poLight ASA (PLT) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to poLight's fourth quarter presentation. My name is Oyvind Isaksen. I'm the CEO in poLight. Together with me today is the Board Chair, Grethe Viksaas; and CFO, Joakim Bredahl. Agenda of today is key events, introduction to poLight for those who are new, update from market side, financial review by CFO, outlook and Q&A. Since this presentation is webcasted, if there's any question from the audience, please wait for the microphone. And also for those who are entering questions through the portal, please leave your credential so that we can reach out to you if there is no time to address your question. Okay. Key events. So many of these key events listed here was actually also informed about last quarter since they happened kind of after that quarter. So it's about Wooptix, which is a very, I would say, scientific instrument, wavefront sensor. They claim that they have very good feedback from customers. Transcend Vivoscope is one of the Mini2P suppliers now. This is a Chinese company, ThorLabs, also an American Mini2P supplier. Actually, all 3 commercial players now, including Phenosys, did demonstrate their capability and the product at Neuroscience '24 conference in October. Also, we got in the quarter, an existing customer, which launched 2 new barcode readers with TLens, so basically a repeat customer. They claim that it's super good performance. And this is also one reason why they would like to remain anonymous, not kind of announcing who this is due to the -- they don't want to disclose the solution they have used to get that performance. Also, we got a follow-up order worth NOK 344,000 related to an existing barcode product. So quite a few events, but they were also announced as post quarter last quarter. Recently, a few days ago, we received a significant, I would say, eval kit order from a, I would say, Tier 1 OEM, consumer OEM related to AR application, actually worth close to NOK 730,000, which is a significant order in -- for sampling an eval kit. This customer also have, I would say, a very mature activity related to TLens. So now they are both considering TLens and early-stage TWedge. This is exactly the situation and the dream we have that we get into glasses, both with the TLens and the TWedge. So there were multiple products in the same product. And also, we participated in -- at CES and SPIE, AR|VR|MR in Las Vegas and in San Francisco, I would say, extremely useful to be there, extremely efficient way to meet customers all over the world. Yes. So for those who are new, founded in 2005, which means that we have a celebration this year, which we are planning. We are a global player. As you can see from the map, we are in all key areas with own people. We have a strong IP platform, 22 worldwide granted patent families, 13 pending applications and 4 registered trademarks. Our technology enables and pose breakthrough application in several markets. As you can see on the top graphics there, you see the glasses, you see the phone, you see the laptop/webcams, you see the industrial, you see the health care. So we have enabling technology for many of these market segments. 51 employees, as I said, very much distributed. We are, say, around 15 at headquarter. The rest is distributed throughout the world. And the strategy we have when it comes to the organization is that we are with competent people where we have customer and where we have partners. So that's why the growth of the company is happening mainly abroad. Fabless, and that's why we can be so I would say, address so many opportunities is because we don't -- and we have relatively few people. This is because we don't own the manufacturing facility. We are working through partners, both on the wafer side and on the assembly side. Yes, listed in 2018. And the -- I would say, the unmatched technical characteristic of poLight's technology, extremely speed, fast speed, very compact solution, constant field of view, no breathing, no pumping and very, very low power consumption. And as you can see, these attributes, these characteristics are extremely important for any wearable. And that's why we are focusing highly on that market segment. Yes. So again, for you, many of you, this is a repetition. We basically replicate the human eye. Lens is the polymer. Our eye muscles is a glass membrane with different layers, one of them being piezo. Putting voltage on the piezo starts to bend, shapes the lens, change the focus. We changed the voltage from 0 to 50 to make the bending to change the optical power to change the focus. So the polymer is a key ingredient in our product being actually, I said fabless, but this is actually the only thing we do fabricate in headquarter, very scalable. 1 liter polymer is 1 million lenses. So it's very, very scalable. Wafer is coming from STMicro, 8-inch wafer comprises more than 2,000 eye muscles. So then we can assemble this either with or without a package, which is done at Tong Hsing in the Philippines. We sell to the OEMs. We try to convince OEMs that you have to use the technology from poLight because of the unmatched characteristics. And they then instruct the camera module guys to make solution with TLens or TWedge. We have many areas we can address. We have decided to focus on 3 which is the consumer, the AR/MR, and you can say a subsegment of AR/MR is also the consumer sooner or later. And then the industrial side. There are other application areas where we kind of sometimes are dragged into. Health care is an example. Mini2P is an example of that. But really, the effort where we kind of proactively use our organization is in these 3 market segments and maybe particular, anything consumer related. Yes. So we have some important design wins. On the AR/MR side, you have the 4 glasses, which we talked about before, already shipping. And we have -- the latest one is the Vuzix. You may saw the interview talk I had with Paul Travers, who is the CEO of Vuzix, where I had a conversation with him where he explained the importantness of this kind of optics. So you might find that video of interest to look at. So that was the latest design win. Then we have the consumer space, which is represented by smartphone, high-performance smart glasses -- smartphone, sorry, and webcam. And we are still active in all these areas as of today also. Industrial side started to be a quite busy slide. So many customers, 6, if I remember correctly, and several customers have several designs based on TLens. And then we have the Mini2P cases we already talked about. Okay. So we -- more and more, we are stepping up in the -- in being visible at important events. Two of them is definitely CS, which is beginning of January every year. And this year, we took the investments of having a suite, where we populated the suite with all our demonstrations and our technology demos, and we were 5 people, including myself in -- who kind of manned that suite. And we had a lot of meetings, extremely constructive. The suite works very well. It's a quiet area instead of having a booth where there are a lot of noise. This was pre-agreed meetings. So it was high-quality meetings. Even we got visitors from shareholders, [ Liv and Bjorard ] trying our smart glasses on. I think Liv has the Vuzix and Bjorard has the LL visions from China. And so these are long-term investors in poLight has been there from the early beginning through LHH, Liv and Bernard. Then we were in -- lastly in San Francisco for SPIE. This year, we decided to be in the AR|VR|MR space. And why we did that is we really would like to tell the world that we are -- have an extremely important technology and products to offer in the AR/MR space. So kind of brand building in that segment. In this case, we had a booth, 5 people again who were in together with -- together in San Francisco. Tristan for the left, our CTO, Pierre Craen, Jon Edwards and Pete and then [ Marcia ], who is the marketing lady. They reported a very, very busy show. They were kind of all busy by talking to people and potential customers. In addition, there were people standing waiting to get access to the booth. And the coffee was on us. So we sponsorship coffee, and that gave us a very good profile and people dropped in and said, thank you for the coffee. And then not to mention Pierre Craen, our CTO, he was also giving a presentation, which dragged a lot of visitors to the booth, who wanted to continue to talk. This is, of course, costing money. It's an investment, costing time, but it's a part of stepping up the kind of brand building of poLight and what we can do. This is extremely important. Okay. Consumer. We have said it before, we will repeat it. We are very persistent. We will have breakthrough in the consumer. The main activity in the quarter, I have to say, has been AR/MR. The consumer-related activity is definitely dominated at the moment by AR/MR. At CES, it was amazing to see from -- compared to last year, how many players who was now profiling themselves as an AR/MR player with different solutions of glasses. So it seems to be a big step up on the AR/MR side. I had a meeting with several, and I remember one comment from one customer saying that this was a Chinese OEM, smartphone OEM. And he said, everybody, big OEMs will sooner or later have AR/MR products. So that was very visible. And that's why, as we said before, this is why it's so important that we have these design wins, these 4 design wins that we have such a good position in this market is super, super important for future consumer business for TLens and TWedge. But laptop, worth mentioning, webcam, absolutely, several cases. Yes, smartphone is not dead. We are still hammering there, and there are activities. Even though we have to say that it is a challenging sentiment, the innovation and the willing to invest is much more related to other areas like AR/MR than in the smartphone. And even