Earnings call transcript: Polight Q2 2025 sees revenue dip, stock falls

Polight ASA reported its second-quarter 2025 earnings, revealing a slight revenue decline compared to the previous year. While the company’s stock price saw a decrease of 3.46% amid these results, reflecting a cautious market sentiment, InvestingPro data shows impressive year-to-date returns of 66.18% and one-year returns of 59.15%. Polight’s strategic focus on augmented reality (AR) and mixed reality (MR) technologies continues, bolstered by a recent strategic agreement with Q Tech Technology Group. The company maintains a strong financial health score of 3.14 (GREAT) according to InvestingPro’s comprehensive analysis.

Key Takeaways

• Q2 revenue slightly decreased year-over-year.
• Stock price dropped by 3.46% following the earnings release.
• Strategic partnership with Q Tech aims to enhance AR/MR market presence.
• Cash position improved significantly due to Q Tech investment.
• Lead-free technology samples expected in Q4 2025.

Company Performance

Polight’s Q2 2025 performance highlighted a challenging period with a slight revenue decline. The company’s focus on AR/MR technologies is seen as a strategic move to capture emerging market opportunities. Despite the revenue dip, Polight’s investment in Q Tech and its robust patent portfolio position it well for future growth in the AR/MR sector.

Financial Highlights

• Revenue: SEK 3,000,000, slightly lower than last year.
• EBITDA: Negative SEK 29,500,000, a deterioration of SEK 8,000,000 compared to the previous year.
• Cash position: Improved to over CHF 270 million after Q Tech investment.
• Inventory: SEK 56-57 million, with a write-down of SEK 6 million during the year.

Outlook & Guidance

Polight remains focused on expanding its footprint in the AR/MR, consumer electronics, and machine vision sectors. The company anticipates more design-ins converting to design wins and plans to introduce lead-free technology samples by Q4 2025. High-volume orders and profitability are projected to be several years away, contingent on achieving high-volume production capabilities.

Executive Commentary

"We strongly believe Polight’s unique technology will be important for several applications," said Eivind, CEO of Polight, emphasizing the company’s strategic direction in the AR/MR space. He further noted, "We can see the need for small cameras. We need low power consumption. We need speed," highlighting the technological demands driving Polight’s innovations.

Risks and Challenges

• Market readiness: Achieving high-volume production remains a challenge, affecting profitability timelines.
• Supply chain: Potential disruptions could impact production and delivery schedules.
• Competitive landscape: Intense competition in the AR/MR sector may pressure Polight’s market share.
• Technological adoption: Consumer and industrial adoption of AR/MR technologies is still evolving.

Polight’s Q2 2025 earnings call underscores the company’s commitment to innovation in the AR/MR market, despite facing immediate financial challenges. With a market capitalization of $132 million and strong momentum indicators from InvestingPro, the strategic partnership with Q Tech and ongoing technological advancements are expected to support Polight’s long-term growth prospects. Discover more exclusive insights and 6 additional ProTips about Polight’s potential with an InvestingPro subscription, including detailed analysis of the company’s growth trajectory and market position.

Full transcript - Polight ASA (PLT) Q2 2025:

Eivind, CEO, Polite: Welcome everybody to Polite’s Second Quarter Earnings Presentation. Together with me today is CFO, Joachim Hines Bredal, over there board chair, could not attend physically today, but I’m sure Gret is following us closely through the web. So the normal agenda, key events, introduction to Polite, operation and market review focusing on the market side, financial review by the CFO, outlook statement and Q and A. So since this webcast this presentation is webcast, please wait for the microphone if you have questions from the audience so that they can pick it up. And for those using the portal to ask questions, please also leave your credentials so that if there is no time to reply to your question, we can contact you for further follow-up.

Super. Yeah. Key events. I think the the absolutely the the most important thing, which you also mentioned as a post quarter event last quarter, is that we entered into a strategic agreement with QTEQ technology group. And this is, as I said, was backed by a top tier consumer OEM.

I’ll come a little bit back to it. We during that process, we collected $223,000,000 gross. No doubt that this event has created a lot of positive momentum and increased market activity. We see a, I would say, continuous positive development in the barcode machine vision market. Repeat orders, existing customer adding us into new products, old customer, the first customer buying new components after having the had the product on market for five years.

So step by step, also very exciting to see what we know potentially can step up in the value chain and offer more solution through this T Lens lens module based on the M 12 standard, which will ease the implementation for many customers. So here we’re taking a step up in the value chain together with Sonix. The tea wedge is amazing, it creates so much interest and also this quarter more than NOK1 million in sampling revenue, which is very very significant. The patent infringement is closed, agreed commercially, and very active quarter when it comes to exhibition. We are attending many, many of the key events, either together with partners alone or only visiting and have meetings.

Post quarter events, which also nearly is filling a page. We have another design in, we got confirmation on during after the quarter was closed. And we expect that this is an enterprise interesting case, I can’t say too much about it, relatively low volume, good prices, and I’m sure that there will be some more visibility on that later, and we expect them to release that product to market in end of this year. And then it would be classified as a design win, of course. We had repeat purchase order, I mentioned it already, worth around 1,000,000, connected to the first related to the first design win we ever announced, which is the EX 30 case, as you probably know.

And then, a very, very interesting step in the right direction. Yesterday, we got a significant PO for T lenses and driver, which is related to the Tier one OEM in The US, which was kind of a trigger point for the strategic investment with Q Tech. So this is to support a qualification program for AR glasses, which is planned to be released. Extremely important event and clearly stating the intention very clearly from from this OEM when it comes to when it comes to using our technology. And and just to recap, the background was that this particular OEM, he was very keen and had in a way qualified our technology, but he did have some kind of concerns related to size of polite, ability to ramp to high volumes, and that’s why it triggered this deal with Q Tech.

And now they have seen that we did that, and for them kind of to show that they meant seriously, there are no triggering programs with us and Q Tech. Super important. And this is basically what we have been facing many times, is that, as I said, Polite being what we are, a small Norwegian company, even though we are growing, we are still small in the ecosystem we are working. There are very demanding customers, big customers, big volumes. So they are a little bit allergic to taking risk on small companies, that’s why this investment from Q Tech is an extremely important remover of pain points.

So they invested 33% after the substantial offering, they are down to 30. Cutech have now two board members, Chris and Lewis in the board pack in sorry, in the quarterly presentation, you can see the presentation of both Lewis and Chris, very experienced people from the ecosystem, contributing a lot to the board discussion. On the board topic, we also have added Katrina, who is very experienced legal legal lawyer, and so now we have a board member of seven. Two of them from Tech. So we also have started a program with Q Tech, where they will build a assembly line and test line at Cutec factory outside Shanghai.

And that is progressing well. And this is intended for the tier one OEM particular, which was a trigger for the investment. Okay. Statement from Roy, same statement as we used last quarter. We strongly believe Polite’s unique technology will be important for several applications.

