Polight ASA

Investor Presentation • Nov 2, 2023

Third quarter 2023

¹ Third quarter 2023 - Earnings presentation Earnings presentation 2 November 2023

Disclaimer

This presentation (the "Presentation") has been produced by poLight ASA (the "Company") exclusively for information purposes. This Presentation has not been approved, reviewed or registered with any public authority or stock exchange. Further to the aforementioned, this presentation is the result of an effort of the Company to present certain information which the Company has deemed relevant in accessible format. This Presentation is not intended to contain an exhaustive overview of the Company's present or future financial condition and there are several other facts and circumstances relevant to the Company and its present and future financial condition that not been included in this Presentation. This Presentation may not be disclosed, in whole or in part, or summarized or otherwise reproduced, distributed or referred to, in whole or in part, without prior written consent of the Company.

This Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates or intends to operate. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward- looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or any of its subsidiary undertakings or any such person's officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors

nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation to update any forward-looking statements or to conform these forward-looking statements to our actual results. Furthermore, information about past performance given in this Presentation is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the Company nor any of its parent or subsidiary undertakings or any such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

By reviewing this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the businesses of the Company. This Presentation must be read in conjunction with the recent financial reports of the Company and the disclosures therein. The distribution of this Presentation in certain jurisdictions may be restricted by law. Persons in possession of this Presentation are required to inform themselves about, and to observe, any such restrictions. No action has been taken or will be taken in any jurisdiction by the Company that would permit the possession or distribution of this Presentation in any country or jurisdiction where specific action for that purpose is required.

No shares or other securities are being offered pursuant to this Presentation. This Presentation does not constitute an offer to sell or form part of, and should not be construed as, an offer or invitation for the sale or subscription of, or a solicitation of an offer to buy or subscribe for, any shares or other securities in any jurisdiction, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any offer, contract, commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company.

By reviewing this Presentation you agree to be bound by the foregoing limitations.

This Presentation speaks as of 2 November 2023. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation. This Presentation shall be governed by Norwegian law, and any disputes relating to hereto is subject to the sole and exclusive jurisdiction of Norwegian courts, with Nordre Vestfold District Court as legal venue.

Today's agenda

Presenting

• Key events
• Introduction to poLight
• Operations and markets review
• Financial review
• Outlook
• Q&A

Dr Øyvind Isaksen

Chief Executive Officer

Dr 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. Øyvind Isaksen holds a PhD in Applied Physics.

Alf Henning Bekkevik

Chief Financial Officer

Bekkevik is a senior executive with a background from Arthur Andersen (E&Y), Wallendahl, Fjord Line, Grenland Group and lately from Wood Group Mustang as VP Finance. He holds a Master in Business & Economics (Siviløkonom) degree from NHH and is a state certified public accountant.

Key events in the quarter

• Order for Mini2P application from company planning to sell Mini2P solution to research institutes.
• Follow-on order for a Machine Vision/code scanner customer from China.
• Multiple customer proof of concept (PoC) projects and variety of improvement projects kept the pressure on the organisation during the third quarter, although the period was relatively sluggish from an order intake and revenue perspective.

poLight® at a glance

Background & description Geographical footprint

• Global player in tunable optics with applications in mobile, web cam, industrial, augmented reality, medical and others
• Founded in 2005 and has since developed state-ofthe-art expertise in tunable optics, polymers, MEMS technology and image applications and processing
• Holds 21 worldwide patent families, 8 pending applications and 4 registered trademarks
• 40 employees including long-term consultants
• Headquartered in Horten, Norway, with employees in Finland, France, UK, US, China, Taiwan and Philippines.
• Listed in Oslo Stock Exchange (PLT) in 2018

poLight enables unique use cases

TLens® Actuator: Enabling Smallest, Lowest Power, Fastest AF Cameras & Laser Projectors

Implementation
Piezo MEMS film
Glass membrane
Silicon
Polymer
Glass window

From Gel > MEMS Wafer > TLens® > Camera module > OEM

poLight products & technology well-suited for several applications

Smartphones, wearables, accessories

• Smartphone represent a large addressable market for which billions of cameras are produced each year
• 1,5 billion phones per year with 1 front camera and an average of 3 back cameras
• Camera function key
• Potential addressable market for TLens®/poLight technology estimated at 3 billion units per year

