POET Technologies Inc. (PTK) Earnings Call Transcript & Summary

[Presentation] Thank you all for spending the time to enjoy this video presentation. Good afternoon, shareholders and guests. Welcome to this 2023 Virtual Annual and Special Meeting of the Shareholders of POET Technologies, Inc. My name is Kevin Barnes. I'm the VP Finance and Administration and Treasurer of the company. By holding this meeting virtually, we have allowed our geographically diverse shareholder base an equal opportunity to participate at this meeting. Now as noted in your information circular, today's meeting is conducted virtually by the Lumi platform, which allows only registered shareholders to participate in voting. Please note, if you have already voted, you do not need to vote on the resolutions as they're read. Now the meeting today will be just about 2 hours long, where we will handle first the formal part of the meeting. This will be chaired by Peter Charbonneau. He is the Lead Director and Chair of the Corporate Governance and Nominating Committee. And it will be followed by another video presentation and an oral presentation, which will be followed finally with questions-and-answer session. Now with us today, we have management and Board representation, namely Dr. Suresh Venkatesan, Vivek Rajgarhia, Thomas Mika; myself, Kevin Barnes; and Raju Kankipati; along with the chairs of the various committees, Peter Charbonneau, Glen Riley and Chris Tsiofas. So the agenda for this formal part of the meeting will cover the topics that you see before you. If you haven't already done so, you will be -- we will be asking you to vote on the following agenda items specifically setting the number of directors, election of directors, approval of the amended and restated bylaws, the appointment of auditors, the approval of an Omnibus plan and the migration of the stock options. At this point, I'd like to turn the meeting over to our Lead Director and Chair of the CGMC, Peter Charbonneau, to Chair the formal part of the meeting. Peter?

Thank you very much, Kevin. Welcome, everyone, to the Annual General and Special Meeting of Shareholders of POET Technologies, Inc. As Kevin mentioned, my name is Peter Charbonneau. I'm the Lead Independent Director and Chair of the Corporate Governance Committee of POET Technologies, Inc. This meeting will now come to order. As noted in the notice of meeting and accompanying management information circular, this year's annual general and special meeting is available online using the Lumi meeting platform, which allows registered shareholders or their proxy holders to vote in real time as well as submit questions and comments to be read and addressed at the meeting. [Operator Instructions] I will now ask Thomas Mika, the Chief Financial Officer and Secretary of the company to act as Secretary of the meeting. I wish to point out that only shareholders of the company or their appointees by proxy are allowed to vote -- excuse me, are allowed to move and second the adoption of resolutions and to vote at this meeting. To this end, shareholders who are in attendance or their proxy holders have been provided with an opportunity to electronically vote for, against or withhold vote where applicable. The voting platform is now open for voting on all resolutions should any shareholder chose to change his or her view -- vote. The voting platform will allow you to choose to vote on each resolution immediately or wait until conclusion of discussion on each resolution prior to casting your vote. If you have already voted, you do not need to do so again. Once discussions on all items of business has concluded, I will give you a minute to enter your votes and then declare voting closed at the end when all formal business items have been discussed and voted upon. There are several matters that must be dealt with at this meeting. In order to expedite these and leave more time for a presentation and questions after the formal meetings, I have arranged for certain persons to make and second the formal motions, and we'll call on these persons as appropriate. The first item of business will be the appointment of a scrutineer to report on shareholders present in person and the number of shares represented in person and by proxy at this meeting. The Chair recognizes David [indiscernible].

Mr. Chairman, I move that Marissa Beintema of Computershare Investor Services Inc. be hereby appointed scrutineer of this meeting.

Thank you, David. The Chair recognizes Mr. Kevin Barnes.

Mr. Chairman, I second the motion.

Thank you, Kevin. Are there any questions or comments? Hearing none, I declare the motion carried. The next item of business is the formal notice of meeting. In accordance with the notice and access rules under National Instruments 54-101, the company had its proxy-related materials, including the notice of the meeting available to shareholders using the Notice and Access method. As such, shareholders received a proxy form and/or voting instruction forms only. The notice of the meeting and the management information circular are and have been accessible from the company's website or from SEDAR. The proof of mailing of the proxy form has been filed with me by the secretary of the company. I direct that a copy of such proof of mailing be annexed to the minutes of the meeting as a schedule. I will now ask John Fairchild to move and someone to second the adoption of a resolution dispensing with the reading of the formal notice of meeting. Mr. Fairchild? Hello, John?

John seems to be...

Kevin, can I ask you then to make the motion?

Sure.

Sorry. Sorry. Sorry, guys. Can you hear me now?

Go ahead, John.

Mr. Chairman, I move that the reading of the notice of this meeting be dispensed with.

Thank you, John. I now recognize Mr. Adrian Brijbassi.

Mr. Chairman, I second the motion.

Thank you, Adrian. Are there any questions or comments? Hearing none, I declare the motion carried. The next item of business is the meeting attendance. The scrutineer has provided me with the preliminary report on shareholder attendance represented at this meeting. The scrutineer reports that there are present at this meeting by person or by proxy 365 shareholders, holding 10,001,293 share -- votes. Common shares, which represent 25.02% of the total issued and outstanding shares available to vote. Accordingly, I declare that the requisite quorum of shareholders is present and that the meeting is duly called and properly constituted for transaction of business. I direct that the scrutineer's final report on attendance be annexed to the minutes of the meeting. The next item of business is the reading of the minutes of the previous shareholder meeting. The last meeting of shareholders of the company was the Annual and Special Meeting held on October 25, 2022. And the minutes of such meeting were filed in the minute book and are available for inspection. I will now ask someone to move and someone to second the adoption of a resolution dispensing with the reading of the minutes and that the minutes be taken as read and verified as correct. The Chair recognizes Mr. Kevin Barnes.

Mr. Chairman, I move that the reading of the minutes of the last meeting of shareholders be dispensed with and the minutes be taken as read and verified as correct.

Thank you, Kevin. The Chair recognize Mr. Mike White.

Mr. Chairman, I second the motion.

Thank you, Mike. Are there any questions or comments? Assuming none, hearing no questions or comments, I declare the motion carried. The next item of business is the presentation of financial statements. I now present to the meeting the audited consolidated financial statements of the company for the year ended December 31, 2022, together with the auditor's report thereon. Copies of such statements were filed on SEDAR, posted on the company's website and mailed to those shareholders who had requested a copy. I will now ask someone to move and someone to second the adoption of a resolution dispensing with the reading of the auditor's report. The Chair recognizes Mr. John Fairchild.

