Dr. Suresh Venkatesan reports

POET TECHNOLOGIES REPORTS FIRST QUARTER 2023 FINANCIAL RESULTS

Poet Technologies Inc. has released its audited consolidated financial results for the first quarter ended March 31, 2023. The company's financial results, as well as management's discussion and analysis, have been filed on SEDAR. All financial figures are in U.S. dollars unless otherwise indicated.

Business highlights since fourth quarter 2022 reported on March 31, 2023:

• Released Poet Infinity, a chiplet-based transmitter platform for 400G, 800G and 1.6T pluggable transceivers and co-packaged optics solutions;
• Released Poet Starlight, a packaged light source solution for artificial intelligence applications;
• Announced an agreement with Celestial AI, creator of the Photonic Fabric, for development and production of Poet Starlight packaged light sources and received an advanced purchase order for initial production units;
• Received first volume production order valued at more than $3-million (U.S.) for optical engines through the company's joint venture company, Super Photonics Xiamen (SPX); the purchase order was placed by Beijing FeiYunYi Technology Ltd.

Management comments

"We've made significant progress on our commercialization road map with the recent purchase orders from world-class customers, as well as our introduction of important new products," stated chairman and chief executive officer, Dr. Suresh Venkatesan. "Our work with leading companies like Celestial AI and Beijing FeiYunYi Technology further validate the commercial viability of our optical engines and other optical interposer-based products. Poet's Infinity optical chiplet solution received wide praise when demonstrated as part of a highly integrated 800G transceiver module at the OFC Conference in March. Additionally, we announced our Poet Starlight products, which are packaged light engines based on our LightBar platform and an ideal solution for AI applications. The creation of this product, while significant, was a seamless modification of the Poet Optical Interposer, underscoring the flexibility of our core technology and its relevance across a wide spectrum of data communications applications."

Non-international financial reporting standard summary

The company reported non-recurring engineering revenue (NRE) of $181,000 in the first quarter of 2023 compared with nil for the same period in 2022 and $200,000 in the fourth quarter of 2022. In the first quarter, the company provided under NRE contract 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 $5.3-million, or 14 cents per share, in the first quarter of 2023 compared with a net loss $5.4-million, or 15 cents per share, for the same period in 2022 and a net loss of $6.3-million, or 17 cents per share, in the fourth quarter of 2022. The net loss in the first quarter of 2023 included research and development costs of $2.3-million compared with $2.2-million for the same period in 2022 and $2.7-million in the fourth quarter of 2022. Fluctuations in R&D for a company of this size and this stage of growth are expected on a period-over-period basis as the company transitions from technology development to product development.

Non-cash expenses in the first quarter of 2023 included stock-based compensation of $1.2-million and depreciation and amortization of $400,000. Non-cash stock-based compensation and depreciation and amortization in the same period of 2022 were $1.0-million and $300,000, respectively. Fourth quarter 2023 stock-based compensation and depreciation and amortization were $1.6-million and $300,000, respectively. The company had non-cash finance costs of $10,000 in the first quarter of 2023 compared with non-cash finance costs of $14,000 in the first quarter of 2022 and non-cash costs of $12,000 in the fourth quarter of 2022.

The company recognized other income, including interest, of $78,000 in the first quarter of 2023, compared with $22,000 in the same period in 2022 and $69,000 in the fourth quarter of 2022.

Non-cash impact of joint venture in the first quarter of 2023 was nil, compared with a net loss of $400,000 in the same period of 2022 and a net loss of $400,000 in the fourth quarter of 2022. The company's share of loss is approximately 80.7 per cent of the loss of Super Photonics in the first quarter of 2023, 88.5 per cent in the first quarter of 2022 and 80.7 per cent in the fourth quarter of 2022. The company's current share of the operating loss is a result of the high value of the company's initial contribution. Although the company's equity ownership of the joint venture approximated 80.7 per cent at March 31, 2023, the company did not recognize a share of loss in the joint venture in the first quarter of 2023 because the value of its investment is carried at nil on the consolidated statements of financial position precluding further loss recognition under the relevant accounting standards.

Cash flow from operating activities in the first quarter of 2023 was $4.4-million, compared with ($3.6-million) in the first quarter of 2022 and ($2.7-million) in the fourth quarter of 2022.

From Jan. 1, 2023, to date, the company received $7.4-million from the exercise of warrants by insiders and warrantholders.

About Poet Technologies Inc.

Poet 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 multichip module using advanced wafer-level semiconductor manufacturing techniques and packaging methods. Poet's Optical Interposer eliminates costly components and labour-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, the Internet of Things, autonomous vehicles, and high-speed networking for cloud service providers and data centres. Poet is headquartered in Toronto, with operations in Allentown, Pa., Shenzhen, China, and Singapore.

We seek Safe Harbor.