7 Third quarter 2023 - Earnings presentation

Barcode/Industrial

• Evolving from 1D laser to 2D imaging barcode readers
• Lasers replaced by camera systems, where autofocus will improve efficiency in scanning and portfolio
• Barcode technology is spreading to new industries
• OEM scan engine vendors today are increasingly looking to enable machine vision capabilities on their current offerings

Augmented Reality (AR)

• AR is expected to to grow significantly as the technology is expanding beyond entertainment and gaming to an increasing number of industrial, commercial, educational applications and later become a consumer device

Other

• New opportunities are emerging that could represent significant potential
• Endoscopy and automobile are two examples of new opportunities for poLight technology

Operations and market review

9 Third quarter 2023 - Earnings presentation

Use case: Consumer

Consumer: Still challenging sentiment

• During the quarter, the focus was on smartphone and augmented reality applications
• Other applications, such as webcams, laptop, smarthome, wearable, etc. are also being explored
• Consumer market remains challenging and is focused on cost reduction rather than implementing new, innovative and more expensive technology
• Currently impacting our ability to achieve new smartphone design-wins
• Nevertheless, we continue to be persistent and push the TLens® message

Design-win	Design-in	Completed PoC	Ongoing PoC	Planning PoC
4 (4)	0 (0)	37 (34)	3 (5)	9 (10)

First smartphone using TLens® on the market – roadshow continues

• Demonstration of the Meizu 20 Infinity, using TLens® in the selfie camera, continued during the quarter
• From a performance perspective, the feedback has been positive
• The cost difference between a TLens®-based AF camera and a non-AF or VCM-based AF solution is dampening interest in the current market climate
• The cost difference is mainly due to less mature assembly processes, for the add-in designs, at the camera module partners

Key actions to secure TLens® adaption in smartphone

• Focus on maturing and cost optimise TLens® based camera module solutions;
• Addressing both component and system level aspects
• Continue to enhance important performance parameters
• Actively develop the capability and relationships with existing and new camera module partners with respect to various add-in designs
• Address higher value applications such as back-facing cameras, create new reference designs
• Continue demonstrating performance of the Meizu 20 Infinity phone
• Key actions also for AR/MR space

Status on consumer

POC = Proof of Concept, including TWedge®

Use case: AR

AR/MR: Strong position in a mega trend

• Why TLens® Key selling points;
• Enables ultra-compact size camera modules
• Ultra-low power consumption
• Fast focusing speed
• Constant field of view (FOV) and high optical stability
• No gravity impact even when head is moving
• Athermalisation robust focusing over temperature range near high heat components (fixed focus camera goes out of focus)
• TLens® camera AR use cases
• Fast sharp focusing of object/text regardless of distance
• Fast QR / barcode scanning regardless of distance
• Hand gesture recognition
• All-in-Focus still images regardless of where the objects or texts are in the scene
• Continuous video focus when recording moving objects

AR/MR market segment continued to develop positively for poLight during the quarter

• TLens® is used/planned for use in both world facing camera applications and display
• The company is currently used in two AR enterprise products already released to market – Magic Leap 2 and LLVision
• Still 5 design-in´s
• Of which 2 may be launched/announced end of 2023, but risk for further delays
• 1 confirmed delayed
• The consumer related case is progressing very well promising high-volume case
• Further a potential new product called TWedge®, enhancing µLED AR display resolution, is receiving good interest.
• Recently carried our roadshow in US. Positive feedback

Design-win	Design-in	Completed PoC	Ongoing PoC	Planning PoC
2 (2)	5 (5)	13 (12)	11 (11)	14 (12)

Status on AR/VR

18 Third quarter 2023 - Earnings presentation

POC = Proof of Concept, including TWedge®

Use case: Industrial

Barcode / Industrial

• Superlead placed a follow-on order worth NOK 1.15 million during the quarter and
• Superlead is now uses TLens® in four products
• Currently five companies use TLens® in commercially available products (design-wins)
• All five cases are still shipping to customers and are expected to do so for several more years
• Other existing customers are also considering expanding their use of TLens®

