SAN JOSE, Calif., May 30, 2019 (GLOBE NEWSWIRE) -- POET Technologies Inc. (“POET” or the “Company”) (OTCQX: POETF; TSX Venture: PTK), a designer, developer and manufacturer of optoelectronic devices, including light sources, passive wave guides, and Photonic Integrated Circuits (PICs) for the data- and tele-communication markets, today reported its unaudited consolidated financial results for the first quarter ended March 31, 2019. The Company’s financial results as well as the Management Discussion and Analysis for the first quarter have been filed on SEDAR.
On February 3, 2019 the Company signed a Letter of Intent (LOI) to sell its DenseLight subsidiary. As a result, effective January 1, 2019, the Company is required to report the activities of DenseLight as a discontinued operation, reflected in its Financial Statements filed today. The Company intends to continue to operate as a single integrated entity until the sale is completed. For comparative purposes, all financial data below represent the combined results from both continuing and discontinued operations and is presented on a proforma, non-IFRS basis in the table at the bottom of this press release. The required IFRS presentation of the Company’s Financial Statements can be found in its recent filings on SEDAR.
First Quarter and Recent Highlights:
- Revenue, including contribution from discontinued operations grew 17% over the prior quarter and increased 2.7 times year-over-year;
- Gross margin expanded to 80% from 67% in the prior quarter and 60% in the prior year period;
- The second tranche of Convertible Debentures was closed for gross proceeds of US$1.1 (C$1.5) million, bringing the total capital raised to approximately US$2.5 (C$3.4) million;
- Definitive Agreements for the sale of DenseLight are currently being drafted and are expected to be complete by June 30, 2019; and
- Key terms of the Definitive Agreements, including the identity of the buyer, will be disclosed in the Notice to Shareholders for the Annual and Special Meeting to be held in Toronto on or before August 15, 2019.
For the first quarter of 2019, revenue, including contribution from discontinued operations was US$1.8 million, compared with US$1.6 million in the prior quarter and US$0.7 million in the first quarter of 2018. The increase in first quarter revenue primarily reflected the recognition of higher non-recurring engineering (NRE) revenue. Gross margin for the first quarter of 2019 expanded to 80%, compared with gross margin of 67% in the preceding quarter and 60% in the first quarter of 2018.
Net loss in the first quarter of 2019 was (US$2.7) million, or ($0.01) per share, compared with a net loss before taxes of (US$3.6) million, or ($0.01) per share, in the fourth quarter of 2018 and (US$3.2) million, or ($0.01) per share, in the first quarter of 2018. The net loss in the first quarter of 2019 included non-cash stock-based compensation of US$0.8 million, non-cash depreciation and amortization of US$48,000, compared with non-cash stock-based compensation and non-cash depreciation and amortization of US$1.0 million and US$0.7 million, respectively, in the preceding quarter. Non-cash stock-based compensation and depreciation and amortization were US$0.8 million and US$0.6 million, respectively, in the first quarter of 2018. The reduction of Depreciation and Amortization Expense in the current quarter is a result of the classification of the DenseLight subsidiary as discontinued operations, for which depreciation and amortization expense is not recognized. On a non-IFRS basis, cash operating losses in the first quarter of 2019 decreased to approximately US$1.4 million from US$2.0 million in the previous quarter and included a US$0.6 million adjustment for an operating loss from discontinued operations. The reduction was due primarily to increased NRE revenue and associated higher gross margin.
Until the time of the sale of DenseLight, the Company intends to continue to report revenues within the DenseLight operation since the bulk of its R&D, production and sales activities are conducted there. The operation of the Company as a single integrated unit also ensures that DenseLight’s activities will continue to be directed by POET toward the completion of remaining developments connected to the Optical Interposer. Following the sale, DenseLight is expected to remain a development resource, key supplier and strategic partner in the expansion of applications and product sales for POET. POET intends to remain focused throughout the sale process on gaining customer interest, NRE support, successful qualification and product sales to customers for POET Optical Interposer-based solutions.
Additionally, subsequent to the end of the first quarter, on May 3, 2019, the Company completed the second tranche closing of its previously announced private placement of Convertible Debentures for gross proceeds of approximately US$1.1 (C$1.5) million, for which the Company paid approximately US$57,200 (C$76,600) in brokerage fees related to the closing. Proceeds from the second tranche of Convertible Debentures are expected to be used to fund operations pending the completion of the Company’s previously announced sale of its subsidiary, DenseLight Semiconductors Pte Ltd. The Company expects to continue to solicit interest from potential subscribers for additional tranches of Convertible Debentures over the coming months. Any subsequent tranches to be completed will be subject to the approval of the TSX Venture Exchange. For a complete description of the terms of the Convertible Debentures, refer to the Company’s press release on April 1, 2019.
