$1.0 billion valuation was back in 2011, since then a lot of new develepments took place. If all goes well to the plan we might see a multiple of $1.0 B. "The company believes its chips “could easily be a $10-billion opportunity” if one or more Silicon Valley companies begin to develop devices made with them.

January 06, 2014

The company is in discussion with several potential industry partners who have the necessary foundry infrastructureto take the POET technology to the manufacturing stage. The company is planning several initiatives to raise global awareness of POET and increase its global investor base. The Company intends to split monetization of the IP between multiple commercial markets and military applications and products to maximize returns of all the different aspects of the POET IP.

Opel's POET at $1-billion says Pellegrino report

2011-03-02 10:31 ET - News Release

Mr. Michel Lafrance reports

THIRD PARTY VALUATION OF POET TECHNOLOGY OVER $1 BILLION

Opel Solar International Inc. has received a third party valuation of intellectual property developed by its United States affiliates Opel Inc. and Odis Inc. The Planar Opto Electronic Technology (POET), initially developed by Dr. Geoffrey Taylor at the University of Connecticut and licensed to Opel Inc., is a semiconductor fabrication technology that enables the dense packing of digital, analog and optical circuits on a single gallium arsenide chip. The technology now makes it possible to monolithically integrate a wide number of electronic and optoelectronic functions in a single chip with higher speeds and reduced power consumption compared with Silicon CMOS. For the same functionality, the chip size would be considerably reduced to approximately the size of half a person's thumb nail.

Opel commissioned a valuation analysis of the POET technology portfolio by an independent, third party valuation firm, Pellegrino & Associates LLC. The Pellegrino firm performed an analysis of the uses of the POET technology, the sales it could achieve in its targeted end-markets, and likely margins if Opel can complete its research and development activities successfully and the market adopts the POET technology. Using a number of valuation techniques and based on technical information provided to it by the company, the valuation firm has estimated that the POET technology portfolio could be worth as much as approximately $1-billion. This worth is derived from a range of values; the median value being $966.6-million, while the mean valuation was reported at $1.31-billion.

Using the income approach to value, Pellegrino & Associates built a valuation model to determine the economic income that might be possible from the potential exploitation of the POET technology in several prospective markets. Pellegrino & Associates used market data, revenue projections, investment data and cost data as from various sources, including from Odis representatives, to determine the economic income attributable solely to the POET technology. Pellegrino & Associates then integrated the information into a valuation model, accounting for the economic life of the POET technology. Pellegrino & Associates LLC performed a royalty rate analysis to determine what the market may bear as a reasonable royalty rate for the exclusive use of the POET technology. Pellegrino & Associates developed a risk-adjusted discount rate to discount forecast future free cash flows to determine a nominal value indication as of the appraisal's effective date.

To account for the uncertainty inherent in the valuation process, Pellegrino & Associates captured the complex model interactions in the face of uncertain estimating assumptions using Monte Carlo simulation techniques. This did not constrain the valuation model to any single value predictions of key values such as royalty rates or costs. Pellegrino & Associates programmed the valuation model to recalculate repeatedly to create a distribution of outcomes that Pellegrino & Associates analyzed. Pellegrino & Associates used the range of values calculated by the model to come to a final determination. In complex situations that involve uncertainty, this methodology helps to generate meaningful estimates that would otherwise be impossible to model using discrete methods such as best-, expected- and worst-case modeling. Pellegrino & Associates used the median value from this simulation process as the fair market value for the POET technology. The company will post a copy of a redacted version of the valuation on its website as well as on SEDAR, concurrent with the dissemination of this press release. Disclosure of certain information in the valuation would be seriously prejudicial to the interests of the company and its shareholders, or would violate confidentiality provisions with third parties, and has been omitted or marked to be unreadable. The redactions have been done by the company and Pellegrino & Associates. The omitted information is that information necessary to protect important proprietary and technical information of the company and third parties, including Pellegrino & Associates, and to protect against competitor infringement.

It is important to note that a third party valuation is not an indication of interest by any party, nor does it represent an actual offer to purchase the POET intellectual property. As indicated in the report, the POET technology is still under development, and no assurances can be given that such development will be successfully completed, that the technology will be brought to commercial realization or that the company's target markets will adopt this technology. Commercial applications of the technology will likely not be available for several years, if ever.

In the real market, the technology could generate as many prices as there are buyers in the market, with each buyer having the ability to pay its own specific price based on its own specific set of circumstances. In the end, the final price will be the result of a set of negotiations between buyers and sellers that the valuation firm could not ascertain or forecast for the purpose of its engagement. However, Pellegrino & Associates did test its value conclusions to ensure that there was a reasonable economic basis for its value opinion.

Pellegrino & Associates prepared its report in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation, and the Principles of Appraisal Practice and Code of Ethics of the American Society of Appraisers. Opel paid Pellegrino & Associates a flat fee for its analysis that was in no way contingent on achieving any predetermined value conclusion. Further, Pellegrino & Associates has no current or contingent interest in Opel and has no duty to update its analysis to account for subsequent events.

The board of directors of Opel engaged Pellegrino & Associates in order to assess the potential for the POET technology and is considering alternatives to realize the full value of the POET technology. On Feb. 28, 2011, the board of directors passed all of the necessary resolutions to authorize the sale of the POET intellectual property portfolio. Currently, the board of directors is evaluating proposals from investment banking firms specializing in this technology regarding an engagement to consider strategic alternatives for Opel's future exploitation of the POET technology, which may include the full or partial sale of the technology.

Opel will host a conference call to discuss the valuation, strategic alternatives and the POET technology. The call will occur on Friday, March 4, at 11 a.m. ET. Interested parties can participate by calling 1-888-510-1765, which is toll-free in Canada and the U.S. (other international callers can dial 1- 719-457-2624, which is not toll-free.) The call will also be webcast. A replay of the call will be available on the Opel website, in the investor relations section, for one year after the call.

Leon M. Pierhal, chief executive officer of Opel, elaborates: "We are extremely proud and excited about the work we are doing on the POET technology. We control a revolutionary technology that we think can fundamentally alter the landscape of the server, smart device and computing industries. Never before has one chip been able to integrate both electronic and optical circuits. By combining them in one part, we believe we can eliminate the inefficiency and cost burden on systems that must use separate chips for each function. These cost-savings and performance improvements can be immense, potentially transforming the whole industry."

Background on POET technology

Known as the Planar Opto Electronic Technology (POET), POET fulfills a long-held objective of the semiconductor industry, bypassing many of the physical limits of existing semiconductor technologies. Key benefits of the POET platform include faster semiconductor operating frequencies -- up to 100 gigahertz-- lower heat losses, greater reliability and total system cost. All components of the technology have been validated by third parties, and the company expects to have a fully integrated, operational chip within months. The technology is protected by numerous U.S. and international patents issued and pending.

Odis personnel are working with leading defense systems integrator companies, and with military and government agencies to develop important applications for the technology. With partners, Odis is developing infrared arrays for imaging, optoelectronic switches, compact ultralow power memory, optical CDMA communications chips and radio frequency detection arrays. The company believes that POET has numerous applications in computing and communications technologies, and it will fundamentally alter the landscape of those industries with heretofore unattainable functionality and price/performance.

We seek Safe Harbor.

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