Shot of Corridor in Working Data Center Full of Rack Servers and Supercomputers with Blue Neon Visualization Projection of Data Transmission Through High Speed Internet.

A story of growth and investing for the future

SenSen Networks 15 September 2022 Update
Download PDF

SenSen Networks

A story of growth and investing for the future

FY22 preliminary results

Software and comp services

15 September 2022

Price

A$0.07

Market cap

A$48m

US$0.67/A$

Net cash (A$m) as at 30 June 2022

3.9

Shares in issue

651.1m

Free float

45%

Code

SNS

Primary exchange

ASX

Secondary exchange

OTCQB

Share price performance

%

1m

3m

12m

Abs

(18.9)

(5.2)

(43.8)

Rel (local)

(16.4)

(7.8)

(38.5)

52-week high/low

A$0.16

A$0.07

Business description

SenSen Networks, an Australian-based technology company, operates in the field of sensor artificial intelligence. By applying its SenDISA AI platform to physical space monitoring, it extracts real-time insights for customers. It provides solutions to customers in the smart city, gaming, retail and surveillance verticals.

Next events

FY22 annual report

September 2022

Q123 quarterly activities and cashflow report

October 2022

Analysts

Ken Mestemacher, CFA

+44 (0)20 3077 5700

Dan Ridsdale

+44 (0)20 3077 5700

SenSen Networks is a research client of Edison Investment Research Limited

SenSen Networks (SNS) reported accelerating growth in FY22, with operating results reflecting continued investments to support the company’s rapid, ongoing vertical and geographic expansion. Management’s expense rationalization efforts should stabilize SNS’s cost base. We adjust our forecasts to account for ongoing macro events and rising inflation, though we still forecast substantial growth through FY24. SenSen’s shift to a ‘pragmatic SaaS’ model should boost margins, and we see the company’s growth potential as underappreciated in the market.

Year end

Revenue (A$m)

EBITDA*
(A$m)

PBT**
(A$m)

EPS**
(c)

P/sales
(x)

Net cash***

(A$m)

06/21

5.5

(2.2)

(3.0)

(0.62)

8.6

3.9

06/22

9.1

(7.8)

(12.3)

(2.02)

5.2

3.9

06/23e

15.5

(2.8)

(5.6)

(0.83)

3.1

2.5

06/24e

23.5

3.2

0.4

0.05

2.0

3.5

Note: *Adjusted EBITDA excludes non-cash share-based payments. **PBT and EPS are normalized, excluding other income and exceptional items. ***Net cash/(debt) is cash less debt and leases.

FY22: Stabilizing the operating cost base

SenSen reported accelerating growth in FY22, with revenues up 65% to A$9.1m, topping a 47% increase in FY21. All three segments rose year-on-year, including Smart Cities up 22% and Gaming climbing 14%. The company’s investments contributed to an operational loss of A$11.9m (versus A$2.8m in FY21) with half (A$6.6m) from non-cash or one-off expenses. To offset this, management took several actions to rationalize expense levels and expects the cost base to be ‘now largely fixed and not expected to materially increase in the near term.’ SNS closed FY22 with A$3.9m in net cash, supported by record cash collections and several equity raises.

Higher-margin SaaS revenue underpins outlook

SenSen continued transitioning to a ‘pragmatic SaaS’ model that generates higher-margin recurring revenues. SenSen reported ARR ‘closing in on A$8m’, boosted by recent contract wins and almost doubling FY21’s A$4.1m. While we recognize that ongoing macro events and rising inflation could have an impact on SenSen’s growth trajectory (so we tweak our forecasts down slightly), growing ARR and recent contract wins should support significant revenue growth of 70% in FY23e and 50%+ in FY24e. We foresee margin expansion as business won in FY22 shifts from initial low-margin hardware/setup to higher-margin, ongoing license revenues.

Valuation: Not reflecting potential growth

SenSen’s shares are trading down 51% year-to-date, and at a 2.0x FY24e price/revenue multiple. Considering that revenues are forecasted to grow much faster than peers, the valuation does not seem to reflect SNS’s potential growth. Using an average peer multiple of 4.2x FY24e price/revenue implies a A$0.15 share price, double SenSen’s trading level. If SenSen continues its momentum of customer wins across multiple geographies and verticals, we expect there could be a reduction in the gap.

