Phil-v: Obviously and unfortunately, we are still hoping that they can make the VCSEL work. It is the product that will demonstrate the promise that copper/photonics can be combined on a chip. Unfortunately, what was eagerly anticipated by all has been reduced to hope. As you said, investing on hope is not a good strategy, but for the longs, that is all we have.

Oh, I strongly believe that we have much more than hope! While my overall confidence in management has gone down the dump, I still have a lot of trust in them on the technical side and I believe they'll be able to achieve their goals, including the VCSEL and the detector, components that Suresh explicitly mentioned in his letter – provided they can speed up the process sufficiently and not run out of money (again).

Please note that Suresh wrote that POET has "completed transfer from the lab and are beginning to develop and optimize our integrated optical platform technology in a high-volume large wafer scale manufacturing foundry". While I have learned to not give too much on the wording in POET's statements and I don't like cloudy phrases like "a high-volume large wafer scale manufacturing foundry" instead of "Wavetek", I think "completed" is pretty definitive.

How does the company try to gain greater control over its own destiny? Well, let's have another look at Suresh's letter:

• "As we continue product development of the POET platform technology, we anticipate bringing key capabilities in-house for the most time-sensitive aspects of technology development to help avoid future delays associated with third-party vendors. These delays relate to the timing and scheduling of POET’s manufacturing requirements in the production plans of the vendors. As a small company with limited prototype runs, we do not represent a large current account to these vendors and lead times can sometimes extend to months. We believe that investments in the development of multiple sources for our epitaxial wafers and in capital equipment will allow us to accelerate the cycles of learning that are needed to produce prototype devices that meet distinct specifications."

This again is pretty clear. They experienced severe delays at several fronts:

• The epitaxial vendor(s). Whenever POET wants to have produced wafers with a modified epitaxy, they have to wait until Epiworks has a free production slot for them. Being a small company, POET has no priority over others. That's the drawback of the growing optoelectronics market: It creates bottlenecks, and we are hampered by them, too.
• The U.S. Department of Commerce. Once Epiworks has produced a new batch of wafers, POET needs an export permit. And again they have to wait. This pertains to each new modification of the epitaxy.
• The foundry. Even if Suresh didn't mention it, I'd guess Wavetek is not running idle all the time and only waiting to start processing POET wafers. So POET will quite likely have to wait here again.

(Pity Suresh does neither systematically list all potential source of delay nor does he mention their respective specific impact, so I have to raise a [Communication Alert] here.)

Anyway, his statement is that POET is facing delays that "can sometimes extend to months". Months! Ajit quite likely has not imagined that when he talked of "few weeks" at the THM.

Now what could the company do to accelerate that?

• Acquire wafers elsewhere. In Suresh's words: "investments in the development of multiple sources for our epitaxial wafers", i.e. finding additional epitaxy partners and enable them to produce POET wafers. This will require lead time of course, but it will be worth it – unless they'd face production delays there, too.
• Avoid export regulation hassles. POET will have / has had to find a company that can export the wafers to Taiwan freely or with only minor delay. A factory in Taiwan would be ideal.
• Do it yourself. Suresh anticipates "investments … in capital equipment". Unfortunately he doesn't specify – [Communication Alert] again – what kind of "capital equipment" he is talking about. MOCVD equipment comes to mind for epitaxial deposition, or whatever equipment they need for FEOL processing, BEOL processing, testing etc. This will require capital as well as lead time. Doing everything in-house would deliver small to medium quantities only, but it would minimize delays. Perhaps it would be too expensive to have everything in-house, so they might want to find / have found a suitable combination of in-house and external services.

Overall I believe they have a viable plan to overcome those difficulties. Unfortunately it requires more money than they (we) had, thus the capital raise. And again a [Communication Alert] is justified, because POET should have told us much earlier what their problems are and how grave they are.

I am keen to learn about the details on the 28th! And please, POET: No "soon", no wish-wash!