smartwatches is being addressed and discussed. When it comes to AR/MR in general, even though we can see that there is a definitely a step-up in activity and interest, it is still a market in early stage, I've said before. It's still a market under definition. Many changes happen from quarter-to-quarter, what priority customers are wanting to focus on. Maybe the most notable change in the quarter is that the planned PoC have increased significantly compared to last quarter. And also, I would say that some of the ongoing PoCs consumer-related, mind you, this is consumer related, have definitely matured, matured in the sense that we are discussing concrete possibilities in products. I'm coming back to it in the AR/MR section. On the enterprise side, we did have 2 cancellations due to priority of customers, which we saw could come, but we got one new, so net one. This is enterprise AR, not consumer. Yes. As mentioned, to position poLight, we have -- in the consumer side, we have a significant investment in, I would say, several things. But one of the things I would like maybe to emphasize today is these reference designs activity. These are not trivial activity. This is highly competent optical engineers who's taking actually the responsibility as poLight in designing the whole lens stack and optimizing how to integrate TLens in that lens stack to get the performance the customer is asking. And we are doing these reference designs based on -- with our own kind of over and investment. And we take that investment because that means that we can bring to the market solutions rather than only a component. And we see now also in the AR/MR space, in the laptop space, this -- how actually important this is to come to the table with the big guys. And not to say actually with the Tier 2s and the Tier 3s because they don't have those resources. So this is a significant activity we have. Yes, the status is given below design-win 4, same; design-in same; completed PoC, up 2; ongoing PoC, down 1, and planning PoC up 2. So here, you can see the more graphical representation. That table I showed is not including AR/MR. This table is including AR/MR, as you can see from the icons. And you can see now there is 12 ongoing PoCs, my new consumer and the 16 planning PoC consumer. This is not only TLens, this is also comprising TWedge. In the report, you will find the number. But as you can see, laptop, accessory, smartphone, smartwatch are also a part of the activity. So AR. We have been challenged to illustrate a little bit use cases for our technology in AR. And we have -- we are trying for the first time to show an animation, which hopefully will be successful. It will take a couple of minutes, so bear with me. This animation shows a person sitting at the airport, having AR glasses. The first section of the movie shows him having glasses without AF, fixed focus, which is mostly what is used today or only what's used today. And why we make this animation is to demonstrate what kind of use experience you can improve by having AF. So first part of the movie is that he's sitting there with the fixed focus glasses. He want to monitor his flights to San Francisco. He's sitting there with his computer doing some work. He's looking at different things and using the intelligence engines to get answer to what he's looking at. He's looking at restaurants to pick up the menu and to order. And he's asking the glasses to follow his flights so he doesn't miss it. Well, you will see the result. After that, he do exactly the same, but having TLens AF and having TWedge for the microdisplay. So bear with me, it will take a couple of minutes. I'm a little bit excited to see whether it's going to go well or not, but let's try. [Presentation] So now it is fixed focus. He's looking at the screen, asking for San Francisco boarding. Sorry, I cannot find your flight. I can't see it. He's looking at the plant, asking the engine to help him, he couldn't do, looking at the restaurant. He has to tell what restaurant he is looking at to get up the menu. Look at the display. Also, display is very, very bad resolution in the glasses, look at that. He ordered a package. He's looking forward to, he's paying. He has to use his voice. He's waiting to pick up. Look at the image of -- in the glass. It's very blurry and not very good resolution. And he's getting hungry. And the problem is that the flight is now boarding, but he can't see it because of the bad quality and now it's departed. At least, I guess he got a good lunch, but he didn't get his flight. So here is the same. But he's using the TLens and TWedge technology. Look at the brightness of the screen, easy for the engine to look at. He can learn something about flowers easily. So look at also the screen of the glasses. It's much, much better resolution. He's looking at the restaurant, quickly detect the restaurant, go to the web page, show the menu. He order package one, and confirm payment. It's 7 minutes to pick up. And then boarding, San Francisco, he saw it, boarding. He got it on his phone and he go to the gate. The question did he bring his lunch? I don't know. So this is a use case. This is what we use -- will use towards our customers and product managers to explain use cases. And this is what is so important as a message from the company is to don't talk about the technology, talk about what the user can gain, how our customer can sell more glasses. This is the key. Difficult, but important. So as I said, AR/MR, a key focus area for poLight, but it needs to mature. I think I'm going to repeat that a few times, I'm sure. It is definitely a market which will happen. The ecosystem is -- and the key players in the ecosystem is definitely saying that this is a market we believe in. It will happen. And that gives us comfort that this is the case. The CES focus this year is a proof of that, we feel, what -- how people look at this market. As I said, consumer-oriented opportunity is growing in number and becoming increasingly mature. When it comes to TWedge, I think I'm not overstating this. I think everybody we talk to say great interest in TWedge. What's also quite interesting, all of them -- many of them have different ways and problems TWedge will solve. So it's potentially not only one thing or one product, it's a platform which can solve different things. So we are continuing to promote. You can say we are developing this technology platform on open scene. We are showing customer at a very early stage what we can do. We have technology demonstration both at CES and at SPIE, AR/MR, and it's creating a lot of enthusiasm. Like I was myself in a meeting in -- after CES in the Bay Area, and we had a meeting with one OEM. And 2 weeks after, we got that big PO for -- of 700,000-plus order. They wanted to start immediately, the evaluation. So this shows the huge interest, which is in this area. When it comes to what we do now on development side, well, we are still in a situation where, as I said, this market is under definition. There is definitely many things we can solve, but we need a lead customer or lead customers to handheld us towards final development into mass production because there are so many different specifications and needs. So it will be wrong of poLight today to kick off mass production or do the development and do the mass production because of this, I would say, different demands the market see and have, we need to be handheld by lead customers so that we can -- yes, so that we hit the market with the right product basically. But we are continuing to develop the technology platform, the TWedge technology platform. And to enable more functions to have better performance. One example, we would like to be tilting more than we do today with technical samples for wobulation to realize other application areas. So the technology platform is continuing to be developed. As I mentioned, during the -- since last quarter, there are 2 cases which disappeared. They are small cases from a volume perspective, small cases since it's enterprise. And it's been -- basically, they have gone away because of the customer decided not to go ahead with these products for, yes, their own strategic reason, nothing to do about TLens. Having said that, a very -- I would say, one other maybe more interesting case came in and has designed us into their next -- their headset for, I would say, enterprise use, quite an interesting use case. We met them also at CES. The number of planned PoCs increased significantly from 22 -- sorry, from 14 to 22. And as I said, we had that very important sample order happening out of the quarter. So for design-win, 2; design-in, 1 down; completed PoC, 21, 1 up; 2 down, ongoing PoC; and planning PoC up with, what is it, 8. And here, you can see the graphic representation where you see a strong contribution from the consumer side. Industrial, yes, maybe not so many things to say. So not to repeat myself, I would say that there is -- there are constantly coming new things in. We got an order for an existing barcode customer, I mentioned that, but also a relatively significant sample order from another customer, which is a completely different application, early stage, but when you buy a sample of TLens of 400,000, it's serious. Very interesting case, by the way. Yes, use case, health care automotive. I would say here, there's nothing new to be said. I already mentioned all of these topics during my presentation. So I think I was going to skip that to the benefit of time. And the same for automotive. Automotive is still on the radar screen, but we are not emphasizing a lot. We are preparing our technology for that market. Yes. So 28 design wins; 2 design-ins, 1 down; 116 completed PoC; 44 ongoing PoC; and 49 planning PoC across over all market segments. And here is the trend where you see planning PoC and completed PoC and PoC in one as a function of time, steady growing. Joakim, you are up.

