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Polight ASA
Quarterly Report • Aug 15, 2024
3717_rns_2024-08-15_00ad308b-07c2-4d1c-8062-ff4f9c6ecf90.pdf
Quarterly Report
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poLight ASA Interim Report Six months ended 30 June 2024
KEY EVENTS IN THE QUARTER
- Design-win with Vuzix Shield industrial AR smart glasses.
- Purchase order received for TWedge® wobulator evaluation kits and samples from major consumer AR/MR original equipment manufacturers (OEM) customers.
- Wooptix announced a wavefront phase camera, the SEBI RT1000, using TLens®.
- New purchase order received worth NOK 600,000 supporting the barcode scanning market.
- Rights issue resulted in approximately NOK 124 million in net proceeds to the company.
- Employed new CFO, Rolf Joakim Hines Bredahl.
- Successfully held Capital Market Day on 5 June.
- Amendments to share option plan replacement of existing agreements with a new agreement with strike at NOK 3.2 per share (with reset of vesting).
Post Q2:
• New purchase order worth NOK 950,000 received August 7th related to the first barcode design-win (back in 2000).
Dr Øyvind Isaksen, CEO of poLight ASA:
"Revenue picked up during the quarter compared to the first quarter of the year. From a market perspective, ongoing trends were clearly confirmed; the company continues to improve its position in the AR/MR market and activity gradually increased in the industrial/barcode market. News flow during the quarter confirms this development. The smartphone/consumer market remains challenging, but measures are actively being taken in order for us to be better prepared for this market segment.
Important progress has been achieved on the development side, to secure an improved offering relevant for all market segments in both the short and long term.
Our technology and solutions are becoming increasingly well known and respected. Key references have been obtained in all defined strategic market segments. Over a period ofsome time, we have strengthened the organisation worldwide, and we will continue to do so to ensure the capability and capacity to explore the market opportunities we foresee will develop over the coming years and to ensure an improved product offering.
I would like to thank our shareholders and partners for their continuing support, and all our employees for their efforts and dedication. We strongly believe we are on our way to "Shaping the Tunable Optics Future"!
| (in NOK million) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Revenue | 5.3 | 7.2 | 6.5 | 14.3 | 22.5 |
| Gross profit | 2.0 | 3.7 | 0.9 | 6.6 | 12.2 |
| EBITDA | -21.7 | -18.0 | -40.6 | -32.0 | -78.8 |
| EBITDA ex share options | -20.4 | -18.9 | -42.9 | -33.0 | -68.8 |
| Net cash flows used in operating activities | -19.3 | -25.9 | -38.5 | -56.6 | -94.6 |
| Net increase/decrease in cash and cash | |||||
| equivalents | 104.1 | 99.6 | 84.5 | 68.7 | 30.4 |
Key figures
MANUFACTURING, PRODUCT DEVELOPMENT AND MARKETS
Manufacturing and operations
poLight works primarily with two categories of subcontractors – a MEMS supplier and assembly partner, in addition to various componentsuppliers. The MEMS partner suppliesthe 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.
The manufacturing activity during the quarter has mainly been related to assembly & test, yield improvement activities as well as establishing the new organisation in the Philippines.
Product development/technology
Development activity has been intensified during 2024. Regarding TLens®, our autofocus (AF) solution, development activities are ongoing to ease the integration of TLens® and hence enable more camera module integrators to develop compact and attractive solutions based on TLens®. Various designs and concepts for different applications are being discussed with potential partners and customers. Furthermore, development related to expanding the AF portfolio to include a bigger aperture has progressed well during the quarter. We have yet to set a date for the market release of these solutions, asthat will depend on the results and specifications of the prototypes being built this year and the level of interest from lead customers. This potential product will enable poLight to deliver AF solutions for larger image sensors, targeting the back cameras on smartphones and other market segments such as the automotive sector.
The development of TWedge® has now reached the next stage, as several OEMs have ordered improved and more compact technical samples for their review. The aim is to attract lead customers, who will hopefully be willing to contribute financially before the product is developed and released for mass production.
Markets
poLight is actively engaged in several market areas. This includes consumer applications, such as smartphones, augmented/mixed reality (AR/MR), laptops and 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 explored, although these are not currently being given a high priority as the need for autofocus for products such as endoscopes is likely some years away; there are also portfolio matters to consider, specifically relating to the need for a bigger-aperture TLens® for the automotive market.
Consumer market
During the quarter, the focus was on augmented/mixed reality (AR/MR), laptop and smartphone applications. Other applications, such as webcams, smart-home devices, wearables etc., are also being explored.
