Polight ASA
OSE:PLT
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
2.62
8.48
|
| Price Target |
|
We'll email you a reminder when the closing price reaches NOK.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
This alert will be permanently deleted.
Good morning, everybody, and welcome to poLight's fourth quarter presentation. Together with me today is, as usual, Alf Henning Bekkevik, CFO. He will talk us through the financial review and support me on the Q&A session. My name is Oyvind Isaksen, I'm the CEO in poLight.As normal agenda, key events, a quick introduction to poLight for those who are new, update on the market side. Alf Henning on through the financial review and then outlook statement and hopefully, a massive Q&A session.The quarter gave us a design win for the first augmented reality case, extremely strategic important for the company. We also got a design win in the barcode area, specifically related to manufacturing line application, which is kind of different from the kind of EX30, a long-range scan engine application. We finally had a breakthrough and won the VAT case, which implies a NOK 12 million cash effect in January, so that will not be shown as cash this quarter. We also did a subsequent share issue and that raised NOK 12.8 million. Opportunity pipeline is definitely improving. And post quarter, we also got a follow order related to the scan engine EX30. EX30 is quite a unique product, which means a lot for Honeywell.Quickly then, poLight, a global player in tunable optics. Tunable optics has definitely been more and more talked about in different industries. As we all know, poLight's focus is mobile, industrial, specifically related to barcode and augment reality, but there are other cases like the webcams, like medical, which step-by-step will grow. It's been a long journey, started in 2005. And since then, we have developed a unique competence in optical -- tunable optics, MEMS, polymers and image application. Strong IP, we have 16 worldwide patent families, 10 pending -- we spend a lot of time and money on protecting our IP. We are growing as an organization and coming back to that, we are today around 34, including what we call long-term consultants. Headquarter in Horten, outside Oslo. Offices in Finland, China, and representation in France, U.K., U.S., Taiwan, Russia, Korea and Japan. Small organization distributed but extremely efficient. In short, the uniqueness of poLight's technology is extremely fast speed, very compact solutions, constant field of view, [ no pumping ] and also for many applications, importantly, very, very low power consumption.So we are already -- if you only go 1 and 1.5 years back, we have already achieved a lot. We have now different customers and customer wins, the smartwatch, the webcam, also smartwatch from Xiaomi, the Honeywell EX30, 2 other barcode-related projects for [ assembly line ] and direct marking and also finally, augment reality of reference. This platform will step by step be more solid. We're going to penetrate different verticals. We're going to expand in different verticals. Having this as a situation as of today means a lot compared to when we were out in the market with blank sheets. Now, we have references, we know we can deliver, customer trust -- trust customer can buy products and test it. It's really, really a different platform we are starting when we are selling to new customers, having these references.Yes, we talked about it already, definitely, smartphone is a key focus area for the company. [indiscernible], today's biggest volume market for sure. Therefore, it is important for poLight to have a breakthrough there, and that will happen. Barcode is also a very interesting high-value segment we are focusing on and augment reality. Those 3 market segments are kind of a focus every day in the company. And then there are other opportunities which kind of come along, which we continuously evaluate to explore on that. And 2 of those at the moment, I would say is medical and webcam accessories type products.Okay. Let's go through the market review. Let's start with smartphone. I know that many of you are extremely interested about what is happening there. And what I can start to say is that it's happening a lot. We have an organization which is in, I would say, peak load. Try to penetrate this market. We are already engaged in many cases. This add-in TLens design where TLens' inside the lens stack, as I mentioned before, really generated a lot of opportunity and interest. And we do feel that this solution is definitely an extremely important feature or what should I say, design, which should enable us to enter this market. We primarily now are focusing on the selfie camera, because that is what we say a sweet spot for our technology. It's not easy to make a good solution with minimizing screen size penalty with other technologies. So that's definitely the focus. But we also think that, that will evolve using TLens in the back-cam structure. Back camera structure today is not one camera. It's typically multiple cameras, and we do see definitely opportunities for TLens to be a part of that structure also.Several PoCs, I would say, a good progress. Customer is showing a strong willingness and not only willingness, also heavily investing both money and time to qualify the use of TLens. They are extremely thorough coming with new technology into the smartphone market is difficult. They are tested -- their test regime is very tough and they are kind of profiling typical themselves that kind of the robustness and the quality of the phone is kind of top class. And that's why all the components going into this type of application will be very totally tested. And that is specifically with new technology and also camera being so important function that this is really, really a tough battle. But I would say, even though there are battles to be overcome, we feel that we are progressing every day. But also every week, there's a new problem we have to address, most of that, we are able to solve and hopefully, that also will be the situation going forward. And number-wise, there are 5 ongoing PoCs. I would say that 3 design wins candidate for the kind of next 12 months and our 5 planning PoCs. Extremely important area, majority of the company resources is being used in this segment, and it's definitely an important area for us when it comes to addressing volumes. And that's why I'm happy to say that progress are significant during the quarter, but still things to be done.AR, AR first assignment announced during the quarter and more opportunities to come. The product, which we are now confirmed to be in, and we also got the first small mass production PO is planned to be launched in 2022. We cannot say more or be more specific, and we cannot also mention the name of the company. But what I can say is that it is one of the players, which people will typically know about. And we hopefully are able to be exposed which one when times are getting closer and definitely after market release.The key for us -- and the key for the AR customers is [ simultaneous ] with TLens. Low power consumption. You can think about -- if you think about future where very compact glass is going to be used and the space for battery is definitely limited. So power consumption is one of the key parameter our customers are highlighting as a benefit of TLens. But also the gravity -- the -- being not sensitive to gravity is also important. We are wearing glasses, and you're moving your ahead and having no gravity sensitive is also super important. Then we have the normal attributes like the speed and the compactness of course, which is highlighted also as key