The convertible securities referred to in this news release have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any applicable securities laws of any state of the United States, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the U.S. Securities Act) or persons in the United States unless registered under the U.S. Securities Act and any other applicable securities laws of the United States or an exemption from such registration requirements is available. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of these securities within any jurisdiction, including the United States.
Non-IFRS Financial Performance Measures
Certain financial information presented in this press release is not prescribed by IFRS. These non-IFRS financial performance measures are included because management has used the information to analyze the business performance and financial position of POET and the proposed sale of its DenseLight subsidiary. These non-IFRS financial measures are intended to provide additional information only and do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. These non-IFRS financial measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
In order to provide the combined business performance and financial position of the proposed sale of DenseLight, certain non-IFRS financial performance measures have been combined to show an aggregate number. Such proforma combined numbers are illustrative only and actual figures may vary materially.
|POET TECHNOLOGIES INC. AND SUBSIDIARIES|
|PROFORMA – NON-IFRS PRESENTATION OF THE|
|COMBINED RESULTS OF CONTINUING AND DISCONTINUED OPERATIONS|
|(AMOUNTS ARE IN US DOLLARS)|
|For the Quarter ending:||31-Mar-19||31-Dec-18||30-Sep-18||30-Jun-18||31-Mar-18|
|Cost of sales||362,977||509,164||378,688||319,939||268,178|
|Research and development||1,885,906||2,531,564||2,087,146||1,899,564||1,638,209|
|Depreciation and amortization||48,216||666,272||640,517||659,820||596,015|
|Wages and benefits||605,831||608,197||617,334||620,696||621,774|
|Management and consulting fees||31,033||31,242||41,638||32,104||50,185|
|General expenses and rent||632,023||512,771||718,095||500,016||519,381|
|Impairment and other loss||-||(22,058||)||178,775||-||-|
|Other (income), including interest||(80,183||)||(903,656||)||3,757||155,218||(761,109||)|
|Net loss per share||(0.01||)||(0.01||)||(0.02||)||(0.02||)||(0.01||)|
About POET Technologies Inc.
POET Technologies is a developer and manufacturer of optical light source products for the sensing and data communications markets. Integration of optics and electronics is fundamental to increasing functional scaling and lowering the cost of current photonic solutions. POET believes that its approach to hybrid integration of devices, utilizing a novel dielectric platform and proven advanced wafer-level packaging techniques, enables substantial improvements in device cost, efficiency and performance. Optical engines based on this integrated approach have applications ranging from data centers to consumer products. POET is headquartered in Toronto, with operations in Ottawa, Silicon Valley, the United Kingdom, and Singapore. More information may be obtained at www.poet-technologies.com.
|Shareholder Contact: |
Brett L. Perry
|Company Contact: |
Thomas R. Mika, EVP & CFO
This news release contains “forward-looking information” (within the meaning of applicable Canadian securities laws) and “forward-looking statements” (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Such statements or information are identified with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “potential”, “estimate”, “propose”, “project”, “outlook”, “foresee” or similar words suggesting future outcomes or statements regarding any potential outcome. Such statements include the Company’s expectations with respect to the success of the Company’s product development efforts, the expected results of its operations, meeting revenue targets, completing the sale transaction of DenseLight, and the expectation of continued success in the financing efforts, the capability, functionality, performance and cost of the Company’s technology as well as the market acceptance, inclusion and timing of the Company’s technology in current and future products.
Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions which may cause actual results or other expectations to differ materially from those anticipated and which may prove to be incorrect. Assumptions have been made regarding, among other things, management’s expectations regarding the success and timing for completion of its development efforts, financing activities, sale of its DenseLight subsidiary, future growth, plans for and completion of projects by the Company’s third-party consultants, contractors and partners, availability of capital, and the necessity to incur capital and other expenditures. Actual results could differ materially due to a number of factors, including, without limitation, operational risks in the completion of the Company’s anticipated projects, delays or changes in plans with respect to the development of the Company’s anticipated projects by the Company’s third-party relationships, risks affecting the Company’s ability to execute projects, the ability of the Company to generate sales for its products, the ability to attract key personnel, and the ability to raise additional capital. Although the Company believes that the expectations reflected in the forward-looking information or statements are reasonable, prospective investors in the Company’s securities should not place undue reliance on forward-looking statements because the Company can provide no assurance that such expectations will prove to be correct. Forward-looking information and statements contained in this news release are as of the date of this news release and the Company assumes no obligation to update or revise this forward-looking information and statements except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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