Thank you. Hello all. So the key financials for the quarter. It's not a quarter with revenues that we are satisfied with. But what has come in has been NOK 1.2 million, of which 40% is nonrecurring engineering, so customer work. And of the remaining sales of TLens and Vuzix is around 60% industrial, mainly in barcode, as can almost be seen in the orders that Oyvind has presented. There is an EBITDA loss in the quarter of NOK 29.3 million. This is NOK 3 million lower than last year at the same -- in the same period, but against quite different revenues of NOK 5 million last year. So the difference is actually -- well, the cost is actually at a lower cost if you look overhead. And part of the EBITDA loss is also an increased provision of inventory obsolescence of just over NOK 1 million. And we have an increase in the -- that we have in the provision for legal expenses that's related to the patent claim that we talked about last quarter. Yes, we can move over to the balance sheet. So with -- still with quite a solid cash position of close to NOK 167 million, which is significantly higher than what we had going out of 2023. And the inventory is at NOK 62 million. And most of that reduction in inventory is due to a write-down of the inventory. So the positive news, I guess, is the inventory is getting sort of booked at a smaller and smaller cost. So when sold, that will increase our margins on that sale. So for cash flow analysis, we have around NOK 12 million used on operating activities during the quarter, which is not that high. I mean our cash burn, if you compare our total cash burn in the quarter of NOK 13.5 million and compare that to last year that was NOK 18 million. So it's quite reduced. And parts of that is the government grant, Scot fin that we received in the fourth quarter of 2024 and also conversion into cash of receivables, which was far better in the fourth quarter of '24 than in '23. We've also made some investments, most notably in the lab, where we bought some technical equipment. And we also -- in conjunction with our move to Tonsberg, our new headquarter, we had some necessary IT equipment that we needed upgrading. So we hope -- we have some of you will come and visit us. Yes, I think that will cover it, and we'll move back to Oyvind.