benefits. We do feel that -- when it comes to the AR space, poLight is at an early stage, a player which everybody knows about. So we are in the beginning, and we are part of the beginning of this kind of, call it, reference design and next-generation AI glasses. It's a fantastic opportunity for the company. Definitely, in the beginning, it will be low volumes because it's more the professional use cases, like the health care, like the logistics, like education, like manufacturing, but step by step, as form factor cost is going down, it will be a consumer product. So yes, it is important today to go into the smartphone area, but it is extremely important to take a position in the AR space to secure tomorrow's volume markets.The -- if you look at the number side of it, on the bottom of the slide, there is one design win already announced. There are 2 design-ins, meaning there is a project which has started with product development having TLens as planned to be used. That's design-in. Design win is when that customer confirms we are in a product to be launched to market. So 2 design-ins and actually [ I heard ] from the press, recently, some hours ago, we actually also got another confirmation of design-in of another [ ARK ]. So actually, today, as we speak, there are actually 3 design-ins. So -- and then there are many, many ongoing PoCs with well-known names, Tier 1 and 4 more planning. So quite an impressive pipeline is building up on -- in the AR space. Of these PoCs, of these activities we are doing, there are actually 4 which are related to consumer products. And those will typically not be released this year, maybe even not next year, but maybe '24 and '25. That's when people believe there is a market for consumer glasses.Again, there are 2 use cases for TLens in the AR space. It is being a part of the world-facing camera and it's being a part of the laser display. Those are the 2 use cases. And also, when it comes to the world-facing cameras, it could be 1 TLens, it could be 2 TLens' and of course, laser the space can be on both classes and then there will be 2 TLens'. So it's one glass, it's not necessarily only one TLens. So in addition to be a per-unit high volume market in the future, it's also a significant potential for that there will be more than 1 TLens per unit. Super, super important long-term, but for the next coming years, it will be more a strategic positioning game with relatively low volume, but very important to secure future consumer business.Okay. Barcodes. Yes, we got another design win in Barcode. We are starting to get quite known in this space now, which has been dominated by other technologies. So if you look at the EX30 from Honeywell on the right side of the slide, that scan engine is quite a unique scan engine, long range and strategic important for Honeywell to get new accounts and for keeping accounts. Below that, you see different OEMs who have been starting to implement this scan engine. We just bought one of the Urovo RT40, which we use for demonstration. It's really impressive performance of that scan engine from close to far distance up to 20 meters. So a really, really impressive scan engine. No doubt that, that scan engine and poLight being insight and scan engine has raised a lot of interest, and we are involved in several activities.We have 3 design wins already. We have 2 design-ins. There are 6 PoCs. Of those 6, 2 are Barcode, there are also other activities. And when I say others, it could be like say a sensor for industrial use, that could be typically laser-based sensor system and our 9 planning PoC, which 4 are our Barcode. So again, this is typically not -- if you look at the EX30, accumulated today is around NOK 5 million order intake. There's a good feedback from the customer. And -- but it's not a higher number as such, but it's a high value. Typically, you have multiple higher prices in this market than we have in typically a consumer market. And also, as I mentioned before, interesting because also a product can last for say 5 years, whereas a smartphone case is like, say, you have finalized your supply within 6 to 9 months. So it's -- you can say it will -- as we build this market, it will be a fundamental -- a very healthy fundament of the company. You can say -- you can then maybe look at that as a little like a recurring business, which is making the fundament. So low volume, important even [ now ].Healthcare, here, what could we say, not a focus area of the company, I would say, because those we have mentioned, smartphone, smartphone, smartphone, AR, industrial. Either way that's the focus. But then we do see that there are clearly other areas where we are fitting well and when are those -- what are those areas are related to healthcare. And we do see some interest in this, what we call compact surgical equipment. We have already won a design-in. If you look at the bottom, which is a surgical device. And we are in dialogue with others for similar applications. We also see that there is an increasing interest in what you say, disposable units due to the cost of cleaning and risk of infection, there is a trend that kind of things going into your body is onetime use, which beats that every time they use it, they need another TLens. So I think it will take time to build this business. The case like we are already in, is hopefully being launched to market in 2022, but it's long processes, a lot of approval processes you have to go through. But as we go, it could potentially be equally as important as what we call the industry, even more like the industrial market, because here also, giving disposable trend could actually be a significant higher volume than the typical barcode cases.Then our classified a design win. We haven't made a big splash about it, but in a way, when we see the way Kavli Institute is using our technology, they have these stacked TLenses where they're using for their research purposes. So they are basically buying now on a regular basis TLenses for making new instrument for new tests and for new research. So basics is in, call it, commercial [ sat ] research use. That's why I think it's fair to classify it as a design win. We relatively recently got a new purchase order from them. But also, this Kavli, which is a very famous team -- very famous team has definitely increased the interest for our TLens. And I think already now, we have more than say NOK 1.5 million to NOK 2 million kind of POs for this market, and we're talking only a handful of TLenses. So high value is not in a way for the money, if you look at the university research, that will, in a way, not be for the money. For us, it's more like a brand building in that space and also for contributing to important research, which we all have a responsibility to do if we can. That brand building, though, we think will have some visibility. We'll show TLens, we'll show poLight where -- which could mean that more of the commercial application, like endoscopes will be aware of TLens and start to implement it into their future next-generation equipment.Okay. So this is the table we have been using for some time now. So you can see we have totally 8 design wins. I suppose compared to 5 last quarter, we spoke, projects, meaning that, that is what we call design-ins. 5, which is down 2, which is because somebody has moved to design wins. We have completed PoCs 44 compared to 39. Ongoing PoCs, 27 compared to 21, planning PoC, 29 compared to 18. I think this says it all. There's no doubt that this technology, this company has a lot of traction in different segments, and this table is kind of showing you that and showing the trend.Okay, Alf Henning, financial review. Will you please join me?
