (text data) Real-time marketing and security data AI analysis in a large cloud server Shift Large scale Small scale
Slide 7: Adoption of edge AI technology is accelerating at global leading companies
Adoption of edge AI technology is accelerating at many global leading companies NVIDIA DRIVE AGX Xavier Accelerate development of Ethos NPU series, Edge- edge devices for autonomous oriented chips specializing in driving to achieve low latency deep learning to achieve high- and safety unaffected by
Slide 8: Edge processing is rapidly expanding
Edge processing is rapidly expanding Total data processed at the edge vs in the cloud*1*2 Growth forecast Through 2018 to 2025 Through 2018 to 2025 175 ZB Edge CAGR*4 131 +69% Cloud 32 ZB*3 3 CAGR*4 44 29 +6% 2018 2025 *1 Source for Edge share: What Edge Computing Means for Infrastructure and Operat
Slide 9: We enable smart cities with edge AI
We enable smart cities with edge AI – Our edge AI platform allows for the circulation and utilization of data in physical spaces Edge AI platform to manage smart cities AI technology Edge technology Privacy protection Smart City that Neural Pocket envisions Immediate parking, No restraints, Flowing
Slide 10: Neural Platform is a comprehensive environment for AI software development and operations
Neural Platform is a comprehensive environment to facilitate AI software development and day-to-day operations Functions Image and overview Functions Image and overview ▪ Manage and provide AI services ▪ Real-time management of (AI models), such as people flow operational (alive/ dead) status of Equ
Slide 11: Neural Pocket possesses proprietary AI libraries and technologies
Neural Pocket possesses proprietary AI libraries/ technologies to enable the AI-ization of society and smart cities People attribute analysis People emotion and thought analysis Gender/ age Line-of-sight Facial expression, Voice/ emotion Natural language Facial recognition Fashion analysis estimatio
Slide 12: Our AI libraries operate on a variety of technical standards
Our AI libraries operate on a variety of technical standards, where we contribute as an Edge AI Platformer Examples of edge devices running our edge AI Processor JETSON Xavier NX JETSON Nano JETSON TX2 OS Language Processor OS Language Copyright © Neural Pocket Inc. All Rights Reserved. 12
Slide 13: Established position as an edge AI platformer
As business models in the AI industry diversify, we have established our position as an edge AI platformer Business model Edge AI Platformer AI service provider Cloud AI Service Selling AI-enabled services Scaling service AI tech provider Selling “AI tech itself” Commissioned Commissioned AI Develop
Slide 14: Accelerating growth since inception in rapidly growing edge AI market
In the rapidly growing edge AI market, we have been accelerating growth since inception Company growth strategy and expansion progress Track record Net sales M JPY 4,500 Focus Channel Inc., NETTEN Inc. consolidation Annual growth rate 4,000 since company founding Sep 2022 3,500 3,000 Parking mobilit
Slide 15: Smart city AI services largest and fastest growing segment at SenseTime
“Smart city-related” AI services is both the largest and the fastest growing segment at SenseTime, the world’s largest AI company The use of AI as a platform and utilization in Smart Cities is driving company-wide growth 2020 2021 +57% (million RMB) +32% 2,143 1,958 1,485 1,369 -4% +16% 434 415 158
Slide 16: AI platforms expected to emerge from Asia
AI platforms expected to emerge from Asia, where the development of smart cities are most rapid U.S. companies are hesitant towards the usage of AI in physical spaces Withdrawal from face recognition In Japan, legislation for business (Jun, 2020) AI utilization and it’s implementation is in progress
Slide 17: AI Industry Trend and Company Advantage; FY2022 Q3 Highlights; Service Progress
• AI Industry Trend and Company Advantage • FY2022 Q3 Highlights • Service Progress Copyright © Neural Pocket Inc. All Rights Reserved. 17
Slide 18: Highlights for FY2022 Q3 – Continued growth and overseas expansion
Highlights for FY2022 Q3 (ended Sep.) – Continued growth and overseas expansion Growth Profitability Sales Force Evolving business model Sustained high gross margins AI startup with large whilst rapidly growing topline allow for strong future profitability 80+ sales staff Net sales growth Gross prof