The consumer market in general, and the smartphone market in particular, remains challenging. This, combined with the fact that poLight's current solution is best suited for front-facing "selfie" cameras, which have a lower priority and budget compared to the main camera, is currently impacting poLight's ability to achieve new smartphone design-wins. Nevertheless, poLight continues to be persistent and has embarked on several development projects to enable less costly integration of TLens® and to broaden the company's offering to cover broader application areas.
In the consumer market, poLight has so far achieved four design-wins, and is involved in two ongoing PoC projects and four PoCs that are in the planning stage. In addition, the company has achieved one design-in and is engaged in 11 ongoing PoCs (four for TWedge®) related to consumer AR/MR-related products.
Augmented/mixed reality (AR/MR)
TLensÒ is being considered and tested by several important AR/MR market players. The TLens® technology's low power consumption, lack of sensitivity to gravity, temperature stabilisation (often referred to as athermalisation), high speed and compactness stand out as key technical benefits.
The AR/MR market segment continued to develop positively for poLight during the quarter, and in the quarter Vuzix released the Vuzix Shield AR enterprise glasses using two RGB cameras with TLens® (see press release dated 8 April).
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. However, potential consumer-oriented opportunities are increasing in number and becoming increasingly mature.
When it comes to TWedge®, major consumer AR/MR OEM customers are ordering technical samples for review. The strategy is to continue to build appetite through selling technical samples, and to learn from the market about needs, applications and specification, and hopefully get commitment from a lead customer before product development and mass production preparation is kicked off. TWedge® could represent an important portfolio expansion for the company, assuming the AR/MR display solutions selected benefit from resolution enhancement by wobulation.
In addition to four design-wins, four design-ins have been confirmed: one relating to a consumer AR application, two for enterprise AR and one related to MR enterprise. Twelve PoCs are ongoing, 11 of which target consumer applications, while 17 PoCs are in the planning stage (seven for consumer applications). A potential TWedge® product is included in the numbers given above for PoCs (five) and planned PoCs (six).
Industrial/barcode/machine vision
It will take time to develop this market, and doing so will require entry into some broader application areas. However, an increasing customer pipeline is clearly a positive sign.
For the barcode/machine vision market,six companies currently use TLens® in commercially available products (designwins) in a total of 11 different products. All the products are still shipping to customers and are expected to do so for several more years. During the quarter, a new purchase order was received worth NOK 600,000 (see press release dated 24 June).
Also, during the quarter Wooptix announced a wavefront phase camera, the SEBI RT1000, using TLens®. This case is classified as design-in, and is expected to become a design-win towards the end of 2024. This is a smaller implementation of the WFPI (wavefront phase imaging) technology. WFPI is the sensor developed by Wooptix to acquire high-resolution wavefront phase maps. The SEBI® RT1000 application is aimed at laboratories, especially in the activities of quantitative phase imaging, optical metrology, material inspection, laser measurement and oncological research. This is yet another example of the broad use cases where TLens® can play an important role.
In addition to the seven design-wins(11 barcode/machine vision products from six different companies, and one designwin from Thorlab), the company has two design-ins (barcode and the Wooptix wavefront phase camera) and is involved in 14 ongoing PoCs, nine of which are for barcode/machine vision applications.
Healthcare
The company is continuing to support selected opportunities in the healthcare market segment. The cooperation 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 microscope1 have led to several similar projects.
In addition to engaging directly with research labs, the company is supplying lenses to three commercial companies that plan to sell microscopes to research labs around the world.
In addition to the activity related to Mini2P, poLight is engaged in commercial endoscope cases. However, in the short/medium term, 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.
1 An open-source miniature two-photon microscope brain explorer for fast high-resolution calcium imaging in freely moving mice.
At the end of the quarter, the company was engaged in two design-wins (Kavli and Phenosys, both related to Mini2P), two design-ins (both related to Mini2P) and 13 ongoing PoCs, of which ten relate to Mini2P.
Automotive
During the quarter, the company has been engaged in three PoCs (of which two are regarded as concluded), while two others are in the planning stage. 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/Technology" section of this report.
