Polight ASA

Annual Report (ESEF) • Apr 29, 2025

2138007ZPDNUIHX6Z659-2024-12-31-0-en.xhtml 2138007ZPDNUIHX6Z6592024-01-012024-12-312138007ZPDNUIHX6Z6592023-01-012023-12-312138007ZPDNUIHX6Z6592022-12-312138007ZPDNUIHX6Z6592023-12-312138007ZPDNUIHX6Z6592022-12-31ifrs-full:IssuedCapitalMember2138007ZPDNUIHX6Z6592022-12-31ifrs-full:SharePremiumMember2138007ZPDNUIHX6Z6592022-12-31ifrs-full:RetainedEarningsMember2138007ZPDNUIHX6Z6592022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138007ZPDNUIHX6Z6592023-01-012023-12-31ifrs-full:RetainedEarningsMember2138007ZPDNUIHX6Z6592023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138007ZPDNUIHX6Z6592023-01-012023-12-31ifrs-full:IssuedCapitalMember2138007ZPDNUIHX6Z6592023-01-012023-12-31ifrs-full:SharePremiumMember2138007ZPDNUIHX6Z6592023-12-31ifrs-full:IssuedCapitalMember2138007ZPDNUIHX6Z6592023-12-31ifrs-full:SharePremiumMember2138007ZPDNUIHX6Z6592023-12-31ifrs-full:RetainedEarningsMember2138007ZPDNUIHX6Z6592023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138007ZPDNUIHX6Z6592024-12-312138007ZPDNUIHX6Z6592024-01-012024-12-31ifrs-full:IssuedCapitalMember2138007ZPDNUIHX6Z6592024-12-31ifrs-full:IssuedCapitalMember2138007ZPDNUIHX6Z6592024-01-012024-12-31ifrs-full:SharePremiumMember2138007ZPDNUIHX6Z6592024-01-012024-12-31ifrs-full:RetainedEarningsMember2138007ZPDNUIHX6Z6592024-12-31ifrs-full:RetainedEarningsMember2138007ZPDNUIHX6Z6592024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138007ZPDNUIHX6Z6592024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2138007ZPDNUIHX6Z6592024-12-31ifrs-full:SharePremiumMemberiso4217:NOKiso4217:NOKxbrli:shares Annual Report 2024 Page 2 Contents This is poLight .................................................................................................................................................... 3 Message from the CEO ...................................................................................................................................... 6 Board of directors .............................................................................................................................................. 7 Management ..................................................................................................................................................... 8 Investor information .......................................................................................................................................... 9 Board of directors’ report ................................................................................................................................ 12 Statement by the Board of Directors and the CEO ......................................................................................... 24 Environment, social and governance report (ESG) ......................................................................................... 25 Corporate governance report .......................................................................................................................... 29 Group financial statements ............................................................................................................................. 38 poLight ASA financial statements .................................................................................................................... 72 Independent auditor’s report .......................................................................................................................... 87 Contact details ................................................................................................................................................. 92 Annual Report 2024 Page 3 THIS IS POLIGHT poLight ASA is a Norwegian company, headquartered in Tønsberg, which has introduced a unique optical lens to the market for both consumer devices and professional applications. The lens replicates the lens of the human eye, enabling new user experiences and easing the implementation of autofocus functions in various applications. Organisation poLight has employees and long-term consultants in Norway, Finland, France, UK, US, China, Taiwan, the Philippines and Japan. Since the company was founded in 2005, it has acquired world-class expertise in optics, polymers and MEMS technology. The poLight team comprises highly skilled researchers and technical specialists, all aiming to develop world-leading tunable optics. Technology & Products poLight´s tunable optics technology enables native capabilities that replicate the human eye, making instant autofocus across a wide focal distance and constant field of view options possible in a variety of camera systems. It is also well suited for uses where beam-steering and optical tilting capabilities are needed. poLight’s patented, proprietary technology offers considerable benefits, such as extremely fast focus, compact size, no magnetic interference, low power consumption and constant field of view. These and other features open the way for its use in a multitude of ways, many of which are as yet unimagined. Instant focus Small real estate Constant field of view + + Extremely low power consumption + OEMs Annual Report 2024 Page 4 Based on its technology platform, the company has developed and patented TLens ® – a tuneable optical lens. TLens ® delivers faster and more accurate autofocus compared to standard Voice Coil Motor (VCM) systems, at significantly lower power consumption. The poLight TLens ® is constructed around a piezo element (piezo film), which is placed on a thin glass membrane and acts as an actuator. A patented polymer is sandwiched between two high-quality glass layers. The piezo material on the thin glass membrane is designed to spherically deform the polymer when a voltage is applied to it. This structure offers a tuneable lens of high optical quality. When the piezo is in standby mode, no force is applied to the thin glass and light passes through the two glass components, and the polymer, without deviation. When a voltage is applied, the piezo actuator will immediately force the thin glass membrane to bend accordingly. This generates a perfect lens, and an optical power, which focuses the light rays. The TLens ® can either be used on top of a fixed-focus camera module (i.e. add-on concept) or integrated as part of the lens stack (i.e. add-in concept). poLight is already mass-producing TLens ® Silver and TLens ® Silver Premium devices, as well as the related ASIC driver (PDA 50), which controls the supply of variable voltage to all TLens ® products and makes them change focus. In future, both larger and smaller TLens® may be developed. From an application perspective, the main difference between the various TLens ® products is the sensor format (size of the image sensor) with which they can be used, due to different aperture sizes (the transparent “opening” in the actuator). The TLens ® can be supplied as a “packaged” version to enable quick integration/testing. The TLens ® Silver Premium is considered suitable for both consumer and industrial products, whereas the TLens ® Silver is best suited for industrial applications where optical range is important. Other products, based on the same technology platform, may be released. TWedge ® , for instance, is a product concept that, among other things, will improve the resolution for μLED AR display solutions. Various technical samples have been developed and sold to customers with the aim of identifying a lead customer. The interest and feedback received so far have been promising. Supply Chain poLight is fabless and uses partners for most manufacturing processes, except for the polymer, which is produced at the company’s headquarters in Norway. ST Microelectronics is poLight´s manufacturing partner for the MEMS actuator, utilising their thin film piezo technology in an 8-inch semiconductor fabrication plant Annual Report 2024 Page 5 in Italy. Polymer and wafers with actuators are shipped to manufacturing partners in the Philippines which assemble and test the complete TLens ® products and ship them to camera module vendors. Market poLight’s TLens® technology is suitable for a wide variety of applications, particularly those where there is a need for compact and high-quality autofocus solutions that benefit from high speed, small size, constant field of view and low power consumption. The main focus areas so far have been the consumer market (e.g. smartphone, smartwatch, webcam, AR/MR etc), industrial/barcode/machine vision and enterprise AR/MR. Furthermore, the company has started to engage with some customer within the healthcare and automotive sectors. However, it remains to be seen if these markets need autofocus and whether poLight´s technology is a good fit. From Gel > MEMS Wafer > TLens® > Camera module > OEM Camera Module Partners OEM´s Driver ASIC Bare TLens® Packaged TLens® Annual Report 2024 Page 6 MESSAGE FROM THE CEO “2024 represented a setback with respect to revenue but market activity remained high. Promising customer interactions are underway in all our prioritised market segments. In particular, our customer engagements in the AR/MR market segment continue to develop positively. At CES 2025 in Las Vegas, we could see more and more OEMs starting to position themselves with various solutions in this space. This is clearly a sign that the AR/MR market is maturing. Although many of the glasses being launched are equipped with fixed-focus cameras, our customer interactions indicate that more advanced solutions, including the use of autofocus (AF), are on several technology roadmaps for smart glasses as well as AR- and MR-glasses. We will continue our efforts to put poLight in a position to seize the business opportunities ahead of us. In addition to AR/MR cases, other consumer opportunities, including laptops, webcams, smartphones and smartwatches, are also being explored. At the same time, we continue to build poLight’s pipeline in the industrial space. It has been very demanding and has taken a lot of time to get to where we are today, and there is still a way to go before we can claim to have “delivered”. However, the opportunity pipeline we have established so far motivates us to keep pushing forward to deliver value to shareholders, partners and employees. Thanks for you unstinting support!” Dr Øyvind Isaksen CEO, poLight ASA Annual Report 2024 Page 7 Board of Directors Grethe Viksaas Chairperson, Independent Grethe Viksaas has had a long career in the Northern European managed service provider Basefarm AS. First as founder and CEO, and later as executive chair and member of the board of directors. Prior to Basefarm, Ms Viksaas served as CEO for SOL System AS and held several management positions in IT companies. She has experience from numerous board positions, including Telenor ASA. She is currently a non- executive director on the boards of Norkart AS, Link Mobility Group Holding ASA, Crayon Group Holding ASA and CatalystONE Solutions Holding AS. She also chairs Farmforce AS’s board of directors. Ms Viksaas has a Master’s degree in Computer Science from the University of Oslo. Thomas Görling Board member, Independent Thomas Görling holds a Master of Science from the Royal Institute of Technology in Stockholm and has a professional background from management positions within the European optical instrument and systems industry. He has wide-ranging experiences of venture capital investments and building successful technology companies from a previous long-term engagement as Senior Investment Director at Stiftelsen Industrifonden. Svenn - Tore Larsen Board member, Independent Svenn-Tore Larsen is the former CEO of Nordic Semiconductor, a position he has held since February 2002. Mr Larsen has broad international experience in the semi- conductor business, previously as Director for the Nordic region for Xilinx Inc. He has also worked at Philips Semiconductor. Mr Larsen has a degree in Electrical Engineering from the University of Strathclyde, UK. Jean-Christophe Eloy Board member, Independent Jean-Christophe Eloy is the founder and CEO of Yole Group, which specialises in the semiconductor industry and provides marketing, technology and strategy consulting, reverse engineering and reverse costing, in addition to corporate finance services. Mr Eloy has spent his entire career in the semiconductor industry, starting at the French applied R&D organisation CEA/LETI as marketing manager and then creating the semiconductor practice at Ernst & Young. He is also a member of the board of the French companies Riber SA and Silmach. Mr Eloy is a graduate from EM Lyon Business School and from the INPG-ENSERG school of engineering. Marianne Bøe Board member, Independent Marianne Bøe has served as Head of Investor Relations at IDEX Biometrics since January 2020. Prior to this, Ms Bøe held various senior asset management positions, and has been a portfolio manager for more than 20 years. She has broad and extensive experience from investing in globally listed companies, with a special focus on the technology sector. Ms Bøe holds a Master of Science degree in Economics and Business Administration from Norwegian School of Economics (NHH) and has completed the Advanced Portfolio Management Program arranged by NFF (Norsk Finansanalytiker- forening). Annual Report 2024 Page 8 MANAGEMENT Dr Øyvind Isaksen Chief Executive Officer Dr Øyvind Isaksen has been CEO of poLight® since August 2014. He has previously held several CEO positions, most recently in the publicly listed company Q-Free ASA, which he left in January 2014, after 7 years as CEO. Dr. Øyvind Isaksen holds a PhD in Applied Physics. Pierre Craen Chief Technology Officer Pierre Craen has more than 20 years’ experience in opto-mechanical systems engineering. Prior to joining poLight®, he managed product development teams at Varioptic, Barco and Motorola/Symbol. Mr Craen holds an MSc in Optical Engineering from Sup-Optic, as well as an MSc in Applied Physics. Joakim Hines Bredahl Chief Financial Officer Joakim Hines Bredahl is a senior executive with background from various aspects of financing, through entrepreneurship, venture capital (Verdane Capital Advisors) and banking (Nordea). He has a BA (Hons) in Finance and Marketing from Strathclyde Business School. Marianne Sandal Chief Operating Officer Marianne Sandal has more than 15 years’ experience heading worldwide operations in Nera ASA (telecommunications) and Q-Free ASA (intelligent transportation systems). Ms Sandal holds a BSc in Mechanical Engineering, in addition to courses in economics and management from BI Norwegian School of Management.. Annual Report 2024 Page 9 INVESTOR INFORMATION Share price development poLight ASA (PLT) has one class of shares. Its shares were listed on the Oslo Stock Exchange on 1 October 2018 at NOK 50 per share. On 30 May 2022, the PLT share was split in the ratio of 1:5, which means every single share before the split became five shares after the split, at which point the share’s value stood at NOK 10. The company had 129,621,605 shares outstanding at the close of 2024, each with a nominal value of NOK 0.04. In 2024, the Group’s share price decreased from NOK 17.06 per share at the beginning of the year to NOK 4.79 at the close. During the year, the share price (at closing) varied between NOK 2.36 and NOK 19.00 per share. In total, 287,472,082 shares were traded in 2024, equivalent to 222 per cent of the shares outstanding as at year end. Major shareholders and voting rights poLight had 7,243 shareholders registered in the Norwegian Central Securities Depository (VPS) as at 31 December 2024. The 20 largest shareholders owned shares representing 39.4 per cent of the share capital. Non-Norwegian shareholders owned 15.9 per cent of the shares. All the shares registered by name carry equal voting rights. The shares are freely tradable. 0 200 400 600 800 1 000 1 200 1 400 1 600 - 2,00 4,00 6,00 8,00 10,00 12,00 14,00 16,00 18,00 20,00 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 PLT OSEBX OSEBX PLT Annual Report 2024 Page 10 Shareholders of poLight ASA at 31 December 2024 Ordinary shares Share- holding Voting rights % % Investinor Direkte AS 14 461 900 11.2 % 11.2 % Nordnet Bank AB (nominee) 9 632 041 7.4 % 7.4 % Nordnet Livsforsikring AS 7 861 844 6.1 % 6.1 % J.P. Morgan SE (nominee) 2 693 716 2.1 % 2.1 % J.P. Morgan SE (nominee) 2 607 127 2.0 % 2.0 % LHH AS 2 500 000 1.9 % 1.9 % Indus Production Services AS 2 000 000 1.5 % 1.5 % Trond Andersen 1 300 000 1.0 % 1.0 % Fjellstuens Eftf. AS 818 785 0.6 % 0.6 % Aquery Holding AS 811 079 0.6 % 0.6 % Erik Schellhorn 810 000 0.6 % 0.6 % CB Helse AS 700 000 0.5 % 0.5 % Danske Bank A/S (nominee) 689 670 0.5 % 0.5 % Youran Su 629 390 0.5 % 0.5 % Danske Bank A/S (nominee) 620 000 0.5 % 0.5 % Mikjel Johannes Skurdal 619 256 0.5 % 0.5 % Richard Hanssen 602 000 0.5 % 0.5 % Arild Hansen Rødum 601 500 0.5 % 0.5 % J.P. Morgan Secruities PLC 552 000 0.4 % 0.4 % Stefan Sveen 544 000 0.4 % 0.4 % Total number of shares owned by top 20 shareholders 51 054 308 39.4 % 39.4 % Number of shares owned by other shareholders 78 567 297 60.6 % 60.6 % Total number of shares 129 621 605 100.0 % 100.0 % An overview of the 20 largest shareholders is available on the poLight website, updated each week. Employee share programme The Board is authorised to issue shares through share option schemes up to a total nominal value of NOK 264,846, equal to 6,621,155 shares. In 2024, no shares were issued in order to fulfil the obligation to provide shares in connection with the exercise of share options. As at 31 December, 6,271,705 share options (equal to 4.8 per cent of shares outstanding) were outstanding, all at a weighted average strike price of NOK 3.30 per share. Corporate actions/events Date Enters into Strategic Investment Agreement with Q Technology Group backed by top tier U.S. consumer electronics OEM 15.04.2025 Follow-on purchase order for implementation in five new products by Superlead 24.03.2025 poLight TLens® confirmed to be used in two new handheld barcode products 08.10.2024 Follow-on purchase order received for a barcode product 07.08.2024 New purchase order received supporting barcode scanning market 24.06.2024 Capital Markets Day 2024 05.06.2024 Share capital increase registered – raising net proceeds of NOK 124 million in a rights issue 21.05.2024 Design-win with Vuzix Shield Industrial AR Smart Glasses 04.04.2024 PhenoSys now offers Turnkey Mini2P Systems with poLight ASA Tunable Optics 21.02.2024 Action Prowave Technology Co. Ltd. confirms release of two new barcode scanner products using TLens® 02.02.2024 Extraordinary General Meeting – Board Election 15.02.2024 Annual Report 2024 Page 11 Dividends and dividend policy poLight is focused on developing and commercialising its technology and intends to retain any future earnings in the foreseeable future to finance development activities, operations and business growth. The company has not previously distributed any dividends to its shareholders and does not expect to do so in the foreseeable future. Any future decision to pay a dividend will depend on the company's financial position, operating profit and capital requirements. Analyst coverage poLight does not currently have analyst coverage. Any changes will be updated on the company’s website www.polight.com. Financial calendar 2025 Date Event 30 April 2025 Quarterly Report – Q1 2025 21 May 2025 Annual General Meeting 14 August 2025 Half-yearly Report 2025 30 October 2025 Quarterly Report – Q3 2025 24 February 2026 Quarterly Report – Q4 2025 Further information can be found on the company’s website www.polight.com and at www.newsweb.no. poLight’s IR policy can be found at www.polight.com. Annual Report 2024 Page 12 BOARD OF DIRECTORS’ REPORT Overall progress in 2024 was encouraging. At the close of the year, poLight´s TLens ® was incorporated into 28 different products, representing both consumer and professional applications and confirming the versatility and market potential of poLight’s unique technology. There was a high level of customer engagement in various segments throughout the year, which has led to design-wins in strategically important market segments. Nevertheless, the conversion of commercial wins into revenues was lower than the company would have liked. Customer-wins status per April 2025 Annual Report 2024 Page 13 Corporate events in 2024 On 15 January 2024, an Extraordinary General Meeting elected Jean-Christophe Eloy and Marianne Bøe as new members of the Board, both with terms lasting until the Annual General Meeting in 2025. The EGM also appointed Jan-Erik Hæreid as chair of the Nomination Committee, and Egil Garberg as a committee member. Anne E. H. Worsøe’s Nomination Committee term has been extended until the 2025 AGM. On 18 April 2024, an Extraordinary General Meeting approved a partially underwritten rights issue, which generated net proceeds of NOK 124 million. At the company’s AGM on 22 May 2024, none of the board members were up for election. Manufacturing and operations poLight primarily works with two categories of subcontractors – a MEMS supplier and assembly partners, in addition to various component suppliers. The MEMS partner supplies the wafer comprising the actuators (i.e. “eye muscles”), while the assembly partners assemble the finished product. The polymer (i.e. lens material) is produced at poLight’s headquarters. In 2024, deliveries to AR/MR customers, industrial and healthcare customers were the main contributor to revenue, relatively evenly distributed. During the year, the company has built a strong local organisation at its assembly partner and worked on various improvement programmes, e.g. yield improvement activities. Output from the assembly partner was relatively low. No new MEMS wafers were ordered, manufactured or delivered during the year, as inventory has been considered to be sufficient. Product development Development activity with respect to both TLens® and TWedge® intensified in 2024. The TLens®-related activities include new reference designs, a bigger aperture and new ways of realising add- in designs. For TWedge®, the focus was to produce technical samples for customers and further develop the technology platform. Considerable efforts were devoted to developing camera reference designs in dialogue with important players in the ecosystem. This comprises various camera solutions for AR/MR, smartphones, laptops, webcams and barcode/machine vision systems. This activity is important to be able to present solutions to the market and make it easier for our customers to adapt TLens®-based solutions. The company’s efforts to expand the autofocus (AF) portfolio to include a larger aperture, and thereby support bigger image sensor formats, was another key activity during the year. This is a challenging project, which is still at an early stage. The focus has been to study various concepts and engage in early-stage prototyping. The first customer interactions are ongoing and some specific applications are being explored. It remains unclear if and when these solutions will be ready for market release, as it will depend on the results and specifications of the prototypes and the level of interest from potential lead customers. Annual Report 2024 Page 14 Interest in poLight´s TWedge® technology is good, and