Review of FY22 preliminary results

SenSen reported solid top-line FY22 growth of 65%, buoyed by rising sales across all three business segments (see Exhibit 1). Smart Cities rose 22% y-o-y, Gaming improved 14% y-o-y and we estimate that Retail (formerly Scancam, acquired in July 2021) rose 6% y-o-y, all driven by multiple contract wins from new and existing global customers, as well as renewals and extensions from customers such as Brisbane City Council, City of Las Vegas, Crown Resorts, Solaire Resort and Casino, AMPOL and Chevron. However, the A$9.1m in total FY22 revenues was slightly lower than our forecast of A$9.3m due to the timing of several orders in late Q422. Finally, SenSen maintained its zero-churn rate in FY22 with a net retention rate of 103%, reflecting the ‘stickiness’ of the company’s products and its ability to renew existing contracts and generate upsells.

Management reported an operational loss of A$11.9m for FY22, though more than half (A$6.6m) was from non-cash and/or one-off expenses in sales, marketing and IT to support SenSen’s global expansion. These included A$3.2m in non-cash share-based payments, A$1.1m in amortization and depreciation charges, A$1.6m in normalized salary adjustments to address an increasingly competitive global IT/tech environment, and the inclusion of about A$1m in staff salaries for Scancam. SNS also filed four additional patents to protect its technological investments in global AI, the Internet of Things and video analytics, with more patent applications in the pipeline.

While we expected EBITDA to fall due to these necessary investments, actual EBITDA was A$0.3m better than our forecast as management’s actions to reduce its operational cost base were even more effective than we anticipated. The normalised loss before tax of A$12.3m was in line with our forecast, while the loss per share of 2.02 cents was better than our 2.11 cent estimate.

Exhibit 1: FY22 preliminary results versus Edison forecasts and FY21  

A$m

FY21

FY22e

FY22

diff

y-o-y

Revenue

5.5

9.3

9.1

(2.1)%

65.3%

Gross profit

3.5

5.7

5.6

(1.8)%

60.8%

Gross margin

63.3%

61.4%

61.6%

0.1%

(1.7)%

EBITDA*

(2.2)

(8.1)

(7.8)

4.8%

(251.0)%

EBIT, normalised**

(2.8)

(12.1)

(12.0)

0.2%

(324.7)%

PBT, normalised**

(3.0)

(12.2)

(12.3)

(0.5)%

(308.3)%

EPS, normalised (c)**

(0.62)

(2.11)

(2.02)

4.0%

(224.5)%

EPS, reported (c)

(0.62)

(2.11)

(2.02)

3.9%

(224.1)%

Net cash***

3.9

3.5

3.9

10.9%

0.5%

ARR****

4.1

8.2

‘Closing in on A$8m’

Segmental performance

Revenues

Smart Cities

4.8

6.3

5.9

(6.2)%

22.3%

Gaming

0.7

0.9

0.8

(3.1)%

13.8%

Retail*****

2.3

2.2

2.4

10.1%

6.1%

Gross Profit

Smart Cities

3.2

4.1

3.8

(6.8)%

19.3%

Gaming

0.3

0.5

0.6

4.9%

78.9%

Retail

-

1.1

1.3

13.0%

-

Gross Margin

Smart Cities

66.2%

65.0%

64.6%

(0.4)%

(1.6)%

Gaming

44.1%

64.0%

69.3%

5.3%

25.2%

Retail

-

50.4%

51.7%

1.3%

-

Source: SenSen Networks, Edison Investment Research. Note: Preliminary results are unaudited. *Adjusted EBITDA excludes non-cash share-based payments. **PBT and EPS are normalised, excluding other income and exceptional items. ***Net cash/(debt) is cash less debt and leases. ****ARR = annual recurring revenue, ie latest monthly recurring revenue x 12. *****Retail FY21a revenues are estimated.

