Quarterly Report • Feb 27, 2024
Quarterly Report
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"After a somewhat sluggish third quarter, the activity in the fourth quarter picked up and several important milestones were achieved. AR/MR-related activity, in particular, remains strong. During the quarter, two follow-on orders were announced, as well as one new design-win for a high-end mixed reality head-mounted device.
The smartphone market remains challenging and the fact that our current solution is best suited for the selfie cameras, which have a lower priority and budget compared to the main camera, is currently impacting our ability to achieve new smartphone design-wins. Nevertheless, we continue to be persistent and have kicked off several activities to make our offering applicable in broader smartphone application areas. However, it is important to mention that apart from smartphone-driven consumer activity, the company is also exploring other opportunities, such as webcams and laptops, not to mentioned AR/MR, in the longer term.
We have recently seen interesting developments in more scientific/research-related sales, such as the Mini2P1 . Our newly established relationship with Phenosys and Thorlabs indicates that this area may, over time, be more important than we initially anticipated. Although this will always represent a niche market, it is a potentially significant one, not only from a brand-building perspective, but also as an attractive business opportunity.
The industrial market is slowly moving forward, but at slower pace than we hoped for. Since the reporting date, however, we have achieved two new design-wins, and TLens® is now used in eleven barcode/machine vision products. There are several ongoing Proof of Concept (PoC) projects which will probably result in new design-wins going forward – both with existing and new customers.
The automotive and healthcare markets will, as mentioned before, take time to develop. Identifying use cases where autofocus offers clear advantages as well as define needed product specification is ongoing through PoC´s and market dialog in general. Both these markets are put on lower priority than our key market segments.
1 An open-source miniature 2-photon microscope brain explorer for fast high-resolution calcium imaging in freely-moving mice.
poLight had a busy start to the year. We participated at both CES and SPIE Photonic West, where we had many positive customer interactions and were able to demonstrate our solution to key market players.
We are continuing to strengthen our organisation to enable us to better explore the opportunities ahead, handle challenges more effectively and evolve our offering.
In January 2024, there were some changes to the board. We would like to thank Ann-Tove Kongsnes from Investinor for being an active and competent board member for more than 12 years, and welcome Marianne Bøe (Head of Investor Relations at IDEX Biometrics) and Jean-Christophe Eloy (CEO and President of Yole) as new members of poLight's board of directors."
| (in NOK million) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Revenue | 5.1 | 4.1 | 22.5 | 13.4 |
| Gross profit | 3.0 | 2.8 | 12.2 | 8.5 |
| EBITDA | -26.3 | -15.0 | -78.8 | -58.7 |
| EBITDA ex share options | -19.3 | -13.7 | -68.8 | -58.9 |
| Net cash flows used in operating activities | -17.8 | -15.2 | -94.6 | -63.6 |
| Net increase/decrease in cash and cash equivalents | -18.0 | -19.9 | 30.4 | -73.5 |
poLight works primarily with two categories of subcontractors – a MEMS/wafer supplier (ST Microelectronics (ST) in Italy) and assembly partners. While ST produces the wafers/actuators, assembly partners assemble the complete product. The polymer (i.e. lens material) is produced at poLight's headquarters.
Assembly and testing activity was relatively low during the quarter and mainly related to AR/MR, science/healthcare and industrial cases at various stages. In addition to yield improvement work, the quarter was used to put into operation the final test equipment in the Philippines as well as strengthen the organisation. All assembly and testing are now conducted in the Philippines instead of being split between Taiwan and the Philippines.
During the quarter ST completed delivery of the wafer backlog.
Regarding new products/functionality, the focus has been on TWedge , a potential new product that enables wobulation, a method for improving resolution in AR projection display solutions. Technical samples of this product have been delivered to selected customers, and many customer interactions/demonstrations have been held. Further planning for new development projects scheduled for startup in 2024 was carried out during the quarter.
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/healthcare products. In addition, the automotive market is being explored, although this is not currently being given a high priority.
