Cyanconnode Holdings (LSE:CYAN) — Investor Presentation

0:08 Good morning, ladies and gentlemen, and welcome to the CYANCONNODE Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. I'd also like to remind you that this presentation is being recorded. Before we begin, we'd like to submit the following poll.

0:39 I'd now like to hand over to John Cronin, Chairman and Heather Peacock, CFO of CYANCONNODE. Good morning. Good morning, Mark, and good morning, shareholders and investors. Really pleased to be able to talk with you today and give you a chance as well to ask questions. And really that is the main point of this is for you to ask questions. I know there's been some pre submitted questions as well, which is good, but it is to sort of air what your concerns are, what your thoughts are, and then we can give you the answers accordingly. So we're going through a short presentation that myself and Heather, the group CFO, will talk you through. And once we've done that, we will move then to q and a and be able to have that dialogue that I'm sure many of you would like.

1:28 So just moving on to the next slide. As you know, we're on AIM, so there's no forward looking statements that we're allowed to make, as you can appreciate. And and therefore, we can answer only you know, we may if you ask a question about something that's forward looking, then we may have to say, sorry. We we can't do that. And it it's the rules have been on AIM that restrict us. Generally then, looking at what we offer today and who we are, just to recap in case there's some new shareholders on that hasn't heard any of the presentation before. We are headquartered in Cambridge, UK, and then we have a subsidiary office in India in Googan. And between the two sites, we've got about 70 employees, and that covers everything from you know, finance all the way through to delivery, engineering, software and hardware engineers, and project managers, and salespeople.

2:30 What we do have we do have a fully, IPV six six six low pan, standards based, portfolio. That's an end to end solution. And today, the end to end solution, the first application on that platform that we have is for electricity metering, and that's really taken a lot of our focus and attention. Notwithstanding that, we can actually go to other applications such as gas metering, water metering, also lighting. And and the latest one that we've been looking at is EV charging, as you know, in The UK in particular and followed with the rest of the the world, you know, diesel and petrol cars have been stopped and everything moving to electricity. So we've been looking ahead to use the the mesh network to, you know, hook up charging stations throughout The UK and other countries in the world. But, again, those sort of applications do take development money.

3:30 And as you know, for those that have followed us for a number of years, we have spent on development something like $50,000,000, and that's fully done for the electricity application that we have today. And as we have done, we've also enhanced the product set this year in 2020, and that product set's been enhanced by adding not only mesh capability now, which is our core sort of communications platform, but also connections for cellular connections, either point to point, as we call it, directly, or indeed we have a hybrid where we use backhaul, using cellular connections from the gateways. And indeed, we've also improved the gateways by having an in meter gateway so that all their intelligence that is sat in the box on the telegraph pole outside can now sit inside one single meter and do the same job as before where it can hook up up to, you know, 500 meters depending on the environment and and the technology that we're deploying.

4:37 It is a fully integrated system. You know, it covers hardware communications, software. And one of our strengths at CYANCONNODE, apart from out of the box system, is the integration that we do, the capabilities that we have for integration. When you look at then the financials just in a snapshot, Heather will talk further later on, but basically, today, we've got, you know, 50,000,000 worth of contracts. These are contracts that are with cash behind them, have actually been won through public tenders, have actually got dates to for delivery, and they've got milestones.

5:25 We've had contracts in the past that haven't had dates or milestones, but these all of these have that and actually are all being rolled out at different stages as I speak. We have roughly roundabout £21,000,000 worth in India and £29,000,000 of the rest of the world. And we know that the pipeline that we've got is a qualified pipeline. We go through different stages, and that's about 300,000,000 worldwide. And that's without the opportunities in India of rolling out a 250,000,000 smart meters, And that's really making progress now in terms of what India will be doing in the future. And we hope and trust that we, you know, can have a big say in that and win quite a quite a bit of that.

6:18 Just moving on to the next slide that I've got here. So really, how we go to market is through partners. So we either go through a system integrator, a mobile operator, or a meter manufacturer. And you can see some of the names on the slides here that, for instance, a new one maybe to many of you is Schneider. Schneider have acquired Larson and Tubro in the last number of weeks. We know Schneider for the last number of years. Worked well with them. We know the CEO of Schneider in India. And, you know, we have worked with them in Thailand and other places because they've had a meter data management system, that software that we actually interface to. We don't supply meter data management systems. That's done on by others.

7:04 And Schneider have used an Oracle based system to go to market as well as others. So it's it's good that that acquisition has been done now and completed and therefore focused on winning new business. When you look at the the bottom number of names on the slide, you've got the meter manufacturers such as Genus, Larsen, Tubro. And and actually, L and T will also be using that that brand for for a while now. It won't disappear. And then there's HPL. So all those three meter manufacturers have more than 50% of the market in India. That's the static meters. And that's why mainly Genius and Larsen and Tubro are really winning the smart metering contracts in India.

7:52 And I'm pleased to say that, you know, now we have this year, roundabout 1,000,000 units that we've won in India that we're ready to well, we are deploying right now throughout different contracts that Heather will mention later on in this presentation. And that's on top of the 1,000,000 electricity meters and smart lights that we've already deployed globally to date as well. So we are starting to be able to talk about millions instead of hundreds of thousands, which is good. And it is all about having relationships. And it's interesting. Like the telecommunications market, sometimes you have a partner that or, you know, a customer that is a partner, And another time, yeah, they're in competition. And and that's just the way it is because, you know, we're not exclusive with any of these partners. They have the right to go work for others.

