Filed
pursuant to General Instruction II.L of Form F-10
File
No. 333-280553
No
securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus
supplement (the “Prospectus Supplement”), together with the accompanying short form base shelf prospectus, dated September
6, 2024 (the “Shelf Prospectus”), to which it relates, as amended or supplemented (collectively, the “Prospectus”),
and each document incorporated or deemed to be incorporated by reference herein and therein, constitutes a public offering of these securities
only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.
See “Plan of Distribution”.
Information
has been incorporated by reference in this Prospectus Supplement and the Shelf Prospectus to which it relates from documents filed with
securities commissions or similar regulatory authorities in Canada and with the United States Securities and Exchange Commission (the
“SEC”). Copies of the documents incorporated herein by reference may be obtained on request without charge from POET
Technologies Inc. at 120 Eglinton Avenue East, Suite 1107, Toronto, Ontario, M4P 1E2 (Telephone: 416-368-9411), and are also available
electronically under the Corporation’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR+”)
at www.sedarplus.ca and the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) at www.sec.gov.
See “Documents Incorporated by Reference”.
PROSPECTUS
SUPPLEMENT
TO
THE SHORT FORM BASE SHELF PROSPECTUS DATED SEPTEMBER 6, 2024
New
Issue |
December
3, 2024 |
POET
Technologies Inc.
US$25,000,002
5,555,556
Common Shares
Warrant
to Purchase up to 2,777,778 Common Shares
This
prospectus supplement (this “Prospectus Supplement”) of POET Technologies Inc. (“POET”, the “Corporation”,
“we” or “us”), together with the short form base shelf prospectus, dated September 6, 2024, to
which it relates (the “Shelf Prospectus”), qualifies the distribution of an aggregate of 5,555,556 common shares in
the capital of the Corporation (the “Common Shares”) and a warrant exercisable for 2,777,778 Common Shares (the “Warrant”
and together with the Common Shares, the “Offered Securities”). The combined price of one Common Share and the accompanying
Warrant in respect of one-half of one Common Share will be US$4.50 (the “Offering Price”), to raise aggregate gross
proceeds to the Corporation of US$25,000,002 (the “Offering”). The Warrant entitles the holder to purchase Common
Shares at an exercise price of US$6.00 per Common Share for a period of five years from the Closing Date (as defined herein). See “Plan
of Distribution”, “Description of Securities Being Distributed under the Offering”.
The
Offered Securities are being issued and sold by the Corporation directly to a single accredited investor (the “Investor”)
as such term is defined under National Instrument 45-106 Prospectus Exemptions. The Corporation entered into a securities purchase
agreement with the Investor dated as of December 3, 2024, setting out the detailed terms of the Offering. The Offering Price has been
determined by arm’s length negotiation between the Corporation and the Investor, with reference to the prevailing market price
of the Common Shares. It is expected that the closing of the Offering will occur on or about December 3, 2024, or such later date as
the Corporation and the Investor may agree (the “Closing Date”). No securities will be issued to any persons other
than the Investor pursuant to this Prospectus Supplement. See “Plan of Distribution”
No
underwriter or agent has been involved in the preparation of this Prospectus Supplement or performed any review of the contents of this
Prospectus Supplement. The Corporation has not engaged in the business of trading and advising in securities with respect to the Offering.
The
outstanding Common Shares are listed and posted for trading on the TSX Venture Exchange (the “TSXV”) under the symbol
“PTK” and on the Nasdaq Capital Market (“Nasdaq”) under the symbol “POET”. On
December 2, 2024, the last trading day prior to the date of this Prospectus Supplement, the closing price of the Common Shares on the
TSXV and Nasdaq was $6.93 and US$4.95 per Common Share, respectively. The Corporation has applied to the TSXV for approval of the listing
of the Common Shares. Listing will be subject to the Corporation fulfilling all of the listing requirements of the TSXV. The board of
directors of the Corporation has approved the voluntary de-listing of the Common Shares from the TSXV. See “Recent Developments”
for additional information.
There
is no public market through which the Warrant may be sold. Purchasers may not be able to resell the Warrant purchased under the
Prospectus. This may affect the pricing of the Warrant in the secondary market, the transparency and availability of trading
prices, the liquidity of the Warrant. See “Risk Factors”.
| |
Price to public | | |
Proceeds to the Corporation(1) | |
Per Offered Security | |
US$ | 4.50 | | |
US$ | 4.50 | |
Total(1) | |
US$ | 25,000,002 | | |
US$ | 25,000,002 | |
Notes:
(1) | Before
deducting the fees and expenses of the Offering (estimated to be US$150,000), which will
be paid by the Corporation from the proceeds of the Offering. |
This
Prospectus Supplement qualifies the distribution of the Offered Securities to an Investor located outside of Canada and the United States.
The Offering is being made only outside of Canada and the United States and the Offered Securities will be offered directly to the Investor
participating in the Offering. No Offered Securities will be offered or sold to Canadian purchasers, and there will be no solicitations
or advertising activities undertaken in Canada in connection with the Offering.
This
Prospectus Supplement should be read in conjunction with and may not be delivered or utilized without the Shelf Prospectus.
THE
OFFERED SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC NOR HAS THE SECURITIES COMMISSION OF ANY STATE OF THE UNITED STATES
OR ANY CANADIAN SECURITIES REGULATOR APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
Offering is made by a Canadian issuer that is permitted, under a multijurisdictional disclosure system (“MJDS”) adopted by
the United States and Canada, to prepare this Prospectus Supplement and the Shelf Prospectus in accordance with Canadian disclosure requirements.
The Investor should be aware that such requirements are different from those of the United States. Financial statements included or incorporated
herein have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards
Board (“IFRS”) and are subject to the rules and auditor independence standards of the United States Public Company Accounting
Oversight Board, and thus may not be comparable to financial statements of United States companies.
The
Offering is only being made outside of Canada under the terms of the Corporation’s prospectus supplement filed pursuant to General
Instruction II.L of Form F-10 under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), supplementing
the base prospectus that forms a part of the Corporation’s registration statement (the “Registration Statement”) on
Form F-10 (File No. 333-280553) filed with the United States Securities and Exchange Commission (the “SEC”). See “Plan
of Distribution”.
The
Investor should be aware that the acquisition, holding or disposition of the Offered Securities may have tax consequences both in the
United States and in Canada. Such consequences may not be described fully in this Prospectus Supplement or the accompanying Shelf Prospectus.
The Investor should consult and rely on its own tax advisors with respect to its particular circumstances, as well as any other provincial,
state, foreign and other tax consequences of acquiring, holding or disposing of the Offered Securities. See “Certain Canadian
Federal Income Tax Considerations” and “Certain U.S. Federal Income Tax Considerations”.
An
investment in the Offered Securities involves significant risks. You should carefully consider the “Risk Factors”
section in this Prospectus Supplement, and in the accompanying Shelf Prospectus, and any risk factors disclosed in the documents incorporated
by reference herein and therein, as well as the information under the heading “Cautionary Statement Regarding Forward-Looking
Information”.
The
enforcement by the Investor of civil liabilities under the United States federal securities laws may be affected adversely by the fact
that the Corporation exists under the laws of Canada, that some of the Corporation’s officers and directors are residents of Canada,
that some or all of the experts named in this Prospectus Supplement and the Shelf Prospectus may be residents of Canada, and that all
or a substantial portion of the assets of the Corporation and said persons may be located outside the United States. See “Enforceability
of Civil Liabilities”.
Jean-Louis
Malinge, Suresh Venkatesan, Theresa Lan Ende and Glen Riley, each a director of the Corporation, and Thomas Mika, the Executive Vice
President and Chief Financial Officer of the Corporation, reside outside of Canada. Each of the foregoing has appointed Bennett Jones
LLP as agent for service of process at 3400 One First Canadian Place, PO Box 130, Toronto, Ontario, M5X 1A4. The Investor is advised
that it may not be possible for it to enforce judgments obtained in Canada against any person who resides outside of Canada, even if
the party has appointed an agent for service of process. See “Risk Factors – The Investor may not be able to obtain enforcement
of civil liabilities against the Corporation”.
The
Corporation’s head and registered office is located at Suite 1107, 120 Eglinton Avenue East, Toronto, Ontario, M4P 1E2.
References
to “United States dollars” or “US$” are to United States dollars. Canadian dollars are referred to as “Canadian
dollars” or “C$”. See under “Financial Information and Currency”.
TABLE
OF CONTENTS
TABLE
OF CONTENTS FOR THE SHELF PROSPECTUS
IMPORTANT
NOTICE ABOUT THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT
This
document is in two parts. The first part is this Prospectus Supplement, which describes the specific terms of the Offering and also adds
to and updates information contained in the accompanying Shelf Prospectus and the documents incorporated by reference into this Prospectus
Supplement and the Shelf Prospectus. The second part, the Shelf Prospectus, gives more general information, some of which may not apply
to the Offering. This Prospectus Supplement is deemed to be incorporated by reference into the Shelf Prospectus solely for the purposes
of the Offering.
The
Corporation has not authorized anyone to provide readers with information different from that contained in this Prospectus Supplement
and the accompanying Shelf Prospectus (or incorporated by reference herein or therein). The Corporation takes no responsibility for,
and can provide no assurance as to the reliability of, any other information that others may give readers of this Prospectus Supplement
and the accompanying Shelf Prospectus. If the description of the Offered Securities or any other information varies between this Prospectus
Supplement and the accompanying Shelf Prospectus (including the documents incorporated by reference herein and therein), you should rely
on the information in this Prospectus Supplement. The Offered Securities are not being offered in any jurisdiction where the offer or
sale of such securities is not permitted.
Readers
should not assume that the information contained or incorporated by reference in this Prospectus Supplement and the accompanying Shelf
Prospectus is accurate as of any date other than the date of this Prospectus Supplement and the accompanying Shelf Prospectus or the
respective dates of the documents incorporated by reference herein or therein, unless otherwise noted herein or as required by law. It
should be assumed that the information appearing in this Prospectus Supplement, the accompanying Shelf Prospectus and the documents incorporated
by reference herein and therein is accurate only as of the respective date of each such document. The business, financial condition,
results of operations and prospects of the Corporation may have changed since those dates. Information in this Prospectus Supplement
updates and modifies the information in the Shelf Prospectus and the information incorporated by reference herein and therein.
This
Prospectus Supplement shall not be used by anyone for any purpose other than in connection with the Offering. The Corporation does not
undertake to update the information contained or incorporated by reference herein or in the Shelf Prospectus, except as required by applicable
securities laws. Information contained on, or otherwise accessed through, the Corporation’s website shall not be deemed to be a
part of this Prospectus Supplement or the accompanying Shelf Prospectus and such information is not incorporated by reference herein
or therein.
Unless
otherwise noted or the context otherwise indicates, “POET”, the “Corporation”, “us” and “we”
refer to POET Technologies Inc. and its subsidiaries and predecessors.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This
Prospectus Supplement, the Shelf Prospectus and the documents incorporated by reference herein and therein may contain forward-looking
statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of Canadian
and United States securities laws, including the United States Private Securities Litigation Reform Act of 1995. Forward-looking
statements can generally be identified by the use of forward-looking terminology or words, such as, “continues,” “with
a view to,” “is designed to,” “pending,” “predict,” “potential,” “plans,”
“expects,” “anticipates,” “believes,” “intends,” “estimates,” “projects,”
and similar expressions or variations thereon, or statements that events, conditions or results “can,” “might,”
“will,” “shall,” “may,” “must,” “would,” “could,” or “should”
occur or be achieved and similar expressions in connection with any discussion, expectation, or projection of future operating or financial
performance, events or trends. Forward-looking statements are based on management’s current expectations and assumptions, which
are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
The
forward-looking statements in this Prospectus Supplement, the Shelf Prospectus and the documents which are incorporated by reference
herein and therein are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control
of the Corporation, including without limitation, risks:
| ● | associated
with the sale of the Offered Securities; |
| ● | associated
with the Corporation’s ability to attract and retain key personnel; |
| | |
| ● | associated
with the Corporation’s history of operating losses; |
| | |
| ● | associated
with the Corporation’s limited operating history in the data center market; |
| | |
| ● | associated
with the highly complex and uncertain nature of developing technologically advanced products
in the semiconductor and photonics sectors; |
| | |
| ● | associated
with the optical data communications industry, including rapid growth, volatility and dependence
on rapidly changing technologies; |
| | |
| ● | that
the Corporation’s objectives for the development of new products will not be met within
the timelines the Corporation expects or at all; |
| | |
| ● | that
the Corporation will not be able to compete in the highly competitive semiconductor and photonics
market; |
| | |
| ● | associated
with the Corporation’s reliance on the success of its Optical Interposer, and its reliance
on a joint venture to assemble, test, package and sell its products; |
| | |
| ● | associated
with the Corporation’s products being completed, qualified and introduced according
to end-user requirements; |
| | |
| ● | associated
with the difficulties of forecasting customer demand and product mix accurately; |
| | |
| ● | associated
with engineering, product development and manufacturing; |
| | |
| ● | associated
with the Corporation’s reliance on a limited number of key suppliers and contract manufacturers; |
| | |
| ● | associated
with companies operating in the People’s Republic of China; |
| | |
| ● | associated
with economic and political uncertainties; |
| | |
| ● | associated
with governmental export and import controls; |
| | |
| ● | associated
with the Corporation’s limited financial liquidity; |
| | |
| ● | associated
with the liquidity of the Common Shares; |
| | |
| ● | associated
with the Corporation’s need for additional financing, which may not be available on
acceptable terms or at all; |
| | |
| ● | that
the trading price of the Common Shares of the Corporation will be volatile; |
| | |
| ● | that
shareholders’ interests will be diluted through future stock offerings or options and
warrant exercises; |
| | |
| ● | that
sales of Common Shares, or the prospect of future sales, may depress the Corporation’s
stock price; |
| | |
| ● | associated
with the Corporation’s internal control over financial reporting; |
| ● | associated
with successfully protecting patents and trademarks and other intellectual property rights; |
| | |
| ● | associated
with potential intellectual property disputes; |
| | |
| ● | associated
with disruptions or failures in information technology systems and network infrastructures; |
| | |
| ● | associated
with significant disruption in, or breach in security of, the Corporation’s information
technology systems or violations of data protection laws; |
| | |
| ● | associated
with potential political, legal and economic instability, foreign conflicts, and the impact
of regional and global infectious illnesses in the countries in which the Corporation and
the Corporation’s customers, suppliers and contract manufacturers are located; |
| | |
| ● | related
to periodic changes in a specific country’s or region’s economic conditions,
such as recession; |
| | |
| ● | associated
with natural disasters or other catastrophic events; |
| | |
| ● | associated
with regulatory matters, including the Corporation’s ability to obtain all required
licenses to conduct its business, trade related barriers, certification requirements, and
Canadian and foreign anticorruption laws; |
| | |
| ● | associated
with fluctuations in foreign currency exchange rates; |
| | |
| ● | associated
with the failure to comply with the U.S. Foreign Corrupt Practices Act; |
| | |
| ● | concerning
the actual allocation of proceeds from any financings undertaken by the Corporation; |
| | |
| ● | concerning
the Corporation’s ability to use its net operating losses and certain other tax attributes; |
| | |
| ● | associated
with the Corporation’s ability to maintain its status as a “foreign private issuer;”
that the rights of the Corporation’s shareholders may differ from the rights typically
afforded to shareholders of a U.S. corporation; |
| | |
| ● | associated
with any future characterization of the Corporation as a passive foreign investment company;
and |
| | |
| ● | the
other risk factors discussed under the heading “Risk Factors” in the AIF
(as defined herein). |
Although
the Corporation has attempted to identify important factors that could cause actual actions, events, conditions, results, performance
or achievements to differ materially from those described in, or implied by, the forward-looking statements, there may be other factors
that cause actions, events, conditions, results, performance or achievements to differ from what is anticipated, estimated or intended.
Those factors are described or referred to under the heading “Risk Factors” in this Prospectus Supplement, the Shelf
Prospectus and the documents incorporated by reference herein and therein. Additional risks and uncertainties not presently known to
the Corporation or that the Corporation currently deems immaterial may also impair the Corporation’s business operations.
Readers
are cautioned that the foregoing list of factors is not exhaustive of the factors that may affect forward-looking statements. Actual
results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements
contained or incorporated by reference into this Prospectus Supplement and the Shelf Prospectus. Such statements are based on a number
of assumptions, which may prove to be incorrect, including, but not limited to, assumptions about the following:
| ● | the
state of the equity and debt capital markets; |
| ● | the
supply and demand for the Corporation’s products; |
| | |
| ● | the
Corporation’s expected operating and capital costs; |
| | |
| ● | the
Corporation’s ability to raise any necessary additional capital on reasonable terms
to advance the research and development of its products and achieve its other business objectives; |
| | |
| ● | the
economy and the semiconductor and photonics sector in general; |
| | |
| ● | the
success of the Corporation’s products; |
| | |
| ● | no
unforeseen changes in the legislative and operating framework for the Corporation occur; |
| | |
| ● | the
accuracy of budgeted costs and expenditures; |
| | |
| ● | the
stability of foreign exchange rates; |
| | |
| ● | the
cost of equipment and labor as anticipated; |
| | |
| ● | the
receipt of any necessary regulatory approvals; |
| | |
| ● | the
Corporation’s ability to attract and retain skilled staff; |
| | |
| ● | prices
and availability of equipment; |
| | |
| ● | the
ability of contracted parties to provide goods and/or services on a timely basis or at all;
and |
| | |
| ● | no
significant events occur outside of the Corporation’s normal course business. |
All
forward-looking statements contained in this Prospectus Supplement, the Shelf Prospectus and the documents incorporated by reference
herein and therein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking
statements. The Corporation undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as
a result of new information or future events or otherwise, except as may be required by law. If the Corporation does update one or more
forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking
statements.
DOCUMENTS
INCORPORATED BY REFERENCE
Information
has been incorporated by reference into this Prospectus Supplement and the Shelf Prospectus from documents filed with the securities
commissions or similar authorities in each of the provinces and territories of Canada and filed with, or furnished to, the SEC. Copies
of the documents incorporated herein by reference may be obtained on request without charge from the Corporate Secretary of the Corporation
at its head office at Suite 1107, 120 Eglinton Avenue East, Toronto, Ontario M4P 1E2, and are also available electronically in Canada
through SEDAR+ at www.sedarplus.ca or in the United States through EDGAR at the website of the SEC at www.sec.gov. The filings of the
Corporation available on SEDAR+ and EDGAR are not incorporated by reference into this Prospectus Supplement except as specifically set
out herein.
This
Prospectus Supplement is deemed, as of the date hereof, to be incorporated by reference into the accompanying Shelf Prospectus solely
for the purposes of the Offering. Other documents are also incorporated, or are deemed to be incorporated, by reference into the Shelf
Prospectus, and reference should be made to the Shelf Prospectus for full particulars thereof.
The
following documents, which have been filed by the Corporation with securities commissions or similar authorities in Canada, are also
specifically incorporated by reference into, and form an integral part of, the Shelf Prospectus, as supplemented by this Prospectus Supplement:
| (a) | annual
information form for the year ended December 31, 2023, on United States Securities and Exchange
Commission Form 20-F, dated March 28, 2024 (the “AIF”); |
| | |
| (b) | management
information circular dated May 25, 2023, relating to the annual and special meeting of shareholders
held on June 30, 2023; |
| | |
| (c) | management
information circular dated May 9, 2024, relating to the annual and special meeting of shareholders
held on June 21, 2024; |
| | |
| (d) | consolidated
audited financial statements for the years ended December 31, 2023, 2022 and 2021, together
with the auditors’ report thereon (the “Annual Financial Statements”); |
| | |
| (e) | management’s
discussion and analysis for the year ended December 31, 2023; |
| | |
| (f) | unaudited
interim financial statements for the three and nine months ended September 30, 2024 (the
“Interim Financial Statements”); |
| | |
| (g) | management’s
discussion and analysis for the three and nine months ended September 30, 2024; and |
| | |
| (h) | material
change report dated May 13, 2024, concerning the May 2024 LIFE Offering and the May 2024
Offering (each as defined herein). |
Any
documents of the type referred to in Item 11.1 of Form 44-101F1 of National Instrument 44-101 – Short Form Prospectus Distributions
subsequently filed by the Corporation with the various securities commissions or similar authorities in Canada after the date of
this Prospectus Supplement and until the Offering is completed or withdrawn shall be deemed to be incorporated by reference into this
Prospectus Supplement and the Shelf Prospectus. To the extent that any document or information incorporated by reference into this Prospectus
Supplement is included in a report that is filed with or furnished to the SEC by the Corporation pursuant to the U.S. Securities Exchange
Act of 1934, as amended (the “Exchange Act”), such document or information shall also be deemed to be incorporated
by reference as an exhibit to the Registration Statement of which this Prospectus Supplement and the Shelf Prospectus form a part. In
addition, the Corporation may incorporate by reference into this Prospectus Supplement, or the Registration Statement of which it forms
a part, other information from documents that the Corporation will file with or furnish to the SEC under the Exchange Act, if and to
the extent expressly provided therein.
If
the Corporation disseminates a news release in respect of previously undisclosed information that, in the Corporation’s determination,
constitutes a “material fact” (as such term is defined under applicable Canadian securities laws), the Corporation will identify
such news release as a “designated news release” for the purposes of this Prospectus Supplement and the Shelf Prospectus
in writing on the face page of the version of such news release that the Corporation files on SEDAR+ (any such news release, a “Designated
News Release”), and any such Designated News Release shall be deemed to be incorporated by reference into this Prospectus Supplement
and the Shelf Prospectus only for the purposes of the Offering. These documents will be able to be obtained electronically in Canada
under the Corporation’s issuer profile on SEDAR+ (www.sedarplus.ca) or in the United States through EDGAR at the website of the
SEC (www.sec.gov).