Market sentiment is currently challenging. Despite this, however, interest in poLight´s solutions have been confirmed through the engagement with customers on various applications, which are expected to gradually develop into a diversified revenue base for poLight.
During the quarter, the focus was on augmented/mixed reality (AR/MR) and smartphone applications. Other applications, such as laptops, 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 the selfie cameras, which have a lower priority and budget compared to the main camera, is currently impacting our ability to achieve new smartphone design-wins. Nevertheless, poLight continues to be persistent and has embarked on several development projects to broaden the company's offering to cover broader application areas.
In the consumer market, poLight has so far achieved four design-wins, is involved in two ongoing PoC projects and three PoCs that are in the planning stage. In addition, the company has achieved one design-in and is engaged in seven ongoing PoCs (3 for TWedge®) related to consumer AR/MR-related products, including those relevant for TWedge®.
TLens is being considered/tested by several important AR/MR market players. The TLens® technology's low powerconsumption, no gravity sensitivity, temperature stabilisation (often referred to as athermalisation), high speed and compactness stand out as key technical benefits.
The AR market segment continued to develop positively for poLight during the quarter. Two follow-on orders were announced, as well as one new design-win for a high-end mixed reality head-mounted device.
TLens® is used/planned for use in both world-facing cameras and displays.
At the close of the fourth quarter, the company's technology is being used in three AR/MR enterprise products already on the market. These are Magic Leap 2, LEION Pro from LLVision, and a high-end mixed reality head-mounted device. In addition, five design-ins have been confirmed. One related to a consumer AR application, one was MR related, and three concerned enterprise AR. One of the three enterprise AR cases will most likely not be launched in the market due to soft demand, and is currently only used for sampling to selected customers. Eight PoCs are ongoing, seven of which target consumer applications, while 17 PoCs are in the planning stage (11 for consumer applications). A potential TWedge® product is included in the numbers given above for PoCs (4) and planned PoCs (7).
The AR/MR market is entering a very important phase and poLight expects to see several companies releasing new products in the coming years. All but one of the current design-in cases relate to the low volume enterprise market. The consumer-related design-in case will take some years before it is ready for potential market release. Volumes in the next few years are therefore expected to be relatively low. However, building a position through these cases, and maturing consumer-related PoC activities, will bring the company into AR/MR high volume applications as the markets mature. In the longer term, therefore, the AR/MR segment has the potential to become a key market for the company.
It will take time to develop this market and will require entry into some broader application areas. Currently, six companies use TLens® in commercially available barcode/machine vision products (design-wins) – a total of 11 different products. All the products are still shipping to customers and are expected to do so for several more years. After the reporting date, it was announced that Action Prowave Technology has released two new barcode scanner products using TLens®. These are included in the numbers given above. In addition to the barcode/machine vision-related designwins, the company announced post quarter that Thorlabs has released an Optical Cage System Product with Integrated TLens®. This is a scientific product used in labs, so very low volume, but still important for profiling TLens® to a wider professional audience.
In addition to the seven design-wins (eleven barcode/machine vision products from six different companies, and one design-win from Thorlab), the company has one design-in (barcode) and is involved in 13 ongoing PoCs, 11 of which are for barcode/machine vision applications.
The company is continuing to support selected opportunities in the healthcare market segment. The cooperation poLight has developed 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 microscope2 has 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. See press releases dated 25 September and 7 December 2023, and latest 21 February 2024.
In addition to this, poLight is engaged in commercial endoscope cases. However, for the short/medium term, the company does not foresee any commercial breakthrough for this application, as the trend still is to use low-resolution sensors, with no clear need for autofocus using current platform available (enabling say all-in-focus), and for some cases very high optical power is needed.
At the end of the quarter, the company was engaged in one design-win (Kavli, Mini2P), three design-ins (all Mini2P related), and 14 ongoing PoCs, of which 10 relate to Mini2P. As mentioned last quarter, Xenocor is experiencing some unexpected problems unrelated to TLens® and had to go through a redesign process. This case has been removed from our design-in list, as the redesign will not include auto focus.