8:48 But in the main, it is all about the relationships and and moving forward. And in some cases where we there's a minimum of three bidders needed in a tender in India, for instance, all three of them have got CYANCONNODE technology inside them, and sometimes that that's that's very good with us. So in the main, when you look at out of the 250,000,000 that is gonna be rolled out over the next number of years in India, there's about 1,500,000 units today that's being deployed.

9:21 We are the largest RF mesh provider in India for deployments. Obviously, there's cellular that is really the competition, I would say, today. And cellular then where AS tell a a buying organization where they buy in bulk, etcetera, that's where they've deployed, you know, some cellular only type types of offering. Interesting enough, the I suppose as we get in The UK where we've got hotspots, there's a lot of hotspots in India, and those hotspots only give a performance of cellular then. It's about 89%, and we operate something like 99 plus percent on performance, which is really important to always be on and always be able to pick up the data for for those customers.

10:13 And this just gives you an idea on this next slide of how how it all sort of pulls together. So on the right hand side, this is what we call the local loop. So this is connections of RF mesh through to a gateway on the bottom right where all the data goes to a gateway, and then it's backhauled either over cellular or it can be Ethernet. So it could be in fiber as a backhaul or point to point cellular. So this is a new product that we can put onto the same platform as the OmniMesh head end system, and we take all that data back then to the meter data management system or to the billing system of the utility. And as I've mentioned, you know, we can have a hybrid where it can be, you know, all RF mesh in the last in the local loop and back all over cellular, or indeed, you know, we can then bring in where we have point to point cellular and RF mesh coming through back onto the platform, the OmniMesh, his his system.

11:19 And the important thing is that it's the integration work that we do. So even though we don't supply the meters and we don't install the meters, we actually help them to really understand what you, as a meter manufacturer, need to do to make your meter from a dub meter to a smart meter. And we ensure that integration is done and it works out of the box like getting your broadband device delivered to your home when you just plug it into your electricity socket. It normally just opens up and works, and that's what the product is we have today. And then on the back end, onto the billing system, we help the the likes of Oracle or Schneider, whoever's the meter data management system, and there's numbers of them that we work with, we help them integrate our product into the billing system.

12:08 And then what you've got is an end to end system. So somebody sat in a call center now, say, EON in The UK, and they can see the readings every fifteen minutes. They got demand response, time of day usage that they can do. They can see if there's something unusual in the network that might allude to that theft occurring, for instance. And what they can do is they they can then send out a command from their computer to the meter as long as it's got a relay in it, and they can disconnect any electricity going through that meter. And then they can send a man in a van to see if it's fraud or it's just a fault. And then if it's a fault, they can then send another command and put them back on onto the system. So that, you know, they they're actually seeing live what is going on at any particular point.

12:58 Just some of the benefits here, just to go through this particular slide here, the rainbow slide, it looks like, doesn't it? So you you've got a a return on investment for CapEx model because we do OpEx now as well. So CapEx models is eighteen to twenty four months for the utility, and that's a good ROI in anybody's business today. And some of the improvements that the utilities get is that improved billing efficiencies. Within three months, it's proven for the solutions we rolled out in India, they better cash collection of 25%. So they've increased cash by 25 because of the billing efficiencies that the system offers them. And that's a huge amount of extra cash that they've got.

13:50 If you think about it and that's why the OpEx model is good because you put the system in, you pay per meter per month over seven to ten years, and if you charge them something like $1.5 per meter all in, that's the meet physical meter, the communications, the meter data management system, they may be collecting $22.5, and therefore, it's paying for itself. Also, that the as I mentioned, the the coverage then that we get with combination, if we need to, of both mesh and cellular depending on the the environment and geographic coverage. But with any building, it it's not only well, it's where the cellular connection is. Even in the Central London where their stockbroker is Arden

14:36 on Old Broad Street, their building you know, when you look at it right on the roof, they get a good cellular connection. But as you go down through the fabric of the building onto their floor, which is the 12th Floor, they actually on some of the offices, they can't get a cellular connection. And that's where knot spots come in. So knot spots do occur in cities as well as, you know, places in Wales and Cornwall and Devon, etcetera. And we, you know, we complement then the cellular where it doesn't work with our technology. And as I mentioned, the the different applications that we can offer as well, you know, street lights, EV charging, smart electric gas metering and water. And I've already spoken about the integration and availability of the network. What else is that RF mesh is good and better than cellular.

15:24 It penetrates through reinforced concrete walls and buildings good.

15:29 And also what's really important is that we've modeled to do scalability to millions of devices on a network. And as you say, that's where we're getting to is millions of devices, especially looking know, what's happening in India with the rollout of the 250,000,000 meters there. So I'll just hand you over to Heather now. Hi. So just really talking through on this slide, talking through recent highlights. By recent highlights, it's anything that we announced as part of the interims sorry, part of the final results, which covered the period from the start of twenty nineteen to March 2020, and then also any developments that have happened since then. I think back in 2017, we had costs of over £900,000 a month, and we were very conscious, especially after we finished the development of OmniMesh, to work on costs down and and really sort of bring the cost down.

16:28 And we got them down to $3.75 approximately per month now. Cash and equivalents at the end of March was 1,200,000, and it's it's in the same region at the start of September. That's after receiving cash of 1,300,000 in in the sort of six month period since since March. We received during the the period from January 2019 until March this year, £6,800,000 of orders, And then we've won a further GBP 6,500,000 since then, which is the order that we announced last week. And approximately 80% of the revenue of these is expected to be taken during the next two years. 70,000 modules have been shipped since March, and that's despite COVID. You know, we there's still a requirement. People people need the the modules because in most countries, they're working that out to to deploy these contracts.

