Hello and welcome to Redeye. Today, we're joined by Lars-Inge Sjöqvist, Gapwaves CEO, to talk about the recent agreement with Bosch. The two companies will co-develop and produce a high-resolution radar antennas, and this is big news and very exciting. Welcome, Lars-Inge, and please- Thank you very much, Forbes. Thank you. Please talk us through the background for this agreement. When did you start collaborating with Bosch and what is the main reason for entering this deal? Yes. Yeah. We have been working with Bosch back and forth a little bit over the years, but they have not really been on the hook before. It started almost a year ago with a new contact again, and yeah, they were interested. Not least after the deal with Hella, they really were more keen, I can say, to collaborate with Gapwaves. They started some projects during the autumn last year. We started these commercial discussions end of last year 2021, and since then we have been in what we call a negotiation phase, and it takes some time to really get in the right mode with everything. We want to stay for our positions, and we want also the Bosch company to be happy with the deal. It took some time, but finally, now we are in an agreement, and we are happy on both sides. That's a good start. I understand that Bosch wants to strengthen its position within high-resolution radars, radar systems. Does Bosch have a product here at present or is this a new product for them? No. There is no imaging radar product coming from Bosch, what I know on the market today. This is really what they are interested now to go ahead with. They already have a number of customer interactions on their side with the OEMs and also with, I'm sure some other high-tech companies or, yeah, big tech companies as well. They are interested really to go into this segment and to make a very strong radar product based on our antenna solutions. That's really a nice position for us, but also I think for Bosch, they are very eager to go ahead with this and are hopeful for the future for selling this radar product as well. I mean, you will start collaborating now with Bosch on this very specific area. Do you think in the future there is an opportunity for Gapwaves to perhaps become an antenna provider for other areas like corner and front radars? You mean for Bosch as well? Yeah, for Bosch. Yeah, yeah. This agreement we are into today is not covering such corner radars or other stuff. Of course, when we are in 2026 and our exclusivity, as we have today with Hella, is so to say ready, that then we are open, and they are interested, I'm pretty sure, to go into another agreement also on the corner radar segment, if that still is of interest for Bosch. Yes, my belief is that that will happen. Excellent. Let's move on to production because there are some questions I would like to ask here. It appears the start of production will begin in 2026. What does the process look like until then, the next 4 years, so to say? This is we are in a phase that we are doing what we call early samples. They call them A, sometimes A samples, and we are together testing different both antenna structure, but also they are testing quite a lot on the radar equipment with the different chipsets, etc. This is ongoing now, and we have delivered I think three different batches or two different batches with antennas so far. They are very what I understand happy with the results, but it's also a lot of job on Bosch side really to get all the technique in the radar to work with this number of antenna elements we are using in this case. It's a quite big aperture for this antenna, and that means there is possibility to really have a high resolution, which is important, of course. Looking for some timeframe, I would say that there will be a time now until 2026 that we will do different prototypes in different phases. Normally, they talk about A, B, C, maybe D samples before start of production. During that timeframe, we also have to set up our facilities for production. We do have this time now to build up and ramp up, so we are ready for production. That means we will deliver the product to the customer, Bosch in this case, but we will also have in that assembly and also testing facility in our own. There will be a small factory for this. We will be lucky during that timeframe. This opportunity is, of course, very important because we take a bigger role, not only giving them a license for using our technology. That's a good start, really. Perfect. Because this agreement, unlike for instance, the one with Hella or Veoneer, you will take a much bigger responsibility in production. Is this a joint decision or is it Gapwaves that wants to take ownership of production? What is the reason for this? What a company coming with a technique like we do, a new technique into the market, first steps has been to really have the buy-in from the customers like both Veoneer, last but not least. Which was very important that Hella took the decision last year to use our technique. That's very important. Really to grow a company and have more turnover and also possibilities for result and being a part of the product, so to say, bill of material for a product, it's rather important to build up the company, and that has been our ambition from many years now. Now we really see that this