FINANCIAL REVIEW
Profit and loss
| (in NOK million) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Revenue | 5.3 | 7.2 | 6.5 | 14.3 | 22.5 |
| Cost of sales | -3.3 | -3.5 | -5.7 | -7.7 | -10.3 |
| Gross profit | 2.0 | 3.7 | 0.9 | 6.6 | 12.2 |
| Research and development expenses 1) | -7.3 | -8.7 | -15.2 | -16.3 | -34.6 |
| Sales and marketing expenses | -4.8 | -4.0 | -9.3 | -7.8 | -17.7 |
| Operational/supply-chain expenses | -6.9 | -4.0 | -12.5 | -6.9 | -16.7 |
| Administrative expenses | -4.7 | -5.0 | -4.4 | -7.6 | -22.0 |
| EBITDA | -21.7 | -18.0 | -40.6 | -32.0 | -78.8 |
| Share option plan expense | 1.3 | 0.9 | 3.5 | 2.0 | 8.1 |
| Accrued employer's NICs re share option plan | 0.0 | -1.8 | -5.8 | -2.9 | 1.9 |
| EBITDA ex share options | -20.4 | -18.9 | -42.9 | -33.0 | -68.8 |
| Depreciation and amortisation | -2.5 | -2.3 | -5.2 | -4.5 | -9.7 |
| EBIT ex share options | -22.9 | -21.2 | -48.1 | -37.5 | -78.5 |
1) R&D expenses, net of government grants (see details of grants in Note 9)
Q2 2024
Revenue totalled NOK 5.3 million in Q2 2024 (NOK 7.2 million in Q2 2023), which reflects deliveries of TLensÒ and ASICs of NOK 4.1 million and NOK 1.1 million in revenue respectively from NRE (non-recurring engineering) relating to customer development projects.
Cost of sales includes an increased provision for inventory obsolescence of NOK 2.2 million. poLight has implemented a general scheme for determining the provision based on age. As a general rule, one-year-old wafers and units have a 10 per cent provision, while two-year-old and three-year-old wafers and units have 20 per cent and 30 per cent respectively.
R&D expenditure, net of government grants, amounted to NOK 7.3 million (NOK 8.7 million in Q2 2023).
Sales and marketing expenses came to NOK 4.8 million in Q2 2024 (NOK 4.0 million). The increase is due to higher headcount in the last 12 months. Operational/supply-chain expenses totalled NOK 6.9 million (NOK 4.0 million), due to increased internal resource usage relating to the development of a production management system, among other things.
Administrative expenses totalled NOK 4.7 million in the quarter (NOK 5.0 million in Q2 2023).
EBITDA totalled NOK -21.7 million in Q2 2024 (NOK -18.0 million). The decrease in EBITDA is attributable to increased provision for inventory obsolescence and an increased number of employees and consultants.
Share option plan expenses amounted to NOK 1.3 million in Q2 2024 (NOK 0.9 million). Mid-June 2024 the Board made a resolution to offer all employees to replace existing share options with a new agreement with a strike (exercise price) at NOK 3.2 per share, with reset of vesting. The strike price for each option was set based on the volume weighted average price (VWAP) the last two weeks prior to grant date. The fair value of the replacement scheme was measured to NOK 4.8 million being the difference between i) Fair value of the original scheme measured at the time of the
replacement and ii) Fair value of the new scheme. The new scheme will vest over 3 years, starting at the time of the grant. NOK 0.2 million was recognised in the quarter.
NOK 0 million in accrued employer's NICs was recognised in the quarter while in Q2 2023, NOK 1.8 million in accrued employer's NICs was reversed. The company pays employer's NICs on the difference between the share's market value and the option's strike price on the date of exercise.
Depreciation and amortisation, which primarily related to intangible assets, totalled NOK 2.5 million in the quarter (NOK 2.3 million).
First half of 2024
The Group recognised revenue of NOK 6.5 million in the first half of 2024, compared with NOK 14.3 million in the first half of 2023. The smartphone market launch in 2023 contributed to the revenue figures in 2023.
R&D expenses amounted to NOK 15.2 million, compared with NOK 16.3 million in the first half of 2023. Reduced thirdparty involvement in R&D projects explains the lower expenditure.
Sales and marketing expenses came to NOK 9.3 million in the first half of 2024 (NOK 7.8 million). The increase is due to higher headcount in the last 12 months. Operational/supply-chain expenses totalled NOK 12.5 million (NOK 6.9 million), due to increased internal resource usage relating to the development of a production management system, among other things.
Administration expenses amounted to NOK 4.4 million in the first half of 2024, compared with NOK 7.6 million in the first half of 2023. Reversed accruals of employer's NICs on share options (see below for further details), as well as employee bonuses in 2023 triggered by the smartphone market launch, contributed to the decreased expenses.
EBITDA totalled NOK -40.6 million in the first half of 2024, compared with NOK -32.0 million in the first half of 2023.
Share option plan expenses amounted to NOK 3.5 million in the first six months of 2024 (NOK 2.0 million), while NOK 5.8 million in accrued employer's NICs was reversed (NOK 2.9 million in reversed accruals in 2023). The reversal is attributable to the decrease in poLight's share price.
Depreciation and amortisation for the first half-year closed at NOK 5.2 million (NOK 4.5 million).