several OEMs have ordered TWedge® technical samples for assessment. The aim is to attract lead customers who will be willing to contribute financially to the product’s further development. Several customer interactions took place during the year. The market remains somewhat undefined and customers are still at an early stage of assessing how the TWedge® can be used, what specifications are required and how it can be integrated. poLight aims to engage with one or more lead customers, with a view to designing a specifically tailored version. The lessons learnt from this first deployment will eventually be used to create a standard poLight product when the market is more defined. In the meantime, poLight will continue to further develop the TWedge® technology platform to enable more functions and applications. Several other important activities are ongoing. These relate more to the continuous enhancement of the current product portfolio and to supporting key customers in their assessment of TLens® for their application areas. Market poLight is actively engaged in several market areas. This includes consumer applications, such as smartphones, augmented/mixed reality (AR/MR), laptops, webcams, smartwatches and other accessories, as well as a broad range of professional applications, such as enterprise AR/MR, barcode/machine vision and scientific-related products. In addition, the automotive and healthcare markets are being monitored, although these are not currently being given a high priority, as the need for autofocus is likely some years away. There are also other factors to consider, specifically relating to the need for a bigger aperture TLens® for the automotive market and a smaller TLens® related to the medical/endoscope market. Consumer market The main activity during the year has been related to augmented/mixed reality (AR/MR), laptop, webcam, smartphone and smartwatch applications. On the AR/MR side in general, the level of activity and interest is high. As mentioned earlier, this market is still in a definition phase. In addition to AR/MR-related consumer cases, the company is exploring the laptop, webcam, smartphone and smartwatch markets, as well as various consumer accessories. The traditional consumer market (e.g. smartphones) is challenging, but there are certain other consumer application areas and trends that may open up attractive business opportunities. poLight continues to be persistent in relation to the consumer market and has embarked on several development projects to enable less costly integration of TLens® and broaden the company’s offering to cover wider application areas. Not least, it is investing in reference designs at the camera module level, which target various consumer applications. Table 1 below illustrates poLight’s activities in the consumer market segment. A potential TWedge® product is included in the numbers given in Table 1 for PoCs (six) and planned PoCs (five). Annual Report 2024 Page 15 Table 1 Overview of consumer-related activities, also including AR/MR. Both for TLens® and TWedge® Compared with last year’s annual report, the number of design-wins and design-ins remains unchanged, while the number of PoCs has increased from 9 to 16, and planning PoCs from 14 to 23. Augmented reality (AR) market TLens ® is being considered and tested by several important AR/MR market players. The TLens® technology’s low power consumption, insensitivity to gravity, temperature stabilisation (often referred to as athermalisation), high speed and compactness stand out as key technical benefits. The ecosystem, the technology and the market in general still need to mature before massive deployment of products will occur. Key players are, however, of the opinion that this will develop into an important market. With TLens® AF solutions now being used in four commercially available AR/MR products, poLight has built a strong foundation for becoming the preferred AF solution for such applications. The current use cases are directed at the professional/enterprise market, which is why present volumes are low. Nevertheless, potential consumer-oriented opportunities are growing in number and becoming increasingly mature, see Section “Consumer Market” above. The AR/MR market segment will be key for poLight. With respect to TWedge®, major consumer AR/MR OEMs have started testing the prototypes for various applications. The strategy is to continue building appetite by selling technical samples, and learn from the market about its needs, applications and required specifications. The objective is to obtain a lead customer’s commitment to supporting further product development and trigger mass production. Due to the lack of maturity in the market and key pieces of technology, the timing is uncertain. In the meantime, customer interactions will continue and the TWedge® technology platform will be further developed to offer more functionality and cover broader application areas. Table 2 illustrates the activity in the AR/MR market segment, also including the consumer cases and TWedge®. Annual Report 2024 Page 16 Table 2 Overview of the AR/MR-related activities. Also includes TWedge®. Green icon = enterprise market; brown icon = consumer market. Comparing the above with the status at the close of 2023, the number of design-wins has increased by one, the number of design-ins has decreased by three, ongoing PoCs increased by four and planning PoCs increased by five. Barcode/Machine Vision/Industrial It will take time to develop this market, and doing so will require entry into some broader application areas. An increasing customer pipeline is, however, a clearly positive sign. In the barcode/machine vision market, six companies currently use TLens® in a total of 13 1 different commercially available products (design-wins). All the products are still shipping to customers and are expected to do so for several more years. See Table 3 for an overview of the activity within the Industrial market segment. 1 Counting each model from the different suppliers as a design-win. Annual Report 2024 Page 17 Table 3 Overview of the Industrial market segments (mainly barcode and machine vision, but also some other applications). The “eye” icon refers to machine vision. Comparing the above with the status at the close of 2023, the number of design-wins has increased by nine 2 , the number of design-ins has decreased by one, the number of ongoing PoCs remains the same, while planning PoCs increased by six. Healthcare The company continues to support selected opportunities in the healthcare market segment. The partnership poLight has developed with the Kavli Institute at the Norwegian University of Science and Technology (NTNU) and the contribution the company has made to the development of the Mini2P microscope 2 have led to several similar projects. In addition to engaging directly with research labs, the company is involved with three commercial companies. All of these have now released commercially available solutions to the market. In addition to the activity related to Mini2P, poLight is engaged in some commercial endoscope cases. In the short/medium term, however, the company does not foresee any commercial breakthrough for this application, as the trend is still to use low-resolution sensors, with no clear need for autofocus. This may change over time. Currently, the company has four design-wins (all related to Mini2P), 14 ongoing PoCs, of which 11 relate to Mini2P – typically universities/research labs, and four planning PoCs. Compared with the status at the close of 2023, this is three more design-wins, three fewer design-ins, same number of PoCs and three fewer planning PoCs. 2 An open-source miniature two-photon microscope brain explorer for fast high-resolution calcium imaging in freely moving mice. Annual Report 2024 Page 18 Automotive Going forward, this market segment may have a need for autofocus technology, and TLens® is one of the solutions being evaluated. The market is potentially significant but will most likely require a new revision of TLens®. To that end, development has started, as explained in the “Product Development” section of this report. Not much has happened in this market segment in 2024, apart from a dialogue with some key market players. In relation to this market segment, the status at the close of 2024 (the figures in brackets refer to the status at the close of 2023): zero design-wins (0), zero design-ins (0), one PoC ongoing (3) and two planning PoCs (5). The table below presents an overview of customer activity in all market segments. The figures in brackets refer to the status as at the close of 2023. The number of design-wins increased during the year. Please bear in mind, however, that the numbers reported for the Industrial market segment are counted differently in Q4-2024 compared to Q4-2023. From Q3-2024, each product release from each customer is counted as a design-win. The correct comparison is therefore 28 per Q4-2024 compared with 20 (15+5) per Q4-2023, implying eight new design-wins during the year. At the close of the year, there are seven fewer design-ins compared with the close of 2023, 21 more completed PoCs, four more ongoing PoCs and nine more planning PoCs. Sustainability poLight adheres to the Norwegian Transparency Act and intends to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD) required reporting deadline. At present, poLight is obligated to submit the initial report by mid-2027 for the 2026 report. Nevertheless, if a postponement is feasible, such as through the “Omnibus Simplification Package,” it will be utilised to prevent unnecessary time, effort and expenses. For additional information, please refer to the ESG (Environment, Social and Governance) chapter later in this annual report. Annual Report 2024 Page 19 Organisation poLight ASA and its subsidiaries had 28 full-time employees at the close of 2024, compared with 22 full-time employees in 2023. In addition, 22 consultants were engaged on long-term contracts, compared with 17 in 2023. In 2024, the employees and consultants were located in 11 different countries and represented 16 different nationalities. Women made up 18 per cent of the workforce, compared with 26 per cent in 2023. poLight is committed to being a healthy workplace, which provides equal opportunities for development to all employees, irrespective of gender, ethnicity or other characteristics. poLight is committed to the health, safety and welfare of its employees and their families, as well as its customers. Sickness absence came to 0.6 per cent in 2024, compared with 0.9 per cent in 2023. Sickness absence remains well below the Norwegian national average of approximately 6.8 per cent (2023: 6.8 per cent). There were no work-related accidents (that needed reporting to the Norwegian Labour Inspection Authority) or material damage in 2024. One minor incident caused personal injuries that did not need medical assistance but led to a 9-day absence from work. The incident related to an accidental fall during the move to Tønsberg. Liability insurance Members of poLight ASA’s board and management are covered by Directors and Officers (D&O) liability insurance provided by AIG. The insurance also includes poLight’s subsidiaries. The Board considers the coverage to be reasonable. Financial performance, poLight Group The Group’s consolidated revenue in 2024 totalled NOK 9.6 million, compared with NOK 22.5 million in 2023. NOK 7.6 million (2023: NOK 20.1 million) reflects sales of TLens® and ASICs for commercial use and sample deliveries, and NOK 2.0 million (2023: 2.4 million) reflects revenue from non-recurring engineering (NRE) relating to customer development projects. Geographically, NOK 5.0 million of the revenue relates to customers in the USA, NOK 4.4 million to customers in Asia and NOK 0.2 million to those in Europe. Cost of sales totalled NOK 2.2 million in 2024, compared with NOK 8.9 million in 2023, mainly due to decreased sales. The increase in inventory obsolescence provision was NOK 6.4 million (NOK 1.4 million). R&D expenses, net of government grants, amounted to NOK 32.3 million, compared with NOK 34.6 million in 2023. No development expenditures have been capitalised in the past two years. Expensed R&D costs include R&D management, patents, improvements of the existing TLens®, feasibility studies on new concepts, and costs related to integration of TLens® in new customer applications/products. Sales and marketing expenses totalled NOK 16.3 million, compared with NOK 17.7 million in 2023. Operational/supply chain expenses totalled NOK 23.5 million, up from NOK 16.7 million in 2023, where the cost increase is related to strengthening of the project and data management teams. Administrative expenses totalled NOK 27.0 million, up from NOK 22.0 million in 2023, reflecting provision for legal expenses related to the patent infringement claims (see Note 17 Provisions for details) and higher salary costs due to strengthening of the finance team. Depreciation and amortisation amounted to NOK 10.5 million, compared with NOK 9.7 million in 2023. Annual Report 2024 Page 20 The Group made an operating loss of NOK 108.6 million in 2024, compared with an operating loss of NOK 88.5 million in 2023. Net financial items in 2024 totalled NOK 7.0 million in net finance income, up from NOK 4.5 million in 2023. This is attributable primarily to interest income on bank deposits. The tax expense in 2024 came to NOK 0.1 million (NOK 0.2 million). The Group made a net loss of NOK 101.8 million in 2024, compared with a net loss of NOK 85.5 million in 2023. This represents a loss in 2024 of NOK 0.97 per share on a fully-diluted basis, compared with a loss of NOK 1.40 per share in 2023. Financial position As at 31 December 2024, total assets came to NOK 264.0 million, compared with NOK 223.4 million at year- end 2023. Total equity came to NOK 231.9 million, compared with NOK 199.5 million at year-end 2023. Intangible assets amounted to NOK 10.3 million as at 31 December 2024, compared with NOK 17.6 million at the close of 2023, reflecting amortisation over the year. At year-end, right-of-use assets amounted to NOK 10.2 million, compared with NOK 2.9 million as at 31 December 2023. The increase is attributable to the signing of a new lease for the company’s HQ in Tønsberg, commencing 1 December 2024. The new lease comprises 720 m 2 of offices and lab facilities, including a clean room, and has a duration of 10 years with two options to extend for periods of five years each. During the year, inventories decreased by NOK 7.7 million to NOK 62.4 million at the close of 2024, compared with NOK 70.1 million at year-end 2023. The decrease in inventories primarily relates to the increased obsolescence provision of NOK 6.4 million. Trade and other receivables totalled NOK 14.1 million, compared with NOK 19.8 million in 2023, of which recognised government grants accounted for NOK 1.9 million (NOK 2.1 million in 2023). As at 31 December 2024, the company had cash and cash equivalents of NOK 166.8 million, compared with NOK 114.8 million at the close of 2023. The rights issue in the second quarter 2024 generated NOK 124.0 million in net proceeds (the rights issue in the second quarter 2023 generated NOK 125.8 million in net proceeds). Long-term liabilities totalled NOK 10.0 million at year-end 2024, compared with NOK 2.0 million in 2023. The lease liability relates to the lease of the company’s headquarters in Tønsberg. Total current liabilities at year- end 2024 came to NOK 19.2 million (NOK 21.9 million in 2023). Cash flow Net cash flow used in operating activities totalled NOK 69.2 million in 2024, compared with NOK 94.6 million in 2023. In 2023, inventory increased by NOK 24.5 million due to purchases of wafers for TLens Silver Premium. No wafers were purchased in 2024, explaining the decreased cash used in operating activities. The main differences between net cash flow from operations and net loss is due to a share option expense of NOK 10.0 million, decreased working capital of NOK 9.4 million, depreciation and amortisation of NOK 9.7 million and interest received of NOK 7.4 million. Annual Report 2024 Page 21 Net cash flow used in investing activities totalled NOK 2.4 million in 2024, compared with NOK 0 million used in 2023. Net cash flow used in financing activities totalled NOK 124.2 million in 2024 (NOK 125.0 million in 2023). The positive cash flow from financing activities reflects the net proceeds of NOK 124.0 million raised in connection with the rights issues undertaken in 2024. (The rights issue in the second quarter 2023 generated NOK 125.8 million in net proceeds). Financial performance, parent company In 2024, the parent company generated NOK 9.6 million in revenue, compared with NOK 22.5 million the year before. Gross profit came to NOK 1.0 million (2023: 12.2 million). It made an operating loss of NOK 112.0 million in 2024, after total operating expenses of NOK 113.0 million. In 2023, the parent company made an operating loss of NOK 91.2 million, after total operating expenses of NOK 103.3 million. Operating expenses in 2024 include employee expenses (including consultants engaged on long-term contracts) of NOK 59.0 million, compared with NOK 58.2 million in the preceding year. The parent company had on average of 36 employees and consultants in 2024, compared with 31 in 2023. In 2024, other operating expenses amounted to NOK 44.7 million, compared with NOK 36.6 million in 2023. (See Note 3 Specification of operating expenses by nature). poLight ASA made a net loss of NOK 103.6 million in 2024, compared with a net loss of NOK 84.9 million in 2023. The Board proposes that NOK 93.6 million be transferred from the share premium and NOK 10.0 million from retained earnings. The Board does not propose payment of a dividend for 2024. Share capital As at 31 December 2024, poLight ASA had a share capital of NOK 5.2 million, consisting of 129,621,605 shares, with a nominal value of NOK 0.04 each. poLight employees have been granted options to subscribe for shares under share option schemes. The Board is authorised to issue shares – in share option schemes – up to a total nominal value of NOK 264,846 (6,621,155 shares at a nominal value of NOK 0.04). As at 31 December 2024, 6,271,705 share options (equal to 4.8 per cent of shares outstanding) have been granted, all at a weighted average strike price of NOK 3.30 per share with a range from NOK 3.20 to NOK 4.33. 6,129,490 share options were granted during the year at a weighted average strike price of NOK 3.30 per share. Of these, 5,304,490 share options from previous schemes with a weighted average strike price of NOK 11.70 per share were cancelled and replaced. 1,130,444 share options where exercisable at 31 December 2024. Risks and risk management poLight’s risk management is based on the principle that risk assessment is an integral part of all business activities. Reference is also made to the ESG risk assessment described in the enclosed ESG Report. As a technology company with global operations, poLight is exposed to risk factors of a financial and operational nature, which may affect business activities and the company’s financial position. poLight’s Board places a high priority on managing risk and has established routines and policies to limit overall risk exposure. Political risk: Given the technical nature of poLight’s products, it can be subject to changes in regulation with regards to taxes (like the now abolished increased employer’s national insurance contribution in Norway), Annual Report 2024 Page 22 work processes or materials used. The company works with experts to keep updated on potential regulatory changes and mitigate this risk by staying ahead of such changes. Additionally, with its global operations, poLight is exposed to various forms of geopolitical risk. Increased instability is caused by armed conflicts, increased tension between nations and groups, increased trade tariffs and protectionism, and interference in democratic elections. Any and all of these may affect poLight’s operations or markets, both directly and indirectly. However, it is difficult to assess the exact nature of their short or long-term impacts until these scenarios materialise. Instability in general, however, may impact consumer spending, which again could affect poLight’s income. Market risk: poLight develops highly innovative autofocus lenses for consumer and industrial products. The markets for these products are undergoing rapid technological changes. poLight’s future success will depend on the company’s ability to align with customers’ development cycles, as well as meet changing industry demands, develop new technologies that address prospective customers’ increasingly sophisticated requirements (e.g. aperture size, optical power, size, non-lead content etc.) and ensure high-quality and cost- effective mass production. IPR-related risk: To protect its intellectual property rights (IPR), poLight relies on a combination of patents, copyright and trademark laws, trade secrets, confidentiality procedures and contractual provisions. IPR constitutes one of poLight’s key assets and poLight actively seeks to protect its products and technologies in the markets and geographic regions in which it operates, and elsewhere as deemed relevant. In its use of IPR, poLight faces several risks. For example, third parties may illegally copy or utilise poLight’s IPR, third parties may (with or without merit) claim that poLight’s use of IPR infringes the IPR of that third party, or the IPR of others may limit poLight’s freedom to operate. Foreign exchange risk: poLight is subject to certain financial risks associated with currency and interest rates. While the company has had limited revenue so far, it does incur costs in various currencies. No single large currency risk that could have a significant impact on the company’s net profit has been identified. Proceeds from share issues are kept in NOK. poLight has not entered into any hedging agreements. Liquidity risk: poLight currently operates at a loss. For the next 12 months, the Group's principal source of liquidity will still be the cash generated from financing, both equity and debt, in addition to soft funding and net cash flows generated from sales. The company may in the future seek to raise further capital to finance R&D activities and expansion plans. Since listing, the company has had the fortune of benefitting in several financing rounds from the improved access to capital through the Euronext Oslo Børs. Continued access to capital in potential future financing rounds is, however, conditional on the goodwill and risk appetite of poLight’s shareholders and the stock market in general, which may be affected by a multitude of factors. Corporate governance poLight aims to comply with the Code of Practice for Corporate Governance published by the Norwegian Corporate Governance Board (NUES). A separate section of this annual report provides further details of the poLight Group’s corporate governance. Going concern poLight does not have any operations, customers or direct suppliers in Russia or Ukraine. The war in Ukraine has therefore not had any direct consequences of significance for the Group’s operations, other than the general impact of the war on the global