D. Mr. Chairman, I move that the reading of the auditor's report be dispensed with.

Thank you, John. The Chair recognizes Mr. Adrian Brijbassi.

I guess -- one moment. And Mr. Chairman, I second the motion.

Thank you, Adrian. Are there any questions or comments? Hearing none, I declare the motion carried. The next item of business is the consideration of a resolution concerning the number of directors of the company. In accordance with the Ontario Business Corporation Act, a person to which the company is incorporated, the shareholders of a company made by resolution empower the Board of Directors of the company to step from time to time by directors resolution, the size of the Board of Directors within the minimum and maximum number of directors set forth in the articles of the company, as more particularly described in the circular in respect of this meeting. The resolution must be approved by a majority of the votes cast by shareholders in respect to this resolution. The full text of the resolution is set out in the circular and is defined in the circular as director number resolution. I will now ask someone to move and someone to second the adoption of the director number resolution as set out in full in the circular. The Chair recognizes Mr. Mike White.

Mr. Chairman, I so move.

Thank you, Mike. The chair recognizes Mr. David [indiscernible].

Mr. Chairman, I second the motion.

Thank you, David. Are there any questions or comments? If you are entitled and intend to cast a vote on this resolution and have not done so already, please do so now. If you have already voted, you do not need to do so again. And we'll just provide a moment for people to cast their vote. The next item of business is the election of directors of the company. It is now in order to proceed with the election of directors to hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed. The number of directors to be elected at this meeting has been set at 7. Will someone please nominate those persons whose names appear as nominee directors in the management information circular of the company. The Chair recognizes Mr. David [indiscernible].

Mr. Chairman, I nominate Suresh Venkatesan, Michael Lipson, Glen Riley; Theresa Lan Ende, Jean-Louis Malinge, Peter Charbonneau and Chris Tsiofas as directors of the company to hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed.

Thank you, David. The company's bylaws provide that in addition to any other applicable requirements for a director nomination to be made by a shareholder, the nominating shareholder must have given timely notice thereof in proper written form to the Corporate Secretary of the corporation at the principal executive offices of the corporation, not less than 30 days prior to the date of the Annual Meeting of Shareholders. No nominations were received from a nominating shareholder. 7 persons have been nominated to fill the 7 directors position. Since no notices of further nominations have been received by the company, I would now ask someone to move and someone to second the adoption of a resolution approving the election of the 7 nominees. The Chair recognizes Mr. Mike White.

Mr. Chairman, I move for the election of the 7 nominees whose names have been read as directors of the company for the ensuing year to hold office until the next annual meeting or until their successors are elected or appointed.

Thank you, Mike, and Chair recognizes Mr. Tom Mika.

Mr. Chairman, I second the motion.

Thank you, Tom. Are there any questions or comments? Hearing none, if you are entitled to intend to cast a vote on this resolution and have not done so already, please do so now. If you have already voted, you do not need to do so again. I'll pause for a moment to provide people some time to cast their votes. [Voting]

I now declare those 7 persons nominated to have been duly elected as directors of the company to hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed. The next item of business is to consider and if thought fit to pass the resolution to approve the adoption of an amended and restated bylaw #1 of the company, which amends -- amendments concern certain corporate governance updates consistent with issuer best practices as more particularly described in the circular. The adoption of the amended and restated bylaw #1 must be approved by a majority of cast -- votes cast for such resolution. The full text of the resolution is set out in the circular and is designed in the circular as the bylaw resolution. I will now ask someone to move and someone to second the adoption of the bylaw resolution as set out in the full circular. The Chair recognizes Mr. Tom Mika.

Mr. Chairman, I so move.

Thank you, Tom. And the chair recognized as Mr. Adrian Brijbassi.

Mr. Chairman, I second the motion.

Thank you, Adrian. Are there any questions or comments? If you are entitled and intend to cast a vote on this resolution and have not done so already, please do so now. If you have already voted, you do not need to do so again. I'll provide a moment for those people to vote. [Voting]

I now declare the motion carried. The next item of business is the appointment of auditors and the authorization of the directors to fix the remuneration of such auditors. I will now ask someone to move and someone to second the adoption of resolution appointing Marcum LLP as the auditors of the company until the close of the next Annual Meeting of Shareholders or until its successor is appointed and authorizing the directors to fix their remuneration during this period. The Chair recognizes Mr. Kevin Barnes.

Mr. Chairman, I so move.

Thank you, Kevin, and the Chair now recognizes Mr. John Fairchild.

Mr. Chairman, I second the motion.

Thank you, John. Are there any questions or comments? If you are entitled and intend to cast a vote on this resolution and have not already done so, please do so now. If you have already voted, you do not need to do so again. Take a moment for those who wish to vote to do so now. [Voting]

I now declare that Marcum LLP has been duly appointed auditors of the company to hold office until the next Annual Meeting of the Shareholders and that the directors have been duly authorized to fix their remuneration. The next item of business is considered and if thought fit to pass the resolution to approve and authorize among other things, the adoption of an Omnibus equity incentive plan as more particularly described in the circular. In accordance with the policies of the TSX Venture Exchange, the Omnibus incentive plan must be approved by a majority of votes cast for such resolution, excluding 216,909 shares held by insiders of the company and their associates and affiliates who would be considered eligible participants in such a plan, if adopted. The full text of the resolution and the terms of the Omnibus plans are as more particularly described in the circular. The resolution approving the Omnibus plan is defined in the circular as the Omnibus Plan Resolution. I will now ask someone to move and someone to second the adoption of the Omnibus Plan Resolution as set out in the full circular. The Chair recognizes Mr. David [indiscernible].

Mr. Chairman, I so move.

Thank you, David. The chair now recognizes Mr. Mike White.

Mr. Chairman, I second the motion.