During the quarter, the company has been engaged in three PoCs, while five others are in the planning stage. This is unchanged from the previous quarter. Going forward, this market segment may have need for autofocus technology, and TLens® is one of the solutions being explored. The market is potentially significant but will most likely require a new revision of TLens®, which will take years to develop and qualify. Current PoC activities are based on existing products.
2 An open-source miniature 2-photon microscope brain explorer for fast high-resolution calcium imaging in freely-moving mice
| (in NOK million) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Revenue | 5.1 | 4.1 | 22.5 | 13.4 |
| Cost of sales | -2.2 | -1.3 | -10.3 | -4.8 |
| Gross profit | 3.0 | 2.8 | 12.2 | 8.5 |
| Research and development expenses 1) | -10.4 | -6.1 | -34.6 | -32.9 |
| Sales and marketing expenses | -5.9 | -3.7 | -17.7 | -13.1 |
| Operational / supply chain expenses | -4.8 | -2.9 | -16.7 | -9.2 |
| Administrative expenses | -8.2 | -5.0 | -22.0 | -12.1 |
| EBITDA | -26.3 | -15.0 | -78.8 | -58.7 |
| Share option plan expense | 2.9 | 1.3 | 8.1 | 4.8 |
| Accrued employer's NICs re. share option plan | 4.1 | 0.1 | 1.9 | -5.0 |
| EBITDA ex share options | -19.3 | -13.7 | -68.8 | -58.9 |
| Depreciation and amortisation | -2.5 | -2.4 | -9.7 | -10.4 |
| EBIT ex share options | -21.8 | -16.1 | -78.5 | -69.3 |
1) R&D expenses, net of government grants (see details of grants in Note 9)
Revenue totalled NOK 5.1 million in Q4 2023 (NOK 4.1 million in Q4 2022), which reflects deliveries of TLens and ASICs of NOK 3.0 million and NOK 2.1 million in revenue from NRE "non-recurring engineering" relating to customer development projects.
R&D expenditure, net of government grants, amounted to NOK 10.4 million (NOK 6.1 million in Q4 2022). Reduction in government grants, combined with increased use of internal and external resources on R&D projects, explains the increase (see details in Note 6).
Sales and marketing expenses came to NOK 5.9 million in Q4 2023 (NOK 3.7 million). The rise is due to increased headcount during the year. Operational/supply chain expenses totalled NOK 4.8 million (NOK 2.9 million), due to increased internal resource usage relating to the development of production management system, among other things.
Administrative expenses totalled NOK 8.2 million in the quarter (NOK 5.0 million in Q4 2022). Increased share option expenses (see below for further details), contributed to the increased expenses compared with Q4 2022.
EBITDA totalled NOK -26.3 million in Q4 2023 (NOK -15.0 million). Share option plan expenses, including employer's NICs, and an increased number of employees and consultants are the main drivers for the increased expenditure.
Share option plan expenses amounted to NOK 2.9 million in Q4 2023 (NOK 1.3 million), while NOK 4.1 million in accrued employer's national insurance contributions (NICs) was recognised in the quarter (NOK 0.1 million in Q4 2022). 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. The increase in accrued employer's NICs was mainly attributable to the increase in poLight's share price in the period.
Depreciation and amortisation, which primarily related to non-current intangible assets, totalled NOK 2.5 million in the quarter (NOK 2.4 million).
| (in NOK million) | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Property, plant and equipment | 9.2 | 10.7 |
| Intangible assets | 17.6 | 24.9 |
| Right-of-use assets | 2.8 | 3.9 |
| Inventories | 70.1 | 45.6 |
| Receivables and prepayments | 8.8 | 8.9 |
| Cash and cash equivalents | 114.8 | 84.2 |
| Total assets | 223.3 | 178.2 |
| Total equity | 199.5 | 150.7 |
| Total current liabilities | 21.8 | 24.6 |
| Total non-current liabilities | 2.0 | 3.0 |
| Total equity and liabilities | 223.3 | 178.2 |
As at 31 December 2023, total assets came to NOK 223.3 million (NOK 178.2 million as at 31 December 2022).
