$11.5MM cash on hand as of the end of the year.

for MD&A elements, keep in mind the report is for Q4'14/YE not Q1'15.

GLAL,

R.

---

The Company has:

1. Successfully produced numerous distinct devices under the POET process, including on-chip continuous-wave lasers and switching lasers with the potential for eliminating chip-to-chip metallic interconnects, complementary hetero-structure field effect transistors (HFETs), optical thyristors, pulsed lasers, super-radiant light emitting devices, and infrared sensors with potential usage for multi-spectral and uncooled operation – all able to be monolithically fabricated through the POET process.

2. Established Technology Design Kits (“TDK”) documentation. TDKs comprise a library of comprehensive design rules and device parameters for the POET technology that will eventually enable customers and partners to implement the POET fabrication process into their preferred foundries.

3. Actively engaged BAE Systems Inc. (“BAE Systems”) to replicate the POET process with greater precision and larger scale using advanced ebeam writing tools. This contractual effort with BAE Syatems will accelerate the “Lab-to-Fab” transition of the POET technology to a manufacturing status of 6" wafer scale. The target of the effort is 40-nm dimensions for the critical features. This engagement is meant to support the development and verification of the foundation devices and design enablement kits. Additionally, it will provide the baseline FEOL (Front End Of Line) process flow in a manufacturing environment and toolset.

4. Continued the development of the 40-nm Planar Electronic Technology (“PET”) Process Design Kits (“PDKs”). PTI is utilizing Synopsys’ TCAD tools and services to develop the PET and POET PDKs. PDKs are used by 3rd party chip developers to create IP libraries that would be used to implement System on Chip (“SoC”) integrated circuits. Availability of the PDKs will enable early evaluation of the performance advantages of POET technology and design of IP required for SoC implementation.

PTI has also recently applied for several key patents for the development of ancillary devices pertinent to the area of quantum computing. This intellectual property is expected to play a strategic role in long-term development, rather than having an impact on near-term deliverables.

PTI is actively working on multiple fronts related to technology milestones. The original target completion dates of the “PET PDK” (originally called to “PET PTK”) was Q3 2014, and for both the “electrical 100-nm ring oscillator” and the “50 GHz VCSEL” was Q4-2014. All timelines were extended to Q1-2015. These three milestones continue to be POET’s primary focus while in parallel advancing on the IP monetization plan. Monetization possibilities are progressing through the expanded agreement recently signed with BAE Systems and implementation of the “Technology Roadmap Advisory Committee”, amongst other developments.