In the 20-F, POET states:

• During the year ended December 31, 2015, $2,980,076 was spent on R&D, of this amount, $1,560,819 was spent on subcontract services as compared to $582,943 in fiscal 2014.

Now why did subcontractor expenditures rise so much? The answer follows immediately and should increase our level of confidence in the technology:

• The subcontract fees related to work done with the Company’s VCSEL technology, epitaxy substrates and technical design kits. This development process required the use of third party consultants to both test and prove the concepts. During the year ended December 31, 2015, the Company expanded on its development roadmap which included additional proof of concept tests conducted by the Company’s then primary R&D consultant, Anadigics, Inc. The Company also engaged other R&D services providers such as Epiworks Inc., Intelligent Epitaxy Technology and Wavetek to expand the technology development. The Company has transitioned to an outsourcing model to expedite the development process. This transition is part of the Company’s ultimate objective of working with a “pure-play” foundry offering a wide range of dedicated, flexible and competitive foundry services.

And, by the way, regarding BAE:

• Additionally, in early 2015, the Company had expanded the capacity of the work being undertaken by BAE but stopped this activity in the second half of 2015 with a transition to Anadigics. BAE was the Company’s primary subcontractor in 2014, most of the subcontract fees for that year were spent on services provided by BAE.