Yes. Thank you, Joakim. Okay. One slide left. Outlook. I think, yes, things have taken time, and we are still in the early stage of commercialization of the company and the product. And as Joakim said, we are definitely not happy with the revenue level we achieved in the quarter. But I think it's more important to try to communicate to you that there is a lot of important positive things happening in the company. And I think that when we also participate in these kind of shows, where we meet so many people and different players in the different segments, it gives a lot of energy back to the organization. It's confirmation that, guys, you are definitely on to something. And not only in one -- with one product, with a platform which can realize different products, not only in one market segment, but in market segments, which has an impressive, I would say, outlook. There are market segments which we also are relevant, which we don't even scratch at least only on the surface. So I think that in addition to that, we have -- as a platform for communication with the customer, we have reference designs. We have key design wins, which is helping us to be trusted. When it comes to our organization, I'm actually very proud what we have developed. When it comes to our partners and the quality and the relationship to our partners is of high quality, long commitment. And what we then are achieving and is when we get visitors to kind of make a due diligence of the company and our capability, we always get thumbs up, always get thumbs up. And we are talking about big players coming in doing due diligence [indiscernible]. So I think what we need to do is to continue to work hard, be persistent, be strong believers, constantly be customer and market oriented. And I think sooner or later, we will be rewarded. The shareholders will be rewarded. And this is what we go to bed every night and say, amen. Thank you. Okay. Then we have Q&A. Joakim, do you want to join me.

