Liquidity and Capital Resources

The Company had working capital of $11,079,641 on December 31, 2014 compared to $3,272,349 on December 31,2013. The increase and maintenance of the higher working capital was due to the $4.5 million dollars of financing completed on February 13, 2014 in addition to the $9.9 million dollars raised through the exercise of stock options and warrants during year ended December 31, 2014.

The Company’s balance sheet as at December 31, 2014 has assets with a book value of $12,850,946 (2013 - $4,557,844) of which 90% (2013 - 78%) or $11,531,365 (2013 - $3,528,376) is current and primarily cash of $11,287,864 (2013 - $3,260,967). This liquid and unencumbered balance sheet has allowed a flurry of activity already undertaken and further expected in 2015, including but not limited to further capital equipment acquisition, investment in staff and achieving technical and operational milestones.

The Company’s cash position has been bolstered by the exercise of warrants and stock options subsequent to the year end that resulted in additional capital of approximately $6.0 million.

There are 12,179,931 warrants outstanding to purchase common shares at an average exercise price of $0.35 expiring between June 8, 2015 and September 27, 2015. The Company is confident that those warrants will be exercised. Should those warrants be exercised, there is a potential for an additional CAD $4.2 million to be raised by the Company. It is important to note, that while the Company is confident that warrants will be exercised, it is dependent on a number of factors that are outside of the Company’s control such as stock price and investor confidence or apathy.

Based on current plans and cash utilization the Company believes it has sufficient liquidity to support its operations and technological programs beyond 2015.

The Company is embarking on an aggressive plan of attempting to monetize POET while simultaneously improving shareholder value. The focus therefore is to remain sufficiently capitalized through lean operations.