17:24 We've got contracts in hand in India alone with about 1,000,000 units to be deployed. During the period from January last year to March this year, we received about $4,100,000 from cash from customers. And then as I mentioned earlier, further 1,300,000 since March. A lot of that was actually because the end of twenty eighteen, we we took a lot of the revenue in the last couple of months. So, obviously, that that was cash to be collected from debtors at the start of twenty nineteen. So I have been asked from people previously why, you know, we've had cash that was higher than our our revenue for the period, but that that's the reason why. We've we launched over the end of last year and into this year new products, the long range module, the dual SIM cellular network interface card, and the in meter gateway.

18:17 And we're already seeing in contracts such as the contract that we announced last week that they are some of these products that are included in this. The long range module was developed mainly for for the HMpower contract, which we're deploying at the moment as well. Then the next slide, we get a lot of questions from people asking about, you know, I I guess, the the process that we go through from tender all the way through to winning a contract. And then most importantly to people after we've announced an order, how soon are they gonna see revenue and how soon are they gonna see cash from the contracts. So all the contracts that we do, we go through a competitive tender with a full bidding process. We have ecosystems of partners.

19:04 So, usually, our contracts will come from a meter manufacturer, sometimes from a system integrator, and they will be the one who will put in the the the bid, taking all of our you know, they'll take our proposal, our technology, and the whole bid from the whole sort of group of partners will be submitted, and that will be evaluated. Sometimes there may be demos that that we need to go through. And after that, the the utility will award a contract to our partner.

19:33 And we we will then start working. You know, originally, we would have put forward a proposal, but depending on what the final contract is that they receive from the utility, we will then start to work on a contract with them. And and, you know, it it it can take depending on the size of the contract and the complexity of the contract, you know, it it can take a little bit of time to to negotiate and finalize those contracts. For example, this recent contract that we awarded, the contract was awarded to our partner that we bid with, and they then decided that they wanted to set up an SPV to run the whole contract. So they there there was a a period where they had to set up the SPV, and then the SPV was obviously the contract was assigned to the SPV by the utility, and we then started the negotiation contract with with that partner who's then placed the order on us.

20:30 The the next part where I talk about so to date, the majority of our contracts have been CapEx contracts. We are moving to OpEx contracts, and the contract last week was partial. It was majority CapEx, but it was partial OpEx. So under a typical CapEx contract, that will consist of hardware, which will be modules and gateways. There will be the head end software, and there'll be services, which include the installation, commissioning services. There'll be training services to train the the customer to use the system. And then there will be a support and maintenance contract that will run typically for five years and then get extended after that, which that will usually start once the the installation is complete.

21:17 So

21:18 with with the contracts, eight sorry. About 60% of them is the hardware, the modules, the gateways. About 20% of it will be the software and the services, and then the remaining 20% will be the support and maintenance that runs over the five year period. And the way that the revenue works is we will take the revenue as soon as we ship the hardware to the customers. And, typically, what the majority of the contracts that we've negotiated recently, as we've announced, they have letters of credit. So we will receive the cash within three to four weeks of sending those modules to the customers. As I say, revenue will take straight away. And then the software and the services, we will usually take the revenue and the cash as those are deployed.

22:06 You know, they might be invoiced and collected in batches of, say, 10,000 units at a time. And the support and maintenance will run over the five year period, usually evenly spread over that five year period. Contracts can vary. What I talked about is a typical Indian CapEx contract. But, for example, in Thailand, the contracts that we've got in Thailand, that included an element of engineering work that had to be done because the the product had to be approved for the the the Thai market, and it was a new frequency.

22:40 And we we we sort of negotiated. We've received about 50% upfront on the contracts and then 50% as each of the different milestones are are reached. And on the hardware, 50% as they place an order for each batch of the hardware and 50% as as we deliver each of the batches. So as we announced back in December, it was 33,000 modules for for this initial part of the contract, And we've just we're in the process of manufacturing the final batch of that. We've delivered about 15,000 of that to date, and then we will deliver the balance of that before the end of the year. As I say, each contract can have slight variations, slightly different payment terms, and revenue recognition can vary.

23:28 Even just you know, it'll depend on the terms of the contract. So while we try to be as specific as we can, you know, there there will be variations at times. Typically, though, we could see about 80% of revenue of a contract being recognized in the first two and a half years after we announce a contract. So, you know, that that as I say, that that's typical for India. As we move into other territories, some we may see some other variations. Heather, can I just add as well that's worth that saying that Heather mentioned that there's a five year support and maintenance contract in the figures? Well, in reality, at the end of five years, it doesn't stop because if they stop paying the support and maintenance contract after five years, it means the smart electricity meter goes back to being a dumb meter.

24:17 What we've actually seen is, for instance, Larsen and Tubro sorry. I beg your pardon. Tata Power in Mumbai, the contract is via L and T. They have come to the end of their maintenance contract. And now last year, they renewed it for ongoing for twelve months at a time. So we see that it will grow and continue the support and maintenance beyond the five years. I mean, for instance, in The UK, we have a fifteen year support and maintenance contract. And, you know, really, meters today last for about fifteen years, the new smart meters. And if for those in The UK would recall the old whirly meters, as I call them, you know, they were in people's homes for thirty years, so they will definitely not stop.

25:03 So that's added revenue for us, reoccurring revenue going forward that would be longer than five years. Unless, of course, they change the whole system out, which they may do, but they're very unlikely, I I would suggest. The one thing I'd add is is that well, the the slight variation with the the new contract is that all the hardware part of it is is being treated the same way as these previous contracts on a CapEx basis. The software and the services as well as the support and maintenance are all being taken on a monthly basis over a five year period. So the initial installation will happen, and after that, we will see equal monthly payments over five years. So that'll be good to see, you know, equal monthly amounts of cash coming in and recurring revenues.