Thank you, Mike. Are there any questions or comments? If you are eligible and intend to cast a vote on this resolution and have not already done so, please do so now. If you have already voted, you do not need to do so gather. Now just take a moment to allow any of those of you who wish to vote now, please do so. [Voting]

I now declare the motion fully carried. As the Omnibus Plan Resolution has now been approved, the next item of business is to consider and if thought fit to pass a resolution to approve and authorize the migration of existing, currently outstanding options granted under the -- under and currently governed by the fixed stock option plan of the company, last approved by the shareholders on October 7, 2021, to now be governed by the Omnibus incentive plan and more particularly -- as more particularly described in the circular. In accordance with the policies of the TSX Venture Exchange, the migration of the existing options must be approved by a majority of cast votes for such resolution, excluding 227,154 shares held by holders of the options subject to this option migration and their associates and affiliates. The particulars of the option migration is set out in the circular and the resolution in respect of the migration is defined in the circular as the option migration resolution. If the option migration resolution is approved, upon formal implementation of the migration of the Board of Directors of the company, there will no longer be any outstanding awards under the fixed stock option plan of the company, and such plan is expected to be terminated. I will now ask someone to move and someone to second the approval of the option migration resolution as more particularly described in the circular. The Chair recognizes Mr. David [indiscernible].

Mr. Chairman, I so move.

Thank you, David. The Chair now recognizes Mr. Mike White.

Mr. Chairman, I second the motion.

Are there any questions or comments? Hearing none. If you are eligible and intend to cast the vote on this resolution and have not already done so, please do so now. If you've already voted, you do not need to do so again. Again, I'll just take a moment to provide a minute for people to vote. [Voting]

I now declare the motion carried. As the Omnibus Plan Resolution has been approved by the shareholders, as described in the circular, the resolution to adopt and approve the amended stock option plan is hereby withdrawn and will no longer be tabled and considered at this meeting. At this point, all registered shareholders and duly appointed proxy holders should have submitted votes on the motions brought forth at this meeting. If you have not already voted, please complete the electronic on [indiscernible] Lumi now. It's pausing for anyone to make any last-minute votes. [Voting]

Voting has now been closed on all items of business. I direct that the final tabulation of the voting results will be included in the meeting minutes and that the final voting results be included in a report on voting results, which will be posted on SEDAR under the company issuer profile in due course following today's meeting. The formal business of the meeting is concluded. Upon the termination of formal business of the meeting, our Chief Executive Officer and Chairman of the Board, Dr. Suresh Venkatesan will be providing updates on the affairs of the business and the company and will be pleased to answer any questions from shareholders. Before the meeting is terminated, is there any additional formal business to be considered? As there is no additional business, I will now ask that someone move that the formal part of this meeting be terminated and that someone second the motion. The Chair recognizes Mr. John Fairchild.

Mr. Chairman, I move that the meeting be terminated.

Thank you, John, and now Chair recognizes Mr. Mike White.

Mr. Chairman, I second the motion.

Thank you, Mike. Are there any questions or comments? Hearing none, I declare this meeting to be terminated. As we move into the informal part of the meeting, we are pleased to present to you a short video presenting the company's path to providing critical AI solutions. Following the video presentation, Dr. Suresh Venkatesan, his address all present here today. His address will be followed by a question-and-answer session. [Operator Instructions] Please reserve all your questions until the conclusion of the presentation. Please enjoy the video. [Presentation]

