Re: Questions for the AGM
in response to
by
posted on
Aug 10, 2014 12:07PM
You probably want to hear this from the company and not from me, but some of the answers you seek have been answered already. I'll do my best below to give the historical responses for the ones that have been addressed already. I'm leaving out the questions that haven't been addressed to my knowledge:
1. ...why [have] the major chip makers have not beaten a path to Poet’s door. Your response was “they will”. Why, in your opinion, have they not done so 3 years later?
At the 2012 AGM Taylor commented that there would be major interest in the combination of the complementary logic "plus" the laser. Subsequently POET has adjusted their technical milestones to accommodate input from unnamed "potential partners".
I think it would be important to define the term "chip makers" because I'm guessing you were thinking of Intel, AMD, etc. As it turns out when those particular guys beat on our door, there will be another chip maker on the other side waiting, and that would be Ajit from GF.
Also note that Taylor (showing some rare emotion) explained how they were "starved" of the needed funds to continue to work at a proper pace due to the propping up of the failing solar business. Even Pellegrino refers to this in his updated valuation - that he didn't think the old management would be able to deliver the chip to the industry (partly) because of the lack of focus. So I wouldn't think of it as a failure to attract the big chip companies, but more a failure to complete the chip due to the reasons stated above. Clearly Taylor was talking about delivering the completed process.
2. At the 2011 AGM, the original run of prototype chips were displayed. At that time the problem was inability to mass produce without an unacceptably high rate of flawed chips. You stated that this was due to one of the heat related fabrication steps (which someone on the message boards for POET explained was the annealment step). Was that ever resolved , or bypassed to complete the subsequent development, and is this the step now delaying completion of the fully integrated opto-electronic chip?
Again at the 2012 AGM, Geoff was joking about the difficulties they had with the "bowing" of the wafers during fabrication. The heat was turning the wafers Pringle shaped, and would do so under varied conditions, succeeding when BAE or UConn made the wafer and annealed themselves, but not when UConn made the wafer and then sent it to BAE for the anneal and vice versa. The fact that he was joking about it and that he planned to have the device makers beat down his door after MS3 and MS6 were complete says to me that that they solved the problem.
4. "The contemplated reverse split would magnify the dilutive effect of subsequent option approvals –which would certainly be requested by future venture capitalists or partners. Management has somewhat insulated themselves from this dilution by requesting a doubling of the options allowable to them. What similar protections can you offer the retail investor?"
This isn't correct. When the split occurs, everything scales to the split factor. If it goes 5:1 like I think it will, everything consolidates. The number of OS divides by five, the number of options divides by five, the number of options they can issue, same thing.
The problem is that people don't know this. If (read when) they do issue options for any of the reasons you describe, they will automatically assume that they have been hurt by the RS. It's just not the case at all.
5. Mr. Sheldon Iwantash has been nominated to the board. Since his company, Pinetree Capital owns millions of shares, the potential conflict of interest (using his position on the board to influence the value of Pinetree’s holdings or using Pinetree’s holdings to pressure decisions of the board) exists. I am in no way implying he would do this, but how would this be viewed by the SEC in ruling on a NASDAQ listing?
You won't like this answer because it's not based on anything from the company, and I can't say how the NASDAQ listing requirements are impacted, but all I know is that people have been complaining that management has no real skin in the game (which I disagree with, for reasons beyond the scope of this response). Electing Sheldon changes that. We will have at least one board member who is only in it for the money. He's on the shareholders' side! People have taken Peter's comments out of context about not looking at the share price. It should be reassuring to them that Sheldon will. There is obviously a risk that Sheldon would be willing to sell out sooner than the rest of us based on how many shares/warrants he has, but if he wanted that he probably wouldn't be joining the board AFTER the decision not to sell the company was made. He will be there to make sure he gets maximum value once the company is known to the industry.
Sorry about the long post, which started out based on facts and ended with pure speculation. Hope at least some of it helps if you can't make the AGM.