is something we can do. Doing it on these quite big apertures, as I say, big antennas is maybe a better start than doing it for a very, very high volume product. We are not in multi-millions use numbers the first years on this product. We do have the time to make them work and have the facility up and running in our own, so to say. That's a very important step to, for us to build up the trust and also do antennas for many other customers in the future. Doing the full steps for the high volume like the corner radars we are into for Hella, it would be a little bit too much demanding in the start phase. I think this is a very good way for us to build up the next step of the company and be a part of the in the supply chain for radars. That's really our ambition. Perfect. Is there any exclusivity in this agreement? I mean, are you still open for business to supply other tier ones with high resolution? No, there is no exclusivity in this agreement. We do have what we call a joint development agreement, meaning that the IP we will, so to say, do together in this cooperation will be owned by both Bosch and ourselves. But it could also be used for other customers freely and also for Bosch for them. It's yeah, there is no exclusivity, and it's for us open to go to another customer using the same technology as well. That's okay. We do already have a number of customers working with imaging radars in the same segment. We couldn't sign anything which would mean that we should close business with other customers. That would not happen. In my view, this is a very major step for Gapwaves. We really have been taking a big step into being a part of the production supply chain and also being a part of really, as I said many times, we do have a technique which is very useful for this market, for the radars. We see that we will take a bigger portion of the total market volume over time here. I can also put in that this thing we did buy a company called Metasum some time ago. This is also part of what we are using in this technique, for example, for Bosch now. This is a combination of good things, two good things, I would say. Mm-hmm. A final question here on production. Can you talk a bit about the market for this kind of radar system, and help us understand, like, how many, like which volumes you could manufacture in the future? I can talk about the market. I will not give the numbers specifically for what we are talking with or having the agreement with Bosch, but I can give the market view from my side. Imaging radars will be a very big impact on these what we call autonomous driving vehicles. Typically, we see that you have today Robotaxis from different companies running on the streets. They do have both radar systems. They have cameras, they have lidar, and there are many systems, and they are together maybe a bit too expensive really to run these kind of taxis, and also autonomous driving as such. The radar solution will be more and more useful when we come up in this kind of resolution we can do with what we call high-resolution radar. Meaning that we can have maybe it will be a one degree or less in what you call that accuracy on the azimuth level, meaning that it will be very useful and it could, in many cases, you don't need the lidar maybe. That's what they really are aiming for, many of them who are in this segment. Because the lidar is still a quite an expensive product if compared to a radar or to a camera. The radar, as I said before, also is a very good product when you are in this kind of segment because you will not be affected of sunshine or by rain or by snow or even the fog, for example, which the lidar has some problem with. Should you use it, this kind of equipment or cars all over the world, it will be very important to do them robust and we know that the radar solution is absolutely the most robust part here. All of them need a better antenna, so that's very good for us. Looking to volumes, we will see also the imaging radar that's coming into the automotive, the normal OEM standards. But for robotaxis, the volumes are increasing as quick as they can run on the streets, I will say. For the normal cars, autonomous driving will take longer time but still there will be a big portion of companies who wants to have a very good imaging radar in their cars, I'm pretty sure. I don't know the volumes over long time, but we see already that in this timeframe we are talking with Bosch, that will be probably up to a double-digit million units per year in the end of that period. That's not only Bosch that, it's what I say on the market. We don't mix it up. Thank you. Great. Well, thank you very much for that. Let's move on to the revenue model. Can you talk us through this? I assume perhaps there is an upfront payment and then product sales and then engineering revenues. Yes. It's three different or maybe four different parts. I can talk them through, but I don't want to give the numbers here. There is an initial fee for using our technique, the background, so to say, license. Bosch will pay us in this quite early phase. Combined with that we will also be into what we call an engineering work. We call that NRE, non-recurring engineering, during this timeframe of four years. That's another thing we will be paid for. Our engineers and work we do here in the