Slide 19: Established Thai subsidiary for green field development in Southeast Asia
Established Thai subsidiary aiming to participate in green field type development popular across Southeast Asia Neural Pocket Thailand (Bangkok office) and CRC Tower where the base is located ©P&T Group ©P&T Group Company name Neural Group (Thailand) Co., Ltd. Representative Kazuma TAKENAKA, CEO/ Ma
Slide 20: Vast infrastructure investment expected in Thailand and SE Asia
Vast infrastructure investment expected in Thailand and SE Asia Urban population growth Urban development market size (over the past 10yrs)*1 (over the past 10yrs)*1 (millions) (trillion dollars) 60.1x 3.9x Urban dev. 58.50 9.55 across ASEAN 2.47 0.97 Japan ASEAN Japan ASEAN i Concentrated investmen
Slide 21: Edge AI critical for compliance with Thailand's Personal Data Protection Act
Edge AI is a critical technology to comply with the newly enacted Personal Data Protection Act (Jun 2022) in Thailand Conventional cloud AI Edge AI: Compatible with PDPA* ※Personal Data Protection Act Large cloud AI Small cloud AI processing Text data processed run in the without personal cloud info
Slide 22: Neural Pocket Group
Neural Pocket Group (as of Nov. 11th, 2022) Ownership 100% 100% 100% Thailand Neural Marketing Inc.*1 Neural Engineering Inc. Neural Group (Thailand) Co., Ltd. Established Aug 20th, 2003*2 Oct 1st, 2021 Nov 2022 Business Development, fabless Installation, operation, and Sales of AI services and syst
Slide 23: FY2022 quarterly financials (Illustrative)
FY2022 ending Dec. quarterly financials (Illustrative) Net Sales Gross Profit EBITDA Net Income (Million JPY) Annual forecast Annual forecast Annual forecast Annual forecast 3,200 2,100 350 -622 1,200 1,000 800 734 640 600 515 513 418 400 351 200 32 41 0 -41 -45 -117 -800 -781 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 24: Net sales trajectory
Net sales trajectory – Sustained steady growth post Q1 M&A +150% (Million JPY) (YoY growth) 734 640 513 288 294 251 226 184 202 163 164 126 91 62 33 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2019 FY2020 FY2021 FY2022 (2nd term) (3rd term) (4th term) (5th term) Copyright © Neural Pocket Inc. All
Slide 25: Gross profit trajectory
Gross profit trajectory – Steady expansion of gross profit, which is the second most important performance indicator after sales Gross profit margin (% of net sales) 64% 65% 64% 81% 93% 93% 88% 81% 87% 77% 81% 64% 69% 65% 70% +117% (YoY growth) 515 (Million JPY) 418 351 250 237 203 152 152 162 157 1
Slide 26: Trajectory of Neural Pocket Group full-time employees
Trajectory of Neural Pocket Group full-time employees*1 180 (# of staff) 168 52 38 42 34 25 18 ’19/6 ’19/12 ’20/6 ’20/12 ’21/6 ’21/12 ’22/6 ’22/9 FY2019 FY2020 FY2021 FY2022 (2nd term) (3rd term) (4th term) (5th term) *1 As of Sep 30th 2022. Excludes executives (full-time board directors, auditors,
Slide 27: Consolidation of prior service domains
Consolidation of prior service domains NETTEN Inc. and Focus Channel Inc. have been consolidated as of Aug. 2022 to pursue further synergy creation. As a result the service domains have been reorganized since. Before (until FY’22 Q2) Digi-Solution Service AI Media Service Lifestyle Service +others*1
Slide 28: Net sales by service domain
Net sales by service domain (million JPY) +150% 734 Digi-Solution Services Lifestyle Services 640 131 70 513 34 288 294 603 570 251 56 66 32 226 479 202 20 184 163 164 32 65 126 22 25 91 31 219 232 228 206 62 32 141 139 152 137 33 34 95 30 3 59 28 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2019
Slide 29: FY2022 Q3 consolidated Statement of Income
FY2022 Q3 (ended Sep.) consolidated Statement of Income FY2021 FY2022 Q1-Q3 Q1-Q3 Increase Increase (million JPY) ended Sep. ended Sep. Value Percentage Net sales 784 1,887 1,103 +140.7% Gross profit 643 1,285 642 +99.9% % of net sales 82.0% 68.1% EBITDA 208 -55 -264 - EBITDA% 26.6% -2.9% Operating
Slide 30: FY2022 consolidated forecast (Unchanged)
FY2022 (ending Dec.) consolidated forecast (Unchanged) Forecast unchanged with a Q4 bias, and a net loss of 622 million yen for the current term due to a one-time amortization of goodwill, etc. recognized in Q2. FY2021 FY2022 FY2022 ended Dec. ending Dec. ending Dec. (million JPY) results Q1-Q3 cum.