Hi. Good day, everybody. Good morning, afternoon, evening wherever you are in the world. I am Dr. Suresh Venkatesan. I'm the Chairman and CEO of POET Technologies. And I want to provide you with a short update on the company, what we've achieved over the past year. Let's see if I can get this working. Have you used ChatGPT lately? Questions like this signal the increasing presence of AI in our tech heavy world. AI, generative AI, artificial intelligence, is all the rage these days. Do you know what the biggest challenge with AI is today? It's power, energy. I was at a conference on this topic the other day. Apparently, the power required to program the 175 billion parameters in ChatGPT runs over a gigawatt. Just by contrast, the human brain consumes 25 watts of power for similar operations. That is quite a chasm to cross. But one way to begin to address the power challenge is to convert data transmission to optics. Data communications over optical fiber using light as the carrier dominates because it's 10x faster, uses 10x less power and produces much less heat than electrons flowing through copper. Nothing else can do what photonics can do to increase bandwidth and speed while reducing latency and power consumption. So what does POET do? POET makes optical modules that enables optical data transmission. And this is fundamental to scaling the presence of AI. Others make optical modules as well. But POET has developed unique intellectual property that allows us to make these modules better, cheaper, lower power and larger scale than anyone else. More than cost or bill of sales, it is the scale where POET shines. And by scale, we mean the number of units that can be economically produced. POET has semiconductorized photonics packaging and put it squarely on the same trajectory as semiconductors. Semiconductization of photonics using POET's proprietary optical interposer provides unprecedented scale and economies for the rapidly growing AI and optical communications market. In fact, it's our belief that it's not possible to address these markets that need hundreds of millions or billions of these devices any other way, integration is the key. Semiconductorization is the key. And we believe we have pioneered this art of semiconductoration of photonics packaging. And that means terrific potential in a large and increasingly relevant market in AI and co-packaged optics. We have come a long way over the past year with many accomplishments under our belt. We serve a very large market where billions of dollars, particularly in data communications and AI. We are squarely in the supply chain for AI hardware. We have a super unique and patented technology that provides us with a source of sustained competitive differentiation across a number of market verticals, including AI and high-performance computing. We have an exciting product road map born out of 6 years of technology and product development. We have partnered with some of the largest optical companies in the world like Lumentum, Broadcom, MACOM. We have a pipeline of customers across the world and design wins that could total more than $150 million of revenue over a 3-year period. We have a majority stake in a manufacturing joint venture that could alone have an asset value of over $200 million over the next 2 to 3 years. The prime motivator for optics and data communications and AI is power and latency. Light, as we have mentioned, is 10x faster and 10x lower power and has ruled the roost when it comes to long distance data communications. In fact, Photonics 1.0, right, was driven by submarine communications, long-distance communications, use optics as the medium for that communication to occur. However, as bandwidth, meaning the amount of information that is communicated per second, keeps increasing, the distance over which this data is communicated with light has become shorter and shorter. Photonics 2.0, data centers, key driver for optics. So optics is now in data center is used for communications when distances exceed about 5 meters. With AI, the bandwidth and power crunch is so severe that there is now a need to utilize optics as a means to communicate there even between individual components, like graphics and memory. The volume and scale of these AI applications quickly trumps the more conventional data center applications. And the greater the need, the greater we feel POET's solutions in this space will begin to gain favor. AI is the killer app for Photonics 3.0. So the market for POET's solutions spans the more traditional data centers and data communications which includes, of course, enterprise and telecom applications and the new and emerging market around AI-driven for optics. In fact, we believe the AI-driven needs are going to trump the more conventional data center interconnects that has really been kind of the prime driver for the past decade. Both of these markets are large and growing. They exceed $12 billion in TAM by 2025. The inflection point for growth in these markets begins next year, and POET is well poised with both solutions and customer access this year. And we're well positioned to intercept this market at the right time with our differentiated solutions. Just some key challenges in photonics, especially when it comes to very large scale in terms of volume, is really the ability to build millions, billions of these devices. And conventional photonics packaging technology simply will not fit the bill. I mean those solutions have been designed and have been developed and honed over 30 years, but they were first designed for single-channel applications, then they were designed for quad applications where the base technology was scaled through engineering. But today, the applications demand 8 channels, 16 channels. They demand hundreds and millions of units a year, and not millions of units a year. And there comes a point where these conventional technologies simply cannot fit the bill. Absolutely possible to engineer in prototype quantities but try to scale that with good economics -- economies and economics. And that's where POET comes in. Our vision has always been way for scale integration of known good die components that address the pinch points of volume, size, cost, power consumption. These are the areas where we believe our technology ticks the boxes consistently. And that is the beauty of what POET has invented, which is the Optical Interposer. The Optical Interposer enables what we call chip scale wafer-level packaging. In the world today in semiconductors, wafer-level chip scale packaging is the norm. You look at your cell phone, you look at these devices that are in high-performance computing, they're all built with wafer-level chip scale packaging, where discrete electronics die are put together into a chip scale package. TSMC would call it CoWoS in telcos that [indiscernible]. But basically, it's wafer level chip scale packaging. We're the first company in the world to adapt to wafer-level chip scale packaging to photonics. So now instead of just integrating electronic die, we're able to mix and match photonics and electronics die on a wafer scale packaging platform. That's what we call the power Optical Interposer, and we've been successfully deploying these interposer-based solutions into a number of products after basically having developed the platform initially. The benefits to customers are of course in cost, size, scale and power consumption. We believe, especially as you go forward in high-frequency data communications, the RF performance benefits of an Optical Interposer result ultimately in lower power consumption. Of course, there's the big conversion of corporate optics that is a big piece of that, too. More importantly, with the Optical Interposer is that our customers who adopt Interposer-based engine solutions can lower their CapEx built by a factor of 10 because we do all the integration onto the optical engine. That is kind of cut both ways for us, right? On the one hand, new and upcoming module makers that have not invested in that CapEx really love it because they take advantage of this huge reduction in CapEx from their perspective to adopt POET solutions. But on the flip side, bigger, larger, well-established module makers that have already invested in warehouses of capital and warehouses of people, it's a little bit more difficult for them to switch, right, and adopt a solution that largely eliminates a lot of their value, which is putting it together by buying an integrated solution from POET. So that has cut us both ways. I mean it's learning for us as we go forward in our progress, right? But I think what is clear is the value proposition that the technology has overall. And that's the platform, the technology that we've developed, which also provides versatility for a number of multiple applications. From a manufacturing standpoint, we have established a joint venture. We worked with Sanan IC in 2019. It was important for POET to ensure that there was a high-volume manufacturing path for its optical engine solutions. As a small company, we leveraged other people's money in this context. We created a joint venture. POET did not -- has not invested a time in creating this joint venture manufacturing capability, not a dime. We've provided know-how, no IP. And we've leveraged that know-how to create a manufacturing asset, a clean room, equipment, people. That's what's required to ultimately scale up the technology. And as a small company, we've been able to leverage Sanan. Sanan is the world's largest provider of compound semiconductors in terms of LEDs. They recently launched a $3.2 billion joint venture with STMicroelectronics to do silicon carbide chips. I mean, these guys know manufacturing. And they want this joint venture to be successful, and they've been investing into it. This joint venture now takes our optical interposers and converts them into optical engines through wafer-level assembly techniques. And these optical engines are then sold to optical module makers and in some cases, back to POET, where POET make the end module. A word on Super Photonics. It's a latent value that we have created in this company that we believe doesn't get enough recognition for what we've been able to deliver. It was a joint venture. We won it in 2020 between POET and Sanan IC just as COVID was breaking out. Its mission is to assemble best package and sell optical engines based completely on POET's Optical Interposer technology. We formed the company in 2019, it's a Chinese company, it was independently valued at USD 50 million at formation. For POET, it enables a fab-light manufacturing model with no investment by POET. I mean we spend all our cash on R&D. Somebody else is enabling us to scale it into manufacturing. If POET ourselves, we had to set up that manufacturing entity, we would have had to raise so much more money to create this capability, but we didn't -- we created a joint venture. We got a partner involved. And they have now invested $10 million and change. They are committed to investing another $15 million to scale this up over the next 6 months. We've employed 38 employees, they've been able to take our technology prototypes that we have developed in Singapore and demonstrate scale and yield and capability that is truly impressive. In fact, I was there, what, 6 weeks ago, first time ever since we formed the joint venture as China has now opened up and we're able to travel frequently with our old [indiscernible]. Terrific stuff. The goal for the Super Photonics joint venture is to IPO in China in 2026, 2027. We currently own an 80% equity stake in this joint venture. At the time of IPO, we would probably be closer to 50%. Even today, there is strong interest from China-based PE firms and owning a piece of Super Photonics. And valuations for photonics in China are huge. Valuations for photonics in China for innovative technology is even bigger. And once that innovative technology starts turning revenue, that valuation sky rocket. We believe that this joint venture could be worth $200 million -- over $200 million in the next couple to 3 years as soon as Super Photonics start generating revenue, in significant in amount, which we think will be in a couple of years. I mean that is just absolute latent value that we have created and our ability to capture that value is to be able to sell our equity stake in that joint venture that provides a non-dilutive source of financing for the company to do other things, more R&D, more products. So we think that we're sitting on really great value. And I commend Vivek and team for their efforts and being able to set this up. And for the overall POET organization to support creating what we believe is a very high-value capability for the company going forward. Our line of optical engines, I mean, this is what they look like. If you guys have seen semiconductors chips, you will know what I'm talking about. These are photonics subassemblies. They look like semiconductor chips. On the left, are our 800-gig receivers as well as transmitters. We