Any
statement contained in this Prospectus Supplement, the Shelf Prospectus or in a document (or part thereof) incorporated by reference
herein or therein, or deemed to be incorporated by reference herein or therein, shall be deemed to be modified or superseded, for purposes
of this Prospectus Supplement, to the extent that a statement contained in this Prospectus Supplement or in any subsequently filed document
(or part thereof) that also is, or is deemed to be, incorporated by reference in this Prospectus Supplement or in the Shelf Prospectus
modifies or replaces such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute part of this Prospectus Supplement or the Shelf Prospectus. The modifying or superseding statement need not state that
it has modified or superseded a prior statement or include any other information set forth in the document which it modifies or supersedes.
The making of a modifying or superseding statement shall not be deemed an admission for any purpose that the modified or superseded statement,
when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required
to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.
References
to the Corporation’s website in any documents that are incorporated by reference into this Prospectus Supplement and the Shelf
Prospectus do not incorporate by reference the information on such website into this Prospectus Supplement or the Shelf Prospectus, and
the Corporation disclaims any such incorporation by reference.
WHERE
YOU CAN FIND MORE INFORMATION
Copies
of the documents incorporated by reference in this Prospectus Supplement and in the accompanying Shelf Prospectus may be obtained on
request, without charge, from the Corporate Secretary of POET at Suite 1107, 120 Eglinton Avenue East, Toronto, Ontario, M4P 1E2, telephone:
416-368-9411. These documents are also available electronically in Canada through SEDAR+ at www.sedarplus.ca or in the United States
through EDGAR at the website of the SEC at www.sec.gov. The Corporation’s filings through SEDAR+ and EDGAR are not incorporated
by reference in this Prospectus Supplement or in the accompanying Shelf Prospectus except as specifically set out herein.
In
addition to the Corporation’s continuous disclosure obligations under the securities laws of the provinces and territories of Canada,
the Corporation is subject to certain of the information requirements of the Exchange Act and, in accordance therewith, files reports
and other information with the SEC on EDGAR. Under MJDS, which the Corporation elects to take advantage of in certain cases (including
for purposes of this Prospectus Supplement, the Shelf Prospectus and the Registration Statement of which this Prospectus Supplement forms
a part), such reports and other information may be prepared in accordance with the disclosure requirements of Canada, which requirements
are different from those of the United States. In addition, as a foreign private issuer, the Corporation is exempt from certain rules
under the Exchange Act prescribing the furnishing and content of proxy statements, and the Corporation’s officers, directors and
principal shareholders are exempt from the reporting and “short swing” profit recovery provisions contained in Section 16
of the Exchange Act. In addition, the Corporation is not required to publish financial statements as promptly as a domestic U.S. issuer
in certain instances or follow certain other rules and regulations applicable to domestic U.S. issuers. See “Risk Factors –
As a foreign private issuer, the Corporation is subject to different U.S. securities laws and rules than a domestic U.S. issuer, which
may limit the information publicly available to its U.S. shareholders”.
The
Corporation has filed the Registration Statement on Form F-10 with the SEC under the U.S. Securities Act, with respect to the Offered
Securities distributed under this Prospectus Supplement. This Prospectus Supplement, which forms a part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the SEC. For further information with respect to the Corporation and the Offering, the Investor should
refer to the Registration Statement and to the schedules and exhibits filed therewith.
DOCUMENTS
FILED AS PART OF THE REGISTRATION STATEMENT
The
following documents referred to in the Shelf Prospectus or in this Prospectus Supplement have been or will (through post-effective amendment
or incorporation by reference) be filed with the SEC and deemed part of the Registration Statement of which this Prospectus Supplement
and the Shelf Prospectus form a part:
| (a) | the
documents referred to under the heading “Documents Incorporated by Reference”
in this Prospectus Supplement and in the Shelf Prospectus; |
| | |
| (b) | the
consent of Marcum LLP; and |
| | |
| (c) | powers
of attorney from certain of the Corporation’s officers and directors. |
NOTE
TO U.S. READERS REGARDING DIFFERENCES
BETWEEN U.S. AND CANADIAN REPORTING PRACTICES
The
Corporation’s financial statements are prepared in accordance with IFRS, which differs from U.S. generally accepted accounting
principles (“U.S. GAAP”). Accordingly, the financial statements incorporated by reference in this Prospectus Supplement
and the accompanying Shelf Prospectus may not be comparable to financial statements of United States companies prepared in accordance
with U.S. GAAP.
FINANCIAL
INFORMATION AND CURRENCY
The
financial statements of the Corporation incorporated by reference into this Prospectus Supplement and the accompanying Shelf Prospectus
are reported in United States dollars. The Corporation’s consolidated financial statements for the years ended December 31, 2023,
2022 and 2021, as incorporated by reference into this Prospectus Supplement and the accompanying Shelf Prospectus, have been prepared
in accordance with IFRS.
References
in this Prospectus Supplement to “$” and “C$” are to Canadian dollars. United States dollars are indicated by
the symbol “US$”.
The
following table sets forth (i) the rate of exchange for the United States dollar, expressed in Canadian dollars, in effect at the end
of the periods indicated; (ii) the average exchange rates for the United States dollar during such periods, expressed in Canadian dollars;
and (iii) the high and low exchange rates for the United States dollar, expressed in Canadian dollars, during such periods, each based
on the daily rate of exchange as reported by the Bank of Canada for conversion of United States dollars into Canadian dollars:
| |
Nine
months ended
September
30, | | |
Fiscal
Year Ended December 31 | |
| |
2024 | | |
2023 | | |
2022 | | |
2021 | |
Rate at end of period | |
$ | 1.3499 | | |
$ | 1.3226 | | |
$ | 1.3544 | | |
$ | 1.2678 | |
Average rate during period | |
$ | 1.3604 | | |
$ | 1.3497 | | |
$ | 1.3013 | | |
$ | 1.2535 | |
Highest rate during period | |
$ | 1.3858 | | |
$ | 1.3875 | | |
$ | 1.3856 | | |
$ | 1.2942 | |
Lowest rate during period | |
$ | 1.3316 | | |
$ | 1.3128 | | |
$ | 1.2451 | | |
$ | 1.2040 | |
On
December 2, 2024, the last trading day prior to the date of this Prospectus Supplement, the daily exchange rate for the Canadian dollar
in terms of the United States dollar, as quoted by the Bank of Canada, was US$1.00 = $1.4056.
POET
TECHNOLOGIES INC.
The
Corporation is a design and development company offering photonic integrated packaging solutions based on the POET Optical Interposer™,
a novel platform that allows the seamless integration of electronic and photonic devices onto a single chip using advanced wafer-level
semiconductor manufacturing techniques. The semiconductor industry has adopted the term “Wafer-Level Chip-Scale Packaging”
to describe similar approaches within the semiconductor industry. The POET Optical Interposer eliminates costly components and labor-intensive
assembly, alignment, and testing methods employed in conventional photonics. The Corporation believes the cost-efficient integration
scheme and scalability of the POET Optical Interposer brings value to devices or systems that integrate electronics and photonics, including
high-growth areas of communications and computing. The emergence of artificial intelligence systems over the past year has placed extraordinary
demands on cloud-based artificial intelligence service providers and hyperscale data centers for increases in network speeds and bandwidth.
The Corporation believes that chip-scale integration is essential to developing hardware that can meet such demands and that the Corporation
is on the forefront of providing scalable solutions for current and future artificial intelligence systems.
Additional
information regarding the business of the Corporation can be found in the AIF and other documents incorporated by reference herein and
in the accompanying Shelf Prospectus, copies of which are available for review under the Corporation’s issuer profile on SEDAR+
at www.sedarplus.ca and on EDGAR at www.sec.gov. See “Documents Incorporated by Reference”.
RECENT
DEVELOPMENTS
The
following section sets out certain of the Corporation’s key developments since the date of the Shelf Prospectus.
On
November 22, 2024, the Corporation announced that its board of directors had approved the voluntary delisting of the Common Shares from
the TSXV. The Corporation intends to submit an application to the TSXV to complete the delisting in due course.
Additional
information regarding the business of the Corporation can be found in the AIF and other documents incorporated by reference herein and
in the accompanying Shelf Prospectus, copies of which are available for review under the Corporation’s issuer profile on SEDAR+
at www.sedarplus.ca and on EDGAR at www.sec.gov. See “Documents Incorporated by Reference”.
RISK
FACTORS
An
investment in the Corporation’s securities is speculative and involves a high degree of risk due to the nature of the Corporation’s
business. The Investor should carefully consider the risks described below, which are qualified in their entirety by reference to, and
must be read in conjunction with, the other information contained in this Prospectus Supplement, the Shelf Prospectus and the information
incorporated by reference herein and therein (and in particular, the risk factors discussed under the heading “Risk Factors”
in the AIF).
The
risks and uncertainties described in this Prospectus Supplement, the Shelf Prospectus and the information incorporated by reference herein
and therein are those the Corporation currently believes to be material, but they are not the only ones the Corporation faces. If any
of the following risks, or any other risks and uncertainties that the Corporation has not yet identified or that it currently considers
not to be material, actually occur or become material risks, the Corporation’s business, prospects, financial condition, results
of operations and cash flows and consequently the price of the Corporation’s publicly traded securities could be materially and
adversely affected. In all these cases, the trading price of the Corporation’s publicly traded securities could decline, and the
Investor could lose all or part of its investment.
The
holder of the Warrant purchased in the Offering will have no rights as a holder of Common Shares until such Warrant is exercised and
Common Shares are issued in respect thereof.
Until
the holder of the Warrant issued in the Offering acquires Common Shares upon exercise of such Warrant, the holder will have no rights
with respect to the Common Shares underlying such Warrant. Upon exercise of the Warrant, the holder will be entitled to exercise the
rights of a holder of Common Shares only as to matters for which the record date occurs after the exercise date.
The
Warrant being offered is speculative in nature.
The
Warrant does not confer any rights of Common Share ownership on its holder, such as voting rights or the right to receive dividends,
but, rather, merely represent the right to acquire Common Shares at a fixed price for a limited period of time. Moreover, following the
Offering, the market value of the Warrant, if any, will be uncertain, and there can be no assurance that the market value of the Warrant
will equal or exceed its imputed offering price. The Warrant will not be listed or quoted for trading on any market or exchange. There
can be no assurance that the market price of our Common Shares will ever equal or exceed the exercise price of the Warrant, and consequently,
the Warrant may expire valueless.
We
may not receive any additional funds upon the exercise of the Warrant.
The
Warrant may never be exercised, and, in certain limited circumstances specified in the Warrant, the Warrant may be exercised by way of
a cashless exercise, meaning that the holder may not pay a cash purchase price upon exercise and, instead, would receive upon such exercise
the net number of Common Shares determined according to the formula set forth in the Warrant. Accordingly, we may not receive any additional
funds upon the cashless exercise of the Warrant or if the Warrant is not exercised at all.
Sales
of a substantial number of our Common Shares, or the perception that such sales may occur, may adversely impact the price of our Common
Shares.
Sales
of a substantial number of our Common Shares in the public markets could depress the market price of our Common Shares and impair our
ability to raise capital through the sale of additional equity securities. Substantially all of our outstanding Common Shares may be
sold in the public market. If substantial additional Common Shares are sold, or if it is perceived that they will be sold, in the public
market, the trading price of our Common Shares could decline. Sales of a substantial number of Common Shares in the public market could
occur at any time. In addition, the issuance of our Common Shares and the Warrant in the Offering could result in resales of our Common
Shares by our current shareholders who may be concerned about the potential ownership dilution of their holdings. In turn, these sales
could have the effect of depressing the market price for our Common Shares. We cannot predict the effect that future sales of our Common
Shares would have on the market price of our Common Shares.
Our
constating documents permit the issuance of an unlimited number of Common Shares, and the purchaser of the Common Shares will have no
pre-emptive rights in connection with such further issuance. Our directors have discretion to determine the price and the terms of further
issuances. We cannot predict the size of future sales and issuances of securities or the effect, if any, that such future sales and issuances
of securities will have on the market price of our Common Shares. The issuance of additional securities and the exercise of common share
purchase warrants, stock options and other convertible securities will result in dilution of the equity interests of any persons who
are or may become holders of Common Shares. Sales or issuances of a substantial number of securities, or the perception that such sales
could occur, may adversely affect prevailing market prices of our Common Shares.
The
Corporation will have broad discretion over the use of proceeds from the Offering.
The
Corporation currently intends to allocate the net proceeds received from the Offering as described under the heading “Use of
Proceeds;” however management of the Corporation will have broad discretion in the application of the net proceeds from
the Offering pursuant to this Prospectus Supplement and the Shelf Prospectus, as well as the timing of their expenditures. Given the
broad discretion given to the Corporation’s management in the actual application of the net proceeds received from the Offering,
the Corporation may elect to allocate proceeds differently from that described under the heading “Use of Proceeds”
if the Corporation believes it would be in its best interests to do so, which may be in ways that an investor may not consider desirable.
The failure by the Corporation’s management to apply any funds received effectively could have a material adverse effect on its
business and results of operations. The results and the effectiveness of the application of the net proceeds are uncertain. If the net
proceeds received from the Offering are not applied effectively, the Corporation’s business, financial condition and results of
operations may suffer, which could adversely affect the price of the Common Shares on the open market.
The
Investor may not be able to obtain enforcement of civil liabilities against the Corporation.
The
Corporation has subsidiaries incorporated in the U.S., Singapore and China. Certain directors and officers reside outside of Canada,
and substantially all of the assets of these persons are located outside of Canada. It may not be possible for shareholders to effect
service of process against the Corporation’s directors, officers and subsidiaries who are not resident or located in Canada. In
the event a judgment is obtained in a Canadian court against one or more of the Corporation’s directors or officers for violations
of Canadian securities laws or otherwise, it may not be possible to enforce such judgment against those directors and officers not resident
in Canada. Additionally, it may be difficult for an investor, or any other person or entity, to assert Canadian securities law claims
or otherwise in original actions instituted in the jurisdictions where the Corporation’s subsidiaries are located. Courts in these
jurisdictions may refuse to hear a claim based on a violation of Canadian securities laws or otherwise on the grounds that such jurisdiction
is not the most appropriate forum to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that the local
law, and not Canadian law, is applicable to the claim. If Canadian law is found to be applicable, the content of applicable Canadian
law must be proven as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by
foreign law.
In
addition, the enforcement by the Investor of civil liabilities under the United States federal or state securities laws may be adversely
affected by the fact that the Corporation is governed by the Business Corporations Act (Ontario) (“OBCA”),
that several of the Corporation’s officers and directors are residents of outside of the United States and that all, or a substantial
portion, of their assets and a substantial portion of the Corporation’s assets, are located outside the United States. It may not
be possible for the Investor to effect service of process within the United States on, or enforce judgments obtained in the United States
courts against, the Corporation or certain of the Corporation’s directors and officers based upon the civil liability provisions
of United States federal securities laws or the securities laws of any state of the United States.
There
is doubt as to whether a judgment of a United States court based solely upon the civil liability provisions of United States federal
or state securities laws would be enforceable in Canada against the Corporation or the Corporation’s directors and officers. There
is also doubt as to whether an original action could be brought in Canada against the Corporation or the Corporation’s directors
and officers to enforce liabilities based solely upon United States federal or state securities laws.
The
Corporation may be classified as a passive foreign investment company for U.S. federal income tax purposes for the current year, which
could result in adverse U.S. federal income tax consequences to U.S. holders of Offered Securities.
The
Corporation would be classified as a passive foreign investment company, or PFIC, for any taxable year if, after the application of certain
look-through rules with respect to the income and assets of the Corporation’s corporate subsidiaries in which the Corporation owns
at least 25% (by value) of the stock, either: (i) 75% or more of the Corporation’s gross income for such year is “passive
income” (as defined in the relevant provisions of the Internal Revenue Code of 1986, as amended (the “Code”)),
or (ii) 50% or more of the value of the Corporation’s assets (generally determined on the basis of a quarterly average) during
such year is attributable to assets that produce or are held for the production of passive income. Based on the market price of the Common
Shares and the composition of the Corporation’s income and assets, including goodwill, the Corporation does not expect to be treated
as a PFIC for U.S. federal income tax purposes for the current taxable year or in the foreseeable future. However, this is a factual
determination that must be made annually after the close of each taxable year and is dependent on many factors, including the value of
the Corporation’s passive assets, the amount and type of the Corporation’s gross income and market capitalization. Therefore,
there can be no assurance that the Corporation will not be classified as a PFIC for the current or future taxable years. Certain adverse
U.S. federal income tax consequences could apply to a U.S. Holder (as defined under the heading “Certain U.S. Federal Income
Tax Considerations”) if the Corporation is treated as a PFIC for any taxable year during which such U.S. Holder holds the Offered
Securities.
If
a U.S. Holder is treated as owning at least 10% of the Common Shares, such holder may be subject to adverse U.S. federal income tax consequences.
If
a U.S. Holder is treated as owning, directly, indirectly or constructively, at least 10% of the value or voting power of the Common Shares,
such U.S. Holder may be treated as a “United States shareholder” with respect to each “controlled foreign corporation”
in the Corporation’s group, if any. Because the Corporation’s group includes one or more U.S. subsidiaries, certain of the
Corporation’s non-U.S. subsidiaries could be treated as controlled foreign corporations, regardless of whether the Corporation
is treated as a controlled foreign corporation. A United States shareholder of a controlled foreign corporation may be required to annually
report and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed
income” and investments in U.S. property by controlled foreign corporations, regardless of whether the Corporation makes any distributions.
An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain
tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. Failure to comply
with these reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent the running
of the statute of limitations with respect to such shareholder’s U.S. federal income tax return for the year for which reporting
was due. The Corporation cannot provide any assurances that it will assist its investors in determining whether any of its non-U.S. subsidiaries
are treated as a controlled foreign corporation or whether any investor is treated as a United States shareholder with respect to any
of such controlled foreign corporations. Further, the Corporation cannot provide any assurances that it will furnish to any U.S. Holder
information that may be necessary to comply with the reporting and tax paying obligations described in this risk factor. U.S. Holders
should consult their tax advisors regarding the potential application of these rules to their investment in the Offered Securities.
As
a foreign private issuer, the Corporation is subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may
limit the information publicly available to its U.S. shareholders.
The
Corporation is a foreign private issuer under applicable U.S. federal securities laws and, therefore, it is not required to comply with
all of the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations. In addition,
the Corporation is eligible to utilize the Multijurisdictional Disclosure System adopted by the United States and Canada (“MJDS”),
which the Corporation elects to take advantage of in certain cases (including for purposes of this Prospectus Supplement, the Shelf Prospectus
and the Registration Statement of which this Prospectus Supplement forms a part). As a result, the Corporation does not file the same
reports that a U.S. domestic issuer would file with the SEC, although it is required to file with or furnish to the SEC the continuous
disclosure documents that it is required to file in Canada under Canadian securities laws. In addition, the Corporation’s officers,
directors and principal shareholders are exempt from the reporting and “short swing” profit recovery provisions of Section
16 of the Exchange Act. Therefore, the Corporation’s shareholders may not know on as timely a basis when its officers, directors
and principal shareholders purchase or sell securities of POET as the reporting periods under the corresponding Canadian insider reporting
requirements are longer. In addition, as a foreign private issuer, the Corporation is exempt from the proxy rules under the Exchange
Act. Potential fluctuations in financial results make financial forecasting difficult.
The
Corporation’s revenues, cash flows and other operating results can vary from quarter to quarter. Sales and margins may be lower
than anticipated due to general economic conditions, market-related factors, unanticipated changes in contractual arrangements and competitive
factors. Cash receipts may also vary from quarter to quarter due to the timing of cash collections from customers. As a result, quarter-to-quarter
comparisons of revenues, cash flows and other operating results may not be meaningful. It is likely that in one or more future quarters,
financial results will fall below the expectations of securities analysts and investors. If this occurs, the trading price of the Common
Shares may be materially and adversely affected.
USE
OF PROCEEDS
The
net proceeds to the Corporation from the Offering will be approximately US$24,850,002, after deducting the fees and expenses of the Offering
(estimated to be approximately US$150,000, which will be paid out of the proceeds of the Offering.
Principal
Purposes
The
Corporation intends to use the net proceeds from the Offering for working capital related to its recently announced intention to expand
assembly operations into Malaysia and for other corporate purposes, as more particularly described below.
| |
Amount (US$) | |
Use of Proceeds | |
| |
Malaysia Expansion | |
| 7,000,000 | |
Working Capital | |
| 17,850,002 | |
Total: | |
| 24,850,002 | |
The
Corporation currently has a negative operating cash flow, which may continue for the foreseeable future. During the fiscal year ended
December 31, 2023, and nine-month period ended September 30, 2024, the Corporation had negative cash flow from operating activities.
The Corporation anticipates it will continue to have negative cash flow from operating activities in future periods until sustained profitable
commercial production is achieved on its main products and projects. As a result, if necessary, certain of the net proceeds from the
Offering may be used to fund such negative cash flow from operating activities in future periods. See “Risk Factors –
Negative cash flows from operations” in the Shelf Prospectus. The Corporation may, from time to time, issue securities (including
equity and debt securities) other than pursuant to this Prospectus Supplement.
While
the Corporation intends to spend the net proceeds of the Offering as stated above, there may be circumstances where, for sound business
reasons, a re-allocation of funds may be necessary or advisable. The actual amount that the Corporation spends in connection with each
of the intended uses of proceeds may vary significantly from the amounts specified above, and will depend on a number of factors, including
those listed under the heading “Risk Factors” in this Prospectus Supplement and in the Shelf Prospectus and the documents
incorporated by reference herein and therein.