The company closed the year with a net cash position of A$3.9m (including debt and leases), unchanged from FY21 and supported by record cash collections in Q122 and Q422 (see Exhibit 2) and the aforementioned cost saving efforts. While Sensen has little debt (A$2.0m), the company’s share count grew from 518.2m in FY21 to 651.1m at the end of FY22, driven primarily by:

20 July 2021 – the issue of 39.3m shares at A$0.13/share as part of the Scancam acquisition.

9 November 2021 – the placement of 30m shares at A$0.12/share to institutional and sophisticated investors.

21 November 2021 – the placement of 5m shares at A$0.12/share to senior leadership.

20 December 2021 – the issue of 23.3m shares at A$0.12/share as part of a share purchase plan that raised A$2.8m.

23 December 2021 – the placement of 25m shares at A$0.12/share.

24 December 2021 – the issue of 9.6m shares in relation to the company’s long-term incentive plan.

Exhibit 2: Quarterly cash receipts from customers (A$k)

Source: SenSen Networks

Recurring revenue up about 90%+

SenSen’s transition to a ‘pragmatic SaaS’ business model that generates significant portions of higher-margin recurring revenues has significantly affected the company’s annual recurring revenue (ARR) over the last several years. Management reported that ARR (monthly recurring revenue × 12) is ‘closing in on A$8m’, though we note that the actual values can vary quarter by quarter depending on the timing of when contracts close. The progression of revenues recognized over time (see Exhibit 3) also reflects SenSen’s transition, moving from 48% of total revenues in FY21 to 57% in FY22. This trend was also seen in the Smart Cities and Gaming segments, which advanced to 65% and 33% of total segment revenues generated over time in FY22, respectively.

Exhibit 3: Revenue by type

Revenue (A$m)

FY21

% of total

FY22

% of total

Consolidated

Point in Time

2.9

52%

3.9

43%

Over Time

2.7

48%

5.2

57%

Total

5.5

9.1

Smart Cities

Point in Time

2.3

48%

2.1

35%

Over Time

2.5

52%

3.8

65%

Total

4.8

5.9

Gaming

Point in Time

0.6

78%

0.6

67%

Over Time

0.2

22%

0.3

33%

Total

0.7

0.8

Retail

Point in Time

1.3

54%

Over Time

1.1

47%

Total

2.4

Source: SenSen Networks, Edison Investment Research. Note: Differences due to rounding.

Updated forecasts

We adjust our forecasts for FY23e and FY24e (see Exhibit 4), lowering revenues slightly to account for potential macro disruptions caused by higher inflation, COVID-19 issues, the war in Ukraine and potential issues in the Taiwan Strait. Nevertheless, we still believe SenSen can achieve significant revenue growth of 70% in FY23e, and over 50% in FY24e, as the growth in ARR and recent Q422 contract wins provide increasing levels of recurring revenue. Moreover, SenSen’s investments made in FY22 should support efforts to continue penetrating the US market. While we do not include potential M&A opportunities in our forecast, it should be noted that the current depressed valuations among many tech companies provide opportunities for management to make bolt-on acquisitions to help scale its business and expand into new and adjacent verticals.

We maintain the view that gross margins should markedly increase in FY23e by 8%. The gross margin profile of SenSen’s contracts typically has two phases: (1) initial point in time, where revenues are from hardware (eg installation of new pods in smart cities, camera systems in gaming and retail locations) and setup at lower gross margins; followed by (2) recurring revenues recognized over time for licenses and maintenance at higher gross margins. In FY22 (see Exhibit 3), 43% of SenSen’s business came from initial contracts, so were at a lower margin and resulted in the full year gross margin of 62%. Now that many initial customers are set up and operating, revenues in FY23e and FY24e should be generated at a much higher margin. Moreover, gross margins should benefit as management converts old Scancam clients to new business models with lower upfront costs and higher subsequent levels of recurring revenue. Altogether, we expect FY23e gross margins to be 69.8% and FY24e to reach 72.5%.

While macro issues and higher inflation could increase input prices, SenSen’s expense reduction efforts (targeting staff costs, professional services, IT, travel and administrative costs) should somewhat offset rising costs. Moreover, many of SenSen’s newer contracts contain escalation clauses that pass through higher input prices. We expect operating costs to remain relatively steady across FY23 and FY24, as management believes the cost base is ‘now largely fixed and not expected to materially increase in the near term as the Company continues to expand revenue.’ We increase our forecasted normalised EPS by about 0.1c in FY23e.