announced just 2 weeks ago that we are starting to sample our alphas of 400, 800-gig scalable transmitter. First of the kind in the industry. First company to use DML lasers and generate 400-gig 800-gig capability. In fact, when we presented the data at the Lumentum. They acknowledge that we are the first company that they have sold these DMLs to, that have actually transformed these DMLs into a working product for them. And we did prototypes at the OFC, we are doing samples now 6 months later. Well on track with our road map to be able to take this into production early next year. On the extreme right-hand side, you'll see our product. This is specifically for ADVA, again, first of the kind in the world, a full chip onboard implementation of a 16-lane architecture that fits inside of a QSFP-DD form factor. It's a 16-lane product. ADVA didn't have any other path to making this, we were the only choice. They're actively architecting this. They have a customer that says, keenly awaiting this product to be made available to them. And so we're stopped. I mean we -- in this particular case, we made this product line happen through our innovation. And these products are now ready. And basically awaiting ADVA to have their module design completed so that they can take it into production. And there's obviously a lot of motivation on their part to do that given the uniqueness of the solution in the market. We're also the first company to do wafer-level remote laser solutions for co-packaged optics and AI. Our product release plans for 2023 and 2024, we have come a long way. About a year ago, we were demonstrating 100-gig products 1 year later, we're demonstrating 800-gigabit products. sampling 800-gigabits today. We've released our 100-gig receiver as well as transmitters, and we have 3 additional variants on the 100-gig. One is what we call POET 1 or the fully integrated single-chip TxRx solution. This is going to be a product that we're going to take into the telecom market in China. with our customer, BFYY and their end customers, the likes of China Mobile and [Audio Gap] So that will be released at the end of Q3. We also have LR4 products, not just the 1 we did for ADVA, but the most conventional LR4, that there are at least 4 customers that we're sampling to today. Again, will be released in Q3. We completed our beta for our 200-gig products that will be released in Q3 as well. 400-gig receivers have been released 800-gig receivers and transmitters end of the year. You can count the number of products that are going to be releasing this year, it is insane but it's possible because of our Interposer technology, the platform approach, the fact that we use known good components and the moment we've been able to ally with some of the top optical component suppliers, we've been able to demonstrate the value that the engine provides in this context, which is converting a DML laser into an engine with good RF, right, and enhanced capability. And what POET would like to do is to be able to generate modules for 800-gig, which is critical, not just for data communications like custom modules for an 800-gig are also used extensively in AI. On the other side, we have a set of remote light source products that we are still developing. I mean, I think our goal is to be able to really expand our portfolio in the space with key investments that we want to be able to make, where we believe that we have the ability to really make a very meaningful contribution in this growing market of artificial intelligence, not just because we might have extremely differentiated DML based 800-gig-ed modules, but also very differentiated remote light source. We've been really busy as a company. Year-to-date in 2023, we've announced key engagements with customers, ADVA, Luxshare. Luxshare is a $1 billion company, right. They sell primarily to Apple and others, and they've got a business and an access to the hyperscale market. We're designed in already with their 800-gigabit solutions with our receivers. In fact, we've gotten initial deals. These are sample quantity POs, which is common early in the development where we provide engines for them to be able to develop their modules. BFYY, our first foray into telecom, the exposure into a really large market there, which are the mobile players, the big mobile players in the telecom space in China. The POET Infinity product line, we announced our engagement with Celestial with this new class of products for their applications. We've received a purchase order from them for supplying product next year. And we also announced some product announcements, around the lines of Infinity, announced the availability of these products sampling of 800-gig. It's been a busy year. And we expect that as we release more products over the next couple of quarters to be able to announce additional customers, additional engagements. And then we do believe that we can keep up with what needs to be done in terms of kind of gaining traction and gaining engagement around this platform. We have 11 current projects with 7 key customers. And just these projects represent a combined $150 million of revenue potential over 3 years, just these products. Nothing new. But we do expect something new, right, we have got another -- a bunch of products that we're planning to release over the course of the next couple of months. And we do believe that when those products are released, there will be more take-up, more engagements. But based on what our customers tell us about these products and when they intend to ramp and their potential forecast for these products. We estimate that for POET and Super Photonics, this can be a cumulative $150 million of revenue potential. So they're successful, we're going to be successful, too. And it's important for us to project and plan because we need to have the manufacturing capability to be able to deliver this. And that's where Super Photonics comes in, and that's where the additional investments from Sanan are going to be placed. Today, our technology and business strategy is fundamentally centered around building interposers and optical engines and providing expertise to end customers or module makers to provide finished modules. While we believe that this is a reasonable model for kind of the legacy, if you will, or 100-gig or 200-gig or 400-gig, especially in the AI segment, we think we have to transcend beyond the optical engine and create optical modules. So the future for POET is to actually create optical modules. And we believe we can do that because a big portion of the optical module is already factored into the engine. We've integrated tiers. We've integrated drivers. We've got very good RF capability on the interposer. We've got all the photo components of the interposter. We create effectively everything except the BSP. So our intent is to add a third set of capabilities for design and development of optical modules. We're already doing it for AI. It's a critical requirement for AI. So our intent in AI is clearly to have optical modules generated. So it doesn't mean that we're going to sell engines to module makers, I think in the advanced technologies, specifically for AI, our intent would be to create optical module. It enables the sale of our leading-edge products directly to the end customer without having to go through this middle man and this long process of getting designed in and the iterations associated with more development to be done along the way. It reduces time to market, eliminates qualification cycle. We think it's the right thing to do. It requires some investment, and we're looking at an [ orphan-ade ] joint venture capability that allows us to potentially fund this activity. Again, raising money with some non-dilutive financing there. In 2020, when we created the joint venture in China, China was in fashion. I mean, we were complemented for having done that. Today, I read the boards. And of course, everybody [ barfs ] on the fact that we have manufacturing in China. But it is important to understand that it is a very, very, very large market. It is, in fact, the largest market for optics, 100 gigabits to 400 gigabits per second. But we recognize that things have changed. There are geopolitical issues. There is likely to be more and more constraints in the high end in AI -- in AI solutions. And so we intend to create an alternate joint venture outside of China, and follow what we would call a China Plus One strategy, which a lot of customers require for demand, where we have a foot in China to support kind of the Chinese market with China components and then we have kind of the ability to be able to manufacture outside of China as well. So we're actively seeking, as I said, an additional JV partner to provide a source of independent financing for this, this is critical to POET's future, and we believe we can be very, very successful in this endeavor. I'm sorry my ability to move the slides is somewhat delayed. We've done a fair bit on the investor outreach front. Our goal was to increase awareness of POET so audience is likely to invest with a focus on U.S. We've taken various steps to do that. Some popular, some not so popular, but the results speak for themselves. We've had a 300% growth in monthly website visits from December to June, 100% month-over-month visit growth from May. 3 to 1 U.S. visitors to Canadian visitors, which is a big thing, right? We wanted to get more presence in the U.S. Our NASDAQ volumes are finally higher than [ PFX ] venture and has been up since December. So we will continue to attack and adapt, of course, not everything that we do works beautifully. We have a path, we have a vision. We want to get something done. But as with everything else, you have to attack on adapt, and we are. But the results speak for themselves. And we will continue to drive this going forward. So in summary, we've created an innovative patented optoelectronic integration platform technology. We believe we're the only known technology that can meet the vectors of volume, size, cost, power for future photonics products, especially in large high-growth markets, including datacom, telecom and AI hardware. We are partnered with some of the leading companies in the optical communication supply chain. We're engaged with several key customers now that allows us to demonstrate the technical acceptance of our solution. I mean we are, after all, doing something that has not been done before. We are after all creating products that are first of its kind in the industry, and there's some degree of healthy skepticism about whether we can actually do it, and that skepticism first is, can it be done technically, then it's, can it actually meet specs, and then it's, can you actually scale this in volume, and we're going through that process. Super Photonics is critical to enable market acceptance of our optical engine products. We're doing that today. They're ramping up. We have a revenue pipeline on customer engagements that provide $150 million of 3-year estimated revenues based on their projections to us, of course. There's no guarantees. But they know their business, they know their customers and they believe that they can represent to us what it would mean to us with this engagement. We expect revenue to begin in 2024. But of course, we will have production orders this year. We already do for the first half of next year, $3 million from BFYY. We expect POs this year as well. In fact, Super Photonics does have POs. But like I said, these are quantities that enable our customers to design their modules in. Although our engines are ready, we can't ramp into production to our customer or in this case, Super Photonics' customer can ramp their solution. And in some cases, there have been some delays because they have never used optical engines before. And so it's a learning process for them as well. So we kind of go through that. I mean it's -- there are changes to our road map, sometimes out of our control. Our products are ready and available and sampling and providing to the customers. And then we just have to work through the process of getting them designed in. And I think we're -- the lights at the end of the tunnel, we can see it. We work with these customers. And we do believe over the next couple of quarters that we should -- or Super Photonics should be able to start their ramp, right? And most significantly, we've created a significant value capture potential with Super Photonics in terms of its asset appreciation and what that can mean to POET in terms of non-dilutive financing to the company, we need it, right? We need the financing to be able to keep our road map to drive our leadership in a sense in the AI space to really take advantage of our existing position and grow it. And we think that this is a very, very critical piece of how that can happen in the long term. So with that, let me close, and I thank you for your time. I thank you for your attention, and thank you for your support. Go POET. Kevin, I hand it over to you at this point.