Business
Objectives and Milestones
The
following sets out key milestones estimated timing and cost for the Corporation’s business during the next 12 months from the date
of the Prospectus Supplement, which are based on the Corporation’s reasonable expectations and intended courses of action and current
assumptions and judgement.
Key Milestone | |
Stage | | |
Timing | | |
Expected Expenditures | |
Research & Development Programs: | |
| | | |
| | | |
| | |
Module Development | |
| Development | | |
| Q4 2024 – Q3 2025 | | |
US$ | 2,500,000 | |
| |
| Prototype | | |
| Q4 2024 – Q2 2025 | | |
US$ | 2,000,000 | |
| |
| Production | | |
| Q2 2025 | | |
US$ | 4,000,000 | |
| |
| Total | | |
| | | |
US$ | 8,500,000 | |
Light Sources for Artificial Intelligence | |
| Prototypes | | |
| Q4 2024 – Q3 2025 | | |
US$ | 300,000 | |
| |
| Total | | |
| | | |
US$ | 300,000 | |
800G Tx | |
| Development | | |
| Q4 2024 – Q2 2025 | | |
US$ | 1,500,000 | |
| |
| Prototypes | | |
| Q2 2025 | | |
US$ | 3,000,000 | |
| |
| Total | | |
| | | |
US$ | 4,500,000 | |
Malaysia Expansion | |
| -- | | |
| Q3 2025- Q4 2025 | | |
US$ | 7,000,000 | |
| |
| Total | | |
| | | |
US$ | 7,000,000 | |
Total Research & Development and Malaysia Expansion | |
| | | |
| | | |
US$ | 20,300,000 | |
The
Investor is cautioned that the above represents the opinions, assumptions and estimates of management considered reasonable at the date
the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that
could cause actual events or results to differ materially from those described above. See “Cautionary Statement Regarding Forward-Looking
Information”.
PLAN
OF DISTRIBUTION
The
Offering
Pursuant
to the Securities Purchase Agreement the Corporation has agreed to issue and the Investor has agreed to subscribe for 5,555,556 Common
Shares and a Warrant exercisable for up to 2,777,778 Common Shares. The combined price of one Common Share and the accompanying Warrant
in respect of one-half Common Share will be US$4.50, to raise aggregate gross proceeds to the Corporation of US$25,000,002. Each Warrant
entitles the holder to purchase Common Shares at a per share exercise price of US$6.00 for a period of five years from the Closing Date.
The Offering Price has been determined by arm’s length negotiation between the Corporation and the Investor, with reference to
the prevailing market price of the Common Shares. No securities will be issued to any persons other than the Investor pursuant to this
Prospectus Supplement. The Securities Purchase Agreement contains terms, representations, warranties and conditions customary for agreements
of their nature, including provisions in respect of termination rights. It is expected that the Closing Date will occur on December 3,
2024, or such later date as the Corporation and the Investor may agree. The Corporation is offering the Offered Securities without any
underwriting discounts or commissions.
The
Corporation has applied to the TSXV for approval of the listing of the Common Shares and Warrant Shares on the TSXV. Listing will be
subject to the Corporation fulfilling all of the listing requirements of the TSXV. The Corporation has not applied to list the Warrant
on the TSXV.
There
is no established public trading market for the Warrant and the Corporation does not expect a market to develop, and the Investor may
not be able to resell the Warrant purchased under this Prospectus Supplement and the accompanying Shelf Prospectus. In addition, the
Corporation does not intend to apply for listing of the Warrant on any securities exchange or other nationally recognized trading system.
This may affect the pricing of the Warrant in the secondary market, the transparency and availability of trading prices, the liquidity
of the Warrant, and the extent of issuer regulation. See “Risk Factors”.
The
Investor is not acting as agent or underwriter and have not engaged in the business of trading or advising in securities with respect
to the Offering.
NO
UNDERWRITER OR AGENT HAS BEEN INVOLVED IN THE PREPARATION OF THIS PROSPECTUS SUPPLEMENT OR PERFORMED ANY REVIEW OF THE CONTENTS OF THIS
PROSPECTUS SUPPLEMENT. THE CORPORATION HAS NOT ENGAGED IN THE BUSINESS OF TRADING AND ADVISING IN SECURITIES WITH RESPECT TO THE OFFERING.
Selling
Restrictions Outside of the United States
Other
than in the United States, no action has been taken by the Corporation that would permit a public offering of the Offered Securities
in any jurisdiction outside the United States where action for that purpose is required. The Offered Securities may not be offered or
sold, directly or indirectly, nor may this Prospectus Supplement or any other offering material or advertisements in connection with
the offer and sale of any such Offered Securities be distributed or published in any jurisdiction, except under circumstances that will
result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this Prospectus Supplement
comes are advised to inform themselves about and to observe any restrictions relating to the Offering and the distribution of this Prospectus
Supplement. This Prospectus Supplement does not constitute an offer to sell or a solicitation of an offer to buy any Offered Securities
in any jurisdiction in which such an offer or a solicitation is unlawful.
DESCRIPTION
OF THE SECURITIES DISTRIBUTED
Common
Shares
The
authorized share capital of the Corporation consists of an unlimited number of Common Shares. As of the date hereof, there are 70,869,240
Common Shares issued and outstanding.
Each
Common Share entitles its holder to notice of and to one vote at all meetings of the Corporation’s shareholders. Each Common Share
is also entitled to receive dividends if, as and when declared by POET’s board of directors. Holders of Common Shares are entitled
to participate in any distribution of the Corporation’s net assets upon liquidation, dissolution or winding-up of the Corporation
on an equal basis per Common Share.
See
“Description of Share Capital” in the Shelf Prospectus for a detailed description of the attributes of the Common
Shares.
Warrant
The
Warrant entitles the holder to purchase one Common Share at an exercise price of US$6.00 for a period of five years from the Closing
Date. The Warrant will be exercisable, at the option of the holder, in whole or in part, by delivering to the Corporation a duly executed
notice of exercise, thereby canceling all or a portion of such holder’s Warrant. No fractional shares will be issued upon the exercise
of the Warrant. The terms and conditions of the Warrant will be set forth in a definitive warrant certificate, which will also provide
for adjustment in the class and/or number of securities issuable upon the exercise of the Warrant and/or exercise price per security
including in the event of, among other things: (a) a reclassification or change of the Common Shares, (b) any consolidation, amalgamation,
arrangement or other business combination of the Corporation resulting in any reclassification, or change of the Common Shares into other
shares, or (c) any sale, lease, exchange or transfer of the Corporation’s assets as an entity or substantially as an entirety to
another entity.
CONSOLIDATED
CAPITALIZATION
Other
than as disclosed under the heading “Prior Sales” herein, there have been no material changes to the share and loan
capital of the Corporation on a consolidated basis since the date of the Interim Financial Statements. In addition, as a result of the
Offering, the equity capitalization of the Corporation will increase by the amount of the net proceeds, less expenses, of the Offering
and the Corporation’s Common Shares outstanding will increase by the amount of Offered Securities issued in the Offering.
PRIOR
SALES
During
the twelve-month period prior to the date of this Prospectus Supplement, the Corporation issued the following Common Shares and securities
convertible or exchangeable for Common Shares (all prices are in C$, unless specified otherwise):
Date of Issuance | |
Description of Securities | |
Purchase/Exercise/Deemed
Price per Security | |
Number of Securities | |
December 4, 2023 | |
December 2023 Units(2) | |
US$0.90 | |
| 1,786,000 | |
January 25, 2024 | |
January 2024 Units(3) | |
$1.22 | |
| 5,098,088 | |
February 9, 2024 | |
Common Shares(4) | |
US$1.39 | |
| 236,755 | |
February 16, 2024 | |
Options(5) | |
US$1.79 | |
| 765,000 | |
February 20, 2024 | |
Common Shares(4) | |
US$1.35 | |
| 31,747 | |
February 27, 2024 | |
Common Shares(4) | |
US$1.38 | |
| 166,903 | |
February 28, 2024 | |
Common Shares(6) | |
$1.52 | |
| 100,000 | |
February 28, 2024 | |
Common Shares(6) | |
US$1.12 | |
| 6,500 | |
March 1, 2024 | |
Common Shares(6) | |
$1.52 | |
| 55,000 | |
March 4, 2024 | |
Common Shares(6) | |
$1.52 | |
| 4,000 | |
April 1, 2024 | |
Common Shares(4) | |
US$1.35 | |
| 26,213 | |
April 1, 2024 | |
Common Shares(4) | |
US$1.40 | |
| 8,486 | |
April 1, 2024 | |
Common Shares(4) | |
US$1.37 | |
| 17,607 | |
April 25, 2024 | |
Common Shares(6) | |
$1.52 | |
| 485,000 | |
April 25, 2024 | |
Common Shares(6) | |
US$1.12 | |
| 215,000 | |
April 25, 2024 | |
Common Shares(4) | |
US$1.30 | |
| 1,525,257 | |
April 25, 2024 | |
Common Shares(4) | |
US$1.43 | |
| 1,828,431 | |
April 26, 2024 | |
Common Shares(6) | |
US$1.12 | |
| 123,500 | |
April 29, 2024 | |
Common Shares(6) | |
US$1.12 | |
| 183,500 | |
April 29, 2024 | |
Common Shares(4) | |
US$2.04 | |
| 404,300 | |
April 30, 2024 | |
Common Shares(4) | |
US$2.44 | |
| 626,156 | |
May 1, 2024 | |
Common Shares(6) | |
US$1.12 | |
| 37,500 | |
May 1, 2024 | |
Common Shares(4) | |
US$2.80 | |
| 7,500 | |
May 2, 2024 | |
Common Shares(4) | |
US$3.15 | |
| 68,324 | |
May 3, 2024 | |
May 2024 LIFE Units(7) | |
$3.07 | |
| 3,258,390 | |
May 3, 2024 | |
Common Shares(6) | |
US$1.12 | |
| 35,000 | |
Date of Issuance | |
Description of Securities | |
Purchase/Exercise/Deemed
Price per Security | |
Number of Securities | |
May 10, 2024 | |
May 2024 Non-LIFE Units(8) | |
$2.90 | |
| 3,448,275 | |
May 13, 2024 | |
Common Shares(1) | |
$1.75 | |
| 18,127 | |
May 17, 2024 | |
Common Shares(4) | |
US$2.40 | |
| 80,465 | |
May 17, 2024 | |
Common Shares(1) | |
$1.75 | |
| 3,020 | |
May 21, 2024 | |
Common Shares(6) | |
US$1.12 | |
| 260,000 | |
May 23, 2024 | |
Common Shares(1) | |
$1.75 | |
| 5,469 | |
June 5, 2024 | |
Common Shares(6) | |
$1.80 | |
| 8,996 | |
June 5, 2024 | |
Common Shares(1) | |
$1.75 | |
| 3,907 | |
June 13, 2024 | |
Common Shares(6) | |
$1.80 | |
| 25,500 | |
June 13, 2024 | |
Common Shares(6) | |
$1.52 | |
| 13,000 | |
June 17, 2024 | |
Common Shares(6) | |
$1.80 | |
| 9,200 | |
June 19, 2024 | |
Common Shares(6) | |
$1.80 | |
| 7,000 | |
June 19, 2024 | |
Common Shares(6) | |
$1.52 | |
| 172,130 | |
June 20, 2024 | |
Common Shares(6) | |
$1.80 | |
| 23,123 | |
June 24, 2024 | |
Common Shares(6) | |
$1.80 | |
| 50,000 | |
June 25, 2024 | |
Options(5) | |
$1.79 | |
| 1,657,659 | |
June 26, 2024 | |
Common Shares(6) | |
$1.80 | |
| 13,122 | |
June 26, 2024 | |
Common Shares(6) | |
$1.52 | |
| 126,000 | |
June 27, 2024 | |
Common Shares(6) | |
$1.80 | |
| 94,250 | |
June 28, 2024 | |
Common Shares(6) | |
$1.80 | |
| 293,874 | |
July 2, 2024 | |
Common Shares(4) | |
US$2.82 | |
| 220,050 | |
July 5 2024 | |
Common Shares(4) | |
US$2.82 | |
| 1,529 | |
July 8, 2024 | |
Common Shares(4) | |
US$3.48 | |
| 200,000 | |
July 19, 2024 | |
Common Shares(9) | |
US$3.00 | |
| 3,333,334 | |
July 19, 2024 | |
July 2024 Warrants(9) | |
US$4.00 | |
| 3,333,334 | |
July 24, 2024 | |
Common Shares(6) | |
$1.52 | |
| 45,000 | |
July 25, 2024 | |
Common Shares(6) | |
$1.52 | |
| 20,000 | |
July 31, 2024 | |
Common Shares(1) | |
$1.75 | |
| 58,161 | |
August 8, 2024 | |
Common Shares(6) | |
$1.52 | |
| 23,000 | |
August 9, 2024 | |
Common Shares(1) | |
$1.75 | |
| 2,500 | |
August 15, 2024 | |
Common Shares(1) | |
$1.75 | |
| 938 | |
August 21, 2024 | |
Options(5) | |
$4.36 | |
| 200,000 | |
August 26, 2024 | |
Common Shares(1) | |
$1.75 | |
| 313 | |
August 27, 2024 | |
Common Shares(1) | |
$1.75 | |
| 313 | |
August 29, 2024 | |
Common Shares(6) | |
$1.52 | |
| 12,500 | |
August 29, 2024 | |
Common Shares(6) | |
US$1.12 | |
| 83,000 | |
September 18, 2024 | |
Common Shares(6) | |
US$1.12 | |
| 333,000 | |
September 24, 2024 | |
Common Shares(1) | |
$1.75 | |
| 136,032 | |
September 25, 2024 | |
Common Shares(6) | |
$1.52 | |
| 20,000 | |
September 25, 2024 | |
Common Shares(10) | |
US$3.75 | |
| 4,000,000 | |
September 25, 2024 | |
September 2024 Warrant(10) | |
US$5.00 | |
| 2,000,000 | |
September 26, 2024 | |
Common Shares(6) | |
$1.52 | |
| 20,000 | |
September 26, 2024 | |
Common Shares(1) | |
$1.75 | |
| 4,500 | |
Date of Issuance | |
Description of Securities | |
Purchase/Exercise/Deemed
Price per Security | |
Number of Securities | |
September 27, 2024 | |
Common Shares(1) | |
$1.75 | |
| 7,032 | |
October 1, 2024 | |
Common Shares(1) | |
$1.75 | |
| 46,300 | |
October 2, 2024 | |
Common Shares(1) | |
$1.75 | |
| 15,380 | |
October 3, 2024 | |
Common Shares(6) | |
$1.52 | |
| 20,000 | |
October 7, 2024 | |
Common Shares(1) | |
$1.75 | |
| 27,656 | |
October 8, 2024 | |
Common Shares(1) | |
$1.75 | |
| 38,777 | |
October 15, 2024 | |
Common Shares(1) | |
$1.75 | |
| 1,563 | |
October 15, 2024 | |
Common Shares(6) | |
$1.52 | |
| 3,000 | |
October 16, 2024 | |
Common Shares(6) | |
$1.12 | |
| 262,200 | |
October 21, 2024 | |
Common Shares(6) | |
$1.52 | |
| 73,500 | |
November 8, 2024 | |
Common Shares(6) | |
$1.52 | |
| 8,200 | |
November 12, 2024 | |
Common Shares(1) | |
$1.75 | |
| 312 | |
November 13, 2024 | |
Common Shares(1) | |
$1.75 | |
| 1,874 | |
November 13, 2024 | |
Options(5) | |
$5.57 | |
| 450,000 | |
November 14, 2024 | |
Common Shares(1) | |
$1.75 | |
| 312 | |
November 15, 2024 | |
Common Shares(1) | |
$1.75 | |
| 96,407 | |
November 18, 2024 | |
Common Shares(6) | |
$1.52 | |
| 4,000 | |
November 20, 2024 | |
Common Shares(1) | |
$1.75 | |
| 6,599 | |
November 21, 2024 | |
Common Shares(1) | |
$1.75 | |
| 5,000 | |
November 25, 2024 | |
Common Shares(1) | |
$1.75 | |
| 5,000 | |
November 26, 2024 | |
Common Shares(1) | |
$1.75 | |
| 32,499 | |
November 27, 2024 | |
Common Shares(1) | |
$1.75 | |
| 5,125 | |
November 28, 2024 | |
Common Shares(1) | |
$1.75 | |
| 1,674 | |
Notes:
(1) | Issued
upon the exercise of stock options of the Corporation granted pursuant to the Corporation’s
stock option plan (as amended, the “Stock Option Plans”). |
(2) | The
Corporation closed a public offering of 1,786,000 units (the “December 2023 Units”)
for aggregate gross proceeds of approximately $2.1 million. Each December 2023 Unit is comprised
of one Common Share and one Common Share purchase warrant (the “December 2023 Warrants”).
Each December 2023 Warrant is exercisable, in whole or in part, at an exercise price of $1.52
per Common Share for a period of five years from the date of issuance. |
(3) | The
Corporation closed a non-brokered private placement of 5,098,088 units (the “January
2024 Units”) on January 24, 2024 and January 25, 2024, for aggregate gross proceeds
of approximately $6.2 million (the “January 2024 Offering”). Each January
2024 Unit was comprised of one Common Share and one common share purchase warrant of the
Corporation (each, a “January 2024 Warrants”). Each January 2024 Warrant
entitles the holder thereof to purchase one additional Common Share at a price of C$ $1.52
per Common Share for a period of five years following the date of issuance. |
(4) | Issued
under the Original Offering pursuant to the terms and conditions of the Original Distribution
Agreement. |
(5) | Represents
options granted pursuant to the Stock Option Plans. |
(6) | Represents
an exercise of common share purchase warrants of the Corporation. |
(7) | The
Corporation closed a non-brokered private placement of an aggregate of 3,258,390 units (“May
2024 LIFE Units”) on May 3, 2024, issued pursuant to the “listed issuer financing
exemption” available under Part 5A of National Instrument 45-106 – Prospectus
Exemptions for aggregate gross proceeds of approximately C$10 million (the “May
2024 LIFE Offering”). Each May 2024 LIFE Unit was comprised of one Common Share
and one common share purchase warrant of the Corporation (each, a “May 2024 LIFE
Warrant”). Each May 2024 LIFE Warrant entitles the holder thereof to acquire one
Common Shares at an exercise price of C$4.26 per Common Share for a period of five years
from the closing date of the May 2024 LIFE Offering. |
(8) | The
Corporation closed a non-brokered private placement of 3,448,275 units (“May 2024
Units”) on May 10, 2024 for aggregate gross proceeds of approximately C$10 million
(the “May 2024 Offering”). Each May 2024 Unit was comprised of one Common
Share and one common share purchase warrant of the Corporation (each, a “May 2024
Warrant”). Each May 2024 Warrant entitles the holder thereof to acquire one Common
Share at an exercise price of C$4.26 per Common Share and is exercisable to acquire one Common
Share for a period of five years from the closing date of the May 2024 Offering. |
(9) | The
Corporation completed a registered direct offering in the United States with a single institutional
investor on July 19, 2024 pursuant to which the Corporation issued 3,333,334 Common Shares
and a warrant exercisable to acquire 3,333,334 Common Shares (the “July 2024 Warrant”).
The combined price of one Common Share and accompanying July 2024 Warrant in respect of one
Common Share was US$3.00 (or approximately C$4.09). The exercise price under the July 2024
Warrant is US$4.00 (or approximately C$5.45) per Common Share and is exercisable for a period
of five years from the date of issuance. The combined price of a Common Share and accompanying
July 2024 Warrant in respect of one Common Share was US$3.00 (or approximately C$4.09). |
(10) | Represents
Common Shares and the accompanying Warrant to purchase up to 2,000,000 Common Shares issued
pursuant to the September 2024 Placement. |
PRICE
RANGE AND TRADING VOLUMES
The
Common Shares are listed and posted for trading on the TSXV under the symbol “PTK” and Nasdaq under the symbol “POET”.
The following table sets forth the reported price range and trading volume of the Common Shares during the 12 months preceding the date
of this Prospectus Supplement.
| |
TSXV (prices in C$) | |
Nasdaq (prices in US$) |
Periods | |
Price Range
(low - high) | |
Volume | | |
Price Range
(low - high) | |
Volume | |
December 2023 | |
$1.02 – $1.55 | |
| 2,236,454 | | |
$0.77 – $1.14 | |
| 341,269 | |
January 2024 | |
$1.14 – $2.17 | |
| 2,155,781 | | |
$0.84 – $1.41 | |
| 327,432 | |
February 2024 | |
$1.61 – $2.10 | |
| 1,054,943 | | |
$1.21 – $1.53 | |
| 308,239 | |
March 2024 | |
$1.48 – $2.06 | |
| 1,150,792 | | |
$1.11 – $1.51 | |
| 173,599 | |
April 2024 | |
$1.37 – $4.72 | |
| 3,816,045 | | |
$1.00 – $3.41 | |
| 3,949,502 | |
May 2024 | |
$2.24 – $4.00 | |
| 2,997,695 | | |
$1.62 – $2.84 | |
| 2,721,500 | |
June 2024 | |
$2.27 – $3.11 | |
| 1,184,182 | | |
$1.66 – $2.29 | |
| 918,723 | |
July 2024 | |
$3.36 – $5.49 | |
| 3,734,478 | | |
$2.19 – $4.01 | |
| 5,269,393 | |
August 2024 | |
$3.24 – $4.82 | |
| 1,897,649 | | |
$2.28 – $3.51 | |
| 3,440,114 | |
September 2024 | |
$3.57 – $7.50 | |
| 4,901,333 | | |
$2.63 – $5.59 | |
| 8,077,485 | |
October 2024 | |
$5.01 – $6.60 | |
| 3,608,882 | | |
$3.64 – $4.88 | |
| 5,412,658 | |
November 2024 | |
$4.80 – $7.75 | |
| 4,019,862 | | |
$3.46 – $5.51 | |
| 5,577,112 | |
December 1 – December 2, 2024 | |
$6.89 – $8.16 | |
| 439,851 | | |
$4.89 – $5.83 | |
| 624,961 | |
Source:
Bloomberg
CERTAIN
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
The
following is a summary, as of the date of this Prospectus Supplement, of the principal Canadian federal income tax considerations under
the Income Tax Act (Canada) (the “Tax Act”) and the regulations thereunder (the “Regulations”)
generally applicable to an investor who acquires beneficial ownership of Offered Securities pursuant to the Offering and who, for the
purposes of the Tax Act and at all relevant times, (i) deals at arm’s length with the Corporation, (ii) is not affiliated with
the Corporation, (iii) acquires and holds the Offered Securities and any Common Shares acquired on the exercise of the Warrant (“Warrant
Shares”) as capital property, (iv) has not been and will not be (and has not been and will not be deemed to be) resident in
Canada at any time, and (v) does not use or hold, and is not deemed to use or hold, the Offered Securities or Warrant Shares in carrying
on a business in Canada (a “Holder”). Generally, the Offered Securities and Warrant Shares will be considered to be
capital property to a Holder provided that the Holder does not use or hold such securities in the course of carrying on a business of
trading or dealing in securities and such Holder has not acquired them or been deemed to have acquired them in one or more transactions
considered to be an adventure or concern in the nature of trade.
