Good morning, everybody, and welcome to poLight's Q3 presentation. My name is Øyvind Isaksen. I'm the CEO in poLight. Together with me today, as usual, is CFO Alf Henning Bekkevik, who will go through the financial. Also, chairman of the board is available, so if there's anybody who would like to have a one-to-one after the presentation, that's also possible. This presentation is webcast, so for those who want to ask questions from the audience, please wait for the microphone. Also for those following from webcast, when asking question, please leave your credentials on the web so that we can get back to you if there's no time to answer. Okay. Today's agenda as normal key events, introduction to poLight, market review, financial review by the CFO, outlook statement, and we take the Q&A in the end. Key events in the quarter. Extremely important follow-on order from an augmented reality customer, and also confirming product will be available in 2022. Other AR cases progressing well. Encouraging pipeline. Company called Xenocor has themself confirmed that they're using TLens in their next generation laparoscope, disposable under qualification. We see an increased activity in industrial market, especially related to the barcode market. Teledyne e2v also launched during the quarter a new Optimum2M multi-focus lens at VISION exhibition in Stuttgart using the TLens. Smartphone cases is very actively pursued, spending a lot of resources in organization on those cases. It's likely to see that over time, that high quality selfie camera will be more and more important. For those who are new to poLight, just a really quick glance. Tunable optics. poLight is all about tunable optics which can be tuned. We are using that in different application areas, as you know. Since 2005, we have been developing and put this into manufacturing. We have a strong IP. We have 17 worldwide patent families, nine pending applications, and four registered trademarks, TWedge being the latest one. 37 employees and distributed all over the world. Headquarters in Horten outside Oslo. Employees in Finland, France, U.K., USA, China, and Taiwan. poLight technology, we claim, enables new user experiences due to the fact that we're extremely fast, instant focus. We are a very compact solution. There is no pumping. There's a constant field of view. We have very low power consumption. As I mentioned, poLight technology can be used in many different verticals. Consumer side, on the left side here, is definitely an extremely important area. We do already have design wins here, related to smartwatches and webcam. Obviously, addressing heavily the smartphone market being the single biggest market and where the camera is a key function. We can also see now the trend of wanting to have AF in the selfie camera is increasing step by step. You can see one of the major players in the world is now releasing such function. Barcode, industrial, completely different market, same product. Long-term market, I can say product lifetime maybe 5-10 years, whereas a smartphone supply will, for us, be 6-9 months. There's a huge difference in the dynamic. Barcode in this segment is definitely the most active. This barcode market is driven now by the fact that 1D coding is moving more and more to 2D coding, like an example, a QR code. That reading those codes needs, instead of a laser system, an imaging system. Having a flexible barcode reader, you need to be able to focus both close and far. You want to do that fast, you want to do that with high reliability over a large temperature range, hence TLens is a good solution. Augmented reality, super important area for poLight. There is huge investment ongoing for a long time in this segment, and we are nicely placed. I will come back to that, of course. Then there are other verticals which we are, what should I say, exploring based on the incoming calls. Two other segments, as an example, is medical, another one is automotive. This is today. We have nine design wins. Here you can see eight. The other one we classified the design win is the activity we have together with Kavli. As I mentioned, we have consumer design wins, which is represented by the smartwatch, the MAXHUB web camera. There are two smartwatches, Xiaomi and SUN. We have smart design win in with Honeywell EX30, which has led to our strong position in this segment. We have three additional design wins in barcode. Those are mainly related, I would say, to the supply chain manufacturing's area. Definitely, we see other potentials in the years and quarters to come. We have one design win already announced in augmented reality, where we are used for the world-facing camera in smart glasses. This is status only going a few years back, there were none. Now step by step, we are building design wins. Of course, as I said many times, selling the poLight technology and company with or without customer references is day and night. It's so much easier to convince a customer when we already are shipping into commercial products, and that we feel definitely is helping us. Let's go into the market review. Consumer, what is the status there? Again, I've said many times, I say it again, the invention or the capability for us to go into an add-in design, meaning the TLens inside the lens stack instead of top of the fixed focus camera, has really opened a lot of opportunities. We see quarter by quarter, the activity is increasing. Not only actually in the smartphone, but also in other areas which is wanting to