Sure. Thank you, and good morning to you. Deliveries of TLenses and ASICs to commercial use and customer development projects gave NOK 3.9 million in revenue, compared with NOK 1.2 million the same quarter in 2020. EBITDA loss of NOK 5.7 million in the quarter, compared with NOK 10 million in loss in the same quarter in 2020. The decrease in losses are mainly explained by the fact that we won the VAT appeal case that gave NOK 12 million in reduced expenses in the quarter, offset by an increase in accrued social security related to the share option plan because of the increase in the share price of poLight.On the balance sheet, the cash position at the end of the year was NOK 158 million compared with NOK 77 million in 2020. A subsequent share issue gave approximately NOK 13 million in the quarter. On the cash flow. We started the quarter with NOK 164 million in '20. Explaining that, in 2020, we received NOK 8.2 million in VAT receivables as a result of being reregistered in the VAT register. We used NOK 1.2 million in investing activities in the period. We received NOK 11.6 million in financing activities due to the subsequent share issue and ended up with NOK 158 million in cash deposits at the end of the year 2021.
Okay. Outlook statement. Yes. Summary in the quarter, 2 design wins, overall good progress in all market segments. The opportunity pipeline is developing nicely, with developments in the AR space being maybe particular of high interest long term. Smartphone customer and we are putting a lot of efforts into maturing cases and qualifying TLens for commercial use. It is a demanding process. We always said it, and that's also why we have used so many years to get where we are today. But there are encouraging progress during the quarter. Having said that, hurdles to be overcome. It's like this, when you are getting close to a real launch of something, there are -- even the test regime and the people who are involved in testing and qualifying a new technology is increasing.Starting with kind of an R&D group looking at advanced technology, step-by-step doing different PoCs and then getting a traction by product management and management being a part of, in a way, a project plan. And then it starts to escalate the number of resources they are using, what they want to go through of testing. And during that process, they will always pop up things. So we shouldn't be surprised at that. So far, we have been managing that, but there are still, I'm sure, homes we need to overcome. And then it's all about having a technology and organization who is capable of handling that, and that's what we are planning with.Also making our supply chain ready for different applications is demanding, especially in these days where yes, capacity and component is restricted. We are luckily been able due to our financial situation to take commitments a long time ago, which put us in a position to be able from a material perspective to deliver. Organization is being strengthened due to basically foreseen activity increase, also being able to address all the kind of challenges we have and we will have going forward in a good way with competent personal, experienced personal being in the right place in the world. So the organization needs to be step-by-step built. I have to say I'm impressed to see how we are able to attract highly skilled experienced people into poLight and then that in itself, it's proof of [ concept ].Tunable optics is getting more and more attention. poLight is definitely one of the key players. There are others. And we are definitely a part of -- a big part of an important technology space. Focus will be important now. We actually more now than before, need to consider seriously to address or not address certain opportunities. So it's all about making sure that we're getting success in smartphone, take, claim the space in AR and step-by-step build back. Thanks a lot.Alf Henning, will you join me for Q&A. And if time allows, we will try to answer all questions. If not, make sure that you leave your contact details, so we can come back to you with answers offline.
Okay. First question. Regarding new people joining the company, how do you get hold of these people with such a good track record?
Yes. I just mentioned it. I think one -- normally, it is basically cherry-picking. And it's very often people we know. And people we have been exposed to during the process of communicating poLight and TLens technology. And I think it's basically the -- many people see that this is an interesting opportunity because it's new technology, it has the future, it has many different verticals. Somebody has -- maybe always been working only on the mobile space, and they want to also be exposed to a company who are doing different things. So I think, we are basically an interesting company to be with. And then I think we have built an extremely dedicated and passionated team, which if -- you can feel when you come inside that this is the place to be old, but still run fast.
Can you say something about interest for applying to recent positions in poLight?
That -- we have -- we are normally posting the positions, but those are -- I would say the success we have is when we go in and pick and address kind of people we know who could be interested. We just had, as an example, an open position on IT. We want to have a young dynamic lady or guy to be with us to make new fantastic manufacturing data system. And that has been super difficult to find, strength enough. We have tried a lot months. So if any of you know some young and promising IT people, contact us, and we will give the most exciting job in Norway.