Special
considerations, which are not discussed in this summary, may apply to a Holder that is an insurer that carries on (or is deemed to carry
on) an insurance business in Canada and elsewhere or an “authorized foreign bank” (as defined in the Tax Act). Such Holders
should consult their own tax advisors.
This
summary is based on the current provisions of the Tax Act and the Regulations in force as of the date hereof and our understanding of
the administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”) published in writing
by the CRA prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act and the Regulations
publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”)
and assumes that the Tax Proposals will be enacted in the form proposed, although no assurance can be given that the Tax Proposals will
be enacted in their current form, or at all. Other than the Tax Proposals, this summary does not otherwise take into account or anticipate
any changes in law, whether by legislative, governmental, administrative or judicial decision or action, nor does it take into account
or consider any provincial, territorial or foreign income tax considerations, which considerations may differ significantly from the
Canadian federal income tax considerations discussed in this summary. This summary also does not take into account or anticipate any
change in the administrative policies or assessing practices of the CRA.
This
summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended
to be, nor should it be construed to be, legal or tax advice to any particular Holder. Accordingly, Holders should consult their own
tax advisors for advice with respect to the tax consequences to them of acquiring Offered Securities pursuant to the Offering having
regard to their own particular circumstances.
Currency
Subject
to certain exceptions that are not discussed herein, for purposes of the Tax Act, all amounts relating to the acquisition, holding or
disposition of Offered Securities and Warrant Shares must be expressed in Canadian dollars. Amounts denominated in any other currency
must generally be converted into Canadian dollars using the rate of exchange quoted by the Bank of Canada on the day the amount first
arose, or such other rate of exchange as is acceptable to the CRA.
Allocation
of Purchase Price
Holders
will be required to allocate the cost of the Offered Securities on a reasonable basis between the Common Shares and the Warrant comprising
such Offered Securities in order to determine their respective costs for purposes of the Tax Act.
Exercise
of Warrant
As
the exercise of a Warrant to acquire a Warrant Share will be deemed not to constitute a disposition of property for the purposes of the
Tax Act, no gain or loss will be realized by a Holder upon the exercise of a Warrant to acquire a Warrant Share. When a Warrant is exercised,
the Holder’s cost of the Warrant Share acquired thereby will be the aggregate of the Holder’s adjusted cost base of such
Warrant and the exercise price paid for the Warrant Share. The Holder’s adjusted cost base of the Warrant Share so acquired will
be determined by averaging such cost with the adjusted cost base (determined immediately before the acquisition of the Warrant Share,
as the case may be) to the Holder of all Common Shares owned by the Holder as capital property immediately prior to such acquisition.
Taxation
of Dividends
Dividends
paid or credited (or deemed to be paid or credited under the Tax Act) to a Non-Resident Holder by the Corporation on Common Shares (including
Warrant Shares) are subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend unless such rate is reduced
by the terms of an applicable tax treaty or convention. Under the Canada-United States Tax Convention (1980), as amended (the
“Treaty”), the rate of withholding tax on dividends paid or credited to a Holder who is resident in the United States
for purposes of the Treaty, who is the beneficial owner of the dividends and who is fully entitled to the benefits of the Treaty (a “U.S.
Treaty Holder”) is generally limited to 15% of the gross amount of the dividend (or 5% in the case of a U.S. Treaty Holder
that is a corporation that beneficially owns at least 10% of the Corporation’s voting shares). Holders should consult their tax
advisors to determine their entitlement to relief under an applicable income tax treaty.
Disposition
of Offered Securities and Warrant Shares
A
Holder will not be subject to tax under the Tax Act in respect of any capital gain (and will not be entitled to claim a capital loss)
realized by such Holder on a disposition (or deemed disposition) of Offered Securities or Warrant Shares unless such Offered Securities
or Warrant Shares constitute “taxable Canadian property” (as defined in the Tax Act) of the Holder at the time of the disposition
and such Holder is not entitled to an exemption from tax pursuant to the terms of an applicable income tax treaty or convention at the
time of the disposition.
Generally,
provided the Common Shares are listed on a “designated stock exchange” as defined in the Tax Act (which currently includes
the TSXV and Nasdaq) at the time of disposition, the Offered Securities and Warrant Shares will not constitute taxable Canadian property
of a Holder at such time, unless at any time during the 60-month period immediately preceding the disposition the following two conditions
are met concurrently: (a) 25% or more of the issued shares of any class or series of shares of the capital stock of the Corporation were
owned by or belonged to one or any combination of (i) the Holder, (ii) persons with whom the Holder did not deal at arm’s length
(for the purposes of the Tax Act), and (iii) partnerships in which the Holder or a person described in (ii) holds a membership interest
directly or indirectly through one or more partnerships, and (b) more than 50% of the fair market value of such shares was derived, directly
or indirectly, from one or any combination of real or immovable property situated in Canada, “Canadian resource property”
(as defined in the Tax Act), “timber resource property” (as defined in the Tax Act), and options in respect of or interests
in, or for civil law rights in, any such property (whether or not such property exists). The Tax Act may also deem the Offered Securities
or Warrant Shares to be taxable Canadian property in certain circumstances.
Even
if the Offered Securities or Warrant Shares are taxable Canadian property of a Holder, such Holder may be exempt from tax under the Tax
Act on the disposition of such Offered Securities or Warrant Shares by virtue of an applicable income tax treaty or convention.
Holders
whose Offered Securities or Warrant Shares are or may be taxable Canadian property should consult their own tax advisors.
CERTAIN
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The
following discussion describes certain U.S. federal income tax consequences to U.S. Holders (as defined below) under current U.S. federal
income tax law of an investment in the Offered Securities acquired pursuant to the Offering. The effects of any applicable state or local
laws, or other U.S. federal tax laws such as estate and gift tax laws, or the Medicare contribution tax on net investment income or the
alternative minimum tax, are not discussed. This summary applies only to investors who acquire and hold the Offered Securities as capital
assets within the meaning of Section 1221 of the Code (generally, property held for investment) and who have the U.S. Dollar as their
functional currency. This discussion is based on the Code, U.S. Treasury regulations promulgated thereunder, judicial decisions, published
rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), all as in effect as of
the date of this Prospectus Supplement. All of the foregoing authorities are subject to change, which change could apply retroactively
and could adversely affect the tax consequences described below.
The
following discussion does not address all U.S. federal income tax consequences relevant to a holder’s particular circumstances
or to holders subject to particular rules, including, without limitation:
| ● | U.S.
expatriates and certain former citizens or long-term residents of the United States; |
| | |
| ● | persons
whose functional currency is not the U.S. Dollar; |
| | |
| ● | persons
holding the Offered Securities as part of a hedge, straddle or other risk reduction strategy
or as part of a conversion transaction or other integrated investment; |
| | |
| ● | banks,
insurance companies and other financial institutions; |
| | |
| ● | real
estate investment trusts or regulated investment companies; |
| | |
| ● | brokers,
dealers or traders in securities, commodities or currencies; |
| ● | S
corporations or entities or arrangements treated as partnerships for U.S. federal income
tax purposes; |
| | |
| ● | tax-exempt
organizations or governmental organizations; |
| | |
| ● | individual
retirement accounts or other tax deferred accounts; |
| | |
| ● | persons
who acquired the Offered Securities pursuant to the exercise of any employee share option
or otherwise as compensation; |
| | |
| ● | persons
that own or are deemed to own 10% or more of the Corporation’s stock by vote or value
directly, indirectly or constructively; |
| | |
| ● | persons
subject to special tax accounting rules as a result of any item of gross income with respect
to the Offered Securities being taken into account in an applicable financial statement; |
| | |
| ● | persons
that hold Offered Securities through a permanent establishment or fixed base outside the
United States; and |
| | |
| ● | persons
deemed to sell Offered Securities under the constructive sale provisions of the Code. |
U.S.
HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES
AS WELL AS THE U.S. STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE OFFERED SECURITIES.
For
purposes of this discussion, a “U.S. Holder” is a beneficial owner of Offered Securities that, for U.S. federal income tax
purposes, is or is treated as any of the following:
| ● | an
individual who is a citizen or resident of the United States; |
| | |
| ● | a
corporation (or other entity treated as a corporation for U.S. federal income tax purposes)
created or organized under the laws of the United States, any state thereof, or the District
of Columbia; |
| | |
| ● | an
estate, the income of which is subject to U.S. federal income tax regardless of its source;
or |
| | |
| ● | a
trust that (1) is subject to the supervision of a U.S. court and the control of one or more
“United States persons” (within the meaning of Section 7701(a)(30) of the Code),
or (2) has a valid election in effect to be treated as a United States person for U.S. federal
income tax purposes. |
If
an investor is an entity taxable as a partnership for U.S. federal income tax purposes, such investor’s tax treatment generally
will depend on the activities of the partnership. Partnerships holding Offered Securities and the partners in such partnerships should
consult their tax advisors regarding the U.S. federal income tax consequences applicable to them.
Allocation
of Offering Price
The
Offered Securities should be treated for U.S. federal income tax purposes as a “unit” consisting of one Common Share and
the Warrant in respect of one-half of one Common Share. Each U.S. Holder must allocate the Offering Price of each Offered Security between
the Common Share and the Warrant in respect of one-half of one Common Share based on the respective relative fair market values of each
at the time of issuance. This allocation will establish the U.S. Holder’s initial tax basis for U.S. federal income tax purposes
for the Common Shares and the Warrant in respect of one-half of one Common Share, respectively. For these purposes, we intend to allocate
approximately $4.49 of the Offering Price to the Common Share and approximately $0.01 of the Offering Price to the Warrant in respect
of one-half of one Common Share.
Any
disposition of an Offered Security should be treated for U.S. federal income tax purposes as a disposition of the Common Share and the
Warrant in respect of one-half of one Common Share comprising the Offered Security, and the amount realized on the disposition should
be allocated between the Common Share and the Warrant based on their respective relative fair market values (as determined by the U.S.
Holder based on all relevant facts and circumstances) at the time of disposition. The separation of the Common Share and the Warrant
in respect of one-half of one Common Share acquired by a U.S. Holder should not be a taxable event for U>S. federal income tax purposes.
The
foregoing treatment of the Offered Securities and our allocation of the Offering Price are not binding on the IRS or the courts, and
the IRS or the courts may disagree.
Taxation
of dividends and other distributions on the Common Shares
The
discussion in this section “Taxation of dividends and other distributions on the Common Shares” is subject to the
discussion regarding PFICs below.
The
gross amount of any distribution to a U.S. Holder with respect to the Common Shares, including any non-U.S. taxes withheld from the amount
paid, will be included in such U.S. Holder’s gross income as dividend income when actually or constructively received to the extent
that the distribution is paid out of the Corporation’s current or accumulated earnings and profits (as determined applying U.S.
federal income tax principles). To the extent the amount of the distribution exceeds the Corporation’s current and accumulated
earnings and profits, it will be treated first as a return of a U.S. Holder’s tax basis in the Common Shares, and to the extent
the amount of the distribution exceeds the tax basis, as capital gain. The Corporation does not intend to calculate its earnings and
profits applying U.S. federal income tax principles. Therefore, a U.S. Holder should expect that distributions will generally be reported
as ordinary dividend income. Dividends paid by the Corporation will not be eligible for the dividends-received deduction available to
corporations in respect of dividends received from U.S. corporations.
Subject
to certain holding period and other limitations, dividends the Corporation pays to certain non-corporate U.S. Holders may be “qualified
dividend income” taxable for regular U.S. federal income tax purposes at preferential tax rates. Non-corporate U.S. Holders should
consult their tax advisers regarding the availability of the reduced tax rate on dividends.
Dividends
paid by the Corporation will be includible in the income of a U.S. Holder in a U.S. Dollar amount calculated by reference to the exchange
rate on the day the distribution is received. A U.S. Holder that receives a foreign currency distribution and converts the foreign currency
into U.S. Dollars subsequent to receipt may have foreign exchange gain or loss based on any appreciation or depreciation in the value
of the foreign currency against the U.S. Dollar, which will generally be U.S. source ordinary income or loss. A loss might not be deductible
due to certain limitations.
Dividends
will generally constitute foreign source income for foreign tax credit limitation purposes. Any tax withheld with respect to distributions
on the Offered Securities may, subject to a number of complex limitations, be claimed as a foreign tax credit against such U.S. Holder’s
U.S. federal income tax liability or may be claimed as a deduction for U.S. federal income tax purposes. The limitation on foreign taxes
eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends generally will constitute
“passive category income”. The rules with respect to the foreign tax credit are complex and may depend upon a U.S. Holder’s
particular circumstances. U.S. Holders should consult their tax advisor regarding the availability of the foreign tax credit under their
particular circumstances.
Taxation
of disposition of the Offered Securities
The
discussion in this section “Taxation of disposition of Offered Securities” is subject to the discussion regarding
PFICs below.
A
U.S. Holder will recognize gain or loss on any sale, exchange or other taxable disposition of the Offered Securities equal to the difference
between the amount realized (in U.S. Dollars) on the disposition and such holder’s tax basis (in U.S. Dollars) in the Offered Securities.
Any such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if such U.S. Holder has held the Offered
Securities for more than one year at the time of the disposition. Otherwise, such gain or loss will be short-term capital gain or loss.
Long-term capital gain recognized by certain non-corporate U.S. Holders, including individuals, generally will be taxable at reduced
rates. The deductibility of capital losses is subject to limitations. Any such gain or loss generally will be treated as U.S. source
income or loss for foreign tax credit limitation purposes. U.S. Holders should consult their tax advisors regarding the proper treatment
of gain or loss in their particular circumstances.
Exercise
of the Warrant
The
discussion in this section “Exercise of the Warrant” is subject to the discussion regarding PFICs below.
A
U.S. Holder generally will not recognize taxable gain or loss on the acquisition of a Common Share upon exercise of the Warrant for cash.
The U.S. Holder’s tax basis in the Common Shares received upon exercise of the Warrant generally will be an amount equal to the
sum of the U.S. Holder’s tax basis in the Warrant (i.e., the portion of the Offering Price that is allocated to the Warrant, as
described above under “—Allocation of Offering Price”) and the exercise price. The U.S. Holder’s holding period
for the Common Shares received upon exercise of the Warrant will begin on the date following the date of exercise and will not include
the period during which the U.S. Holder held the Warrant.
Upon
the expiration (lapse) of the Warrant, a U.S. Holder will recognize a capital loss in an amount equal to such U.S. Holder’s tax
basis in the Warrant. The deductibility of capital losses is subject to certain limitations.
Constructive
Distributions
The
discussion in this section “Constructive Distributions” is subject to the discussion regarding PFICs below.
The
terms of the Warrant allow for changes in the exercise price of the Warrant under certain circumstances specified therein. A change in
exercise price of the Warrant that allows holders to receive more Common Shares on exercise may increase a U.S. Holder’s proportionate
interest in the Corporation’s earnings and profits or assets. In that case, such U.S. Holder may be treated as though it received
a taxable distribution in the form of Common Shares. A taxable constructive stock distribution would generally result, for example, if
the exercise price is adjusted to compensate holders for distributions of cash or property on the Common Shares. However, a change in
exercise price to prevent the dilution of a U.S. Holder’s interest upon a stock split or other change in capital structure pursuant
to a bona fide reasonable adjustment formula is not treated as a constructive stock distribution for these purposes. Conversely, if an
event occurs that dilutes a U.S. Holder’s interest and the exercise price is not adjusted, the resulting increase in the proportionate
interests of the holders of the Corporation’s Common Shares could be treated as a taxable stock distribution on the Common Shares.
Any
taxable constructive stock distributions resulting from a change to, or a failure to change, the exercise price of the Warrant that is
treated as a distribution of Common Shares would be treated for U.S. federal income tax purposes in the same manner as distributions
on the Common Shares paid in cash or other property, resulting in a taxable dividend to the recipient to the extent of the Corporation’s
current or accumulated earnings and profits (with the recipient’s tax basis in the Common Shares or the Warrant, as applicable,
being increased by the amount of such dividend), and with any excess treated as a return of capital or as capital gain. U.S. Holders
should consult their own tax advisors concerning these rules and their potential application to the Warrant.
Sale,
Exchange or Other Taxable Disposition or Lapse of a Warrant
The
discussion in this section “Sale, Exchange or Other Taxable Disposition or Lapse of a Warrant” is subject to the discussion
regarding PFICs below.
Upon
a sale, exchange or other taxable disposition of a warrant, a U.S. Holder generally will recognize capital gain or loss in an amount
equal to the difference between the amount realized in U.S. Dollars on the disposition and such U.S. Holder’s tax basis in the
warrant. The amount realized will include the amount of any cash and the fair market value of any other property received in exchange
for the warrant. Gain or loss will be long-term capital gain or loss if the U.S. Holder has held the warrant for more than one year.
Long-term capital gains of non-corporate U.S. Holders are generally taxed at preferential rates. Upon the expiration (lapse) of a warrant,
a U.S. Holder will recognize a capital loss in an amount equal to such U.S. Holder’s tax basis in the warrant. The deductibility
of capital losses is subject to certain limitations.
Passive
foreign investment company
A
non-United States corporation will be a passive foreign investment company, or PFIC, for United States federal income tax purposes for
any taxable year if, after applying certain look-through rules with respect to subsidiaries in which the Corporation owns at least 25%
(by vote or value) of the stock, either:
| ● | at
least 75% of its gross income for such taxable year is passive income, or |
| ● | at
least 50% of the total value of its assets (generally based on an average of the quarterly
values of the assets during such year) is attributable to assets, including cash, that produce
passive income or are held for the production of passive income. |
The
Corporation believes it was not a PFIC for the year ended December 31, 2023. Based on the market price of the Common Shares and the composition
of the Corporation’s income and assets, including goodwill, the Corporation also does not expect to be treated as a PFIC for U.S.
federal income tax purposes for the current taxable year or in the foreseeable future. However, this is a factual determination that
must be made annually after the close of each taxable year, and is dependent on a number of factors, including the value of the Corporation’s
passive assets, the amount and type of the Corporation’s gross income and the market price of the Common Shares, which could fluctuate
significantly. Therefore, there can be no assurance that the Corporation will not be a PFIC for the current or future taxable years.
If
the Corporation is a PFIC for any taxable year during a U.S. Holder’s holding period for the Offered Securities, it generally will
continue to be treated as a PFIC with respect to such holder’s investment in the Offered Securities for all succeeding years during
which such holder holds the Offered Securities. In that event, a U.S. Holder would (unless it made one of the elections discussed below
on a timely basis) be taxable on gain recognized on a disposition of the Offered Securities and upon receipt of certain “excess
distributions” (generally, distributions that exceed 125% of the average amount of distributions in respect to the Offered Securities
received during the preceding three taxable years or, if shorter, during the U.S. Holder’s holding period prior to the distribution
year) as if such income had been recognized ratably over the U.S. Holder’s holding period. Tax would be computed on such income
at the highest ordinary income tax rate in effect for each taxable year to which income is allocated, and an interest charge on the tax
as so computed would also apply.
A
U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect
out of the tax treatment discussed above. If a U.S. Holder makes a valid mark-to-market election for the Offered Securities, such holder
will include in income for each year that the Corporation is treated as a PFIC, an amount equal to the excess, if any, of the fair market
value of the Offered Securities as of the close of such holder’s taxable year over the holder’s adjusted basis in the Offered
Securities. Amounts included in a U.S. Holder’s income under a mark-to-market election, as well as gain on the actual sale or other
disposition of the Offered Securities, will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible
portion of any mark-to-market loss on the Offered Securities, as well as to any loss realized on the actual sale or disposition of the
Offered Securities, in each case to the extent the amount of such loss does not exceed the net mark-to-market gains for the Offered Securities
previously included in income. A U.S. Holder’s basis in the Offered Securities will be adjusted to reflect any such income or loss
amounts.
The
mark-to-market election is available only for “marketable stock,” which is stock that is regularly traded on a qualified
exchange or other market, as defined in applicable U.S. Treasury regulations. The Common Shares are listed on Nasdaq, which is a qualified
exchange. Because a mark-to-market election cannot be made for equity interests in any lower-tier PFICs the Corporation owns, a U.S.
Holder generally will continue to be subject to the PFIC rules with respect to such holder’s indirect interest in any investments
held by the Corporation that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. The mark-to-market election
also cannot be made with respect to the Warrant.
A
mark-to-market election made by a U.S. Holder will apply to each Common Share acquired upon the exercise of the Warrant by such U.S.
