Welcome to Elliptic Labs Q4 Presentation, March 10, 2021. My name is Laila Danielsen. I'm the CEO of Elliptic Labs. Before we jump into the presentation, just some practical information. You have the chance to submit questions during the presentation. Just use the submit question buttons up on the screen. Let's just jump in here. Agenda, introduction, and Q4 2020 highlights, then the financial will be presented by our CFO, Thor Talhaug, and then we will conclude with a summary and end with some questions. Let's just jump straight into it. Q4 was a very good quarter for Elliptic Labs. It was the highest quarterly revenue in the history of the company, with NOK 27 million. During this quarter, we demonstrated that we have a scalable business model with EBITDA margin exceeding 65% in Q4. Furthermore, as you know, we secured healthy financing last year when we went public, and we spent some of that to pay down interest-bearing debt. This quarter, last quarter of Q4, we also obtained positive cash flow from operation of NOK 15 million. Over Q4, we have continued to expand our customer base in the smartphone market and IoT. We have made excellent progress on the POC in the PC laptop market, and we expect that with a positive outcome from these POCs, that this will have a significant change and positive impact on the financial performance during 2021 and onwards. We continue to have a really good customer relationship with our customer, Xiaomi, and we had several launch on their high-volume smartphones. Another point that we will be discussing further during the presentation is the partnership that we keep working with this global leading chip manufacturer. All of our underlying and scalable technology, we continue to patent, and now we have a patent portfolio that is close to 100 patents granted and pending. Let's just take a step back and talk sort of what our core technology is. Our mission that we're doing and our core focuses today is that we're developing smart software sensor that use AI and ultrasound to sense you and the surroundings. What does this mean? This means that we use sound, so ultrasound, and when you look at any device, whether it is a smartphone, a smart speaker, a laptop, we use standard microphones and speakers. How it works is that ultrasound operates on a higher frequency. When you send out sound, you send out audible sound that human beings can hear, which is under 20 kilohertz, and the devices also send out ultrasound, which you cannot hear as a human being. This unused frequency, this is what we're using. For example, let's say you have a smartphone that has a speaker, and the speaker sends out an ultrasound, and the ultrasound will bounce off your body, your head, your hand, and then the ultrasound will go back, and then the microphones will listen to it, and then our technology would transform this into a set of features. That's our mission, but our vision, and as we've been working for several years, is to build a leading software platform for all sensors, making every device smarter and more environment friendly. What does this mean? Our core focus that we started on was using ultrasound software-only solution. We will continue being a software-only solution, we will start incorporating more and more sensors. For example, one thing we're seeing from several companies in the market, that they want to have the ability to detect, this is particularly around wellness features, to detect heartbeat on human beings. We are talking to them, for example, we can use a radar sensor, we work with several world-leading radar sensor providers in the world, like Infineon and Texas Instruments, multi-billion dollar companies. What they have, they have the physical sensor, but they don't have the software to truly enable sophisticated type of features like heartbeat. This is what the customers are now coming to us as well, and what we are seeing that we can provide even additional features. There's lots of other sensors we are reviewing as well, but the next one we are seeing beginning interest on is radar, and we've been working also with radar sensor for several years. Our vision is to really continue expanding this platform, now in the smartphone, laptop, and then on other markets. An important note. Today, we are the leader in the market for the consumer market for anything using ultrasound capability. We're recognized as a leader. We have global presence, of course, in Norway, where we're headquarters. Within Asia, we have offices in China, Shanghai, Shenzhen. We have presence in Taiwan, South Korea, and Japan, and of course, we also have in Silicon Valley. We, over time, have built out presence where our customers are. This is an important element because we spent quite some time and resources to establish these relationship, built a solid platforms that we've demonstrated now. We have now deployed over 150 million devices, and we keep growing. As we are scaling, this is why our business becomes very scalable, we already have established this global presence where our customers are. As we're scaling the revenue, our cost, and Thor Talhaug can address that further, would not scale so much. Therefore, we see that