Regarding AR glasses, are the PoCs with add-in design.
Yes, actually, I just mentioned now that hot out of press a few hours ago, we got the confirmation of a design-in, in AR space, and that is actually a case where they will be adding and not only that, but it actually will be 2 key TLenses progress.
PoLight...
And I think future, also due to the compactness which is an added design when it comes to the nose will give you, I think add-in design is of high relevance for the future AR.
PoLight seems to get traction in many segments. Has there been contact with new players in different markets now after getting references in more verticals?
As I said in the beginning, having a reference platform, which is steadily increasing, is maybe the most important sales tools we have. So yes.
You have been mentioning sensors as possible field of interest. Can you go further in detail on use case here?
These cases are developing very slow, and we are kept at arm length distance minimum. So -- but what I can say is typically laser-based systems. That's what I can say.
Why has it taken so long time to get design win within smartphone?
I understand that question. If you -- this is a long story. And how can I do it short. We came out with a product in, say, '14, '15 around that. And then we did the testing and qualification internally. We came out to the customer with great confidence. The test regime way we're exposed to especially in the smartphone world was tougher and different from what we were -- have been learning before. We feel we have to go back, upgrade the product, do a new qualification round, came back out in the market a year or 2 after successfully passed the testing and then what happened. Then we focused on the selfie screen, selfie sorry, camera, what happened. Well, suddenly, the screen was more important. It should be as big as possible, as small hole as possible. So a nice high-performance camera in the selfie was on the second priority compared to a bigger screen. So we had to go back again and say, how could we make the hole smaller in the selfie camera? And then we came up with this add-in concept, which needed an ecosystem to move. We couldn't do that alone. And then after a year or 2, somebody grabbed that idea, and made this added design and now we are where we are. It's been a tremendously long journey, but now we are there.
You said in the third quarter report that in medical case, you are doing more than just delivering the TLens. Can you say more about this?
It's typically that if you take the Kavli as an example, what we do in that kind of -- that type of application is that we -- they are going to make a scope -- a microscope, but the optical power they need is typically much higher than a single TLens can do. So for those kind of research institutes, we are taking their kind of microscope picture, and we are packaging a number of TLenses into that, tested, qualified, we do different coatings to be sensitive for different frequencies and then we ship. So we deliver more like a system. Also, when it comes to designing we have in the surgical equipment, we don't use many TLenses, but we typically also integrate the TLens into the tip of the instrument, because we have the competence to do that. It's optical, it's a sensitive device and to make that right with the right tolerances, it takes the qualification we have and many of these kind of equipment providers that don't like to do it. So then we integrate more. We deliver more like a system than only a component.
[ More so ] and the Kavli Institute's TLens in microscope has now in February presented a breakthrough in brain research. How will poLight describe the importance of TLens being central to more and more scientific discoveries. And do this mean that even more medical customers will make contact in other areas?
I think I answered that during my presentation I hope. When it comes to that particular references, I'm not so sure they're using the same instrument we are in, to be honest, maybe it's a different one. But it's brand building. It's creating visibility of TLens and poLight and we have seen many, many other universities, which we are now preparing to supply to similar things. So it is brand building and reference and hopefully, visibility into the more commercial side.
PoLight is currently working on a lens with a larger aperture, the so-called MOU project. Can you say something about which players you work with here? For instance, is it mainly a camera model supplier or a smartphone customer who will -- who has taken the initiative for the processor.
First of all, we have delivered that project according to our scope. So in our books that is closed and the revenue has been recognized over the last year. So that's -- in a way, that was one concrete case. What the customer is doing, we don't know in detail, to be honest. But I think that our customer was a camera model supplier. And if a camera model supplier is not having a push from an OEM, they probably very often don't move. So we don't know what that -- what's happening there. But from our side, it's a closed project, but it's not a closed concept.
PoLight has granted a patent for TLens with a larger aperture this January. Can you explain how this is intended to be accurate?
Yes, accurate. Yes. Good question. We -- this is related to the last question. So we have -- we are obviously trying to protect our IP. So I think it's not a granted, I think it's still an application. And it's basically 2 glass membranes with polymer in between, which can be quite big appetite-wise, but it needs an external mechanical actuator. So that's how we need to avail our systems like that. It's an external mechanical actuator. It could be VCM, it could be other things.
Can you say something about how the total transmission of light through TLenses?
My god, it is starting to be very advanced questions. Transmission is quite good. It's around, say, typical value is around 97%, meaning 97% is going through without any reflections. That will be, as we step by step improve the TLens and the processes, manufacturing processes that we suspect will be even better in the future.
Can you say something about the feedback from the barcode product that was released on the market in December?
Only that we know that the customer has been supplying to only selected customer and that we haven't heard any negative.
Can you say something about the AR glasses that were announced design win in December?
Not more than I said in the presentation. It's -- we hope that it be launched to market this year. It is a professional kind of use case, which would be medical, education, manufacturing, logistics. So more than that, I cannot say. Just let's wait in excitement when it comes out.
Can you say more about the customers related to AR PoC projects?