use an add-in design. We have been more and more invested internally in the capability to make reference design. What I mean by that is that, instead of only coming to the customer with a nice component, a TLens, we are telling the customer, "You know, for your product, you can design your system like this, and this will give you this and this functionality." We're coming more with a solution, a reference design, than only a component. This has helped us a lot in interaction. The focus for consumer during the quarter has definitely been smartphone and augmented reality. Applications such as webcams, drone, is definitely also being explored. Short-medium term, I think the biggest thing is, of course, to break through into the selfie camera smartphone, and we are continuing using a lot of effort and resources to make that happen. Summarized, three design wins, eight ongoing POCs, proof of concepts, and 10 planning POCs. Of the eight POCs, three are related to augmented reality, four related to smartphone, and one related to iris detection. AR. What I can confirm today is that there will be, not saying when, but there will be AR enterprise product in 2022 using TLens on market. Not being precise whether it has happened or will happen, but there will be. We are extremely, I would say, engaged with big names and smaller names in this market. What we feel is pointing to our solution is the power consumption is so low, which is, as you can imagine, say in example, in all the wearable glasses, where there very, very limited space for battery. Power consumption is key. There is no gravity sensitivity using our technology. You can do whatever you want with your head, no impact. Temperature stabilization by inner design is TLens, very good for that. High speed and compactness, of course. I also believe that we have a pipeline which should make it possible to have further design wins, more products out in the market in the next, say, six months. Of course, we don't control release dates, but I can say that we do expect additional design wins in the next six months. Two use cases, we talked about it before. The one which will be on market in 2022, or the ones, should I say, will be for camera. But we also engage in display solutions. Summarized, one design win, five design-ins, one of them being consumer, four ongoing POCs, three consumer, and nine planning POC. Quite an impressive pipeline. Industrial. Teledyne e2v, a fantastic, good, strong, and innovative company, have launched to the market what they call Optimum2M multi-focus lens at VISION show in Stuttgart. This is actually the second generation camera powered by TLens. They had a purpose-made, should I say, product for a specific customer, but this is a more generic product they're going to they have launched. You can see in the middle of the right picture there, they call it an innovative multi-focus product. They can sell this product with or without multi-focus or auto focus and the option with focus is based on TLens. Strong company selecting TLens, selecting poLight is obviously following others who have done the same. A strong indication for the position we can potentially build in this area. These are big companies making very thorough evaluations, which clearly is a big motivation for us. On the top of that picture on the right, you can see we had announcement. You may remember a Chinese supplier called Superlead, which have confirmed using TLens in the scan engine. This is a scan engine going into typical manufacturing line applications. You can see now they're not only using that scan engine in one product, but they're using it in several products. That's why you can see three pictures there. It is a market which takes longer time to develop, but it is also representing a market which you can, in a way classify as a more recurring business as we will be established with several players. As I said, the product lifetime is 5-10 years, meaning that even though volume is low or lower, I should say, we feel that the when we build more and more cases and more and more references, we will also be brought into, should I say, scan engines, which hopefully are used closer to the point of sales, meaning higher volumes. I think it's a significant important part of our strategy, which is drive high volume, like consumer, enable to drive down the cost of our product, and then using very same product in different niche market with higher price point and higher gross margin. This combination, high volume, low volume, is a really important part of our strategy. Over and above barcode, we are also involved in other industrial application without going into more details on that. Four design wins in sum, one design-in, which is Teledyne. Why we still classified as a design-in is that we would like to see it shipping, we would like to see the POs coming, so that's why we still classified as a design-in, but it is a product which is launched. We have 12 POCs, of which eight is barcode, and we have 12 planning POCs, proof of concept again, of which eight is barcode. We keep us busy. Healthcare. One of the eager poLight fans in Norway found out that Xenocor have designed TLens into their next generation laparoscope disposable. We were told strictly to not tell anything, and we did. When somebody found out and we are now allowed to say that, yes, that's true. Xenocor is using our TLens. You can see the picture there. You can see the bending tip, which can be bended by automation, and TLens is just inside