With backing from the top tier US consumer electronic customer, we are confident this alliance will bring a cutting edge solution to the market addressing key industry challenges. It’s a strong statement, it’s a strong commitment from Cutech, and I think that combining our strength on the technology, their, I would say, customer base, their experience in ramping. It’s it’s really, really and and I would say, we are entering into a new era of the company. Okay. Just quickly on Polite.

Many of you have heard that so many times, that you can present it better than me. Focusing on ARMR consumer, and we also are step by step building up the industrial enterprise market. Those two markets are very different. The consumer have the high volume potential. Each project has relatively short lifetime.

Hopefully, we are able to build a a a fundament through the industrial engagement we have, which is a kind of a slow moving, lower volume business, higher price point. So that would be the kind of the the basis, and then the higher volume will be on top. The high volume will of course enable a lot of, I would say, cost reduction in our supply chain, so that we have very, very good margin on the enterprise market. So that is the the strategy. Our technology, I just had a customer meeting yesterday in headquarter, and the statement there was quite encouraging.

Of course, there’s a lot of variables kind of being discussed. And he’s saying, you know, we can see the need for small cameras. We need low power consumption. We need speed. And he said, there’s known not much to choose other than polite technology.

It’s a very, very strong statement from a big customer. So so our kind of attributes is is like design for what’s coming. You know, it was designed twenty years ago, or at least invented twenty years ago, and now we can more and more see how we fit into this new market which is developing. Yeah, it has been a long ride, but now we really see how good fit we are for what’s coming. Global player.

We are now 50 something people, very dedicated team. I’m very happy with the team. Very international. I don’t know how many nationality we are now at 15 plus. And we are spread around the world.

We focus on health resources with our customer and partners. Meaning the growth will not be in Norway, the growth will primarily be in the international markets. So today we are present in Norway of course, Finland, France, UK, US, China, Taiwan, Japan and The Philippines. So, and the IP situation is very strong, and we are continuing investing in IP. Yeah, you know this very well: two glass membranes, polymer in between, bending the top glass membrane through a PXO wafer layer, changing the focus, very fast, low power consumption.

The same technology platform, not bending, but tilting, is the T wedge. We produce the polymer in headquarter in Thamesbank, Very scalable. We source wafer from Estee Micro. We ship this to our assembly partner, which now will be two. It will be the Tongxing and it will be Cutec.

They are assembling, do the packaging, and we then deliver this to camera module players, whereas we’re also focusing a lot on convincing the various OEMs, the product owners, to design the products based on the TLENSE technology TWATCH technology. It is basically the OEM who dictates what is the spec of the camera. So it’s very important that we as Polite is very convincing and have relationship direct to the product owners. So many the meetings we have from a sales perspective is with the product owners. Yesterday is the case, same today.

This is very, very important. But of course, we need to support the camera module players, they are instrumental for us, so we also spend a lot of time to support and convince them. As I said, targeting momentum markets, AIMR, I feel is the most strategic thing we do now. A lot of innovation is happening there. Having said that, the consumer market, generally speaking, being the smartphone, being the laptop, being the webcam is important, being watches.

But I think the fit and the need in the AR in my market is clearly the most important. But we also are addressing the consumer in general. Machine vision, industrial, yeah, I’ve said it many, many times, we are there, we get more and more visible, we have many design wins now, And we are starting to build quite an impressive platform. This M12 case I’ve been mentioning is another level where we can step up and make solution an easy adaption for the customer. We also support emerging markets, but the momentum markets is clearly where we put the focus.

And we are a small team, so we need to be dedicated and loyal to those markets. So I would say the emerging use cases like in this quarter, we haven’t spent time. We are following, we are monitoring, but we are not spending resources on this now, because we need to focus on all the opportunities we have in the momentum markets. But when we do development, when we do planning for the future, we do keep the needs we think will emerge in the emerging use cases in mind. So that when we say five or ten years from now, we will see that we have a portfolio which also will kind of serve that market.

But today, we don’t spend a lot of time on it. I think the key for a company like Polite in the face we are, is to don’t take too much, or should I say, don’t address too much focus is key. Starting to be a busy slide, and the latest one is the iData. So in all the key market segments, which I’ve been calling the momentum markets, we have references. And more will come.

Let’s go into the consumer market segment. Yeah, as I said, clearly, AIMR has been the main activity, clearly. I would say that when it comes to the advanced AR glasses, it’s still a market which needs to mature. But we do see that what they call smart glasses or AI glasses is really building quite some momentum. You know the players as good as me, and you can see they are ramping up and actually have no problem.

One of the key players have problem to supply, because they were surprised by the demand. Also the MR mixed reality market is significant. So today, however, they are using fixed focus, except those we have in the enterprise AR MR market. But as I said last quarter, we are we are close to our customer and we do see the need for AF. I had a meeting with one of the big player a couple of months ago and I tried to convince him that he needs to plan with AF and he was telling me, you know, Evan, we know and we probably know better than you and the answer is yes.

So this is coming. This is coming. I think it will come with some of the major guys and then the other will be also moving after. Just the fact just the fact that the the design of the cameras, the compactness, the specification drives for AF to have a proper proper camera. And then you have the use cases, the AI reading menu, reading your business card, reading whatever, a QR code, or then you have all the AI use cases which also will will trigger that need.

So we are quite convinced that it will happen, but there will be a mixed bag. Will be some with or some without, because there is a cost issue, or there is a cost penalty for having a more advanced camera. But at least the signals we get and also mind you, when is Q doing such an investment, one of the key strategic market for Q Tech is AIMR. So in a way for you as an investor it’s a validation. It’s a huge validation.

They are sitting with big customers every day. They understand what they want to do and they invest in polite. It’s a big validation. Also, is encouraging to see is that, as we have seen, there are many POCs. Some are moving very slow, some are moving faster.

Some of those, which has been there for a while, is now, I would say, progressing towards something more than POC. Okay? I mentioned this tier one OEM which we referred to on the press release of April 15. It’s when they see that QTech and Polite established this partnership, their commitment was this, that now they are starting programmes. Not for studying technology, but for making camera platform for for their product portfolio.

So so that’s one example. There are other examples where we are on the way transferring from PUC, advanced PUC into real products. I think that, I think we need to be aware that this is not something which would come super quick, but it will come. We don’t control that tempo of course. It’s it’s they are extremely thorough, extremely thorough.

When they first go in with this kind of new technology, they want to make sure that everything is good, that you as a user would like to buy not only one, but two for you and your son and your daughter, maybe three. And so they are extremely thorough and they are driving us crazy in all the things they would like to explore and test and finding new problems we need to solve together. So it’s not something like easy thing. But we have made the fundament, extremely good fundament, when big customers telling us, you know, you are the guys, you have the technology. But step by step they go and those steps we don’t control.