No, only that we have an extremely good feeling about it. And all the companies we talk to seem to be very interested and feel that this is a good fit. So -- and there are -- yes, we are working with all of the, I would say, major players and others in that segment, as you can see from the overview. So more than that, it's difficult to say. It's not going to be a walk in the park. I'm sure there will be challenges. We don't -- do not see today, which will come in that space also. But from the opportunity pipeline, it's quite interesting. And also, I just want to say that if you take this space and compare it to what we've gone through in the smartphone world, there's a huge difference. In this case, we are in, in the beginning, more or less. In smartphone, we came after many years. It was an established technology DCM, which were used in all cameras. And that -- so that was a different -- you had to compete with an incumbent technology. And in this space -- in the AR space it is different.
PoLight has a lot of ongoing project activities. Are there any of your customers who have many projects? Or are they mostly different OEMs. I also wonder if a single project can lead to several design wins from the same customer?
No. It is a mix bag. There are some customers which also have different kind of PUC or planning PUC for different function in the mobile phone as an example. But there is -- if you look at the names on our customer list, it's a good handful of different, what should I say, names and some of them have different type of activities related to TLens.
If not confidential information, how many TLenses have been shipped so far?
Yes. It's at least close to confidential. But what I can say is because we report numbers and if you mean in dollars or Norwegian krone, if you also report a number of units, we are exposing us to competition that they can calculate what kind of pricing we're using. But anyway, what I can say, still early days for poLight, when it comes to it, but we have actually now a good handful of say sub-100,000 has actually been delivered already to different customers.
How is competition progressing? Do you see any new emerging, any copy cats?
No we don't see any copy cats and that may come, but it's going to take them some effort and time and they will be visited by us. So we haven't seen that. We do see competition, but nothing new during this quarter. It's basically the biggest competition we have is incumbent DCM, I would say. Then tunable optics, is different types of liquid-based technology, which is auto. Like if you take the industrial market and you look at liquid, liquid is more used actually and more -- referred -- much more references than poLight TLens in those markets. So in that sense, we are a kind of fighting through an incumbent type liquid technology. We think that our technology has some advantages, but we also have some disadvantages like the aperture size, optical core. So -- but yes, for some cases, we are best for some other cases, maybe the liquid is best. So but nothing -- obviously, nothing new during the quarter.
Do you encounter demands for exclusitivity from customers in order to do business with them?
Yes. That is typically something which come up now and then. And so far, we have said thank you, but no thank you.
What is the strategy to cope with second source requirements? Are customers already asking for this?
Good question. That is one of the hurdles that if a customer decides to use tunable optics from poLight, there's no other ways to go. And that I don't feel confident in that. So then there are other tunable optics like liquids, so that helps. Then also we can say there are different camera modules players, which kind of -- but still they will source TLens from us. So yes, that's a topic can be sold. It can be sold over time if it becomes a problem by having licenses and stuff like that. Today, we don't see it as a showstopper, definitely not. But it can -- it's an important question we need to follow.
Do you face any problems or restrictions in simultaneously serving different markets considering trade sanctions?
We are also, of course, carefully monitoring the situation between U.S. and China. And so I don't think that's good for anybody. So -- but so far, it hasn't stopped any cases for us.
How about [ IPR ] new applications, possible infringements and who likes freedom to operate?
We do this quite carefully. We have advisers working with us on a quarterly basis to go through kind of mapping the landscape. And I have some fantastic shareholders, which is giving me a lot of information on a weekly basis. So we spend a lot of time here. We protect ourselves as good as possible. We do patents. We do publications. So it is a big area, which is actually costing. We are using millions a year to -- on this protecting also on the IP side. And freedom to operate, on a regular basis, we do freedom to operate, meaning what does mean is that before we -- on a regular basis, scan the market patents and see that the TLens in used in such a way is somebody stopping us, and that's what we're checking on a regular basis.
With the recent funding, have you, for instance, increased the number of customer projects or further developments? If so, does this mean increased cost base, new staff, et cetera.
I think without the funding which shareholders have been enabling for us, we couldn't do what we do today. We are preparing a lot of material. We're taking a lot of assembly development cost -- we are supporting a lot of customer with dedicated personnel. We are increasing in headcount. So definitely, that funding, which we have been given by our shareholders has been super important to have a solid base to build poLight.
Do you anticipate reaching positive cash flow within current funding, if so...
I only would just want to repeat what we said in the guiding a few quarters ago and that 2025, we will be USD 500 million with EBIT of plus/minus 20%. That is, of course, given that the breakthrough, you remember the operating milestones, which was the basis for that statement is happening. So if things are delayed, of course, then that will not happen or it will be delayed. So -- what I can say, there is no -- currently, there's no plans for raising capital.
The ramping up of shipments will increase capital binding and choose need for financing. Which financing facilities are you contemplating? Can you still see need for additional equity funding?
Yes. Start with the last one. We could never rule that out, but there's no concrete plan. When I look -- we -- in our plans, factoring is a mean of financing. And also when we start to be at that stage where we have significant revenue, obviously, other financing group banks are possible.
Do you still work on developing the TLens material polymer, and get the parts to improve, for instance, optical properties like [ infrastructive ] index, optical power and increased lens size, aperture size?