All right. I'll jump in. I think, Suresh, with some questions from the group. At -- Go POET, indeed, tell us what your objectives were with the ATM or at-the-market financing that was announced this morning?

Sorry, I think I was -- I might have been on mute. Can you repeat that? Because it just didn't come through clearly on my end?

Sure. Tell us what your objectives were with the ATM or the at-the-market financing that was announced this morning?

Yes. The ATM, or at-the-market program, it gives POET management the flexibility to raise capital in small amounts over the course of the next year. I think there's a lot of misunderstandings associated with the mechanics of how ATM works. So I will shortly kind of ask Tom to maybe step in and paint some color and provide some guidance there. But as the ATM itself, it's the least costly method for the company to raise capital in the public markets. No commissions compared to public offerings, no warrants attached. You're basically selling shares at market price, no discounts. So the ATM programs have been common among issuers in the United States for several years, and have become much more popular now recently in Canada, and we believe that an ATM is an essential part of the financing strategy of a high-growth technology-based company. But the mechanics of the ATM is, I guess, misunderstood. And so perhaps, Tom, you might want to take a few minutes to explain how the mechanics work.

Sure, I'd be happy to, Suresh. Thank you. What I want to emphasize first is that this is not a $30 million financing that we're doing today or anytime in the near future. It's very much misunderstood as being that. It's a facility that allows us, the company to sell shares at the market price. And we're -- it's a heavily regulated transaction. So we're -- we have to be cautious about whether our intervention or our sale of shares into that market moves the market at all. So we're intending over the course of the next 12 months, to take advantage of high-volume days in which we believe we can sell common shares at a reasonable and appropriate price. And the way that, that happens is there were 2 investment banks that were named in the prospectus. One is Craig-Hallum in the United States, who many of you know, follows us through Richard Shannon, their analysts in the Optics area. And in Canada, Cormark, that has been an investment bank for us for a couple of transactions -- a few transactions over the past couple of years. So I have access to a particular trader at each of those desks. And we convened early in the morning and see what the market activity is going to be, project what we think the market activity may be during the week. And we determined at that time whether or not we're going to be selling any shares into the market. We are totally in control of the price at which we sell shares and the number of shares that we sell. And so having that kind of facility around allows us to raise capital in the public market, as Suresh said, at the lowest cost. It's a 3% commission rather than a 7% commission, and there are no warrants, and it's at the market. So we're not really competing against others to who want to buy or sell our shares. So it's important to remember that this is a facility that we have that we're completely in control of. It's been very common, as Suresh said, in the United States for a long time among most issuers and in Canada, because they've relaxed the rule somewhat over the last 2 years, it's becoming more common, and I think you'll see it in many other issuers up in Canada. So we're going to be -- we're going to be looking at both markets over time. And as I said, we're -- we have to be very cautious about not moving the market in any way. And I'm sure that the regulators will be watching that over the course of the next 12 months. So thank you.