Yes, I will. Right. We'll just get straight at it.

Yes, please.

2025 is projected to be a defining year on a path towards significant growth in the AR glasses market. How does poLight's strategic road map align with this projection? And what are the critical factors that would determine whether 2025 marks a turning point for poLight's commercial performance in this sector?

Yes. Good question. I think when it comes to our road map, I think that is a very good fit to the current -- what's happening in the AR/MR market. I think we feel that we are, for the application we are addressing, resolution enhancement, auto focus or change of focus, the products we have, we feel that is basically on -- high on that list of customers. You will see that many of the glasses coming out today and tomorrow will use conventional technology, very often meaning fixed focus, very often meaning resolution, which is not performing this way, which is not performing very well. But we also know the plan of the customers. And of course, why are people buying these expensive eval kits and TLenses for evaluation if they don't have a plan to implement it and improve the products. I think that was a long answer to say we definitely feel that we are aligned.

Yes. So what are the key technical challenges in developing a combined autofocus and OIS solution using poLight's tunable optics technology? How is poLight addressing these challenges? And how might they impact the time line for commercial availability?

Yes. This is also an interesting question and OIS may become important in applications. High-speed focus will potentially limit the need, you can say. But yes, we could potentially have -- foresee that our technology platform could both do AF and OIS in one product. We have talked about it, I think, in the Capital Market Day presentation. And that is something which is possible. Of course, there's a lot of integration aspects and synchronization aspects that needs to be done, and we haven't started that combined program as of yet. But I would like to mention that a first step could be that we do 2 separate products before you combine into one product. And if you look at the TWedge platform, that is basically a beam steering platform. That could be wobulation, but it could also, over time, do OIS. And then the next phase could be a combined product.

Next question. poLight holds patents for adjustable focused spectacle lenses. What is the current status of this technology? And what is the outlook for its integration into commercial eyewear?

Yes. This is something which we know and then get asked. So we did some, I would say, paper studies. And actually, we built some quick and dirty prototypes, which is typically our technology but fitted into big glasses. And we prove it works. Then, of course, it will be challenged to find actuator, which can do this good enough because we're talking about relatively big stuff and you need a quite big force. But there are ways potentially in the future. And we felt that this was something we would like to protect. And that's why we did the patent, but we haven't started any concrete product development. So it's too early to say.

Do AI-powered humanoid robots, camera-equipped earbuds and other wearable AI devices represent potential target markets for poLight?

I think any wearable with camera is a potential application for TLens. And not only that. And it's again, it's the sweet spot of poLight's technology, compact, speed and low power consumption, no gravity impact. Those characteristics are so important for everything about wearable.

If TWedge reaches mass production, can we say any plans regarding pricing?

Yes. We -- of course, we have some ideas. We are kind of -- as we talk to the market, we are developing a business plan. And before we start a product development program, I need to go to Grethe, my Board Chair and ask for permission to do so. And then I need the business plan. And then I need pricing, I need cost. I think it will be more expensive than TLens.

How do you envision the margins per sold TWedge compared to TLens considering that there seems to be little competing technology for TWedge?

It's a difficult one. We know too little about the cost today. One of the driver for cost is the bulk piezo. And what we are asking is quite special piezo and they are not -- we are kind of the only customer, and they have never been produced in any volume. So we need to develop that supply chain, to be honest. So it's a question mark on the cost. There are other ways of doing that actuation still with piezo but other methodlogies. So early to say. But I would say all consumer type products will be hammered heavily on costs. These are professional buyers, and they are even though you can say, yes, it seems like we are definitely the solution as we see it today. But the sourcing guy, he will say to me, but I can live without. So they don't compare us necessary alternative technology, but they compare us to not doing it. So -- but yes, we -- of course, we should use the fact that we are the preferred and we are the best, yes. And hopefully, that will improve margin. But I can't be more specific than that.

Okay. So here's one also that can be difficult to determine. As you see it today, will the first AR consumer design win be with TLens for an autofocus camera or TLens as part of a display solution?

Yes. It's -- I will be speculating. But I think what I can say, we are involved in much more TLens activity related to camera, many, many more cases than LBS. I think I would like to answer it that way.

Have you been showing a demo of larger TLens to customers yet? And if so, how is the feedback?

No, not a physical demo. Of course, we have been discussing spec and simulations and how it can work. So -- and we did hope to have working prototypes we could show to customer. We were not happy with the performance. So we didn't, but we did show simulations. We are still kind of working on getting prototyping built in a good way. So that is the status. The dialogue is based on paperwork so far.

Is it possible to combine a projector with both TLens and TWedge wobulator? And if so, could you tell us how the synergy could work?

I'm not sure, but if the intention with this question is, can TLens and TWedge be needed in a projector solution? Potentially, yes, but we haven't seen it yet.