Design-win	Design-in	Completed PoC	Ongoing PoC	Planning PoC
5 (5)	1 (0)	30 (27)	12 (15)	7 (10)

Status on Barcode/Industrial

21 Third quarter 2023 - Earnings presentation

Use case:

Healthcare & Automotive

Healthcare

• The Xenocor (https://xenocor.com) case ;
• Initial human trials carried out
• Experiencing some unexpected delays in the market launch
• Cooperation with 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, has led to several similar engagements
• Lately, for example, the company has also begun collaborating with commercial players supplying products to the various research laboratories around the world
• In addition to this, poLight is engaged in several commercial endoscope cases.

1 design-win, 2 design-in, 17 PoCs ongoing and 6 planning PoC

Mini2P – a key reference

"TLens® has been instrumental to achieve the performance of Mini2P system.

The speed and temperature stability of TLens® is much better than any other tuneable lens we have tested, implying we can achieve results we never have been able to do before.

This is very important for our research to understand the mechanism of information coding in the brain.

We have seen a lot of interest in our work from many other research groups around the world. TLens® will continue to be important for our future solutions, says Dr. Weijian Zong"

Automotive – a nontrivial volume opportunity

• In-cabin camera requirement demand new solution
• Autonomous driving drives step change in camera adoption
• The use case calls for non-mechanical focusing solution
• This market segment will be challenging to penetrate
• There is a need for new technology, and TLens® is one of the solutions being explored
• Market is significant but it will take may years to develop

0 design-win, 0 design-in, 3 PoCs ongoing and 5 planning PoC

Promising pipeline

		Design-win	Design-in	Completed PoC	Ongoing PoC	Planning PoC
Consumer		4 (4)	0 (0)	37 (34)	3 (5)	9 (10)
Augmented/Mixed Reality		2 (2)	5 (5)	13 (12)	11 (11)	14 (12)
Industrial		5 (5)	1 (0)	30 (27)	12 (15)	7 (9)
Other (medical, automotive)		1 (1)	2 (2)	5 (5)	20 (20)	11 (10)
Number in ( ) represents last quarter		12 (12)	8 (7)	85 (78)	46 (51)	41 (41)

poLight PoC pipeline development

Key financials

(in NOK million)	Q3 2023	Q3 2022	FY 2022
Revenue	3.1	5.3	13.4
Cost of sales	-0.5	-2.1	-4.8
Research and development expenses	-8.0	-7.2	-32.9
Sales and marketing expenses	-4.0	-2.6	-13.1
Operational / supply chain expenses	-4.9	-1.9	-9.2
Administrative expenses	-6.1	-2.8	-12.1
EBITDA	-20.5	-11.3	-58.7

• Revenue reflects sales of TLens® and ASICs of NOK 3.1 million for commercial use and to customer development projects
• EBITDA loss of NOK 20.5 million vs. loss of NOK 11.3 million in Q3 2022
• Increased number of employees +3.
• NOK 3.9 million in share option expense (Q3-2022: NOK 0.3) including accrued employer's national insurance contributions (NICs)

Income statement Balance sheet summary

(in NOK million)	Q3 2023	Q3 2022	FY 2022
Intangible assets	19.4	26.7	24.9
Inventories	69.6	36.0	45.6
Cash and cash equivalents	132.8	104.4	84.2
Total equity	224.3	166.2	150.7
Total current liabilities	16.0	15.7	24.6
Total equity and liabilities	242.4	185.1	178.2

• Cash position of NOK 132.8 million, compared with NOK 84.2 million at year end 2022
• Inventory of NOK 69.6 million compared with NOK 45.6 million at 31.12.2022.
• The inventory has increased by NOK 3.3 during the quarter
• The increase in inventories mainly relates to wafers from ST Microelectronics (long lead-time components)

Cash Flow

• Q3 cash used in operating activities was NOK 20.3 million, compared with NOK 19.6 million in Q3 2022
• Q3 net decrease in cash was NOK 20.3 million 153,2