our software-only business model have an opportunity to exceed over 50% EBITDA margin. We have still target that we will reach NOK 500 million over the next three years. Right. Talk a little bit about our features. One thing that is very important when you go after this large market is that you spend some time to be really, really good in one thing and demonstrate that you can scale and then build your ecosystem and get your partners with you. What we focused on initially was to replace a physical proximity sensor in the smartphone. What is the purpose of a proximity sensor? Yes, it is when the phone rings, the screen turns on, and when you put it up to the ear, the screen turns off, and when you take it away again, the screen turns on. This particular capability is in every single smartphone today. The first time that was used was from Apple in 2007. You have 1.5 billion of these infrared sensors. These are the ones that we are now starting to replace. The beauty is we have spent this time in building up this platform. The beauty is that the underlying technology now, we can use that into other markets. For example, what we are seeing now is the presence detection for laptop. Once again, we're using software only. We're reusing the microphones and speakers that is on the laptop. This is for presence detection, means when you stand in front of the laptop, it's on. When you move away from the laptop, the display or the screen dims and then locks and then shuts down. This is important for power consumption and security. When you come back, the technology, the ultrasound would keep checking if somebody's come back, then turning on, then using for authentication, either camera for face recognition or fingerprint to unlock the device. The beauty is that the underlying technology that we have now proven at scale in the smartphone market, we can now leverage into other markets with other capability. Gesture, we also see coming in the PC market. In the IoT and automotive, we see other features that we will discuss further when we're further along with those type of feature set in those markets. Really good, really scalable that we can take proven technology, product is in the market, and then moving into new large market like the PC market. In the beginning of 2021, we also experienced, and this is good for us, this is very good for us, that the hardware sensor prices increased. This improved our competitive advantage. I want to highlight these two key markets that we have the strongest focus on. That's smartphone. As you see in the smartphone, that's the pricing on our competitive hardware sensors. I would say it's relatively low. It's a large volume, I would say relatively low. It's around NOK 0.10-NOK 0.25. The reason for that is that, as I mentioned earlier, Apple started this back in 2007. It has been sold billions of billions of these sensors, therefore, the way it's manufactured, they're making also this infrared sensor really small, there are really low costs. The feature or the capability of the infra sensor is that the signal it sends out is very, very narrow. When you go into the PC market, you have to use this different type of sensor. This sensor is more costly. It requires a wider field of view because if you're sitting, for example, in front of a laptop and let's say you use an infrared sensor, it's very narrow field of view, you just move a little bit, and then the display will turn off, which will be very annoying and not usable. For this market, it's a different type of sensor, which is a higher cost. Also, in the infrared sensor, you have lots of large companies that are incumbent. The infrared sensor is incumbent. However, in the PC laptop market, there is no incumbent today. This is where we have this fantastic opportunity to be the de facto standard in this market. We're also moving into these other markets as well. We mentioned we have on a smart fridge, and we expect that we will gradually keep growing in this market. Our two key focus market now is these smartphone and the PC market. Let's talk a little bit more detail what we did in Q4. We launched to high volumes, with Xiaomi, which is important, and we keep growing with that customer. We also launched with a new smartphone customer, ByteDance, on their model. Furthermore, we also strengthened our partnership, particular with MediaTek. The relationship we did with them makes this easier for also integrations. It's easier for us to scale with our customers. This happened in Q1, but if you pay attention to the news we had here a few weeks ago, you also saw that we launched our first large volume model on a MediaTek platform with Xiaomi. This relationship that we are strengthening is already paying off. This is also a big advantage as we are scaling. I talked about PC market. We are super excited about the PC market. Lots of good things are happening. That market has been growing a little bit due to COVID, which is phenomenal. We have announced POC, and we have mentioned that we are working with all the big players. Now we can't mention their name, but I think it's pretty obvious when you see it on the display on the screen here. Also, we have started and we are