Z3 the sale of DenseLight is being carried out for multiple purposes to advance POET's and the customer’s needs.

Running a fab is both complicated and expensive. The owner will have a license to build the active OI ready components. That is the III-V chips containing active devices such as lasers and detectors with III-V waveguides attached and mating features to connect with the dielectric waveguides. 

The new owner operates fabs and is investing in DenseLight in a way that POET could not. They bring their expertise to the operation and their money to expand the DenseLight operation and production capacity. They will be a partner of POET with co-operation agreements and supply agreements and will benefit in the commercialization of the POET dielectric optical interposer platform. 

I suspect the $40 million also has the advantage of advancing the funds to POET to accelerate the production of the OI based optical engines without having the new DL owner being seen as making a direct investment in POET’s ownership. This is part of the fab light model but the other part is on the silicon side where POET has invested their own money in equipment that enables the dielectric fabrication at silicon fabs. Again the fab is operated and maintained by the owner of the fab but POET owns equipment within the fab to build the dielectric waveguides, filters and the silicon side is processed by the plant. 

This is  a path to  rapid growth without having to own, operate and maintain fabrication plants.

POET is totally focused on building a design and development company that is where the big dollars are. The optical interposer is can provide the connectivity and filtering needs for a very wide range of applications and they are at a point where they see the growth opportunity to  make a very big impact on industry.

The sale of DL and the agreements that will be put into place with what we believe is  a major company is  a step in that direction.