Balance sheet
| (in NOK million) | Q2 2024 | Q2 2023 | FY 2023 |
|---|---|---|---|
| Property, plant and equipment | 9.1 | 10.3 | 9.2 |
| Intangible assets | 13.9 | 21.2 | 17.6 |
| Right-of-use assets | 2.2 | 3.3 | 2.9 |
| Inventories | 64.8 | 66.3 | 70.1 |
| Receivables and prepayments | 11.5 | 10.4 | 8.8 |
| Cash and cash equivalents | 199.3 | 153.2 | 114.8 |
| Total assets | 300.8 | 264.8 | 223.4 |
| Total equity | 283.8 | 242.5 | 199.5 |
| Total current liabilities | 15.2 | 19.8 | 21.9 |
| Total non-current liabilities | 1.8 | 2.4 | 2.0 |
| Total equity and liabilities | 300.8 | 264.8 | 223.4 |
As at 30 June 2024, total assets came to NOK 300.8 million, compared with NOK 264.8 million as at 30 June 2023 and NOK 223.4 million as at 31 December 2023.
Property, plant and equipment totalled NOK 9.1 million as at 30 June 2024, compared with NOK 10.3 million as at 30 June 2023 and NOK 9.2 million as at 31 December 2023. At the reporting date, intangible assets totalled NOK 13.9 million, compared with NOK 21.2 million as at 30 June 2023 and NOK 17.6 million as at 31 December 2023, reflecting amortisation during the year.
Inventories decreased by NOK 3.0 million during the second quarter of the year, of which NOK 2.2 million is due to the increased provision for obsolescence, to stand at NOK 64.8 million net of the provision for obsolescence, which amounted to NOK 19.4 million at the close of the quarter (NOK 14.9 million as at 31 December 2023).
As at 30 June 2024, poLight had cash and cash equivalents totalling NOK 199.3 million, compared with NOK 153.2 million as at 30 June 2023 and NOK 114.8 million as at 31 December 2023. The rights issue in Q2 2024 generated NOK 124.0 million in net proceeds (Rights Issue in Q2 2023: NOK 125.8 million).
Total current liabilities amounted to NOK 15.2 million as at 30 June 2024, compared with NOK 19.8 million as at 30 June 2023 and NOK 21.9 million as at 31 December 2023.
Cash flows
| (in NOK million) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Net cash flows used in operating activities | -19.3 | -25.9 | -38.5 | -56.6 | -94.6 |
| Net cash flows used in investing activities | -0.3 | 0.0 | -0.9 | -0.1 | 0.0 |
| Net cash flows from/(used in) financing | |||||
| activities | 123.7 | 125.6 | 123.8 | 125.3 | 125.0 |
| Net increase in cash | 104.1 | 99.6 | 84.5 | 68.7 | 30.4 |
Q2 2024
The net cash outflow from operating activities totalled NOK 19.3 million in Q2 2024 (NOK 25.9 million in Q2 2023). The purchase of TLens Silver wafers for inventory build-up in Q2 2023 is the main driver for the decreased cash spending. The inventory increased with NOK 9.5 million in Q2 2023 compared with a decrease of NOK 3.0 million Q2 this year.
The net cash flow from financing activities totalled NOK 123.7 million (NOK 125.6 million in Q2 2023), of which net proceeds of NOK 124.0 million were generated through the rights issue. Last year the rights issue generated NOK 125.8 million in net proceeds.
The net increase in cash and cash equivalents totalled NOK 104.1 million for the quarter, compared with a net increase of NOK 99.6 million in the same period in 2023.
First half of 2024
The net cash outflow from operating activities totalled NOK 38.5 million in the first half of the year, compared with NOK 56.6 million in the same period in 2023. The purchase of TLens Silver wafers for inventory build-up in the first half of 2023 is the main driver for the decreased cash spending. The inventory increased with NOK 20.7 million in the first half of 2023 compared with a decrease of NOK 5.3 million this year.
The net cash flow from financing activities totalled NOK 123.8 million, of which net proceeds of NOK 124.0 million were generated through the rights issue. Last year the rights issue generated NOK 125.8 million in net proceeds.
The net increase in cash and cash equivalents for the first half year was NOK 84.5 million, compared with a net increase of NOK 68.7 million in the same period in 2023.
RISK FACTORS
The risk related to current tensions between China and Taiwan mentioned in previous quarterly reports has been mitigated by relocating all assembly and testing activity from Taiwan to the Philippines.