Slide 31: FY2022 Q3 consolidated Balance Sheet
FY2022 Q3 (ended Sep.) consolidated Balance Sheet (million JPY) FY2022 As of Sep 30th Total current assets 2,090 Cash and cash assets*1 1,244 Total non-current assets 1,772 Total assets 3,862 Total liabilities 3,384 Interest bearing debt 2,956 Total net assets 477 Copyright © Neural Pocket Inc. All
Slide 32: Neural Pocket Group operates locations internationally
Neural Pocket Group operates 14 locations internationally, possessing the necessary infrastructure to support the development of smart cities Neural Pocket Inc. locations Neural Marketing Inc. locations Bangkok Office*3 Niigata Branch Singapore Branch Nagoya Branch Sendai Branch Neural Marketing Inc
Slide 33: Org structure
Org structure (as of Sep. 30th, 2022) • Current org structure allows for different business divisions to pursue scale, independent of each other • Broad executive team in place to lead each of the divisions Board of Directors CEO Technology Financial Marketing Digi-Solution Lifestyle Development Man
Slide 34: Our management team
Our management team Name Career overview Former Partner at McKinsey, working in 11 countries including Japan, Germany, and the U.S as CEO leader in IoT and AI field. Founded Neural Pocket in January 2018 with the goal of realizing the Roi Shigematsu digitization of the real world through AI. He hold
Slide 35: General shares/floating shares increasing since IPO
General shares/ floating shares increasing since IPO (as of Oct. 31st, 2022) General shares/ floating shares*1 4.6% VC/ Angel 18.8% investors*2 24.4% 29.0% Total issued Total issued Total issued 13,784,000 14,013,200 12.6% 14,436,199 shares shares shares 62.1% 68.6% 8.9% 71.0% Management*3 Aug. 20th
Slide 36: AI Industry Trend and Company Advantage; FY2022 Q3 Highlights; Service Progress
• AI Industry Trend and Company Advantage • FY2022 Q3 Highlights • Service Progress Copyright © Neural Pocket Inc. All Rights Reserved. 36
Slide 37: Digi-Solutions service lineup
Digi-Solutions service lineup – Providing various packaged AI services Parking management system to Visualization .. of vehicles Visualization of people flow for Ready-to-install AI signage with eliminate waiting time through license plate analysis improved facility operations viewership and audienc
Slide 38: Digi-Solutions unit installation trajectory
Digi-Solutions unit installation trajectory (Cumulative) 1,265 units 980 units 547 DigiLook*1 317 644 units 106 406 units 485 526 SignDigi*2 384 185 units 301 103 121 95 units units 192 DigiPark/ Digi Flow 97 154 178 87 90 105 etc. 16 24 ’21 Q1 ’21 Q2 ’21 Q3 ’21 Q4 ’22 Q1 ’22 Q2 ’22 Q3 *1 LED signag
Slide 39: Digi-Solution services introduced across Japan
Digi-Solution services introduced across Japan Recently disclosed developments Muroran city Sendai city Regional revitalization People flow in urban centers, with AI-enabled urban evacuation center operation optimization development Kashiwa-no-ha smart city Outdoor AI safety surveillance for town mg
Slide 40: Mitsubishi Estate: Detection of people flow in Marunouchi
Mitsubishi Estate: Detection of people flow across 3 major buildings in Marunouchi Total guest count and the number of guests staying within the building at any given time is visualized. Edge AI processors were connected to existing surveillance cameras across events spaces, entrances and exits, and
Slide 41: Huis Ten Bosch Amusement Park parking lot visualization
Huis Ten Bosch Amusement Park Parking lot visualization Where system was Edge AI cameras installed at the entrance/ exit of (4 cameras in total) and installed*1 webpage view for visitors displaying congestion in real time Parking lot No.1 Entry/ exit License plate detection camera detection camera V
Slide 42: Digi-Thru license plate detection at Mitsui Fudosan logistics facility
Introduction of "Digi-Thru" license plate detection to Mitsui Fudosan's logistics facility Edge AI cameras installed near entrances and exits detecting license plates of moving vehicles to visualize traffic volume, determine vehicle attributes, and analyze utilization. The data is used to eliminate
Slide 43: Customer testimonials for Digi-Solutions