25:54 So we we often get asked from people as well about recurring revenues, how much of our contracts are recurring revenues. But because we are quite sort of early in the stages of of rolling out some of these larger contracts, the recurring revenues often come after the installation stages. So some of the contracts we are moving you know, we are seeing the recurring revenues coming through. The first MPWZ contract, for example, we installed that. We received the contract in May 2018. We delivered we delivered all of those 75,000 units

26:26 by the first part of twenty nineteen. Then we got a follow on order for 45,000 units of modules, and that was all delivered in the next couple of months. And that contract's gone really well, which is obviously why MPWZ were were keen on our technology while, you know, counted towards us winning this latest order. And but that original contract is really sort of in an ongoing maintenance phase where everything's been installed, and we're receiving, you know, the the services and and support maintenance on on the contract.

26:58 So the next slide is really to talk about why to invest, why we think that it's a good time, especially now, to invest. The first table, it was shown in our RNS when we announced the recent order. This is just in India.

27:11 The current contracts that we've announced and talked about recently make up 922,000 units. We've delivered 55,000, so there's 867,940 to go. And we expect those to be delivered within the next two to two and a half years at most. You know, we we we are really seeing a demand from our customers asking us to, you know, how quickly can we manufacture and deploy on those contracts. So, you know, it's we think that it's a really exciting time for for the stage. There there's, as I say, a million units to deploy in India, focus on India, UK, Sweden, Thailand, and The Middle East. We get requests, we've got other opportunities in other territories. But this is really where the key focus is right now because we're a small team, limited resources because we're focusing on where we've got near term revenues and near term cash. So these are the the territories that we see as as our main focus at the moment.

28:09 In India, there's a framework for 250,000,000 prepaid smart meters, which is going to be released by the government of India. They are looking at rolling this out via SPVs, so larger contracts than we would have seen previously. They because, obviously, if they're going to deploy that large number, they're not going to do it via sort of relatively small tenders. They see, you know, people getting together in in in sort of ecosystems and consortiums forming SPVs to roll out larger chunks of of the the opportunity. And, you know, the government is obviously serious about it because they allocated $3,000,000,000 in their budget earlier this year towards the whole rollout. In overall, as a group, we've got orders of 50,000,000 pounds, of which 44,000,000 is still to roll out.

28:59 We are vendor agnostic, which means that we can work with a number of different partners, meat manufacturers. And, you know, we've integrated with the three key ones in India who make up 50% of the market. That's L and T, as we've said, recently taken over by Schneider, Genius, and HPL. And we can connect anything in the network, and we've got blue chip partners. So that that's good from the point of view of getting paid and, you know, working with them. Their technology, which we integrate to, is obviously reliable as well. So it it all works well for a good a good contract.

29:36 Moving to metering as a service. So the recent contract was a partial OpEx, but moving to metering as a service on a full contract. What that means is we're seeing this request in India, and we're also seeing it in other territories where it makes sense for people to rather than invest a huge amount upfront in CapEx to they may award the contract to, for example, an SPV, and the SPV will then supply to the utility who will pay on a per meter per month basis. And we've got the opportunity where we can be involved in that SPV, or we could also be in other situations where we supply from a CapEx basis to the SPV and receive our cash and revenue in the same ways we currently do, but probably slightly quicker because the SPV will provide you know, a a funder will provide all the cash into the SPV who would then pay us for the cap you know, the the the part of the solution that we supply to the SPV.

30:33 And the reason why, obviously, utilities are are keen on this model is because, as John talked about earlier,

30:41 they will see savings from having the system installed, and the savings will probably be greater than what they're paying to us or to the SPV on a on a monthly basis. We've we've seen a number of infrastructure funds and and quite a few that we've actually engaged with who are really keen to to finance. So for example, Macquarie, there are green funds in India who are already keen to finance these sorts of opportunities. So, you know, that that's that's really the key thing that that we're working towards,

31:11 I think, you know, to to help with with the large rollouts in India. And, basically, with the market cap at the moment only in the region of 10,000,000 as of the the end of end of last week, there's obviously a large growth opportunity. Yeah. I think it's probably worth saying about COVID as well. So in the countries that we operate in, so in India, we know that there was initial sort of about four to six weeks where things in lockdown and didn't move that much, but our partners, both Genus, L and T, have full back work in their factories and production lines. And in fact, we see the growth, as I say, coming out of India. And remember that we don't get paid when it's installed in the home. We get paid when we ship the modules to the meter manufacturer.

32:04 And that's a good thing that is what's happening right now because we've been in the design and delivery stage of those modules to our customers in their factories, and they haven't had to go out to the homes to fit them. And that's when we get the revenue recognition and also where we get the cash as well, and that's why we've done so well to date. And the same in Sweden. Sweden just carried on, basically. They didn't do any lockdown unlike what we did in The UK. And then in Thailand as well,

32:37 where, you know, as Heather's mentioned, we get 50% of of the money actually, on the on when they order the modules, they pay us the 50 percent on the paper before we deliver them in the actual fact, which which is good. So we get them the cash, and and then we get the revenue revenue recognition after the cash, which is kind of interesting the other way around there. But, again, Thailand, you know, that with MEA, the utility there, they are open for business, and that's rolling out. Ironically, the country that has been affected more than anywhere is The UK. As we all know that there've been some issues with The UK, nothing to do with CYANCONNODE or the communications part, but the back office. And when they did SMETS one or version one where if you swapped utilities, it went back from a smart meter to a dumb meter, but now the rollout of SMETS two is there. And the government through because the issues with the back office extended the contract to 2024.