So nothing we’re waking up tomorrow with a lot of design wins in the AOML market, no. But and I’ve said many many times, it will take time, but I’m getting more and more sure that it come and we will be there. In addition to the the ARMR market, we do see some extremely interesting, I said it before, but I repeat it, and now we are actually moving to real, how should I say, execution on technology and development and POCs with major players in the laptop area. That is in a way you can call it AR market, there are different way to describe the AR market, but certainly the more advanced AR market is still to come. Technology need to mature.

Laptop is a market which is there. It’s a huge market. We buy laptops every day in a way, at least I do every year. So this is something a market which is there, so if we can qualify us and if there is really a use case in the laptop market, that is something extremely important, adding to the bigger context in the consumer market for us. Webcam the same, a more more activity we see now on the on the laptop compared to webcam, but we also see traces of interest in the in the webcam side.

And then of course, smartphone and smartwatch. I said again smartphone is difficult at the moment. We have a fantastic reference through the Meitsu. It’s difficult to scale because of the cost of that new solution. I think the cooperation with Q Tech can be important here.

One of the reasons why the selfie camera with t lens is expensive is due to the manufacturing process. QTEC is, in my view, an extremely innovative player in manufacturing. They even develop their own devices and machines. They have very smart guys on the algorithm So I think that the way they potentially can integrate tLens and the processes they are using to integrate tLens as an add in solution which is needed can change this game. But at the moment, it’s difficult because of the cost sensitivity and that VCM is so installed.

But not to be forgotten, and the same with the smartwatch. We had a very interesting case smartwatch with a big player, but that is kind of concluded for now as a PUC. But I think that, to be honest, I don’t understand why these kind of advanced watches like say, I’m using Apple iWatch. I can’t understand why that doesn’t have a camera. This is I have a big phone, I will leave that, I will go from my jogging, leave the phone home, I have my camera here, my phone, everything, and I should also have a camera.

I can’t understand, but I I am quite confident that sooner or later these kind of variables will also need a small compact camera. And then it’s an evolution that they also sooner or later will need AI. So this is my I said that from day one when we got Xiaomi and Sony Simon, and I’m still convinced that that has to happen. Okay. Yeah, you can see the the status there.

One, I would say, disappointing thing in in this in this market is that this LBS program, a laser beam steering program, which has been a design in for some time, I’ve decided to take away. I’ve been communicating that program that the customer is waiting for a lead customer. They’re still waiting for a lead customer. They’re still promoting the solution. But when I don’t see any clear evidence of MP plants, I feel it’s most, the most, what should I say, correcting for me to do is to remove it from design in.

It doesn’t mean that we are not in the concept, we are in the concept. We are instrumental for the concept actually. It doesn’t mean that the customer has stopped kind of demoing the system. Basically mean my judgment of what I believe today. Of course, it would be more bullish to keep it there, but I like to be balanced.

That’s why I took it away. Yeah. As you can see here, POCs, 21 POCs, 19 related to AOMR. And in the report you will find a split between T lens and TOH. 23 planning POC, 16 related to AIMR.

Yeah. I think we have mentioned most of this. Yeah. T wet. It’s a little bit confusing to be honest, because we have a technology platform, we I think we can say we’re engaging with nearly all major guys.

And we’re getting significant POs and we’ll continue to get for them to qualify, test and understand. The confusing thing I feel is that every meeting, every dialogue we have with its customers, we learn new things. Meaning that it’s today difficult to say what is the spec of a TV edge product, How does it fit into the system solution at the customer? It’s difficult. There are so many things we learn every day.

So I’m still there that I think we should continue developing the technology platform. Don’t rush, don’t rush it. The worst thing we can do now is to throw millions into a product development and mass production scheme and come out with something, oh, by the way, I would like to have that change and this change. So I think we need to move on, I think we need to develop more, move to the next level of technical samples, which has started to be quite certain advanced. We are now progressing towards TS five, you know, technical sample fifth version.

We have customer lining up to buy that. But kicking off a real product and understanding today when we go into mass production with TW, I don’t know. The only thing I know, I feel very very strong about it, it will happen. But we need to be careful how we that we end up with a product which is a market fit with the market. But it’s interesting because this kind of technical samples, it’s learning us, it’s getting us income which partly finance the investment we do.

But we are in a balance sheet as an example, which my CFO was hammering me all the time. There’s nothing about TLH. Everything is expensed. Everything is expensed. Very clean balance sheet.

So and also, it’s interesting to see, all this started by resolution enhancement. You know, like micro LED, very difficult trade off between brightness in the display and resolution. We said at that point of time, guys, you take care of the brightness, we will fix the resolution. But what we see now, not only for micro LED, but for ELCOs and others, there are different needs, but different pain points, and maybe the resolution is not the biggest pain point. And we have seen demos at the big names, which has integrated T WET into their system, which is impressive what they can solve.

And what’s also impressive is that each of the big names we’re talking to, and we’re to all the big names, all the big names are using this now. And they’re saying to us different things: We would like it to be used for that, we would like it to be used for that. So it’s an amazing resolution is only a small part of it. Here you see the status there. And and here, this graph this slide shows you only AOMR, but includes also the consumer part.

And you can see that those are those icons, which is labeled with c, is consumer. Significant part of it. Yeah, we already mentioned this. To start with the newest, iData, very innovative company, releasing in one go five products using key lens. They placed a preparation PO, small PO, 200 k was it.

Yesterday we arrived, we got another 400 k PO. So step by step building the platform. Here will be more news flow this year, I’m sure, in the barcode market. I’m very interesting to see how this m 12 can fly. The feedback we have from the customer, we are working together with Sonix, and the feedback we have from customer is that there’s a good interest in this.

So I think this can can quickly be a trigger for a different revenue level in this segment. Busy activity, as I said, we expect more to come this year from design in to moving up to design win. Healthcare, not really any, I would say nothing to report this quarter. There are two things I would like to mention though, which maybe is not on the slide even. Is that there is, in Asia, there seems to be more commercial interest in endoscope using AF than rest of the world.

We don’t quite understand why. Another interesting observation is that, when we look into the image sensor roadmap, which is an important, kind of thing for us to understand, We do see now some signs of going from a two mega sensor to a five mega sensor. Remember, we have been involved in several cases and it has kind of stopped up because of the seeing that two mega sensor doesn’t really need an AF. Doesn’t make sense. Some of the programs we had, you remember that you had this big program with this huge huge steroid endoscope device which doctors are using when they’re operating.

This is a big company. They planned to use the five Mega, but during the process they stayed with the two Mega, so they need the spit. Now looking into the roadmap which we have seen on the image sensor side, there are actually traces of five mega sensor coming out. That could potentially change everything. So even though there’s nothing there today, as I said in the beginning, but we need to keep an eye on it.