Finally, management is ‘driving towards cash-flow positivity and profitability’ and we expect free cash flow to reach positive levels by FY24 and thus lessen the need for future capital raises to fund operations. However, we are assuming a further A$2m raise in FY23 to maintain a minimum level of cash.

Exhibit 4: Changes to forecasts

A$m

FY23e

FY24e

Old

New

change

y-o-y

Old

New

change

y-o-y

Revenue

16.4

15.5

(5.6)%

69.5%

24.9

23.5

(5.8)%

51.6%

Gross profit

11.7

10.8

(7.2)%

92.0%

19.0

17.0

(10.4)%

57.6%

Gross margin

71.0%

69.8%

(1.7)%

8.2%

76.3%

72.5%

(5.0)%

2.7%

EBITDA*

(3.3)

(2.8)

14.9%

64.1%

2.5

3.2

26.9%

N/A

EBIT, normalised**

(6.2)

(5.3)

13.3%

55.6%

0.1

0.6

453.0%

N/A

PBT, normalised**

(6.3)

(5.6)

10.9%

54.6%

0.0

0.4

N/A

EPS, normalised (c)**

(0.9)

(0.8)

12.8%

59.0%

0.0

0.0

N/A

EPS, reported (c)

(1.0)

(0.8)

12.7%

59.0%

0.0

0.0

N/A

Net cash/(debt)***

(0.7)

2.5

N/A

N/A

1.7

3.5

111.1%

39.1%

Source: Edison Investment Research. Note: *Adjusted EBITDA excludes non-cash share-based payments. **PBT and EPS are normalised, excluding other income and exceptional items. ***Net cash/(debt) is cash less debt and leases.

Valuation

SenSen’s share price is down 51% year-to-date, slightly more than the 48% recent average for its peer group of small cap AI and SaaS, and vision analytics firms. This is the lowest level it has traded this year, bar the recent dip in mid-June to mid-July. The company trades at 2.0x FY24e’s price/revenue multiple, substantially below the 4.2x peer multiple (see Exhibit 5), despite a much larger forecasted growth rate (see Exhibit 6). Using the 4.2x peer multiple implies a share price of A$0.15, or double its current A$0.073 trading level. SenSen’s transition to a ‘pragmatic SaaS’ model should support sustained recurring revenue growth, and if management can sustain the recent momentum of contract wins across verticals, we expect that it could lead to a reduction in the valuation gap.

Exhibit 5: Price/revenue multiple versus peer groups

Exhibit 6: Growth estimates for FY1e and FY2e

Source: Edison Investment Research, Refinitiv. Note: Multiples are medians for peer group. Pricing as of 1 September 2022.

Source: Edison Investment Research, Refinitiv, company websites. Note: Peer forecasts are consensus, SenSen’s forecast is Edison’s. Estimates as of 2 September 2022.

Exhibit 5: Price/revenue multiple versus peer groups

Source: Edison Investment Research, Refinitiv. Note: Multiples are medians for peer group. Pricing as of 1 September 2022.

Exhibit 6: Growth estimates for FY1e and FY2e

Source: Edison Investment Research, Refinitiv, company websites. Note: Peer forecasts are consensus, SenSen’s forecast is Edison’s. Estimates as of 2 September 2022.

Exhibit 7: Financial summary

A$000s

2020

2021

2022

2023e

2024e

Year end 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

3,764

5,533

9,145

15,500

23,500

Cost of Sales

(997)

(2,030)

(3,513)

(4,683)

(6,455)

Gross Profit

2,766

3,503

5,633

10,817

17,045

Other Income

1,539

2,807

2,978

3,275

3,603

Operating Expense (not incl. share-based payments)

(7,567)

(9,078)

(17,330)

(17,950)

(18,561)

Share-based payments (non-cash)

(290)

(72)

(3,173)

(1,500)

(1,500)

EBITDA

(2,807)

(2,209)

(7,751)

(2,779)

3,199

Operating Profit (before except.)