33:33 But I suspect that will go to early twenty five with some delays in COVID. Remember, in our internal budgets well, you won't know this, but just to say that in our internal budgets,

33:46 we've only got a small amount very small amount of revenue this year, not much, and also next year. We're at the we're all at the back end of the rollout because cellular is taking preference with mesh feeding the knot spots as we know as we call them in The UK. So that revenue comes later, but we haven't taken an awful lot into the our internal budget. And the important thing is, as Heather said, if you can work it out yourselves, that in up to two and a half years, we'll get 80% of the contracts that we have to date so you can work out what you think about the revenues. But I just thought I'd miss mention a little bit about COVID, how we're working, and things have done quite well. And, you know, looking at what we've done in the past despite COVID, this could be the best year for us actually in terms of revenue, which is ironic, but, you know, it's just the year that we've had contracts

34:42 unlocked. We're getting we got, for the first time, letters of credit, which we haven't had before, and that's helped with our cash and all the rest of it. So just wanted to add that to have this conversation. Yeah. I mean, typically, on the hardware, we will ship the hardware, and we'll get paid within under with the letters of credit, we receive the the cash from the bank after all the paperwork's been processed within a maximum of three to four weeks after us shipping the the modules to our

35:14 customers. On anything that isn't on letter of credit in India, it typically has sixty to ninety day payment terms, and and we do get paid. You know, we we I think we mentioned in the results that, for example, I think the first 40,000 modules for for for the JVVNL contracts. We've received all the cash against that. So, you know, that that that's positive. And and I think it was the first 10,000 for the Tanjeetco order we've received the cash on that as well, but that was by an HR credit.

35:47 Perfect. Thank you very much, And is that going answer the questions? Yes. Thank you, John. Thank you, Heather. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the top right hand corner of your screen. But I guess just before the company take a few moments to review the investor questions that have been submitted today, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard. I'd also like to remind you that feedback is important to the company. And immediately following the presentation, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations.

36:25 John here, I guess before we look at the Q and A that has come in today during the live event, obviously investors had the opportunity to pre submit questions. And if it's okay, I'd like to address those to you ahead of going into the live Q and A.

36:39 The first question that we have is, as India is the prime market at the moment of CYANCONNODE's RFMES solutions and will possibly be forced for some years to come, can you indicate or update the meeting on the present possible percentage target market opportunities for CYANCONNODE's RFMS solutions in comparison with the Indian government's aspiration to deliver two fifty million smart meters over the next three, five, seven or ten years? And perhaps I could address that to you, John. Yes. Yes, sure. Thanks, Mark. Yes, good question. And I mean, as I did indicate in the presentation, CYANCONNODE today is the leader of mesh solutions to to the Indian market. And, you know, as I mentioned, cellular is is the the competition, if you like. However, now if you think about our platform, we we can now offer mesh and cellular through our platform. So that sort of opens that that market more for us. So when you look at the 250,000,000 that's is the addressable market and that's just electricity, then, you know, look, you know, there can't be any forward looking statements, but, I mean, I'd be surprised that in ten years that, you know, gosh, you know, we'd be in a good place to, you know, target really sort of 50,000,000 of that.

37:59 And, you know, obviously, depending on the the next three to five years of what we get, as I say, we're expecting significant revenues to what we've had in the past because of the position that we now have and the partners that we have. You. Got as I say, we've got about nine questions in total. So the second question that came in is with the confirmation recently of the updated CYANCONNODE partner list and the fact that mostly all of CYANCONNODE's partners will at some time work with each other, sometimes working with each other to the exclusion of CYANCONNODE for whatever reason, can you simplify how this works in practice for CYANCONNODE? Yeah. Sure. As illustrated in the presentation, as I mentioned, there's sometimes I think I have answered this really in the presentation, think, about it is is, you know, sometimes there are partners, sometimes there are competitor, you know, because none of it is exclusive.

38:58 Why would we want to go exclusive? We we like to sort of go with whoever's got the best solution, the capabilities to deliver, and the the lowest cost, of course. So we always want to be flexible, really, in in the partners that that we have. And as I say, you know, it's an ecosystem of partners. We've got multiple partners. It's not as if we've only got a few. And we're actually always looking to extend that, and we are working with some new partners to be announced whereby we are integrating our cellular the sub cellular well, cellular and mesh modules into their smart meters and the communication platforms. You.

39:44 Follow on question here is do you see any evidence of increased RF only tender project opportunities in India and also globally? Or do you see a 10 for a mix of solutions going forward, I. E, RF, cellular, PLC, solar, etcetera? Yes. I mean, it's very rare that you you see anything just on on one on one communications platform. You know, what I see is that there will be, you know, a hybrid of the local loop as I call it, you know, going to to the home is RF with cellular as a backhaul. And and that's really think about it, that cellular the mobile operators have to pay for their spectrum. You gotta remember that RF is actually unlicensed spectrum, so you don't pay for it. So if you think about it from a mobile operator, we're like an extension to the home in the in the in the local loop, as we call it, the last mile.

40:39 And therefore, I see that there'll always be hybrid and that within that, there'll be point to point cellular with backhaul and RF mesh as well. So, yeah, it it is really just to have a combination. That is that is why we've actually opened up the capability to have cellular throughout our platform, our head end platform, to offer both. I don't I don't see really one being more so than the other, to be honest. I don't see that RF mesh that, you know, is big in The USA as well. We'll continue to have a good dominance as well as cellular going forward on the projects. Thank you. The next question, are any potential smart water gas meter opportunities in India additional to the two fifty smart meter figure proposed by the Indian government?

