Driver monitoring specialist Seeing Machines Limited (LON:SEE) is making progress on many fronts and expects to have its innovative DMS system on the road for a global car maker in 2017.
It came as the firm issued a wide ranging trading update, in which it said it expects to report a stronger performance in the year to end June, than in the previous year.
This is due to the one-off license fee from supply partner and machines giant Caterpillar of A$21.85mln. Caterpillar is now running the supply chain of its ruggedised product business.
Seeing Machines highlighted that, through the Cat deal, it has received royalties on products and services for the first full operational quarter (January to March 2016) of more than US$400,000 and higher revenues still are expected in the April to June quarter.
It confirms the group's view that Caterpillar's global distribution network exceeds what its own direct sales efforts would have, it said.
Despite the soft resource sector, Caterpillar remains confident of building the DSS business, including to non-mining industries such as construction and cement, Seeing added.
As previously stated, the firm has signed a term sheet for a US-based investor, to investment into a separately funded company, focused on commercialising Seeing Machines' technology in the automotive market and it is working with the US firm to complete due diligence.
Elsewhere, in aerospace, there has been significant growth in reach and the firm expects by the end of June to have its capability and solutions deployed in Aircraft and Air Traffic simulators across the US, UK / Europe, UAE and Australia.
On the railways, it is working in close collaboration with Progress Rail and EMD, to jointly develop a rail specific operator monitoring solution.
Trials are underway with three railroads and are returning positive feedback from the industry, it said.
House broker finnCap said due to the fact the firm expects non-CAT revenue to be lower than last year, it has reduced its 2016 sales forecasts to A$37.6mln and given the increased spend on automotive following the recent VSI investment, it lifts its forecast loss before tax to A$6mln.
"The imminent spin-out of the Automotive OEM business will move a great deal (estimated 40%) of the cost base into the separately-funded business, leaving just the Guardian and group costs funded by CAT royalties until self-sufficient."
Shares fell 10.71% to 3.125p.