POET Technologies Inc. (“
POET” or the
“
Company”) (TSX Venture: PTK; OTCQX: POETF), the
designer and developer of the POET Optical Interposer™ and Photonic
Integrated Circuits (PICs) for the data center and
tele-communication markets, today reported its unaudited condensed
consolidated financial results for the third quarter ended
September 30, 2020. 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.
Third Quarter
Financial (non-IFRS) and Recent
Business Highlights:
- Signed a development and supply
agreement with a leading European optical systems company to design
optical engines for a 400G data center application;
- Held annual general and special
meeting of shareholders using a virtual format, with all
resolutions being ratified;
- Proved out all features and
production methods for the Optical Interposer platform to achieve
production-ready status
- Extended the final expiry date of
12,545,350 warrants with an exercise price of CN$0.75 from
September 30, 2020 to November 17, 2020 (no warrants were exercised
prior to expiry);
- Ended period with cash and cash
equivalents of $9.4 million, compared to $1.4 million on December
31, 2019; and
- Subsequent to quarter end,
completed the signing of a definitive agreement with Xiamen Sanan
Integrated Circuit Co. Ltd (“Sanan IC”) for the formation of “Super
Photonics,” a joint venture with an estimated value of $50
million.
Board
Resignation
POET also announced that one of its directors
and former executive chairman, David Lazovsky, has notified the
Company that he will be resigning from the Board as of the end of
November to dedicate full-time to his most recent venture,
Inorganic Intelligence.
Management Comments
“During the third quarter, we made extraordinary
progress on our product development efforts on the Optical
Interposer platform, and in several instances, exceeding our own
internal performance metrics,” said Dr. Suresh Venkatesan, the
Company’s Chief Executive Officer. “We intend to release this data
publicly once we have collected additional data from our product
tests with potential customers. We are also actively engaged with
our strategic partner, Sanan IC, under the newly formed joint
venture aimed at the development and manufacturing of optical
solutions for the data communications and telecommunications
markets. Lastly, I would like to take this opportunity to thank
Dave for his several years of service to POET, including serving as
executive chairman for three years. Dave was instrumental in
helping to guide the Company's strategy and provided insightful aid
in discussions with potential strategic partners.”
Financial Summary
Due to the sale of its wholly owned subsidiary,
DenseLight, the Company was required to report the activities of
DenseLight as a discontinued operation with effect from January 1,
2019. The financial statements filed today reflect this
classification. While the Company operated as a single
integrated entity until November 8, 2019, the Closing Date of the
sale transaction, the financial data below presents the net
operations of DenseLight in prior periods as a single line item
titled “Income (loss) from discontinued operations (net of taxes)”.
The net operations of the Company do not include discontinued
operations in the third quarter of 2020 due to closing of the sale
in November 2019. Comparative results include those of discontinued
operations. The following discussion and the summary table
presented at the bottom of this press release are on a proforma,
non-IFRS basis. The required IFRS presentation of the Company’s
Financial Statements can be found in its recent filings on
SEDAR.
The Company reported a net loss of ($3.5)
million, or ($0.01) per share, in the third quarter of 2020
compared with a net loss of ($2.9) million, or ($0.01) per share,
in the third quarter of 2019 and net loss of ($6.2) million, or
($0.02) per share, in the second quarter of 2020. The loss in the
third quarter of 2020 included research and development costs of
$1.3 million compared to $0.5 million in the third quarter of 2019
and $1.3 million in the second quarter of 2020. The increase
compared to the prior year period reflects a redistribution of
research and development activities and costs that were previously
accounted for by DenseLight and reported as discontinued operations
when the organization operated as a single entity. These costs are
now accounted for solely by POET. Non-cash expenses in the third
quarter of 2020 included stock-based compensation of $1.1 million
and depreciation and amortization of $0.2 million. Non-cash
stock-based compensation and depreciation and amortization were
$0.8 million and $42,000 in the third quarter of 2019,
respectively, and $0.8 million and $0.2 million, respectively, in
the second quarter of 2020.
During the third quarter of 2020, the Company
had debt related finance costs of $244,000 compared to $321,000 in
the third quarter of 2019 and $229,000 in the second quarter of
2020. Of the finance costs recognized in the third quarter of 2020,
$141,000 was non-cash compared to $110,000 in the third quarter of
2019 and $130,000 in the second quarter of 2020.
On a non-IFRS basis, cash flow from operations
in the third quarter of 2020 was ($2.9) million compared to ($1.3)
million in the third quarter of 2019 and ($1.7) million in the
second quarter of 2020.
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 prior to the sale of its DenseLight subsidiary.
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.
In order to provide the combined business
performance and relative financial position prior to the sale of
DenseLight, certain non-IFRS financial performance measures have
been combined to show an aggregate number. Such proforma combined
numbers are illustrative only and actual figures may vary
materially.
POET TECHNOLOGIES INC. AND
SUBSIDIARIESPROFORMA – NON-IFRS PRESENTATION OF
THECOMBINED RESULTS OF CONTINUING AND DISCONTINUED
OPERATIONS(AMOUNTS ARE IN US DOLLARS)
For the Quarter ended: |
30-Sep-20 |
30-Jun-20 |
31-Mar-20 |
31-Dec-19 |
30-Sep-19 |
|
|
|
|
|
|
Research and development |
(1,166,567) |
(1,250,475) |
(1,419,744) |
(836,815) |
(373,592) |
Depreciation and
amortization |
(206,819) |
(189,582) |
(174,317) |
(118,912) |
(41,748) |
Professional fees |
(123,664) |
(177,149) |
(125,001) |
(411,001) |
(366,885) |
Wages and benefits |
(493,887) |
(475,114) |
(543,571) |
(441,784) |
(375,358) |
Management and consulting
fees |
- |
- |
- |
(61,260) |
(31,230) |
Stock-based compensation |
(1,096,013) |
(846,485) |
(776,783) |
(643,315) |
(837,637) |
General expenses and rent |
(167,608) |
(559,679) |
(213,027) |
(270,918) |
(162,157) |
Debt issuance cost |
- |
- |
- |
(145,917) |
(124,522) |
Impairment and other loss |
- |
(2,500,000) |
- |
(1,764,459) |
- |
Interest expense |
(243,805) |
(228,591) |
(216,684) |
(301,577) |
(320,794) |
Other (income), including
interest |
13,910 |
18,543 |
1,362 |
5,677 |
40 |
Taxes |
- |
- |
- |
292,740 |
- |
Income (loss) from
discontinued operations, net of taxes |
- |
- |
- |
8,151,301 |
(310,332) |
Net (loss) income |
(3,484,453) |
(6,208,532) |
(3,467,765) |
3,453,760 |
(2,944,215) |
|
|
|
|
|
|
Net (loss) income per
share |
(0.01) |
(0.02) |
(0.01) |
0.01 |
(0.01) |
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 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 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.
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, financing activities, future
growth, the form and potential of its planned joint venture, if
approved, 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, operational risks in the completion
of the Company’s anticipated projects, a delay or abandonment of
its planned joint venture, delays or changes in plans with respect
to the development of the Company’s anticipated projects by the
Company’s third-party relationships, 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, and
the ability to raise additional capital. 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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