lab, et cetera, and prototypes will be paid during all that timeframe. Then when we start of production, we do have a what we call a price tag we are, so to say, targeting. On that we have a fixed profit and also our own cost are included in that on a fixed sum every piece of product we are selling. We will help each other to really make the product as cheap as possible with suppliers around that. It's in many ways a quite good start for us coming into the market and also be able to produce this product. We do have the same ambition to make it in the right price level. Because if we are not in the right price level it will always be very tricky to sell the product from Bosch to the end customer. It's important that we understand this is something we call a joint agreement so we can do it together. We will have Bosch supporting this with a number of also engineers and people on their side. I think we are in a strong position to take this to a very successful product family. Excellent. Maybe I missed something in your questions. Please repeat if I missed it. No, that's fine. I mean, I want to ask you about the size of these product sales, but I think this is probably difficult to talk about for you. Yeah, I can't really give you the number of radars or antennas we are aiming for or Bosch are aiming for, but it's a number, yes. It will start 2026 and will ramp up during some years. In this agreement, we do have a quite good timeframe to really be focused on and to see that everything will come up and running with the deliveries, with the testing, so everything is so to say in line with what is expected from the customer here. The volumes are bigger than we have seen in the market of imaging radar before. We know that Bosch has good connections with a number of OEMs, but also with these tech giants, et cetera, who are into these robotaxi areas, et cetera. This is a very good connection and Bosch, as they are the biggest supplier in the world for automotive parts, I think, it's a good partner to be holding in hand when we are going into this business together. In that sense, I feel quite comfortable that we will absolutely have now the chance to make this company, Gapwaves, growing in a very nice way. I want to ask you about the customers. Is there perhaps a lead customer today, or is this not yet the case? Do you have an understanding of how many OEMs Bosch aims to win with this offering? Both these two questions are a little bit outside what I can talk about. Sorry. I can't comment so much on that. We know that Bosch has a very good reputation on the market and have good connections with many car manufacturers. They work with all OEMs on Earth, I would say. They are also, of course, very interested for, and interesting for companies like you see in Silicon Valley, companies who wants to buy an imaging radar. We know that, but there is no imaging radar really on the market which is good enough to be put into robotaxis yet. Of course, the Bosch could be a very good provider of such equipment. I can't really say anything about number of customers or quantities here. It would be outside the confidentiality. Please bear with me. On to my final question. What is next for Gapwaves now that you have secured these a couple of really big automotive agreements? What is the focus area now? Of course, now we are very keen to be a good, I call it a company to work together with, meaning that we are running a number of different product development cases with customers. These are very important that we now see that the result become what they expect, because otherwise it's always tricky to win in the long end. So far, we feel very confident in what we can deliver from us. Now we also see that we need to take the steps fully to be a supplier. This is also very important and will take some time and also effort from us. We don't have all the people needed for doing that yet, so we have to employ more people. Combined with that, I would say we will still work with more customers in the automotive area because there are a number of interactions going on with even more, maybe not as big as Bosch and Hella, or they are in the same size on the radar market, who are also interested to be a customer for us. Because I think really it has been obvious that our technique really makes what I said we have in our tagline. It's a key for doing this kind of products. And that's for me, it is just fantastic to have been running this company since 2014, or when I started as CEO was 2014, and we started with the IPO 2016. We have said that early, that this is a technique which will be very important for this market. Now we are there, and it's also evident on the board, which is so nice. I'm so happy to say that, maybe I also have been struggling some days during this timeframe, but you have to be patient, and you have to understand that you have something unique, and then you can always be doing very interesting business with it. Bear with me. This is a good story, and it will be even better over time. Excellent. Well, congrats to you and to the entire team, and I look forward to seeing how this goes. Thank you, Forbes, and thank you all shareholders for looking at us and buying our shares because I think there is absolutely an opportunity for this company. We see it very much. Thank you.