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 Group's TLensÒ technology and products derived from this technology are involved in different qualification tests for various applications by potential customers. There is no guarantee that the TLensÒ products (or other products produced by the Group) will meet the various parameters set by potential customers (e.g. aperture size, optical power, size, non-lead content etc.), or by parties testing the Group's products at a later time. If the Group's products do not meet such parameters, the Group may be required to implement changes to its products or may not be able to enter into commercial agreements with potential customers. Any requirement to implement changes to the Group's products may involve a delay in the commercialisation of the Group's technology and may also entail significant costs that may not be recovered. Furthermore, there is no guarantee that changes to the Group's products will be sufficient to satisfy the demands of the Group's potential customers. Failure to enter into commercial agreements will have a material adverse effect on the Group's revenues, profitability and financial position.
Over the next 12 months, the Group's principal source of liquidity will remain cash generated from financing, equity and/or debt, in addition to net cash flows generated from sales. In May 2024, the company carried out a partially underwritten rights issue that generated NOK 124 million in net proceeds. Accordingly, these consolidated financial statements have been prepared on the assumption that both the Group and the parent company are going concerns, and management confirms that this an appropriate assumption.
OUTLOOK
Progress continues in the AR/MR market. poLight's AF solutions are now being used in four commercially available AR/MR products, have achieved four design-ins and are involved in several PoCs, and have thereby built a strong foundation for becoming the preferred AF solution for such applications. The current design-wins in AR/MR products are directed at the professional/enterprise market, which is why present volumes are low. However, potential consumer-oriented customer cases are increasing in number and becoming increasingly mature.
When it comes to TWedge®, major consumer OEMs are showing high interest and are ordering technical samples for review. TWedge® may represent an important portfolio expansion for the company. In summary, the AR/MR market outlook is promising, with potentially multiple poLight products per pair of glasses, for both camera and display solutions.
The smartphone market is clearly the biggest volume market. The current portfolio and market sentiment make it challenging to achieve new design-wins. As previously mentioned, initiatives have been taken to make TLens® based cameras more price-competitive compared to VCMs, as well as to develop concepts for a bigger-aperture TLens® that could fit back cameras, and hence open up the opportunity landscape.
The industrial market, including barcode/machine vision, as well as more scientific/professional applications, such as Wooptix, Mini2P, Thorlab etc., is gradually revealing more opportunities.
poLight and its technology and solutions are becoming increasingly well known and respected. Key references have been obtained in all defined strategic market segments. Initiatives to strengthen our portfolio and organisation have been implemented, and are progressing well.
FORWARD-LOOKING STATEMENTS
This report contains statements regarding the future. In particular, the "Outlook" section contains forward-looking statements regarding the Group's expectations. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual results and developments deviating substantially from what has been expressed or implied in such statements. These factors include the risk factors relating to the Group's activities described in the section "Risk factors" above and in poLight's Annual Report for 2023, including the section "Risks and risk management" in the Board of Directors' Report.
RESPONSIBILITY STATEMENT
We confirm that, to the best of our knowledge, the condensed set of financial statements for the period 1 January to 30 June 2024 has been prepared in accordance with IAS 34 – Interim Financial Reporting and gives a true and fair view of the poLight group's assets, liabilities, financial position and results for the period. We also confirm that, to the best of our knowledge, the financial review includes a fair presentation of important events that have occurred during the first six months of the financial year and their impact on the financial statements, any major transactions with related parties, and a description of the principal risks and uncertainties for the remaining six months of the financial year.
