http://www.poet-technologies.com/wp-content/uploads/2013/07/POET-AR-2014.pdf

In brief, this is the situation:

To our Shareholders: The past year has been a transformative one for the Company. During 2014 and into 2015 we were and are focused on transitioning from “Labto-Fab”. As a Company we are moving beyond proof of concept, to proof of commercialization. Our monetization strategy will benefit from the implementation of the POET (Planar Opto-Electronic Technology) process in a Fab environment. Our process is intended to enable monolithic fabrication of integrated circuits containing both electronic and optical elements. This alone is transformative; however, with the combination of the projected material performance and power savings advantages of our III-V semiconductor platform the technology will be disruptive. The semiconductor industry improvements based on Moore’s Law that have sustained the semiconductor world over the last 50 years are coming to an end. The capital investments necessary for the industry to sustain reducing the size of silicon CMOS technology nodes down to 10-nm and below continue to increase, creating economics that only a select few companies can participate in and benefit from. POET is intended to provide a resurgence in high-speed and power-efficient applications in devices including smart-phones, tablets, servers and wearable computers. POET may offer a cost competitive alternative with equivalent performance three to four nodes ahead of Silicon CMOS and provide the ability to mix analog, mixed signal, digital and optical devices on the same chip. This will not only allow companies to continue to offer their customers added product differentiated feature benefits but also offer solutions that cannot be created today with the current semiconductor fabrication process capabilities. You can find more information on POET and our proprietary semiconductor platform, at our website at www.poet-technologies.com. Our strategy for “Lab to Fab” is beyond a simple catch phrase. We are engaged on multiple fronts with a single convergence point of commercialization, which in turn will lead to monetization. Dr. Taylor, our visionary, has made great progress moving the “Dial” on this technology. However, a laboratory setting has limitations. Fab environment equipment is ISO Certified and carefully calibrated to continually deliver quality and repeatability of results. Our ongoing non-exclusive work with BAE Systems (“BAE Systems”), a third party foundry is intended to provide access to this quality of equipment required to prepare our POET IP process for delivery to potential customers. Additionally, we are exploring other potential relationships to further the technological development. In early 2014, we successfully concluded a $4.5M USD ($5M CAD) capital raise to enable the Company to fund the internal and third party development efforts necessary to complete the milestones required for the monetization and “Lab-to-Fab” transition of the POET Technology. We renegotiated our contract with the University of Connecticut and established a new agreement under significantly improved terms. Additionally, during 2014 and into 2015 we raised $14.8M USD ($17.2M CAD) through the exercise of warrants; and as I write this letter to you, we have $15.2M USD ($19.5M CAD) of cash resources to allow us to execute our vision. We have made great strides during the year. The team achieved the fabrication of infrared (IR) detectors working with BAE Systems; the team achieved the operation of its switching laser within the POET platform with implications for complementary metal-oxide semiconductor (CMOS) onchip and off-chip optical communications applications; the team completed the documentation associated with the POET technology design kit and announced the collaboration BAE Systems to reproduce and enhance the repeatability of the 100-nm results and shrink the PET process to 40-nm scale. While we maintain our focus and attention to the POET platform at 100 and 40-nm geometries, the shift from “Lab-to-Fab” continues through IP and process development. To that end, we are actively engaged and listening to our potential customers. In the past, milestones were focused on proof of concept. Our current milestones are based on the market requirements through active consultation with industry and prospective clients. In closing, I would like to thank my fellow Directors for their continued guidance and leadership, our executives and our employees for their dedication and efforts. We also greatly appreciate the support and interest of our shareholders and look forward to communicating updates of POET’s continued success to you in the future. In the meantime, we look forward to greeting many of you at our Annual General Meeting on June 12, 2015.