Because we have a fantastic solution for that market, when the market is there. Another interesting thing is that this MINI 2P market is there, not big but very profitable, extremely profitable. And we also see now that one of the customer is planning to place a repeat order on this new revision of the Mini 2P having a broader spectrum. So there will be coming something there. Again, nothing nothing to report in automotive, doesn’t mean that it will not come at the moment, not the focus.

Yeah. So sum up, design win 33 as before, design in four up to two, completed POC 01/1927 up to 01/2024, ongoing POC 54 up from ’47, and planning is still at 55. Good activity. Yeah. Here you can see plot.

Step by step, more activity. So Joakim, financial review.

Joachim Hines Bredal, CFO, Polite: Thank you. So we are looking if we start with the P and L, we have a revenue in the quarter of SEK 3,000,000, which is slightly lower than last year in Q2. But if we look at the year to date numbers, we are a bit ahead of last year, which was a few 100,000 ahead of last year. So it’s sort of going at the same pace. There’s a the gross margin in the quarter is slightly negative, which is mainly due to the change in the obsolescence provision, which is quite high in the quarter.

And the reason why it’s high in in Q2 is that historically we have bought inventory. We bought in wafers, so that’s a trigger point where we do the time based obsolescence provision that we’ve talked about before. So that’s the reason why it’s higher this quarter and will be every second quarter. That’s to be expected. The EBITDA was negative of 29,500,000.0, which is 8,000,000 about 8,000,000 more than last year in same period.

And this is mainly due to a higher OpEx, particularly in the r and d department. We’ve seen traction in the r and d, so it’s more external expenses, also more time spent internally in r and d. Also, the the inventory obsolescence provision is is higher than than was. Then if we, turn our eyes to the balance sheet, the one thing that sticks out the most is of course the cash position, which was improved in the quarter with the with the private placement from QTech. And I also want to point out that the subsequent offering, the repair offering is not included in these numbers since that was closed early July.

So that will come be recognized in in Q3. And then we have an inventory of 56,000,057 million, which has been written down about 6,000,000 during the year and 3,000,000 during the quarter, mostly due to the provision for obsolescence, but also because of goods sold. So we took that out of the inventory. If we look at the cash flow development, again, the most important event in the quarter is the cash inflow from the private placement, leaving us with a cash position of more than CHF270 million at the end of Q2. If we look at the cash used in operating activities, we have about 24,000,000 in cash used.

Again, this is mainly due to the increased OpEx that was referred to in the P and L. And a slight change in the working capital, increase in the working capital of about 1,000,000. So, yep, that’s that’s it for the financials, And I will refer back to Evin to close the presentation.

Eivind, CEO, Polite: Thank you, Joachim. Yes. So a concluding outlook summary. And then after that, we will take the Q and A. As mentioned, the Q Tech investment agreement has been positively received.

And as I said, this top tier consumer OEM in The US, which was a direct trigger for this to happen, has now kind of delivered and starting programme. Which is super important, extremely important. Several customers which we meet have said this remove many of our pain points. Yesterday, it said, today it will be said, and every meeting we have, this is clearly something they see extremely positive. There is some kind of, we should say, not fear, but question marks from other camera module companies, you can imagine, saying, as an example, this top tier consumer area which is backing the investment told me a few days ago that one of the big camera module guys was concerned that we will not support them if this company want would like to use because that that consumer OEM will not only use one camera module guy, he will use more.

And and one of them talked to to the the OEM and was expressing, yes, but will polite support us? Of course, we will support them. We will support all camera module guys. After all, it’s not the camera module guy who decide what spec the camera should have. It’s the OEM.

So if the OEMs would like to use whatever camera module guy, we need to be professional and support them of course. No doubt that us being, having Q Tech as the biggest shareholder, no doubt that that is means that we are doing many things together and we are working very close together. But it doesn’t mean that we don’t work with others and support others. That we are extremely clear and important to that to the market. We support everybody and we do what the OEM would like to do.

But you can say the fact that as I mentioned last quarter, the ecosystem is like this. On the camera module side, in the beginning they were, I would say, contract manufacturers assembling a camera module specified by the OEM. That is a tough business to be in, very low margin. So what you’re seeing over time is that more and more the camera module guy is trying to be vertically integrated. So they are expanding, they want to go into lens stack, they want to have their own lens stack, they want to have their own actuation, AF technology, etcetera, etcetera, so that they add more value to the business.

Instead of kind of buying actuation, buying a lens stack and just assemble, they actually have technology themselves. This means that many of the camera motor guys have AF technology in house. And of course, they would prefer to use that instead of buying t lens. Luckily it’s not them deciding, it’s OEM. But still there will always be some kind of, call it, resistance there.

Having Q Tech as an investor in Polite, and they are of course highly intensified to make Polite a success, it means that suddenly overnight we have a friend in the ecosystem which have really a lot of enthusiasm to exactly promote t lens camera modules. And not only their own whatever VCM solution which they have. Qtech acquired recently TDK’s VCM activity. But they also have T Lens. So in a way we suddenly have a completely different dynamic as before that investment.

This is key. And this is why we have been trying for years to find that strategic partner. Now we have a good friend in the ecosystem. But I think it’s correct also to say, given how I explained how the ecosystem works, that of course this investment will not change our market position completely overnight. Because it is the OEM who dictates.

Even Q Tech cannot tell the OEMs what to do. Q Tech has to do what the OEMs want to do. So it doesn’t change things overnight. But it does help a lot, definitely. So given what I’ve said, given the market position we are in, given that we have very important references in all key markets, given that we have still big markets to explore, what I call the emerging markets, the initiatives we have ongoing to improve our self and our offering becoming more and more evident that this company will sooner or later become a success.

Thank you. Okay. Should we do q and a? Let me just pick up some water. Is there a few question Joaquin?

Joachim Hines Bredal, CFO, Polite: We have some questions as

Eivind, CEO, Polite: we usually do. Okay.

Joachim Hines Bredal, CFO, Polite: We can start with the questions that come on have come in during the presentation.

Eivind, CEO, Polite: Okay.

Joachim Hines Bredal, CFO, Polite: So there’s one question here about the patent infringement that we mentioned. We state that it was sold commercially, which indicates that there was an infringement. But in the previous quarterly print presentation, you firmly stated there is no infringement. Please elaborate to close this uncertainty once and for all. What was the problem?

Is it Telens? Did polite or the accused pay the compensation?

Eivind, CEO, Polite: No. So there was no infringement. We we, our advisers, is extremely clear about that. It happens to be that this particular country called US and Texas in specific has a system where you can be relatively unfairly attacked in a way, And the cost of going a legal process is extremely expensive. You can believe as much as you believe in that you are not guilty and we are not.

But the cost of proving that and in dollars is extreme. That’s why we took a commercial approach guided by our advices to settle commercially. That’s it. Good.

Joachim Hines Bredal, CFO, Polite: Can you say anything about what kind of product the mentioned enterprise design in is that is supposed to be released in the second half of this year?