Q3 2023 cash flow development

Outlook

• Consumer market remains challenging, no sign of improvement short term
• poLight will continue to address this market by actively capitalising on its first important smartphone reference and by
• focusing on maturing, improving and cost optimise TLens®-based camera module solutions
• AR will be a key market for poLight going forward
• Good match between market need and the properties of the TLens®, and potentially also the TWedge® at a later stage
• Automotive and healthcare market being explored could become very important
• poLight plans to continue strengthening its organisation to enable it to address all the above-mentioned opportunities and challenges in a professional and robust manner

Management Team

Dr Øyvind Isaksen Chief Executive Officer

Dr 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. Øyvind Isaksen holds a PhD in Applied Physics.

Alf Henning Bekkevik

Chief Financial Officer

Bekkevik is a senior executive with a background from Arthur Andersen (E&Y), Wallendahl, Fjord Line, Grenland Group, and, most recently, as VP Finance for Wood Group Norway AS. He holds a master's degree in business & economics (Siviløkonom) from NHH, and is a certified public accountant.

Pierre Craen

Chief Technology Officer

Craen is a senior executive with 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.

Marianne Sandal

Chief Operating Officer

Sandal is a senior executive with background from Tele-communications (Nera) and Road User Charging (Q-Free). She holds a BSc in Mechanical Engineering in addition to courses from Norwegian School of Management (BI). She has been responsible for world wide operations for more than 15 years.

Board of Directors

Grethe Viksaas – Board Chair, 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 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.

Ann-Tove Kongsnes – Deputy Chair

Ann-Tove Kongsnes is an Investment Director and Deputy CEO at Investinor AS. Over the course of her career, Kongsnes has gained extensive experience of investment, development, M&A, IPOs and exits of technology companies. Prior to her present position, she worked for seven years in international marketing, and was formerly a Director of Marketing and Operations. Ms Kongsnes has extensive board experience, and currently serves on the boards of six of Investinor's portfolio companies. She also serves on or chairs four nomination committees. She holds an MSc in Economics and Business Administration from HIB and took the Advanced Program in Corporate Finance at NHH.

Svenn-Tore Larsen - Board member, independent

Svenn-Tore Larsen is CEO of Nordic Semiconductor, a position he has held since February 2002. Mr Larsen has broad international experience in the semiconductor business, previously as Director for the Nordic region for Xilinx Inc. He has also worked at Philips Semiconductor. Svenn-Tore Larsen has a degree in Electrical Engineering from the University of Strathclyde, UK.

Thomas Görling - Board member, independent

Thomas Görling is a Senior Investment Director at Stiftelsen Industrifonden (Sweden) and is closely involved in building successful technology companies. Representing Industrifonden, he has served on several portfolio company boards, at present HVR Cardio Oy (Finland) and eBuilder AB (Sweden). Before joining Industrifonden in 1998, Mr Görling held management positions within the European optical instrument and systems industry. He holds a Master of Science degree from the Royal Institute of Technology in Stockholm and studied business economics at Stockholm University.

Statement of

income
	NOK 000	Note	Q3 2023	Q3 2022	YTD 2023	YTD 2022	FY 2022
	Sale of goods		2 947	3 092	17 059	6 498	10 034
	Rendering of services		103	2 181	305	2 771	3 328
	Revenue		3 051	5 272	17 364	9 270	13 363
	Cost of sales		-469	-2 086	-8 164	-3 517	-4 826
	Gross profit		2 581	3 186	9 200	5 753	8 536
	Research and development expenses net of
	governmental grants	6,9	-7 995	-7 175	-24 255	-26 780	-32 907
	Sales and marketing expenses		-4 029	-2 633	-11 841	-9 373	-13 122
	Operational / supply chain expenses		-4 886	-1 942	-11 836	-6 272	-9 179
	Administrative expenses		-6 147	-2 759	-13 789	-7 023	-12 068
	Operating result before depreciation and amortisation
	(EBITDA)		-20 475	-11 322	-52 521	-43 694	-58 740
	Depreciation and amortisation and net
	impairment losses	8	-2 616	-2 271	-7 165	-8 013	-10 400
	Operating result (EBIT)		-23 092	-13 594	-59 686	-51 706	-69 140
	Net financial items	7	1 626	704	1 874	664	1 496
	Loss before tax		-21 466	-12 890	-57 812	-51 042	-67 644
	Income tax expense		-81	-49	-110	-53	-242
	Loss for the period		-21 547	-12 939	-57 922	-51 095	-67 886