Yes, we do. And we have a lot of things we would like to do. But having said that, as I say in my -- right in my report, is that there's no doubt that the organization are today, I would say, 99% busy with helping customers to integrate poLight's TLens into products. That is taking basically the whole organization and ramping. So then we have some funding from the Research Council historically and also hopefully this year. Then we have some plans of 2 stages. We have a plan for how to improve TLens as of today, what we call must improve. That goes on the direction of more optical power, bigger aperture size, bigger -- better transmission et cetera, et cetera. Those are kind of things more robust to drop tests, et cetera. So those are kind of things which we are working with in a way, but I would say, at a lower pace than compared to what we do for customers today. And then we have longer term like new products based on the same technology platforms. which is also kind of in our plan and which we will execute on when we have more capacity, and we have built organization. So yes, there are plans. And particularly for the short-term improvements, there are very concrete plans. And then, of course, we need to balance the -- how much we can do and how much resources we can spend on that compared to making sure that we're winning new customers.
Have you any future plans of moving from being TLens component supplier to motor supplier? Or do you consider it wiser to concentrate on developing TLens variants and improvements?
Yes, yet another good question. I think we have a vision, and we have in our strategic long-term planning, we have plans to and/or willing to explore ways of moving up in the value chain, clearly. And that could be -- there could be different things in a way. But we are also -- what was the -- yes, and then also, in a way, there's no note that today, the most important thing is to grow business based on TLens. So in a way, that has 90% plus of the focus, get TLens out as many applications as possible. But then also, yes, we have a vision that we would like to be when we grow up to be something more.
Can you tell us about your work with your sales and project activities as well as distribution channels and how to further improve and expand them?
Yes. So when it comes to our strategy on sales, it is clearly that we would like to be in important markets with local people with high competence. In all my experience of 20 years plus being CEO in tech companies is telling me that you need, if you are drinking coffee and tea with a customer on a daily basis and we have high competence, the customer like to talk to you because you are knowledgeable and you are there, that generates relationship and that generates business. Sitting in Horten and only talking on teams, only flying now and then will not work. So our strategy is clearly to build a global organization where we have competent people in the important markets.
Has COVID been a significant obstacle for poLight?
It has been and it starts to fees like more -- it is more difficult. But luckily, we have built global organization. And without that, it would have been super difficult. But we can see now that when we are ramping and as an example, that we would like to have an easier access to send people to assembly partners, manufacturing partners, which has not been easy. So in that sense, I think somehow they kind of improvement processes we are working on could have been faster executed if we could send the right people when we want it.
Is the demand for TLens would be so big that you would be required to increase capacity several times in a year. How would you see this happen? How steep of a production increase do you think is possible over the next few years?
Yes, good question. There are different supply chain as we produce polymer in Horten, unlimited capacity. No problem. You can scale to whatever. We are using wafers from wafer fab, micro in Italy. Definitely an issue to scale. Luckily, we did there to place a lot of POs. So we are -- we don't see the problem from that side in the foreseeable future, but maybe after few years, we do. But we need basically to be careful to plan that at the moment. Sooner or later, that will be a different situation. But today, it is doubling capacity, say, out of wafer out, will easily take a good year, I'm sure.If you look at the assembly side of the supply chain where they are making assembled complete TLens, is the assembly partner as such, can scale quite nicely in a way, and yes, say, 6 months plus 9 month plus or something like that, depending on capacity, of course, the main bottleneck there is maybe the final test. We have a very advanced machine, which we are using to test all TLenses being tested. And that's a machine and that machine, depending on situation in the market, can be everything from, say, 6 months to 12 months to get a new one. So it's not a simple answer to that. But yes, it's a significant number of months to double capacity.
You say that customer demands of the smartphone slide. Can you elaborate this? Are there any known obstacles?
I think there are many kind of things they are doing testing as I tried to mention when I walked through the presentation. But I would like -- I would say that one thing is definitely the reliability. Reliability is extremely important for the customer. And then you have other things like optical performance, quality, blah, blah, blah, which is also, of course, important, but in a way, reliability has, for us, been a big topic and not only for us, for all technology going into this kind of market. So I would say, reliability is definitely something which we -- I think we always need to work on. We always need to work on how could we protect our product in the product itself and how could we integrate TLens into different products in a way which also protects TLens. So TLens has a glass membrane, which obviously can break. And that's what we need to kind of strengthen that product in itself by the way we design it. And I think we can never lose sight and focus on continuously working on that, because a few years ago, they dropped that meter. Today, they're dropping it at 1.5 meter and they are tilting. So you're dropping into the rock with a tilt. And there are extremely many g-forces which are impacting the TLens. So that is an area where we have to be continuously innovate new -- what you say, improvements and both on -- in the product itself, but also how to protect when you integrate.
It's mentioned on the smartphone slide that the use of TLens in front cam may represent the route to back cam. Can you elaborate this? Are all companies interested in using TLens silver in back cam?