Property, plant and equipment totalled NOK 9.2 million as at 31 December 2023 (NOK 10.7 million as at 31 December 2022). At the reporting date, intangible assets totalled NOK 17.6 million (NOK 24.9 as at 31 December 2022), reflecting amortisation during the year.
Inventoriesincreased by NOK 24.5 million during the year, to stand at NOK 70.1 million net of provision for obsolescence amounting to NOK 9.3 million at the close of the fourth quarter (NOK 45.6 million at 31 December 2022). The increase in inventories mainly relates to wafers from ST Microelectronics.
As at 31 December 2023, poLight had cash and cash equivalents totalling NOK 114.8 million (NOK 84.2 million as at 31 December 2022). The rights issue in the second quarter 2022 generated NOK 125.8 million in net proceeds.
Total current liabilities amounted to NOK 21.8 million as at 31 December 2023 (NOK 24.6 million as at 31 December 2022).
| (in NOK million) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Net cash flows used in operating activities | -17.8 | -15.2 | -94.6 | -63.6 |
| Net cash flows used in investing activities | 0.1 | -4.4 | 0.0 | -9.2 |
| Net cash flows from/(used in) financing activities | -0.3 | -0.3 | 125.0 | -0.7 |
| Net increase/decrease in cash and cash equivalents | -18.0 | -19.9 | 30.4 | -73.5 |
The net cash outflow from operating activities totalled NOK 17.8 million in Q4 2023 (NOK 15.2 million in Q4 2022). Working capital decreased by NOK 4.3 million in the quarter, of which NOK 0.5 million relates to the increased inventory.
The net decrease in cash and cash equivalents totalled NOK 18.0 million for the quarter, compared with a net decrease of NOK 19.9 million in the same period in 2022.
The risk related to current tensions between China and Taiwan mentioned in previous quarterly reports has been resolved by relocating all assembly and test 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 TLens 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 TLens products (or other products produced by the Group) will meet 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 imply 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. Consequently, any shortfall in cash generated from operations will have to be covered through additional financing in order to safeguard the Group's ability to continue as a going concern. According to current plans, the Group's cash deposits will fund activities through the fourth quarter 2024. Thereafter, additional capital will be required to continue poLight's planned commercialisation of its TLens technology. Management and the Board of Directors are focused on the Group's liquidity requirements and are evaluating alternatives, such as issuing additional equity and/or taking on new debt. Based on the Group's track record of raising funds, and in light of the positive developments achieved in the past year, it is expected that the capital markets will be receptive to the issue of equity sufficient to meet liquidity requirements and support ongoing operations and expansion plans under current conditions. poLight's ability to continue as a going concern is dependent upon the success of these efforts. However, there is a risk that, when needed, adequate sources of funds may not be available, or available on acceptable terms and conditions.
The consumer market remains challenging. poLight will continue to address this market by actively capitalising on its first important smartphone reference. Further key actions will be to mature and cost optimise TLens®-based camera module solutions, addressing both component and system level aspects, continuously enhance important performance parameters, actively develop the capability and relationships with existing and new camera/lens module partners with respect to add-in designs, and address higher value applications such as back-facing cameras based on new solutions. It is important to emphasise that all the activities listed above will have direct relevance for other application areas, such as augmented/mixed reality (AR/MR).
AR/MR will be a key market for poLight going forward. So far, there seems to be a good match between market need and the properties of the TLens®, and potentially also the TWedge® at a later stage. Volumes for AR/MR cases are still low, since most of the applications relate to the enterprise market. poLight aims to establish a strong position at an early stage and grow its business within this area as consumer cases using TLens® (later potentially TWedge®) start to be deployed. However, this is expected to still be some years ahead of us.
