POET Technologies Inc. (“
POET” or the
“
Company”) (TSX Venture: PTK; NASDAQ: POET), the
designer and developer of the POET Optical Interposer™, Photonic
Integrated Circuits (PICs) and light sources for the data center,
tele-communication and artificial intelligence markets, today
reported its unaudited condensed consolidated financial results for
the third quarter ended September 30, 2022. The Company’s financial
results as well as the Management Discussion and Analysis have been
filed on SEDAR. All financial figures are in United States dollars
(“USD”) unless otherwise indicated.
Recent Business Highlights:
The Company made significant progress during the
three months ended September 30, 2022:
-
Collaborated with Lumentum Holdings Inc. (“Lumentum”), a
market-leading designer and manufacturer of innovative optical and
photonic products, which led to the recent signing of an agreement
to supply its breakthrough 100G directly modulated lasers (DMLs)
for POET’s 400G FR4 transmit optical engine chiplets for
applications in 400/800/1.6T data communications solutions. This
represents the industry’s first implementation of flip chip
high-speed DMLs into optical engines at these data rates, resulting
in unparalleled integration and easily meeting the form factor
requirements of today’s transceiver modules.
- Announced the sampling of its 200G
FR4 transmit (Tx) and receive (Rx) optical engines, both based on
the POET Optical Interposer platform, and incorporating the
industry’s only monolithically integrated multiplexers and
demutiplexers in its proprietary waveguide structures, avoiding the
need for a separate demultiplexer component, while providing
superior transceiver performance and efficient use of installed
fiber assets in data centers.
- Conducted a well-attended virtual
Annual and Special Meeting of shareholders, which resulted in all
proposed measures being passed by shareholders and the election of
Theresa Lan Ende and Dr. Michal Lipson to the POET Board of
Directors by an overwhelming approval of shareholders.
The industry-leading 400G Tx chiplet achieves
maximum integration and minimum size compared to any competing Tx
device. The 400G Tx chiplet integrates laser drivers, high-speed
DMLs, monitor photodiodes and an optical multiplexer into a highly
power-efficient 4.4mm x 10.5mm form factor. POET’s 800G Rx chiplet
integrates an 8-channel Octal TIA, high-speed photodiodes and an
optical demultiplexer into a space efficient 5.1mm x 14.7mm form
factor. By combining multiple 400G Tx and Rx chiplets into a single
module for 800G and 1.6T pluggable transceivers, POET provides
unparalleled flexibility and cost savings in network design for
hyperscale data centers.
As part of its third quarter business
commentary, the Company reiterated two key milestone objectives for
the balance of 2022: 1) the development of a 400G FR4
multiplexed transmit engine that will be combined with the existing
400G receive engine to create a full transmit and receive
sub-assembly for a 400G FR4 transceiver module; and 2) the delivery
of samples of a packaged light source assembly for Celestial AI, a
lead customer in the emerging growth market for Artificial
Intelligence – Machine Learning (AI-ML) accelerator chips.
Management Comments
Dr. Suresh Venkatesan, Chairman & CEO
commented, “We are making great progress toward the two key
objectives we outlined at the end of last quarter. First, we
completed the design of our 400G FR4 DML laser powered chiplet and
secured a supply of breakthrough DMLs from Lumentum, one of the
world’s leading laser suppliers. This exciting development serves
as both a foundation and a distinct competitive advantage as we
scale our platform technology to address 800G and 1.6T pluggable
transceivers. Additionally, we advanced our second objective with
the recognition of $0.2 million of revenue from Celestial AI, which
reaffirmed its commitment to use POET’s Lightbar packaged light
source. We expect to deliver alpha samples to Celestial AI within
just a few weeks consistent with our roadmap. We also demonstrated
an Optical Interposer-powered thin-film lithium niobate modulator
based 400G Tx solution and expect to demonstrate further
improvements in the design of such modulators at the CIOE in
December. Having developed and established the base capabilities of
the Optical Interposer using 100G/200G components, POET is quickly
ratcheting up its capabilities to serve the high end of the market
with 800G/1.6T solutions.”
“As discussed at our annual meeting of
shareholders, we are confident that we will achieve a key step
toward commercialization of several products by year end and be in
full commercial production in 2023. We are targeting production
release of four products by the end of this year and another four
in the first half of next year. In the coming months, we expect to
expand sampling of our portfolio of 100G, 200G and 400G transmit
and receive optical engines in support of growing our pipeline of
design wins, together with advancing our ongoing development
efforts on next-generation optical engines with strategic customers
to enable 800G and 1.6T pluggable transceivers for hyperscale data
centers.”
Based on published research from leading market
research firms, POET has calculated that its served market for
transceiver modules will expand from approximately $4 billion in
2023 to approximately $7 billion in 2027. POET estimates that the
market for its packaged light source products, in which it believes
it has a material competitive advantage, will begin to emerge in
2024 and will grow rapidly to over $5 billion in 2027, vastly
exceeding the transceiver market in volume and value in subsequent
years.