Thanks, Tom. Thanks, Suresh, on giving us some background on that. Following on the same topic, how does the company plan to fund itself for the next 6 to 12 months while ramping production and does the company need or plan to raise additional capital before the end of 2023 beyond what you've already mentioned?

Yes. It puts current stage, we're continuously evaluating the capital required to operate the business and execute on our ongoing strategic initiatives. As part of this process, we're actively considering several potential alternative non-dilutive means of bringing in additional capital. As mentioned in the presentation, we believe that our equity in SPX is a valuable asset that is not obvious in our financial statements. And we have been approached by private equity companies interested in owning a piece of that operation, which both JV partners believe is a good prospect for an IPO in China. So once SPX begins to generate revenue, we expect its value to increase exponentially. In addition, in connection with our plan to sell modules, we believe that there are good opportunities to form additional joint ventures. If you were to create a new JV for module production, we would expect to structure it in a way to both provide capital to put and also to allow us to consolidate its results in our financial statements.

Okay. And moving on to a question on some of our early adopters, our early customers. When do we expect to be in production or have received initial orders from ADVA and FiberTop for some of the POET legacy that they're [indiscernible].

As I said, I mean, I think initial orders, we've had it, we've delivered it, SPX has rather -- I think the key thing is how quickly can they complete their module design and it's gone through some iterations. These are companies, I mean, not used to working with optical engines. In the case of ADVA, it's -- I mean, like I said, 16 channels in the QSFP-DD, never been done before. So they're going through some learning curves on their end, right? Our designs are complete, the product's ready but we believe they're close, and they do have an end market that they can sell into their customers that are waiting. So motivated motivation and vested interest on the part of them to finish their module design. We expect that this happens over the course of this quarter, honestly. I think now that we have the ability to travel to China, and I believe Raju is there next week, we're going to be able to get much better engagement with them and hasten their development in the case of FiberTop, for example. But ADVA is, I mean, they're engaged. We've got weekly meetings. It's hard to project and predict exactly when they're going to ramp. I mean this has been our challenge as well and that -- our product is ready, we will release at the end of this coming quarter in Q3, but does that mean it ramps immediately, probably not, but it's not very far. And for sure, it's not a question of if and what but rather when. The opportunity is there, the value potential is there. We just need to -- we need our customer in a sense to begin their ramp, which we do expect to happen in '24 with, like I said, initial production will start at the end of this year. But really, the meaningful production will be in 2024. But that's largely given their schedule, right? I mean it's hard for us to kind of really push that on our end aggressively. I think the best we can do is to release the product and have it available and work with them closely, which is what the team is doing to enable their design to be completed.

Okay. Terrific. On to a couple of questions back to the stock price as a topic. Two questions on that. What strategy is being employed to attract new institutional investors and what gives you the confidence it will be effective?

Look, I mean, over the past 18 months, I think -- about the time we kind of move to the NASDAQ or about the time Russian and Ukraine whichever way you look at it. We have participated in 9 Wall Street focused conferences targeted at institutional retail investors in the U.S. We have -- we remained engaged with and distribute all announced business development, to a sizable number of institutional investor targets, which are continuing to follow towards its progress. We've also stayed actively engaged with multiple sell-side research analysts, including our existing covering analysts, such as Richard Shannon at Craig-Hallum, who initiated last year and has continued to provide forward with much broader exposure. He is highly recognized in the industry. It covers momentum in some of the larger companies, right? So he knows what he's talking about, and I think he's respected and recognized. Additionally, we have been driving increased visibility through participation and presentations at industry trade shows. I think just this week, we had a video that was actually in Chinese created by Mo, that got a lot of inbound traction when it was published at the industry trade show there. So this all contributes to elevated awareness, not just among customers, but also tech-oriented investors.

Okay. And what else is the company doing to increase the current share price?

Look, as shareholders ourselves, we're always looking at new ways to support our stock price and attract new investors. Our top priority as a management team is to create shareholder value. through continued execution on our business plan and begin generating a sustainable and growing revenue stream. To the extent that we are successful in capturing even a portion of the available market opportunity, we believe the stock price will ultimately reflect that value appropriately. To help further expand our investor outreach efforts in January, we retained stock house to help execute an advertising and marketing campaign that has seen increased interest through website visitation as well as expanded awareness by our newsletters and digital marketing. Then in April, we engaged AG Capital Markets for distribution of our company's content on investors hub and Wall Street Silver services. We also continue to actively participate on Wall Street focused events, conferences, speaking opportunities. So one thing I'd like to point out is that POET's stock is up like over 40% year-to-date. And even over the past 12 months, we've kind of meaningfully outperformed a large majority of publicly traded microcap tech companies. It's not been an easy market folks. But there's still dissatisfaction, obviously. And -- but what we can do is manage what is in our control, and that is execute our road map which we've been doing, and you've seen it, we've provided our road map and we periodically give you updates and we're on track.

And what do you think then Suresh, based on this activity, the POET's valuation should be now based on the progress that you've outlined, what we've made this year?

I don't think it's my job to comment on valuation. So I don't think I'm going to answer that question.

Okay. And let's have one here on when can we expect to see additional buying and/or exercising warrants [ to buy ] insights?

Look, I mean, I think most of the warrants are done. There's probably a single tranche of warrants left in August. So yes, I mean, I think like I said, I don't control what other management members or the Board do [indiscernible]. They're all independent folks. So yes, I don't think there's a lot more warrants left honestly, to be exercised, and we'd like to keep it that way going forward, too.

Okay. And with the stock trading where it is today, how committed is management and the Board to resisting a potential unsolicited buyout offer at an attractive valuation?

Look, our interest is in building long-term shareholder value. And so I think we're -- we recognize and understand the value we bring, and we recognize and understand the value that is achievable. And so I don't think this is a concern that existing shareholders need to have. I think we all collectively are invested in doing what is necessary to drive shareholder value at valuations that we believe accurately represents what we offer in the industry, right? And what we offer to this large and growing market, especially in AI.

Okay. And we have a question here about competitors, both. Let's go with NVIDIA. They're currently the kings of the AI market, how could POET enhance their offering?