So what we mean when I say evolve to the back half, is that one of the things why we are not being used all over the place in a smartphone today is the fact that the camera engineers haven't used the technology before. And they are so used -- they are so DCMs in their brain. That's what they do. And that's what they know. And they know the weaknesses and they know the strength of the extra [ charger ]. Coming with something new is why should we, in a way, it works as it works. So you need to find the sweet spot where we can make a difference, a significant difference, which kind of wakes up the camera engine, okay, let's try, let's try. And that is the selfie camera, has been for long time. When they get into the selfie camera and they see the performance, to see what they can do, they can do all in focus, they can do book care, they can do so much faster, much nicer face time calls and et cetera. When they see that the engineers are getting used to it, then they will come out in a way, relax a little bit and shoulder down and we start to innovate ideas on how could we use that fantastic technology on the back cam. We know the technology, poLight can deliver, customer likes it, why don't we use it also on the back, and that's going to happen.
Are there plans to take over a larger part of the assembly process? Or will you keep using other partners for the next few years?
Yes. No plans for that. We will always also internally have competence in a salary process, definitely. And we do today have capability in our new headquarter in Horten and a new clean room to assemble TLenses. But -- and that we do. And as an example, for some of the medical use cases, we do everything in Horten. But those are not millions and 100 case, those are thousands in a way. So and even less. So that we will always like to have that capability, and it wouldn't take us a lot to increase that capacity to more, not millions, but to more. But for high volume, we foresee the smartest thing is to work with suppliers.
Is it likely to see TLens in phones like Apple, Samsung or Sony down the line?
As we don't comment on names. So I think I will not answer that question. Sorry for that.
You have previously had several issues to overcome in phones due to hard tests and requirements. Are the similar issues in the AR glasses and have they been solved?
So far, let me start to say that AR is still in the early stage. Smartphone business is very mature stage. So they are very different. I'm sure that will come up topics on the AR side when it comes to specific demands and reliability. But it is for me and take this as a statement from me without being 100% precise. For me, it's difficult to see that things we are able to solve on a smartphone is not having a high relevance for AR.
Do you still have no plans on a share split?
No, still no plans.
Do you have any projects like tablets. If so, do these go under the smartphone category? Or is it under another category?
We are on and off being exposed to that market. And if there are cases there, it will be typically be in under what we call the consumer and consumer is easy smartphone, but it could also be other things.
How did the recently COVID outbreak in the U.S. inflect with poLight's attendance during CES?
Yes. We were planned to be with 3 people, including myself. We ended up not to be there. The -- lot of companies withdraw last minute from CES due to the COVID situation. But luckily, we have a local employee in Bay Area. So he was there. And so we had -- we got to meet those we could meet and we have the Teams meeting from Norway to U.S. during that week intensively. So -- but the reports back from those who have been there is that it was really, really low attendance and very, very little people compared to what usually is the case.
Are you feeling excited for the MWC Barcelona?
Normally, I would. This year, what we're hearing is that very few is going to attend of relevance in Mobile World Congress. We normally are there in a relatively big way, but the way we see it today, that's not going to happen. As an example, we don't know any of the Asian customer coming to Mobile World Congress as an example.
PoLight is involved in several smartphone projects. How many different OEMs are we talking about?
It's a good handful of names, I would say.
What is the reason for changing the 3 design in possibilities from the Q3 to 3 design win possibilities in Q4?
I'm not sure what that means. Okay. Let me see. What is the reason for changing the 3 design in possibilities? In which area? We need to come back to that, sorry.
Smartphone is the 3 design in now?
We have the answer to that in the presentation, I hope.
Why can't we see any design in smartphone? Do you still mean that TLens will be shipped end of Q2?
Yes, that's still possible. And of course, design in or a mature PUC is, of course, a -- what should I say, something we have to judge how we classify it. As I tell in the smartphone side, there has been great progress during the quarter. We still, I would say, would like to place it in the PUC category. That doesn't mean that we're going to see TLens, say, in midyear being shipped for wheel case. But how we consider the situation, I think it's better to classify it as should I say, a mature PUC than design-in.
Regarding the...
Still test to be done.
Regarding the smartphone projects, are they from several different potential customers and/or several models from single customers?
Yes. I think we answered to that already.
How many TLens are designed into design win AR case?
I think we have answered to that. We have one design win, and we have now 3 design-in. Sorry, how many -- what was...
How many TLens are designed into a design-win AR?
Okay. Okay. Sorry, I misunderstood. Yes, in the design win, it's 1 TLens, now, what let me think. Yes, actually, I started to beat up. But I think it's -- I think it's 1 or 2. I need to recap, yes, sorry.
Regarding AR and design-in wins. Are TLens designed in world-facing camera or laser displays [indiscernible]
Yes. When it comes to AR, the design win is world-facing. When it comes to the latest design-in, which I talked about, which is not in the report as a design-in, that is also a world-facing camera, but we are involved in PUCs for the laser side.
Regarding the second fabs, why is only one purchasing -- producing or Singapore have qualified and ready and producing? Or are there still things to be done there and therefore, not only using [indiscernible]?
We're not in Singapore, but we are in Taiwan, and we are in Philippines. And why we have been producing only from one of them is currently is due to the volumes we are running at the moment. We want to concentrate that in one place to be able to kind of get the yield improvement work as efficient as possible.
Have you heard poLight [ podcast ]? And what do you think? Will you recommend it?
