Business Outlook

The Company will not be able to reconfirm its previously provided guidance to achieve revenue of US$2,000,000 in the second half of 2016, primarily as a result of unexpected production delays at its Singapore fab. It was anticipated at the completion of the DenseLight acquisition that changes were needed in the operations and organization of the business unit, a strategy for which has been developed and is being implemented.  Substantial progress has been made to date and will continue into 2017. The new guidance is for revenue in the range of US$1,600,000 to US$1,800,000 for the second half of 2016, and depends on closing and shipping multiple orders for sensor products, 2.5G DFB lasers and the timely completion of NRE for key clients.  Even with the reduced revenue guidance, the Company has achieved significant quarter on quarter revenue increases and expects that the DenseLight business unit will develop into a robust platform for the commercialization of POET technology.  The Company anticipates continued revenue growth at DenseLight and its intention to reach positive operating cash flow by the first half of 2017.

I'm very curious to know if Denselight is on pace to hit it's pre-determined revenue target, and get that extra $1.0 Million worth of shares. I guess we won't know until next quarter.

JW