Some details at first glance:

As at April 30, 2021, the Corporation has US$21.9M in cash and US$20.3M in working capital. As detailed above, the Corporation reasonably expects that US$1.0M of its current liabilities will be settled through the conversion of a portion of the Corporation’s outstanding convertible debentures.

The Corporation has prepared an annual operating plan for the next 12 months (April 1, 2021 to March 31, 2022) which estimates operating and capital expenditures to be between US$12.5M and US$14.5M. The annual operating plan was presented to the Corporation’s auditors and its audit committee to satisfy the assumption that the Corporation would continue as a going concern between April 1, 2021 to March 31, 2022. The Corporation determined, and the auditors agreed, that the Corporation had sufficient cash to settle its current liabilities and pay its budgeted capital and operating expenditures over the next 12 months.

Based on the Corporation’s cash on hand as at April 30, 2021, the Corporation’s operating and capital expenditures estimated by the annual operating plan for the next 12 months represents approximately 57%-66% of the Corporation’s cash on hand and 61.5%-71.4% of the Corporation’s working capital. At an estimated yearly burn rate of US$12.5M–US$14.5M, the Corporation’s cash balance as of April 30, 2021 of US$21.9M is sufficient to fund the Corporation’s cash requirements for approximately 18-21 months without raising additional capital.

In addition to available cash on hand, the Corporation has reasonable expectations of additional cash proceeds of US$6.9M from the exercises of in-the-money warrants which are expiring on November 2, 2021.

The Corporation intends to engage in further product development on two main projects, which it is anticipating to take to production in the next 18 months.

An optical engine is a unique device that utilizes the novel POET Optical Interposer to integrate photonic, optic and electronic components at wafer level. The optical engine is the primary component of a transceiver used in data centers, currently at speeds of 100 or 200 Gigabits per second (G). The Corporation has designed and tested its optical engine and feels that it is ready to build prototypes which will be presented as samples to prospective customers by Q3 2021. The Corporation expects to transition prototypes into saleable products under scalable production conditions by Q4 2021.

1 ResearchAndMarkets.com, Global Optical Transceivers Market Trajectory Analytics Report, 2021

The 400G optical engine is the next generation of the optical engine utilizing the POET Optical Interposer. The 400G optical engine will use some components that differ from the 100/200G optical engine. Development of the 400G optical engine is underway with prototypes expected in Q2 2022 and scalable production expected in Q3 2022.

The following table outlines the project milestones, expected completion dates and costs:

The Corporation approximates that it requires US$13.0M for the next 18 months to take the above-noted projects to production, which is included in its annual operating plan and yearly burn estimates. Based on the above projections, the Corporation expects that it has sufficient cash on hand to meet the project milestones and take the projects to production stage.