poLight ASA Horten, 14 August 2024
| Grethe Viksaas (sign) | Svenn-Tore Larsen (sign) | |
|---|---|---|
| Chair, Independent | Board member, Independent | |
Thomas Görling (sign) Board member, Independent
Jean-Christophe Eloy (sign) Board member, Independent Marianne Bøe (sign) Board member, Independent Dr Øyvind Isaksen (sign) Chief Executive Officer
CONDENSED INTERIM FINANCIAL STATEMENTS
Interim condensed consolidated statement of income
| NOK 000 Note |
Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Sale of goods | 4 139 | 6 991 | 4 999 | 14 112 | 20 099 |
| Rendering of services | 1 129 | 201 | 1 547 | 201 | 2 412 |
| Revenue | 5 267 | 7 192 | 6 547 | 14 313 | 22 511 |
| Cost of sales | -3 313 | -3 496 | -5 680 | -7 695 | -10 349 |
| Gross profit | 1 955 | 3 696 | 867 | 6 618 | 12 162 |
| Research and development expenses net of | |||||
| governmental grants 6,9 |
-7 347 | -8 708 | -15 246 | -16 261 | -34 616 |
| Sales and marketing expenses | -4 774 | -4 030 | -9 310 | -7 812 | -17 712 |
| Operational / supply chain expenses | -6 910 | -3 989 | -12 507 | -6 950 | -16 684 |
| Administrative expenses | -4 664 | -5 019 | -4 375 | -7 642 | -21 971 |
| Operating result before depreciation and amortisation | |||||
| (EBITDA) | -21 741 | -18 050 | -40 572 | -32 046 | -78 821 |
| Depreciation and amortisation | 8 -2 530 |
-2 315 | -5 198 | -4 548 | -9 670 |
| Operating result (EBIT) | -24 271 | -20 365 | -45 770 | -36 594 | -88 492 |
| Net financial items | 7 1 531 |
49 | 2 562 | 248 | 3 223 |
| Loss before tax | -22 740 | -20 315 | -43 208 | -36 347 | -85 269 |
| Income tax expense | -29 | -28 | -29 | -28 | -220 |
| Loss for the period | -22 769 | -20 344 | -43 237 | -36 375 | -85 489 |
| Attributable to: | |||||
| Equity holders of the parent | -22 769 | -20 344 | -43 237 | -36 375 | -85 489 |
| Earnings per share: | |||||
| Basic, attributable to ordinary equity holders of the | |||||
| parent (NOK) | -0.24 | -0.34 | -0.54 | -0.61 | -1.40 |
| Diluted, attributable to ordinary equity holders of the | |||||
| parent (NOK) | -0.24 | -0.34 | -0.54 | -0.61 | -1.40 |
Interim consolidated statement of other comprehensive income
| NOK 000 | Note | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|---|
| Loss for the period | -22 769 | -20 344 | -43 237 | -36 375 | -85 489 | |
| Other comprehensive income | ||||||
| Exchange differences on translation of foreign operations | -101 | 83 | 14 | 423 | 151 | |
| Income tax effect | 0 | 0 | 0 | 0 | 0 | |
| Net other comprehensive income to be reclassified to | ||||||
| profit or loss in subsequent periods | -101 | 83 | 14 | 423 | 151 | |
| Total comprehensive income for the period, net of tax | -22 870 | -20 261 | -43 223 | -35 952 | -85 338 | |
| Attributable to: | ||||||
| Equity holders of the parent | -22 870 | -20 261 | -43 223 | -35 952 | -85 338 |
Interim consolidated statement of financial position
| NOK 000 Note |
Q2 2024 | Q2 2023 | 31.12.2023 |
|---|---|---|---|
| ASSETS | |||
| Property, plant and equipment | 9 148 | 10 349 | 9 239 |
| Intangible assets 8 |
13 943 | 21 218 | 17 580 |
| Right-of-use assets | 2 179 | 3 327 | 2 915 |
| Total non-current assets | 25 270 | 34 893 | 29 735 |
| Inventories | 64 771 | 66 281 | 70 089 |
| Trade and other receivables 9 |
11 244 | 10 324 | 8 194 |
| Prepayments | 220 | 103 | 626 |
| Cash and cash equivalents | 199 311 | 153 172 | 114 788 |
| Total current assets | 275 546 | 229 879 | 193 697 |
| Total assets | 300 816 | 264 773 | 223 432 |
| EQUITY AND LIABILITIES | |||
| Share capital | 5 185 | 2 647 | 2 648 |
| Share premium | 315 929 | 271 038 | 194 503 |
| Reserves | 1 295 | 1 552 | 1 281 |
| Retained earnings | -38 586 | -32 701 | 1 108 |
| Total equity | 283 823 | 242 535 | 199 541 |
| Lease liabilities | 1 329 | 2 419 | 1 951 |
| Total non-current liabilities | 1 784 | 2 419 | 1 951 |
| Trade and other payables 10 |
13 137 | 17 676 | 19 757 |
| Current lease liabilities | 1 072 | 1 142 | 1 182 |
| Provisions | 1 000 | 1 000 | 1 000 |
| Total current liabilities | 15 209 | 19 819 | 21 940 |
| Total liabilities | 16 993 | 22 238 | 23 891 |
| Total equity and liabilities | 300 816 | 264 773 | 223 432 |
Interim consolidated statement of changes in equity
| Attributable to equity holders of the parent | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 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 | ||||
| Loss for the period | -36 375 | -36 375 | |||||||
| Other comprehensive income | 423 | 423 | |||||||