situation. The same applies to increased instability in the Middle East after the escalation of conflict levels between Israel and Hamas. Annual Report 2024 Page 23 The Group possesses sufficient liquidity to fund its operations for the next 12 months. Additionally, on 15 April 2025, the company announced a private placement by Q Technology Group, that when approved by the General Assembly and completed will provide gross proceeds of NOK 171.5 million and a subsequent offering to existing shareholders that could result in additional NOK 51.4 million, if fully subscribed. Management, together with the Board of Directors, continuously evaluates the Group’s liquidity requirements to ensure adequate financing of planned operations, research and development activities, as well as any investments necessary for scaling up the business. According to the business plan before the private placement, the Group’s cash reserves were expected to cover activities through the second quarter of 2026. However, contingent on shareholders approving the private placement in the company’s AGM, a revision of the business plan will be carried out to reflect the improved runway. Accordingly, these consolidated financial statements have been prepared under the assumption that both the Group and the parent company remain going concerns. Management confirms that assumption to be appropriate. Outlook Although the ongoing market activity did not translate into substantial revenues in 2024, there is still good reason to be optimistic about future developments. Throughout the year, the company received numerous confirmations that it is well positioned with respect to several promising market segments representing significant business potential. poLight is becoming increasingly well-known, with reputable customers and other players in the ecosystem praising its technology and solutions. Key design-win references have been achieved in all prioritised market areas. poLight is also implementing important technology programmes aimed at future-proofing the company. The manufacturing setup is gradually being optimised and, not at least, the organisation is highly competent, capable and motivated for what lies ahead. Furthermore, the company is yet to actively explore several market segments and fully develop the technology platform, both of which have the potential to open up a wide range of business opportunities. As a part of their strategic investment in poLight, Q Tech is working to establish a dedicated TLens® assembly and test line, in addition to poLight's existing manufacturing capabilities. Combining poLight’s technology and expertise with Q Tech’s experience in ramping up technology to high volume, will be an important element in convincing major OEM´s to use poLight’s products and establish the company as a trusted long-term supplier. By working hard, being persistent and consistently taking a market and customer-oriented approach, poLight’s progress will continue going forward. poLight ASA Tønsberg, 29 April 2025 Grethe Viksaas (sign) Chairperson, Independent Thomas Görling (sign) Board member, Independent Svenn - Tore Larsen (sign) Board member, Independent Jean-Christophe Eloy (sign) Board member, Independent Marianne Bøe (sign) Board member, Independent Dr Øyvind Isaksen (sign) Chief Executive Officer Annual Report 2024 Page 24 STATEMENT BY THE BOARD OF DIRECTORS AND THE CEO We confirm that, to the best of our knowledge, the consolidated financial statements for 2024 have been prepared in accordance with IFRS® Accounting Standards, as adopted by the EU, as well as additional disclosure requirements set out in the Norwegian Accounting Act; and that the financial statements for the parent company for 2024 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway; and that the information presented in the financial statements provides a true and fair view of the parent company and the Group’s assets, liabilities, financial position and results for the period as a whole; and that the Board of Directors’ report provides a true and fair view of the development, performance and financial position of the parent company and the Group, and includes a description of the material risks that the Board of Directors, at the time of writing this report, considers could have a significant impact on the financial performance of the Group. poLight ASA Tønsberg, 29 April 2025 Grethe Viksaas (sign) Chairperson, Independent Thomas Görling (sign) Board member, Independent Svenn-Tore Larsen (sign) Board member, Independent Jean-Christophe Eloy (sign) Board member, Independent Marianne Bøe (sign) Board member, Independent Dr Øyvind Isaksen (sign) Chief Executive Officer Annual Report 2024 Page 25 ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) REPORT 1. Introduction poLight ASA was founded in 2005 and is publicly traded on the Oslo Stock Exchange (OSE: PLT). The company offers a patented, proprietary tunable optics technology, starting with its first product TLens®, which replicates “the human eye” experience in autofocus cameras in devices such as smartphones, augmented reality glasses, smartwatches, barcode scanners, machine vision systems and medical devices. poLight’s TLens® enables better system performance and new user experiences due to differentiated advantages such as extremely fast focus, small size, ultra-low power consumption, no magnetic interference, no gravity sensitivity, and constant field of view. poLight® has built a world-class team with expertise in optics, polymers, MEMS technology, imaging applications and camera systems. This team is establishing poLight® as the world leader in tunable optics. poLight® is a fabless company using MEMS foundry, assembly and packaging services from well-established suppliers. poLight® is headquartered in Horten, Norway, with employees in Finland, France, China, Taiwan, USA, UK, the Philippines and Japan. 2. Sustainability poLight aims to be a responsible company with regard to working conditions, human rights, the environment and anti-corruption. The company promotes a healthy, safe and fair working environment in accordance with applicable laws and regulations, including the UN Global Compact. poLight has established a code of conduct as an initial step in developing formal guidelines, principles, procedures and standards related to corporate social responsibility. poLight is not regulated by any environmental permits or regulatory mandates. Sustainability Statement We create sustainable technology We are committed to creating cutting-edge technology for a sustainable world, and doing so in a sustainable way. We will offer innovative products that remain highly efficient throughout their service life. We prioritise people People are our biggest asset. We work proactively to ensure employee health, respect, safety and wellbeing, while maintaining a diverse and inclusive corporate culture that establishes optimum conditions for the sustainable commitment of our employees. We believe diversity enables innovation and stakeholder engagement, and supports growth. We protect the planet We are committed to protecting the environment by mitigating the impact of our activities and minimising our carbon footprint, thereby ensuring that our products and services can be delivered with minimal environmental impact. All of our operations, processes, business practices and entire value chain are firmly rooted in sustainability principles. We are committed to achieving carbon neutrality and reducing all greenhouse gas emissions in our own operations, while also striving for zero waste. We generate long-term value for all stakeholders We believe we have an important role to play in the effort to create a sustainable future and that we are stronger if we act collectively. We are committed to collaborating with suppliers who share our values and to working locally to improve the social, economic and environmental wellbeing of the communities in which we operate. Annual Report 2024 Page 26 3. ESG risk assessment In recent years, management has carried out an annual ESG (environmental, social and governance) assessment, which has been subjected to evaluation by poLight ASA’s Board of Directors. A risk assessment tool developed by Investinor (poLight’s largest shareholder) has been used for this purpose. In mid-2023 poLight embarked on a project to carry out a double materiality assessment. Several meetings were held with Investinor and external ESG competence, while several internal working sessions were conducted on this topic. An ESG double materiality assessment has been carried out. This identified the following strategic and compliance focus areas: 1. More environmentally friendly components ESG and environmental considerations have been implemented in the procedures for selecting suppliers, components and process solutions. For example, poLight aims to adopt lead-free piezo when this becomes available in the future. 2. Business ethics poLight’s anti-corruption efforts have a high priority. Business associates must comply with poLight’s code of conduct, which expresses a zero tolerance for all forms of corruption. 3. Supplier working conditions and labour rights Since the company is fabless and relies on several subcontractors around the world, poLight must monitor these companies and ensure they provide decent working conditions to their employees. 4. Environmental poLight is still in an early phase of its commercial development, with consequently low production volumes. For this reason, the environmental impact of its products is, at the present time, not considered to be significant. However, we do focus on environmental aspects in our production processes and have conducted projects to study the use of more environmentally friendly materials in the TLens ® . With wafers manufactured in Europe and assembly and final test operations in the Philippines, some transport-related environmental impact is unavoidable. With one TLens® weighing approx. 6 milligrams, the environment impact of their transportation is nevertheless limited, even at high volume. Since poLight operates globally and has customers in Europe, Asia and the USA, business travel is currently the largest contributor to the company’s carbon footprint. Video conferences are therefore frequently used, both to reduce poLight’s environmental impact and boost operational efficiency. As mentioned in the Sustainability Statement, poLight is committed to protecting the environment. All business decisions are made with this in mind. 5. Social poLight believes in the strength of diversity and has employees and consultants in eight different countries. As a technology company, poLight focuses on attracting and retaining employees, since these represent an important resource for the Group. poLight’s code of conduct states that: “poLight expects dedicated employees, who treat others with respect and maintain open communications. There shall be no discrimination or harassment on the grounds of age, gender, disability, race, sexual orientation, ethnic origin, religion or political affiliation. poLight shall be an Annual Report 2024 Page 27 attractive workplace with an inclusive working environment. poLight expects its employees to not act in ways that could harm the poLight brand. When we are working in cultures other than our own, we treat everyone – individuals as well as organisations – with respect, and act in accordance with national laws and regulations. We also pay attention to local etiquette and values in the countries where we are working. In meetings with contacts outside poLight, we behave with professionalism and courtesy. poLight supports and respects internationally recognised human rights, including those set out in the International Labour Organization’s conventions. The company respects the right to freedom of association and opposes any form of child labour, forced labour or discrimination, and requests all representatives and suppliers to abide by the same principles. All employees, partners, etc., are made aware of these guidelines.” To ensure the above: • poLight conducts quarterly management reviews, which address all parts of the value chain with respect to risks and opportunities, • all managers carry out quarterly MUST (mutual understanding and special topics) meetings, • annual appraisals are performed, • the CEO holds one-to-one meetings with all employees to take the temperature of the entire organisation, • during the annual poLight seminar, the CEO highlights the importance of the code of conduct and ESG in general. The company’s whistleblowing procedure is described in the code of conduct. Organisation poLight ASA and its subsidiaries had 28 full-time employees at the close of 2024, compared to 22 full-time employee in 2023. In addition, 22 consultants were engaged on long-term contracts, compared with 17 in 2022. In 2024, the employees and consultants were located in eleven different countries and represented 16 different nationalities. Women made up 18 per cent of the workforce, compared with 26 per cent in 2023. poLight is committed to being a healthy workplace, which provides equal opportunities for development to all employees, irrespective of gender, ethnicity or other characteristics. poLight is committed to the health, safety and welfare of its employees and their families, as well as its customers. Sickness absence came to 0.6 per cent in 2024, compared with 0.9 per cent in 2023. Sickness absence remains well below the Norwegian national average of approximately 6.8 per cent (2023: 6.8 per cent). No work-related accidents (that needed to be reported to the Norwegian Labor Inspection Authority) or material damage in 2024. One minor incident caused personal injuries that didn’t need medical assistance due to a fall accident during the moving process to Tønsberg. It led to a 9-day absence from work. 6. Governance poLight considers good corporate governance to be a prerequisite for value creation and credibility, as well as for attracting investors and accessing capital on favourable terms. See the Corporate Governance Report for further details. 7. Norwegian Transparency Act The Norwegian Transparency Act went into effect on 1 July 2022. The Act requires companies to uphold human rights and ensure decent working conditions in their operations and supply chains. Annual Report 2024 Page 28 poLight has embedded responsible business conduct in its code of conduct, which was last updated on 9 January 2023. As a standard practice when entering into new business agreements, our business associates are asked to commit to the code’s provisions. poLight’s code of conduct is available at www.polight.com/Investors/Corporate Governance/Code of Conduct. A risk assessment regarding human rights and decent working conditions has been performed by poLight. All direct Tier 1 suppliers are required to identify, assess, address and report on social impacts and risks. When conducting supply chain audits, specific actions have been standardised with respect to human rights and decent working conditions. In its risk assessments, poLight focuses on the following issues, among others: • Health, safety and hygiene • Working hours • Waste and pollution These issues are also addressed when approving new Tier 1 suppliers. A separate transparency report will be published no later than 30 June 2025. The report will be available on poLight’s web site at: www.poLight.com/investors/corporate-governance/Transparency. 8. ESG reporting The company is aware of the increasing demand for sustainability-related information from stakeholders and regulators. The company’s focus and effort on this area have therefore increased the last years. ESG competence has been provided by Investinor, with support from external ESG competence, and a double materiality assessment has been carried out in 2023. Frequent working sessions with key personnel across the organisation have been conducted. Efforts have got underway to formalise the structure of carbon reporting in order to demonstrate the commitments made. In February 2023, the previous Audit Charter was updated to also include sustainability reporting. ESG reporting has therefore become a subject for discussion at Audit and Sustainability Committee meetings. Annual Report 2024 Page 29 CORPORATE GOVERNANCE REPORT 1. Governance principles and objectives poLight ASA (“poLight” or the “company”) seeks to create sustained shareholder value and pays due respect to the company’s various stakeholders. These include its shareholders, employees, business partners, society in general and the public authorities. poLight is committed to maintaining a high standard of corporate governance and has established principles and guidelines that define the roles and relationship between the shareholders, the Board of Directors (the “Board”) and the company’s executive management (“management”). poLight is incorporated and registered in Norway and subject to Norwegian law. The company’s shares are listed on the Oslo Stock Exchange. As an issuer of shares, the company must comply with rules applicable to companies listed on the Oslo Stock Exchange and rules applicable to public limited companies in general. The company observes the Norwegian Code of Practice for Corporate Governance, issued by the Norwegian Corporate Governance Board (the “Code of Practice”). The Code of Practice is available at www.nues.no. Application of the Code of Practice is based on the “comply or explain” principle, which stipulates that any deviations from the code, should be explained. poLight seeks to follow the Code of Practice, and any deviation will be explained in the corporate governance report included in its annual report. poLight’s corporate governance policy is available on its website, www.polight.com, in accordance with the company’s IR policy. The principles and implementation of corporate governance are subject to annual review by the company’s Board of Directors. The corporate governance policy was last reviewed and approved 15 June 2023. 2. Business The operations of the company comply with the business objective set forth in its Articles of Association, which reads as follows: “The company’s purpose is to develop and deliver optical components and all naturally related activities, including ownership of shares and other securities in other companies.” The Board of Directors has established goals, strategies and a risk profile for the company within the definition of its business objective which are described in the Annual Report. These are subject to annual review by the Board. poLight has adopted a set of ethical guidelines (code of conduct) which represents the foundation of poLight’s corporate culture. The guidelines define the core principles and ethical standards for the company’s operations, and the integration of stakeholder considerations and how these relate to the value creation by the company. The code of conduct applies to the members of the Board, all employees and representatives of poLight as well as direct business partners such as agents or re-sellers. The code is available at www.polight.com. Annual Report 2024 Page 30 3. Equity and dividends Capital adequacy As at 31 December 2024, poLight's consolidated equity totalled NOK 234.9 million, which is equivalent to 89% of total assets. Liabilities were mainly trade payables and other payables. The Board of Directors is responsible for ensuring that poLight is adequately capitalised relative to the company’s goals, strategy and risk profile. Dividend policy poLight has not previously distributed any dividends to its shareholders and does not expect to pay any dividend in the foreseeable future. The company is focused on developing and commercialising its technology and intends to retain any future earnings to finance development activities, operations and business growth. Any future decision to pay a dividend will depend on the company's financial position, operating profit and capital requirements. Authorisations to the Board of Directors On 22 May 2024, the annual general meeting (AGM) granted the Board of Directors an authorisation to issue new shares to holders of share options in poLight who exercise their rights to subscribe for new shares. The authorisation to issue new shares at a nominal value of NOK 0.04 each, up to the share capital equivalent of NOK 264,846, is valid until the date of the 2025 AGM, or 30 June 2025 at the latest. As at 31 December 2024, no shares have been issued under this authorisation. The AGM on 22 May 2024 granted the Board a general authorisation to issue shares and to increase the share capital by a maximum of NOK 529,692. The authorisation is valid until the 2025 AGM, or 30 June 2025 at the latest. As at 31 December 2024, no shares have been issued under this authorisation. The AGM also granted the Board an authorisation to buy back shares equal to a share capital of NOK 264,846. The authorisation is valid until the 2025 AGM, or 30 June 2025 at the latest. The authorisation had not been utilised as at 31 December 2024. 4. Equal treatment of shareholders and transactions with related parties Pre-emption rights to subscribe In the event of an increase in share capital, the Board shall propose that existing shareholders be granted pre-emptive rights. If the Board decides to waive the pre-emptive rights of existing shareholders pursuant to an authorisation granted to it by a general meeting of shareholders, the reason therefor shall be publicly disclosed in a stock exchange announcement. Trading in treasury shares Any trading undertaken by the company in its own shares shall be carried out through the stock exchange, and always at prevailing market prices. If there is limited liquidity in the company’s shares, other ways shall be considered to ensure that all shareholders are treated equally. There has been no trading in treasury shares after the IPO in 2018. Approval of agreements with shareholders and related parties In the event of not immaterial transactions between the company and its shareholders, a shareholder’s parent company, members of the Board, executive personnel or close associates of any such party, the Board shall arrange for an independent third-party valuation. There were no transactions with close non-group Annual Report 2024 Page 31 related parties in 2024. For further details see Note 18 Related parties to the financial statements in the Annual Report. 5. Shares and negotiability poLight ASA has one class of shares and each share carries equal rights, including the right to participate in general meetings. All shareholders shall be treated equally, unless there is just cause for treating them differently. The company’s shares are freely negotiable. 