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Is POET Technologies About To Move From Stealth Mode To Wealth Mode?

|Includes: POET Technologies Inc. (POETF)

Introduction

According to POET Technologies Corporate Overview

(http://poet-technologies.com/docs/POET-Technologies-Corporate-Overview.pdf)

"POET Technologies has developed a revolutionary semiconductor technology ultimately replacing current silicon based IC devices while delivering up to 90% power savings and dramatic performance gains in like applications"

POET's process accomplishes this while integrating electronics and optics, digital and analog. The claims project performance at 40nm to be equivalent to, or better than, silicon at 14nm. If true, and progress to date supports the veracity of these statements, POET's technology promises to become a disruptive force in this $600 billion+ industry as the multiple chips required for operation of devices may be replaced by a single chip. Companies bowing out of the chip race at 28nm and lower may now be re-vitalized and enabled to produce chips at lower cost.

This article will not address the technological breakthroughs claimed by POET. An excellent overview is provided by the company in a presentation conducted by POET executives at an investors' meeting conducted in London this past February, available at POET-Technologies.com .

POET Technologies anticipates step function improvements in technology, but has yet to create as much as a ripple of investor interest. Two reasons stand out: 1) POET Technologies (OTCQX:POETF) currently trades on the Canadian Venture Exchange, largely beyond the purview of the mainstream American investment community and 2) the technology remains two significant milestones away from industry-wide validation. However, it appears that both of these obstacles are anticipated to be eliminated over the next few weeks/months. POET's share price currently stands in the $1.20 (US) range.

A Nasdaq listing

POET has indicated its intent to initiate a Nasdaq listing application as early as this month, in order to open the door to a broader and deeper pool of investors. This unique circumstance creates an opportunity not unlike an IPO, with the notable exception being that small retail investors have the opportunity to acquire positions prior to many in the investment community who must await the Nasdaq listing.

The CEO has indicated that such a move (to the Nasdaq) by necessity will require significant progress that will advance and support the higher share price required for a listing. News of milestone completion, partnerships, and/or revenues would certainly assist in fulfillment of this need.

The Milestones

The aforementioned milestones are actually semiconductor devices (a ring oscillator and a 50 GHz VCSEL), well known within the industry, that will enable professionals in the semiconductor industry to immediately compare the POET technology to its corresponding silicon counterpart. The ring oscillator functions to measure and validate POET's potential superiority in the electronic domain versus silicon . Multiple potential clients and partners await this result. The VCSEL serves a comparable function for laser/optics, and is equally important, as the company has indicated that at least one multi-billion dollar client has expressed interest in this product's successful completion . These devices are anticipated to be completed within the second quarter which ends this month.

Further indication of POET's advancements is suggested by the selection of Dr. Subhash Deshmukh, former VP Applied Materials (NASDAQ:AMAT), for the position of COO for POET, effective June 8. The company has indicated that Dr. Deshmukh's role will incorporate his demonstrated abilities to lead technology companies both in technology development and in strategies to create sustainable revenues. Dr. Deshmukh's decision to move from a $25 billion leader in the industry to accept the COO role of a $200 million start up, with a significant portion of his compensation being deferred (1.5 million stock options vesting over several years, at a cost to him of $1.62 Canadian, approximately $1.29 US) certainly suggests both his long term commitment and his strong belief in what is to come.

Among other significant personnel decisions is the addition of Tony Blevins to the company's Technical Roadmap Advisory Board. More information here:

http://app.quotemedia.com/quotetools/newsStoryPopup.go?storyId=74442979&topic=PTK:CA&symbology=null&cp=null&webmasterId=92583

The release of this announcement did not include Mr. Blevins' current role within one of the largest companies in the world. Since POET did not include this in their release, it will be left for the more than mildly inquisitive to seek out this interesting tidbit. (You may find the results very interesting.)

POET appeared to begin its move from stealth mode in February 2015 by running a series of 15 second advertisements through business media outlets, including Bloomberg and Fox Business News. However, these ads were discontinued proximate to POET's announcement of the delay in milestone completion from end of first quarter to second quarter of this year, due to an equipment installation issue. The equipment issue has now been resolved, and these ads have reappeared (to view, see company homepage), and statements within the ads, such as "POET Technologies will change the foundation of electronics" and "Imagine a new world, charging your phone only twice a week" are among the proclamations suggesting potentially revolutionary advancements in semiconductor technology.

The company has continued its infusion of high caliber talent over the past few years, hiring Ajit Manocha, former CEO of Global Foundries, and member of President Obama's Advanced Manufacturing Partnership Steering Committee, as Executive Vice Chairman for POET, and Dr. Deshmukh, as well as selecting highly respected industry executives to the Board of Directors and their Technology Roadmap Advisory Board. Combined with the return of the ad campaign, these key additions may indicate that POET is ready to move from stealth mode and into the mainstream of the industry. They are anticipated to add an industry savvy CEO near term, as part of the transition to commercialization. This will likely indicate the completion of the validation process and the acceleration toward the commercialization of the industry changing technology that POET purports to become.

Summary

Should POET achieve the results the milestones are anticipated to demonstrate, partnerships and revenues will follow. The proposed Nasdaq listing, along with a subsequent increase in investor access and awareness, will further drive demand for POET shares. A viral response cannot be ruled out in an industry with insatiable demand and need for innovation, as the wall of Moore's Law signifying the end of silicon chip node reduction rapidly approaches.

POET Technologies market cap stands at approximately $200 million. Possession of proprietary, step function advancements in processing speed and power savings, while not priceless, is incalculable. Failure to have access to such a technology, particularly for the most advanced semiconductor companies is not a viable option. This duality itself may accelerate POET's valuation to unforeseen levels as competition for licensing, exclusivity or outright ownership emerges.

Disclosure: The author is long POETF.