Look, I think -- I mean NVIDIA, the kings in the AI market because they create a highly parallel computing infrastructure with their GPUs and then they tie it up with large amounts of memory and sell these DGX boxes at $30,000, $40,000 a [ month ]. But I think going forward, I mean I think data center servers are going to incorporate NVIDIA graphics processors and so on and so forth. So yes, they're a graphics company. They are kings there. I think how POET helps is by providing the means to communicate either between graphics and memory or by providing the means to communicate between servers. And today, much of that is done either by 800-gig kind of transceiver modules. They look like transceiver modules, but they're kind of custom specifically for AI or they can take the form of photonic fabrics and other such applications that there are other companies kind of driving and -- so the AI segment is kind of bifurcated, right? One is there's just a growth or a need for a lot of optics, and that is bifurcated into kind of transceiver like form factors which we play into. And then into photonic fabric like fab -- form factors with new companies and upcoming companies that, again, we play into by providing remote light sources. So I think we're well covered in terms of what we can do and are actively working to intercept this very large growth market over the next couple of years.

Okay. Of the 11 current contracted projects that you stated having today, which one or two represent the largest near-term revenue opportunities. I guess this is specifically with our products and our customers. And what are the remaining steps to convert these opportunities into revenue?

Well, I mean, I think for most part, these are committed projects. I mean I think we're going through the development phases in the case of companies like Celestial and their projected volumes to us. I mean those are products that are committed, and we have POs. We have to deliver, the teams working on finishing up that design by the end of this year. And we have a PO to deliver a certain number of those engines by the end of 2024 for kind of a larger ramp next year. Turn most of those, except for one, I believe, which is still in evaluation by the customer, there are commitments to use the products. They are designed in. So then it's not, to me, a question of if then, it's a question of when and that when depends less on POET's readiness than more on our customers' ability to convert that into a module design and then ultimately take it and be successful in the market. But on a balance, I think we're well positioned there with really good potential.

Okay. And regarding Ayar Labs, do you view them as a competitor or a potential partner?

Neither, I view them as a customer, a potential customer I mean, they are one of the companies that have a photonics fabric. They also require a remote light source and we believe we have a good technical solution and there have been dialogues and discussions. And we hope at some point that we can convert that opportunity into a real engagement.

And with sticking with the products and the optical interposer. How far behind our competitors to what the optical interposer can do?

I'm sorry, I think you have to repeat that question, please?

How far behind are the competitors to the optical interposer and what it's able to deliver to the market?

Look, I mean I have yet to see -- I mean, I've said this publicly before, I think the only company that had capability or at least a vision or very similar to what POET was discussing and talking about was Rockley Photonics, they ultimately were not successful in creating these products and data communications. I mean we've successfully sampled 800-gig receivers. So it's kind -- I mean we've done -- we've come a long way as relative to what others thought they could do, but couldn't ultimately do it. Now outside of them, I'm not seeing too many solutions...

And a question -- No, that's good. That's -- and regarding the LightBar, have other companies tested the LifeBar family of products? And how are those samples being received? And can we expect future announcements?

Yes. I think there's a little bit of, I mean, ambiguity among the customer base, especially as it relates to co-packaged optics or remote lasers. It is a very, very custom market. It's kind of a wild west right now. There's no kind of standards. What Ayar Labs uses is something completely different, what Celestial wants is something completely different, what [ Lightmanner ] uses something completely different, like [indiscernible] is completely -- they're all different, right. And so what -- in a sense, it plays to our strength because we've got a platform, we have the ability to adopt these solutions but it's also difficult because we keep sampling and talking to customers, and they change their requirements and needs. Sometimes it's 4 channels, it grows to 8, and it's 12. And so yes, I think -- the good thing is we've got the right products and we've got the relationships and the engagement. And we do believe that as those requirements and needs develop and coalesce into something, we will have the solutions available for them. But today, our primary focus is ensure a successful deployment on Celestial AI. I mean, honestly, if they are half as successful as they think they're going to be and have represented in their forecast that -- I'm sure you can read up. You can see how lucrative just simply that is going to be for this company. And then you add 1 or 2. I think the intent is really not to go -- we're not here trying to get numbers in terms of customers. We're trying to get win with the winners, right? And we think if we can just convert a couple of them. These are really, really large opportunities ahead of us.

And I've got one here on -- I know the team is excited about this application with thin-film lithium niobate. Can you comment on that? And how is that progressing?

I mean, it's a technology of the future. The important thing is that we have the ability to incorporate new and upcoming components onto our interposer. But look, I mean, thin-film lithium niobate is not going to be ready for prime time in terms of kind of commercial volumes for at least 3 years. So I think it's -- it's something that we are engaged with, in this case, [ Liobate ] and we're working with them in parallel. But we've also got to focus on products that we know are imminently require. So we are initiating our development programs around a 200-gig per lane. EML-based solutions that those are the most mature solutions for 200-gigabit per lane per day. Lithium niobate will be there at some point. But I think we need to work with components that are ready today and leverage them fast and rapidly and not keep betting the farm on some future. I think we made that mistake 1.5 years ago with -- so waiting for a silicon photonics modulator to be available, and we lost a year on our road map, and I don't think we're ready to make that mistake again.

No, certainly not. And a lots going on with the company. And I don't see any more questions, Suresh. I'm just going to throw it back to you for some closing remarks.

Yes. Well, I mean, it's been an exciting year so far. We've got a lot of work ahead of us for sure. We've had shareholders that have either expressed good satisfaction or dissatisfaction and I'm hoping that we can all coalesce around the fact that we, over the past 5 years have developed something that is new, that is unique. We're committed as a team to drive progress, we're committed as a team to ensure success. And we do believe that we've got as a company, the products to be able to leverage this new and rapidly growing area of AI, which is going to provide tremendous opportunity to everybody in photonics including POET, right. And so -- and the good thing is we're well positioned to capitalize on it because it kind of plays to our strengths. So I'm kind of stoked about that looking forward to the future. And as always, thank you for your continued support.

Very good. Thank you, Suresh. I really appreciate the comments that you made, and we appreciate the videos that were shown. I'm sure the shareholders and participants and guests also appreciate what was disclosed and reported here today. So again, we want to express our gratitude to everyone who's participated and thank you to the Lumi platform for making this available to us today. Ladies and gentlemen, we've come to the end of the meeting. Again, we want to extend our gratitude to you for your continued support, and we look forward to joining with you again at future meetings. Please have yourselves a good, safe and enjoyable Canada Day, long weekend in July 4th long weekend. Thank you all.