6. General meetings The general meeting of shareholders is the company’s highest decision-making body. The Board shall ensure that the general meeting is an effective forum for communication between the shareholders and the Board, and enable as many shareholders as possible to exercise their rights through their attendance. Extraordinary general meetings (EGM) may be called by the Board at any time, or by shareholders representing at least 5% of the shares. Notification The Board will ensure that proposed resolutions and any supporting material shall be sufficiently detailed and comprehensive to enable shareholders to understand and form an opinion on all matters to be considered at the general meeting. Registration and proxies Deadlines for shareholders to give notice of their attendance at the general meeting shall be set as close to the date of the general meeting as practically possible. Shareholders who cannot attend the general meeting may vote by proxy on each individual matter. Agenda and execution The agenda for the general meeting is set by the Board. The agenda shall include detailed information on the resolutions to be considered, as well as the Nomination Committee’s recommendations. The shareholders attending may vote to determine who will chair the general meeting. The Board and the general meeting’s chair shall ensure that the shareholders are able to vote separately on each candidate nominated for election. Representatives of the Board and the Nomination Committee’s chair shall be present at general meetings. Although general meetings will normally be chaired by the Board’s chair, the Board must also ensure that the general meeting can appoint an independent chairperson. In 2024, poLight held its AGM on 22 May. 7. Nomination Committee Composition The company shall have a nomination committee consisting of two to three members, see section 7 of its Articles of Association. The general meeting elects the Nomination Committee’s members and chair, and determines their remuneration. As at 31 December 2024, the Nomination Committee elected by the AGM, consisted of the following three members: Annual Report 2024 Page 32 • Jan Erik Hæreid (independent) as chair, elected until annual general meeting of 2025, • Anne E. H. Worsøe (independent), elected until annual general meeting of 2025 and • Egil Garberg (independent), elected until annual general meeting of 2025. None of the Nomination Committee’s members are members of the Board or executive management. All the Nomination Committee’s members are deemed to be independent of the company’s Board and executive management. Tasks The Nomination Committee is responsible for recommending candidates for election to the Board and the Board’s chair, and the remuneration payable to members of the Board and its sub-committees. It also recommends candidates for election to the Nomination Committee itself. The objectives, responsibilities and functions of the committees are detailed in the company’s “Guidelines for the Nomination Committee”. All shareholders are entitled to nominate candidates for election to the Board of poLight ASA. Nominations are submitted by sending an e-mail to the Nomination Committee’s chair at the following address: je@alliance.vc. Nominations must be received well in advance to be considered for election at poLight’s AGM. All proposals should include information about the candidate, grounds for consideration and contact details for the person nominating the candidate concerned. 8. The Board of Directors – composition and independence According to the company’s Articles of Association, the Board of Directors shall consist of up to seven members. At 31 December 2024, the Board consisted of the following five members: Grethe Viksaas (Chair), Svenn-Tore Larsen, Thomas Görling, Jean-Christophe Eloy and Marianne Bøe. The Board’s chair has been elected by the general meeting. Members of the Board are elected for a term of up to two years at a time and may be re-elected. poLight’s annual report and website provide details of board members’ background and expertise. All members of the Board are considered independent of executive management and material business associates. Further, all members of the board are independent of the company’s shareholder(s). The Board of Directors does not include executive personnel. Annual Report 2024 Page 33 Name Role Considered independent 3 Served since Served to/ Term expires Participation at Board Meetings 20 2 4 Shares in poLight 31 December (direct/ indirect) Grethe Viksaas Chairperson Yes June 2018 AGM 2025 100% Svenn-Tore Larsen Board member Yes May 2019 AGM 2025 100% Thomas Görling Board member Yes May 2021 AGM 2025 100% Jean-Christophe Eloy Board member Yes Jan 2024 AGM 2025 100% Marianne Bøe Board member Yes Jan 2024 AGM 2025 100% Members of the Board of Directors are encouraged to own shares in the company. 9. The work of the Board of Directors The Board of Directors’ tasks The Board of Directors is elected by the shareholders to oversee executive management, and to make sure that the long-term interests of shareholders and other stakeholders are properly served. The Board has ultimate responsibility for management and the company’s activities in general. Its main responsibilities include the company’s organisation and planning, and the control and supervision of its operations. The Board shall also ensure that the organisation of the company’s accounting and cash management is compliant and under satisfactory control. The Board adopts an annual plan for its work, with particular emphasis on objectives, strategy and implementation. Instructions to the Board of Directors The Board has issued instructions for its own work, as well as for the CEO, to allocate duties and responsibilities between the CEO and the Board of Directors. The instructions are based on applicable laws and well-established practices. The current instructions were last amended by the Board in April 2015. Members of the Board of Directors and the company’s executive management shall notify the Board in the event of any material direct or indirect interest in a transaction entered into by the company. The Board’s instructions state that, in situations when its chair cannot, or should not, lead the work of the Board, the longest-serving director shall chair the Board, until an interim chairperson has been elected by and from among the directors present. Audit and Sustainability Committee The Audit and Sustainability Committee supports the Board with respect to the assessment and control of financial risk, financial and sustainability reporting, auditing and control, and prepares discussions and resolutions for board meetings. The Audit and Sustainability Committee does not make decisions on behalf of the Board, and the establishment of the committee does not alter the Board’s legal responsibilities or tasks. In addition, under the whistleblower procedure, complaints from employees and other concerned parties are received and followed up by the Audit and Sustainability Committee. The Chief Financial Officer 3 independent of the company’s major shareholder(s) Annual Report 2024 Page 34 participates in the meetings. The committee meet quarterly as a minimum but may meet more frequently if deemed advisable. One meeting per year is held with the auditor without the Chief Financial Officer or any other members of the Group Management and administration being present. The Audit and Sustainability Committee held six meetings in 2024 and was in regular contact with the company’s auditor regarding audits of the statutory accounts. The committee also assesses and monitors the auditor’s independence, including non-audit services provided by the auditor. The committee makes recommendations to the Board with respect to; • the Company’s financial statements, accounting and financial reporting processes and financial statement audits • the Company’s compliance with legal and regulatory requirements • the Company’s independent auditors’ qualifications, independence and performance The tasks and rules of procedure of the Audit Committee are further regulated in the Audit and Sustainability Committee Charter. The Audit and Sustainability Committee shall consist of at least two members of the Board. The committee shall in total have the expertise that, based on the company’s organisation and operations, is necessary to carry out its tasks. At least one of the members of the committee is to be independent of the operations and have accounting or auditing qualifications. The Board shall appoint one member of the committee to be its chair. As at 31 December 2024, the Audit and Sustainability Committee consisted of the following two members: Grethe Viksaas (leader) and Marianne Bøe. Remuneration Committee The Board of Directors has established a remuneration committee which assists and facilitates decision- making related to the remuneration of executive personnel. The purpose of the Remuneration Committee is to ensure thorough and independent preparation of matters relating to compensation to the executive personnel. The Remuneration Committee puts forth a recommendation for the Board of Directors’ guidelines for remuneration to senior executives in accordance with section 6-16a of the Norwegian Public Limited Liability Companies Act. The Remuneration Committee shall consist of at least two members of the Board of Directors. The Remuneration Committee’s members and chair are appointed for a term of two years. All members must be independent of the company’s executive management. As at 31 December 2024, the Remuneration Committee consisted of the following members: Grethe Viksaas (leader) and Thomas Görling. Evaluation of the Board The Board evaluates its performance and expertise annually. 10. Risk management and internal control The Board places a high priority on managing risk, and has established routines and policies to limit overall risk exposure. The rules and guidelines take into account the extent and nature of the company’s activities Annual Report 2024 Page 35 and the integration of stakeholder considerations in the company’s value creation through its corporate values, ethical guidelines and corporate social responsibility policies. The Board conducts an annual review of the company’s most important areas of risk exposure and its internal control arrangements. poLight’s risk management is based on the principle that risk assessment is an integral part of all business activities. As a technology company with global operations, poLight is exposed to various risk factors of a financial and operational nature, which may affect business activities and the company’s financial position. Management reports monthly to the Board of Directors on key operational developments, including project risk assessments, and on financial performance. In addition, quarterly financial reports are prepared and distributed to the financial market, in accordance with the Oslo Stock Exchange’s requirements. Information on the company’s operational and financial risks are included in the Annual Report. 11. Remuneration of the Board of Directors The remuneration payable to board members is decided by the AGM, based on the Nomination Committee’s recommendation. The remuneration paid shall reflect the Board of Directors’ responsibilities, competence, time involved, and the complexity of the business. The remuneration of the Board of Directors shall not be performance-based and shall not contain option elements. Members of board sub-committees shall be compensated separately. The company shall not provide loans to board members. Detailed information on the remuneration of board members is specified in Note 18 to the consolidated financial statements. Members of the Board of Directors and/or companies with which they are associated should not take on specific assignments for the company in addition to their directorships. Should they do so, however, this must be disclosed to the full Board. The remuneration for such additional duties must be approved by the Board of Directors. 12. Remuneration of executive management The Board of Directors prepares guidelines for the remuneration of the company’s executive management. These guidelines are communicated annually to the Annual General Meeting. A separate remuneration report will be published on poLight's website as a part of the notification of the Annual General Meeting. The remuneration paid to members of executive management consists of a fixed salary in combination with certain benefits in kind and a performance-based bonus, in addition to participation in a share option scheme. See Note 5.2 Employee benefits expense, in the consolidated financial statements for further details. Performance-related remuneration of executive personnel in the form of share options, bonus programmes, or the like, shall be linked to value creation for the shareholders or the company’s earnings performance over time. 13. Information and communications The Board places great emphasis on open, honest and timely dialogue with shareholders, potential investors, analysts and other participants of the capital markets. The primary purpose of poLight’s external information activities, is to provide the financial markets with sufficient information to accurately appraise the company’s Annual Report 2024 Page 36 shares. Such information shall be presented factually and soberly, and shall be issued using methods and channels that ensure simultaneous, fair and wide distribution. All information is published in English, which is poLight’s corporate language. The company’s primary channels for communication are its interim reports, the annual report and associated financial statements. poLight also issues other notices to shareholders when appropriate. All reports and notices are issued and distributed in accordance with the Oslo Stock Exchange’s rules and practices, and are made available on the company’s website, and at www.newsweb.no. poLight has adopted an investor relations policy and guidelines for the company’s contact with shareholders other than through general meetings. The CEO and the CFO are responsible for communicating with shareholders, the stock exchange, analysts and the media. The general meeting provides a forum for shareholders to raise issues with the Board. The Board of Directors will review and evaluate the content of the IR policy at least annually. 14. Takeovers General In the event of a takeover bid, the Board of Directors and the company’s executive management each have an individual responsibility to ensure that the company’s shareholders are treated equally, and that the company’s activities are not unnecessarily interrupted. The Board has a special responsibility to ensure that the shareholders have sufficient information and time to form an informed opinion about the offer. The Board has established guiding principles for how it will act in the event of a takeover bid. These are available at www.polight.com. If an offer is made for the company’s shares, the Board shall issue a statement evaluating the offer, and make a recommendation as to whether, in the Board’s opinion, the shareholders should or should not accept the offer. If the Board finds itself unable to give a recommendation to shareholders on whether or not to accept the offer, it should explain the reasons for this. The Board of Director’s statement on a takeover bid shall make it clear whether the views expressed are unanimous, and if this is not the case, it shall explain the reasons why specific members of the Board do not endorse the statement. The Board shall consider whether to arrange a valuation from an independent expert. If any member of the Board, or close associates of such member, or anyone who has recently held such a position but has ceased to do so, is either the bidder or has a particular personal interest in the bid, the Board shall arrange an independent valuation. This shall also apply if the bidder is a major shareholder. Any such valuation should either be enclosed with the Board’s statement or reproduced or referred to in the statement. 15. Auditor The company’s external auditor is KPMG. Each year, the Audit and Sustainability Committee ensures that it receives a presentation of the auditor’s plan for its annual audit of the company. Additionally, the Audit and Sustainability Committee requires the auditor to participate in committee meetings where any of the following is on the agenda: the annual financial statements, accounting principles, assessment of any important accounting estimates and matters of importance on which there has been disagreement between the auditor and the company’s management. Annual Report 2024 Page 37 At least once a year, the Audit and Sustainability Committee and the auditor will jointly review the company’s internal control procedures, including identification of weaknesses and proposals for improvement. The auditor also at least once a year meets with the committee without the presence of the CEO and CFO. The remuneration paid to the auditor is approved by shareholders at the AGM. The Audit and Sustainability Committee will provide the AGM with a breakdown of the fee paid for audit work and fees paid for other services, if any. Annual Report 2024 Page 38 GROUP FINANCIAL STATEMENTS Consolidated statement of income for the year ended 31 December (in NOK 000) Note 2024 2023 Sale of goods 4 7 586 20 099 Rendering of services 2 038 2 412 Revenue 9 624 22 511 Change in obsolescence provision 12 6 409 1 410 Cost of sales 5.1 2 208 8 939 Gross profit 1 007 12 162 Research and development expenses 5.4 - 32 323 - 34 616 Sales and marketing expenses 5.5 -16 305 -17 712 Operational / supply chain expenses 5.6 -23 542 -16 684 Administrative expenses 5.7 -26 950 -21 971 Depreciation, amortisation and net impairment losses 8, 9, 11 -10 489 -9 670 Operating profit / loss ( - ) - 108 602 - 88 492 Finance income 5.9 7 642 4 518 Finance costs 5.9 -685 -1 295 Net financial items 6 956 3 223 Profit / loss (-) before tax -101 646 -85 269 Income tax expense 6 -139 -220 Profit / loss ( - ) for the year - 101 785 - 85 489 Attributable to: Equity holders of the parent -101 785 -85 489 Non-controlling interests 0 0 Earnings per share: Basic, attributable to ordinary equity holders of the parent (NOK) 7 -0.97 -1.40 Diluted, attributable to ordinary equity holders of the parent (NOK) 7 -0.97 -1.40 Annual Report 2024 Page 39 Consolidated statement of comprehensive income for the year ended 31 December (in NOK 000) Note 2024 2023 Profit / loss (-) for the year -101 785 -85 489 Other comprehensive income Exchange differences on translation of foreign operations 155 151 Income tax effect 0 0 Net other comprehensive income to be reclassified to profit or loss in subsequent periods 155 151 Total comprehensive income for the year, net of tax -101 630 -85 338 Attributable to: Equity holders of the parent -101 630 -85 338 Non-controlling interests 0 0 Annual Report 2024 Page 40 Consolidated statement of financial position as at 31 December (in NOK 000) Note 2024 2023 ASSETS Property, plant and equipment 8 9 559 9 239 Intangible assets 9 10 306 17 580 Right-of-use assets 11 10 241 2 915 Total non-current assets 30 106 29 735 Inventories 12 62 431 70 089 Trade and other receivables 13.1, 14 3 792 8 194 Prepayments 953 626 Cash and cash equivalents 15 166 752 114 788 Total current assets 233 927 193 697 Total assets 264 033 223 432 EQUITY AND LIABILITIES Share capital 16 5 185 2 648 Share premium 16 222 373 194 503 Translation reserve 1 436 1 281 Retained earnings 2 889 1 108 Total equity 231 882 199 541 Interest-bearing loans and borrowings 13.2 369 0 Lease liabilities 11, 13.2 9 615 1 951 Total non-current liabilities 9 984 1 951 Trade and other payables 13.2 14 116 19 757 Interest-bearing loans and borrowings 13.2 57 0 Current lease liabilities 11, 13.2 663 1 182 Provisions 17 7 331 1 000 Total current liabilities 22 167 21 940 Total liabilities 32 151 23 891 Total equity and liabilities 264 033 223 432 Tønsberg, 29 April 2025 THE BOARD OF DIRECTORS OF POLIGHT ASA Grethe Viksaas (sign) Chairperson, Independent Thomas Görling (sign) Board member, Independent Svenn-Tore Larsen (sign) Board member, Independent Jean-Christophe Eloy (sign) Board member, Independent Marianne Bøe (sign) Board member, Independent Dr Øyvind Isaksen (sign) Chief Executive Officer Annual Report 2024 Page 41 Consolidated statement of changes in equity for the year ended 31 December Attributable to equity holders of the parent (in NOK 000) Note Share capital Share premium Retained earnings Translation reserve Total As at 1 January 2023 2 078 145 785 1 699 1 130 150 692 Profit / loss ( - ) for the year - 85 489 - 85 489 Other comprehensive income 151 151 Total comprehensive income 0 0 -85 489 151 -85 338 Issue of ordinary shares 16 568 147 931 148 500 Share options exercised 16 2 285 287 Transaction costs 16 -22 702 -22 702 Equity-settled share-based payments 5.3 8 101 8 101 Allocation to retained earnings -76 796 76 796 0 At 31 December 2023 2 648 194 503 1 108 1 281 199 541 Profit / loss (-) for the year -101 785 -101 785 Other comprehensive income 155 155 Total comprehensive income 0 0 -101 785 155 -101 630 Issue of ordinary shares 16 2 536 143 846 146 382 Transaction costs 16 -22 419 -22 419 Equity-settled share-based payments 5.3 10 008 10 008 Allocation to retained earnings -93 556 93 556 0 At 31 December 2024 5 185 222 373 2 889 1 436 231 882 Annual Report 2024 Page 42 Consolidated statement of cash flows for the year ended 31 December (in NOK 000) Note 2024 2023 Operating activities Profit / loss (-) before tax -101 646 -85 269 Adjustments for: Depreciation and impairment of property, plant and equipment and right- of-use assets 8 3 214 2 396 Amortisation and impairment of intangible assets 9 7 275 7 275 Net finance income 5.9 -6 956 -3 223 Equity-settled share-based payments 5.3 10 008 8 101 Gain on disposal of property, plant and equipment 0 -14 Other non-cash items -404 -807 Changes in unrealised net foreign exchange rate differences/fluctuations -162 -18 Changes in working capital: Decrease (+) in trade and other receivables and prepayments 3 905 -2 374 Decrease (+) in inventories 12 7 658 -24 512 Decrease (-) in trade and other payables -5 641 -2 723 Changes in provisions and government grants 17, 14 6 502 2 497 Interest received 5.9 7 431 4 518 Interest paid 5.9 -256 -259 Income tax paid 6 -139 -220 Net cash flows used in operating activities -69 213 -94 631 Investing activities Proceeds from sale of property, plant and equipment 0 392 Purchase of property, plant and equipment 8, 9 - 2 402 - 387 Net cash flows used in investing activities -2 402 6 Financing activities Proceeds from issuance of ordinary shares 16 146 382 148 500 Proceeds from exercise of share options 16 0 287 Transaction costs on issuance of shares 16 -22 419 -22 702 Payment of lease liabilities 11 - 1 128 - 1 089 Proceeds from borrowings 13.2 474 0 Repayment of borrowings 13.2 - 48 0 Net cash flows from / (used in) financing activities 123 261 124 996 Net increase in cash and cash equivalents 51 647 30 371 Effect of exchange rate changes on cash and cash equivalents 317 169 Cash and cash equivalents at 1 January 15 114 788 84 249 Cash and cash equivalents at 31 December 15 166 752 114 788 Annual Report 2024 Page 43 Notes to the Consolidated Financial statements 1 Corporate information poLight ASA is a publicly listed limited company, founded in 2005, which is incorporated and domiciled in Norway. The address of its registered office is Kjelleveien 21A, N-3125 Tønsberg, Norway. poLight ASA (OSE: PLT) offers patented, state-of-the-art tunable optics technology, leveraging its proprietary polymer and piezo MEMS technology . Founded in 2005, its first product TLens® replicates "the human eye" experience in autofocus cameras used in applications such as AR/MR devices, smartphones, wearables, webcams and other consumer devices, industrial barcode scanners and machine vision systems, and healthcare applications. With over 160 granted patents, poLight's technology delivers extremely fast focus, small footprint, ultra-low power consumption, no magnetic interference, and constant field of view, enabling better imaging system performance and new user experiences compared to alternative technologies. poLight is based in Tønsberg, Norway, with employees in Finland, France, UK, US, China, Taiwan, the Philippines and Japan. For more information, please visit https://www.polight.com. Information on the Group and related parties are presented in Note 18 Related parties. The consolidated financial statements of poLight ASA and its subsidiaries (collectively, poLight or the Group) for the year ended 31 December 2024 were authorised for issue in accordance with a resolution of the Board of Directors on 29 April 2024, to be approved by the annual general meeting on 21 May 2025. 