Holder. As a result, if a mark-to-market election has been made by a U.S. Holder, each such Common Share acquired upon exercise of the
Warrant will automatically be marked-to-market in the year the Warrant is exercised. Solely for purposes of the PFIC rules, a U.S. Holder’s
holding period for such Common Shares includes the period during which such U.S. Holder held the Warrant. As a result, a U.S. Holder
will be treated as making a mark-to-market election with respect to such Common Shares after the beginning of such U.S. Holder’s
holding period for such Common Shares unless the Common Shares are acquired in the same tax year as the year in which the U.S. Holder
acquired the Warrant. Consequently, the mark-to-market gain realized in the tax year in which Common Shares are acquired upon the exercise
of the Warrant will be allocated ratably over the U.S. Holder’s holding period for the Warrant and will be subject to the highest
tax rate in effect for each such year, and an interest charge will be imposed on the resulting tax liability for each such year as described
above. The general mark-to-market rules will apply to such Common Shares in subsequent tax years.
Investors
should consult their tax advisor as to the availability and desirability of a mark-to-market election, as well as the impact of such
election on interests in any lower-tier PFICs.
As
an alternative to the tax treatment described above, a U.S. Holder could elect to treat the Corporation as a “qualified electing
fund” (a “QEF”), in which case the U.S. Holder would be taxed currently, for each taxable year that the Corporation
is a PFIC, on its pro rata share of the Corporation’s ordinary earnings and net capital gain (subject to a separate election to
defer payment of taxes, which deferral is subject to an interest charge). Special rules apply if a U.S. Holder makes a QEF election after
the first taxable year of its holding period in which the Corporation is a PFIC. In the event that the Corporation concludes that it
will be classified as a PFIC, the Corporation will also determine at that time whether it will provide U.S. Holders with the information
that is necessary to make a QEF election. Amounts includable in income as a result of a QEF election will be determined without regard
to the Corporation’s prior year losses or the amount of cash distributions, if any, received from the Corporation. A U.S. Holder’s
basis in its Offered Securities will increase by any amount included in income and decrease by any distributions of amounts previously
taxed under the QEF rules.
If
the Corporation is a PFIC for any taxable year during which a U.S. Holder owns Offered Securities, it generally will continue to be treated
as a PFIC with respect to the U.S. Holder for all succeeding years even if it ceases to meet the requirements for PFIC status. Notwithstanding
any election made with respect to the Offered Securities, if the Corporation is a PFIC in either the taxable year of the distribution
or the preceding taxable year, dividends received with respect to the Common Shares will not qualify as “qualified dividends”
eligible for taxation at reduced federal income tax rates.
A
U.S. Holder of a PFIC is required to file an IRS Form 8621. U.S. Holders are urged to consult their tax advisors regarding the potential
application of the PFIC rules to an investment in the Offered Securities.
Information
reporting and backup withholding
Dividend
payments (including constructive dividends) with respect to the Offered Securities and proceeds from the sale, exchange or other disposition
of the Offered Securities may be subject to information reporting to the IRS and U.S. backup withholding. Certain U.S. Holders are exempt
from backup withholding, including corporations and certain tax-exempt organizations. A U.S. Holder will be subject to backup withholding
if such holder is not otherwise exempt and such holder:
| ● | fails
to furnish the holder’s taxpayer identification number, which for an individual is
ordinarily his or her social security number; |
| ● | furnishes
an incorrect taxpayer identification number; |
| ● | is
notified by the IRS that the holder previously failed to properly report payments of interest
or dividends; or |
| ● | fails
to certify under penalties of perjury that the holder has furnished a correct taxpayer identification
number and that the IRS has not notified the holder that the holder is subject to backup
withholding. |
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit
against the U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
U.S. Holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures
for obtaining such an exemption.
Additional
reporting requirements
Certain
U.S. Holders who are individuals (and certain entities) that hold an interest in “specified foreign financial assets” (which
may include the Offered Securities) are required to report information relating to such assets, subject to certain exceptions (including
an exception for Offered Securities held in accounts maintained by certain financial institutions). Penalties can apply if U.S. Holders
fail to comply with such reporting requirements. U.S. Holders should consult their tax advisors regarding the applicability of these
requirements to their acquisition and ownership of Offered Securities.
THE
ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO
THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE OFFERED SECURITIES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX
CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
LEGAL
MATTERS
Certain
legal matters relating to the Offering will be passed upon on behalf of the Corporation by (i) Bennett Jones LLP with respect to Canadian
legal matters and (ii) Katten Muchin Rosenman LLP with respect to United States legal matters.
AUDITOR,
TRANSFER AGENT AND REGISTRAR
POET’s
auditors are Davidson & Company LLP, 1200-609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, British Columbia, V7Y
1G6, which were appointed by the Corporation effective as of April 23, 2024. The Corporation accepted the resignation of Marcum LLP,
Certified Public Accountants, the predecessor auditor of the Corporation on April 22, 2024.
The
transfer agent and registrar of the Common Shares is Computershare Investor Services Inc., 510 Burrard St. 3rd Floor, Vancouver, British
Columbia, V6C 3B9.
INTERESTS
OF EXPERTS
Marcum
LLP, Certified Public Accountants, has prepared the auditor’s report with respect to the Corporation’s annual financial statements
for the year ended December 31, 2023, which is incorporated by reference into the Shelf Prospectus and this Prospectus Supplement. Marcum
LLP has advised that they are independent in accordance with and within the meaning of the applicable rules and related interpretations
prescribed by the relevant professional bodies in Canada and the rules and standards of the United States Public Company Accounting Oversight
Board and the securities laws and regulations administered by the SEC.
As
of the date hereof, the “designated professionals” (as such term is defined in Form 51-102F2 – Annual Information
Form) of each of Bennett Jones LLP, Katten Muchin Rosenman LLP and Ellenoff Grossman & Schole LLP, respectively, beneficially
own, directly or indirectly, less than 1% of any securities of the Corporation or any associate or affiliate of the Corporation.
Prospective
purchasers that intend to hold Offered Securities in a TFSA, RRSP, RRIF, RDSP, FHSA or RESP should consult their own tax advisors with
respect to their individual circumstances.
ENFORCEABILITY
OF CIVIL LIABILITIES
The
Corporation is a corporation incorporated under and governed by the OBCA. Some of the directors and officers of the Corporation, and
some of the experts named in this Prospectus Supplement, are residents of Canada or otherwise reside outside Canada or the United States,
and all or a substantial portion of their assets are located outside Canada and the United States. The Corporation has appointed an agent
for service of process in Canada, but it may be difficult for holders of securities who reside in Canada to effect service within Canada
upon those directors who are not residents of Canada. It may also be difficult for holders of securities who reside in Canada to realize
in Canada upon judgments of courts of Canada predicated upon the Corporation’s civil liability and the civil liability of the directors
and officers of the Corporation under applicable securities laws.
In
addition, it may be difficult for investors who reside in the U.S. to effect service within the U.S. upon those of the Corporation’s
directors, officers and experts who are not residents of the U.S. It may also be difficult for investors who reside in the U.S. to realize
in the U.S. upon judgments of courts of the U.S. predicated upon the Corporation’s civil liability and the civil liability of the
Corporation’s directors, officers and experts under the U.S. federal securities laws. A final judgment for a liquidated sum in
favor of a private litigant granted by a U.S. court and predicated solely upon civil liability under U.S. federal securities laws would,
subject to certain exceptions identified in the law of individual provinces and territories of Canada, likely be enforceable in Canada
if the U.S. court in which the judgment was obtained had a basis for jurisdiction in the matter that would be recognized by the domestic
Canadian court for the same purposes. There is a significant risk that a given Canadian court may not have jurisdiction or may decline
jurisdiction over a claim based solely upon U.S. federal securities law on application of the conflict of laws principles of the province
or territory in Canada in which the claim is brought.
The
Corporation filed with the SEC, concurrently with the Registration Statement, an appointment of agent for service of process on Form
F-X. Under the Form F-X, the Corporation appointed CT Corporation System, with an address at 111 Eighth Avenue, New York, NY 10011 USA,
as its agent for service of process in the United States in connection with any investigation or administrative proceeding conducted
by the SEC, and any civil suit or action brought against or involving the Corporation in a United States court, arising out of or related
to or concerning the offering of Securities under this Prospectus.
Jean-Louis
Malinge, Suresh Venkatesan, Theresa Lan Ende and Glen A. Riley each a director of the Corporation, and Thomas Mika, the Chief Financial
Officer of the Corporation, reside outside of Canada and have appointed the following agent as their agent for service of process:
Name
of Person |
|
Name
and Address of Agent |
Jean-Louis
Malinge |
|
Bennett
Jones LLP
3400 One First Canadian Place,
PO Box 130,
Toronto, Ontario
M5X 1A4 |
Suresh
Venkatesan |
|
Theresa
Lan Ende |
|
Glen
A. Riley |
|
Thomas
Mika |
|
The
Investor is advised that it may not be possible for it to enforce judgments obtained in Canada against any person or company that is
incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party
has appointed an agent for service of process.
This
short form prospectus is a base shelf prospectus. This short form base shelf prospectus has been filed under the legislation in each
of the provinces and territories of Canada, that permits certain information about these securities to be determined after this prospectus
has become final and that permits the omission from this prospectus of that information. The legislation requires the delivery to purchasers
of a prospectus supplement containing the omitted information within a specified period of time after agreeing to purchase any of these
securities, except where an exemption from such delivery requirement is available.
No
securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form
base shelf prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered
for sale and therein only by persons permitted to sell such securities.
Information
has been incorporated by reference in this short form base shelf prospectus from documents filed with securities commissions or similar
authorities in Canada and filed with, or furnished to, the U.S. Securities and Exchange Commission. Copies of the documents incorporated
herein by reference may be obtained on request without charge from POET Technologies Inc. at 120 Eglinton Avenue East, Suite 1107, Toronto,
ON M4P 1E2 (Telephone: 416-368-9411), and are also available electronically at www.sedarplus.ca and www.sec.gov.
SHORT
FORM BASE SHELF PROSPECTUS
New Issue and/or Secondary Offering |
September 6,
2024 |
POET
Technologies Inc.
US$250,000,000
Common
Shares
Debt
Securities
Convertible
Securities
Subscription
Receipts
Warrants
Units
POET
Technologies Inc. (the “Corporation” or “POET”) may, from time to time, offer and issue common
shares (“Common Shares”), debt securities (“Debt Securities”), securities convertible into or exchangeable
for Common Shares and/or other securities (“Convertible Securities”), subscription receipts, each of which, once purchased,
entitle the holder to receive upon the satisfaction of certain release conditions, and for no additional consideration, one or more Common
Shares and/or other Securities (as defined herein) (“Subscription Receipts”), warrants to purchase Common Shares and/or
other Securities (together, “Warrants”), and units comprised of a combination of any of the above (“Units”
and, together with the Common Shares, Debt Securities, Convertible Securities, Subscription Receipts and Warrants, the “Securities”)
in an aggregate initial offering price of up to US$250,000,000 (or the equivalent thereof, at the date of issue, in any other currency
or currencies, as the case may be), in one or more transactions during the 25 month period that this short form base shelf prospectus
(the “Prospectus”), including any amendments hereto, remains effective. Securities may be offered for sale separately
or in combination with one or more other Securities, in amounts, at prices and on such terms as the Corporation may determine from time
to time depending upon its financing requirements, prevailing market conditions at the time of sale and other factors.
Any
offering made pursuant to this Prospectus is made by a Canadian issuer that is permitted, under a multijurisdictional disclosure system
adopted by the United States and Canada, to prepare this Prospectus in accordance with Canadian disclosure requirements. Prospective
investors should be aware that such requirements are different from those of the United States. Financial statements included or incorporated
by reference herein have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as
issued by the International Accounting Standards Board, and are subject to Canadian auditing and auditor independence standards, and
thus may not be comparable to financial statements of United States companies prepared in accordance with U.S. generally accepted accounting
principles.
The
enforcement by investors of civil liabilities under the United States federal securities laws may be affected adversely by the fact that
the Corporation is incorporated or organized under the laws of Canada, that some of its officers and directors are residents of Canada,
that some or all of the underwriters or experts that may be named in the Registration Statement (as defined below) may be residents of
Canada, and that all or a substantial portion of the assets of the Corporation and said persons may be located outside the United States.
THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) NOR
ANY STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
specific terms of any offering of Securities will be set forth in an applicable prospectus supplement (a “Prospectus Supplement”)
and may include, where applicable: (i) in the case of Common Shares, the number of Common Shares offered and the issue price; (ii) in
the case of Debt Securities, the specific designation, aggregate principal amount, the maturity, interest provisions, authorized denominations,
offering price, covenants, events of default, any terms for redemption or retraction, any exchange or conversion terms and any other
terms specific to the Debt Securities being offered; (iii) in the case of Convertible Securities, the number of Convertible Securities
offered, the offering price, the procedures for the conversion or exchange of such Convertible Securities into or for Common Shares and/or
other Securities and any other specific terms; (iv) in the case of Subscription Receipts, the number of Subscription Receipts being offered,
the offering price, the conditions and procedures for the exchange of the Subscription Receipts for Common Shares and/or other Securities,
provisions applicable to any escrow of the proceeds from the sale of the Subscription Receipts and for the release of such proceeds from
escrow, any securities exchange listing, and any other terms specific to the Subscription Receipts being offered; (v) in the case of
Warrants, the designation, number and terms of the Common Shares or other Securities issuable upon exercise of the Warrants, any procedures
that will result in the adjustment of these numbers, the exercise price, dates and periods of exercise and any other specific terms;
and (vi) in the case of Units, the designation, number and terms of the Common Shares and/or other Securities forming part of the Units,
any procedures that will result in the adjustment of these numbers, the exercise price, the dates and periods of exercise, the currency
in which the Units are issued and any other terms specific to the Units being offered. A Prospectus Supplement may include specific variable
terms pertaining to the Securities that are not within the parameters described in this Prospectus. One or more securityholders of the
Corporation may also offer and sell Securities under this prospectus (the “Selling Securityholders” and each a “Selling
Securityholder”). See “Secondary Offerings by Selling Securityholders”.
All
shelf information permitted under applicable laws to be omitted from this Prospectus will be contained in one or more Prospectus Supplements
that will be delivered to prospective purchasers together with this Prospectus. Each Prospectus Supplement will be deemed to be incorporated
by reference into this Prospectus as of the date of the Prospectus Supplement and only for the purposes of the offering of Securities
to which the Prospectus Supplement pertains.
This
Prospectus constitutes a public offering of Securities only in those jurisdictions where they may be lawfully offered for sale and therein
only by persons permitted to sell such Securities. The Corporation or any Selling Securityholders may sell Securities to or through underwriters
or dealers from time to time and may also sell Securities directly to purchasers pursuant to applicable statutory exemptions or through
agents. Underwriters, dealers or agents with respect to the Securities sold to or through underwriters, dealers or agents will be named
in the Prospectus Supplement relating to that particular offering of Securities. The Prospectus Supplement relating to a particular offering
of Securities will also set forth the terms of the offering of Securities including, to the extent applicable, any fees, discount or
other remuneration payable to the underwriters, dealers or agents in connection with the offering, the method of distribution of the
Securities, the initial issue price (in the event the offering is a fixed price distribution), the manner of determining the issue price(s)
(in the event the offering is a non-fixed price distribution), the proceeds that the Corporation and/or any Selling Securityholders will
receive and any other material terms of the plan of distribution. Securities may be sold from time to time in one or more transactions
at a fixed price or prices or at non- fixed prices. If offered on a non-fixed price basis, Securities may be offered at market prices
prevailing at the time of sale, at prices related to such prevailing market prices or at prices to be negotiated with purchasers at the
time of sale, which prices may vary as between purchasers and during the period of distribution of the Securities.
No
underwriter, dealer or agent has been involved in the preparation of this Prospectus or performed any review of the contents of this
Prospectus. See “Plan of Distribution.”
This
Prospectus may qualify an “at-the-market distribution” (as defined in National Instrument 44-102 – Shelf Distributions
(“NI 44-102”)). The Securities may be offered and sold pursuant to this Prospectus through underwriters, dealers,
directly or through agents designated from time to time at amounts and prices and other terms determined by the Corporation or any Selling
Securityholders. The Securities may be sold from time to time in one or more transactions at a fixed price or prices or at non-fixed
prices. If offered on a non-fixed price basis, the Securities may be offered at market prices prevailing at the time of sale, at prices
determined by reference to the prevailing price of a specified security in a specified market or at prices to be negotiated with purchasers,
including sales in transactions that are deemed to be “at-the-market distributions,” including sales made directly on the
TSX Venture Exchange (the “TSXV”), the Nasdaq Capital Market (“Nasdaq”), or other existing trading
markets for the Securities, and as set forth in an accompanying Prospectus Supplement.
In
connection with any underwritten offering of Securities other than an “at-the-market distribution,” unless otherwise specified
in the relevant Prospectus Supplement, the underwriters may over-allot or effect transactions which stabilize or maintain the market
price of the Securities offered at levels other than those that might otherwise prevail on the open market. Such transactions, if commenced,
may be commenced, interrupted or discontinued at any time. See “Plan of Distribution.” No underwriter or dealer involved
in an “at-the-market distribution” under this Prospectus, no affiliate of such an underwriter or dealer and no person or
company acting jointly or in concert with such an underwriter or dealer may, in connection with an “at the market distribution,”
enter into any transaction that is intended to stabilize or maintain the market price of the securities or securities of the same class
as the securities being distributed under the applicable Prospectus Supplement, including selling an aggregate number or principal amount
of securities that would result in such underwriter or dealer creating an over-allocation position in the securities.
This
Prospectus, together with an applicable Prospectus Supplement, qualifies the issuance of Debt Securities. The Corporation has no long-term
debt as of the date hereof and had no long-term debt as of December 31, 2023. Though the Corporation has no long-term debt to service,
the Corporation also has limited financial resources and negative cash flow. As a result of the foregoing, the earnings coverage ratio
for the twelve months ended December 31, 2023, is less than one-to-one. The earnings coverage ratio is calculated by dividing an entity’s
profit or loss by its borrowing costs and dividend obligations.
The
Corporation’s issued and outstanding Common Shares are listed on the TSXV under the symbol “PTK” as well as on the
Nasdaq under the symbol “POET”. The closing price of the Common Shares on the TSXV and on the Nasdaq on September
5, 2024, the last trading day prior to the date of this Prospectus, was CAD$3.97 and US$2.94, respectively.
Any
offering of Securities other than Common Shares will be a new issue of securities with no established trading market. Unless otherwise
specified in the applicable Prospectus Supplement, the Securities will not be listed on any securities or stock exchange or on any automated
dealer quotation system. Unless otherwise specified in the applicable Prospectus Supplement, there is no market through which the Securities
other than Common Shares may be sold and purchasers may not be able to resell such Securities purchased under this Prospectus or any
Prospectus Supplement. This may affect the pricing of the Securities in the secondary market (if any), the transparency and availability
of trading prices, the liquidity of the Securities, and the extent of issuer regulation. Certain broker-dealers may make a market in
the Securities, but will not be obligated to do so and may discontinue any market making at any time without notice. We cannot assure
prospective purchasers that any broker-dealer will make a market in the Securities or as to the liquidity of the trading market, if any,
for such Securities.
Prospective
investors should be aware that the acquisition of the Securities may have tax consequences both in Canada and the United States. This
Prospectus does not discuss United States or Canadian tax consequences and any such tax consequences may not be described fully in any
applicable Prospectus Supplement with respect to a particular offering of Securities. Prospective investors should read the tax discussion,
if any, in the applicable Prospectus Supplement and consult with an independent tax advisor. See “Risk Factors.”
An
investment in Securities involves significant risks that should be carefully considered by prospective investors before purchasing Securities.
The risks outlined in this Prospectus and in the documents incorporated by reference herein, including the applicable Prospectus Supplement,
should be carefully reviewed and considered by prospective investors in connection with any investment in the Securities. See “Cautionary
Statement Regarding Forward-Looking Information” and “Risk Factors.” See also “Secondary Offerings
by Selling Securityholders.”
Jean-Louis
Malinge, Suresh Venkatesan, Theresa Lan Ende and Glen Riley each a director of the Corporation, and Thomas Mika, the Executive Vice President
and Chief Financial Officer of the Corporation, reside outside of Canada. Each of the foregoing has appointed Bennett Jones LLP as agents
for service of process at 3400 One First Canadian Place, PO Box 130, Toronto, Ontario M5X 1A4. Prospective investors are advised that
it may not be possible for investors to enforce judgments obtained in Canada against any person who resides outside of Canada, even if
the party has appointed an agent for service of process.
Investors
should rely only on the information contained or incorporated by reference in the Prospectus and any applicable Prospectus Supplement.
The Corporation has not authorized anyone to provide investors with different or additional information. If anyone provides investors
with different or additional information, investors should not rely on it. The Corporation is not making an offer to sell or seeking
an offer to buy Securities in any jurisdiction where the offer or sale is not permitted. Investors should assume that the information
contained in the Prospectus and any applicable Prospectus Supplement is accurate only as at the date on the front of those documents
and that information contained in any document incorporated by reference is accurate only as at the date of that document, regardless
of the time of delivery of the Prospectus and any applicable Prospectus Supplement or of any sale of the Corporation’s securities.
The Corporation’s business, financial condition, results of operations and prospects may have changed since those dates.
Market
data and certain industry forecasts used in the Prospectus and any applicable Prospectus Supplement and the documents incorporated by
reference in the Prospectus and any applicable Prospectus Supplement were obtained from market research, publicly available information,
and/or industry publications.
The
head office of the Corporation is Suite 1107, 120 Eglinton Avenue East, Toronto, Ontario M4P 1E2.