Eivind, CEO, Polite: Not yet. Sorry.

Joachim Hines Bredal, CFO, Polite: That’s quick. If possible, could you give some new examples on t wedge solutions that you haven’t mentioned before? You did mention quite a few.

Eivind, CEO, Polite: Yeah. No. It’s it’s a I say one thing which we are hearing is this motion blur that when you do have motions, we there is a blur which we are fixing. Fill factor in the pixels dead pixel. Yeah.

It’s several things, but I think those those are definitely important. Mhmm.

Joachim Hines Bredal, CFO, Polite: In April, you said, we have been working with this OEM for many years qualifying our technology. So this is referring to the press release on the April 15.

Eivind, CEO, Polite: What

Joachim Hines Bredal, CFO, Polite: is the difference between the technology qualification referred to in April compared to the qualification program referred to yesterday with the same OEM?

Eivind, CEO, Polite: Good question. So typically when the customer, typically the bigger customer are more structured and more thorough than the smaller ones. But so they start what they call, of course they do a desktop screening of technology And then they select what they would like to test and try. Then they initiate what they call typically, somebody call it PUC, somebody call it NTI, new technology introduction. And then after having done that, they go more into the phase of the they call it more to product, product focus.

Say, call it a new product introduction. You start with a technology introduction and then when you understand the technology you move into a product introduction. So it’s the different stages. What we have been going through with this particular OEM is years of technology study, the technology introduction. They want to introduce new technology.

Then this is the R and D guys, you know, of course based on needs which has been expressed from the product team. They are starting to investigate technologies. If you pass that and they see, yeah, this technology we believe, this technology we feel is the best, then they are turning around to the product managers who’s specking the product and say, yeah, guys, now we have we have this technology, here is the demo, you know. We took the last release of whatever, put it into the the the this prototype, try it. Do you like it?

And then the product I said, no, no. Yeah, but yes, but it’s too expensive, so leave it. So what it means now, that this particular customer has moved from technology study, has kind of convinced the product manager who’s designing the product, spec’ing the product that yeah, this technology is good, let’s move into new product introduction. So what this program is about, is about a new product introduction. A big step in the right direction.

Joachim Hines Bredal, CFO, Polite: Okay? Yes. Another question about the new enterprise design in mentioned today from a sort of different angle, might become a design win in 2025. Is this a new OEM customer for Polite? And can you say which market

Eivind, CEO, Polite: Sorry. Is this related to the same press release?

Joachim Hines Bredal, CFO, Polite: No. It’s related to the design in that we mentioned today, the enterprise design in.

Eivind, CEO, Polite: That’s a new customer.

Joachim Hines Bredal, CFO, Polite: That’s a new customer. Can we also say which market segment? I would say the professional market. See here. Under ARMR you said that all the big names are using t lens now in testing.

Is this the big names in consumer market that everyone has heard of, not only people who is into tech.

Eivind, CEO, Polite: Did I say that on Thales or T Wets?

Joachim Hines Bredal, CFO, Polite: Anyway care about it in T Wets at least.

Eivind, CEO, Polite: Yeah. So so when I say that when I say all or most and all of the the big names is is typically the names you would have heard of, yes.

Joachim Hines Bredal, CFO, Polite: And some you haven’t. So we haven’t, of course. Yes. But Given T Lens given that TLENS reaches mass production, what are reasonable assumptions regarding future unit sales price and contribution margin for TLENS?

Eivind, CEO, Polite: Good question and we don’t know. It’s the clear answer or honest answer, but of course we have some assumptions. If you look at the price point, and we said this before, the price point today of TLENS, how we see the world, is that enterprise, professional market, low volume, dollar plus minus. Quite high. If you go into the more the consumer world, take the Meizu type devices, you are typically in a, let’s say, factor four or five less compared to that enterprise market.

I think that to when we are ramping up in high volume, we need to prepare to be into dollar below. DCM is selling for $0.2. I don’t think we’re to go there, but we need to be we need to definitely, when volume increase, we need to be ready to be a dollar minus. T I didn’t talk about T regs.

Joachim Hines Bredal, CFO, Polite: And then another related to the patent infringement. When do you expect a design in or design win from the player involved in the patent infringement after it’s now reported as resolved?

Eivind, CEO, Polite: No. But that’s an existing customer already in. We just got a new appeal from that customer.

Joachim Hines Bredal, CFO, Polite: Meta Ray Ban smart glasses translate restaurant menus, scan QR codes, and detect objects using fixed focus. Based on your mentioned discussions with OEM customers, do you have use cases of when AI needs AF?

Eivind, CEO, Polite: I think we answered that in the presentation, I feel. Yeah.

Joachim Hines Bredal, CFO, Polite: You say t wedge does not only improve resolution but could also be a solution to other pain points. Do you have some examples of these pain points? And one, this is a question for me. Is the obsolescence only a write off or are you also scrapping the goods meaning it cannot be used or sold? So technically what we can do is both, but in all essence what we do is write off based on age.

And our inventory is in all the majority of the majority of our inventory is wafers. So it’s the age of the wafer, which means that in the we have to according to IFRS, we have to write off the value over years. But, of course in the inventory obsolescence there can also be write offs related we’ve described this in the quarterly report. There can also be write offs due to if if there are any technical issues. So that’s that doesn’t necessarily mean we’re scrapping the goods, but it means that there is doubt as to which customers that can be sold to and at what value.

And then we can’t keep it at the value that it is in in the books. It doesn’t mean we’re scrapping it. So so there’s a bit of both, in all the the the the in the in in the majority of the the obsolescence provision is is based on age. The vast majority.

Eivind, CEO, Polite: Are there more questions?

Joachim Hines Bredal, CFO, Polite: Those are the then we can look at the questions related that came in before the quarter. Oh,

Eivind, CEO, Polite: yeah. Okay.

Joachim Hines Bredal, CFO, Polite: In the last weeks several leaders of big tech companies have commented on their excitement and ambitions in the personal glasses category. Mister Zuckerberg of Meta said on the July 30 that Meta’s future vision is super intelligence and personal glasses. How do you feel about Polite’s position in this huge industry when it comes to developing the personal glasses of the future?

Eivind, CEO, Polite: I think we are right up as I said in my presentation. I think as I also referred to this customer yesterday, I think we are really really well positioned. I think we are the the company in in in in the AF space which is best positioned. Will we be alone? No.

But we are very well positioned.

Joachim Hines Bredal, CFO, Polite: And this is a question.

Eivind, CEO, Polite: I think it’s it’s it’s I think it goes a little bit without saying. When when when customer like Q Tech, which has been triggered by a big tier US OEM, is is doing all this, starting programs, it says everything. Then of course, we have to execute. We have to execute, which is not given, but we have to focus on execution now, more and more.