these LEDs lighting up. Actually, as far as we know, first disposable laparoscope product with AF. Xenocor is still in the, I would say, qualification phase, so I will still qualify it as a design-in and then of course, when we start shipping, we will declare it differently. Again, a fantastic opportunity for the company to place ourselves in a new high-value segment. This is a really high-value segment. I think the fact that we work together with Kavli, there was actually an article now in Nature, talking about poLight's role and TLens role in this two-photon microscope, which has been developed by the innovative team in Trondheim Kavli, which we still are working very closely with. This is, as I said many times, this is for us, has not so much been about the money. It's more been building position and building a brand in that science, medical, healthcare. We feel that that has been working. We are getting a name, our product is starting to be more and more recognized in this segment. We have, as announced a quite a big NRE development project with a tier one player in endoscope, which also now is planning to use a TLens, a dual TLens actually for stereo endoscope in these big advanced machines. Step by step, building a position over time is super important. Also feels good to use this technology for this type of application, which is for the greater good. Like the Kavli case, as I've told before, is all about studying imaging the brain activity for animals when animals is being impacted by different external factors. They're using then the TLens, actually stacked four TLenses to get enough optical power to see the behavior and to understand the behavior. This is being important research used for studying the cause of diseases like Alzheimer and stuff like that. It really feels good to be a part of that. In the sum, one design win, which I call it the Kavli, a really innovative team in Trondheim there, the team of Moser. We have one design in, which is the Xenocor case. We still declare it as a design in. We have 12 ongoing POCs and eight planning POCs. A big part of these 12 is type Kavli activity. The Kavli activity and the publication in different articles in Nature is definitely making. I think we have universities in all corners of the world who want to do something similar with the TLens. Not going through the details, you know this table very well. It's a good track to see how things are developing. Nine design wins, same as last quarter. Then you can see that there is a Teledyne, there is a Xenocor, which is hopefully soon qualifying. There are seven project design-ins. There are 68 completed POCs as opposed to 58, so progressing. 33 ongoing POC as opposed to 31, and 36 planning POC as opposed to 29. As I said, keep us busy. Alf Henning, would you like to join me for or take over the financial review? Sure. Thank you, Øyvind Isaksen, and good morning to you. Revenue of NOK 5.3 million in the quarter compared with NOK 1.7 million last year. Revenue reflects sales of TLenses and ASICs of NOK 3.1 million, and NOK 2.2 million in revenue from NRE related to customer development projects. EBITDA loss of NOK 11.3 million in the quarter compared with NOK 2.9 million the same quarter last year. The increased loss is mainly due to increased sales and R&D operational resources. Last year, we had a reversed expense related to accrued social securities on the share option program of NOK 5 million due to the decline in the poLight share price in that quarter. On the balance sheet, a cash position of NOK 104 million compared with NOK 164 million Q3 last year. Inventory of NOK 36 million increased from NOK 12 million in Q3 in 2021. The inventory has been increased by NOK 19 million year to date, and it's mainly long lead time components that have been increased from STMicroelectronics. But also we have increased number of finished units, which improved the readiness for potential high volume customers. Cash flow. We started the quarter with NOK 124 million in cash deposits. We used NOK 19, almost 20 million in operating activities. NOK 300,000 was used in investing activities and NOK 200 in financing activities. We ended up with NOK 104 million in cash at the end of the quarter. Okay, thank you. Thank you, Alf Henning. Okay, one slide to go and then Q&A. When it comes to outlook, of course, there are challenges. There is never a straight line to success, but I think there is underlying things happening in the company and in the market and our position, which makes all reason to see poLight's future in a bright light. As I said, there will be issues. The focus then we need to build an organization, we're able to handle those issues. There are market, global market things which are happening which we can't control, and we definitely need to maneuver in that landscape, and that the part of that answer is to explore different verticals, using the same TLens, reducing the risk. The activity level is high. Many could say too high. We are still a small organization, but the advantage in poLight is that everybody works for five. We have several smartphone OEMs experience difficult times, reduced sales, impacting their willingness to invest in new releases, and it also implies cost awareness. New releases are very often about cost down for those OEMs. However, there's no doubt about it, and we have said it for many years, when you look at the selfie camera trend, higher megapixel, lower F number, that needs AF, if you look at the use cases of a