INTERPRETATION
In
this Prospectus, unless otherwise indicated or the context otherwise requires, the terms “POET,” the “Corporation,”
the “Issuer,” “we,” “us” and “our” are used to refer to POET Technologies Inc. and its
subsidiaries.
The
address of the Corporation’s website is www.poet-technologies.com. Information contained on POET’s website does not form
part of this Prospectus nor is it incorporated by reference herein. Prospective investors should rely only on the information contained
or incorporated by reference in this Prospectus and any applicable Prospectus Supplement. The Corporation has not authorized any person
to provide different information. The Corporation takes no responsibility for, and can provide no assurance as to the reliability of,
any information that others may provide to you.
Unless
otherwise indicated, all dollar amounts in this Prospectus are expressed in United States dollars. Canadian dollars are stated as “CAD$.”
On September 5, 2024, the last business day before the date of this Prospectus, the daily exchange rate as quoted by the Bank of Canada
was CAD$1.00 = US$0.7400 (or US$1.00 = CAD$1.3514).
The
Securities being offered for sale under this Prospectus may only be sold in those jurisdictions in which offers and sales of the Securities
are permitted. This Prospectus is not an offer to sell or a solicitation of an offer to buy the Securities in any jurisdiction where
it is unlawful. The information contained in this Prospectus is accurate only as at the date of this Prospectus, regardless of the time
of delivery of this Prospectus or of any sale of the Securities.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This
Prospectus contains forward-looking statements and forward-looking information within the meaning of Canadian and United States securities
laws, including the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements and information
can generally be identified by the use of forward-looking terminology or words, such as, “continues,” “with a view
to,” “is designed to,” “pending,” “predict,” “potential,” “plans,”
“expects,” “anticipates,” “believes,” “intends,” “estimates,” “projects,”
and similar expressions or variations thereon, or statements that events, conditions or results “can,” “might,”
“will,” “shall,” “may,” “must,” “would,” “could,” or “should”
occur or be achieved and similar expressions in connection with any discussion, expectation, or projection of future operating or financial
performance, events or trends. Forward-looking statements and forward-looking information are based on management’s current expectations
and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
The
forward-looking statements and information in this Prospectus are subject to various risks and uncertainties, including those described
under the heading “Risk Factors” as well as under the heading “Risk Factors” in the AIF (as defined
herein), many of which are difficult to predict and generally beyond the control of the Corporation, including without limitation, risks:
| ● | associated
with the Corporation’s ability to attract and retain key personnel; |
| ● | associated
with the Corporation’s history of operating losses; |
| ● | associated
with the Corporation’s limited operating history in the data center market; |
| ● | associated
with the highly complex and uncertain nature of developing technologically advanced products
in the semiconductor and photonics sectors; |
| ● | associated
with the optical data communications industry, including rapid growth, volatility and dependence
on rapidly changing technologies; |
| ● | that
the Corporation’s objectives for the development of new products will not be met within
the timelines the Corporation expects or at all; |
| ● | that
the Corporation will not be able to compete in the highly competitive market; |
| ● | the
Corporation’s reliance on the success of its Optical Interposer, and its reliance on
a joint venture to assemble, test, package and sell its products; |
| ● | associated
with the Corporation’s products being completed, qualified and introduced according
to end-user requirements; |
| ● | associated
with the difficulties of forecasting customer demand and product mix accurately; |
| ● | associated
with engineering, product development and manufacturing; |
| ● | associated
with the Corporation’s reliance on a limited number of key suppliers and contract manufacturers; |
| ● | associated
with companies operating in the People’s Republic of China; |
| ● | associated
with economic and political uncertainties; |
| ● | associated
with governmental export and import controls; |
| ● | the
Corporation’s limited financial liquidity; |
| ● | associated
with the liquidity of the Common Shares; |
| ● | associated
with the Corporation’s need for additional financing, which may not be available on
acceptable terms or at all; |
| ● | that
the trading price of the Common Shares of the Corporation will be volatile; |
| ● | that
shareholders’ interests will be diluted through future stock offerings or options and
warrant exercises; |
| ● | that
sales of Common Shares, or the prospect of future sales, may depress our stock price; |
| ● | associated
with the Corporation’s internal control over financial reporting; |
| ● | associated
with successfully protecting patents and trademarks and other intellectual property rights; |
| ● | associated
with potential intellectual property disputes; |
| ● | associated
with disruptions or failures in information technology systems and network infrastructures; |
| ● | associated
with significant disruption in, or breach in security of, our information technology systems
or violations of data protection laws; |
| ● | associated
with potential political, legal and economic instability, foreign conflicts, and the impact
of regional and global infectious illnesses in the countries in which we and our customers,
suppliers and contract manufacturers are located; |
| ● | related
to periodic changes in a specific country’s or region’s economic conditions,
such as recession; |
| ● | associated
with natural disasters or other catastrophic events; |
| ● | associated
with regulatory matters, including the Corporation’s ability to obtain all required
licenses to conduct its business, trade related barriers, certification requirements, and
Canadian and foreign anticorruption laws, |
| ● | associated
with fluctuations in foreign currency exchange rates; |
| ● | associated
with the failure to comply with the U.S. Foreign Corrupt Practices Act; |
| ● | concerning
the actual allocation of proceeds from any financings undertaken by the Corporation. |
| ● | concerning
the Corporation’s ability to use its net operating losses and certain other tax attributes; |
| ● | associated
with the Corporation’s ability to maintain its status as a “foreign private issuer;”
that the rights of our shareholders may differ from the rights typically afforded to shareholders
of a U.S. corporation; and |
| ● | associated
the with Corporation’s characterization as a passive foreign investment company. |
Although
the Corporation has attempted to identify important factors that could cause actual actions, events, conditions, results, performance
or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause actions,
events, conditions, results, performance or achievements to differ from what is anticipated, estimated or intended. Those factors are
described or referred to under the heading “Risk Factors” in this Prospectus and in the AIF and elsewhere in this
Prospectus and the documents incorporated by reference herein. Additional risks and uncertainties not presently known to the Corporation
or that the Corporation currently deems immaterial may also impair the Corporation’s business operations.
Readers
are cautioned that the foregoing list of factors is not exhaustive of the factors that may affect forward-looking statements. Actual
results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements
contained or incorporated by reference into this Prospectus. Such statements are based on a number of assumptions, which may prove to
be incorrect, including, but not limited to, assumptions about the following:
| ● | the
state of the equity and debt capital markets; |
| ● | the
supply and demand for the Corporation’s products; |
| ● | the
Corporation’s expected operating and capital costs; |
| ● | the
Corporation’s ability to raise any necessary additional capital on reasonable terms
to advance the research and development of its products and achieve its other business objectives; |
| ● | the
economy and the semiconductor and photonics sector in general; |
| ● | the
success of the Corporation’s products; |
| ● | the
stability of the legislative and operating framework for the Corporation occur; |
| ● | the
accuracy of budgeted costs and expenditures; |
| ● | the
stability of foreign exchange rates; |
| ● | the
cost of equipment and labor as anticipated; |
| ● | the
receipt of any necessary regulatory approvals; |
| ● | the
Corporation’s ability to attract and retain skilled staff; |
| ● | prices
and availability of equipment; |
| ● | the
ability of contracted parties to provide goods and/or services on a timely basis or at all;
and |
| ● | no
significant events occur outside of the Corporation’s normal course business. |
All
forward-looking statements contained in this Prospectus and the documents incorporated herein by reference are qualified by this cautionary
statement. Accordingly, readers should not place undue reliance on forward-looking statements. The Corporation undertakes no obligation
to update publicly or otherwise revise any forward-looking statements, whether as a result of new information or future events or otherwise,
except as may be required by law. If the Corporation does update one or more forward-looking statements, no inference should be drawn
that it will make additional updates with respect to those or other forward-looking statements.
DOCUMENTS
INCORPORATED BY REFERENCE
Information
has been incorporated by reference in this Prospectus from documents filed with the securities commissions or similar authorities in
each of the provinces and territories of Canada and filed with, or furnished to, the SEC. Copies of the documents incorporated herein
by reference may be obtained on request without charge from the Corporate Secretary of the Corporation at its head office at Suite 1107,
120 Eglinton Avenue East, Toronto, Ontario M4P 1E2, and are also available electronically in Canada through the System for Electronic
Data Analysis and Retrieval+ (“SEDAR+”) at www.sedarplus.ca or in the United States through EDGAR at the website
of the SEC at www.sec.gov. The filings of the Corporation through SEDAR+ and EDGAR are not incorporated by reference in this Prospectus
except as specifically set out herein.
The
following documents of the Corporation, filed by the Corporation with the securities commissions or similar authority in each of the
provinces and territories of Canada and filed with, or furnished to, the SEC are specifically incorporated by reference in this Prospectus:
| ● | annual
information form for the year ended December 31, 2023, on United States Securities and Exchange
Commission Form 20-F, dated March 28, 2024 (the “AIF”); |
| ● | management
information circular dated May 25, 2023, relating to the annual and special meeting of shareholders
held on June 30, 2023; |
| ● | management
information circular dated May 9, 2024, relating to the annual and special meeting of shareholders
to be held on June 21, 2024; |
| ● | consolidated
audited financial statements for the years ended December 31, 2023, 2022 and 2021, together
with the auditors’ report thereon; |
| ● | management’s
discussion and analysis for the year ended December 31, 2023 (the “MD&A”); |
| ● | interim
financial statements for the three and six months ended June 30, 2024; |
| ● | management’s
discussion and analysis for the three and six months ended June 30, 2024; and |
| ● | material
change report dated May 13, 2024, concerning the May 2024 LIFE Offering and the May 2024
Offering (each as defined herein), |
provided
that these documents are not incorporated by reference to the extent their contents are modified or superseded by a statement contained
in this Prospectus or in any other subsequently filed document that is also incorporated by reference in this Prospectus. To the extent
that any document or information incorporated by reference into this Prospectus is included in a report that is filed with or furnished
to the SEC pursuant to the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), such document
or information shall also be deemed to be incorporated by reference as an exhibit to the Registration Statement (in the case of a report
on Form 6-K, if and to the extent expressly provided in such report).
Any
documents of the type described in section 11.1 of Form 44-101F1 – Short Form Prospectus, if filed by the Corporation after
the date of this Prospectus and before the termination of the distribution, are deemed to be incorporated by reference in this Prospectus.
Any
statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein, or in any other subsequently filed document which also
is incorporated or is deemed to be incorporated by reference herein, modifies or supersedes such statement. The modifying or superseding
statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document
that it modifies or supersedes. The making of a modifying or superseding statement will not be deemed an admission for any purpose that
the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission
to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances
in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.
A
Prospectus Supplement containing the specific terms of an offering of Securities will be delivered to purchasers of such Securities together
with this Prospectus and will be deemed to be incorporated by reference into this Prospectus as of the date of such Prospectus Supplement,
but only for the purposes of the offering of Securities covered by that Prospectus Supplement.
Upon
a new annual information form and related annual financial statements being filed by us with, and where required, accepted by, the applicable
securities regulatory authority during the currency of this Prospectus, the previous annual information form, the previous annual financial
statements and all interim financial statements, material change reports and information circulars and all Prospectus Supplements filed
prior to the commencement of the Corporation’s financial year in which a new annual information form is filed shall be deemed no
longer to be incorporated into this Prospectus for purposes of future offers and sales of Securities hereunder.
All
information permitted by National Instrument 44-102 – Shelf Distributions to be omitted from this base shelf Prospectus
will be contained in one or more shelf Prospectus Supplements that will be delivered to purchasers together with this base shelf Prospectus.
Each shelf Prospectus Supplement will be incorporated by reference into this base shelf Prospectus for the purposes of securities legislation
as of the date of the shelf Prospectus Supplement and only for the purposes of the distribution of the securities to which the shelf
Prospectus Supplement pertains.
The
Corporation may determine to incorporate into any Prospectus Supplement, including any Prospectus Supplement that it files in respect
of an “at-the-market” offering, any news release that the Corporation disseminates in respect of previously undisclosed information
that, in the Corporation’s determination, constitutes a “material fact” (as such term is defined under applicable Canadian
securities laws). In this event, the Corporation will identify such news release as a “designated news release” for the purposes
of this Prospectus in writing on the face page of the version of such news release that the Corporation files on SEDAR+ (www.sedarplus.ca)
(any such news release, a “Designated News Release”), and any such Designated News Release shall be deemed to be incorporated
by reference into this Prospectus and the Prospectus Supplement for the offering in respect to which the Prospectus Supplement relates.
MARKETING
MATERIALS
Certain
“marketing materials” (as defined in National Instrument 41-101 – General Prospectus Requirements (“NI
41-101”)) may be used in connection with a distribution of Securities. Any “template version” (as defined in NI
41-101) of any marketing materials filed after the date of a Prospectus Supplement and before the termination of the distribution of
the Securities offered pursuant to such Prospectus Supplement (together with this Prospectus) will be deemed to be incorporated by reference
in such Prospectus Supplement for the purposes of the distribution of Securities to which the Prospectus Supplement pertains.
DOCUMENTS
FILED AS PART OF THE REGISTRATION STATEMENT
The
following documents have been, or will be, filed with the SEC as part of the Registration Statement, of which this Prospectus forms a
part: (1) the documents listed under “Documents Incorporated by Reference;” (2) the consent of Marcum LLP; (3) powers
of attorney from certain of the Corporation’s directors and officers; and (4) the form of indenture relating to the Debt Securities.
AVAILABLE
INFORMATION
The
Corporation is subject to the informational requirements of the Exchange Act and applicable Canadian requirements and, in accordance
therewith, files reports and other information with the SEC and with securities regulatory authorities in Canada. Under the multijurisdictional
disclosure system adopted by the United States and Canada, such reports and other information may be prepared in accordance with the
disclosure requirements of Canada, which requirements are different from those of the United States. As a foreign private issuer, the
Corporation is exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and the Corporation’s
officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in
Section 16 of the Exchange Act. Reports and other information filed by the Corporation with, or furnished to, the SEC may be obtained
on EDGAR at the SEC’s website: www.sec.gov.
The
Corporation has filed with the SEC a registration statement on Form F-10 (the “Registration Statement”) under the
U.S. Securities Act with respect to the Securities. This Prospectus, including the documents incorporated by reference herein,
which forms a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain
parts of which are contained in the exhibits to the Registration Statement as permitted by the rules and regulations of the SEC. For
further information with respect to the Corporation and the Securities, reference is made to the Registration Statement and the exhibits
thereto. Statements contained in this Prospectus, including the documents incorporated by reference herein, as to the contents of certain
documents are not necessarily complete and, in each instance, reference is made to the copy of the document filed as an exhibit to the
Registration Statement. Each such statement is qualified in its entirety by such reference. The Registration Statement can be found on
EDGAR at the SEC’s website: www.sec.gov.
POET
TECHNOLOGIES INC.
The
legal and commercial name of the Corporation is POET Technologies Inc. The Corporation was originally incorporated under the Business
Corporations Act (British Columbia) on February 9, 1972, as Tandem Resources Ltd. On November 14, 1985, Tandem Resources Ltd. amalgamated
with Stanmar Resources Ltd. and Keezic Resources Ltd., to continue as one company under the name Tandem Resources Ltd. under the Business
Corporations Act (British Columbia). By Articles of Continuance dated January 3, 1997, Tandem Resources Ltd. was continued under
the Business Corporations Act (Ontario) (“OBCA”). By Articles of Amendment dated September 26, 2006, Tandem
Resources Ltd. changed its name to OPEL International Inc. By Certificate of Continuance dated January 30, 2007, OPEL International Inc.
was continued under the Business Corporations Act (New Brunswick). By Articles of Continuance dated November 30, 2010, OPEL International
Inc. was continued under the OBCA and changed its name to OPEL Solar International Inc. By Articles of Amendment dated August 25, 2011,
OPEL Solar International Inc. changed its name to OPEL Technologies Inc. By Articles of Amendment dated July 23, 2013, OPEL Technologies
Inc. changed its name to POET Technologies Inc. Today, the Corporation is an Ontario-based corporation governed by the OBCA.
The
Corporation is a reporting issuer in each of the provinces of Canada.
Intercorporate
Structure
The
following is the corporate structure of POET as of the date hereof.
Description
of the Business
The
Corporation is a design and development company offering photonic integrated packaging solutions based on the POET Optical Interposer™,
a novel platform that allows the seamless integration of electronic and photonic devices onto a single chip using advanced wafer-level
semiconductor manufacturing techniques. The semiconductor industry has adopted the term “Wafer-Level Chip-Scale Packaging”
to describe similar approaches within the semiconductor industry. POET’s Optical Interposer eliminates costly components and labor-intensive
assembly, alignment, and testing methods employed in conventional photonics. We believe the cost-efficient integration scheme and scalability
of the POET Optical Interposer brings value to devices or systems that integrate electronics and photonics, including high-growth areas
of communications and computing. The emergence of artificial intelligence systems over the past year has placed extraordinary demands
on cloud-based artificial intelligence service providers and hyperscale data centers for increases in network speeds and bandwidth. We
believe that chip-scale integration is essential to developing hardware that can meet such demands and that the Corporation is on the
forefront of providing scalable solutions for current and future artificial intelligence systems.
Additional
information regarding the business of the Corporation can be found in the AIF and other documents incorporated by reference herein, copies
of which are available for review under the Corporation’s issuer profile on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.
See “Documents Incorporated by Reference.”
Optical
Interposer and Optical Engines
The
Corporation’s Optical Interposer is a platform technology; a technology on which specific products can be integrated and built.
The optical interposer platform’s basic elements and built-in features allow the close integration of a wide variety of electronic
and photonic components into an “optical engine.” The combination of the platform, selected platform features and a specific
set of components define an optical engine product.
Utilizing
the Optical Interposer platform, the Corporation has successfully developed several optical engine products. These products are in various
stages of evaluation / qualification by major customers, which are primarily makers of optical modules and, therefore, are in the process
of being commercialized. The evaluation / qualification process typically takes several months and often involves a request to make specific
modifications to the optical engines or the optical interposer in order to meet either established industry standards or specific customer
requirements. Although the Corporation has not yet commenced the mass production of its optical engine products, the Corporation does
expect to generate near-term revenue from charging for Non-Recurring Engineering (“NRE”) fees for customization of
its Optical Interposer and from the sale of 800G optical engine samples.
R&D
and Manufacturing
Except
in certain collaborative efforts, the Corporation is primarily responsible for conducting its own research and development. In the event
the Corporation collaborates with third parties, such collaborative arrangement may be in two forms: (a) those that involve two parties
dedicated to producing a product that will be sold by both parties; and (b) those in which the end product will be used by one party.
The Corporation’s collaboration with MultiLane Inc. is a good example of the former, in which the product is expected to be an
800G optical module utilizing the Corporation’s optical engines. An example of the latter is the cooperation that occurs when a
module maker wants to be able to use the Corporation’s optical engines in its module product. In that case, there will be collaboration
and cooperation on the module design, with the possibility that some modification of the optical engines may be required.
At
the present time, expenditures for manufacturing infrastructure in China are financed exclusively by the Corporation’s joint venture
partner, Xiamen Sanan Integrated Circuit Co. Ltd. (“Sanan IC”). The manufacturing infrastructure for the production
of Optical Interposer wafers has been in place since 2018 at the Corporation’s foundry partner, Silterra Malaysia. At the present
time, SPX (as defined herein) is the only assembly and manufacturing organization capable of producing optical engines at the expected
volumes for the Corporation. Although SPX plays an assembly and manufacturing role, SPX is not involved in design, development and production
of Optical Interposers. Accordingly, SPX’s role is limited to the assembly, testing and sale of the 100/200G optical engines to
customers internationally, as well as the production and sale of 400G optical engines in China. The Corporation is also evaluating the
possibility of duplicating the capabilities of SPX outside of China, likely through the use of contract manufacturers.
Additional
information regarding the Corporation’s research and development and manufacturing can be found in the AIF and other documents
incorporated by reference herein, copies of which are available for review under the Corporation’s issuer profile on SEDAR+ at
www.sedarplus.ca and on EDGAR at www.sec.gov. See “Documents Incorporated by Reference.”
SPX
Joint Venture
On
October 21, 2020, the Corporation signed a joint venture agreement (the “SPX JV Agreement”) with Sanan IC, a subsidiary
of Sanan Optoelectronics, one of the largest manufacturers of compound semiconductor devices in the world, establishing a joint venture
company, Super Photonics Integrated Circuit Xiamen Co., Ltd (“SPX”). The SPX JV Agreement is a material contract of
the Corporation. A copy of the SPX JV Agreement is available on SEDAR+ (www.sedarplus.ca) under the Corporation’s issuer
profile and on EDGAR at www.sec.gov. While the financial information in respect of the Corporation’s wholly-owned subsidiaries
are consolidated into the Corporation’s consolidated financial statements, SPX is accounted for as a joint venture and not a subsidiary,
and as a result financial information for SPX is not consolidated into the Corporation’s financial statements but presented via
the equity method.
Upon
the formation of SPX, the Corporation and Sanan IC capitalized the joint venture. The Corporation contributed certain intellectual property
and know-how valued by an independent appraiser at $22.5 million and Sanan IC has committed to contributing cash of approximately $25
million over time, subject to the achievement by SPX of certain milestones. As part of the Corporation’s contribution of intellectual
property, the Corporation contributed the rights to assemble and sell 100G, 200G and 400G optical engines to module makers, the large
majority of which are based in China, to SPX. The Corporation retained and did not contribute its core intellectual property related
to the design and manufacturing of the Optical Interposer.