Balance sheet	NOK 000	Note	Q3 2023	Q3 2022	FY 2022
	ASSETS
	Property, plant and equipment		9 848	6 612	10 748
	Intangible assets	8	19 399	26 674	24 855
	Right-of-use assets		3 055	3 982	3 871
	Total non-current assets		32 302	37 268	39 474
	Inventories		69 632	36 025	45 577
	Trade and other receivables	9	7 298	4 071	8 386
	Prepayments		419	3 366	557
	Cash and cash equivalents		132 772	104 413	84 249
	Total current assets		210 121	147 875	138 769
	Total assets		242 423	185 143	178 242
	EQUITY AND LIABILITIES
	Share capital		2 648	2 078	2 078
	Share premium		271 300	209 573	145 785
	Reserves		1 369	1 136	1 130
	Retained earnings		-51 050	-46 563	1 699
	Total equity		224 267	166 223	150 692
	Lease liabilities		2 136	3 178	2 970
	Total non-current liabilities		2 136	3 178	2 970
	Trade and other payables	10	13 856	14 244	22 480
	Current lease liabilities		1 163	998	1 100
	Provisions		1 000	500	1 000
	Total current liabilities		16 020	15 742	24 581
	Total liabilities		18 156	18 920	27 550
	Total equity and liabilities		242 423	185 143	178 242

Cash flow	NOK 000 Note	Q3 2023	Q3 2022	YTD 2023	YTD 2022	FY 2022
	Operating activities
	Profit / loss (-) for the period	-21 466	-12 890	-57 812	-51 042	-67 644
	Adjustments for:
	Depreciation of property, plant and equipment and
	right-of-use assets	797	453	1 709	1 309	1 877
	Amortisation of intangible assets 8	1 819	1 819	5 456	6 703	8 522
	Net finance income	-1 626	-704	-1 874	-664	-1 496
	Equity-settled share-based payments	3 198	1 021	5 173	3 554	4 821
	Other non-cash items	1 260	399	1 484	-431	-430
	Changes in unrealised net foreign exchange rate
	differences/fluctuations	-127	-32	46	-73	143
	Changes in working capital:
	Increase (-) in trade and other receivables and prepayments	-1 548	-234	-1 523	10 384	11 925
	Increase (-) in inventories	-3 351	-5 530	-24 055	-19 190	-28 741
	Decrease (-) in trade and other payables 10	-3 820	-8 626	-8 624	-5 663	2 574
	Changes in provisions and government grants	4 258	4 511	2 749	5 713	3 166
	Interest received 7	430	385	706	1 344	2 255
	Interest paid 7	-61	-80	-199	-253	-330
	Income tax paid	-81	-49	-110	-53	-242
	Net cash flows used in operating activities	-20 317	-19 556	-76 875	-48 361	-63 600
	Investing activities
	Purchase of property, plant and equipment	-28	-301	-109	-4 764	-9 202
	Net cash flows used in investing activities	-28	-301	-109	-4 764	-9 202
	Financing activities
	Proceeds from issuance of ordinary shares	0	0	148 500	0	0
	Proceeds from exercise of share options	287	0	287	254	254
	Transaction costs on issue of shares	-23	0	-22 702	0	0
	Payment of lease liabilities	-262	-238	-771	-700	-964
	Net cash flows from/(used in) financing activities	2	-238	125 314	-446	-710
	Net increase/decrease in cash and cash equivalents	-20 343	-20 095	48 330	-53 571	-73 513
	Effect of exchange rate changes on cash and cash equivalents	-56	69	194	174	-49
	Cash and cash equivalents at the start of the period	153 172	124 438	84 249	157 810	157 810
	Cash and cash equivalents at the close of the period	132 772	104 413	132 772	104 413	84 249