selfie camera, among them, look at this social media, TikTok, where you're dancing close to the camera or dancing far away from the camera, doing all funny stuff. That means a very good camera is needed in the selfie camera. We think that will force everybody to have a high-quality selfie camera. When we said this five years ago, not many believed us. Today it's happening. I think even though it's a little bit depressed these days, the pandemic, China is one of them who is having a very strict regime handling the pandemic. Of course, many of the smartphone OEMs is based in China and they are impacted by this regime. This will someday stop, and one day it will improve. Now, we just need to continue to position poLight to make sure that we are there when the customer are willing to move. We will continue to use resources to be there when the opportunity is there. We are involved, as I say in the report, in cases which is making, I would say, the fundament for my statement. There is no reason to give up. The AR side is, how should I say it, extremely encouraging. A s I said many times, we are in the AR space. We are in the beginning of something. We are on the lips of everyone who is thinking of AR technology and cameras and display solutions. Of course, it's not done by itself. We need to deliver. Now we have opportunities. We are getting mass production orders for cameras or for lenses to be used for AR and consumer and that is a fantastic opportunity, and this is happening this year. The rest is, in a way, up to us to deliver good quality and to make sure that the other projects, the POCs and the design is materializing into something good. So far, I would say a major milestone achieved by the company. It's important to emphasize that we're both involved in enterprise part of the AR world and the consumer. I mentioned before, the consumer devices, I do expect more to be in 2025, 2026. The most of the releases on the AR side will be typically enterprise. It will step-by-step become a consumer device, leading to more volumes. I would say markets such as the industrial market and the medical markets is less impacted by the current global situation. I would say it's progressing as expected and is giving us a lot of nice opportunities. Thank you. We are here for the Q&A. Alf Henning, will you join me for the Q&A session? As I said, if there are questions from the audience, Grethe will be here to hand you the microphone. We will do the best to answer. Okay. Start with this? Okay. Okay, first question. You mentioned that the concept tunable TWedge is for super resolution for display in AR glasses. Is this also relevant concept for use in smartphones? If so, how will it work? Yes. I would say that, as a starting point, and the primary focus is for the AR world. Can it be used for smartphone? In principle, it can. You could think about maybe using larger pixels, giving you a better light sensitivity, but you would like to compensate that by having a wobulator technology who then increase the perceived resolution. T hat could be a solution. As I said, not the focus, but then also a question mark, is the real estate enough in a smartphone? Question mark. Maybe it is. Yes, possible. There are some new patents surfacing regarding multiple TLens in folded optics. Can you describe benefits with this? Yes. Folded optics, that's probably then related to telephoto. Telephoto has a quite a long TTL, height of the camera or will be very long effective focal length. They fold it so that you not go in the Z direction to fold. You need to fold it to go in the X-Y direction. That's why folding. TLens in that folded system is quite nice actually. Why they're using TL enses, that must be to improve optical power. If you have one T Lens, you get, say, call it eight or nine or 10 or whatever optical power. If you double, you can double that by having two TL enses. That's the reason why and you have a relatively nice space in that direction of the phone. That's probably the reason. Regarding pre-shaped. By the way, that's similar what Kavli does. Kavli is stacking four TLenses to get enough optical power to image the brain activity. Regarding pre-shaped membranes and curved back window, can you tell us more about these future solutions? Yes. You're probably referring to what we showed at Capital Markets Day, where we showed a roadmap of where we think we can develop. In the TLens, the TLens is this membrane which we bent with the piezo muscles. It's polymer, and then it's the back window. You can think about having those components pre-shaped, curved, and that's something which we have on our plan. Why? Because it's giving you an extra parameter to tune. Design-wise, this gives you another parameter to tune to make it more compact camera, to make it more fitting bigger sensors. Basically, giving you another parameter to design around. More flexibility. Okay. IR filters usually has its own space in the camera module. Can you go further into detail how this will work when integrated to be a part of TLens? I have to say that next time I need to take my CTO to the show. IR filter in a camera, yes, that's normal, and it's typically or it is on top of the sensor, the image sensor. Quite a thick layer, and we have communicated to the ecosystem that we can have that IR filter implemented as a part of the back window on the TLens, which is a flat surface and which will minimize the TTL, the thickness of the camera, which is important in the smartphone. Th at we present as