SPX
is considered a joint venture entity, not a subsidiary of the Corporation. The Corporation’s interest in SPX is limited to an economic
interest and, therefore, the Corporation’s relationship with SPX is analogous to that of a passive investor with access to facilities
and services. The Corporation does not participate in the day-to-day operations or management of SPX. Further, SPX does not distribute
any cash to the Corporation or the Corporation’s shareholders, nor has SPX generated any cash flow for the Corporation since its
creation. Each of the Corporation and Sanan IC as joint partners has appointed one member to the board of directors of SPX, but SPX board
decision-making is conducted via consensus and requires unanimity; the Corporation thus does not exercise control over SPX. The Corporation
has no capital commitment requirements in respect of SPX.
As
of the date of this Prospectus, the Corporation does not consider SPX a material operating entity or subsidiary of the Corporation. In
connection with the filing of the Prospectus, the Corporation has filed the Material Operating Entity Undertaking (as defined herein).
See “Exemption and Undertaking.”
Business
of SPX
SPX’s
principal role with respect to the Corporation is limited to the assembly, testing and production of sales of 100G and 200G optical engines
globally and 400G optical engines in China. At the present time, the role of SPX does not include volume production of any optical engine
products for the Corporation. Although the Corporation benefits from SPX’s assembly and testing capabilities, the primary benefit
of the SPX joint venture for the Corporation is the Corporation’s ability to benefit from the demonstration of the technical feasibility
and market acceptance of its products. The Corporation expects these demonstrations provided by SPX to enhance the Corporation’s
ability to sell 400G optical engines outside of China as well as 800G and higher speed optical engines in all markets.
Based
on the terms of the SPX JV Agreement, all revenue from sales of 100G and 200G optical engines globally, and sales of 400G optical engines
in China, is generated and recognized by SPX and not the Corporation. All sales of 400G optical engines outside of China are generated
and recognized by the Corporation. In addition, all revenue generated by the assembly, testing and production of 100G and 200G optical
engines globally and 400G optical engines in China are generated and recognized by SPX and not the Corporation. At this time, the Corporation
has not yet determined if it will grant SPX the right to assemble and produce in volume 800G optical engines in China.
Upon
the formation of SPX in 2020, the primary intention of the Corporation was to use SPX as a means to demonstrate the viability and market
acceptance of its unique approach to integration and fabrication of 100G and 200G optical engines using its Optical Interposer and to
establish an initial presence in the market. These objectives were largely achieved, as SPX supplied hundreds of 100G and 200G optical
engines based on the Optical Interposer platform to prospective customers in China. Two major customers committed design resources to
include optical engines produced by SPX in their optical modules. However, the design and qualification cycle with module end-users took
well over one year, which was much longer than was originally planned. As a result, by the time those modules were available for sale,
the market had substantially changed. Prices for conventional 100G modules declined precipitously, selling for under producers’
cost. The 200G market also evaporated with the introduction of 400G optical engines, for which the Corporation was initially unable to
supply designs for mainstream 400G applications. The Corporation has now developed this capability, and there is currently a robust market
in China for 400G optical engines. The Corporation believes that it is in the functionality of 400G optical engines designed for 800G
applications and in 800G and above optical engines that its unique approach to integration will provide the Corporation with competitive
advantages sufficient to overcome drawbacks inherent in conventional approaches to optical engine design and fabrication.
Given
the foregoing and in light of the advancement of artificial intelligence and the high demand for 800G optical engines among manufacturers
of artificial intelligence networks and equipment, the Corporation expects the 800G and higher speed optical engines to constitute the
Corporation’s primary business on a go-forward basis. As a result, the Corporation’s strategy will be to prioritize the development
of 800G and higher speed optical engines over the 100G, 200G and 400G optical engines. In terms of production plans, with respect to
400G optical engines, only 400G Rx Optical Engines have been released to production and it is anticipated that such optical engines will
be built by SPX for consumption in China and potentially under a “contract manufacturing” arrangement for the Corporation
for the consumption outside of China. The Corporation is planning to build a 400G Tx and Rx optical engine capability outside of China
for 800G applications, which is distinct from 400G optical engine production for mainstream 400G applications.
In
light of the evolving demands of this dynamic and volatile market landscape, the Corporation continues to assess the possibility of establishing
contract manufacturing operations outside of China which will allow the Corporation to assemble, test and package its 400G optical engines
as well as its 800G and higher speed optical engine products for sale outside of China, which are expected to be the Corporation’s
primary products on a go-forward basis, as detailed above. The Corporation is satisfied that the current role of SPX in the Corporation’s
business strategy achieves its intended objectives; however, the Corporation also continuously evaluates its investment in SPX and considers
its options and alternatives with respect to the joint venture on a regular basis. Such alternatives could include, among other things,
further investment in SPX (in the form of additional rights to the Corporation’s intellectual property or otherwise), a reorganization,
purchase or sale transaction with respect to the Corporation’s interest in SPX, the establishment of a new joint venture or partnership
or another form of strategic transaction.
SPX
Plant, Property and Equipment
SPX
currently leases its equipment and facilities from Sanan IC. SPX currently leases 5,000 square feet of office and production facilities
from Sanan IC and is charged approximately $31,000 per year for exclusive use of such space. To the extent additional space is required
by SPX as it expands its production capacity, Sanan IC has an excess of available production facility space available and will be able
to provide SPX with access to additional contracted space as needed.
Sanan
IC has purchased equipment for SPX’s exclusive use valued at approximately $4.0 million. SPX leases the equipment from Sanan IC
for approximately $75,000 per year. The arrangement between SPX and Sanan IC with respect to the lease of equipment is provided for under
the SPX JV Agreement, which also provides that equipment lease expenses will be converted into equity in SPX for Sanan IC upon the commencement
of volume production. As of the date of this Prospectus, such conversion has not yet occurred. Although the Corporation is not involved
in the preparation of SPX’s financial statements, it is advised by SPX that the annual rental costs and equipment lease expenses
paid by SPX to Sanan IC are recorded as research and development (“R&D”) expense in SPX’s financial statements.
Financial
Information of SPX
The
Corporation is not involved in the management or day-to-day operations of SPX but has access to periodic financial reporting as required
under the SPX JV Agreement. The balance sheet and income statement of SPX for the years ended December 31, 2023 and 2022, as well as
for the six months ended June 30, 2024, as provided to the Corporation by SPX, are set out below (collectively, the “SPX Financial
Information”). The SPX Financial Information has not been audited or reviewed by the Corporation’s auditor. All SPX Financial
Information has been provided by, or is derived from, information provided to the Corporation by third parties without independent review
by the Corporation. Although the Corporation has no reason to believe that such SPX Financial Information is inaccurate or incomplete,
the Corporation does not have the ability under the SPX JV Agreement to independently verify such SPX Financial Information. Accordingly,
the Corporation does not assume any responsibility for the accuracy and completeness of such SPX Financial Information.
The
information provided in this section represents the Corporation’s understanding of SPX based on the information available to it
as of the date hereof and is provided in reliance on third party information, including the SPX Financial Information, which cannot be
independently verified by the Corporation (other than transactions involving the Corporation). All financial information disclosed herein
are provided on an unaudited basis.
| ● | Revenue:
SPX reported revenue of $20,361 for the year-ended December 31, 2023, and $17,098 for
the six months ended June 30, 2024, from the sale of optical engines, primarily to the Corporation.
The Corporation made such purchases to provide samples of specialized devices to its own
customers in North America. Although the Corporation is not involved in the day-to-day management
and operation of SPX, it is the Corporation’s understanding that SPX provided samples
of its 100G and 200G optical engines to customers in China free of charge or for a nominal
amount, which is common industry practice. |
| ● | R&D:
SPX incurred R&D expenses in the amounts of $3,812,362, $4,319,857 and $1,893,964
for the years ended December 31, 2023 and 2022, as well as for the six months ended June
30, 2024, respectively. R&D expenses incurred by SPX include the amortization of intangible
assets of $2,049,000 for the years ended December 31, 2023 and 2022 and $1,024,500 for the
six months ended June 30, 2024. The remaining R&D expenses incurred by SPX during the
reported periods represent costs incurred in assembly and test process improvement, as well
as assisting prospective customers with incorporating optical engines into module designs.
The increases in R&D expenses during such comparative periods were the result of an increased
head count as SPX established a structure for volume production and ramp up. |
| ● | NRE:
During the years ended December 31, 2023 and 2022, SPX charged the Corporation $11,000
and nil, respectively, in non-recurring engineering services for optical engine purchases.
SPX did not charge the Corporation for any services or product purchases during the six months
ended June 30, 2024. In addition, the Corporation provided SPX with $737 and nil in materials
during the years ended December 31, 2023 and 2022. |
| ● | Receivables
and Payables: SPX’s accounts receivable includes $9,166 and nil due from the Corporation
at December 31, 2023 and 2022, respectively. Nil was due to SPX from the Corporation at June
30, 2024. SPX accounts payable at December 31, 2023 and 2022 includes $737 and nil due to
the Corporation, respectively. Nil was due to the Corporation from SPX at June 30, 2024. |
| ● | Transactions
with Sanan IC: During the years ended December 31, 2023 and 2022, Sanan IC charged SPX
$16,400 and $480,000, respectively, for services and materials provided to SPX. SPX rents
its facilities from Sanan IC. In 2023 and 2022, SPX either paid or accrued $31,000 and $31,000
in rent, respectively, the Corporation is advised that SPX treated such rent as an R&D
expense in its financial statements. During the six months ended June 30, 2024, SPX was charged
$15,500 for rent. SPX leases equipment from Sanan IC. In 2023 and 2022, SPX either paid or
accrued $75,000 and $75,000 in equipment lease cost, respectively. During the six months
ended June 30, 2024, SPX was charged $33,000 for the equipment it leases from Sanan IC. |
Balance sheet of SPX for the years ended December 31, 2023 and 2022
|
Item | |
December 31, 2023(RMB) | | |
December 31, 2022(RMB) | |
CURRENT ASSETS: | |
| | | |
| | |
Currency fund | |
| 12,262,278.69 | | |
| 13,417,537.34 | |
Financial assets held for trading | |
| | | |
| | |
Derivative financial assets | |
| | | |
| | |
Notes receivable | |
| | | |
| | |
Accounts receivable | |
| 83,296.51 | | |
| | |
Accounts Receivable Financing | |
| | | |
| | |
Advances to suppliers | |
| 121,532.94 | | |
| 26,853.65 | |
Other receivable | |
| 20,989.70 | | |
| 22,021.21 | |
Including: interest receivable | |
| | | |
| | |
dividend receivable | |
| | | |
| | |
Inventories | |
| 1,863.56 | | |
| | |
Contract assets | |
| | | |
| | |
Held for sale assets | |
| | | |
| | |
Long-term debt investment due within one year | |
| | | |
| | |
Other current assets | |
| | | |
| | |
Total current assets | |
| 12,489,961.40 | | |
| 13,466,412.20 | |
NON-CURRENT ASSETS: | |
| | | |
| | |
Debt investment | |
| | | |
| | |
Other debt investment | |
| | | |
| | |
Long-term account receivable | |
| | | |
| | |
Long-term equity investments | |
| | | |
| | |
Other non-current financial assets | |
| | | |
| | |
Investment property | |
| | | |
| | |
Fixed assets | |
| | | |
| | |
Construction in progress | |
| | | |
| | |
Productive biological asset | |
| | | |
| | |
Oil-gas assets | |
| | | |
| | |
Right-of-use assets | |
| | | |
| | |
Intangible assets | |
| 114,742,800.00 | | |
| 129,085,650.00 | |
Research and development expenditure | |
| | | |
| | |
Good will | |
| | | |
| | |
Long term deferred expense (deferred asset) | |
| | | |
| | |
Deferred tax asset | |
| | | |
| | |
Other non-current asset | |
| 1,033,489.94 | | |
| 693,938.28 | |
Total non-current assets | |
| 115,776,289.94 | | |
| 129,779,588.28 | |
Total asset | |
| 128,266,251.34 | | |
| 143,246,000.48 | |
Balance sheet of SPX for the years ended December 31, 2023 and 2022
|
Item | |
December 31, 2023(RMB) | | |
December 31, 2022(RMB) | |
CURRENT LIABILITY: | |
| | | |
| | |
Short-term loans | |
| | | |
| | |
Financial liabilities held for trading | |
| | | |
| | |
Derivative financial liabilities | |
| | | |
| | |
Notes payable | |
| | | |
| | |
Accounts payable | |
| 101,279.56 | | |
| 69,693.14 | |
Advances from customers | |
| | | |
| | |
Contract liabilities | |
| | | |
| | |
Payroll payable | |
| 2,106,766.02 | | |
| 1,942,437.91 | |
Tax payable | |
| 104,154.91 | | |
| 99,845.39 | |
Other payable | |
| 6,310,847.22 | | |
| 10,242,600.24 | |
Including: interest payable | |
| | | |
| | |
dividend payable | |
| | | |
| | |
Liabilities associated with assets held for sale | |
| | | |
| | |
Non-current liability due within one year | |
| | | |
| | |
Other current liabilities | |
| | | |
| | |
Total current liabilities | |
| 8,632,047.71 | | |
| 12,354,576.68 | |
NON-CURRENT LIABILITY: | |
| | | |
| | |
Long-term loans | |
| | | |
| | |
Bonds payable | |
| | | |
| | |
Including: Preferred stock | |
| | | |
| | |
Perpetual bond | |
| | | |
| | |
Lease liabilities | |
| | | |
| | |
Long-term payable | |
| | | |
| | |
Long-term payroll payable | |
| | | |
| | |
Accrued liabilities | |
| | | |
| | |
Deferred income | |
| | | |
| | |
Deferred tax liability | |
| | | |
| | |
Other non-current liability | |
| | | |
| | |
Total non-current liability | |
| | | |
| | |
Total liability | |
| 8,632,047.71 | | |
| 12,354,576.68 | |
OWNER’S EQUITY | |
| | | |
| | |
Paid-in capital | |
| 184,729,429.32 | | |
| 168,729,429.32 | |
Other equity instruments | |
| | | |
| | |
Capital surplus | |
| | | |
| | |
Other comprehensive income | |
| | | |
| | |
Special reserve | |
| | | |
| | |
Surplus reserve | |
| | | |
| | |
Undistributed profit | |
| (65,095,225.69 | ) | |
| (37,838,005.52 | ) |
Total owner’s equity | |
| 119,634,203.63 | | |
| 130,891,423.80 | |
Total liabilities and owner’s equity | |
| 128,266,251.34 | | |
| 143,246,000.48 | |
Balance sheet of SPX for the six months ended June 30, 2024
|
Item | |
As at June 30, 2024 (RMB) | | |
As at Beginning of Year (RMB) | |
Current assets: | |
| | | |
| | |
Monetary Funds | |
| 4,248,696.24 | | |
| 12,262,278.69 | |
Trading financial assets | |
| 0.00 | | |
| 0.00 | |
Notes receivable | |
| 0.00 | | |
| 0.00 | |
Accounts receivable | |
| 61,176.64 | | |
| 83,296.51 | |
Prepayments | |
| 104,570.28 | | |
| 121,532.94 | |
Interest receivable | |
| | | |
| 0.00 | |
Dividend receivable | |
| 0.00 | | |
| 0.00 | |
Other receivables | |
| 307,253.74 | | |
| 20,989.70 | |
Inventories | |
| 669,008.31 | | |
| 1,863.56 | |
Non-current assets due within one year | |
| | | |
| | |
Prepaid expenses | |
| 0.00 | | |
| 0.00 | |
Total current assets | |
| 5,390,705.21 | | |
| 12,489,961.40 | |
Non-current assets: | |
| | | |
| | |
Available-for-sale financial assets | |
| 0.00 | | |
| 0.00 | |
Held-to-maturity investments | |
| 0.00 | | |
| 0.00 | |
Long-term receivables | |
| 0.00 | | |
| 0.00 | |
Long-term equity investments | |
| 0.00 | | |
| 0.00 | |
Fixed assets | |
| 0.00 | | |
| 0.00 | |
Accumulated depreciation | |
| 0.00 | | |
| 0.00 | |
Fixed Assets-Net Amount | |
| 0.00 | | |
| 0.00 | |
Fixed assets impairment reserves | |
| 0.00 | | |
| 0.00 | |
Construction in Process | |
| 0.00 | | |
| 0.00 | |
Engineering Materials | |
| 0.00 | | |
| 0.00 | |
Disposal Of Fixed Assets | |
| 0.00 | | |
| 0.00 | |
Total fixed assets | |
| 0.00 | | |
| 0.00 | |
Intangible assets | |
| 107,571,375.00 | | |
| 114,742,800.00 | |
R&D expenditure | |
| 0.00 | | |
| 0.00 | |
Goodwill | |
| 0.00 | | |
| 0.00 | |
Long-term deferred expenses | |
| 0.00 | | |
| 0.00 | |
Deferred tax assets | |
| 0.00 | | |
| 0.00 | |
Total non-current assets | |
| 107,571,375.00 | | |
| 114,742,800.00 | |
Total Assets | |
| 112,962,080.21 | | |
| 127,232,761.40 | |
Balance sheet of SPX for the six months ended June 30, 2024
| |
| | | |
| | |
Item | |
As at June 30, 2024 (RMB) | | |
As at Beginning of Year (RMB) | |
Current Liabilities: | |
| | | |
| | |
Short-term loans | |
| 0.00 | | |
| 0.00 | |
Deferred Income | |
| 0.00 | | |
| 0.00 | |
Notes payable | |
| 0.00 | | |
| 0.00 | |
Accounts payable | |
| 218,710.79 | | |
| 101,279.56 | |
Receipts in advance | |
| 1,800.00 | | |
| 0.00 | |
Payroll Payable | |
| 2,974,070.71 | | |
| 1,596,097.53 | |
Taxes payable | |
| (1,268,522.38 | ) | |
| (933,367.26 | ) |
Interest payable | |
| 0.00 | | |
| 0.00 | |
Dividend payable | |
| 0.00 | | |
| 0.00 | |
Other payables | |
| 353,177.52 | | |
| 64,956.23 | |
Accrued expenses | |
| | | |
| 231,448.77 | |
Other current liabilities | |
| 163,522.17 | | |
| 0.00 | |
Total current liabilities | |
| 2,442,758.81 | | |
| 1,060,414.83 | |
Non-current Liabilities: | |
| | | |
| | |
Long-term loans | |
| 0.00 | | |
| 0.00 | |
Debentures payable | |
| 0.00 | | |
| 0.00 | |
Long-term payables | |
| 0.00 | | |
| 0.00 | |
Specific payables | |
| 0.00 | | |
| 0.00 | |
Estimated liabilities | |
| 0.00 | | |
| 0.00 | |
Deferred tax liabilities | |
| 0.00 | | |
| 0.00 | |
Other non-current liabilities | |
| | | |
| | |
Total non-current liabilities | |
| 0.00 | | |
| 0.00 | |
Total liabilities | |
| 2,442,758.81 | | |
| 1,060,414.83 | |
Owners’ equity (or shareholders’ equity) | |
| | | |
| | |
Paid in capital (or share capital) | |
| 190,729,429.32 | | |
| 190,729,429.32 | |
Capital Surplus | |
| 0.00 | | |
| 0.00 | |
Less: Treasury stocks | |
| 0.00 | | |
| 0.00 | |
Other comprehensive income | |
| | | |
| | |
Surplus Reserves | |
| 0.00 | | |
| 0.00 | |
Unappropriated profits | |
| (80,210,107.92 | ) | |
| (64,557,082.75 | ) |
Total Equity of owners (or shareholders) | |
| 110,519,321.40 | | |
| 126,172,346.57 | |
Total Liabilities & owners (or shareholders) | |
| 112,962,080.21 | | |
| 127,232,761.40 | |
Income statement of SPX for the years ended December 31, 2023 and 2022
|
Item | |
As at December 31, 2023 (RMB) | | |
As at December 31, 2022 (RMB) | |
1. Sales revenue | |
| 144,611.22 | | |
| | |
Less: Cost of goods | |
| 276,714.76 | | |
| | |
Tax and surcharge | |
| 7,414.54 | | |
| 20,176.42 | |
Selling expenses | |
| 792,569.99 | | |
| 914,840.21 | |
Administration expenses | |
| 3,048,901.99 | | |
| 2,908,740.61 | |
Research and development expenses | |
| 23,329,347.91 | | |
| 25,625,389.55 | |
Financial expenses | |
| (18,704.38 | ) | |
| (19,222.38 | ) |
Including: Interest expense | |
| | | |
| | |
Interest income | |
| (21,212.38 | ) | |
| (24,337.59 | ) |
Add: Other income | |
| 34,484.26 | | |
| 16,733.45 | |
Investment gains/losses (“-” for losses) | |
| | | |
| | |
Including: Investment gains/losses from associate and joint venture | |
| | | |
| | |
Derecognition of financial assets measured at amortized cost | |
| | | |
| | |
Net gains on hedging (“-” for losses) | |
| | | |
| | |
Gains/losses on movement of fair value (“-” for losses) | |
| | | |
| | |
Credit impairment losses (“-” for losses) | |
| | | |
| | |
Assets impairment losses (“-” for losses) | |
| | | |
| | |
Assets disposal gains/losses (“-” for losses) | |
| | | |
| | |
2. Profit/Loss from main operations | |
| | | |
| | |
Add: Non-operating income | |
| | | |
| | |
Less: Non-operating expense | |
| 70.84 | | |
| 57.37 | |
3. Profit/Loss before income tax | |
| (27,257,220.17 | ) | |
| (29,433,248.30 | ) |
Less: Income tax | |
| | | |
| | |
4. Net profit | |
| (27,257,220.17 | ) | |
| (29,433,248.30 | ) |
Net profit on going concern (“-” for losses) | |
| | | |
| | |
New profit on operation termination (“-” for losses) | |
| | | |
| | |
5. Net profit after tax of other comprehensive income | |
| | | |
| | |
(1) Other comprehensive income that cannot be reclassified into profit or loss | |
| | | |
| | |
1. Remeasure the amount of change in the benefit plan | |
| | | |
| | |
2. Other comprehensive income that cannot be transferred to profit and loss under the equity method | |
| | | |
| | |
3. Fair value movement on other equity instruments | |
| | | |
| | |
4. Fair value movement on credit risk of the company | |
| | | |
| | |
5. Other | |
| | | |
| | |
(2) Other comprehensive income that can be reclassified into profit and loss | |
| | | |
| | |
1. Other comprehensive income that can be transferred to profit or loss under the equity method | |
| | | |
| | |
2. Fair value movement on other debt investment | |
| | | |
| | |
3. Financial assets are reclassified in other comprehensive income | |
| | | |
| | |
4. The credit risk losses on other debt investment | |
| | | |
| | |
5. The effective portion of cash flow hedging gain and losses | |
| | | |
| | |
6. Exchange difference in financial statements with foreign currency | |
| | | |
| | |
7. Other | |
| | | |
| | |
6. Total comprehensive income | |
| | | |
| | |
Income statement of SPX for the six months ended June 30, 2024
|
Item | |
Amount for the period ended June 30, 2024 (RMB) | | |
Current Year Cumulative Amount (RMB) | |
1. Operating Revenue | |
| 24,318.58 | | |
| 131,999.03 | |
Less: Cost of goods sold | |
| 12,971.19 | | |
| 711,862.10 | |
Tax and associate charge | |
| 329.52 | | |
| 1,616.41 | |
Sales expenses | |
| 49,863.90 | | |
| 416,278.23 | |
General and administrative expenses | |
| 222,283.20 | | |
| 1,387,416.25 | |
R&D expenses | |
| 1,726,991.43 | | |
| 11,954,770.40 | |
Financial expenses | |
| (5,782.47 | ) | |
| (11,845.83 | ) |
Asset impairment loss | |
| 0.00 | | |
| 0.00 | |
Add: Other income | |
| 0.00 | | |
| 50,162.78 | |
Investment income (“-”means loss) | |
| 0.00 | | |
| 0.00 | |
Including: Income from investment in associated enterprises and joint ventures | |
| | | |
| | |
Incomes from change in the fair value (“-”means loss) | |
| 0.00 | | |
| 0.00 | |
Disposal gains on assets (“-”means loss) | |
| 0.00 | | |
| 0.00 | |
Exchange gains (“-”means loss) | |
| | | |
| | |
2. Operating income (“-”means loss) | |
| (1,982,338.19 | ) | |
| (14,277,935.75 | ) |
Add: Non-operating income | |
| 0.00 | | |
| 0.00 | |
Less: Non-operating expenses | |
| 0.00 | | |
| 0.00 | |
Including: Non-current asset disposal losses | |
| | | |
| | |
3. Income before tax (“-”means loss) | |
| (1,982,338.19 | ) | |
| (14,277,935.75 | ) |
Less: Income tax | |
| 0.00 | | |
| 0.00 | |
4. Net Income (“-”means loss) | |
| (1,982,338.19 | ) | |
| (14,277,935.75 | ) |
5. Earnings per share (EPS) | |
| | | |
| | |
Basic EPS | |
| | | |
| | |
Diluted EPS | |
| | | |
| | |
Operations
in Emerging Market Jurisdictions
Guidance
from Canadian securities regulators provides that issuers operating in markets deemed “emerging markets” include additional
disclosure with respect to operations in such markets. The Corporation has operating subsidiaries located in Singapore and China. Although
Singapore is considered to be a relatively stable jurisdiction for business, it is possible that operating in Singapore and / or China
may expose the Corporation to a certain degree of political, economic and other risks and uncertainties. For these reasons, the following
disclosure is in included in contemplation of the guidance in Staff Notice 51-720 – Issuer Guide for Companies Operating in
Emerging Markets of the Ontario Securities Commission.
