Hi everyone, 

Is this new information flied today on sedar (In the Short Form Base Shelf Prospectus)? Expected revenues for 2019 now between 8 and 10 millions and not expecting to reach cash break-even before 2010? Please don't shoot the messenger, I'm over invested in this stock like many here and reading this board everyday, so I'm not interested in another equity financing, but when I read this I think a last one will be needed?

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On November 12, 2018 the Corporation announced that it had received orders for POET Optical Interposer-based solutions from leading global networking companies and others targeting data communication applications. The orders include sales and development contracts with a value in excess of US$3 million (CAD$3.9 million) to purchase current device prototypes, to develop and provide increasingly integrated optical engine components and to systematically address specific customer integration requirements under paid development programs.

Recent events leading up to the foregoing announcement of orders for POET Optical Interposer-based solutions support the Corporation’s strategy to center its development programs on the Optical Interposer, a differentiated, proprietary platform that it believes will materially expand the Corporation’s markets and revenue in the coming quarters.

During the current quarter, and at minimum over the first two quarters of 2019, the Corporation expects to devote a substantial amount of its development and operational resources to demonstrating the utility of the Optical Interposer to new products to be offered by its existing leading data communications customers, including those new global networking customers noted above. The Corporation believes that addressing product-specific requirements with willing partners and committed funding is the optimal way to introduce the Optical Interposer technology to the market. Identifying and overcoming individual technical challenges increases the likelihood of success and promotes innovation. The Corporation expects that successful implementation of its designs into component prototypes, combined with the cost advantage inherent in Optical Interposer-based solutions, will lead to additional funding for other products, as well as to contracts for the delivery of production devices, once fully qualified. 1 The reported amounts represent guaranteed funding, not dependent on device performance, which the Corporation expects to recognize as revenue between Q4 of 2018 and Q2 of 2019. Overall, Optical Interposer applications developed in connection with leading data communications customers represent the largest area of potential revenue growth for 2019 and beyond for the Corporation.

One consequence of the recently announced customer engagements is a reordering of the Corporation’s development priorities, bringing forward its plan to develop lasers to be incorporated in a full 'Transmit and Receive Optical Engine' (TROE) and addressing the requirements of 400G implementations. The Corporation believes that the performance of its existing QuadPIN device can be improved to address the requirements of 400G transceiver designs with a planar optical axis, an architecture that is likely to be adopted for 400G transceiver designs now in development. The QuadPIN device with Spot Size Converter is expected to be placed into qualification with a “thru” waveguide on Interposer in Q1 of 2019, both as a component device and as a Receive Optical Engine. Any such devices sold in 2019 will be in limited quantities, since 400G transceivers are not expected to ship in volume until 2020 or later. More importantly, it will be incorporated into the Corporation’s TROE, expected to be introduced into qualification in Q3 of 2019, in a 100G implementation. Apart from the product-specific developments with industry-leading customers,an offering of a 100G CWDM TROE could have the biggest impact on the Corporation’s data-communications revenue over the next two to three years, because of the size of the market and the need for transceiver module suppliers to address customer gross margin concerns. However, because of the longer development cycle and longer qualification period required for a TROE compared to a Receive-only Optical Engine (ROE), production volumes in the 100G CWDM version are not anticipated to be realized until 2020.

In addition to the new products in the data communications market noted above, the Corporation expects a significant increase in its Sensing product revenue in 2019. Recent trends have been positive. With some existing customers expanding order size and the addition of new customers, the Corporation has a strong pipeline of committed orders. Expanded laser product-lines in CW, FP and DFB configurations address new and complex applications in the sensing market. In addition, by incorporating the packaging innovations developed for the Optical Interposer, the Corporation expects that in mid to late 2019 it will be in a position to introduce a differentiated sensing product-line at lower cost and higher performance.

In recent quarters, the Corporation has taken major steps to advance its development of Interposer-based new products, including through the purchase of equipment, improvement of facilities and the strengthening of its engineering team with more highly qualified talent and larger staff, all represented in the Corporation’s financial statements through additions to fixed assets and increased operating expenses. Certain additional capital equipment may be needed to enhance its development and production capabilities, but the Corporation expects only marginal increases in operating expenses over the next 3 to 4 quarters, as it is able to address the needs of its customers with its existing engineering staff and production facilities. The next few quarters will be devoted to the successful completion of funded development programs, the introduction of new devices into qualification cycles with customers, and preparation for higher production volumes in subsequent quarters. As a result of the recently announced contractual commitments for Optical Interposer prototypes, other anticipated ROE prototype orders in 2019, increases in Sensing product revenue and improvement of overall gross margins described below, the Corporation expects a material increase in its revenues in 2019, forecasting total revenue in the range of approximately $8 to $10 million, though it does not expect to reach cash break-even until 2020. Gross Margins should increase as a result of the proportion of higher margin development contracts for Non-Recurring Engineering (NRE) compared to products sales, which utilizes the Corporation’s existing engineering and operations staff. In addition, the Corporation plans to continue product development with an expansion of opportunities in markets beyond data communications for its Optical Interposer technology, such as telecommunications, Automotive LIDAR, and integration with Application Specific Integrated Circuits (ASICs), including switches and graphics generators.