Elliptic Laboratories ASA — Earnings Release 2021

May 12, 2021

Elliptic Labs is reporting enhanced operational performance in Q1, 2021 along with building momentum for future growth

Elliptic Labs is reporting enhanced operational performance in Q1, 2021 along with building momentum for future growth

Elliptic Labs, a global AI software company and leader in AI Virtual Smart Sensors for the smartphone, laptop, Internet of Things (IoT), and automotive industries, reports progress from Q1 last year and operating revenues of NOK 4.5m in Q1 2021 compared to NOK 4.0m in Q1 2020. Recent announcements and progress will contribute to a stronger second half than first half 2021. EBITDA for Q1 2021 ended at NOK –8.5m compared to NOK –11.1m in Q1 2020. The development is in line with management expectations and due to solid sales revenues in Q4 2020, cash flow from operations ended slightly positive with NOK 0,2m in Q1 2021 up from NOK –6.0m in Q1 2020. Cash position at the end of the quarter ended at NOK 95.4m down from NOK 99.7m at the end of Q4 2020.

Highlights from the first quarter:

- Added one new large smartphone manufacturer to the customer base

- Announced launches on four high-volume smartphones with Xiaomi; Redmi Note 10, Redmi Note 10s, Mi 11 Lite and Mi11 Lite 5G. In addition, the flagship phone Mi11 launched globally during the quarter.

- Launched with a new smartphone customer, Black Shark, on their gaming phones Black Shark 4 and Black Shark 4 Pro

- Announced collaboration with Cadence Design Systems, Inc. to optimize Elliptic Labs machine learning algorithms on Cadence® Tensilica® HiFi DSPs to bring our AI Virtual Smart Sensors to more embedded systems

- Secured one more Proof-of-Concept (PoC) with new PC/laptop customer, while having good progress on PoCs with other PC/laptop manufacturers

- Two patents granted, adding to an already strong patent portfolio as we are the leader in patents using ultrasound virtual smart sensors in the consumer electronics market. Today, our portfolio consists of close to 100 patents granted/pending.

“In Q1 we continued to build our strategic foundation for broader adoption for our AI Virtual Smart Sensor platform, launching more smartphones with existing and new customers along with making solid progress to enter into new verticals.”, says CEO Laila Danielsen. “Additionally, due to the ongoing tight global supply chain, hardware component prices are higher, and our customers struggle to source physical hardware parts. Fortunately, our all-software solution allows our customers to bypass issues around hardware sensor supply chain constraints. Consequently, the interest in engaging with Elliptic Labs from both partners and customers has increased. Thus, we continue to work with our global chipset partners to incorporate our AI Virtual Smart Sensor platform into their short- and long-term roadmaps. This quarter we expanded and opened an office in Taiwan to work more closely with the top PC companies and their local vendors.”

We re-confirm our 2021 expectations that are based on the robust demand for our AI software platform, in particular across the smartphone and PC markets. We are excited about the opportunities ahead and very confident in our long-term strategy as we continue to execute and scale with current and new customers.

About Elliptic Labs:

Elliptic Labs is headquartered in Norway with presence in the USA, China, South Korea, Taiwan and Japan. Founded in 2006 as a research spin-off from Norway’s Oslo University, it is now a global enterprise targeting the smartphone, laptop, IoT, and automotive markets. The Company’s patented AI software combines ultrasound and sensor-fusion algorithms to deliver intuitive 3D gesture, proximity and presence sensing experiences. Its scalable AI Virtual Smart Sensor Platform creates software-only sensors that are sustainable, eco-friendly, and already deployed in over 150 million devices. Elliptic Labs is the only software company in the market that has delivered detection capabilities using AI software, ultrasound and sensor-fusion deployed at scale. Elliptic Labs’ technology and IP are developed in Norway and solely owned by the Company.

For more information visit: www.ellipticlabs.com