Another question about TWedge. Your TWedge solution is driven by piezo and is, therefore, a very power-efficient solution. Is this the reason why the solution does not give a high-frequency sound? Or is it due to less moving mechanical parts?

This is quite important question/comment because if you're going to wear these glasses with some resolution enhancement type equipment like TWedge, you're going to wear them here. And it's extremely sensitive towards noise, auditable noise. So you have to use a technology which is very silent, which the user will not be annoyed by some sounds transferring into your brain. And this is where actually TWedge is quite unique. And I think one of -- there probably could be several reasons for this. You are correct, piezo makes us also fast and low power consumption that you're absolutely right. But maybe the size, the compactness of the solution is an important reason why we are so quiet and not noisy at all compared to other technology used in projectors as an example, which is very noisy.

So there have recently been 2 orders for TWedge PoCs from top consumer OEMs. Is this the same OEM?

No.

Short answer there. Did you get any feedback regarding interest from OEMs around the LBS design-in?

In a way, it's not us getting that feedback. It's our customer getting that feedback. I know the customer was at CES, our customer. I know the customer has been on a road show. But we haven't heard any, I would say, significant changes of how they perceive the opportunities. They are still promoting and they're still pushing, but they haven't gone into any mass production because they're still seeking for the lead customer. So the status is basically the same as last quarter.

So a question regarding wafers. Is it so that you notice a difference between TLenses on the wafers? And if so, how do you tackle this?

Okay. So there will -- from -- in the early days of manufacturing wafers with all the processes that takes, there will be wafer-to-wafer variation, meaning the characteristic of one wafer can be a little bit different from the next wafer, from batch to batch. Of course, as the CPK, which is a measurement of how stable and repeatable a process is, as that increase, that will improve by volume and by training and that then this variation will be less and less. So you're right. So if you take one wafer and you produce TLenses, there could be different performance for that TLens depending on wafer and depending on where on the wafer. So we handle that by, I would say, 2 things: defining a spec of the TLens, specification of TLens, say, on optical power, which means that all will be within that limit, even there are variation. And also, if there is a situation that a customer want to have a particular spec for that particular TLens, we can do sorting and binning, meaning that we are testing every TLens and we know the performance of every TLens so that we get, okay, you want TLenses with this performance, you go there, you go there, you go there. So you do sorting.

Any progress in simplifying integration on add-in design? You are working on a new way of mounting it?

I think the main -- there's nothing new on that one. We have an add-in design. We have different add-in designs. We have small packages. We did the program PoC with one camera module guy, which is towards a concrete OEM. And we have continued -- but when we do this reference design, we are using that kind of design knowledge about how we can integrate TLens. So -- but there's no new, I would say, design harder activity. It's more on the reference design we have been emphasizing now.

So another point returning to the bulk piezo on TWedge that we talked about earlier. It seems to have a lower lead time than the one you used in TLens. How is the pricing in comparison to this device versus the TLens piezo?

Today, it's higher. Those bulk piezo is quite expensive, but it's sampling and also it's purpose made for us. So it's too early to say how this will look like in the mass production. But on a sampling level, it's definitely quite expensive. But we also sell expensive.

Can you give a comment about scalability of TWedge if it hits commercial launch, given that you are working with Texas Instruments that is very capable in this field?

Yes, without referring to Texas, but I mean, the scalability of TWedge is very good. Compared to TLens, it will be -- as it is today, it will not be a MEMS-based piezo. It will be bulk piezo as we see it today, can change, meaning that the long lead item on wafer is less of an issue. And -- but there will be more assembly steps. So it will be more extensive assembly steps. But scalability wouldn't really be a problem. It's only we need to plan properly.

So one more question about TWedge. Can you say anything about partners in the value chain?

Today, we are heavily focusing on the OEM to let them know and understand what TWedge can do for them. And that is where we get different answers from the market. And the way we see it is that we are -- when it comes to partners, we are actively working with many partners to demonstrate TWedge performance in a system solution. You have seen some of the press releases we have done and what we showed at CES and SPIE is that we are planning and also we do more, we are planning to do demos with partners where they -- where we demo the system solution and not only the TWedge as such. When it comes to -- and this is in the promoting phase, having powerful demos is super important. I hear our partners are extremely important. What I see in the -- and of course, those partners are potential future customers. But I think also it's important to say the customer who in the end decides is those OEMs, Tier 1, Tier 2 who buy samples directly from us and do an evaluation. Those are the guys who decides. And the partners we do demonstration and prototyping with, could be potentially integrators towards the same OEMs.

Okay. So then we have some more questions that come in the latest hour. Does it look like you will need a share issue in 2025? Should I answer that?

You can answer that, yes.