Joachim Hines Bredal, CFO, Polite: We have a question we’ve talked about this quite a lot in here but there’s an opportunity here for you to see if there’s more to say. For Qtech as a major investor, Polite’s success will be Qtech’s success. With Q Tech’s huge connections in the industry, can they help promote Polite to new potential customers?

Eivind, CEO, Polite: It’s so right, it’s 110% correct what you’re saying. And we just see now that we are being Q Tech being Q Tech are obviously having a big company and they have relationship on top level on all the big names. And what’s happening now, and typically when we are coming, we are very often being pushed into the R and D guys, know, and if you’re lucky we meet later when we are qualified, we meet the product guys. It’s more difficult for us to kind of access the top level because of the size and who we are. What we see now is that when Roy is having top management meeting Roy is the chairman and the biggest investor in Q Tech he invites us and he talks about and he lets us present, he talks about us and his capability to use our technology.

Of course it’s a big difference. It’s a it’s a game changer.

Joachim Hines Bredal, CFO, Polite: Now is a this is a bit of a personal question for you, Eivind. Yeah. Being CEO at this time in four lights history, what excites you the most going forward?

Eivind, CEO, Polite: It’s what I see coming. I’ve been Hanover for eleven years. I’ve never seen things so clear.

Joachim Hines Bredal, CFO, Polite: Good. Has a formal contract been signed with The US top US tier one consumer OEM who encouraged Q Tech to invest?

Eivind, CEO, Polite: The contract the PO slash contract is coming through the camera model guy through our distributor in China. Has

Joachim Hines Bredal, CFO, Polite: the collaboration with Q Tech already resulted in initiated projects with new customers?

Eivind, CEO, Polite: Yeah.

Joachim Hines Bredal, CFO, Polite: Is Qtech planning to incorporate t lens into any of their standard standard products?

Eivind, CEO, Polite: Very good question. I’m talking about that we would like to like the m 12. We would like to move up in the value chain. We would like to be a standard solution which is easy for people customer to use. I hope that we also in the partnership with with Q Tech can make standard camera module which can be offered to the market.

Very often what you see, the big ones, they don’t use off the shelf camera module because they are they want they have so many technology guys who would like to have this spec or that spec, so it always ends up with a particular camera with a particular spec. But a massive market with company which is smaller, cannot have that luxury of speccing their own things because it’s too costly. That market could be addressed very effectively with an OTS camera off the shelf. And hopefully with the the our friends in in Q Tech now that process can move.

Joachim Hines Bredal, CFO, Polite: Then a few segment specific questions for the AR segment. Are there any design ins or POCs that you can tell us a little more about that might be of particular interest to us shareholders?

Eivind, CEO, Polite: Not more than I’ve said. But what I’m saying is that there are a few ones which now is moving from advanced PUC to very advanced PUC and even getting close to design ins. And we are working very hard to materialise that. There are a few which is in that stage, which I’ve already kind of indirectly talked about.

Joachim Hines Bredal, CFO, Polite: The PO that recently came in for the very exciting project with the consumer top tier OEM. It must be referring to the one sent two days ago. Can you say anything about whether this is AR or MR or something else? AR. Can you say anything about the potential for volume if this project is a success and whether it’s camera related or for other applications?

Sorry.

Eivind, CEO, Polite: Can you repeat that Joakim?

Joachim Hines Bredal, CFO, Polite: Can you say something about the potential for volume if this project is a success?

Eivind, CEO, Polite: Oh yeah. I think it’s difficult to say. It’s still some time ahead of us. The market needs to it’s impossible to see how market will react. So I can’t commit.

I think typically these advanced AI glasses will start with relatively low volume before it takes off. But I don’t know.

Joachim Hines Bredal, CFO, Polite: I’m not sure if you can make Well, can you say something about whether it’s camera related or for other Camera. Camera. Camera. Then moving on, the Vuzix shield is still on sale. And it is getting a lot of praise from sander glasses among others.

How are you working with Vuzix in terms of future product product products or projects?

Eivind, CEO, Polite: Yeah. Now we are we are I I recently had a meeting with with the CEO, and he is extremely positive. He’s repeating what he’s telling me many many times. You guys will be very important for this market. I think this this is Vizix, of course, is a smaller player.

I think they will they will be a very good example that they cannot spec their camera. They need the this is a very interesting case for off the shelf camera. So I think that we we need to be if we get into this off the shelf camera or the standard cameras from from some platform guys, then we are there. But they they will not be capable of doing their own camera. So we need to be in the standard camera suite.

Joachim Hines Bredal, CFO, Polite: Part of this question has been answered but there’s a separate part. How are the T Wedge projects you are involved in going? But also, is there a possibility of seeing the T Wedge TS four prototype in a demo video?

Eivind, CEO, Polite: You know, we talked about that the other day and it’s super difficult to make a video, of the video in a way. That that is very difficult to to So I think that what we can do when we have the TS five up and running and have a good demo and we are talking about having a Capital Market Day that we could invite everybody to see the demo there. I think that would be the best.

Joachim Hines Bredal, CFO, Polite: How do you feel about that the the development and interest in t lens and ARMR glasses is coming from China? Sorry? How do you feel about the development and interest in t lens and ARMR glasses coming from China.

Eivind, CEO, Polite: No. No. It’s it’s a very good interest. I think there’s no doubt that the innovation in this segment has been happening in The US, very bay oriented. But you can see now, and you could see from, from, the CES twenty twenty five, and I’m sure you will see even more in 2026, is that the the Chinese player is is starting to be very active, very active, very active.

So So so that’s that’s coming, definitely. I met one of the key key OEMs in China at CES. And he told me, you know, even all the major OEMs in China will move into this market. And and if you don’t believe, if it if they don’t follow the the trend of of on the camera spec and the need for AF, that that would be huge market.

Joachim Hines Bredal, CFO, Polite: Then moving on from ARMR, well you’ve covered this how are things going with smart watches and webcams. That’s we’ve discussed that. Smartphones were reported to be moving a bit in Q1. How is the contact with this area now?

Eivind, CEO, Polite: It is there. As I said in the presentation, I think the opportunity may be different now with the relationship to Q Tech and their ability to manufacture cost efficiently, adding designs. So but I would also like to kind of say that it’s a super difficult market and the VCM is extremely established. But the market do say that yes, you have a very good solution, but it’s too expensive. So if we can cost optimize it so that it’s less less more expensive, I think there is an opportunity.

So we shouldn’t give it up, but it’s I would also like to say that it’s it’s not something we have a lot of activity on today, but it’s something we are discussing with Cutech.

Joachim Hines Bredal, CFO, Polite: Okay. So how about competition regarding the T Lens? Is it increasing? Are there any new players? Are there any incumbents improving their alternatives or alternatively cutting their prices to

Eivind, CEO, Polite: Yeah. Mean, it yeah. Good question. I think you can say VCM. When you’re selling a VCM for for $20 cent, it’s it’s really, really aggressive.