41:33 Yes. So that two fifty million that everybody quotes is actually electricity metering. And there are opportunities for smart water gas and also for EV charging and also for streetlights. Now all of those is really for you know, we would require additional resources and some development on those other products. You know, today, we've developed, you know, for the market of electricity metering, and and it's there for for you know, that's the low hanging fruit, if you like. So we feel that it's better to focus on that, and then we can address the the other opportunities later on. You. Heather, I'm just going to jump one question and go to the next question here.

42:18 Can you please clarify why some details are not always included for a contract that has been awarded at the time of an r and s by the company on that particular contract. Sometimes the value is excluded. Sometimes the number of units, solutions are excluded. There have been occasions where the meter manufacturer and or the utility have also been excluded. So what is the reasoning behind the varied detail given at the time? Sorry. Sorry. My connection lost everything. Yeah. No. On on on that, you know, it's all going to depend on we've got to remember that we we'd love to put as much information out as possible, but it's not only shareholders who who read the RNSs. You know, the competition reads, so we've got to think about, are we giving away too much information if we're saying, for example, it's it's 10,000 units and it's got a value of a 100,000, then it's obviously very easy for people to to work things out.

43:20 And there's also other, you know, other customers that that might look at this. Sometimes it might even come down to NDAs. And and, generally, we we always send the RNSs to our partners to give permission. Sometimes they don't even want their names and the details disclosed. And other times, as as you've seen, they will even provide a quote. So it really depends on the partner that we're working with and sort of getting agreement with them and considering the sort of any commercial sensitivity around it. Thank you very much. John, perhaps I could address this one to you. With the inclusion of the updated CYANCONNODE Partners list within the full year results video presentation, there was an update that included the acquisition of Larsen and Toubro by Schneider Electric with a brief description of the potential benefits to CYANCONNODE.

44:11 Is there anything else that you can share about any other partners at the moment, old or new, that may be of interest? Yeah. Well, again, I think in the main, I did talk about partners in the presentation. And, you know, let let's not forget Thailand that, you know, JST, our partner, and also is one of our largest shareholders, but also fourth in Thailand that work closely with JST hand in glove. They're quite a large system integrator, and they're doing really well in tie in Thailand. And, you know, not only for the contracts that we have, but also looking at other business development opportunities in Thailand through those two partners. So, yeah, it's continuing to prove in Thailand our capabilities and delivering against the milestones and plan, which is what we're doing, and then looking at extending that and other opportunities through JST and forth.

45:08 Perfect. Thank you. So we're down to the last couple of questions here. Perhaps Heather, can address this one to you. Can you confirm if the new order is the one that was commented on in the final results RNS? Also are the remaining two from a year ago still expected? Yes, it was the same order. We were in the final stages of negotiating the contract. So we're very confident about that. And that's why we put, you know, the the note in in the RNS. And then with regard to the other two, we've we've been advised that on one of them, we are one of the approved partners for it. However, the project has has recently been stalled because there was a Chinese communication provider that had been approved, and India at the moment is moving to a position where they are already focusing on the sort of make in India initiative and not not keen to be working on working with Chinese meter supply well, Chinese suppliers of any sort of communication or meters. I mean, for example, there's another contract where we've recently seen that Hexing, a Chinese meter manufacturer, has been removed from it.

46:17 Regarding the other contracts, there was a change in the government in the state. And as with our JVVNL contract, it it basically meant that with the new government coming into the the the state, they need to go through all the contracts and agree which ones are going to be approved first, etcetera. So, yes, we still expect it, but it could take some time. You know, as I say, as with JBPNL, it took some time for things to move through to the new government. Thank you very much. And finally, October 2018 was the last time that CYANCONNODE raised money through replacing. Could you explain the financial mechanisms and options you have been using to navigate the company through to its present position with all the challenges that the company has met during the last eighteen, twenty four months or so with COVID-nineteen, the Indian elections and including the delayed contracts?

47:10 So as I explained when I was talking earlier, we we sort of well, we came into the the the period at the start of 2019 with about 4,500,000 cash in the bank, we had taken quite a lot of the revenue from 2018 in the last sort of quarter. So customer collection all fell into 2019 on on those amounts that have been delivered. We we were also just at the start of really costing down, I think, our our monthly operating expenses at that time were around about 550,000 a month, and we've reduced down further really because as we went into last year, we could see that things were starting to get delayed due to the elections. We, you know, we took more of a conscious effort effort to reduce costs.

48:01 And then more recently into this year, all the contracts that we we've done, we've negotiated letters of credit. So we receive the cash when we deliver the hardware within a month of it, or we we get advance on on the orders. Last year, we received 824,000 in r and d tax credit. And this year, we took an advance on our r and d tax credit because of the fact that our year end was extended. So we knew that receiving the r and d tax credit cash was was going to be extended because it would be, you know, three months later that we could actually submit the tax credit. So, you know, I think that all all of that has sort of contributed to it, but, know, it's at the forefront of our mind to to sort of watch costs and watch the cash to ensure that we can manage it.

48:54 Thank you very much indeed. That I think take cares of the pre submitted questions. And of course, investor throughout this presentation have been able to submit questions during the live event. Obviously, only you can see investors' questions. So what I'd like perhaps do is ask you, if possible, to maybe start at the top and work your way through them. I guess you probably have touched on a number of these questions, I guess, through the Q and A of the pre submitted questions. But perhaps I could ask you to look at those questions, read the questions out and give a response where it's appropriate to do so. And for the benefit of investors, any questions that the company doesn't get to review during the meeting or answer during the meeting, we'll obviously be able to have a look on the back end to make sure that they can give an appropriate response if it is appropriate to do so. So if I stop waffling and hand back to you guys, the q and a tab, obviously, on the right hand side of your screen.

