Fourth Quarter and Recent Business Highlights

The Company achieved the following during the three months ended December 31, 2022 and more recently:

• Successfully completed a non-brokered private placement of an aggregate 1,126,635 units of the Corporation at a price of C$3.81 (US$2.78) per unit for aggregate gross proceeds of C$4,292,479 (US$3,184,332).
• Released to production four optical engine products, further advancing the Company’s commercialization goals. The products included transmit and receive optical engines for 100G CWDM4 as well as receive optical engines for 200G FR4 and 400G FR4.
• Developed multi-engine 100G CWDM4 and 100G LR4 chip-on-board solutions for its lead customer, ADVA Optical Networking SE. ADVA will use POET’s multi-engine transmit and receive chips in an innovative pluggable solution that packs the functionality of four independent 100Gbit/s interfaces into a single QSFP-DD housing that is scalable to high volume as well as higher data rates.
• Began sampling 400G FR4 and 800G 2xFR4 receive optical engines in partnership with Luxshare Technology Co., Ltd., a global technology provider for data-communication facilities and enterprise-level products, to enable the sale of power-efficient and cost-optimized 400G and 800G transceiver solutions.
• Amended the terms of 1,764,720 common share purchase warrants with an expiry date of February 11, 2023 and an exercise price of C$11.50 to expire on May 11, 2023 at an exercise price of C$4.25. The Company had received US$5,475,102 from the exercise of 1,758,716 of these warrants by March 10, 2023.
• Demonstrated 800G optical engines and light source products at the 2023 OFC Conference and Exhibition, where the Company also hosted numerous meetings with potential customers, partners and media. Additionally, the Company introduced and showcased a live demonstration of “POET Infinity™”, a new chiplet-based transmitter platform for 400G, 800G and 1.6T pluggable transceivers and co-packaged optics solutions.
• Entered into an agreement with Beijing FeiYunYi Technology Ltd. (“BFYY”) to design optical engines for deployment of optical modules in the telecom market globally, beginning in China.  The agreement, valued at up to $1 million over a two-year period, includes NRE for POET and an initial purchase order for 10,000 units that will be used to sample customers. BFYY has forecasted optical engine purchases from POET’s joint venture company, Super Photonics Xiamen (“SPX”), at over $30 million over a three-year period.
• Announced a collaboration with Vanguard Automation GmbH, the developer of 3D-nanoprinted Photonic Wire Bond and Micro-Lens technology and manufacturer of software-defined equipment for photonic integration and packaging, to enable the integration of Micro-Lenses on the POET Optical Interposer platform to maximize coupling efficiency while maintaining POET’s wafer-level passive assembly process.
• Several current and former directors holding warrants that expire on April 3, 2023 have exercised their warrants.

Management Comments

“The Company’s effort during the fourth quarter has been well rewarded in the form of several pivotal announcements in early 2023,” stated POET Chairman & CEO, Dr. Suresh Venkatesan. “In January, we released to production four optical engines, marking a significant commercialization milestone for both POET and Super Photonics. Having recently completed product design verification and reliability testing on these optical engines, we are now working closely with multiple customers on the internal qualifications for their end customers. We were also pleased to announce POET’s optical engines enabling ADVA’s unique MicroMux Quattro pluggable device. The opportunity to work with ADVA serves to further validate the Company’s optical engines. As additional evidence of our progress, in February we announced our partnership with Luxshare Technology, which is focused on leveraging POET’s highly integrated Infinity chiplet platform to expand its 400G and 800G pluggable transceiver solutions for the data center market. Also notable was the signing of key supplier arrangements in the fourth quarter with Lumentum Holdings for its directly modulated lasers.”

“Most recently, the Company participated at OFC 2023 where we successfully hosted live demonstrations of our advanced optical engine and light source products as well as held meetings with a series of prominent prospective customer and partners. In conjunction with OFC, we also showcased our POET Infinity chiplet-based transmitter platform for 400G, 800G and 1.6T pluggable transceivers and co-packaged optics solutions. Our team was extremely pleased with the high level of interest and engagement at OFC, which we anticipate to lead to expanded product sampling and customer qualifications in the coming quarters. We believe POET is increasingly in a predominant position to become a leading optical engine supplier at advanced data rates, as we continue preparations to ramp volume production in the second half of 2023. Additionally, we are making important advancements on our targeted products for AI-ML applications at an ideal time as market demand rapidly expands for new scalable, cost-effective solutions.”