When I started in this industry, they were selling for a dollar a dollar plus at least, $2 for high VCM. So it’s it’s you know, the VCM is an industry, you know, it’s huge industry. And and, of course, not all the VCMs are selling for that cheap because they are more expensive VCMs. But, I think we need to see we need to we need to find the sweet spots where we are a better fit, so that we because we can’t today compete on that price level. So and that’s the better fit we have found in e.

G. The AIMR market. Other competitors, I highly respect for competition. And I never talk bad about competition. And we have auto tunable optics company.

I would say that in the AMR space, I do feel that because small speed, low power consumption, and I of course I talk to my competition, I have meetings from my competition, and we compare notes and we kind of silently agree that maybe Thielance is the best for that kind of application. But then they are better for other applications, for bigger aperture sizes, for more optical power. So it depends what you want, but I highly highly respect competition and I think competition is important. When I talk to the OEMs one of the pain points which is not removed after the Q Tech investment is that but you are single sourced? Yeah.

But I’m nice. Yeah. But that’s not enough.

Joachim Hines Bredal, CFO, Polite: And speaking of single sourced. The next question is related to the QTEK T lens production line. When do you expect it to start ramping up volume and production, or what’s the status of it right now?

Eivind, CEO, Polite: Quite good progress there. We have consigned a final test machine, which is on its way to be operational. I think they have done all assembly steps already. There are different assembly steps as you know from the video we showed you. So I hope that we will be together with the tier one OEM in at QTEC line maybe September or October this year already.

Going quite well. Then of course we need to need to do qualification, which in a way we will be highly involved in. We’re produce something at Tongxing, we’re gonna produce something at Cutec, we’re going to compare and the standard differences, do the testing, you know. So and this is a little bit back to this qualification program. This is this is an element of it of course.

Joachim Hines Bredal, CFO, Polite: Does the top tier OEM you just received the PO from also consider using T Wedge and if so, is that in the same product?

Eivind, CEO, Polite: You’re asking so many interesting questions. Yeah, that’s absolutely possible and yes, they are also engaged in in T Wedge.

Joachim Hines Bredal, CFO, Polite: Could you comment on the progress and status of the large aperture T lens? Typical specs, when can samples be ready for customer development and evaluation? Is there customer interest? Is it ready

Eivind, CEO, Polite: for all of This very is difficult program. And we have done a lot and we are prototyping and we are testing and simulating. I think it’s I think we are we are far from the product there, far from the product. Still a technology program. Again, nothing is in the balance sheet.

Everything is expensed. So r and d. Will it be a product out of that? It depends as I I think I say in my quarterly report. If that will be a product, we need first to understand what spec can we achieve, what optical power can we achieve, what mechanical dimension can we achieve, what wavefront level can we achieve, etcetera, etcetera, etcetera.

So this is not fully understood. We are simulating and building different concepts. What I can say, think is think is more promising in the direction of the enterprise than the consumer. So too early to say, but it’s a difficult program. But we learn a lot.

Joachim Hines Bredal, CFO, Polite: There’s a follow-up to that Are you focusing on the large aperture only for and together with specific customers or would you also develop a more general generic version?

Eivind, CEO, Polite: No, no. It’s a it’s a I would say today it’s not a product development. It’s a generic technology platform.

Joachim Hines Bredal, CFO, Polite: Okay. We have a few more questions. How does TWedge compare to TLens regarding need for robustness lifetime cycles, thermal drift? How have you managed to cope with these possible challenges?

Eivind, CEO, Polite: Yeah. It’s a good question and it’s a little bit premature to answer in a good way. Teawedge is a completely different non wafer based product as of today. So many of the wafer related challenges will not be there. On the other hand, there are more assembly, more parts which needs to be assembled and be assembled robustly.

So I think drop tests will be challenging, but hopefully solvable. And we’ve already done some drop testing and reliability testing preliminary. We see it as clearly possible, but it’s also clearly challenging, yes. But as I said, technology program, we can’t focus on everything in this phase. We need to focus on the fundamental now, and then we need to see how we can solve those challenges.

Remember in the early days of t lens when we started to we thought we had a solution and then we started to test and dropping and humidity and we had one, one and a half, two years extra more to do, remember? So hopefully that will not happen again because we have learned more, but it’s a tough program and it’s premature to answer these questions. A

Joachim Hines Bredal, CFO, Polite: couple of more elements concerning the T Wedge. Competition regarding T Wedge, have you noticed anyone else using the same idea to enhance resolution?

Eivind, CEO, Polite: They are flying around some patent application which is I’m being informed about, but not really. What we said before to that, I think the maybe this is a little bit arrogant to say, but I think the biggest competition is not using evobulation, meaning avoid it. So I think we haven’t really seen any kind of tea veg competitor as such which we believe strongly in, but not using it is of course a competition in a way.

Joachim Hines Bredal, CFO, Polite: There’s another question might be a bit premature, but are Q Tech considering the same approach with t wedges as with t lens?

Eivind, CEO, Polite: I’m not sure what we mean with that question, same approach.

Joachim Hines Bredal, CFO, Polite: I would guess assembly, but we’re not in the assembly.

Eivind, CEO, Polite: Oh, that’s That’s premature.

Joachim Hines Bredal, CFO, Polite: But we have interest in TWedge.

Eivind, CEO, Polite: There are definitely interest in TWedge, yes correct.

Joachim Hines Bredal, CFO, Polite: Will you approach other market segments, for example automotive and robotics more actively in the near future or will you do first things first and are you approached from these markets?

Eivind, CEO, Polite: First things first as I said in my presentation.

Joachim Hines Bredal, CFO, Polite: So in the qualification program there’s a lot of interest to our latest press release. Congratulations on that. You do mention further milestones need to be passed. Can you elaborate on time span we can expect when it comes to potential design win? And also what kind of product it is?

Eivind, CEO, Polite: Think we answered partly already, but in a way, so we are now moving from a new technology investigation to and they say, okay, yeah, we like the technology. CureTek has invested in you, so we move on to product focus. So no, but still they haven’t seen a camera from Q Tech with Helens yet. So of course they need to see what performance that it will give them. So that’s what they need to know and understand.

And will that fit into the products in a good way mechanically spec wise? So this is what they know, those are the milestones I’m referring to. When? Impossible for me to say, but it’s typically they’re using quite some time to do these processes. So it’s nothing going to happen this year, it’s nothing maybe even happen next year, but maybe it’s a ’27 program, you know, we don’t know.

But as I said before, this market is still a few years ahead of us.

Joachim Hines Bredal, CFO, Polite: With the LBS case removed from the design in, success in bigger projects seem to be more or less riding on this, referring to the previous

Eivind, CEO, Polite: That I have to say I disagree strongly on. This one he is referring to is definitely important. It’s a major player and and it will give us a lot of lot of credibility and lot of volumes. But there are many others we are working with and hopefully you will see traces of that. Yes.