Looking forward, another potential high-volume market is the automotive sector. poLight is currently engaging with key players in this market to better understand the opportunities and challenges involved. It has not yet been decided whether this is a market poLight will actively address. What seems clear is that both potential demand and the availability of relevant products that meet specifications are several years ahead of us. The same applies to the healthcare market. Automotive and healthcare are still markets under observation and are not high on poLight's list of priorities.
poLight continues to strengthen its organisation to enable it to address all the above-mentioned opportunities and challenges in a professional and robust manner.
According to current plans, the Group's cash deposits will fund activities through the fourth quarter of 2024. Thereafter, additional capital will be required to continue poLight's planned commercialisation of its TLens technology. The company has planned accordingly.
This report contains statements regarding the future. In particular, the section "Outlook" 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 2022, including the section "Risks and risk management" in the Board of Directors' Report.
| NOK 000 | Note | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|
| Sale of goods | 3 040 | 3 536 | 20 099 | 10 034 | |
| Rendering of services | 2 107 | 557 | 2 412 | 3 328 | |
| Revenue | 5 147 | 4 093 | 22 511 | 13 363 | |
| Cost of sales | -2 185 | -1 309 | -10 349 | -4 826 | |
| Gross profit | 2 962 | 2 784 | 12 162 | 8 536 | |
| Research and development expenses net of governmental grants | 6,9 | -10 360 | -6 128 | -34 616 | -32 907 |
| Sales and marketing expenses | -5 871 | -3 750 | -17 712 | -13 122 | |
| Operational / supply chain expenses | -4 849 | -2 907 | -16 684 | -9 179 | |
| Administrative expenses | -8 182 | -5 046 | -21 971 | -12 068 | |
| Operating result before depreciation and amortisation | |||||
| (EBITDA) | -26 300 | -15 048 | -78 821 | -58 740 | |
| Depreciation and amortisation | 8 | -2 506 | -2 387 | -9 670 | -10 400 |
| Operating result (EBIT) | -28 806 | -17 435 | -88 492 | -69 140 | |
| Net financial items | 7 | 1 349 | 831 | 3 223 | 1 496 |
| Loss before tax | -27 457 | -16 604 | -85 269 | -67 644 | |
| Income tax expense | -110 | -189 | -220 | -242 | |
| Loss for the period | -27 567 | -16 791 | -85 489 | -67 886 | |
| Attributable to: | |||||
| Equity holders of the parent | -27 567 | -16 791 | -85 489 | -67 886 | |
| Earnings per share: | |||||
| Basic, attributable to ordinary equity holders of the parent (NOK) | -0.42 | -0.32 | -1.40 | -1.31 | |
| Diluted, attributable to ordinary equity holders of the parent | |||||
| (NOK) | -0.42 | -0.32 | -1.40 | -1.31 |
| NOK 000 Note |
Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Loss for the period | -27 567 | -16 791 | -85 489 | -67 886 |
| Other comprehensive income | ||||
| Exchange differences on translation of foreign operations | -88 | -6 | 151 | 95 |
| Income tax effect | 0 | 0 | 0 | 0 |
| Net other comprehensive income to be reclassified to profit or | ||||
| loss in subsequent periods | -88 | -6 | 151 | 95 |
| Total comprehensive income for the period, net of tax | -27 655 | -16 797 | -85 338 | -67 791 |
| Attributable to: | ||||
| Equity holders of the parent | -27 655 | -16 797 | -85 338 | -67 791 |
| NOK 000 Note |
31.12.2023 | 31.12.2022 |
|---|---|---|
| ASSETS | ||
| Property, plant and equipment | 9 239 | 10 748 |
| Intangible assets 8 |
17 580 | 24 855 |
| Right-of-use assets | 2 763 | 3 871 |
| Total non-current assets | 29 583 | 39 474 |
| Inventories | 70 089 | 45 577 |
| Trade and other receivables 9 |
8 194 | 8 386 |
| Prepayments | 626 | 557 |
| Cash and cash equivalents | 114 788 | 84 249 |
