I talked about POET’s need to raise money in order to (in my words) attack the market with products. That view has grown stronger. I believe it is essential for POET to get products into the market place in the absolute shortest amount of time in order to take the lead and keep the lead.  And I believe that they will need to have deals in place with all the big players in the industry to do this.

I am more convinced today than ever before that unless POET can do this the company will be taken over by someone who can.

I mentioned that tranche 3 should close before the end of the month to avoid the Espresso default rate. That has been confirmed.

In the case of an event of default by the Issuer, the interest rate in respect of the Credit Facility will be 22.0% per annum (the "Default Interest Rate"), calculated daily from the day following the event of default. If the Issuer is unable to raise an additional US$3,600,000 in equity or equivalent funding, in addition to the funds raised in the Tranche 1 Financing, by May 31, 2019, the Interest Rate shall increase to the Default Interest Rate until the full cumulative equity minimum of US$5,000,000 is raised, at which point the interest rate shall revert to the normal 17.25% Interest Rate. For greater certainty, the failure to satisfy this obligation shall not constitute an event of default.

I expect that institutional buyers will be invited to participate in this round.

It is also confirmed in tranche 3 that in the case of a buy out of the company (POET) the debenture conversion date accelerates to a fixed date to allow shares to be tendered. I  believe the company is  very aware of the need to hit this  market as hard as they can  and as fast as they can and that is  the reason they are not simply waiting for  the DL deal  to  close to  build out production capacity.

I mentioned yesterday that I felt that POET may invest money in the equipment necessary for the OI production at one of the DL buyer’s silicon foundries. It makes a lot of sense to  me however that may be a bridge too  far for competing companies to tolerate unless they can be assured a piece of the action.

 As the centrepiece of its growth strategy, Poet will retain ownership of all the intellectual property unique to the Optical Interposer. The company is now preparing to meet high-volume manufacturing requirements for Optical Interposer-based solutions, applying the active device designs successfully achieved at DenseLight, and exploring additional vertical markets beyond datacom.

Poet's chief executive officer, Dr. Suresh Venkatesan, commented: "We believe this offer, and the anticipated agreements, once completed, represent a compelling opportunity to leverage our assets and inject non-dilutive capital into Poet. The deal further allows Poet to pursue a fab-light strategy with a less capital-intensive business model that is focused on growing the Optical Interposer business through targeted investments in the design, development and sale of vertical market solutions. At the same time, a well-funded partner capable of making investments in both DenseLight and in additional manufacturing capacity will both support the anticipated ramp of Poet's Optical Interposer and transform DenseLight into a world-class manufacturer with global market reach. In addition to being one of its potentially largest customers, we expect to remain engaged with DenseLight and its partner over the long term for the benefit of both companies. We are very excited about the potential that this represents for all parties to this proposed transaction."

I  expect the next few months to  be the most exciting in POET's history.