Joachim Hines Bredal, CFO, Polite: In both Q1 and Q2 report, you state that when it comes to smart glasses, market engagement indicates that trends in camera specifications and use cases will likely trigger the need for autofocus. A) How is this trend progressing? B) When do you see this shift happen?

Eivind, CEO, Polite: I think we partly have answered it. I think that some customers are convinced it will need an AF, and some customers are less convinced. So that’s the word. Referring to the as I said, referring to that big consumer OEM who was triggering point for the investment agreement, which now has moved on with programs. I guess it’s what you say, the proof of the pudding is eating.

So now they’re eating the pudding and they like it. And when you’re talking about more the most advanced guys in the world saying that this we need, and when I try to convince this guy and he say, Irwin, you can stop. I know. I know better than you. We need.

Then I don’t see I don’t see what more I can say. It’s it’s clearly coming. But there will be there will be players who will not do it because they are selling on cost and they’re supposed to be cheap and but I’m sure there will be and there will be there will be both. There will be with or without.

Joachim Hines Bredal, CFO, Polite: Quite a detailed question. Consumer related POCs. How many would be defined as smart glasses and how many would as more advanced ARMR glasses? Oh, that’s a hard one. Yeah.

Eivind, CEO, Polite: That’s really a hard one. And you know the definition in the market is changing every quarter. Further to smart glasses, it’s AI glasses, we further smart glasses without display, now suddenly talking also having display and smart glasses and then smart glasses becomes an AI glasses, you know. I think at the end of the day, it will converge to an AI glass. But today, it’s like smart glass without display, may becoming smart glass with display, may becoming a very advanced AR, but I think sooner or later it will kind of converge to something similar with different specs.

That’s a good question, but difficult to answer very correctly.

Joachim Hines Bredal, CFO, Polite: A couple of quarters back you showed an animation to illustrate the difference between fixed focus and auto focus in smart glasses. To what extent does OEMs relate to the same pain that you’re describing?

Eivind, CEO, Polite: No. No. As I said, some some see the need, some don’t see the need.

Joachim Hines Bredal, CFO, Polite: Just a few more questions now. The phrase next phase project discussions has also been used in two successive reports. Does this include several design ins with different OEMs? And is it possible to provide any time frame?

Eivind, CEO, Polite: I have to give credit to the way you’re trying to get information out to me, but coming from all angles. I appreciate it and I appreciate really, really, really the questions. But I would say that what I’m saying now, there are a few POCs which is now getting very mature and approaching if we deliver on this now in this time. And we are sitting and discussing not the technology, but we’re sitting, discussing now with a few product intersection. When can we take you into product?

And this is maturing quarter by quarter. And I have a few particular cases in mind. Very interesting cases. So Yeah. So that’s what I can say.

Joachim Hines Bredal, CFO, Polite: Yeah. Let’s not say anymore.

Eivind, CEO, Polite: Now

Joachim Hines Bredal, CFO, Polite: this is an interesting question. You are mentioning some OEMs prefer lead free t lens. How major is the issue and how complex is it to resolve?

Eivind, CEO, Polite: Yeah. Good question. Yeah. A lead free solution is is is something which some big names are wanting. And they are the direct reason why we have one of the reason why we have now started the lead free program, expensive program with SD and IME.

Another reason is that SD as a big player in this market, are investing heavily in lead free because they see that coming. So how difficult is it? We don’t know. This year we will receive samples as we speak. The time plan for that is the first samples will be hopefully seen in Q4 this year actually.

We are keeping the big OEM in the loop informing them about status. You know, I’m so close to saying too much.

Joachim Hines Bredal, CFO, Polite: Yeah, let’s move on.

Eivind, CEO, Polite: Yes. So and that is is that looks very promising and I think will if we are successful it will open huge opportunities for us. And I think that now I’m speculating, now I’m moving from fact to speculation. I think that there will be other who also will take this kind of philosophy of having a lead free lead free kind of products completely, like a green, green wave going. So but but what the tea does today, which is using PCT, which has some lead, which is clearly within within kind of the rules and regulations, is gonna have a long life still.

Many doesn’t care about it at all. We will keep shipping that. But to grow and expand our opportunity, I think lead free is important. And hopefully then everything can converge to lead free. But that’s a little bit early to talk about, but that’s the aim.

Joachim Hines Bredal, CFO, Polite: And here’s a question for someone who’s been counting your tables on POCs. Oh, Okay. So in Q4 twenty twenty four you listed a smartwatch among POCs. In Q1 the term accessory has gone from one to two and smartwatch is gone from the list. I assume that you have now sorted smartwatch under accessories.

Eivind, CEO, Polite: No. No. I don’t think so. I know these are impressive details but I think that smartwatch case he is mentioning is probably under completed PUC. Then

Joachim Hines Bredal, CFO, Polite: we have Are you gonna kill me or? No, we have one more question. I think I can answer this so you can can have water. When can and we’ve had this question before, but it’s it’s good that it comes up and we can answer it. When can investors expect that Polite finally becomes profitable?

In 2021, 2025 was stated as the year that Polite was a completely different company. And this is proved correct. However, the financial situation is still not secured. Considering that high volume orders still are some time away, how will this change in the next years? And what we said before and what still goes is that profitability will not come until we have high volumes.

That would demand a radical change in the company And that is not the direction we’re going, that is not the strategy. The strategy is to achieve high volumes and and we are clearly taking steps to to get there. But as we’ve stated quite a few times, it takes time to get there. So which is why we are very happy to have secured a a good strategic shareholder in Qtech, and and the private placement and subsequent offering that we had this year places us in a position where we we can keep developing the company and keep keep being present for the market opportunities for for quite some time still.

Eivind, CEO, Polite: And

Joachim Hines Bredal, CFO, Polite: that concludes it. I just like to say that we get lots of questions in, some by email and some through the portal. And some some might seem like they’re asking that we’re not giving enough information, but I’ll just I’ll I’ll just close with this statement. Having followed Polite for over ten years, please let me express my gratitude to you and the whole hard working and persistent team for impressive achievements. I think that’s a nice sentiment.

Yeah.

Eivind, CEO, Polite: Absolutely. Best question today. Yeah. Do you agree?

Joachim Hines Bredal, CFO, Polite: Yeah. Great.

Eivind, CEO, Polite: Okay. That’s it. Any question more from the audience? No? I will be amazed if if it were possible to have more questions to be honest.

But now Joe set aside, mean this kind of Q and A session I think is adding a lot to the value of understanding the company. And we are here to answer that, we paid for that and so that we are really, really appreciating. So thanks for you following us through the webcast, thanks for you coming all the way to Oslo, joining us here and see you next time. It will be on the October 13 for the Q3. Thank you.

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