2 Material accounting policies 2.1 Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with IFRS® Accounting Standards adopted by the EU. The consolidated financial statements have been prepared on a historical cost basis. The consolidated financial statements are presented in Norwegian kroner (NOK), and all values are rounded off to the nearest thousand (NOK 000), unless otherwise indicated. 2.2 Basis of consolidation The consolidated financial statements comprise the financial statements of poLight ASA and its subsidiaries. 2.3 Summary of material accounting policies The following are the material accounting policies applied by the Group in preparing its consolidated financial statements: Revenue from contracts with customers The Group has two revenue streams: • Sales of TLenses and related driver ASICs. The Group recognizes revenue from sale of TLenses and other components at the point in time when the control of goods is transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods. Revenue is generally recognised on delivery of the goods. • Non-recurring engineering (“NRE”) services related to customer development projects. In certain cases, when the counterparty to the contract is a customer or a potential customer, the Group will engage in customer development projects financed by the customer. In general, income is recognised when the project is finalised according to the contract and the customer can obtain the benefits from the project. Revenue may be recognised over time when one of the following criteria are met: Annual Report 2024 Page 44 • Customer consumes benefits as the Group performs the service • Customer controls benefits as the Group performs the service Earned revenue for the period is earned revenue at the reporting date, less earned revenue in prior periods. If the project is ongoing, income will be recognized continuously in accordance with the agreement, based on actual deliveries. The Group has for the periods presented limited sales and revenues. Further information on revenue recognition or disclosures according to IFRS 15 is consequently not relevant for these financial statements. Foreign currencies The Group’s consolidated financial statements are presented in Norwegian kroner (NOK), which is also the parent company’s functional currency. For each entity, the Group determines the functional currency, and items included in the financial statements of each entity are measured using that functional currency. The Group uses the direct method of consolidation, and on disposal of a foreign operation, the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method. Differences arising on settlement or translation of monetary items are recognised in profit or loss. On consolidation, the assets and liabilities of foreign operations are translated into NOK at the rate of exchange prevailing at the reporting date, and the statement of profit or loss are translated at average monthly exchange rates. The exchange differences arising on the translation are recognised in OCI. Exchange differences arising from the translation of net investment in subsidiaries and borrowings are included in OCI. At December 31, 2024 an intercompany subordinated loan to poLight France SAS of EUR 2,650,000 / NOK 31,256,750 (2023: EUR 2,650,000 / NOK 29,787,325) was regarded as a part of the net investment in poLight France SAS. Government grants Government grants are recognised when there is reasonable assurance that the grant will be received, and that all attached conditions will be complied with. When the grant relates to an expense item, it is deducted from the related expense on a systematic basis over the periods that the costs, which it is intended to compensate, are expensed. Where the grant relates to an asset, it reduces the carrying amount of the asset. The grant is then recognised as income over the useful life of the depreciable asset, by way of a reduced depreciation charge. Taxes Current income tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted, or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation, and it establishes provisions where appropriate. Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities, and their carrying amounts, for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for: all deductible temporary differences: the carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date, and are recognised, to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of the reporting period. Annual Report 2024 Page 45 Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction, either in other comprehensive income or directly in equity. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities, and the deferred taxes relate to the same taxable entity and the same taxation authority. Property, plant and equipment Office/lab upgrades and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing parts of the facility upgrades and equipment. Repair and maintenance costs are recognised in the profit or loss as incurred. Refer to Significant accounting judgements, estimates and assumptions (Note 3). Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows: • Leased building: The duration of the lease agreement • Equipment: 3 to 6 years An item of office/lab upgrade and equipment is derecognised upon disposal, or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss when the asset is derecognised. The residual values, useful lives and methods of depreciation of office/lab upgrade and equipment are reviewed at each financial year end, and adjusted prospectively, if appropriate. Leases The Group assesses at contract inception whether a contract is, or contains, a lease. Group as a lessee The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: • Office & lab lease, headquarter The right-of-use assets are also subject to an impairment assessment. In calculating the present value of the fixed lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. The Group applies the short-term lease recognition exemption to its short-term leases of office leases in Finland and China (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term. Intangible assets Intangible assets acquired separately, are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalised development costs, are not capitalised, and expenditure is recognised in the statement of profit or loss when it is incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Annual Report 2024 Page 46 Development costs Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate: • The technical feasibility of completing the intangible asset, so that it will be available for use or sale • Its intention to complete and its ability to use or sell the asset • How the asset will generate future economic benefits • The availability of resources to complete the asset • The ability to measure reliably the expenditure during development Expenses related to the development of the TLens® technology platform were recognised as an intangible asset with effect from 2015. The development project ended in 2019 when the initial mass production line was qualified. Since then, R&D resources have been devoted to improvement projects and helping customers to integrate TLens® into their products. Related costs have therefore not been recognised as an intangible asset. The company has also engaged in research/concept studies related to potential new products. However, as they have not met the definition given above, they have not been defined as an intangible asset. This relates, for example, to the TWedge® – a potential product for the enhancement of AR/MR display solutions. Software license Licences for the use of intellectual property are granted for periods ranging between three and five years, depending on the specific licence. A summary of the policies applied to the Group’s intangible assets is as follows: Software licence Development costs Useful lives Finite (3-5 years) Finite (3-7 years) Amortisation method used Amortised on a straight- line basis Amortised on a straight- line basis over over the lives of the licences the period of expected consumption of future economic benefits from the related project Internally generated or acquired Acquired Internally generated Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity, and a financial liability or equity instrument of another entity. i) Financial assets The Group´s financial assets are trade receivables, government grant receivables, accruals and cash. Trade receivables are measured at the transaction price determined under IFRS 15 Revenue from contracts with customers. The other financial assets are measured initially at fair value plus transaction costs. Subsequently the assets are measured at amortised cost. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. ii) Financial liabilities Financial liabilities are recognised initially at net of directly attributable transaction costs and subsequently measured at amortised cost. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Annual Report 2024 Page 47 Impairment of financial assets For trade receivables and contract assets, the Group applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Inventories Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition, are accounted for as follows: Components: • Purchase cost on a first-in, first-out basis Finished goods and work in progress: • Cost of direct materials and services from subcontractors Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs to sell. When determining the net realisable value, the Group assesses the provision for obsolescence. Customers’ demand and age are parameters that are considered when assessing this provision. Impairment of non-financial assets Disclosures relating to impairment of non-financial assets are summarised in the following notes: • Disclosures of significant judgements and estimation uncertainty Note 3 • Property, plant and equipment Note 8 • Intangible assets Note 9 • Research and development costs Note 10 The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash-Generating Unit (CGU)’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets, or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired, and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value, using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. Value in use impairment calculation is based on detailed budgets and forecasts and with use of scenario analyses. These budgets and forecast calculations are generally covering a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year. Impairment losses are recognised in the consolidated statement of comprehensive income. Cash and short-term deposits Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand, and short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the consolidated statement cash flows, cash and cash equivalents consist of cash and short-term deposits as defined above, as they are considered an integral part of the Group’s cash management. Annual Report 2024 Page 48 Provisions The Group’s terms and conditions agreed with the customers contains a warranty clause. A general provision to meet potential claims under the clause have been recognised (Note 17 Provisions). Pensions and other post-employment benefits The Group operates one defined contribution plan. Contributions are recognised in the statement of income in the period in which the contribution amounts are earned by the employee. Share option plans Employees (including senior executives) of the Group have received remuneration in the form of share options in poLight ASA (equity- settled transactions). The fair value of share options that are granted has been calculated using the Black-Scholes option pricing model. The basis for the valuation comprises several factors that affect the calculated fair value of granted share options like the share price at the date of the grant, exercise price (strike), the likelihood of holding the share options to expiry date, risk-free interest rate and the volatility that is deemed based on historic volatility of the poLight share. The cost of equity-settled transactions is recognised in employee benefits expense (Note 5.3 Employee benefits expense), together with a corresponding increase in equity (other equity) over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date, reflects the extent to which the vesting period has expired, and the Group’s best estimate of the number of equity instruments that will ultimately vest. The share options expense recognised in the income statement includes accrued employer’s national insurance contribution (“NICs”) expenses that are calculated based on the number of vested share options and a proportion of share options under vesting multiplied by the difference between market price and exercise price at the end for the period. The NICs is accounted for as a cash settled element with a liability recognised in the consolidated statement of financial position. The expense in the consolidated statement of income for a period, represents the movement in cumulative expense recognised as at the beginning and end of that period. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in Note 7). 3 Significant accounting judgements and key sources of estimation uncertainty 3.1 Significant judgements in applying the Group’s accounting policies The following summarizes the most significant judgements used in preparing the consolidated financial statements. Share option plans Estimating fair value for share option plans transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model, including the expected life of the share option, volatility and dividend yield, and assumptions about the inputs. For determining the fair value of equity-settled transactions with employees at the grant date, the Group uses the Black-Scholes option pricing model. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 5.3 Employee benefits expense. Development costs Initial capitalisation of costs is based on management’s assessment that technological and economic feasibility is likely, usually when a product development project has reached a defined milestone, according to an established project management model. Cost of material used in manufacturing line until status of “mass production” is achieved is recognised as development costs to the extent that it is not sellable parts. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied, and the expected period of benefits. Annual Report 2024 Page 49 Impairment of non-financial assets The management has evaluated that the Group as a whole is one cash generating unit (CGU) for impairment testing, see note 10. Judgements are required to determine if impairment indicators are present. During 2024, no impairment indicators have been identified, and no impairment test has been performed. As the Group as a whole is one CGU, the market capitalisation based on the company’s share price is both one of the impairment indicators and basis for estimating fair value less cost of sales if an impairment test should be performed. See Note 10 Development costs for further details. See also note 3.2. below. 3.2 Key sources of estimation uncertainty – significant accounting estimates The preparation of poLight’s consolidated financial statements requires the use of accounting estimates. These estimates affect the reported amounts of assets, liabilities, income and expenses, and the accompanying disclosures. Accounting estimates and assumptions, which are continuously reviewed, are based on historical experience and various other factors that are believed to be reasonable and appropriate under the circumstances. Uncertainty about these estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The following summarizes the most significant estimates used in preparing the consolidated financial statements. Provision for obsolescence When estimating net realisable value of the inventory the Group assesses the provision for obsolescence. Customers’ demand, expected sales prices obtainable in the market and age are parameters that are considered when assessing this provision. Customers’ demand for each product and each variant of the products are determined based on feedback from customers using the TLens® in released products as well as completed and ongoing PoC’s. Specifically, poLight has made provision on most of the first generation of the TLenses as it most likely is not addressable to the smart phone market or other mass market products as was intended originally when the wafers were produced. In addition, a general provision has been made for aging of wafers and materials. As a general rule, one-year-old wafers and units prompt a 10 per cent provision, while the provision for two-year-old and three-year-old wafers and units is 20 per cent and 30 per cent respectively. As there have been limited sales volumes to date, the provisions made are subject to significant estimation uncertainty. The provision is disclosed in Note 12 Inventories. Impairment of non-financial assets As described in note 3.1 and note 10 Development costs, the Group has not performed an impairment test during 2024, among other things with reference to its market capitalisation. The market capitalisation at 31 December 2024 materially exceeded the carrying amount of equity. The share price has in the first quarter of 2025 declined materially, but market capitalisation at the end of the first quarter 2025 was still above the carrying amount of equity at 31 December 2024. If the market capitalisation should decline below the carrying amount of equity, or other impairment indicators are present, the Group would have to perform an impairment test, which could result in an impairment charge being recognised. 4 Segment information The Group has only one operating segment – the TLens® technology platform, consistent with the reporting to the CEO and the Board. poLight’s product TLens® may be used in devices such as smartphones, wearables, barcode, machine vision systems and various medical equipment. poLight's TLens® enables better system performance and new user experiences due to benefits such as extremely fast focus, small footprint, no magnetic interference, low power consumption and constant field of view. Geographical distribution Revenue (in NOK 000) 2024 2023 America 4 982 5 990 Asia 4 410 11 818 Europe 232 4 702 Total 9 624 22 511 Annual Report 2024 Page 50 Geographical distribution Right-of-use assets Machinery & equipment Development costs (in NOK 000) 2024 2023 2024 2023 2024 2023 Norway 10 241 2 915 3 161 1 947 10 306 17 580 France 0 0 2 9 0 0 Finland 0 0 48 61 0 0 Taiwan 0 0 2 30 0 0 The Philippines 0 0 6 338 7 176 0 0 China 0 0 8 16 0 0 Total 10 241 2 915 9 559 9 239 10 306 17 580 All patents and most of the economic IP (intellectual property) is owned by parent company based in Norway. A sales office has been established in China, with a parent holding company in Hong Kong. 5 Other income/expenses 5.1 Specification of Cost of Sales (in NOK 000) Note 2024 2023 Wafer and assembly production cost, outsourced 2 097 7 556 Customer customisations, employee expense 5.3 19 248 Final testing, employee expense 5.3 67 871 Depreciation of final testing equipment 8 25 264 Total Cost of Sales 2 208 8 939 5.2 Specification of operating expenses by nature (in NOK 000) Note 2024 2023 Employee benefits expense1) 5.3 70 401 68 725 Depreciation and amortisation 10 489 9 670 Other operating expenses 28 720 22 258 Total operating expenses 109610 100 653 1) Including consultants engaged on long-term contracts Annual Report 2024 Page 51 5.3 Employee benefits expense (in NOK 000) 2024 2023 Included in Research and development expenses: Wages and salaries 10 388 10 616 Consultants engaged on long-term contracts 9 214 10 108 Social security costs 1 979 2 087 Pension costs 514 516 Other benefits and social costs 645 363 Share based compensation costs 2 154 2 053 Grants -323 -495 Included in Sales and marketing expenses: Wages and salaries 2 572 5 054 Consultants engaged on long-term contracts 7 834 6 297 Social security costs 490 993 Pension costs 127 246 Other benefits and social costs 160 173 Share based compensation costs 2 115 1 976 Included in Operational / supply chain expenses: Wages and salaries 5 679 2 141 Consultants engaged on long-term contracts 8 054 6 194 Social security costs 1 082 421 Pension costs 281 104 Other benefits and social costs 353 73 Share based compensation costs 1 460 2 188 Included in Administrative expenses: Wages and salaries 12 571 10 631 Consultants engaged on long-term contract 287 238 Social security costs 2 394 2 090 Pension costs 622 516 Other benefits and social costs 781 363 Share based compensation costs -1 032 3 779 Total employee benefits expense 70 401 68 725 Average number of man-years, employees 27 23 Average number of man-years, total 45 38 Bonus program All employees are included in a cash bonus program with identical bonus triggers for all employees except the CEO, who has additional triggers related to capital raise and exit, and some modifications implemented for the sales employees. The bonus is calculated based on fixed salary, with a maximum of 80% for the CEO, 40% for the other members of the Executive Management Team, 20-30% for sales employees, 20% for department managers, and 10% for other employees. The bonus costs are included in “Wages and salaries” and “Consultants engaged on long-term contracts”. Annual Report 2024 Page 52 Pensions poLight ASA (the Group’s Norwegian company) is subject to the requirements of the Mandatory Occupational Pensions Act, and the company’s pension scheme follows the requirements of the Act. As the subsidiaries in France, Finland and China are not subject to mandatory pension schemes in addition to the national insurance schemes, no pension scheme has been established there. The pension scheme in Norway is based on a defined contribution plan, and the premium is calculated on the basis of the employees’ income. In 2023 and 2024, 7% of the salary between 0G (1G=NOK 124,028 per May 1, 2024) and 7.1G, and 15% of the salary between 7.1G and 12G was calculated. The period’s contributions are recognised in the Consolidated statement of income. (in NOK 000) 2024 2023 Defined contribution plan 1 467 1 299 Employer’s national insurance contribution 207 183 Total pension cost 1 674 1 483 Share option plans (equity-settled) Share options in the parent company are granted to all employees. The exercise price of the share options is equal to, or higher than, the market price of the underlying shares on the date of grant. The share options are vested over 3 years, and exercisable with 1/12 each quarter over 3 years, starting at the date of grant. According to the share option agreement, the company is liable for corporate taxes including National Insurance, with a limitation of 20%. The program is conditional on the employee’s continued employment in poLight. The share options can be exercised up to two years after the three-year vesting period. Exercisable share options may as a general rule, be exercised and shares issued once per quarter each following the release of poLight ASA’s quarterly reports. Share option expense (in NOK 000) 2024 2023 Share based compensation costs 10 008 8 101 Employer’s national insurance contribution -5 312 1 894 Recognised as employee benefits expense 4 697 9 996 The share options expense includes accrued employer’s national insurance contribution expenses that are calculated based on the number of vested share options and a proportion of share options under vesting multiplied by the difference between market price and exercise price at the end for the period. The board is authorised to issue additional shares - in share option scheme - up to total par value of NOK 264,846 (6,621,155 shares at par value of NOK 0.04). Annual Report 2024 Page 53 Outstanding share options at December 31, 2024 Remaining Outstanding Exercisable Remaining Total estimated Exercise price no. of share no. of share contractual expensed (in expense (in Year granted Notes (NOK) options options life (years) NOK 000) NOK 000) 2019 1 3.78 157 215 157 215 0.47 368 0 2022 2 21.00 0 0 0.00 1 406 162 2023 3 12.15 0 0 0.00 5 199 2 347 2023 3 12.82 0 0 0.00 1 840 249 2024 3 3.20 5 564 490 927 399 4.46 3 452 4 073 2024 4.33 550 000 45 830 4.72 355 967 6 271 705 1 130 444 4.38 12 620 7 799 1) 157,215 share options issued in 2019 originally expired in June 2024 was extended by board resolution in June 2024 with 1 year 2) The board offered, after board resolution in August 2023, a replacement share option agreement (after cancellation) to those how got share options at strike 21.00 (2022). 