continue working very closely with the partners, all three of the partners, and I'll dive into that in a few slides here. The PC market, we signed two new POCs with leading PC manufacturer here in Q4. More importantly, also what we're doing this to accelerate the relationship, and the speed we're going to market is that we added on experts, PC consultants in the U.S. and in Japan. This will help us to strengthen relationship to make sure that we get up to the executive leadership with these companies, and as well as particular in Japan, so we don't get any language barrier. Because of COVID, we have a little bit limiting to traveling, so it's good to get these specialists, and these are so connected that this makes it also easier for us to add more people exactly where we need it as we are scaling to engage with more PC engagement. Really positive around everything that's happening around the PC, and Q4 has been incredibly positive for us. The partnership that we have with each chipsets partner, all of this would help us streamline deployment, as we're targeting these joint customers. We have several joint POCs. We mentioned already we did a launch with MediaTek that I touched upon. What we're seeing for laptop is really exciting for Intel, AMD, and Qualcomm. Not only are they looking for how they're going to work with us and align with us on the short term, now they're also starting to looking longer term out, making sure that we have appropriate and good, strong relationship, not just in 2021, but they're looking three years out. This we are very excited about, and the reason is very straightforward, is because they get a lot of pressure from the customer. Good progress in alignment on the roadmaps makes us easier to support our customer, and this will also help us on the road to become the de facto standard for this market. We continue working also with other partners. I mentioned a little bit about Infineon, AAC, and Knowles. These are companies that are very leading in selling microphone and speakers. Frankly, we can support any type of microphones and speaker, but it's good to have these go-to-market partnerships and joint marketing and promotion just to get our name in front of more people. We could continue also strengthen that, just pure sort of marketing purpose as well. Now I want to leave the word to Thor. Thank you. Thank you, Laila. Yes, like for the Q3, we would like to first go through some of our main non-financial KPIs. We believe these KPIs are very important in order to understand the company, where we stand, and make predictions going forward. Even though we have had the big success with a few customers in the smartphone space, we are still in an early commercialization phase overall, and we are entering into new huge verticals that will transform the company, if we succeed, to another dimension, I would say, to a much huger company in the years going forward. What we have built, our basis has been to have much focus on patents and to grow the number of patents for each year and each quarter. We can show now that we have in total 93 patents granted and filed after 2020. This has also made us a very attractive partner for ecosystem partners, and we have now 15 partner agreements after 2020. When we are entering into new verticals, we have been successful with the POCs in the first phase. As you can see, we started with the POCs in the smartphone space early in 2016, and we are now, as you see in the lower part of the slide to the right, the cumulative number of models launched, which has reached now 27 in the smartphone space. In the latter period, we have introduced a lot of or several POCs also in the laptop space. The last being announced earlier this week, actually. We believe this will also lead to models launched in the laptop area going forward. Looking at our numbers for Q4, we can emphasize that we have had the highest quarterly revenue in the history of the company. It was also expected to be a good quarter, we also saw that the profitability maybe also was stronger than what we have earlier made expectations of. With the EBITDA margin of 65% in Q4, it is almost above our expectations. For the H2 in total, 35%, maybe more in line with what we could expect. As you know, we have our target with 50% the EBITDA margin. Have to keep in mind that the H1 of 2020 was a very special year for us, with almost zero in revenue due to the COVID-19 effects, especially in the Chinese market that we were hardly hit by in the H1. Looking a little bit ahead, we also want to give some guidance for 2021. We expect it to be a significantly stronger top line than what we have achieved in Q4 and for 2020. We also expect EBITDA for the year as a whole to be positive. EBITDA for 2020, as you can see, was a little bit less than NOK -5. We believe that this is a realistic target for the year. We still expect seasonal effects for 2021. We must keep in mind that we have a few customers, and we have also been having paying customers in the smartphone market so far. We have experienced that this has been very seasonal. Most contracts have been entered into in the H2 of the year. This will also be the case for 2021. In addition, you