49:52 Yeah. Thanks, Mark. And and and the first one here, it talks about the EV application. Sounds interesting. Presumably, smart meters would only be useful if they were connected to a charging station in remote locations. Yeah. So so the opportunity for EV applications isn't just for remote locations. This is for, you know, urban as well. And so, you know, there are plans to roll out, you know, hundreds of thousands, if not millions, across The UK and across other places in the world. And and this is where mesh would come to in to its own. So you wouldn't necessarily have a like, electricity meter that goes in your home into an EV charging station. There'd be a device then we would provide the readings back, you know, the connections back for whoever supplied the EV chargers for them to then, you know, bill the the, you know, the people that use the EV chargers or or whatever. So, hopefully, that that's what you you get into on that. I mean, there's a subsequent question on that, but on EV applications. Could the smart meters also be fitted to vehicles to measure two way flow from the grid, I. From the grid to the vehicle and from the vehicle back to the grid to assist the grid in coping with searches in demand? So how we see this work, and remember it's early days, is from the charging point, obviously, the car

51:24 plugs into the charging point. At that point, the data would be able to be carried back for that. Obviously, we we we won't it wouldn't be good for in the vehicle itself, you know, as the vehicle's moving that is as long as it's stationary and it's plugged to the charger, then we can get data back. So, hopefully, I've covered the questions on the EV applications. The next one, how confident are you that the business is now self financing? So, Heather, I think you could answer this, and you would not need to revert to further equity based finance. Well, you know, we've talked quite a lot about the different funding mechanisms that we're using with the letters of credit.

52:09 And, you know, cash flows at the moment don't show that we need to go and get any further equity finance. And we we will always look at other options first, anything from I think there's another question a bit further on asking about the types of funding that we might look at. And letters of credit obviously help invoice discounting even if it's then debt finance. And, you know, we've obviously got r and d tax credits that we always rely on each year. So so anything possible that that we could that we think would be more suitable is is what we would go for. Thanks, Heather. Yeah. And then it says that given the number of smart meters deployed deployment have now been done, how big do you think is your remaining market opportunity? I think I answered that when I I did a question earlier on about, you know, this came in sort of before we got to the questions.

53:04 But, you know, the market is is huge. We, you know, India remains our number one market, you know, because of the opportunity of electricity metering of two fifty million. And, yes, we've got other opportunities in other places in the world, but I really focus. That's why we've got, you know, a legal entity there. That's why we've got 30 people operating in India purely for that big market. And we know that, you know, today that India loses $32,000,000,000 a year where they generate electricity distributed and not collected the cash, and the government are actively doing something about that to fix that issue. Because if they don't fix the issue, they don't grow as a a country. And if you think it's 1.9% of GDP that it costs them, they do need to need to sort that out.

53:55 Another one here sort of goes on about why is a smart meter provider choosing RF mesh, CYANCONNODE, rather than go on to a more standard, largely deployed technologies like LoRa, NB IoT, or Sigfox? Well, as I mentioned, there are two two parts of this answer, really. One is our platform can actually carry cellular. And cellular, actually, all of those that I've just mentioned, LoRa, MB IoT, or Sigfox, are all derivatives of cellular. The, you know, the the core is cellular. So we can hook up through our platform two g, three g, four g, five g cellular, LoRa, MB IoT, or Sigfox, any of that. Now Laura and any of those MB IoT and Sigfox on their own for electricity metering isn't that good. So, you know, you need two way communications.

54:51 Some of that is one way. You need to not only do the meter reading, but also what you need to do is have time and day usage, demand response. So the utilities require more data throughput for features and functionality of electricity metering other than, for instance, some of the LoRa, for instance, is better for battery operated solutions like water and also for gas metering. So for electricity, RF mesh and cellular is is the best for the functionality. And for instance, MB IoT, I do know that there are companies that invested a lot in that have pulled back from it actually because it hasn't delivered what they said. And one is a major UK global telecommunication mobile company, and one is out of Japan.

55:45 And that and you I think it was about three months back, they've put a note out to the market that they'll pull back on on that particular application. I don't hear much of Sigfox or Laura, to to be honest, in the in the markets that we operate in. Not saying they're not there, but I think they're more for battery operated as opposed to electricity smart metering. I think this next one, Heather, if you wanted to just talk through this one, I'll read it out, and then you can answer it. For the support and maintenance contracts, which last for five years, can you ensure that they stop working after five years, or do they keep going until they wear out? Would the terms of an extended contract be the same similar to the original five year contract? Well, I mean, we could turn off the system. The the the actual meters, obviously, they they what makes them smart is our technology.

56:37 So if it's not supported, we could turn that off. And when it when it comes to the extended terms, I mean, they could be similar. They could actually even be better. You know, it's it it it it gives us an opportunity to revisit rather than agreeing, say, a twenty year contract now. It gives us a chance every every sort of five years or or an ongoing basis after that to negotiate and dependent on on the level of support that's needed at the time. So, you know, it it it won't necessarily be the same, but it could be. Another one for you, Heather. Is there any additional margin benefits on the SPV model, the special purpose vehicle model? I think that's really going to depend on on the contract. You know, we we haven't yet won a full SPV model, so we're working on different models with with different people, but I think it's going to depend on on contracts really to to be able to say that fully. I mean, we we would build our normal model our normal margins into the contracts.