| Total comprehensive income | 0 | 0 | -36 375 | 423 | -35 952 | ||||
| Issue of ordinary shares | 568 | 147 931 | 148 500 | ||||||
| Transaction costs | -22 679 | -22 679 | |||||||
| Equity-settled share-based payment | 1 974 | 1 974 | |||||||
| As at 30 June 2023 | 2 647 | 271 038 | -32 701 | 1 552 | 242 535 | ||||
| As at 1 January 2024 | 2 648 | 194 503 | 1 108 | 1 281 | 199 541 | ||||
| Loss for the period | -43 237 | -43 237 | |||||||
| Other comprehensive income | 14 | 14 | |||||||
| Total comprehensive income | 0 | 0 | -43 237 | 14 | -43 223 | ||||
| Issue of ordinary shares | 2 536 | 143 846 | 146 382 | ||||||
| Transaction costs | -22 419 | -22 419 | |||||||
| Equity-settled share-based payment | 3 543 | 3 543 | |||||||
| As at 30 June 2024 | 5 185 | 315 929 | -38 586 | 1 295 | 283 823 |
Interim consolidated statement of cash flows
| NOK 000 Note |
Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Operating activities | |||||
| Profit / loss (-) before tax | -22 740 | -20 315 | -43 208 | -36 347 | -85 269 |
| Adjustments for: | |||||
| Depreciation of property, plant and equipment and | |||||
| right-of-use assets | 712 | 496 | 1 561 | 911 | 2 396 |
| Amortisation of intangible assets 8 |
1 819 | 1 819 | 3 637 | 3 637 | 7 275 |
| Net finance income | -1 531 | -49 | -2 562 | -248 | -3 223 |
| Equity-settled share-based payments | 1 345 | 920 | 3 543 | 1 974 | 8 101 |
| Gain on disposal of property, plant and equipment | 0 | 0 | 0 | 0 | -14 |
| Other non-cash items | 1 035 | 6 | 1 967 | 224 | -807 |
| Changes in unrealised net foreign exchange rate | |||||
| differences/fluctuations | -5 | 52 | -23 | 172 | -18 |
| Changes in working capital: | |||||
| Decrease (+) in trade and other receivables and prepayments | -4 924 | 7 395 | -2 644 | 25 | -2 374 |
| Decrease (+) in inventories | 3 019 | -9 513 | 5 318 | -20 704 | -24 512 |
| Decrease (-) in trade and other payables 10 |
1 518 | -6 091 | -6 620 | -4 804 | -2 723 |
| Changes in provisions and government grants | 0 | -678 | 0 | -1 509 | 2 497 |
| Interest received 7 |
546 | 109 | 696 | 275 | 4 518 |
| Interest paid 7 |
-49 | -66 | -103 | -138 | -259 |
| Income tax paid | -29 | -28 | -29 | -28 | -220 |
| Net cash flows used in operating activities | -19 285 | -25 945 | -38 468 | -56 557 | -94 631 |
| Investing activities | |||||
| Proceeds from sale of property, plant and equipment | 0 | 0 | 0 | 0 | 392 |
| Purchase of property, plant and equipment | -289 | -45 | -884 | -82 | -387 |
| Net cash flows used in investing activities | -289 | -45 | -884 | -82 | 6 |
| Financing activities | |||||
| Proceeds from issuance of ordinary shares | 146 382 | 148 500 | 146 382 | 148 500 | 148 500 |
| Proceeds from exercise of share options | 0 | 0 | 0 | 0 | 287 |
| Transaction costs on issue of shares | -22 419 | -22 679 | -22 419 | -22 679 | -22 702 |
| Payment of lease liabilities | -293 | -257 | -575 | -509 | -1 089 |
| Proceeds from borrowings | 0 | 0 | 474 | 0 | 0 |
| Repayment of borrowings | -19 | 0 | -24 | 0 | 0 |
| Net cash flows from/(used in) financing activities | 123 651 | 125 564 | 123 837 | 125 312 | 124 996 |
| Net increase in cash and cash equivalents | 104 078 | 99 573 | 84 486 | 68 673 | 30 371 |
| Effect of exchange rate changes on cash and cash equivalents | -96 | 30 | 37 | 250 | 169 |
| Cash and cash equivalents at the start of the period | 95 330 | 53 568 | 114 788 | 84 249 | 84 249 |
| Cash and cash equivalents at the close of the period | 199 311 | 153 172 | 199 311 | 153 172 | 114 788 |
Notes to the condensed interim consolidated financial statements
1 General
poLight ASA is a public limited liability company. It was founded in 2005 and is incorporated and domiciled in Norway. The address of its registered office is Innlaget 5, 3185 Skoppum, Norway.
poLight 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 Horten, Norway, with employees in Finland, France, UK, US, China, Taiwan, and the Philippines. For more information, please visit https://www.polight.com.
2 Basis of preparation
The interim condensed consolidated financial statements for the quarter ended 30 June 2024 are unaudited and have been prepared in accordance with IAS 34. These interim condensed consolidated financial statements do not include all the information required for the Group's full annual financial statements and should be read in conjunction with the consolidated financial statements for 2023.
These interim consolidated financial statements have been prepared on a historical cost basis, are presented in Norwegian kroner (NOK) and all values are rounded to the nearest thousand (NOK 000), except when otherwise indicated.