Non-IFRS Financial SummaryThe
Company reported non-recurring engineering revenue (“NRE”) of
$233,000 in the third quarter of 2022 compared to $nil for the same
period in 2021 and $120,000 in the second quarter of 2022. The
Company provided services under an NRE contract to one customer
throughout 2021. In 2022, the Company is now providing similar
services to multiple customers, one of which continued to contract
services from last year. The revenue relates to unique projects
that are being addressed utilizing the capabilities of the POET
Optical Interposer.
The Company reported a net loss of $4.0 million,
or ($0.11) per share, in the third quarter of 2022 compared with a
net loss $3.5 million, or ($0.10) per share, for the same period in
2021 and a net loss of $5.3 million, or ($0.15) per share, in the
second quarter of 2022. The net loss in the third quarter of 2022
included research and development costs of $1.9 million compared to
$1.2 million for the same period in 2021 and $1.8 million in the
second quarter of 2022. Fluctuations in R&D for a Company of
this size and this stage of growth is expected on a
period-over-period basis as the Company transitions from technology
development to product development.
Non-cash expenses in the third quarter of 2022
included stock-based compensation of $0.9 million and depreciation
and amortization of $0.3 million. Non-cash stock-based compensation
and depreciation and amortization in the same period of 2021 were
$1.3 million and $0.3 million, respectively. Second quarter 2022
stock-based compensation and depreciation and amortization were
$1.0 million and $0.3 million, respectively. The Company had
finance costs of $12,000 in the third quarter of 2022 compared to
$20,000 in the third quarter of 2021 and $13,000 in the second
quarter of 2022. All of the finance costs recognized in the third
quarter of 2022 were non-cash compared to $49,000 during the same
period in 2021. The finance costs in the second quarter of 2022
were also non-cash. The Company recognized other income, including
interest of $57,000 in the third quarter of 2022 compared to
$208,000 in the same period in 2021 and $40,000 in the second
quarter of 2022.
Non-cash impact of joint venture in the third
quarter of 2022 was $0.1 million compared to $0.4 million in the
same period of 2021 and ($0.7) million in the second quarter of
2022. The Company’s share of loss is approximately 87.9% of the
loss of Super Photonics, the Company’s joint venture with Sanan.
The Company's current share of the operating loss is a result of
the high value of the Company's initial contribution. The non-cash
impact of joint venture in the third quarter of 2022 consisted of a
gain on the Company’s investment in the joint venture of $0.5
million netted against a loss on the joint venture operations of
($0.4) million. The gain in the period of 2021 was $1.4 million and
was netted against a loss from operations of ($1.0) million. There
was no gain in the second quarter of 2022.
Cash flow from operating activities in the third
quarter of 2022 was ($2.5) million compared to ($2.8) million in
the third quarter of 2021 and ($3.3) million in the second quarter
of 2022.
Non-IFRS Financial Performance
MeasuresCertain financial information presented in this
press release is not prescribed by IFRS. These non-IFRS financial
performance measures are included because management has used the
information to analyze the business performance and financial
position of POET. These non-IFRS financial measures are intended to
provide additional information only and do not have any
standardized meaning under IFRS and may not be comparable to
similar measures presented by other companies. These non-IFRS
financial measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS.
POET TECHNOLOGIES
INC.PROFORMA – NON-IFRS AND IFRS PRESENTATION OF
OPERATIONS(All figures are in U.S. Dollars)
For the Quarter ended: |
|
30-Sep-22 |
30-Jun-22 |
31-Mar-22 |
31-Dec-21 |
30-Sep-21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
232,928 |
|
120,261 |
|
- |
|
- |
|
- |
|
Research and development |
|
(1,884,767 |
) |
(1,829,369 |
) |
(2,232,534 |
) |
(2,010,793 |
) |
(1,231,676 |
) |
Depreciation and
amortization |
|
(336,446 |
) |
(313,677 |
) |
(302,018 |
) |
(281,178 |
) |
(296,424 |
) |
Professional fees |
|
(203,778 |
) |
(291,185 |
) |
(248,112 |
) |
(269,306 |
) |
(354,163 |
) |
Wages and benefits |
|
(646,349 |
) |
(728,313 |
) |
(608,518 |
) |
(610,428 |
) |
(623,731 |
) |
Impact of join venture |
|
116,747 |
|
(745,961 |
) |
(430,321 |
) |
1,022,417 |
|
422,834 |
|
Stock-based compensation |
|
(880,796 |
) |
(969,661 |
) |
(997,441 |
) |
(1,181,375 |
) |
(1,295,864 |
) |
General expenses and rent |
|
(484,559 |
) |
(552,410 |
) |
(622,060 |
) |
(377,223 |
) |
(275,078 |
) |
Impairment and other loss |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Interest expense |
|
(11,707 |
) |
(12,627 |
) |
(13,794 |
) |
(15,512 |
) |
(19,729 |
) |
Other (income), including
interest |
|
57,429 |
|
40,300 |
|
21,999 |
|
26,650 |
|
208,100 |
|
Net loss – non IFRS and
IFRS |
|
(4,041,298 |
) |
(5,282,642 |
) |
(5,432,799 |
) |
(3,696,748 |
) |
(3,465,731 |
) |
|
|
|
|
|
|
|
Net loss per share – non IFRS
and IFRS |
|
(0.11 |
) |
(0.14 |
) |
(0.15 |
) |
(0.10 |
) |
(0.10 |
) |
Grant of Options to Directors, Officers
and EmployeesAs part of the Company’s stock option
program, on November 11, 2022, the Board of Directors granted a
total of 1,395,144 options to purchase common shares to directors,
officers and employees of the Company. The total included 268,894
options to non-management directors, 450,000 to officers and
676,250 to other employees. The options granted to directors and
officers have an exercise price of C$4.00, which is higher than the
current market price and are exercisable for 10 years following the
grant. 25% of the directors’ options vest upon grant and the
balance vests quarterly until August 11, 2023. The grant to the
directors represents the option portion of directors’ fees for the
12-month period beginning August 1, 2022. The options granted to
other employees are exercisable for 10 years at a price of C$3.54.