800,000 share options were cancelled and replaced with a new share option agreement at strike 12.82. The fair value of the new share options was measured to NOK 2.1 million net after reduction of the fair value of the cancelled share options. 3) The board offered, after board resolution in June 2024, a replacement share option agreement (after cancellation) to all share option holders. 5,304,490 share options were cancelled and replaced with a new share option agreement at strike 3.20. The fair value of the new share options was measured to NOK 7.5 million net after reduction of the fair value of the cancelled share options. The terms of the stock options imply that exercise windows for exercising stock options shall be opened, normally each quarter after the presentation of quarterly reports. Throughout the term of these options, the Board has on several occasions not been able to open such exercise windows. The Board have mandate to extend the term of previously granted options for a period equivalent to the period of exercise windows that have not been opened, or subject to lock-up arrangements. The weighted average remaining contractual life for the share options outstanding as at 31 December 2024 was 4.38 years (2023: 2.69 years). Reconciliation of outstanding share options 2024 2023 Number of WAEP Number of WAEP share options share options Outstanding at 1 January 5 579 066 11.3 4 238 645 12.9 Granted during the year 6 129 490 3.3 2 270 000 12.5 Forfeited during the year -113 750 11.1 -65 556 22.1 Cancelled during the year -5 304 490 11.7 -800 000 22.4 Exercised during the year -1 250 3.2 -48 330 5.9 Expired during the year -17 361 22.8 -15 693 14.9 Outstanding at 31 December 6 271 705 3.3 5 579 066 11.3 In % of outstanding shares 4.84 % 8.43 % Exercisable at 31 December 1 130 444 3.3 3 498 122 10.6 Annual Report 2024 Page 54 The weighted average exercise price (WAEP) for the share options exercised during 2024 was NOK 3.2 (2023: NOK 5.9), and the average market price at the exercise dates was NOK 3.82 (2023: NOK 12.27). The weighted average exercise price for the share options outstanding as at 31 December 2024, was NOK 3.3 (2023: NOK 11.3) with a range from NOK 3.20 to NOK 4.33. At the end of the year, the weighted average exercise price was NOK 3.3 (2023: NOK 10.6) on exercisable options. In the case of an offeror becomes the owner of at least 9/10 of the issued shares of poLight, all of the unvested share options becomes immediately vested. Share option valuation The fair value of the options granted in 2024 has been calculated to NOK 8.8 million excluding social security expenses (2023: NOK 7.5 million), by using the Black-Scholes option pricing model. The basis for the valuation comprises several factors that affect the calculated fair value of granted options. The assumptions used in the calculation was: 2024 2023 Program 1 Program 2 Price at grant date NOK 3.85 NOK 12.15 NOK 12.15 Exercise price NOK 3.30 NOK 12.15 NOK 12.15 Maximum1) option life 5 years 5 years 5 years Assumed option life 2.63 years 2.5 years 4 years Risk-free interest rate 3.62 % 4.1% 4.1% Volatility 85 % 60 % 60 % Fair value per share option NOK 1.442) NOK 4.8 NOK 6.0 1) Although the share options expire 5 years from the date of the grant, any vested options are required to be exercised no later than the first exercise window after an employee's last day of service with the company. 2) The low fair value is due to the fact that most of the grants in 2024 were replacements of existing programs, where the fair value was measured to net after reduction of the fair value of the cancelled share options. ) Weighted average parameters at grant of the share options. Expected vesting is estimated based on employee turnover, and volatility is deemed based on historic volatility. Sensitivity analysis The fair value of the share options granted in 2024 of NOK 8.8 million was determined based on an assumption of a volatility of 85%. At a volatility of 60%, holding other assumptions constants, would have decreased the fair value with NOK 2.8 million over the vesting period. A decrease in the assumed lifetime of the share options with 1 year, would have decreased the fair value with NOK 2.2 million over the vesting period. Annual Report 2024 Page 55 5.4 Research and development expenses (in NOK 000) 2024 2023 Employee benefits expense (incl. consultants) 24 895 25 743 Other operating expenses 9 646 10 990 Government grants -2 217 -2 117 Capitalized 0 0 Total Research and development expenses 32 323 34 616 Research and development costs that are not eligible for capitalisation have been expensed in the period incurred and are recognised as Research and development expenses. R&D costs that are expensed, includes R&D management, patents, improvements of the TLens (see Note 14 Government grants), feasibility study of new concepts, software license and costs related to integration of TLens in new customer applications/products. None of the activities were eligible for capitalisation during 2024 and 2023 since these have so far been in an early phase from an R&D point of view. 5.5 Sales and marketing expenses (in NOK 000) 2024 2023 Employee benefits expense (incl. consultants) 13 298 14 739 Other operating expenses 3 007 2 973 Total Sales and marketing expenses 16 305 17 712 5.6 Operational/supply chain expenses (in NOK 000) 2024 2023 Employee benefits expense (incl. consultants) 16 909 11 121 Other operating expenses 6 633 5 563 Total Operational / supply chain expenses 23 542 16 684 5.7 Administrative expenses (in NOK 000) 2024 2023 Employee benefits expense 15 622 17 617 Other operating expenses 11 328 4 354 Total Administrative expenses 26 950 21 971 Annual Report 2024 Page 56 5.8 Auditor's remuneration (in NOK 000) 2024 2023 Statutory audit 985 1 528 Other attestation services 279 309 Tax consultancy 38 66 Other services that are not part of the audit 128 128 Total Auditor's remuneration (excluding VAT) 1 430 2 031 5.9 Financial items (in NOK 000) 2024 2023 Finance income 211 0 Interest income 7 431 4 518 Finance income 7 642 4 518 Net foreign exchange losses 404 1 020 Interest expense on debts and borrowings 4 0 Interest expense on lease liabilities 252 259 Finance expenses 25 16 Finance cost 685 1 295 6 Income tax The significant components of income tax expense are: (in NOK 000) 2024 2023 Consolidated statement of profit or loss Current income tax expense 139 220 Deferred tax: Relating to origination and reversal of temporary differences 0 0 Income tax expense reported in the statement of profit or loss 139 220 A reconciliation between tax expense and the product of accounting profit multiplied by Norway’s domestic tax rate is as follows: (in NOK 000) 2024 2023 Calculated income tax at statutory rate of 22% -22 362 -18 759 Government grants exempt from tax -428 -466 Tax effect of permanent differences 1) 1 083 2 053 Change in unrecognised deferred tax assets 22 122 14 162 Change in tax rate 0 3 314 Effect of different tax rates compared with Norwegian tax rate -249 43 Foreign currency effects 112 14 Adjustments previous year -139 -142 Income tax expense 139 220 Effective tax rate 0.1 % 0.3 % 1) Includes tax effect of share option expense, see Note 5.3 Employee benefits expense. Annual Report 2024 Page 57 Movements in deferred tax balances Balance at 31 December 2024 Net balance Recognised in Recognised in Deferred tax Deferred tax (in NOK 000) at 1 January profit or loss OCI Net assets liabilities Property, plant and equipment -87 -134 0 -220 0 -220 Intangible assets 5 031 -135 0 4 896 4 896 0 Inventories 3 288 1 410 0 4 698 4 698 0 Group loan -1 833 0 -323 -2 156 0 -2 156 Provisions 220 1 393 0 1 613 1 613 0 Tax losses carried forward 182 101 24 682 0 206 784 206 784 0 Tax assets (liabilities) before set-off 188 720 27217 -323 215614 217 990 -2 376 Set-off of tax 0 -2 376 2 376 Unrecognised deferred tax assets -188 720 -27 217 323 -215 614 -215 614 Net tax assets (liabilities) 0 0 0 0 0 0 Balance at 31 December 2023 Net balance at Recognised in Recognised in Deferred tax Deferred tax (in NOK 000) 1 January profit or loss OCI Net assets liabilities Property, plant and equipment 4 -91 0 -87 0 -87 Intangible assets 5 166 -135 0 5 031 5 031 0 Inventories 2 978 310 0 3 288 3 288 0 Group loan -1 387 0 -445 -1 833 0 -1 833 Provisions 220 0 0 220 220 0 Tax losses carried forward 162 522 19 580 0 182 101 182 101 0 Tax assets (liabilities) before set-off 169 502 19 664 -445 188 720 190 640 -1 920 Set-off of tax 0 -1 920 1 920 Unrecognised deferred tax assets -169 502 -19 664 445 -188 720 -188 720 Net tax assets (liabilities) 0 0 0 0 0 0 Since the Group is still in an early commercialisation phase with significant losses, no deferred tax assets have been recognized. Total unrecognised deferred tax assets net, relate to (in NOK 000) 2024 2023 Norway (no expiry date) 211 225 184 398 France (no expiry date) 4 388 4 322 Total unrecognised deferred tax assets 215614 188 720 Annual Report 2024 Page 58 7 Earnings per share Basic earnings per share (EPS) is calculated by dividing the profit or loss for the year attributable to ordinary equity holders of the parent, by the weighted average number of shares outstanding during the year. The following table reflects the income and share data used in the basic and diluted EPS computations: 2024 2023 Weighted average number of ordinary shares for basic EPS 104 962 138 61 045 873 Effect of dilution: Share options in-the-money (average) 484 537 2 883 370 Anti-dilutive for the periods presented -484 537 -2 883 370 Weighted average number of shares adjusted for the effect of dilution 104 962 138 61 045 873 Fully vested and Exercisable share options have no dilution effect on EPS computations, because this would have decreased loss per share. There have been no other transactions involving ordinary shares, or potential ordinary shares, between the reporting date and the date of authorisation of these financial statements. (in NOK) 2024 2023 Profit / loss (-) attributable to ordinary equity holders of the parent -101 785 -85 489 Earnings per share for income attributable to equity holders of poLight: Basic -0.97 -1.40 Diluted -0.97 -1.40 8 Property, plant and equipment (in NOK 000) Building Equipment Total Cost at 1 January 2023 1 232 22 081 23 313 Additions 16 371 387 Disposals at cost 0 -472 -472 Foreign currency translation effect 0 144 144 Cost at 31 December 2023 1 248 22 123 23 371 Accumulated depreciation and impairment losses at 1 January 2023 -348 -12 217 -12 565 Depreciation -249 -1 303 -1 552 Impairment losses 0 0 0 Accumulated depreciation and impairment losses disposals 0 94 94 Effect of changes in foreign exchange 0 -108 -108 Accumulated depreciation and impairment losses at 31 December 2023 -598 -13 533 -14 131 Net book value at 31 December 2023 650 8 590 9 240 Annual Report 2024 Page 59 (in NOK 000) Building Equipment Total Cost at 1 January 2024 1 248 22 123 23 371 Additions 27 2 375 2 402 Disposals at cost -68 -91 -159 Foreign currency translation effect 0 109 109 Cost at 31 December 2024 1 207 24 516 25 723 Accumulated depreciation and impairment losses at 1 January 2024 -598 -13 533 -14 131 Depreciation -249 -1 811 -2 060 Impairment losses 0 -26 -26 Accumulated depreciation and impairment losses disposals 41 91 132 Effect of changes in foreign exchange 0 -79 -79 Accumulated depreciation and impairment losses at 31 December 2024 -805 -15 359 -16 164 Net book value at 31 December 2024 402 9 157 9 559 Estimated useful lives (years) 1) 3-7 1) Modifications and upgrades in leased premises are depreciated over the leasing period. 9 Intangible assets Development costs Software (in NOK 000) and TLens patents license Total Cost at 1 January 2023 78 184 181 78 365 Cost at 31 December 2023 78 184 181 78 365 Accumulated amortisation and impairment losses at 1 January 2023 -53 329 -181 -53 511 Amortisation -7 275 0 -7 275 Accumulated amortisation and impairment losses at 31 December 2023 -60 604 -181 -60 785 Net book value at 31 December 2023 17 580 0 17 580 Annual Report 2024 Page 60 Development costs Software (in NOK 000) and TLens patents license Total Cost at 1 January 2024 78 184 181 78 365 Cost at 31 December 2024 78 184 181 78 365 Accumulated amortisation and impairment losses at 1 January 2024 -60 604 -181 -60 785 Amortisation -7 275 0 -7 275 Accumulated amortisation and impairment losses at 31 December 2024 -67 879 -181 -68 060 Net book value at 31 December 2024 10 306 0 10 306 Intangible assets with finite useful lives, are amortised systematically over their estimated useful lives, ranging between 3 and 7 years. In 2008/2009, poLight acquired the core patents of the TLens® technology for NOK 5 million. The patents were granted in 10 different countries in 2006. poLight has since invested substantial resources in research and product development of the TLens®. poLight started amortising capitalised development costs for TLens Silver in the second quarter of 2019 as it became ready for commercial shipments. The useful lives are deemed to be 7 years which correlates with the remaining number of years of the first patent. Research and development costs that are not eligible for capitalisation have been expensed in the period incurred and are recognised in Research and development expenses net of government grants received. 10 Development costs The part of poLight’s IP (intellectual property) that is recognised as an intangible asset is the fundamental TLens® technology, which can become a component in smartphones, wearables, augmented reality and various medical equipment, as well as a wide range of industrial applications, such as barcode readers and machine vision/sensor applications. Carrying amount before Carrying amount Accumulated net (in NOK 000) impairment after impairment impairment loss CGU: TLens® technology platform At 31 December 2023 35 860 17 580 18 280 At 31 December 2024 28 586 10 306 18 280 The TLens® technology platform is poLight’s major asset. In January 2020, the first product using TLens Silver was launched within the consumer market segment: a smartwatch phone for children, with a main camera with an advanced autofocus (AF) function delivered by poLight. Since then, a further 27 design-wins have been achieved, including an additional three in consumer products. The first smartphone design-win was achieved in January 2023. poLight has also achieved 16 design-wins in industrial products like barcode and machine vision, 4 design-wins in augmented / mixed reality (AR/MR) and 4 design-wins in healthcare products. The company has one major asset, the TLens® technology platform, and management has evaluated that the Group as a whole constitutes one CGU for impairment testing. The remaining carrying value of development costs are NOK 10.3 million and are related to TLens® technology platform. Indicators of impairment of the TLens ® technology platform have been reviewed, and none identified. TLens® Platinum, a larger version of the TLens®, is still under development. Engineering samples have been produced and have already been tested by some potential customers. However, efforts to prepare TLens® Platinum for mass production have been put on hold until the product is closer to the anticipated market breakthrough. In December 2019, a management assessment was made Annual Report 2024 Page 61 and an impairment charge of NOK 18.3 million was recognised with respect to this product, reducing the carrying amount to NOK 0. This variant of the TLens® is still on the technological roadmap, and will be continued when the product has sufficient customer commitment. In addition, management considers that the equity value of the company is an indication of the fair value of the CGU. The company’s shares are listed on Oslo Stock Exchange and fair value is estimated on the basis of the observed share price. The fair value measurement is categorised in level 2 of the fair value hierarchy in accordance with IFRS 13. There is considerable headroom between the carrying value and the fair value less cost of disposal. 11 Lease agreements poLight has entered into leases with regard to premises and office equipment used in its operations. In Norway (HQ), the Group leases lab facilities, including a clean room, and further offices are leased in Norway, Finland and China. In November 2024, the Group moved its headquarters from Horten to Tønsberg. The new premises in Norway comprise 720 m 2 . The contract expires in December 2034, with two options to extend the lease agreement by an additional 5 years each. The determined value of the right-to-use assets and the corresponding liability is NOK 10.2 million. Due to the duration of the lease agreement, the options are not assumed to be utilised when determining the lease period, which would have increased the lease assets and liabilities. The office lease terms in Finland and China are terminable by both lessee and lessor with twelve months’ notice or less. The leases relating to office equipment are of low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases. Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period: Building (in NOK 000) 2024 2023 At 1 January 2 915 3 871 Additions 10 324 152 Termination of contract -1 846 0 Depreciation expense -1 153 -1 108 At 31 December 10 241 2 915 Set out below are the carrying amounts of lease liabilities and the movements during the period: (in NOK 000) 2024 2023 At 1 January 3 133 4 070 Additions 10 324 152 Termination of contract -2 052 0 Interest expense 252 259 Payments -1 380 -1 348 At 31 December 10 278 3 133 Current, < 1 year 663 1 182 Non-current 9 615 1 951 The Group had non-cash additions to right-of-use assets and lease liabilities of NOK 10.3 million in 2024 (2023: NOK 0.2 million) whereof NOK 10.2 million related to the new HQ lease. The addition is also attributable to the yearly adjustment in lease payment. The maturity analysis of lease liabilities are disclosed in Note 13.2 Financial liabilities. The following are the amounts recognised in profit or loss: Annual Report 2024 Page 62 (in NOK 000) 2024 2023 Depreciation expense of right-of-use assets 1 153 1 108 Interest expense on lease liabilities 252 259 Expense relating to short-term leases (included in research and development expenses) 535 529 Expense relating to short-term leases (included in sales and marketing expenses) 868 89 Expense relating to leases of low-value assets (included in administrative expenses) 47 42 Total amount recognised in profit or loss 2 854 2 026 The Group had total cash outflows for leases of NOK 2 829 in 2023 (2023: NOK 2 007). 12 Inventories (in NOK 000) 2024 2023 Components; mainly wafers (at cost) 77 472 78 837 Finished goods; lenses and driver ASICs (at cost) 6 312 6 195 Obsolescence provision -21 353 -14 944 Total inventories at the lower of cost and net realisable value 62 431 70 089 During 2024, NOK 6.4 million (2023: NOK 1.4 million) was recognised as an obsolescence expense for inventories carried at net realisable value. 13 Financial assets and financial liabilities 13.1 Financial assets (in NOK 000) 2024 2023 Financial assets at amortised cost: Trade receivables 217 4 265 Grants recognised, not received 1 946 2 117 Other receivables 1 629 1 813 Total financial assets 3 792 8 194 Total current 3 792 8 194 Total non-current 0 0 Trade receivables are non-interest bearing and generally on 30-day terms. Annual Report 2024 Page 63 13.2 Financial liabilities (in NOK 000) Interest rate Maturity 2024 2023 Current interest-bearing loans and borrowings: Lease liabilities (Note 11 Lease agreements) 9,9 % < 1 year 663 1 182 Secured loan, DnB 0.99% < 1 year 57 0 Total 720 1 182 (in NOK 000) Interest rate Maturity 2024 2023 Non-current interest-bearing loans and borrowings: Lease liabilities (Note 11 Lease agreements) 9,9 % 2034 9 615 1 951 Secured loan, DnB 0.99/6.35% 2032 369 0 Total 9 984 1 951 In 2024 a company car was bought with car loan from DnB with monthly instalments over 60 months, secured by car mortgage. The first 36 months annual interest rate of 0.99% is payable. The annual interest rate increases to 6.35% the next 60 months. (in NOK 000) 2024 2023 Financial liabilities at amortised cost, other than interest-bearing loans and borrowings: Trade payables 6 571 5 893 Other payables 7 017 8 025 Accrued employer’s NICs on share option plan (Note 5.3) 527 5 839 Provisions(Note 17) 7331 1 000 Total 21 447 20 757 Total current 21 447 20 757 Total non-current 0 0 For all the financial liabilities the carry amounts represent a reasonable approximation of fair value. Terms and conditions of the above financial liabilities • Trade payables are non-interest bearing, and are settled on 15–45 day terms • Other payables are non-interest bearing, and have an average term of 3.0 months • Accrued employer’s NICs on exercisable share options with remaining contractual life of 4.38 years as at 31 December 2024. See Note 5.3 Employee benefits expense for additional information. 