(3,534)

(2,835)

(12,038)

(5,349)

596

Exceptionals

(18)

(6)

145

(9)

(9)

Operating Profit (EBIT)

(3,552)

(2,840)

(11,893)

(5,357)

587

Net Interest

(138)

(176)

(254)

(237)

(162)

Other

-

-

-

-

-

Profit Before Tax (norm)

(3,672)

(3,011)

(12,292)

(5,586)

434

Profit Before Tax (reported)

(3,690)

(3,016)

(12,300)

(5,594)

425

Tax

(15)

(6)

8

(34)

(85)

Other

-

-

-

-

-

Profit After Tax (norm)

(3,687)

(3,016)

(12,284)

(5,619)

349

Profit After Tax (reported)

(3,705)

(3,022)

(12,292)

(5,628)

340

Average Number of Shares Outstanding (m)

436

484

608

678

721

EPS - normalised (c)

(0.85)

(0.62)

(2.02)

(0.83)

0.05

EPS - reported (c)

(0.85)

(0.62)

(2.02)

(0.83)

0.05

Dividend per share (c)

-

-

-

-

-

 

 

Gross Margin (%)

73.5%

63.3%

61.6%

69.8%

72.5%

EBITDA Margin (%)

N/A

N/A

N/A

N/A

13.6%

Operating Margin (before GW and except.) (%)

N/A

N/A

N/A

N/A

2.5%

 

 

BALANCE SHEET

 

 

Fixed Assets

790

2,168

9,127

8,733

8,319

Intangible Assets

-

1,300

8,281

7,681

7,081

Tangible Assets

353

391

435

641

827

Other

437

477

410

410

410

Current Assets

4,706

8,022

11,391

11,570

11,967

Stocks

803

241

232

232

232

Debtors

744

979

1,943

3,000

4,400

Cash & cash equivalents

2,463

5,176

6,214

5,336

4,333

Other

696

1,625

3,002

3,002

3,002

Current Liabilities

(4,498)

(3,640)

(7,999)

(10,060)

(8,237)

Creditors

(1,095)

(750)

(1,239)

(2,500)

(2,000)

Short term borrowings

(1,313)

(861)

(1,954)

(2,454)

(454)

Lease Liabilities

(235)

(306)

(185)

(185)

(185)

Other

(1,856)

(1,723)

(4,621)

(4,920)

(5,597)

Long Term Liabilities

(276)

(244)

(506)

(508)

(510)

Long term borrowings

-

-

-

-

-

Lease Liabilities

(197)

(138)

(183)

(183)

(183)

Other long-term liabilities

(79)

(106)

(324)

(325)

(327)

Net Assets

721

6,305

12,012

9,734

11,539

Minority Interests

-

-

-

-

-

Shareholder equity

721

6,305

12,012

9,734

11,539

 

 

CASH FLOW

 

 

Operating Cash Flow

(2,884)

(3,250)

(7,632)

(2,502)

1,935

Net Interest

(42)

(127)

(73)

(237)

(162)

Tax

(101)

(31)

(232)

(34)

(85)

Capex

(100)

(253)

(220)

(400)

(400)

Acquisitions/disposals

-

-

(1,010)

-

-

Equity financing

3,329

7,043

9,644

2,070

-

Dividends

-

-

-

-

-

Other*

288

(667)

560

224

(2,290)

Net Cash Flow

490

2,714

1,037

(878)

(1,002)

Opening net debt/(cash) w/o Leases

(648)

(1,150)

(4,315)

(4,259)

(2,881)

HP finance leases initiated

-

-

-

-

-

Exchange rate movements

-

-

-

-

-

Other

12

451

(1,093)

(500)

2,000

Closing net debt/(cash)

(1,150)

(4,315)

(4,259)

(2,881)

(3,879)

Closing net debt/(cash) w/ Leases

(718)

(3,871)

(3,891)

(2,513)

(3,511)

Source: SenSen Networks, Edison Investment Research. Note: *Includes repayment of leases, proceeds from/repayment of borrowings, etc.

General disclaimer and copyright

This report has been commissioned by SenSen Networks and prepared and issued by Edison, in consideration of a fee payable by SenSen Networks. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e., without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by SenSen Networks and prepared and issued by Edison, in consideration of a fee payable by SenSen Networks. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e., without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Share this with friends and colleagues

You may be interested in