Like many of you, I was not pleased with a capital raise announcement yesterday. This said, the sky is not falling. Consider taking a deep breath and not reacting on emotion.

Something to consider:

There is a growing stable of optical products: ie. Lasers, Detectors, etc. that are real products in POET's possession today. POET, via Denselight, is projecting a revenue increase from 450K to 2M by the end of 2016. These are not large numbers, but growth none the less. The optical and sensor market (IOT etc.) is growing (very) significantly and POET has an opportunity to sell the existing products more pervasively into this growing trend. To sell more they need more sales people, partners/channels, build some inventory/working capital possibly factory changes etc. POET executives have more industry contacts than what Denselight had in the past so in combination with a ramped go-to-market + execution, new revenue and sales can be realized. Note: Sensors and detectors tend to be of higher margin.

Other thoughts:

-Pushing forward with a diversified product sales approach (vs. waiting), will decrease time to positive cash flow. This is a key point in time.
-We all agree that a diversified Optical /Laser/Semiconductor technology company with a stable of products selling to a diversified group of customers - is a healthier business vs. a single product to limited amout of customers.
-Building the sales infrastructure will assist in growing revenues via Denselight based solutions today, but also positon the company to hit the ground running faster when POET based solutions hit the market.

So ....the company is doing a capital raise. Is it perfect timing- no. Is it at the optimal stock price- no....but this is the decision the company has made to balance the -here and now revenue- with what soon will come with a POET VCSEL AOC solution. The ~10M or so of cash on hand is likely not enough of a float to support current development operations and ramp the sales engine/inventory/working capital needed for the company to compete in a multi billion dollar market.

What is not far down the road and why remain optimistic:

-(for what it'is worth) I truly believe the VCSEL is not far away. Most will agree that Ajit is a respected executive …he looked us all in the eye at the THM to say (paraphrasing) “it is not far, a matter of weeks not months”. I believe he meant it truthfully at the time - only to find out the last mile of completing the solution needs to take longer partly due to the cycle time to complete each iteration of the final optimization process. (My 'gut' read - it is a short term month to month situation. it could be Nov, Dec, Jan...)

-Once the VCEL is complete…. I believe it is extremely likely there are industry entities that are waiting, that are sitting on a preliminary agreements/MOU. What logically comes next is official partnership agreements/ co-development contracts that can be announced to the market with NRE attached. After which the final AOC cable undergo development, completed and sold into the market.

What is the SP catalyst?

I believe both #1 and #2 and #3 are possible anywhere in Q1-Q2 of FY17. Call me crazy.

Let’s ask ourselves what the SP will be after #1 and #2 are complete. Will it be higher than .65? Will it be over $1, $2? Will it matter what the SP is today or in the meantime? Is now this the right time to exit this investment?

This story is taking incredible patience from all of us. We have spent years and hard earned $. I personally believe it will be worth it. I personally am not getting rattled at this point. I am not about to sell on a dip or pull out now. Forest for trees.

TechGC