| Total current assets | 193 697 | 138 769 |
| Total assets | 223 279 | 178 242 |
| EQUITY AND LIABILITIES | ||
| Share capital | 2 648 | 2 078 |
| Share premium | 194 503 | 145 785 |
| Reserves | 1 281 | 1 130 |
| Retained earnings | 1 108 | 1 699 |
| Total equity | 199 541 | 150 692 |
| Lease liabilities | 1 955 | 2 970 |
| Total non-current liabilities | 1 955 | 2 970 |
| Trade and other payables 10 |
19 757 | 22 480 |
| Current lease liabilities | 1 026 | 1 100 |
| Provisions | 1 000 | 1 000 |
| Total current liabilities | 21 783 | 24 581 |
| Total liabilities | 23 738 | 27 550 |
| Total equity and liabilities | 223 279 | 178 242 |
| Attributable to equity holders of the parent | ||||||
|---|---|---|---|---|---|---|
| NOK 000 | Note | Share capital | Share premium | Retained earnings | Translation reserve | Total |
| As at 1 January 2022 | 2 077 | 209 320 | 977 | 1 035 | 213 409 | |
| Loss for the period | -67 886 | -67 886 | ||||
| Other comprehensive income | 95 | 95 | ||||
| Total comprehensive income | 0 | 0 | -67 886 | 95 | -67 791 | |
| Share options exercised | 1 | 253 | 254 | |||
| Equity-settled share-based payment | 4 821 | 4 821 | ||||
| Allocation to retained earnings | -63 788 | 63 788 | 0 | |||
| As at 31 December 2022 | 2 078 | 145 785 | 1 699 | 1 130 | 150 692 | |
| As at 1 January 2023 | 2 078 | 145 785 | 1 699 | 1 130 | 150 692 | |
| Loss for the period | -85 489 | -85 489 | ||||
| Other comprehensive income | 151 | 151 | ||||
| Total comprehensive income | 0 | 0 | -85 489 | 151 | -85 338 | |
| Issue of ordinary shares | 568 | 147 931 | 148 500 | |||
| Share options exercised | 2 | 285 | 287 | |||
| Transaction costs | -22 702 | -22 702 | ||||
| Equity-settled share-based payment | 8 101 | 8 101 | ||||
| Allocation to retained earnings | -76 796 | 76 796 | 0 | |||
| As at 31 December 2023 | 2 648 | 194 503 | 1 108 | 1 281 | 199 541 |
| NOK 000 | Note | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|---|
| Operating activities | |||||
| Profit / loss (-) before tax | -27 457 | -16 604 | -85 269 | -67 644 | |
| Adjustments for: | |||||
| Depreciation of property, plant and equipment and right-of-use | |||||
| assets | 687 | 568 | 2 396 | 1 877 | |
| Amortisation of intangible assets | 8 | 1 819 | 1 819 | 7 275 | 8 522 |
| Net finance income | -1 349 | -831 | -3 223 | -1 496 | |
| Equity-settled share-based payments | 2 929 | 1 267 | 8 101 | 4 821 | |
| Gain on disposal of property, plant and equipment | -14 | 0 | -14 | 0 | |
| Other non-cash items | -2 290 | 1 | -806 | -430 | |
| Changes in unrealised net foreign exchange rate | |||||
| differences/fluctuations | -63 | 216 | -18 | 143 | |
| Changes in working capital: | |||||
| Increase (-) in trade and other receivables and prepayments | -850 | 1 541 | -2 374 | 11 925 | |
| Increase (-) in inventories | -457 | -9 551 | -24 512 | -28 741 | |
| Increase (+) in trade and other payables | 10 | 5 901 | 8 237 | -2 723 | 2 574 |
| Changes in provisions and government grants | -252 | -2 547 | 2 497 | 3 166 | |
| Interest received | 7 | 3 812 | 911 | 4 518 | 2 255 |
| Interest paid | 7 | -60 | -77 | -259 | -330 |
| Income tax paid | -110 | -189 | -220 | -242 | |
| Net cash flows used in operating activities | -17 756 | -15 239 | -94 631 | -63 600 | |
| Investing activities | |||||
| Proceeds from sale of property, plant and equipment | 392 | 0 | 392 | 0 | |
| Purchase of property, plant and equipment | -277 | -4 438 | -387 | -9 202 | |
| Net cash flows used in investing activities | 115 | -4 438 | 6 | -9 202 | |
| Financing activities | |||||
| Proceeds from issuance of ordinary shares | 0 | 0 | 148 500 | 0 | |
| Proceeds from exercise of share options | 0 | 0 | 287 | 254 | |
| Transaction costs on issue of shares Payment of lease liabilities |
0 -318 |
0 -264 |
-22 702 -1 089 |
0 -964 |
|
