POET set the valuation criteria for P2 as shown below.

Item 1 has radically changed due to move to tablets and phablets and laptops - this is far more favourable to POET and drives a greater need for energy efficiency, cooler operating temps as well as faster and smaller processors

Item 2 is underway and Pellegrino would probably be advised of certain aspects of the progress and if any significant barriers

Item 3 is far clearer today than in 2010 (this is probably the one area of greatest uncertainty)

Item 4 UCONN deal has been completed

Item 5 Not clear how all encompassing this is or what product(s) this applies to but POET must be close to a fully functioning demo down to 100nm

What is interesting is that there isn't a measure for the other IPs and supercomputing.

What this seems to imply is that compared to 2010 the valuation should be far in excess of the original P1 report given the number of uncertainties that have been eliminated and progress on deala and milestones in the last 3-4 years.

In recalculating the value models, Pellegrino and Associates will be performing a regression analysis of the key value drivers
associated with each of the value models including:

• the general computer marketplace;
• the ability to close a deal successfully;
• the ability to execute strategy in the various originally and currently anticipated markets for the POET Technology;
• the ability to successfully conclude a renegotiation of the amount of the UConn royalty on more favorable terms which is currently in progress; and
• the ability to develop a fully functioning product in the shortest amount of time.