3 Accounting policies
The accounting policies adopted in the preparation of these interim condensed consolidated financial statements are consistent with the consolidated financial statements for the year ended 31 December 2023.
4 Significant accounting judgements, estimates and assumptions
Management makes accounting judgements on development costs. Key significant estimates are made regarding impairment of intangible assets, inventory obsolescence and the accounting for share option plans, described in the consolidated financial statements for the year ended 31 December 2023.
5 Specification of operating expenses by nature
| (in NOK 000) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Employee benefits expense 1) | 18 861 | 16 111 | 31 794 | 28 179 | 68 725 |
| Depreciation and amortisation | 2 530 | 2 315 | 5 198 | 4 548 | 9 670 |
| Other operating expenses | 4 834 | 5 635 | 9 644 | 10 485 | 22 258 |
| Total operating expenses | 26 226 | 24 061 | 46 637 | 43 213 | 100 653 |
1) Including consultants engaged on long-term contracts
6 Research and development expenses net of governmental grants
| (in NOK 000) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Employee2) benefits expense | 5 710 | 6 694 | 11 755 | 12 772 | 25 743 |
| Other operating expenses | 1 638 | 2 692 | 3 491 | 4 997 | 10 990 |
| Government grants | 0 | -678 | 0 | -1 509 | -2 117 |
| Total | 7 347 | 8 708 | 15 246 | 16 261 | 34 616 |
2) Including consultants engaged on long-term contracts
7 Financial items
| (in NOK 000) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| Net foreign exchange gain (loss) | 13 | -776 | -28 | -1 155 | -1 020 |
| Interest income | 1 576 | 895 | 2 705 | 1 544 | 4 518 |
| Interest expense on lease liabilities | -49 | -66 | -103 | -138 | -259 |
| Financial expenses | -8 | -3 | -10 | -3 | -16 |
| Net financial items | 1 531 | 50 | 2 562 | 249 | 3 223 |
8 Intangible assets
| (in NOK 000) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
|---|---|---|---|---|---|
| At the start of the period | 15 761 | 23 036 | 17 580 | 24 855 | 24 855 |
| Amortisation | -1 819 | -1 819 | -3 637 | -3 637 | -7 275 |
| At the close of the period | 13 943 | 21 218 | 13 943 | 21 218 | 17 580 |
poLight's operations constitute one single cash generating unit (CGU) for impairment assessment purposes, the TLens® technology platform. Indicators of impairment of the TLens® technology have been assessed, and none identified.
| 9 Government grants | |||||
|---|---|---|---|---|---|
| (in NOK 000) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | FY 2023 |
| Net receivables at the start of the period | 2 117 | 5 445 | 2 117 | 4 614 | 4 614 |
| Grants received | 0 | 0 | 0 | 0 | -4 614 |
| Grants earned | 0 | 678 | 0 | 1 509 | 2 117 |
| Net receivables at the close of the period | 2 117 | 6 123 | 2 117 | 6 123 | 2 117 |
10 Trade and other payables
| (in NOK 000) | Q2 2024 | Q2 2023 | FY 2023 |
|---|---|---|---|
| Trade payables | 5 331 | 9 023 | 5 893 |
| Other payables 3) | 7 805 | 7 628 | 8 025 |
| Accrued employer's NICs on share option plan | 0 | 1 025 | 5 839 |
| At the close of the period | 13 137 | 17 676 | 19 757 |
3) Accrued employer's NICs on salary, withholding taxes and accruals for incurred expenses
11 Related party transactions
poLight ASA is the ultimate parent company. None of the shareholders of poLight ASA has control of the company. As at 30 June 2024, the largest shareholder was Investinor Direkte AS, which owned 13.55 per cent of the company's shares.
Intercompany agreements are entered into with all Group subsidiaries. All sales by the subsidiaries are made to the parent company. All transactions are performed on an arm's length basis. No transactions have been undertaken with other related parties during the relevant financial period.
12 Events after the reporting date
No significant events have occurred after the reporting date that have a material effect on the financial statements.
ALTERNATIVE PERFORMANCE MEASURES (APMS)
poLight uses the following alternative performance measures for interim and annual financial reporting, in order to provide a better understanding of the Group's underlying financial performance:
EBITDA Earnings before interest, taxes, depreciation and amortisation. EBITDA ex share options EBITDA excluding share option plan expense incl. changes in accrued employer's NICs EBIT Earnings before interest and taxes EBIT ex share options EBIT excluding share option plan expense incl. changes in accrued employer's NICs
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poLight ASA Innlaget 5 3185 Skoppum, Norway E-mail: [email protected]