Dr. Suresh Venkatesan reports

POET TECHNOLOGIES REPORTS FIRST QUARTER 2017 FINANCIAL RESULTS

Poet Technologies Inc. has released its consolidated financial results for the first quarter ended March 31, 2017. The Company's unaudited financial statements as well as the Management Discussion and Analysis for Q1 2017 have been filed on SEDAR.

First Quarter and Recent Highlights: 

Revenue increased over 65% sequentially from Q4 to US$712,600, including US$80,000 of NRE; Gross profit was US$293,000 or 41.1% of sales; Granted 9 new patents year-to-date; Ended the quarter with cash and short-term investments of US$11.7 million. 

Total sales in the first quarter of 2017 were US$712,600, compared to US$423,500 in the preceding quarter. The sequential increase was due primarily to backlog from the fourth quarter being shipped in the first quarter as well as NRE revenue of US$80,000. Revenue in both the first quarter of 2017 and the fourth quarter of 2016 reflected the sale of DenseLight photonic sensors, primarily for test & measurement applications. Gross margin increased to 41% during the first quarter of 2017, compared to a negative 10% in the fourth quarter of 2016, as higher sales and NRE revenue allowed for better absorption of factory costs. First quarter net loss was US($3.5 million), or ($0.01) per share, compared to US($3.0) million, or ($0.01) per share in the same quarter one year ago. The loss in Q1 2017 included non-cash stock-based compensation of $894,813 and depreciation & amortization of $540,393, compared to $1,259,051 and $87,844 respectively in the same quarter one year ago.

Management Comments

Dr. Suresh Venkatesan, Chief Executive Officer of Poet, commented, "First quarter results reflect our recent streamlining and realignment of the consolidated business, which was a meaningful contributor to the sequential improvement in our top-line results and gross margin. Since announcing our successful demonstration of a functional Vertical Cavity Surface Emitting Laser (VCSEL) for our integrated GaAs opto-electronic platform in early April, we have continued to make progress on performance optimization as part of our development effort to create a single-chip transceiver optical engine for the short-reach Active Optical Cable (AOC) market. The current market size for GaAs-based AOCs is $339 million, growing to $779 million by 2021, according to a recent report from LightCounting. The expected growth is the result of major cloud-based data center operators committing to AOCs because of the higher cost associated with the power consumption of copper-based cables."

"Additionally, we are enthusiastic about the development of our hybrid integration platform, which utilizes a combination of indium phosphide (InP) technology and dielectric waveguide devices in a single package. By leveraging this approach, we are able to target additional high-growth markets within data communications. This Dielectric Photonics approach eliminates the need for active alignment and other expensive packaging elements and enables significantly lower cost solutions for medium-reach applications. Industry reports, including those from LightCounting and Oculi, llc referenced in our recent filings, estimate that the 100G to 400G optical transceiver market will grow from roughly $2.5 billion in 2016 to over $7.5 billion by 2021. In addition to addressing this substantially larger market opportunity with our integrated optical engine, we believe our product roadmap also provides the flexibility to sell active and passive discrete components across the broader data communications market. Looking forward, product development and commercialization based on this new hybrid approach as well as further advancement of our monolithic integration technology will continue to be the Company's highest priority for 2017 and beyond."

Annual General Meeting and Business Update 

Poet will hold its Annual General Meeting on July 13, 2017, with a shareholder record date of May 26, 2017. The Company's 2017 meeting will be held in San Jose, California. Executive management plans to provide a comprehensive business overview and update as part of Poet's annual general meeting on July 13, which the Company intends to webcast.