know that we are working with several POCs in the laptop space. We don't expect these to be hugely recognizing revenue in the H1, but rather in the H2 of 2021. Both these factors are leading us to the conclusion that the H2 of 2021 will be likely very good. First half will be less so, but better than 2020. If you look at the balance sheet after the share issue we made in October 2020 and the listing on the Euronext Growth, we have a strong balance sheet. We have equity book value of NOK 191 million at the end of the year. We have a strong cash position of NOK 101 million, even after paying down NOK 25 million in debt in the Q4. If you look at the cash flow, we are very pleased to see that the cash flow from operations is following the profitability. Cash flow from operations in the Q4 ended at NOK 15 million in plus, whereas it for the H2 in total ended at NOK 12 million. For the whole year 2020, we ended at minus NOK 5, which we believe is good, taking into account that H1 of 2020 was, as I already mentioned, severely hit by COVID-19 effects, and we had very little revenue. With our software-only business model and the minimal working capital requirements that we see, we believe that cash flow will be very strong when top line is growing. We reiterate our target for NOK 500 million in revenue and EBITDA margin of more than 50% within the next three years. Regarding the EBITDA margin, we believe that our H2 of 2020 is a good signal that the EBITDA margin is reachable. When it comes to the revenue target of NOK 500 million, it can seem as a big step from today's NOK 45 million in 2020. You must remember that we are at present only in one vertical and mainly with one product in this vertical at present. Also much of the revenue in the smartphone space stems from one big customer. As you have seen, we announced in this quarter, Q1 2021, that we have signed the contract with another big smartphone customer. This contributes to the long-term target of NOK 500 million. In addition to this, for sure, all the POCs that we have entered agreements with different OEMs in the PC market is very important to understand. We are feeling that we are approaching a crossing point where we go from POC to contract also in the laptop market. When we are successful with one or a few laptop PC customers, we believe that the target is within reach. As you know, the alternative cost in the PC laptop market is 10-30 times higher than the alternative cost in the smartphone market for our solution. Therefore, we don't need so much success in order to reach the NOK 500 million target in the laptop space to get there. Looking at the shareholder structure, there has been a few changes since last time, but the main shareholders have been pretty stable, I would say. We have a huge portion also of shares owned by the board of directors and the management, in total 22%. We have also increased the number of shareholders after the flotation of the shares on the Euronext Growth. We are now around 900 shareholders in the company. With that, I will leave the word and the closing remarks to Laila. Thank you. Just to reiterate or summarize, we are very nicely positioned to capitalize in multiple verticals, specifically at the smartphone and the laptop. We have already demonstrated we have a proven business model with software only, we are also in the market today, and we have proven that we can scale our technology to over 150 million devices. This underlying platform are we now deploying into new markets. Over time, over close to a decade, we have spent effort to build our company global and be close to our customers, as well as we've been working hard with all these various global partners that enables us easier support for both new and current verticals. We have launched on several smartphone models, we have added more customers, we will continue to do so. I would say what is truly exciting is this visibility that we have in the PC market. Of course, by strengthening in our organization has also given us even further visibility into this market, and positions nicely also to be able to meet these demands that is in the PC market. Just reiterating what Thor Talhaug said, with a few large smartphone customers, as well as either do really well with one laptop manufacturer or just okay with a few, this allows us to be in a good position to become a NOK 500 million company within three years. With that, we have finished our presentation. What we will take is a small break so we can have a chance to address the questions that are being submitted. Thank you. Okay. We see some questions are taken in, so we'll just jump straight into it. Let me see here. The first question, do you see if we are on track with our medium-term financial targets? I believe we addressed also during the presentation, we are on track. We see that the new contract with the new big customer in the smartphone space is positive for us in the smartphone area, in addition to some new smaller clients that we have added on during the last six months, that we also have announced. We are also working very good with our biggest customer in the smartphone space, Xiaomi. As you have seen, we have also announced