a possibility. We do study different coating methodologies to make that happen. It's quite an advanced coating, I have to say. Many layers. But that's possible. It will save potentially cost and will definitely save height. It will also challenge the established ecosystem. Because if you're going to do it like that, you need to those who are doing the assembly of the camera needs to be able to do it in such a way that the cleanliness is there. Today, the sensor is maybe done in a Class 10 clean room, and that's not normally what the camera module supplier can do. It needs to. S omebody can do and somebody cannot. Yes, possible. Good. OIS TLens concept seems very promising, but a bit further down the road. Present patent suggest hybrid between other actuator solutions combined with TLens on top integration. Could this be relevant until TLens has both functions in the same module? Combining, we have patented an OIS optical image stabilization concept, and that is quite a nice concept. In that concept, we call it hybrid MEMS. We're using some, say, mechanical actuator to actuate. Optical image stabilization is a device which is when you are shaking your hand, taking a picture, it's stabilizing the picture. Yes, that's all about hybrid MEMS which we have applied for patent and have already a patent, and that's exactly that. That is combining existing mechanical actuator with type TLens solution. That's exactly what it is. Also interesting, combining that with sensor shift, which is another way of doing OIS. Athermalization by design but also mentioned as use case. Can you go further into detail? Athermalization, yes. In some, like in the AR space, this temperature changes. Means that, say, if you have a camera which is fixed focus and the temperature is changing, then that fixed focus camera which used to be in focus, due to the temperature will be out of focus. If you have a TLens, even a passive TLens not activated, that will compensate in a different direction. The reason for that is that the refraction of the index of TLens is dependent on temperature, and that compensation is actually by design, so it's actually compensate without any even actuation. Of course, if you want to change focus from close, then you have to actuate. That's why we say by design. It's actually compensating somehow there, and we call it athermalization. Yes. Are you still expanding team? Maybe you could say by luck. Are you still expanding team? Yes. Actually, if you look at the numbers, this quarter is one down from last quarter, I think. Yes, maybe at least around the same. W e are expanding team. As you can see from the pipeline, we are super busy. At the same time, we have to, of course, balance the cost and the cash flow and all that. Yes, we are step-by-step expanding team. We are looking for a couple of new software resources now to be based in headquarters. We are looking for some manufacturing specialist in the Philippines. Yes, we are, and if anybody knows somebody, good software guys or manufacturing specialists, ask them to call me. Good. The last quarter seems to be a busy quarter for poLight. Has there been a special focus? I think we answered that during the presentation. It's the smartphone, it's AR, and it's industrial, and it's more and more, medical. Did new potential use cases appear? Completely new use cases this quarter. I think what we can see though, I think I mentioned this also last time, is that the automobile is starting to knock on the door. Why is that? There is somebody who's having a vision that, the cameras we have inside, outside the car will step-by-step go the same route as what happened in a mobile phone. Meaning more megapixels, smaller pixels. That is a trend which in a way the ecosystem will drive because they will like to sell as much silicon as possible. That is happening. If that happens, it will definitely need AF sooner or later, by the fact that there are more megapixel and the fact that there are smaller pixels. That's another dimension to this is that today, they're using glass lenses, expensive, quite heavy, so they would like to go to plastic lenses, and plastic lenses are more temperature unstable, so changing temperature, changing the plastic lens' characteristics. This means that a camera which was at a temperature in focus will be not in focus on another temperature, meaning need for tuning the focus. Those two facts is potentially making automotive a huge AF market. Will it happen fast? No. Will it be very difficult? Yes. Is it tough qualification programs? Extremely tough. Is it something we are considering? Yes. Are we being contacted by major players? Yes. Still very early days. Did you ever consider collaboration with your competition for hybrid solutions that may benefit both? Yes. We're continuously looking at all type of actuation, especially if I say, if we look at the OIS, that's definitely something we do. One day we may be there with some combined solutions. Related to the miniaturized two-photon microscope developed by Kavli or similar, how many TLenses have been delivered? Yes. This is related to the type Kavli activity, which is this two-photon microscope. How many? I think it's around 500 TLenses which we have shipped to those cases. Each scope use four TLenses, and those 500 TLenses are probably sold for approximately NOK 2 million. It's not smartphone pricing, to say it like that. Okay. Why are not design-in shown for mobile phone, while it's shown for other verticals? Well, that is not completely correct. When we feel that we have a strong design wins, we should, of course, also show it for the smartphone. Earlier you had guidance of going to net zero result in 2023. Also, there was a guidance of $100 million in 2025. How do you see this as of the current pipeline and opportunities? I think the last guiding we did, we didn't say anything about 2023. We said that we're going to. Now, I'm taking a little bit from top of the head, but I think we said that 2025, we reiterated the guiding. 