I haven't heard it. There are some rumors. I will be invited to one podcast. But what I'm hearing is that it's getting a lot of good credits. And thanks to those who have been spending time to do it. Of course, it's good for us, but it's also important to say that it's a podcast for well-educated shareholders, and it's not a company podcast. But I heard that they were -- for a couple of weeks ago, they were on the top 2 list for downloaded podcast from Spotify. So it must be good.
Regarding smartphone, you mentioned 3 possible design wins, have these already qualified TLens through EBT and therefore, are 3 design-ins.
No. As we said -- I think we answered to that in the presentation, I feel. There are still qualification rounds ongoing. So when there is a design-in, it will be designed in, but of course, some of the PCs, which are relatively mature.
PoLight collaborates with 2 assembly partners in Asia. During the quarter, production has been ongoing as only one of the suppliers. What is the reason?
Yes, we answered to that. Does it never end?
Appreciate all that you do. Ratio of converting PoC to product is low. How do you explain that you have 113 projects ongoing with several complete PoCs, but poLight's only in a few customer projects?
And that's the pain of being a newcomer and with new technology. That's basically the route you have to go. Hard work over time, but it will pay.
Are there any new concerns regarding supply chain? Or are things moving smoothly forward?
I think smoothly forward, will be an overstatement. We have a lot of challenges, I feel, but they are being handled as good as we can. But in these days, in this world and the situation we have, supply chain is not smoothly at all. I just had a talk with a customer yesterday, and he is saying that for their products, they had to redesign the product continuously to cope with availability or lack of ability of components. So supply chain today is everything else does good.
Can you say something about how long it generally takes to go from PoC to design-in and from design into design win?
Good question, but it's impossible to give one answer. Some go directly into projects, not even doing a PoC. So we got directly into the signing and then that maybe 6 months, 12 months, you could be a little bit smart watches was a little bit like that. And then we have other companies, which start with a very thorough PoC, maybe PUC for a year or 2 may even, and then they go in to get enrolled in a product phase, maybe that could take a year or 2. So it's really, really a big difference between company and application.
The hurdles in the progress of getting into smartphone. Is it smaller hurdles per customer or is it bigger obstacles that prevent getting into any smartphone?
I think we have answered that more or less during the other questions.
In a given case that the situation between Ukraine and Russia and Greece, and heavy sanctions are imposed on Russia and the U.S. and you. Will that affect poLight since you are represented in Russia?
Yes. When we say we are represented in Russia, that is basically -- we have recently got one fantastic good guy, [ Vadin ] in Russia, who has a history of very good optical engineer. And he happens to live in Moscow. And so he is kind of working from there. And he will be traveling here and there when needed and potentially also transfer to other places. But -- so that's basically that we have won very senior guy principal engineer in optics, which is working with the optical designs for us. And again, it's an example where we move away from only being good at TLens to be able to design lens systems where TLens is a part of it. So it's in a way, a step towards being able to do more for our customers and come up with innovative designs. But we don't foresee any problems as long as Vadin is safe in his home.
How many [ laptop ] interest now. Can you say anything about background for key people you have hired legally?
There are -- laptop is just coming -- is kind of on and off. I wouldn't say that, that is any significant activity at the moment in the company.
And then the background for key people?
Yes. That is the background for key people is basically be with the right people close to customer and market. That's very important. Like the Russian guy get inside poLight competence, which means that we can innovate system solution, not only TLens solution. So this is typically the background for -- we also recently got a team from Oxford, which is -- has been working in smartphone world for decades. And that, of course, is to get us system knowledge. So we need to move from only now in TLens to understanding how the different markets integrate and how the different markets work. That's why we take on these people.
How is the new facility working in Norway?
Very good.
Do you still see 3 possible design wins in the second half of 2022?
I don't know which market [ Ana ] refers to here. But I would say if it is smartphone, which I suspect, we definitely see the [ seismic ] possibilities in 2022 in Smartphone.
For smartphone are there are mainly large or small players that are willingly to launch in 2022?
I don't think I will answer to that. But what I can say is that typically, customers will take TLens into a, what should I say, a relatively low-volume device to start with and then, in a way, get experience and then ramp from there.
The question you didn't understand was related to smartphone from design-in possibilities in Q3 to design-win possibilities in Q4. And then we recap the first question. What was the reason for changing the 3 design in possibilities from Q3 to 3 design win possibilities in Q4?
Okay. I'm not sure what you referred to. But of course, when we -- it's difficult for us to see kind of when particular a case will conclude. And in a way, it's not definitely only in our hands. But -- and that's why -- so when I kind of maybe for one quarter to another, is delaying it with a quarter or 2 is kind of just my best assessment, what I think is more likely now compared to last time. So yes -- and I may be wrong.
Actually, that was the last question.
Okay. That's fantastic. As I said many times before, having you asking so many questions. Hopefully, most of them were answered. If -- and I know myself, there were some of them we were flagging with a blink, so we could come back to you offline on that. But hopefully, most of them were answered either on Q&A or through the presentation. I appreciate very much the effort you do to make this into a more dynamic event than, I would say, normally. I'm starting to be completely exhausted. So weekend will be good to come.Next event is annual report 27th of April 2022. Q1 is 12th of May 2022. So that will be the next time. But I'm sure some of you will be in contact with me long before that. Thanks a lot. Thank you for participating. Have a great weekend when it comes and see you next time. Thank you.
Thank you.