The Company:

1. Has successfully produced numerous distinct devices using 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 multi-spectral and uncooled infrared sensors.

2. Continues establishing Technology Design Kit (“TDK”) documentation as the IP portfolio is expanded. TDKs comprise a library of design rules and parameters for the POET technology that will eventually enable customers and partners to implement the POET fabrication process into their preferred products.

3. Has engaged BAE Systems Inc. (“BAE Systems”) to establish the POET process with greater precision and larger scale using advanced ebeam writing tools. POET is also considering foundry relationships with other commercial foundry suppliers with direct opto-electronic experience. This contractual effort with foundries will accelerate the “Lab-to-Fab” transition of the POET technology to potentially a 6" wafer scale. Amongst other objectives this engagement is meant to support the development and verification of the foundation devices and design enablement kits. Additionally, it will provide the baseline process flow in a manufacturing environment and toolset.

4. The Company is utilizing Synopsys’ TCAD tools and services to develop the POET PDKs. PDKs are used by 3rd party chip developers to create integrated opto-electronic circuits.

The Company 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.

With an immediate view to commercialization, the Company has continued to develop the base process technology necessary to build the complete suite of optoelectronics devices. The new management team is focused on exploiting existing high growth markets where the disruptive power of the POET platform IPprovidescompetitive differentiation.

To that end the planned milestones - “PET PDK”, the “electrical 100-nm ring oscillator” and the “50 GHz VCSEL” will be replaced with market relevant and product driven milestonesthat maximizes the commercialization potential. These milestones will also capture the aggressive lab-fab transition plans being put in place, ensuring that the technology can be commercialized with no additional transfer delays from concept validation to product realization.

The Company is engaged in discussions with multiple companies as it finalizes its choice of foundry and epitaxial wafer partners and has recently signed memorandums of understanding with some of these companies and expects to continue this process.

Strategy and Outlook