2023, we didn't say anything. The reason for that is because we saw that the smartphone breakthrough did go to the right, meaning that. We still saw that the 2025 target was possible. We said nothing about 2023. We haven't reviewed, or sorry, we haven't got out with any new guiding, meaning that we still have an ambitious target for 2025. Of course, everybody understand that that is fully dependent on breakthrough in the smartphone. In Q2, you mentioned a very fast maturing smartphone project outside Asia. How is this going? Yes. We have smartphone project outside Asia, and I would say it's progressing. That's what I can say. How fast? I think they are doing quite a good job, and we are hopeful. Okay. How do you define a key market player, Apple? Yes. Apple is definitely a key market player, but there are many others. Has TLens been tested in military equipment and weapons? Is this a realistic, more realistic market for the future? No. To the first question, no. Not that I'm aware of, but of course we have people buying TLenses which we don't know really what they are using it for, who knows? Maybe I could think about AR-type devices, which I think also would be relevant for military application. Could be possible. What happened to the three matured POCs in smartphones you mentioned in the last quarter? Is there still possibility to launch it early in 2023? Remember when we one quarter we said that we saw that things were shifting to 2023 and onwards. I think that was the wording I used. How should I answer this? We are still working day and night to mature 2023 case. I think there is opportunities, there is activity which could lead to new sales in 2023. As I said, and I will repeat, it's super difficult for a company like poLight and any company which is a new entrant player into that difficult market to sit inside the boardrooms and understand the product portfolio strategy. In a way, when we say and when we hope and wish that there's obviously a lot of uncertainty related to those statements. What I can say is that if I look at the activity we are doing, having today with customers, there is potential for 2023. The last question. Would a larger stock issue make it easier for you to grow or are you limited for a controlled growth anyway? Yes. I guess this is about financing. Today, I feel that we are being viewed as robust and reliable from the customer perspective. Of course, when we need to ramp bigger numbers, we need to buy a lot more material. We still have, I would say, sufficient material to supply what I can see in 2023, which is a really good situation to be in. Really good situation. W e are in that situation because we took some bold decisions to order long lead items. You can see from the inventory build Alf Henning is talking about, you can see that is coming in these days, meaning that we can be less stressed about being able to supply because we have material, which is a super good situation to be in. Ramping further, doubling, tripling, blah, blah, blah, of course, that will need more capital and we need to plan for that need for capital as we see cases of maturing. Thank you. Okay. Grethe, could you give the microphone to the gentleman to the right? Will poLight announce it when the AR product is released to the market? Yes. It's a super good question, and I would expect that question. This is really difficult for us because we are under such a strict NDA with customer and like a little bit like the Xenocor and the Teledyne, it's a little bit of a happening that we're able to say it today. When it comes to the AR product, what I've said today is that I know that in 2022 you can buy a true AR product with TLens inside. That I've confirmed today. T hat's new information. That doesn't mean that I'm allowed. I'm not necessarily, or most likely I should say, I'm not allowed to say no other customer has launched the product. I'm not allowed to do that. I obviously every time I ask, not only once, but many times, but I'm generally speaking not allowed. Of course, typically when products are being released to market, there is what you call a teardown analysis being carried out. In these teardown analysis there are potential information which could be of interest and then of many of this key component will be visible. That was a long answer, but hopefully it was a good one. Thanks Alf Henning Bekkevik for joining me for the Q&A. Is there any last minute? No. Not anymore. Okay. Thank you all for coming to the presentation at Hotel Continental today. It's good to see that so many was here. Hope you will come back next time and bring your partner. There are still some open chairs. Thanks for coming. Also, thanks to you for watching the webcast and thanks for all of you asking all these questions which is making these quarterly presentations so much dynamic and so much better. We really appreciate that activity. Next event, it's actually after Christmas, Q4 2022, sixteenth of February 2023. Thank you. Have a great day. Thank you.