So share issue or any capital infusion will be a product of a discussion with the Board and conclusion by the Board, who will continuously assess, do we have sufficient funds. And when the Board reaches a conclusion that we will go out and fund the company further, we will then communicate a need for a share issue. I think there are many factors that can influence that need. So it's a bit premature to be talking about that at the moment. Next question. Can you say something regarding Tampere and what and how many projects you're involved in there? We have an office in Tampere.

We have an office in Tampere and [ Stina ] knows that. Our main activity at the moment in Tampere is, I would say, technology development. So -- but of course, there are potential customers in Tampere also, which we on and off have a project with, but I can't be more specific than that.

While the report mentions some setbacks in the enterprise AR/MR market, it also highlights a significant increase in consumer and potential high-volume AR/MR projects. What is driving this increased interest? Can you elaborate on this trend and discuss the potential for poLight's technology in this growing market, including a time line for when we might see these consumer-focused products come to fruition?

I think the animation we showed is a good example. There are early entrants of early products and people clearly feel that they need a better solution for the camera. At the same time, you see more and more players, as I mentioned, coming into this market segment, meaning that there is an increased activity. So I think also -- during my presentation, I think we highlighted why this is super interesting at the moment.

The report also indicates that some consumer-related PoCs are progressing well with discussions about real product possibilities. Can you provide examples of these PoCs and discuss their potential time lines for commercialization?

I have to be very careful here, but there could be a sign of something in the late this year. But that can quickly become next year because this is something which is completely out of our control. But I would expect that in '26 and '27 onwards will be the year where you will see several activities in that space. But if we are lucky or if the customer wants, there can be some sign of activity in the end of this year also.

All these questions come from reading the report, which was released the 7th. So it's quite impressive quality of the questions. The report highlights poLight's investment in new camera reference designs for various consumer applications. Can you explain how these reference designs can accelerate the adoption of TLens and give examples of specific consumer products they are targeting?

Yes. So I think I answered that at least partly, but let me quickly try to reiterate. So we are addressing many different customers, the high-end Tier 1, Tier 2, Tier 3. And some organizations, they are themselves equipped to do a lot of things from scratch. Taking TLens as a component, do the design, do the prototyping and go all the way to [ MP ] together with us. Some is capable of doing that. But TLens is a special and a sensitive lady. So -- and the competence we have in TLens, and we have seen it several times when we are in the design phase, when we are fronting it, when we are advising, things end up better. So that's why we took the decision to build an organization which is capable of making these reference designs so that we are not only coming here as a component customer, you figure out how to do it. We are coming with a solution proposal. And by the way, we have already some activity with the camera module guy to be able to give you samples of the camera module. Then you're talking you're talking about solution. And this is an example. We do this for AR/MR. We do this also actually for industrial application. We do this for type selfie cameras. We do this for webcams. We will do this for laptop. So we do it for many different segments.

Okay. So we have one entry here. There's several questions in one, but I'll divide them up. What does the strategic decision from the AR/MR customers more exactly mean? I think this is a reference to the case -- the strategic decision to close.

Yes. It can be -- I have one example in mind. I will use that as an example. So one customer is having a road map with several products. He launching the first product and he is extremely busy by supporting that product. I know I'm talking about the real case, which I can't name the name. And he's extremely busy supporting customer, getting more customer than -- advanced customer than he planned. And then he said that version of that program, which was meant to go live, I need to cancel. I need to concentrate on making sure that my customer is supported on the existing release. So I need to wait next product 2 years or whatever. This is kind of judgment they continue to do, completely out of our control. As an example.

And then regarding one of our more explorative segments regarding automotive, why is a new revision of TLens required? What does it more specifically mean? And why would it take so long to develop? Have any development activities started?

So good question. Automotive, most of the dialogue we have had in automotive shows that the TLens we have today is too small. And you may have heard us talking about a bigger TLens, which we have a program ongoing. And that is kind of that kind of TLens, which need to be developed in -- to go into those markets, we believe. Why is that so difficult? Well, TLens like to go small. That is by design. It really likes to go small. Going bigger, meaning there's something bigger we have to bend and becoming more difficult to bend, need more power to get the right optical power, need new actuator technology. And these are fundamental research, which we are doing at the moment in -- under the context of bigger TLens for different application, e.g., automotive.

So this we have answered. There have been significant inventory for some time now. Is there a risk of it getting too old and obsolete?

I think we -- I would say that we have a way of handling that inventory, which is if you're more than 1 year, if you're more than 2 years, more than 3 years, you write down and as Joakim explained before. And then we do concrete judgment on certain inventory. Is it good or is it not good? So we -- each quarter, we take that evaluation. And I would say we -- today, we feel that we are on the conservative side. But of course, if we never ramp, we have too much inventory, of course.

