Hi Cat,

I think your concerns about achieving these MS are unfounded. See the statements from the MS&A below.

The MD&A explains in a little more detail the problem with the spluttering tool. It was in fact already rectified by the time we had Q1 results, (see statement 1), which is why it was so casualy mentioned at that time, but I do feel the company neglected to empahsise enough that it was no longer a problem,it that was rather implied by their up-beat report. Yes it cost them a lot of man wasted hours which could have been spent but it was not a significant barrier to progress because it led to the contract with BAE to do validation work.

Look at statement 2, I read this as the validation of the work done at Stoors has been completed by consultants at BAE during the Lab to Fab process. The importance of this is that the milestones required by the large cooperation you mention, which presumably were, to establish confidence in the IP, the whole POET process and to measure performance results, all by a third party quality assurance process. A good policy to my mind - imagine the conversation "you don't have to take our word for it, go and speak to QA at BAE they have all the results you need, we'll give you full acess to them".

Yes the wrongly fitted spluttering tool had screwed up the results in lab which created a concern, but the company sensibly chose, and paid to have them proved elsewhere. This I think was the whole point of engaging BAE in the Lab to Fab process - to prove the validity of the whole thing to any third parties.

I think we can safely assume that the large cooperation could examine the results by BAE and if they were happy, which I think they were, the milestones they specified were consequently unecessary. I also think that serious conversation has taken place and the TRAB has met. My reading of this in the MD&A and the new direction stated is that the interested party likes what it sees has specified new goal based on getting POET device they have in mind made to put into the product they wish to sell to the public.

Every thing said in the MD&A points to this Company having started production for its first custome. as I argue in my previous post your post refers too.

No need to be confused about new milestones Cat, they are targets for production not testing and you should be very excited about the consequences of that for your investment.

Sula

Statements from the 2015 Q2 MD&A fianancial analysis:

1. 'The Company’s R&D progress was also stalled in the first half of 2015 due to the improper installation of equipment which was purchased in 2014. The improper installation was conducted by a third party and contributed to the team working significant over time hours to identify the cause of poor test results generated by this piece of equipment. The issues relating to the faulty installation were rectified in the first quarter of 2015.'

2. 'The Company is developing proprietary IP. This development process requires the use of third party consultants to both test and prove the concepts. During the six months ended June 30, 2015, the Company expanded on its development roadmap which includes additional proof of concept tests done by the Company’s primary R&D consultant, BAE. Of the $466,958 spent on R&D in the six months ended June 30, 2015, $270,000 was spent or incurred on consulting services with BAE and another $60,000 in services with other consultants in an effort to capitalize on opportunities that the POET process presents.'