| Net cash flows from/(used in) financing activities | -318 | -264 | 124 996 | -710 | |
| Net increase/decrease in cash and cash equivalents | -17 959 | -19 942 | 30 371 | -73 513 | |
| Effect of exchange rate changes on cash and cash equivalents | -25 | -222 | 169 | -49 | |
| Cash and cash equivalents at the start of the period | 132 772 | 104 413 | 84 249 | 157 810 | |
| Cash and cash equivalents at the close of the period | 114 788 | 84 249 | 114 788 | 84 249 |
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 a patented, proprietary tunable optics technology, starting with its first product, TLens® which replicates "the human eye" experience in autofocus cameras used in devices such as smartphones, wearables, barcode scanners, 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. 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.
The interim condensed consolidated financial statements for the quarter ended 31 December 2023 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 full annual financial statements of the Group and should be read in conjunction with the consolidated financial statements for 2022.
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.
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 2022.
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 2022.
| (in NOK 000) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Employee benefits expense 1) | 22 986 | 14 168 | 68 725 | 45 614 |
| Depreciation and amortisation | 2 506 | 2 387 | 9 670 | 10 400 |
| Other operating expenses | 6 276 | 3 662 | 22 258 | 21 663 |
| Total operating expenses | 31 767 | 20 217 | 100 653 | 77 676 |
1) Including consultants engaged on long-term contracts
| (in NOK 000) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Employee 2) benefits expense | 7 374 | 6 595 | 25 743 | 22 878 |
| Other operating expenses | 3 238 | 2 582 | 10 990 | 14 922 |
| Government grants | -252 | -3 047 | -2 117 | -4 892 |
| Total | 10 360 | 6 128 | 34 616 | 32 907 |
2) Including consultants engaged on long-term contracts
| (in NOK 000) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Net foreign exchange gain (loss) | -33 | 270 | -1 020 | -385 |
| Interest income | 1 449 | 667 | 4 518 | 2 249 |
| Interest expense on lease liabilities | -60 | -77 | -259 | -330 |
| Financial expenses | -7 | -28 | -16 | -38 |
| Net financial items | 1 349 | 831 | 3 223 | 1 496 |
| (in NOK 000) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| At the start of the period | 19 399 | 26 673 | 24 855 | 33 377 |
| Amortisation | -1 819 | -1 818 | -7 275 | -8 522 |
| At the close of the period | 17 580 | 24 855 | 17 580 | 24 855 |
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.
| (in NOK 000) | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Net receivables at the start of the period | 1 864 | 1 566 | 4 614 | 7 280 |
| Grants received | 0 | 0 | -4 614 | -7 558 |
| Grants earned | 252 | 3 047 | 2 117 | 4 892 |
| Net receivables at the close of the period | 2 117 | 4 614 | 2 117 | 4 614 |
| (in NOK 000) | Q4 2023 | Q4 2022 |
|---|---|---|
| Trade payables | 5 893 | 10 612 |
| Other payables | 8 025 | 7 923 |
| Accrued employer's NICs on share option plan | 5 839 | 3 945 |
| At the close of the period | 19 757 | 22 480 |
poLight ASA is the ultimate parent company. None of the shareholders of poLight ASA has control of the company. As at 31 December 2023, the largest shareholder was Investinor Direkte AS, which owned 13.44 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.
No significant events have occurred after the reporting date that have a material effect on the financial statements.
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
poLight ASA Innlaget 5 NO-3185 Skoppum, Norway E-mail: [email protected]
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