With the diversity of investors sourced, when China Prosper Group requested funds to be transferred to DL-Shanghai, each investor had a different procedure for approval, and not all investors were able to transfer their committed funds to DL-Shanghai’s account on a timely  basis. Without the funds in place, the process of obtaining approval from the PRC government for the conversion of funds to US dollars for Overseas Direct Investment (“ODI”) could not begin. As a result, DL-Shanghai has decided to submit two applications for ODI, one that has been submitted for the first tranche payment to POET of US$8 million on or before October 31, 2019 (plus US$1 million of additional funds for due diligence, legal expenses and other expenses to be paid to Oak Capital), and a second that will be submitted for the balance of the funds, including a US$18 million payment to POET on or before December 31, 2019, plus an additional US$1 million for Oak Capital), and funding for DenseLight’s working capital needs. The first payment of US$8 million will be sufficient to allow the Company to pay off its bridge debt, improve the currency of its payables and to fund the POET operation until the second tranche payment is made.

 
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At the time of the Closing on or before October 31, 2019, the Company intends to transfer an estimated 30% ownership position in the capital stock of DenseLight to DL-Shanghai, proportionate to the estimated US$8 million in cash to be paid at that time. A duly executed transfer instrument in favor of DL-Shanghai for the balance of the DenseLight shares, representing the estimated remaining 70% of the total, will be escrowed with Bird & Bird ATMD LLP, attorneys for POET, to be released to DL-Shanghai only upon receipt of full payment for DenseLight. An additional guarantee signed by DL-Shanghai and backed by guarantees from the expected investors, representing the balance of the amount owed to POET, will also be provided by DL-Shanghai at Closing. As long as the shares remain in escrow, all costs and liabilities related to the operation of DenseLight will be assumed by DL-Shanghai. In the event that the full payment cannot be made by December 31, 2019, the Company will either negotiate additional time for the payment or seek some other arrangement with DL-Shanghai or its investors in order to conclude the sale. In the circumstance that the parties cannot conclusively agree on terms for the sale of DenseLight by June 30, 2020, the shares in escrow will be returned to POET.
 
Although the names of all the investors have not been disclosed by China Prosper Group, several are known to them as having both the motivation and the means to fund more than the entire amount of investment in DL-Shanghai, and China Prosper Goup has advised the Company of same. China Prosper Group is confident that the amounts needed for each of the two payments for the purchase of DenseLight will be available to DL-Shanghai, both at the Closing on or before October 31, 2019 and for the second payment to be made on or before December 31, 2019. However, since the ODI process is somewhat unpredictable, the Company is seeking approval from the shareholders to extend the time beyond December 31, 2019 to complete the sale, as well as approval to amend existing agreements or enter into new agreements that both protect the Company’s assets and give it more flexibility to consider other arran