57:43 And and then, obviously, any financing on top of that would be any any finance charges that we have would be recharged. So I would think that it would be similar, but it's going to depend on contract by contract. Yeah. It will will depend on the contract. I mean, if it's a if we're not involved directly in the SPV, but a special purpose vehicle is being set up and we sell into it, as Heather mentioned earlier on in the presentation, that's still like a CapEx model to us. We we get that. If we're involved in the SPV model, then we would expect to share in in in the upside to that because generally, when you do a special purpose vehicle, when that's set up by an infrastructure fund, maybe after, I don't know, say say it's a a ten year contract, and maybe after five years, they've received their money back through the IRR that they've charged.

58:34 And after that, it's all upside. So sometimes they might sell an SPV to, you know, a pension company or whatever. And, you know, if we're part of it, we may get some additional benefit from that. But we're certainly not putting in that yet into our our model because it's the SPVs. It's new. You know, it's new for electricity metering that is. I mean, it's been going for years, you know, in lots of projects around the world. And we just want to see then how how that is. And we're working very closely with a lot of the green funds, and there's a lot of them now coming to us saying, yes. They can see the opportunity, and they're all gearing up to look at how best to to form this. So we're heavily working with them on that.

59:20 Another question here is, is there any dependency on spare parts of on equipment manufacturers in India on China? No. Obviously, nothing to do with CYANCONNODE. There are have been issues between India and China recently. We're fortunate that we have this process, and we've had it for a long time now that it's it's it's made in India, make in India as prime minister Modi say. So our hardware is actually made in India for India. It's manufactured in India for India, and the software then comes from The UK. So, you know, we're we're not dependent on that. I mean, you know, we have had components ourselves from China, but also we get them from Taiwan, Singapore, and actually, we even get some components from The UK.

1:00:11 So, you know, we're we're okay on that front as far as as made made in India goes. Here, we got do you prefer the metering as a service contracts compared to payment upfront? I suspect that metering as a service is likely to appeal more to investors than the on front payments model. I think you probably covered that. Heather, do you wanna add to anything from that? Yeah. I mean, one thing that that I think is is good about the metering as a service is that they would generally be the larger contracts because people are not going to do one of these contracts, I think, for a very small volume. So so, clearly, you know, that that that that's what would be great because there would be know, it's a it's a better way of of rolling things out and making sure that things actually happen and everybody gets larger contracts.

1:01:02 Mhmm. I've got one here. It just talks about the technology. As I mentioned, it can penetrate through concrete buildings. Is there any plan to use the technology collaboration with wireless? Well, technology will actually RF mesh is wireless. So, you know, we are that's what we are. Just to be clear, I didn't make that clear, it's a radio frequency is a wireless technology. I'm not too sure whether you mean that or or anything else, but that's just what I get from reading on that. And the next question, how many modules can you produce a month? Well, we can produce as many as needed. We got various, what we call, contract equipment manufacturers that can gear up for millions and millions of devices. You know, they can do three runs a day, if you like, production runs, and they're only running one, you know, which is quite easy what they're doing today. So, you know, all of that hasn't needed to be geared up, but they are they can gear up quite quite quickly. Heather, do you want to add anything to that at all?

1:02:07 No. I think as you say, I mean, the the main one that we use in India is is geared up. We've we've been setting this up for a number of months. So they they're working to one run, but we can expand those runs. We've got a couple of contract equipment manufacturers we can use in China. They're the ones that we use at the moment for contracts such as HMpower in in Sweden and also for the Thailand contract, and they could also be scaled up. So yeah. You know? So Okay. I've got I've got a couple of questions that are very similar, so I'll answer it. But it's the first time I've heard of cellular hotspots being the real opportunity in India. 11% of smart meetings was smart meetings were suggested. Please, can you elaborate? Yeah. I mean, we are not chasing in India just cellular not spots.

1:02:58 We well, that's what we have in The UK. Yes. It can be used for that wherever in the world. What's happening in India and other places in the world, different to The UK, is that we're providing the full end to end solution from the home all the way through regardless of a Nutspots or not. So Nutspots really has been just for The UK, and that's how The UK has decided to do the national program as one national program. Everywhere else in the world, every single other utility is doing its own thing, its own communications, its own smart metering. And therefore, that's where we go in and offer the full end to end. I mean, if a country changed to The UK model, then, of course, we we can do that. But the the benefit to us as investors and shareholders is that we we've got the full end to end capability, and and that's what we're selling throughout throughout the world.

1:03:58 Perfect. Thank you. I think I don't know if there's any others that have come in late, but, of course, we can review those at a later point. I think we are obviously pushing on the time. And also, I know that you're mindful that you want investors to give feedback. Okay. Thanks, Mark. Yeah. So what Is that okay? Perhaps I could just ask you to wrap up, then obviously, we'll direct investors for feedback. Yeah. Thanks, Mark, and thanks everybody for your your good questions, and I'm pleased that I could answer the majority of them. And, you know, what I would just leave you with is, you know, you know, despite COVID, this could be our best year in revenue terms. And believe you and me, we're we're pulling out all the stops to make sure that and ensure that we deliver on the projects that we've got right now. And it's very encouraging that even, you know, in COVID times, we are winning contracts, delivering contracts.

1:04:52 And more importantly, and everybody understands this as shareholders, we're collecting cash. So thank you very much indeed. Thank you very much, John. Thank you, Heather, for updating investors today. Could I ask investors not to close this session as you will be automatically redirected for the opportunity to provide the company feedback. If you access this meeting from our website, you will be automatically the form will automatically appear. But if you accessed it via the link in the email, you'll be asked simply to log in to provide the company feedback. On behalf of the team at CYANCONNODE and Investor Meet company, we'd like to thank you for attending today's presentation. That now concludes today's session. Good morning to you all.