All options granted to officers and other employees shall vest
quarterly in arrears over sixteen (16) quarters, with the first
vesting date being February 11, 2023, with equal amounts vesting at
the end of each 3-month period thereafter. All of the options
expire on November 11, 2032.
About POET Technologies
Inc.POET Technologies is a design and development company
offering integration solutions based on the POET Optical
Interposer™ a novel platform that allows the seamless integration
of electronic and photonic devices into a single multi-chip module
using advanced wafer-level semiconductor manufacturing techniques
and packaging methods. POET’s Optical Interposer eliminates costly
components and labor-intensive assembly, alignment, burn-in and
testing methods employed in conventional photonics. The
cost-efficient integration scheme and scalability of the POET
Optical Interposer brings value to any device or system that
integrates electronics and photonics, including some of the highest
growth areas of computing, such as Artificial Intelligence (AI),
the Internet of Things (IoT), autonomous vehicles and high-speed
networking for cloud service providers and data centers. POET is
headquartered in Toronto, with operations in Allentown, PA,
Shenzhen, China and Singapore. More information may be obtained at
www.poet-technologies.com.
Shareholder Contact:Shelton GroupBrett L.
Perrysheltonir@sheltongroup.com |
Company Contact:Thomas R. Mika, EVP &
CFOtm@poet-technologies.com |
This news release contains “forward-looking
information” (within the meaning of applicable Canadian securities
laws) and “forward-looking statements” (within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995). Such
statements or information are identified with words such as
“anticipate”, “believe”, “expect”, “plan”, “intend”, “potential”,
“estimate”, “propose”, “project”, “outlook”, “foresee” or similar
words suggesting future outcomes or statements regarding any
potential outcome. Such statements include the Company’s
expectations with respect to the success of the Company’s product
development efforts, the performance of its products, the expected
results of its operations, meeting revenue targets, and the
expectation of continued success in the financing efforts, the
capability, functionality, performance and cost of the Company’s
technology as well as the market acceptance, inclusion and timing
of the Company’s technology in current and future products and
expectations for approval of proposals at the Company’s annual
meeting of shareholders.
Such forward-looking information or statements
are based on a number of risks, uncertainties and assumptions which
may cause actual results or other expectations to differ materially
from those anticipated and which may prove to be incorrect.
Assumptions have been made regarding, among other things,
management’s expectations regarding the success and timing for
completion of its development efforts, the introduction of 800G
modules based on 400G optical engine developments, financing
activities, future growth, recruitment of personnel, opening of
offices, the form and potential of its joint venture, plans for and
completion of projects by the Company’s third-party consultants,
contractors and partners, availability of capital, and the
necessity to incur capital and other expenditures. Actual results
could differ materially due to a number of factors, including,
without limitation, the failure of its products to meet performance
requirements, missing the window for 800G modules based on 400G
optical engines, lack of sales in its products, once released,
operational risks in the completion of the Company’s anticipated
projects, lack of performance of its joint venture, delays in
recruitment for its newly opened operations or changes in plans
with respect to the development of the Company’s anticipated
projects by third-parties, risks affecting the Company’s ability to
execute projects, the ability of the Company to generate sales for
its products, the ability to attract key personnel, the ability to
raise additional capital and the agreement by shareholders to
approve proposals put forth by the Company at shareholders’
meetings. Although the Company believes that the expectations
reflected in the forward-looking information or statements are
reasonable, prospective investors in the Company’s securities
should not place undue reliance on forward-looking statements
because the Company can provide no assurance that such expectations
will prove to be correct. Forward-looking information and
statements contained in this news release are as of the date of
this news release and the Company assumes no obligation to update
or revise this forward-looking information and statements except as
required by law.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.120
Eglinton Avenue, East, Suite 1107, Toronto, ON, M4P 1E2- Tel:
416-368-9411 - Fax: 416-322-5075
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