Customer testimonials for Digi-Solutions Tokyo Tatemono Co., Ltd. Digi-Park case example Enhancing customer experience and operations every day in large parking lots Reference: Available on our website from November 2, 2022. (https://digisolution.neuralpocket.com/usecase/tokyotatemono) Copyright © N
Slide 44: Oedo Line Tochomae Station: AI signages using local 5G
Oedo Line Tochomae Station: Installation of AI signages using local 5G 【Overview】 • Joint initiative with JTOWER, NTT East, and FCNT to verify use cases of new digital technology in train stations using 5G technology • Installed AI signage in stations to broadcast information to commuters and measur
Slide 45: Focus Channel: Media overview
Focus Chanel: Media overview Reach approx. 190K affluent consumers/ residents in the metropolitan area ➢ # of views (Impressions) Stable reach even during Covid ➢ View frequency Located in living spaces and repeatedly views by all residents (1.5 million estimated monthly view count per program) ➢ Ta
Slide 46: Delivering content that enhances residents' lifestyles
Delivering content that enhances residents' lifestyles Broadcasting lifestyle-oriented content targeting affluent residents Area-specified ads Varon Mitsui Sumitomo (Men’s skincare) Card (Credit card) Initiated area-specific ads in Nosh ZAMET central Tokyo with updated CMS (Delivery healthy foods) (
Slide 47: Announced collaboration with GROWTH taxi media
Announced collaboration with GROWTH taxi media • Start of collaboration with "THE TOKYO TAXI VISION GROWTH" (operated by News Technology Co., Ltd.), one of the largest taxi signage media in Japan • Started sales of "Executive Reach Plan," delivering information from living spaces to mobile spaces ta
Slide 48: DigiLook: Top share in Japan with over 10,000 LED signage installations
DigiLook: Top share in Japan with more than 10,000 LED signage installations #1 installations with more than 10,000 signages nationwide ➢ Unparalleled installation track record Experience in a wide variety of industries, including large corps, government offices, commercial facilities, and merchant
Slide 49: Vast potential of locations for Digi-Solution Services
There is vast potential of locations for Digi-Solution Services to be installed Figures represent # of locations within Japan Apartments Office Buildings Restaurants Large Scale Retail Stores ~200K ~10K ~700K ~130K Hotels Hospitals, Pharmacies Airports Fitness Gyms ~50K ~70K ~100 ~6K Electricity Dis
Slide 50: Appearances at seminars/events
Appearances at seminars/ events AI technology ▪ RX Japan NexTech Week2022【Fall】 Lecture title “Smart Cities Today” ▪ Macnica: Possibilities in Retail for Image Recognition AI Speaker on Image Recognition AI ▪ AI Innovation AWARD2022 “Future envisioned by Smart Cities” ▪ HONGO AI 2021 Judge ▪ JR East
Slide 51: Membership in public and private organizations related to AI and smart cities
Membership in many public & private organizations related to AI and smart cities Smart City related Ministry of Land, Infrastructure, Transport and Tourism Smart City Public-Private Partnership Platform Kamakura City Smart City Public Private Sector Research Association MaaS Social Implementation Pr
Slide 52: Industrialization of AI space is underway; transitioning to next stage
Industrialization of AI space is underway, and the company is transitioning to the next stage Industrialization • Winners/ losers emerge within Edge Dawn of technology technologies and de facto standards formed • Edge AI technology began to take • Edge technology platforms are to be off in 2018 form
Slide 53: Company mission: Update the world for a better tomorrow
Company mission “Update the world for a better tomorrow” Copyright © Neural Pocket Inc. All Rights Reserved. 53 53
Slide 54: Disclaimer
Disclaimer Handling of the material This document contains forward-looking statements. These statements are based solely on the information available at the time the statements were made. Furthermore, such statements are not guarantees of future results and are subject to risks and uncertainties. Ac
Slide 55: Copyright © Neural Pocket Inc. All Rights Reserved.
Copyright © Neural Pocket Inc. All Rights Reserved. 55