Thanks for sharing Rick and I appreciate it is a first clance from your contact.  But I think they need to do some more DD. It has certainly got us all talking, which is a good thing.

They are listed on the TSX-V. Being on this exchange automatically excludes the company from most large institutional investors and pension funds. I know they are looking to list on the NASDAQ but this may be good, but may also bring them some pain.

Yes this is true and has always been an issue for POET.  Most investors wouldn't read on from here. Hence the move to the NASDAQ.  Which management are well aware could be a bad thing if they don't time it right (position of strength)

• They do not have much in the way of analyst support – only 3. I would not be surprised if these are paid analysts. To get any trading volume and real price fluctuations a good network of analysts following the stock is imperative.

Again true - but they will follow after design wins and a NASDAQ listing - hard to attract credible analysts on the Venture

• They have an unusually large number of shares/warrants outstanding – needed given a massive $139M burn

Not sure if the warrants are unusually high for a startup like POET - Burn rate I would argue has been controlled well considering what POET is trying to achieve - Remember even the deep pocketed haven't achieved it with huge budgets way above $139M - Does the writer understand what has been acheived in a short period of time??

• They have burned through an exceptionally large amount of cash. They look more like a pharmaceutical that burns through massive funds up front, but unlike pharma they do not go through any form of a regulatory vetting process. The only revenue they’ve had was from a subsidiary company that they subsequently sold.

Again i'm not entirely sure where the $139M figure comes from.  I assume that is the net loss over the last 5/6 yrs.  Whatever it is, is it really that large a sum when you consider what the big players spend a year on R&D e.g. Intel - to date they haven't achieve what POET has. Not sure the comparison to Pharma is a fair one - each industry has their costs associated with development and I don't really know if they're wildly different - Of course POET has to spend upfront and then recoup that money later, they're not making match sticks.  The R&D costs are huge, as are the associated validation costs with partners.

The aquistion and subsequent sale of Denselight was absolutely necessary and served a hugely valuable function in POETs progress - For me it was a highly astute piece of business and gave POET a good sum of cash to work with.  

• What concerns me the most is that after 5+ years they have absolutely no customers, and no revenue. Typically, at least one key strategic customer is involved throughout the development process, and this customer is vested to be a consumer of the end product. The customer helps define the needs, requirements, and product roadmap. Also having a key strategic customer leads to other sales given the reputation of the partner. I’ve seen so many tech companies fail because someone thinks they have the next best thing, they raise some funds based on hype, they spend years developing the product, only to find out that what was built does not meet customer needs. These are often pump-and-dump companies as opposed to long term value players.

What concerns me is that this is so wrong I'm not entirely sure if I should take it seriously.  They do have cusomers or partners and have received some small amounts of NRE. All along POET has been working with a partner to meet their needs - If you take one look at their news releases you'll see multiple reference to POET working to customers needs.  They aren't sitting in an R&D facility anymore thinking they have the next best thing.  They are validating the tech with industry leaders and are way beyond a pure R&D company.  Hence the Alpha/Beta samples going out. 

• They have been selling subsidiaries, which to me indicates they are still trying to figure out who they are and what they are going to do. Then to top if off, they had to write-off some of their sales proceeds due to lack of payment.

Selling subsidiaries!! I can only remeber the DL sale and that was an absolutley necessary transaction - which I have covered already.  I just can't see how they can draw the conclusion that POET are somehow unsure of their direction. Certainly not since the shift away from the GaAs tech. 

• They are not using one of the big accounting firms as an auditor. A small independent auditor is a red flag.

Not sure now is the time to be splashing large sums of money on big accountoing firms, given the already large spend highlighted by the writer. Lets face it they are all prone to corruption anyway.

• They do not have their own manufacturing, so they will have to rely on third party FABs for production. Given Covid there is a worldwide shortage of computer chips, and a long line of companies waiting for manufacturing. FABs are hugely expensive and take a long time to build. I fear that even if they produce a breakthrough product they will be unable to get it manufactured anywhere for a few years.

In a word...!! Sanan - POET are well aware of the cost of a FAB, hence the move to sell DL and move to a Fabless model. Yes the chip shortage is a concern - but it's not a reason for POET to become a FAB company.

• They have partnered with Chinese companies for manufacturing. China is famous for steeling technology and IP.

Legitimate concern - But has been discussed a lot

• Information seems to be leaking out that they are about to announce a number of new customers. They will get into a world of hurt about insider trading. The TSX-V is a bit of a wild west exchange, but the NASDAQ will put the screws to them. If they do not learn to control their news the SEC will be all over them. This also implies a pump-and-dump mentality.

This is just not true and certainly isn't something you don't see from NASDAQ listed companies - POET have recently done an excellent job of not leaking news out.  Ok past management might have had that issue, but not this.

• Their stock price on the TSX-V has been highly volatile.

Stock market as a whole has been higly volatile and we are on the venture.

• They come from a long history of penny stock BC mining companies, which screams of pump-and-dump. They definitely do not have a clean corporate history.

What!!! this is just not true - is he/she referring to the current management team?? That is totally unfair and wrong.

• Actual R&D costs are around $6M/year. This seems very unusual given their massive losses, and a large portion of the R&D was related to the subsidiary they sold. Funds are going to may places other than core R&D for their primary product.

The reason they sold DL was because it had served it's function as an R&D facility in their R&D phase of development.  Of course the funds went there, it was an R&D facility for POET.  They then sold it, as it would have cost them too much to run and had served it's function.  

• Their convertible debentures carry an interest rate of 12%. They paid 20% to one of their investment companies for a bridge loan. They are paying massive rates for their financing.

Can't really comment, haven't a good knwoledge of this.   

• A 20% ESOP is unusually high. This is normally around 10%, and the Board/Management seem to be feasting on it, rather than allocating to key employees.

Again not really sure on this one - Although I'm not sure they are "feasting on it".  Afterall their primary income comes from it. That said i'm sure this could be better.

• The company has a very limited number of employees, another flag given high burn rate on other expenses. Are they a Unicorn that turns into a massively valuable company given amazing technology? Hard to tell given a checkered corporate past with what I would say are not Tier 1 suppliers (accountants, investment syndicate, analysts, etc). It looks like a pump-and-dump scenario to me, but it just might turn into something great.

Their number of employees is steadily growing since they moved away from being a pure R&D play.  This is natural and will increase as money starts to flow in.  Not sure they should have a huge number of employees at this stage.  Using the pump and dump analogy does a disservice to everyone on here.  Sure back in the Copetti era that certainly could have been levelled at POET - But not now.