And I guess you can have a different aspect to that. Is there a technical where when they store it for a long time, does their performance go down? That's the question to that is no. So how about competing technologies? Is there any new or anyone progressing significantly?

Nothing really new on the competing side. I think the most -- the biggest competition is conventional VCMs or not using AF at all. When it comes to TWedge, I would say today, we see the competition is not doing anything, live with the resolution you have and be happy because we don't see any other solution today. Of course, the world doesn't stand still. But today, that's the situation.

Then a question inspired by some of our POs, and its POs. It seems that TWedge is potentially better positioned than TLens to drive poLight's near-term revenue growth. What factors support this assessment? And does this impact your strategy and focus for the coming quarters?

I wouldn't say so. I wouldn't say so. I would say that TLens is in mass production. And what we need for TLens is an OEM saying, yes, I would like to have that TLens in my consumer product being this or that. So I think there are a shorter way to success for TLens and TWedge. But TWedge definitely shows a lot of promising outlook, no doubt about it. But we're going to make sure that TLens and TWedge will be 2 very successful products. At the moment, the interest in TWedge is phenomenal, but it's not a product yet. We need to keep that in mind.

So the outlook sections in the more recent reports seem notably more optimistic than those in the earlier reports. Are things looking better now compared to previous quarters? And what factors are contributing to this more positive outlook?

Okay. So you read that more positive than before. I would say that I feel it is positive. I mean there's no doubt that the outlook is promising. We have said that many, many quarters, but then we use different wordings, maybe. Maybe it's your fault to you -- so -- but I feel that there is -- step by step, we are getting more confident. Maybe that's the right word to say. But I would say, fundamentally, if you go through the reports, which I know you have done, I think we have been quite optimistic about future for quite some time.

Okay. So here's a question where you can go mad there, Oyvind. What key factors give you confidence in poLight's path to commercial success?

I think here, there are extremely many answers and long answers. But I would like to refer to our feedback after CES and SPIE. And if we look at that interest and if we look at those quality meetings, we are not talking about small names. We're talking about big names. And look at the interest, a PO 2 weeks after for 700,000 for TWedge evaluation. We know what big players are also planning with TLens. So I think it's just we have to execute. And of course, the customer needs to decide. But when they decide, we will be ready.

Are there -- it is a very concrete question. Are there many customers working on products similar to the Ray-Ban metal glasses that are interested in your product?

Yes. I think there are several glasses coming out, and I think they're all -- I think many of them will start with a fixed focus. I think that's the way to go quick, easy. But I think sooner or later, due to my animation today, they will come and say we need AF.

Absolutely. Why aren't there more car producers in PoC? One would think that the benefit of using TLens for cameras monitoring the road would be great since it is not that affected by the temperature.

The reason for that is that I think that market is not ready yet. We said when we started talking about automotive, we talked about 5 years perspective. Remember that. And also our TLens is not ready. Of course it's not big enough.

There's a question about TWedge will solve potential customer problems, if there are examples, but you have given some.

Yes, I'll give them some. I think we need to maybe one more question. How many left is there -- how many?

There are quite a few left.

I think we need to take one more and then we need to take rest offline.

We've answered that quite -- you can do that one. I think we can do that quickly if you look at this one because this is a question about the share issue, how close we are to another share issue, which we've answered, but the question also is, are loans off the table still? And I mean, any financing instrument will never be completely off the table, but it would be -- need to be a highly specialized loan scheme as banks typically depend on future cash flow for their repayment capability. And with -- I mean, in our own projections, we have sufficient cash flow, but the bank also needs to trust that and believe in that and have that passed through their credit committees. So a regular bank loan is probably not on the table yet. And then you have hybrid loan instruments, which can affect equity in the long term if repayments become delayed. So loan is associated with quite high risk. If there's anything, it should be probably a government subsidized loan or an EU subsidized loan. That might be interesting, but that's the only thing that could be at this point. Is it a challenge that poLight is a small company that will probably serve the largest companies in the world? Is it an issue to bring in a partner that provides greater security for customers?

Yes, I think it's a good question, comment. Of course, bigger companies, they will do carefully due diligence on the sustainability of poLight so they don't take a decision and then suddenly poLight has an issue. So that is clearly a challenge. And that's why building the organization, being strongly financed, having shown that we can do mass production. We have an assembly partner for 14 years now. Potentially, over time, you need to have a dual source. So it is challenging, but we are -- I would say we are addressing those challenges as we go. Okay. I think to the benefit of those who have other things to do, I would like to thank you, everybody, for, again, a very dynamic and interesting presentation and Q&A session, mostly, I would say. Next time, we will have the Q1 report, end of April. Hope to see you then. Thanks for you in the audience. Thanks for you following us from the webcast, and thanks to Joakim and to Grethe.

And to you.

Bye for now.