13.3 Financial instruments risk management objectives and policies poLight’s principal financial assets include trade and other receivables, and cash. poLight’s principal financial liabilities comprise trade and other payables, lease liabilities and provisions. poLight is exposed to foreign currency risk, credit risk and liquidity risk. The Executive Management oversees the management of these risks. Annual Report 2024 Page 64 Foreign currency risk Trade receivables, trade payables and inventory; poLight’s contracts with the suppliers of the actuator and the assembly of the TLens®, are denominated in USD. Foreign currency risk will be mitigated by entering sales contracts in USD or using hedging instruments. The Group had not entered into any hedging instruments as at 31 December 2024. Research and development (“R&D”); a significant part of the R&D expenses is in foreign currency. Services from subsidiaries are invoiced in EUR and development programs at manufacturing partners are invoiced in USD. These activities have not been hedged by entering into forward exchange rate contracts or other as of today. Since the monetary assets and liabilities in foreign currency, as at 31. December mainly consists of trade payables and receivables which are naturally hedged for the most part, any change in exchange rates will not have a material impact on the profit before tax, nor the equity. Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. poLight is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. Historically, no bad debt has been recognised and since the trade receivables, post balance sheet date, have been paid in full, no provision has been made. Credit quality of a customer is assessed based on D&B’s credit rating scorecard and are regularly monitored. As at 31 December 2024, most of other receivables consisted of government grants with low credit risk. As at 31 December, the ageing analysis of the receivables is as follows: Past due Not past (in NOK 000) Total due < 30 days 30–60 days 61–90 days 91–120 days > 120 days 2024 3 792 3 764 2 26 0 0 0 2023 8 194 7 675 479 39 0 0 0 Credit risk from balances with banks are mitigated using 10 different Norwegian banks with a deposit limit of NOK 40 million each. Credit quality is assessed and regularly monitored. Liquidity risk and Capital Management The Group monitors its risk of a shortage of funds using 5 years forecasting model. At year-end, poLight had cash deposits of NOK 166.8 million. In the current business plan, the Group’s cash deposits will fund activities through the second quarter of 2026. However, on 15 April 2025, the company announced a private placement by Q Technology Group, that when approved by the General Assembly and completed will provide gross proceeds of NOK 171.5 million and a subsequent offering to existing shareholders that could result in additional NOK 51.4 million, if fully subscribed. The maturity analysis below shows the remaining contractual maturity of financial liability. The analysis shows contractual undiscounted cash-flows (i.e., includes interest), and thus differs from the amounts recognised in the statement of financial position. 3 to 12 (in NOK 000) < 3 months months 1 to 5 years > 5 years Total As at 31. December 2024 Interest-bearing loans 15 46 342 76 480 Lease liabilities 398 1 192 6 338 7 741 15 668 Trade and other payables 11 764 2 352 0 0 14 116 12 177 3 590 6 680 7 817 30 264 Annual Report 2024 Page 65 3 to 12 (in NOK 000) < 3 months months 1 to 5 years > 5 years Total As at 31. December 2023 Lease liabilities 342 1 025 2 049 0 3 416 Trade and payables 17 774 1 983 0 0 19 757 18 116 3 008 2 049 0 23 173 The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may issue new shares and/or debt. The Group monitors cash monthly towards 5-year budgets and forecasts. (in NOK 000) 2024 2023 Interest-bearing loans 426 0 Trade and other payables 21 447 20 757 Less: cash and short-term deposits -166 752 -114 788 Net debt -144 879 -94 031 The Group's capital structure is primarily based on deposits. 14 Government grants (in NOK 000) 2024 2023 Receivable at 1 January 2 117 4 614 Received during the year -2 388 -4 614 Grants recognised as reduction of research and development expenses in the consolidated statement of income 2 217 2 117 Receivable at 31 December 1 946 2 117 The Group have in 2023 received grants for development of next generation optical components based on TLens® technology. In 2024 two new projects have been granted a tax grant. There is a clear need in the market for cameras with both smaller and lager aperture size. One of these projects’ focus will be on larger devices like lenses with a big aperture (typical for mobile phone main camera and conventional cameras) and other that bend or shift the light path (Wobulator). The other project will focus on smaller aperture size solutions that could fit for medical products among others. (in NOK 000) 2024 2023 Current 1 946 2 117 Non-current 0 0 Total 1 946 2 117 Annual Report 2024 Page 66 15 Cash and short-term deposits (in NOK 000) 2024 2023 Cash at banks 165 572 113 602 Restricted cash, taxes withheld 1 180 1 186 Cash and short-term deposits 166 752 114 788 Cash at banks earns interest at floating rates based on daily bank deposit rates. 16 Issued capital and reserves 2024 2023 Ordinary shares 129 621 605 66 211 548 The shareholders are presented in Note 16 Share capital and shareholder information, in the financial statement of the parent company, poLight ASA. Number of Issued capital Shares issued and fully paid shares (in NOK 000) At 1 January 2023 of NOK 0.20 each 51 952 700 2 078 Rights Issue on 10 May 2023 each with a par value of NOK 0.0.4 12 918 660 517 Underwriting commission related to the rights Issue on 10 May 2023 each with a par value of NOK 0.0.4 1 291 858 52 Exercise of share options on 18 September 2023 each with a par value of NOK 0.04 48 330 2 At 31 December 2023 66 211 548 2 649 Rights Issue on 21 May 2024 each with a par value of NOK 0.0.4 60 481 758 2 419 Underwriting commission related to the rights Issue on 21 May 2024 each with a par value of NOK 0.0.4 2 928 299 117 At 31 December 2024 129 621 605 5 185 (in NOK 000) Share premium At 1 January 2023 145 785 Rights Issue on 10 May 2023 each with a par value of NOK 0.0.4 147 931 Decrease due to transaction costs for issued share capital -22 702 Exercise of share options on 18 September 2023 each with a par value of NOK 0.04 285 Allocated to retain earnings -76 796 At 31 December 2023 194 503 Rights Issue on 21 May 2024 each with a par value of NOK 0.0.4 143 846 Decrease due to transaction costs for issued share capital -22 419 Allocated to retain earnings -93 556 At 31 December 2024 222 373 The board is authorised to increase the share capital issuing new shares up to a total nominal value of NOK 529,692 (13,242,310 shares at par value of NOK 0.04) that is approximately 20 per cent of shares outstanding, in addition to shares through share option schemes. Annual Report 2024 Page 67 Share option schemes The board is authorised to issue shares through share option schemes up to a total nominal value of NOK 264,846 (6,621,155 shares at par value of NOK 0.04), that is approximately 5 per cent of shares outstanding. The company’s share option schemes, with the opportunity to subscribe for shares in poLight, have been offered all employees (Note 5.3 Employee benefits expense). 17 Provisions Warranty (in NOK 000) provision Claims Total At 1 January 2023 1 000 0 1 000 At 31 December 2023 1 000 0 1 000 New or increased provisions 0 6 331 6 331 Utilised 0 0 0 At 31 December 2024 1 000 6331 7331 Expected timing of cash flow Warranty (in NOK 000) provision Claims Total Current, < 1 year 1 000 6 331 7 331 Non-current 0 0 0 At 31 December 2024 1 000 6 331 7 331 Warranty provision A general provision to meet potential claims under the warranty clause. Claims Two customers of poLight received a patent infringement claim during 2024, and lawsuits have been filed. Although poLight and its local and domestic legal advisors consider that the use of TLens® does not infringe any of the patents mentioned, resolving the matter will require legal expenses for poLight and a provision has been made to reflect the legal strategy and expected outcome of these legal claims discussed. Although the cost involved with the final outcome of these claims are uncertain, the provisions currently made are management’s best estimate and increased provisions affecting future accounting periods should not be required under current scenarios. Since the company's Q4 reporting the year-end provision has been increased with NOK 3 000 000 to reflect re-assessed expected remaining legal fees in order to come to a resolution. Annual Report 2024 Page 68 18 Related parties The financial statements include the financial statements of the Group and the subsidiaries listed in the following table: Country of Name Principal activities incorporation 2024 2023 R&D, Sales and poLight ASA management Norway 100 % 100 % poLight France SAS R&D France 100 % 100 % poLight Finland Oy R&D Finland 100 % 100 % poLight Hong Kong Limited Holding company HK, China 100 % 100 % poLight (Shenzhen) Technical Service Company Limited Sales China 100 % 100 % poLight ASA is the ultimate parent. None of the shareholders of poLight ASA has control of the company. As of 31 December 2024, the largest shareholder was Investinor Direkte AS, with an ownership of 11.32%. Transactions between group companies Intercompany agreements are entered with all the subsidiaries in the Group. All sales in the subsidiaries are made with parent company. All transactions are considered to be on an arm’s length basis. (in NOK 000) 2024 2023 Purchases from subsidiaries 16 617 15 735 Subordinated loan 2024 2023 EUR 000 NOK 000 EUR 000 NOK 000 Subordinated loan agreement 2 650 31 257 2 650 29 787 A subordinated loan agreement was concluded on 29 December 2016, between poLight ASA and poLight France SAS. Only the part that exceeds a prudent level, with regards to both equity and subordinated loan combined, shall be regarded as loan in respect to interest accrual. For the financial year 2024, the entire principal is considered as equity, and not interest-bearing. Since the loan is considered to be a part of the net investment in poLight France SAS, the currency translation effect is recognised in OCI. In the parent company an impairment loss of NOK 28,456,51 related to the subordinated loan have been recognised, whereof NOK 969,425 recognised in 2024. Transactions with other related parties No transactions have been made with other related parties for the relevant financial years. Compensation to management personnel and board of director’s A separate remuneration report will be published on poLight's website as a part of the notification of the Annual General Meeting. Annual Report 2024 Page 69 Management remuneration In accordance with the Norwegian public Limited Companies Act §6-16 a, the board of directors prepares a separate statement related to the determination of salary and other benefits for the corporate management. The statement shall be subject to an advisory vote by the annual general meeting in accordance with §5-6 (3). The statement for 2024 will be submitted for approval in the annual general meeting 21 May 2025 and will be available on poLight ASA’s website at the time the notice of the meeting is sent to the shareholders. The total remuneration to the management consists of fixed salary, bonus, benefits in-kind, share option program and pension schemes. The fixed salary is subject to an annual evaluation, and any salary increases and other amendments to the employments terms shall be based on a review by the CEO and the Board each year, taking into account trends in local labour markets, the results achieved, and individual contributions to the development of the Company. Value1) Pension Other share Total Total (in NOK 000) Salaries Bonus costs benefits options 2024 2023 Øyvind Isaksen -CEO 3 741 814 138 355 2 334 7 382 7 256 Pierre Craen - CTO 2) 2 582 0 0 0 496 3 078 3 162 Alf Henning Bekkevik - former CFO 3) 986 0 105 12 298 1 401 2 223 Marianne Sandal - COO 1 909 0 154 50 530 2 643 2 770 Joakim Bredahl- CFO 4) 550 0 9 8 233 800 0 Total management team 9 768 814 406 425 3 891 15 304 15 412 1) Fair value of the share options vested in 2024 are calculated using the Black-Scholes option pricing model at the date of the grant. Most of the programs were replaced with a new program in June 2024 – see more details in Note 5.3 Employee benefits expense. 2) Pierre Craen has invoiced NOK 2,582 (2023: NOK 2,764) thousands of the remuneration through Tilia-Blue SRL as a consultant, included in the above figure. 3) Alf Henning Bekkevik served as CFO from 1 February 2016 to 1 September 2024 and now serves as VP Finance. The remuneration in the figure above reflects the remuneration as CFO. 4) Joakim Bredahl served as CFO from 2 September 2024 If the company terminates the CEO’s employment, the CEO is entitled to nine months’ salary, in addition to a three months’ notice period. Below is an overview of poLight management's and board members' granted share options: Opening Cancelled Exercised Granted Ending Exercisable balance options options options balance options Øyvind Isaksen - CEO 2 083 746 -1 926 531 0 1 926 530 2 083 745 478 303 Pierre Craen - CTO 410 615 -410 615 0 410 615 410 615 68 435 Alf Henning Bekkevik - former CFO 351 115 -351 115 0 351 115 351 115 58 519 Marianne Sandal - COO 458 615 -458 615 0 458 615 458 615 76 435 Joakim Bredahl- CFO 0 0 0 250 000 250 000 41 666 Total management team 3 304 091 -3 146 876 0 3 396 875 3 554 090 723 358 Annual Report 2024 Page 70 Most of the programs were replaced with a new program in June 2024 – see more details in Note 5.3 Employee benefits expense. The exercise price on exercisable share options for the management’s balance at 31 December 2024 was NOK 3.33 per share in weighted average. No share options were exercised in 2024. In the case of an offeror becoming the owner of at least 9/10 of the issued shares of poLight, all of the unvested share options becomes immediately vested and exercisable. Remuneration members of the board (in NOK 000) 2024 2023 Grethe Viksaas - chair of the board 538 500 Ann-Tove Kongsnes 1) 39 258 Svenn Tore Larsen 270 258 Thomas Görling 270 258 Jean-Christophe Eloy 2) 231 0 Marianne Bøe 2) 231 0 Juha Alakarhu 3) 0 125 Total Board of Directors 1 578 1 399 1) Member to January 15, 2024 2) Member from January 15, 2024 3) Member to May 24, 2023 There are no loans from poLight to the management or members of the board. Remuneration of the nomination committee (in NOK 000) 2024 2023 Jan-Erik Hæreid - chair 1) 39 30 Thomas S. Wrede-Holm - formerchair2) 6 40 Anne E. H. Worsøe 30 30 Egil Garberg 3) 26 0 Total 100 100 1) Chair from January 15, 2024 2) Chair to January 15, 2024 3) Member from January 15, 2024 Remuneration of the audit and sustainability committee (in NOK 000) 2024 2023 Marianne Bøe - chair 1) 34 0 Ann-Tove Kongsnes - former chair 2) 6 57 Grethe Viksaas 30 48 Total 70 105 1) Chair from January 15, 2024 2) Chair to January 15, 2024 Annual Report 2024 Page 71 Remuneration of the remuneration committee (in NOK 000) 2024 2023 Grethe Viksaas - chair 35 45 Ann-Tove Kongsnes 0 38 Thomas Görling 30 45 Total 65 128 19 Going Concern and significant events after the end of the reporting period The Group possesses sufficient liquidity to fund its operations for the next 12 months. Additionally, on 15 April 2025, the company announced a private placement by Q Technology Group, that when approved by the General Assembly and completed will provide gross proceeds of NOK 171.5 million and a subsequent offering to existing shareholders that could result in additional NOK 51.4 million, if fully subscribed. Management, together with the Board of Directors, continuously evaluates the Group’s liquidity requirements to ensure adequate financing of planned operations, research and development activities, as well as any investments necessary for scaling up the business. According to the business plan before the private placement, the Group’s cash reserves were expected to cover activities through the second quarter of 2026. However, contingent on shareholders approving the private placement in the company’s AGM, a revision of the business plan will be carried out to reflect the improved runway. Accordingly, these consolidated financial statements have been prepared under the assumption that both the Group and the parent company are going concerns. No events, except the private placement mentioned above, have occurred after the end of the reporting period that requires disclosure. The completion of the Private Placement is conditional upon the approval by the Company's general meeting for the share issuance to Q Tech, the appointment of Q Tech's two nominated directors to poLight's Board of Directors, and certain amendments to the Company's articles of association regarding the composition of the Board of Directors. The Company's largest shareholders Investinor Direkte AS and LHH AS, holding 10.42% and 5.01% of the shares of the Company respectively, have entered into irrevocable undertakings to vote in favour of the Private Placement and the related resolutions at the general meeting. Following the Private Placement, the Company may carry out a subsequent offering of up to 19,122,933 new shares to existing shareholders of poLight (the "Subsequent Offering"). As a part of the strategic investment, Q Tech is working to establish a dedicated TLens® assembly and test line ("Strategic Partnership Agreement"), in addition to poLight's existing manufacturing capabilities. 20 Standards issued, but not yet effective A number of new or amended accounting standards are effective for annual periods beginning after 1 January 2024 and earlier application is permitted provided approval by the EU. However, the Group has not early adopted any of these, and none are expected to have a significant impact on the Group’s consolidated financial statements, except potentially IFRS 18. IFRS 18 Presentation and Disclosure in Financial Statements IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies for annual reporting periods beginning on or after 1 January 2027, provided it is approved by the EU. The new standard introduces the following key new requirements: 1) Classify all income and expenses into five categories in the consolidated statement of income, namely the operating, investing, financing, discontinued operations and income tax categories. It is also required to present a newly-defined operating profit subtotal. Net result will not change. 2) Management-defined performance measures (MPMs) are disclosed in a single note in the financial statements.3) Enhanced guidance is provided on how to group information in the financial statements. In addition, it is required to use the operating profit subtotal as the starting point for the consolidated statement of cash flows when presenting cash flows from operating activities under the indirect method. The Group has not assessed the impact of the new standard, particularly with respect to the structure of the profit or loss section of the consolidated statement of comprehensive income, the consolidated statement of cash flows and the additional disclosures required for MPMs. Annual Report 2024 Page 72 POLIGHT ASA FINANCIAL STATEMENTS Statement of income poLight ASA – for the year ended 31 December (in NOK 000) Note 2024 2023 Sale of goods 2 7 586 20 099 Rendering of services 2 2 038 2 412 Revenue 9 624 22 511 Change in obsolescence provision 13 6 409 1 410 Cost of sales 2 208 8 939 Gross profit 1 007 12 162 Research and development expenses -34 017 -36 386 Sales and marketing expenses -17 835 -18 438 Operational / supply chain expenses -23 542 -16 684 Administrative expenses -28 330 -23 318 Depreciation, amortisation and net impairment losses 10,11 -9 304 -8 506 Operating profit / loss (-) -112 020 -91 170 Finance income 8 10 347 8 862 Finance costs 8 -1 892 -2 589 Net financial items 8 456 6 272 Profit / loss (-) before tax -103 564 -84 898 Income tax expense 9 0 0 Profit / loss (-) for the year -103 564 -84 898 Allocated to/from: Share premium 17 -93 556 -76 796 Retained earnings 17 -10 008 -8 101 Profit / loss (-) for the year -103 564 -84 898 Annual Report 2024 Page 73 Balance sheet poLight ASA – as at 31 December (in NOK 000) Note 2024 2023 ASSETS Property, plant and equipment 10 9 502 9 154 Intangible assets 11 10 306 17 580 Investments in subsidiaries 12 320 320 Subordinated loan to subsidiaries 14,2 1 2 800 2 300 Total non-current assets 22 927 29 354 Inventories 13 62 431 70 089 Trade receivables 14 217 4 265 Other receivables 14 4 085 4 200 Cash and cash equivalents 15 160 688 110 568 Total current assets 227 420 189 121 Total assets 250 347 218 474 EQUITY AND LIABILITIES Share capital 16,17 5 185 2 648 Share premium 17 222 373 194 503 Total equity 227 558 197 152 Interest-bearing loans and borrowings 18 426 0 Total non-current liabilities 426 0 Trade payables 14 9 115 8 175 Public duties payable 2 606 7 907 Other payables 14 10 643 5 241 Total current liabilities 22 363 21 323 Total liabilities 22 789 21 323 Total equity and liabilities 250 347 218 474 Tønsberg, 29 April 2025 THE BOARD OF DIRECTORS OF POLIGHT ASA Grethe Viksaas (sign) Chairperson, Independent Thomas Görling (sign) Board member, Independent Svenn-Tore Larsen (sign) Board member, Independent Jean-Christophe Eloy (sign) Board member, Independent Marianne Bøe (sign) Board member, Independent Dr Øyvind Isaksen (sign) Chief Executive Officer Annual Report 2024 Page 74 Statement of cash flows poLight ASA – for the year ended 31 December (in NOK 000) Note 2024 2023 Operating activities Profit before tax -103 564 -84 898 Gain on disposal of property, plant and equipment 0 -14 Depreciation, amortisation and net impairment losses 10,11 9 304 8 506 Depreciation of final testing equipment recognised as Cost of Sales 10 25 264 Changes in inventories, trade receivables and trade payable 12 646 - 28 886 Changes in other accruals 8 791 8 422 Net cash flows from / (used in) operating activities -72 800 -96 606 Investing activities Proceeds from sale of property, plant and equipment 0 392 Purchase of property, plant and equipment 10 -2 402 -387 Proceeds from group borrowings 14,21 0 1 150 Dividend from subsidiaries 8 933 1 125 Net cash flows from / (used in) investing activities -1 469 2 281 Financing activities Proceeds from Issue of ordinary shares 17 146 382 148 500 Proceeds from exercise of share options 17 0 287 Transaction costs on issue of shares 17 -22 419 -22 702 Proceeds from borrowings 18 474 0 Repayment of borrowings 18 -48 0 Net cash flows from / (used in) financing activities 124 389 126 085 Net increase in cash and cash equivalents 50 120 31 759 Cash and cash equivalents at 1 January 15 110 568 78 808 Cash and cash equivalents at 31 December 15 160 688 110 568 Annual Report 2024 Page 75 Notes to the Financial statement poLight ASA 1 Significant accounting policies The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway. The consolidated financial statements of the Group have been prepared in accordance with IFRS® Accounting Standards. The Company’s accounting principles are similar to the accounting principles for the Group with the following exceptions; • Leases (IFRS 16 in the consolidated financial statement). The company’s financial