So where do we now stand with PET after the CC? - One component of PET development is the relationship with Synopsys. This is still critical, as mentioned by SV in the CC transcript (see my underling below).

We can assume that the relationship with BAE continues too, as the contract made for six months March to August was described as the first phase, Logically there would be other phases, but really we are still left in the dark as to just what the achievements were with PET during its eighteen month development period to August 2015.

That said given that 'the modelling of our devices remains critical' statement from above is a evidence that PET is still alive and kicking. But is it available for others to develop POET IP in their own products yet?. Again no progress report has been made on the achievements of the Synopsis partnership. The company really should say more on this as well as what was gained during the PET focus period otherwise it would seem that a long period of development was wasted.

Whilst my initially concern, post CC, was that we had lost our way with PET and wasted time There is clear evidence that whilst PTI is becoming a commercial company to develop the POET VCSEL, the long term aim remains for PTI to become an IP company. The evidence for this would be the following statements from the CC (note my under lining). There is a danger that this underlying, but primary, aim has been rather forgotten in all the VCSEL excitement generated by the CC and perhaps the company could have been clearer about whether it is now a commercial company, which is fine by me, or intends to revert to becoming a IP company. What do others think about this?

As regards our 'Big Customer' we were stimulated by the CIC event in February by the notion that a 'Big Customer' had become involved. We were later told that a customer was now setting the technical goals i.e. the VCSEL and Oscillator Milestones. The 'Big Customer' notion then gained wings particularity when the TRAB was co-announced with the BAE contract and the Blevin saga raised heads and expectations, none of this has been refuted by the company.

If a 'Big Customer' remains interested, it would be entirely logical and necessary for the company to treat that 'Big Customer' very carefully and to remain silent in order to protect its customers commercial interests, so we are not going to be given any indication that it exists. It is however very hard to imagine that the contract with Anadigics and the MOUs with suppliers would be transacted without some reasonable assurance of down line revenue, which suggests that a customer remains on the sidelines. The clearest evidence of this was stated in the CC by SV at 32:21-(please note my underlining).

Conclusions Drawn:

1. The new executive team arrival and clearly has got a grip of what was becoming a confused situation in Q2-Q3 2015 as regards PTI 'go to market' policy, which has meant that the' low hanging fruit' policy has been narrowed and refocused from PET products in general, to the specific single product of a POET VCSEL as part of the 'get to market' policy but this is to ultimately establish a licensing model. Thus the company remains an IP company albeit through commercialising one product, the VCSEL. It will be interesting to see if other commercial products will be developed but as stated above it would appear to be a one off.

2. I suggest that the imperative for this change of focus was the discussions that were had with our 'Big Customer' who was demanding more assurance. In passing I don't think they were overly impressed by the facilities at Stoors perhaps this was influenced by the 'spluttering tool' failure and perhaps caused a degree of cold feet about the quality PTI could produce establishing a need for more assurance from the company and hence VCSEL development.

3. Finally, I think revenue from POET IP, remains as the long term aim of this company, as such PET will remain as an important part of the PTI armoury.

Sula