several POCs in the laptop space. These are moving forward, and also will contribute to revenue in the medium term. Yeah. Medium term, I would say. We got some more questions around our business model. Yeah. Since we're talking about customer, we want to elaborate a little bit about our business model and how we generate revenue from our customers. Yes. Okay. We are entering into different kind of deals with our customers. Sometimes there can be annual contracts of license, there can be lump sum upfront payments, et cetera. Whatever we do, all is derived from a per unit cost of our software, which again is derived from the alternative cost the customer has from hardware sensors. This you can see from the slide we presented the alternative solutions in the different verticals, smartphone, laptop PC, smart TV, IoT, et cetera. Okay. There are lots of questions popping in here, so let me see. I'll take the next one. Shortage of hardware sensors if we experience more interest due to the increased cost on the competitive hardware sensors that we're competing against. In general, we've seen great interest about our technology in particular now, it's increasing in the laptop PC market. We see the sort of shortage around hardware sensor or rather the increase of pricing also in the hardware sensors. It's not necessarily is increasing the interest around our technology, I think it's the overall, and then also, we don't get as much pressure on price because the alternative price if they would go with a hardware sensor, it has increased significantly. We're getting several questions around the POC, so I'll elaborate a little bit more on the POC. Just to be clear, in the smartphone market, in general, we don't do POC. We've been so long out in the market. The customers, we have very good reference customers. In the smartphone market, we go straight to production. However, in the laptop market, we do a POC. In general, when we engage initially in a laptop, a PC market, we start first do feasibility study, and a POC is where we go in with a very dedicated focus project where we're targeting specific models that the customer would like to deploy upon completion of the POC. In general, we expect that this deployment into production is about 12 to 18 months from initiating POC. However, what we're seeing due to the fact that we are software only, we have a potential to actually get deployment earlier. Let me see what's some more. Since we are talking about competitive landscape, for software-only solution, what we're seeing in the market is that, particularly when we look at the commercial laptops and the PC market, it's very important for the customer that they see mature, scalable technologies. For today, we are the leading in the market using ultrasound. We are the only one in the world today that has deployed a virtual smart sensor based on ultrasound in over 150 million devices. This is critical. Also, another aspect that is critical when you're engaging with these large customers is that you've been around, that you have proven you can scale, that you have a strong IP portfolio, and also that you are close to the customer, that you have established presence around the world to support these customers. For today, we don't see any other companies, large or small, that is working on any short-term threat, even from the next one to two years. Even if somebody's going to start now, we know that's going to take other software companies quite some time, plus that we have a strong IP portfolio to be a significant threat for us. Let me see. It looks like we have addressed. Okay. I'll take this one too. This is for you. How is the dividend yield plan for the future? Yeah. The board has not resolved any specific dividend yield going forward yet. This will be done as soon as we reach good profitability, I would say. Yeah. Next year, maybe there will come some news about this. We'll see. Let's see. We can give it maybe another minute to see if there's other questions ticking in, but it seems like we have addressed. There was a question about the accounts receivable there. Yeah. I can address that, as the question was, why is accounts receivable so low in the balance sheet as per 3112, whereas you have significant revenue in the Q4? The reason for this is that, one, much of the invoiced revenue was more or less all paid. The accrued revenue, you find under other current receivables. This will be invoiced early 2021. Okay. We'll do one last one here. It just ticked in. Could you comment on the numbers deviating from guiding targets from the IPO process in October? Yeah. During the IPO process, we were guiding at NOK 60 million. We could reach NOK 60 million in revenue for the year in the total, subject to significant laptop revenue in the Q4, as we have not announced contracts in the laptop space. We have announced POCs, not contracts. This is postponed. We see it is coming, it was not coming in the Q4. Despite this, we were able to generate very good revenues, maybe more than we had expected in the smartphone space, and also good profitability in the last quarter. Okay. Thank you. Yeah. Thank you for your time. Thank you for the questions. Have a good day.