statements have been prepared without recognition of the right-of use of premises and related lease liabilities. • In the parent company the subsidiaries are valued as cost less any impairment losses and not consolidated. Use of estimates The management has used estimates and assumptions that have affected assets, liabilities, incomes, expenses and information about potential liabilities in accordance with generally accepted accounting principles in Norway. Foreign currency translation Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign currency are translated into NOK, using the exchange rate applicable on the balance sheet date. Non-monetary items that are measured at their historical price expressed in a foreign currency are translated into NOK, using the exchange rate applicable on the transaction date. Non-monetary items that are measured at their fair value expressed in a foreign currency are translated at the exchange rate applicable on the balance sheet date. Changes to exchange rates are recognised in the income statement as they occur during the accounting period. Revenue recognition Revenues from the sale of goods are recognised in the income statement, once delivery has taken place and the risk and control has been transferred. Research and development Development costs are capitalised, providing that a future economic benefit associated with development of the intangible asset can be established and costs can be measured reliably. Otherwise, the costs are expensed as incurred. Capitalised development cost is amortised straight-line over its useful life. Research costs are expensed as incurred. Government grants Government grants are recognised when there is reasonable assurance that the grant will be received, and that all attached conditions will be complied with. When the grant relates to an expense item, it is deducted in the related expense on a systematic basis over the periods that the costs it is intended to compensate, are expensed. Where the grant relates to an asset, it reduces the carrying amount of the asset. The grant is then recognised as income over the useful life of the depreciable asset by way of a reduced depreciation charge. Income tax The tax expense comprises tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all differences between the book value and tax value of assets and liabilities. Deferred tax is calculated as 22% of temporary differences and the tax effect of tax losses carried forward. Deferred tax assets are recorded in the balance sheet when it is more likely than not that the tax assets will be utilized. Taxes payable and deferred taxes are recognised directly in equity, to the extent that they relate to equity transactions. Classification and valuation of balance sheet items Current assets and short-term liabilities consist of receivables and payables due within one year, and items related to the operating cycle. Other balance sheet items are classified as fixed assets/long-term liabilities. Current assets are valued at the lower of cost and fair value. Short-term liabilities are recognised at nominal value. Fixed assets are valued at cost, less depreciation and impairment losses. Long-term liabilities are recognised at nominal value. Annual Report 2024 Page 76 Fixed assets Property, plant and equipment is capitalised and depreciated straight-line over the estimated useful life. Significant fixed assets which consist of substantial components with dissimilar economic life, have been unbundled; depreciation of each component is based on the economic life of the component. Costs for maintenance are expensed as incurred, whereas costs for improving and upgrading property, plant and equipment are added to the acquisition cost and depreciated with the related asset. If carrying value of a non- current asset exceeds the estimated recoverable amount, the asset is written down to the recoverable amount. The recoverable amount is the greater of the net realisable value and value in use. In assessing value in use, the discounted estimated future cash flows from the asset are discounted. Investments in subsidiaries The investments in subsidiaries are valued as cost less any impairment losses. An impairment loss is recognised if the impairment is not considered temporary, in accordance with generally accepted accounting principles. Impairment losses are reversed if the reason for the impairment loss disappears in a later period. Dividends, group contributions and other distributions from subsidiaries are recognised in the same year as they are recognised in the financial statement of the subsidiaries. If dividends/group contribution exceeds withheld profits after the acquisition date, the excess amount represents repayment of invested capital, and the distribution will be deducted from the recorded value of the acquisition in the balance sheet for the parent company. Inventory Inventories are recognised at the lowest of cost and net selling price. The net selling price is the estimated selling price in the case of ordinary operations, minus the estimated completion, marketing and distribution costs. The cost is arrived at using the FIFO method, and includes the costs incurred in acquiring the goods and the costs of bringing the goods to their current state and location. Receivables Accounts receivable and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful accounts. Provisions for doubtful accounts are based on an individual assessment of the different receivables. Cash flow statement The cash flow statement is presented using the indirect method. Cash and cash equivalents include cash, bank deposits and other short-term, highly liquid investments with maturities of three months or less. 2 Revenue (in NOK 000) 2024 2023 By business area TLens® 9 624 22 511 Total 9 624 22 511 Geographical distribution America 4 982 5 990 Asia 4 410 11 818 Europe 232 4 702 Total 9 624 22 511 Annual Report 2024 Page 77 3 Specification of operating expenses by nature (in NOK 000) Note 2024 2023 Employee benefits expense 1) 5,6 58 992 58 212 Depreciation, amortisation and net impairment losses 10,11 9 304 8 506 Other operating expenses 7,19 44 732 36 614 Total operating expenses 113 027 103 332 1) Including consultants engaged on long-term contract 4 Government grants (in NOK 000) 2024 2023 At 1 January 2 117 4 614 Received during the year -2 388 -4 614 Grants earned 2 217 2 117 At 31 December 1 946 2 117 poLight ASA has received grants for reimbursement of expenses related to technology and product development. 5 Employee benefits expense (in NOK 000) 2024 2023 Wages and salaries 22 130 19 336 Consultants engaged on long-term contract 25 456 23 707 Social security costs 3 618 3 417 Pension costs (note 6) 1 544 1 381 Other benefits and social costs 1 870 869 Share based compensation costs 4 697 9 996 Government grants -323 -495 Total employee benefits expense 58 992 58 212 Average number of man-years, employees 18 14 Average number of man - years, total 36 29 All employees are included in a cash bonus program with identical bonus triggers for all employees except the CEO, who has additional triggers related to capital raise and exit, and some modifications implemented for the sales employees. The bonus is calculated based on fixed salary, with a maximum of 80% for the CEO, 40% for the other members of the Executive Management Team, 20-30% for sales employees, 20% for department managers, and 10% for other employees. All employees in the Group are included in a share option programme. Details are presented in Note 5.3 Employee benefits expense, in the consolidated financial statement. Management and board member’s remuneration are presented in Note 18 Related parties, in the consolidated financial statement. 6 Pensions PoLight ASA is subject to the requirements in the Mandatory Occupational Pensions Act, and the company’s pension scheme adheres to the stipulations of the Act. The pension scheme is based on a defined contribution plan, and the premium is calculated on the basis of the employee’s income. In 2023 and 2024, 7% of the salary between 0G (1G=NOK 124,028 per May 1, 2024) and 7.1G, and 15% of the salary between 7.1G and 12G was calculated. At 31 December 2024, 20 members were covered by the plan. Annual Report 2024 Page 78 (in NOK 000) 2024 2023 Defined contribution plan 1 467 1 299 Social security 207 183 Total pension cost 1 674 1 483 7 Auditor's remuneration (in NOK 000) 2024 2023 Statutory audit 956 1 501 Other attestation services 279 309 Tax consultancy 38 66 O ther services that are not part of the audit 1) 128 128 Total (excluding VAT) 1 401 2 004 1) The auditor participated in the meetings held by the Audit and Sustainability Committee 8 Financial items Finance income (in NOK 000) 2024 2023 Interest income from group companies ) 0 0 Other interest income 7 431 4 518 Currency gain on loan to group companies 1 469 2 024 Dividend subsidiaries 933 1 125 Other financial income (currency gain) 514 1 195 Total finance income 10 347 8 862 ) According to the subordinated loan (see Note 14 Intercompany balances with group companies) only the part that exceeds a prudent level, both equity and subordinated loan combined, shall be regarded as loan in respect to interest accrual. Finance expenses (in NOK 000) 2024 2023 Other interest expenses 4 0 Impairment of group loan 969 374 Other financial expenses (currency loss) 918 2 215 Total finance expenses 1 892 2 589 Annual Report 2024 Page 79 9 Income tax Income tax expense (in NOK 000) 2024 2023 Current income tax expense 0 0 Changes in deferred tax 0 0 Total income tax expense 0 0 Tax base calculation (in NOK 000) 2024 2023 Profit before income tax -103 564 -84 898 Permanent differences 4 921 9 333 Transaction costs on issue of shares -22 419 -22 702 Government grants exempt from tax -1 946 -2 117 Temporary differences 11 019 -1 265 Adjustments previous year -633 -644 Tax base -112 622 -102 293 Temporary differences: (in NOK 000) 2024 2023 Inventories 21 353 14 944 Fixed assets -1 002 -394 Intangible assets 22 253 22 867 Group loan 18 657 19 157 Provisions 7 331 1 000 Tax losses carry forward 919 979 807 357 Net deferred tax assets/(liabilities) 988 572 864 931 22 % deferred tax asset/(liability) 21 7 48 6 190 285 Unrecognised deferred tax assets - 21 7 48 6 - 190 285 Recognised net deferred tax assets 0 0 Reconciliation of nominal tax rate to effective tax rate: (in NOK 000) 2024 Calculated income tax at statutory rate of 22% -22 784 Tax effect of permanent differences - 3 850 Government grants exempt from tax -428 Change in unrecognised deferred tax assets 27 201 Adjustments previous year -139 Income tax expense 0 Effective tax rate 0 % Annual Report 2024 Page 80 10 Property, plant and equipment (in NOK 000) Building Equipment Total Cost at 1 January 2024 1 248 19 799 21 047 Additions 27 2 375 2 402 Disposals at cost -68 -91 -159 Cost at 31 December 2024 1 207 22 083 23 290 Accumulated depreciation -805 -12 983 -13 789 Accumulated impairment losses 0 0 0 Accumulated depreciation and impairment losses at 31 December 2024 -805 -12 983 -13 789 Net book value at 31 December 2024 402 9 100 9 502 Impairment losses for the year 0 26 26 Depreciation of equipment recognised as Cost of Sales for the year 0 25 25 Depreciation for the year 249 1 754 2 003 Estimated useful lives (years) Note 1) 3-7 Amortisation plan Linear Linear 1) Modifications and upgrades in leased premises are depreciated over the leasing period. 11 Intangible assets (in NOK 000) Development costs and TLens patents Software license Total Cost at 1 January 2024 78 184 110 78 294 Disposals 0 0 0 Additions 0 0 0 Cost at 31 December 2024 78 184 110 78 294 Accumulated amortisation - 49 599 - 110 - 49 708 Accumulated impairment losses -18 280 0 -18 280 Accumulated amortisation and impairment losses at 31 December 2024 -67 879 -110 -67 988 Net book value at 31 December 2024 10 306 0 10 306 Amortisation for the year 7 275 0 7 275 Estimated useful lives (years) 3-7 3-7 Amortisation plan Linear Linear In 2008/2009, poLight acquired the core patents of the TLens® technology for NOK 5 million. The patents were granted in 10 different countries in 2006. poLight has since invested substantial resources in research and product development of the TLens®. Annual Report 2024 Page 81 poLight started amortising capitalised development investments for TLens Silver in the second quarter of 2019 as it became ready for commercial shipments. The useful lives are deemed to be 7 years which correlates with the remaining number of years of the first patent. Research and development costs that are not eligible for capitalisation have been expensed in the period incurred and are recognised in Research and development expenses. 12 Investment in subsidiaries Company Date of foundation Location Share ownership Voting rights poLight France SAS 19.08.2010 Lyon, France 100 % 100 % poLight Finland Oy 15.09.2016 Tampere, Finland 100 % 100 % poLight Hong Kong Limited 08.12.2016 HK, China 100 % 100 % poLight (Shenzhen) Technical Service Company Limited 24.04.2017 Shenzhen, China 100 % 100 % Company Share capital Number of shares Book value Equity Net profit 2024 NOK 000 NOK 000 NOK 000 NOK 000 poLight France SAS 80 10 000 0 -21 338 978 poLight Finland Oy 23 100 23 1 112 537 poLight Hong Kong Limited 202 200 000 202 202 0 poLight (Shenzhen) Technical Service Company Limited 246 200 000 94 2 575 775 The entities in France and Finland provide R&D services to poLight ASA, Norway. In China a sales office is established with a parent holding company in Hong Kong. 13 Inventories (in NOK 000) 2024 2023 Work in progress (at cost) 77 472 78 837 Finished goods (at cost) 6 312 6 195 Obsolescence provision - 21 353 - 14 944 Total inventories at the lower of cost and net realisable value 62 431 70 089 During 2024, NOK 6.4 million (2023: NOK 1.4 million) was recognised as an obsolescence expense for inventories carried at net realisable value. This is recognised in cost of sales. Annual Report 2024 Page 82 14 Intercompany balances with group companies Receivables (in NOK 000) 2024 2023 Trade receivables 0 0 Other receivables 0 0 Total 0 0 Subordinated loan (in NOK 000) 2024 2023 Non-current receivables 31 257 29 787 Impairment -28 457 -27 487 Total 2 800 2 300 A subordinated loan agreement was concluded on 29 December 2016, replacing all intercompany balance. Because of limited activity in France, a significant part of the loan has been subject to impairment. Payables (in NOK 000) 2024 2023 Trade payables 3 238 2 564 Other payables 0 0 Total 3 238 2 564 15 Cash and short-term deposits (in NOK 000) 2024 2023 Cash at banks and on hand 159 508 109 382 Restricted cash, taxes withheld 1 180 1 186 Cash and short - term deposits 160 688 110 568 16 Share capital and shareholder information Number of shares Par value Book value NOK NOK 000 Ordinary shares 129 621 605 0 . 04 5 185 Annual Report 2024 Page 83 Shareholders of poLight ASA at December 31, 2024 Ordinary shares Share- holding Voting rights % % Investinor Direkte AS 14 461 900 11 . 2 % 11 . 2 % Nordnet Bank AB (nominee) 9 632 041 7.4 % 7.4 % Nordnet Livsforsikring AS 7 861 844 6 . 1 % 6 . 1 % J.P. Morgan SE (nominee) 2 693 716 2.1 % 2.1 % J.P. Morgan SE (nominee) 2 607 127 2 . 0 % 2 . 0 % LHH AS 2 500 000 1.9 % 1.9 % Indus Production Services AS 2 000 000 1.5 % 1.5 % Trond Andersen 1 300 000 1.0 % 1.0 % Fjellstuens Eftf. AS 818 785 0.6 % 0.6 % Aquery Holding AS 811 079 0.6 % 0.6 % Erik Schellhorn 810 000 0.6 % 0.6 % CB Helse AS 700 000 0.5 % 0.5 % Danske Bank A/S (nominee) 689 670 0.5 % 0.5 % Youran Su 629 390 0.5 % 0.5 % Danske Bank A/S (nominee) 620 000 0.5 % 0.5 % Mikjel Johannes Skurdal 619 256 0.5 % 0.5 % Richard Hanssen 602 000 0.5 % 0.5 % Arild Hansen Rødum 601 500 0.5 % 0.5 % J.P. Morgan Secruities PLC 552 000 0 . 4 % 0 . 4 % Stefan Sveen 544 000 0.4 % 0.4 % Total number of shares owned by top 20 shareholders 51 054 308 39 . 4 % 39 . 4 % Number of shares owned by other shareholders 78 567 297 60.6 % 60.6 % Total number of shares 129 621 605 100.0 % 100.0 % At 31 December 2024, Øyvind Isaksen, CEO, owned 317,625 shares (0.24%), through his company Oimacon AS. Share option schemes The board is authorised to issue shares through share option schemes up to a total nominal value of NOK 264,846 (6,621,155 shares at par value of NOK 0.04), that is approximately 5 per cent of shares outstanding. The company’s share option schemes, with the opportunity to subscribe for shares in poLight, have been offered all employees (Note 5.3 Employee benefits expense in the consolidated financial statement). 17 Equity (in NOK 000) Share capital Share premium Retained earnings Total Equity at 31 December 2023 2 648 194 503 0 197 151 Loss for the period - 10 3 564 - 10 3 564 Issue of ordinary shares 2 536 143 846 0 146 382 Transaction costs - 22 419 0 - 22 419 Equity - settled share - based payment 10 008 10 008 Allocation to retained earnings - 9 3 556 9 3 556 0 Equity at 31 December 2024 5 185 222 373 0 227 558 Annual Report 2024 Page 84 18 Financial liabilities Interest-bearing loans and borrowings: (in NOK 000) Interest rate 2024 2023 Secured loan, DnB 0.99/6.35% 426 0 Total 426 0 In 2024 a company car was bought with car loan from DnB with monthly instalments over 60 months, secured by car mortgage. Pledged assets (in NOK 000) 2024 2023 Accounts receivable 217 1 072 Company car 435 0 Total 652 1 072 DnB have issued a bank guarantee to lessor of the premises in Tønsberg, of NOK 0.6 million with a duration to 31.12.2034 with account receivable pledge with nominal value of NOK 1.5 million. 19 Operating lease agreements poLight ASA has entered into commercial leases on premises and office equipment. The premises (lab facilities and offices) comprise 720 square meters. The contract expires in December 2034 with two options to extend the lease agreement with additional 5 years each. Future minimum rentals payable under non-cancellable operating leases are as follows: (in NOK 000) 2024 2023 Within one year 1 622 1 370 After one year but not more than five years 6 501 2 049 More than five years 7 743 0 Total 15 867 3 419 20 Provisions (in NOK 000) Warranty provision Claims Total At 1 January 2023 1 000 0 1 000 At 31 December 2023 1 000 0 1 000 New or increased provisions 0 6 331 6 331 Utilised 0 0 0 At 31 December 2024 1 000 6 331 7 331 Expected timing of cash flow (in NOK 000) Warranty provision Claims Total Current, < 1 year 1 000 6 331 7 331 Non-current 0 0 0 At 31 December 2024 1 000 6 331 7 331 Annual Report 2024 Page 85 Warranty provision A general provision to meet potential claims under the warranty clause. Claims Two customers of poLight received a patent infringement claim during 2024, and lawsuits have been filed. Although poLight and its local and domestic legal advisors consider that the use of TLens® does not infringe any of the patents mentioned, resolving the matter will require legal expenses for poLight and a provision has been made to reflect the legal strategy and expected outcome of these legal claims discussed. Although the cost involved with the final outcome of these claims are uncertain, the provisions currently made are management’s best estimate and increased provisions affecting future accounting periods should not be required under current scenarios. Since the company's Q4 reporting the year-end provision has been increased with NOK 3 000 000 to reflect re-assessed expected remaining legal fees in order to come to a resolution. 21 Related parties poLight ASA is the ultimate parent. None of the shareholders of poLight ASA has control of the company. As of 31 December 2024, the largest shareholder is Investinor Direkte AS, with an ownership of 11.32%. Transactions between group companies Intercompany agreements are entered with all the subsidiaries in the Group. All sales in the subsidiaries are made with the parent company. All transactions are considered to be on an arm’s length basis. A subordinated loan agreement (balance 31.12.2024: EUR 2,650,000) was concluded on 29 December 2016, between poLight ASA and poLight France SAS. Only the part that exceeds a prudent level, with regards both to equity and subordinated loan combined, shall be regarded as loan in respect to interest accrual. For the financial year 2024, the entire principal is considered as equity, and not interest-bearing. Transactions with other related parties No transactions were made with other related parties for the relevant financial years. 22 Going Concern and significant events after the end of the reporting period The Group possesses sufficient liquidity to fund its operations for the next 12 months. Additionally, on 15 April 2025, the company announced a private placement by Q Technology Group, that when approved by the General Assembly and completed will provide gross proceeds of NOK 171.5 million and a subsequent offering to existing shareholders that could result in additional NOK 51.4 million, if fully subscribed. Management, together with the Board of Directors, continuously evaluates the Group’s liquidity requirements to ensure adequate financing of planned operations, research and development activities, as well as any investments necessary for scaling up the business. According to the business plan before the private placement, the Group’s cash reserves were expected to cover activities through the second quarter of 2026. However, contingent on shareholders approving the private placement in the company’s AGM, a revision of the business plan will be carried out to reflect the improved runway. Accordingly, these consolidated financial statements have been prepared under the assumption that both the Group and the parent company are going concerns. No events, except the private placement mentioned above, have occurred after the end of the reporting period that requires disclosure. The completion of the Private Placement is conditional upon the approval by the Company's general meeting for the share issuance to Q Tech, the appointment of Q Tech's two nominated directors to poLight's Board of Directors, and certain amendments to the Company's articles of association regarding the composition of the Board of Directors. The Company's largest shareholders Investinor Direkte AS and LHH AS, holding 10.42% and 5.01% of the shares of the Company respectively, have entered into irrevocable Annual Report 2024 Page 86 undertakings to vote in favour of the Private Placement and the related resolutions at the general meeting. Following the Private Placement, the Company may carry out a subsequent offering of up to 19,122,933 new shares to existing shareholders of poLight (the "Subsequent Offering"). As a part of the strategic investment, Q Tech is working to establish a dedicated TLens® assembly and test line ("Strategic Partnership Agreement"), in addition to poLight's existing manufacturing capabilities. Annual Report 2024 Page 87 Annual Report 2024 Page 88 Annual Report 2024 Page 89 Annual Report 2024 Page 90 Annual Report 2024 Page 91 Annual Report 2024 Page 92 CONTACT DETAILS Homepage www.polight.com HQ address Kjelleveien 21A, 3125 Tønsberg, Norway Investor relations contacts: Dr Øyvind Isaksen CEO +47 90876398, oyvind.isaksen@polight.com Joakim Bredahl CFO +47 97521731, joakim.bredahl@polight.com Annual Report 2024 Page 92 poLight ASA Kjelleveien 21A NO-3125 Tønsberg, Norway E-mail: info@polight.com