POET Technologies Inc.

A number of posters are struggling to understand what will be the outcome of the agreement with BAE and where this work lies in relation to the agreement with Anadigics. With thanks to Kooter for pointing to the Key References, I’ll try and join some dots for you. Please read the references in detail because the answers to your confusion are all there.

References:

A. The Collaboration with BAE

http://www.poet-technologies.com/poet-technologies-enters-into-a-vcsel-manufacturing-services-agreement-with-anadigics/

B. The agreement with Anadigics

http://www.poet-technologies.com/poet-technologies-enters-into-a-vcsel-manufacturing-services-agreement-with-anadigics/

My theory

The agreement with BAE was stated in NR dated 30 March 15 at Reference A. In that reference a collaboration is announced of which the first phase last until August 2015.

'The current phase of the work will be performed between March 2015 and August 2015'.

The first point to note is that the collaboration is an on-going agreement, with the ‘current’ phase ending August, so there’s more to come. The purpose of the agreement was stated as:

‘Key objectives of the collaboration include process transfer, prototype builds and design enablement kit development. Using BAE Systems’ ISO Certified manufacturing facility will improve the quality, process control and analytical capacity of prototype builds. The result will be both a more manufacturable process and improved optimization of the device structures included in the POET technology’

Clearly this work is about process transfer, prototype build, and design enablement. Here we need to leap forward to August when the current phase of the collaboration with BAE ends and what do we have? Another news report on 24 August, Reference B, announcing the agreement with Anadigics to make the POET VCSEL. I put it to you that the BAE agreement and the Anadigics agreement are all part of the same process of VCSEL Lab to Fab My rational is that the customer who has placed an order for the POET VCSEL needed to be assured that what they were getting was of high quality and with high assurance of the ability to manufacture it. If you were the customer and were happy with what you had seen in the Storrs lab, what you would want to know is can this be manufactured to the quality we want in a commercial fabrication process . Hence PTI’s employment of their good friends at BAE who they have a special relationship with.

So let us not imagine that there is a mysterious new product to emerge from BAE we are talking here about the production of POET VCSELs for a multi-billion dollar company because that strategically is the product that our clever management have determined is the product that will have the greatest immediate effect on the market and establish the POET process in the mainstream world of IC.

There is one more factor and this is my particular chestnut that I have argued a number of times before but with no response from the board. In Reference A was also the announcement of the formation of the TRAB;

‘Formation of Technology Roadmap Advisory Board

The Company announces the formation of a “Technology Roadmap Advisory Board” comprising of Dr. Geoff Taylor, Ajit Manocha, and Tony Blevins. This Advisory Board collectively has extensive expertise in the semiconductor industry, supply chain management and operations, consumer products, and key technology markets, with over 100 years of combined experience.

This Advisory Board will act as advisors to the Board of Directors and the Executive team with primary focus on optimizing and accelerating the company’s “Lab-to-fab” transition and commercialization plans. “The Company is looking forward to leveraging the newly formed Advisory Board’s semiconductor market expertise and execution track record,” said Mr. Peter Copetti, Executive Co-Chairman and interim CEO’.

The fact that the TRAB and BAE collaboration were announced in the same News Report was no coincidence in my view. The TRAB was focused on optimizing and accelerating ‘Lab to Fab’ and Commercialization plans, is that not what the BAE agreement deliveres? Let us link to Reference B and we see what I believe we are seeing is the outcome of that BAE collaboration, effectively we have a deal with our Multi-billion dollar customer, which is why there is an agreement with Anadigics to manufacture POET VCSEL. Surely, I need not point to the significance of the presence of Tony Blevin on that board.

Conclusions drawn

1. My answer to the confusion expressed by some here is that the POET product we are talking about in the BAE collaboration is VCSEL. It is a product that has now been transitioned from Lab to Fab by BAE using their ISO certificated process. The success of that process has given our customer the confidence to partner with PIC resulting in our Company signing an agreement with Anadigics to manufacture POET VCELS on mass, which will lead to revenue.

2. Whilst there is yet no announcement of whom that Customer might be I have already stated that it is a matter for our Customer to make that announcement. I leave it to you to judge whether that customer might be the company that hired the Bill Graham Stadium 4-9 September, but that event would have to occur before the news of who our customer might be published. This is of course speculation but I believe that a window of opportunity to announce news lies within the period say 9th to 30th September.

3. Our relationship with BAE is special and ongoing. We have in August concluded but one phase that required a special agreement for a specific customer in order to accelerate the lab to fab process. There are undoubtedly other products that BAE and PIC are collaborating on in the military field which will not be open to the normal level of publicity for reasons of national security. Our long term BAE collaboration will produce products that result in revenue and given the advanced state of VCSEL development, it is not unreasonable to conclude that other POET devices are at an equivalent state of readiness for development and are next in line for the Lab to Fab treatment.

4. Given the current share price, which bears no relationship with the advanced state of POET process development, investing in POET remains something I can recommend for those who can stomach the helter-skelter adventure of venture capital markets. However, remembering PC’s requirement for a deal before a run to the NASDAQ, I have the distinct feeling that cannot be too far away.

5. For those who fret about warrant overhang let me remind you that most of the above process has to be financed from POET coffers and without calling in those warrants this company would not have the working capital to achieve that process. It’s therefore shortsighted to look at the warrants situation solely from the current share price point of view. Management are acting sensibly to meet the opportunity costs for the POET process to be monetarized from our venture capital input as a pre revenue company. That I hope is about to change as revenue is now within sight.

This is all looking very good to my mind, I hope others will soon see this logic too.

sula