The
establishment and development of POET Technologies Pte. Ltd (“POET Singapore”) (Singapore), POET Optoelectronics Shenzhen
Co. Ltd (“POSC”) (China) and a joint venture with Quanzhou Sanan Optical Communication Technology Co. Ltd. (“Sanan”),
SPX (China), adds an additional regulatory framework to which the Corporation operates and is supplementary to the existing regulatory
framework existing in Canada.
The
Corporation’s operating entities in emerging jurisdictions are governed in accordance with applicable local laws and entity-wide
governance principles. The directors and management of the Corporation’s operating entities in emerging jurisdictions are generally
comprised of a majority of senior management employees and where required by local laws, local residents, who are generally longstanding
local management level employees, or local corporate counsel. In addition, certain members of the Corporation’s management have
experience of conducting business in China, as detailed below, and in Singapore, where the Corporation has maintained operations since
2016. The Corporation maintains oversight over the operations in Singapore and China. Each jurisdiction will require greater internal
controls and adherence to a regulatory framework that creates challenges in relation to decision-making, communication, and compliance.
The Corporation has experienced management and retained legal advisors and consultants to help facilitate adherence to regulatory requirements
in order to meet this challenge.
Use
of and Reliance on Experts
The
Corporation has retained legal counsel in various international jurisdictions in which it operates regarding various corporate and regulatory
legal issues, including the Corporation’s right to conduct business in Singapore and China, and has relied on advice from that
counsel with respect to such matters. The Corporation has retained Bird & Bird LLP, an international law firm with offices in both
Singapore and China, as well as Intertrust Consultants Limited, an international consulting firm specializing in compliance, business
ethics, legal, administrative and regulatory duties for conducting the Corporation’s business in China.
The
Corporation ensures that any such counsel or provider retained has their credentials vetted, referenced, with considerable diligence
and adherence to local licenses, professional associations, and regulators.
Law,
Language, Cultural and Business Practices
Singapore
The
government of Singapore recognizes four official languages, being English, Malay, Mandarin and Tamil. The Corporation’s executive
officers and all members of the board of directors of the Corporation (the “Board”) are fluent in English and, in each case,
English is their primarily language. In addition, the Corporation and POET Singapore operates in English and all board materials are
prepared in English. The Corporation works with advisors, such as Bird & Bird LLP, capable of professionally conversing in English.
See “Use of and Reliance on Experts.”
The
financial records of the Corporation and POET Singapore existing under the laws of Singapore are maintained in English. The Corporation
does not believe that any material language or cultural barriers exist.
Should
a translation from a jurisdiction’s official language to English be required, the Corporation intends to engage a professional
translator to execute the required translation. In particular, the Corporation can rely on translators, bilingual local lawyers and/or
bilingual local auditors.
In
addition, the Corporation has operated in Singapore since 2016 and has experienced management and board of directors that is sensitive
to Singaporean business practices and customs. The Corporation engages with all subsidiaries and staff on a global basis as a team and
interacts through cross company telecommunications to update and communicate corporate advancement, policies and practices with great
frequency.
China
The
government of China recognizes Mandarin as its official language. Some of the Corporation’s executive officers, including James
Lee and Dr. Jinyu Mo, have proficiencies in Mandarin. The Corporation engages a professional translator to execute any required translation.
In particular, the Corporation can rely on translators and Bird & Bird LLP, its bilingual local lawyers. As noted above, the Corporation
has engaged multiple service providers in China to assist with compliance with laws and regulations. Service providers include an international
law firm, Bird & Bird LLP, which has expertise in various facets of Chinese law, including corporate law, commercial law, employment
law, intellectual property law, and IT, data and telecommunications law. The Corporation also retains Intertrust Consultants Limited,
an international consulting firm specializing in compliance, business ethics, legal, administrative and regulatory duties for international
companies conducting business in China. See “Use of and Reliance on Experts.”
In
addition, the certain officers of the Corporation, including Vivek Rajgarhia, Advisor to the Chief Executive Officer of the Corporation,
James Lee, Vice President and General Manager of POET Singapore, and Dr. Jinyu Mo, possess extensive experience in conducting business
in China and familiar with the laws, requirements and local business culture and practices in China.
1. | Corporate
Governance in China |
Under
Chinese law, a corporation established in China is required to appoint a legal representative. The legal representative may be held personally
accountable for actions carried out by the applicable Chinese company. The legal representative is exposed to personal risks for acts
and omissions, either individually or by the company and its employees. Such risks include civil, administrative, or criminal liability.
Vivek Rajgarhia, Advisor to the Chief Executive Officer of the Corporation, is the legal representative of POSC. Liangcai Jing, the President
of SPX, is the legal representative of SPX.
The
articles of POSC and SPX do not provide for any variation to the role, powers and responsibilities of the legal representative, other
than those as typically provided under Chinese law. The legal representative represents the company and is responsible for performing
duties and powers on behalf of the company in accordance with applicable Chinese laws and the company’s articles of association.
Most company registration or change filing-related formalities require the wet signature of the legal representative; however, the legal
representative also is typically provided a personal seal which serves as a formal signature for some other authorities or bank formalities.
The legal representative’s name will be recorded on the company’s business license, which is publicized online.
There
are certain procedures to be followed to legally remove a legal representative, directors and officers of an entity under Chinese law.
| (1) | Procedures
to legally remove the legal representative |
If
the chairman of board or executive director of the company concurrently serves as the legal representative according to company’s
articles of association (“AoA”), the shareholder of the company is entitled to re-appoint a new chairman of board or executive
director to replace the prior legal representative by shareholder resolution. If the general manager concurrently serves as the legal
representative according to company’s AoA, the board or executive director is entitled to re-appoint a new general manager to replace
the prior legal representative by resolution. Upon appointment, the newly appointed person will automatically serve as the legal representative
pursuant to the AoA. In addition, the company shall prepare application documents related to the change of legal representative and submit
them to local company registration authority where the company is domiciled. Local company registration authorities will then issue a
new business license, which contains the name of new legal representative.
| (2) | Procedures
to legally remove the directors and officers |
The
removal of a director of the entity is done by way of a shareholder resolution. While “officer” is not specifically defined
under the PRC Company Law, “senior officer” under the PRC Company Law refers to any manager, deputy manager, financial principal,
secretary to the board of directors of a listed company, or any other person specified in the AoA. The board or executive director of
the company can remove managers by way of resolution and remove financial principals by way of resolution in accordance with the nomination
of the general manager. For the removal of directors and general managers, the company shall prepare application documents related to
such removal and submit such documents to local company registration authority where the company is domiciled. No new business license
will be issued relating to a change of directors and general managers of an entity. Certain filings may be required for changes in officers;
however, changes in the general manager and financial principal require filings.
There
are requirements for a minimum number of directors and/or supervisors that must be complied with if directors/supervisors are removed
but not replaced. Specifically, a board shall comprise at least three members. A Chinese company is not allowed to have two directors
in its governance structure. If a board is not established, the company shall have only one executive director instead.
In
addition, POSC and SPX have chops which are essential for conducting business in China, including entering into contracts, conducting
banking activities and undertaking day-to-day business activities. POSC has a Company Chop, Legal Representative Chop, Financial Chop
and Invoice Chop while SPX has a Company Chop, Legal Representative Chop and Financial Chop. The specified purposes of the chops is detailed
below:
| (i) | Company
Chop. The Company Chop is used by an authorized person at each of POSC and SPX and is
required for the daily operations of the Chinese entity. It is required when any important
document is signed and is also used to provide legal authority when dealing with bank formalities.
All letters, official documents, contracts, and introduction letters issued in the name of
the company, certificates, or other company materials can use the official chop, which will
legally bind the company. Pursuant to the policies of POSC, the Corporation’s subsidiary,
the use of the company chop for transactions above $10,000 must be approved by the Corporation’s
CEO, President and CFO,; however, under Chinese laws, the use of the Company Chop alone or
the signature of the parties to the contract alone is sufficient to bind the Chinese entities. |
| (ii) | Legal
Representative Chop. The Legal Representative Chop is evidence of the Legal Representative’s
signature and may be used in place of a signature, or alongside the Legal Representative’s
actual signature. |
| (iii) | Financial
Chop. The Financial Chop is used for opening a bank account, issuing checks, authenticating
financial documents, such as tax filings and compliance documents, and for most bank-related
transactions by the financial controller / officer of POSC and SPX. |
| (iv) | E-VAT
Fapiao. The E-VAT Fapiao is used to issue invoices in China known as Fapiao. The E-VAT
Fapiao was acquired in preparation for the time that the Corporation (and POSC) will begin
issuing invoices to customers. |
Other
than the POSC chops held by Intertrust, in order to maintain the physical security of the chops, each chop is stored separately in secured
locations accessible only to a single authorized personnel, who are members of the entity’s senior management whose role and function
is aligned with the purpose and use of the assigned chop. The Company Chop of POSC is used by Jinyu Mo, the general manager of POSC and
stored in a locked safe at the offices of POSC located at Unit 02, 10th Floor, A4 Building, Kexing Science Park, No. 15. The Financial
Chop, Legal Representatives Chop and Invoice Chop of POSC is in the possession of the Corporation’s and POSC’s local consultant,
Intertrust and kept in a locked safe by Intertrust in its offices at Room 708, Guangzhou IFC, No. 5 Zhujiang West Road, Tianhe District,
Guangzhou, China 510623. The use of the Legal Representative Chop by Intertrust on behalf of POSC strictly forbidden without the express
written approval of the legal representative of POSC, Vivek Rajgarhia, Advisor to the Chief Executive Officer of the Corporation. The
Company Chop, Financial Chop and Legal Representative Chop of SPX is used by Vivi Jieqiong Qui (Operations Manager of SPX), Arden Zhu
(Finance Manager of SPX) and Liangcai Jing (President of SPX), all kept under locked safes at the offices of SPX located at 6th Floor,
No.799 Min ‘an Ave, Tong ‘an District, Xiamen City, Fujian Province, China.
Related
Parties
The
Corporation is subject to Canadian securities laws and accounting rules with respect to approval and disclosure of related party transactions
and has policies in place which it follows to mitigate risk associated with potential related party transactions. The Corporation may
transact with related parties from time to time, in which case such related party transaction may require disclosure in its consolidated
financial statements and in accordance with relevant securities laws.
Risk
Management and Disclosure
The
Corporation has implemented a system of corporate governance, internal controls over financial and disclosure controls and procedures
that apply to the Corporation and its subsidiaries, which are overseen by the Board and implemented by senior management of the Corporation.
Executive management and the board of the Corporation prepare and review the financial reporting of its subsidiaries as part of preparing
its consolidated financial reporting, and the Corporation’s independent auditors review the consolidated financial statements under
the oversight of the Corporation’s audit committee. In addition, the management of each subsidiary entity review, on a monthly
basis, the financial activities of local operations, which includes a review of variances and trend analysis against approved budget.
These monthly reviews are also part of the discussions between the management of the subsidiary entity and the Corporation. As such,
the Corporation’s board and management have insight into the monthly operations and finances and can provide effective oversight
of subsidiary level financial reporting and operations.
In
general, the board of each subsidiary entity is responsible for maintaining good corporate governance practices and risk controls. Board
members and management of the Corporation regularly discuss business operations and risk management practices with directors and management
of each subsidiary entity.
Internal
Controls
The
Corporation prepares its consolidated financial statements on a quarterly and annual basis, using IFRS. The Corporation implements internal
controls over the preparation of its financial statements and other financial disclosures, including its MD&A, to provide reasonable
assurance that its financial reporting is reliable. The quarterly and annual financial statements are being prepared in accordance with
IFRS and other financial disclosures, including its MD&A, are being prepared in accordance with relevant securities legislation.
These systems of internal control over financial reporting and disclosure controls and procedures are designed to ensure that, among
other things, the Corporation has access to material information about its subsidiaries.
The
Corporation’s operations and adherence to risk management in Singapore and China is regulated and actively monitored. The Corporation
provides internal monitoring through management and ensures the supervisors and general managers in both Singapore and China work alongside
the Corporation’s counsel and consultants to facilitate active regulatory and risk management monitoring. In addition to the above,
the Corporation ensures that each subsidiary entity has sufficient and qualified employees which allows for the proper functioning of
different processes and appropriate segregation of duties. Stringent approval processes are in place through approved delegation of authority.
Proper
security measures are in-place to safe guard company assets, including the use of the chops of POSC and SPX. As detailed above, corporate
seals and chops are maintained at the local entity level with appropriate security measures in place to safeguard such seals.
The
minute books, corporate records and corporate seals of these entities are maintained locally. In addition, a copy of the corporate records
for POSC is maintained at the offices of the Corporation’s local counsel, Bird & Bird LLP.
Disclosure
Controls and Procedures
The
Corporation has a disclosure policy that establishes the protocol for the preparation, review and dissemination of information about
the Corporation. This policy provides for multiple points of contact in the review of important disclosure matters and integrates inputs
from Vivek Rajgarhia and Jinyu Mo, as the main contact persons for disclosure matters in Singapore and China for the Corporation. Such
disclosure and information are subsequently by the Corporation’s disclosure committee, comprising of senior management and overseen
by the Corporation’s Audit Committee and Corporate Governance and Nominating Committee.
CEO
and CFO Certifications
In
order for the Corporation’s CEO and CFO to be in a position to attest to the matters addressed in the quarterly and annual certifications
required by National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings, the Corporation
has developed internal procedures and responsibilities throughout the organization for its regular periodic and special situation reporting,
in order to provide assurances that information that may constitute material information will reach the appropriate individuals who review
public documents and statements relating to the Corporation and its subsidiaries containing material information, is prepared with input
from the responsible officers and employees, and is available for review by the CEO and CFO in a timely manner.
RECENT
DEVELOPMENTS
The
following section sets out certain of the Corporation’s key developments since December 31, 2023.
On
January 25, 2024, the Corporation closed a non-brokered private placement of 5,098,088 units of the Corporation (the “January
2024 Units”) at a price of CAD$1.22 per January 2024 Unit, for aggregate gross proceeds of approximately CAD$6.2 million (the
“January 2024 Offering”). Each January 2024 Unit was comprised of one Common Share and one common share purchase warrant
of the Corporation (each, a “January 2024 Warrants”). Each January 2024 Warrant entitles the holder thereof to purchase one
additional Common Share at a price of CAD $1.52 per Common Share for a period of five years following the date of issuance. In connection
with the January 2024 Offering, the Corporation paid a cash finders’ fee of CAD$43,829 to GloRes Securities Inc. and World Source
Securities Inc.
On
March 27, 2024, the Corporation announced a collaboration with MultiLane Inc. (“MultiLane”), a leading provider of
high-speed IO and data center interconnect test solutions, to develop next-generation, performance-optimized pluggable 800G, 1.6T and
higher speed transceivers using the Corporation’s newly designed transmit and receive optical engines. The Corporation and MultiLane
will focus on jointly developing pluggable transceivers that will reduce cost and improve power efficiency over existing solutions, and
address the increasing need for more scalable hardware components for artificial intelligence and cloud data center markets.
On
April 17, 2024, the Corporation announced that it has augmented its investor outreach through two new engagements with Hybrid Financial
Ltd. and LFG Equities Corp. The Corporation also announced a management role change whereby Vivek Rajgarhia would transition from the
positions of President and General Manager to the position of Advisor to the Chief Executive Officer, effective immediately.
On
April 30, 2024, the Corporation entered into a consulting agreement with L5 Capital Inc. (“L5 Capital”) whereby L5
Capital has agreed to act in an independent contractor capacity to provide special opportunity assessments and corporate development
advice to the Corporation (the “Consulting Agreement”). In connection with the Consulting Agreement, the Corporation
has agreed to pay to L5 Capital a total fee in the amount of US$1.5 million comprised of: (i) an upfront fee in the amount of US$750,000,
which has been paid to L5 Capital by the Corporation; and (ii) an additional fee of US$750,000 which is to be paid to L5 Capital in equal
quarterly instalments of US$187,500 over the term of the Consulting Agreement. Pursuant to the terms of the Consulting Agreement, the
Corporation will also pay an additional fee to L5 Capital in the event the Corporation completes certain corporate transactions.
On
May 3, 2024, the Corporation closed a non-brokered private placement of an aggregate of 3,258,390 units of the Corporation (“May
2024 LIFE Units”) issued pursuant to the “listed issuer financing exemption” available under Part 5A of National Instrument
45-106 – Prospectus Exemptions issued at a price of CAD$3.069 per May 2024 LIFE Unit for aggregate gross proceeds of approximately
CAD$10 million (the “May 2024 LIFE Offering”). Each May 2024 LIFE Unit was comprised of one Common Share and one common
share purchase warrant of the Corporation (each, a “May 2024 LIFE Warrant”). Each May 2024 LIFE Warrant entitles the
holder thereof to acquire one Common Shares at an exercise price of CAD$4.26 per Common Share for a period of five years from the closing
date of the May 2024 LIFE Offering.
On
May 10, 2024, the Corporation closed a non-brokered private placement of 3,448,275 units of the Corporation (“May 2024 Units”)
issued at a price of CAD$2.90 per May 2024 Unit for aggregate gross proceeds of approximately CAD$10 million (the “May 2024
Offering”). Each May 2024 Unit was comprised of one Common Share and one common share purchase warrant of the Corporation (each,
a “May 2024 Warrant”). Each May 2024 Warrant entitles the holder thereof to acquire one Common Share at an exercise
price of CAD$4.26 per Common Share and is exercisable to acquire one Common Share for a period of five years from the closing date of
the May 2024 Offering.
On
May 14, 2024, the Corporation announced that Foxconn Interconnect Technology (“FIT”) has selected the Corporation’s
optical engines, which are silicon photonics integrated circuits (Silicon PIC), for its 800G and 1.6T optical transceiver modules. The
Corporation and FIT have entered into a collaboration to develop FIT’s 800G and 1.6T pluggable optical transceiver modules using
the Corporation’s optical engines with an aim to address the growth in demand from cutting-edge artificial intelligence applications
and high-speed data center networks. As part of the collaboration, the Corporation will develop and supply its silicon photonics integrated
circuit optical engines based on the patented Optical Interposer technology and FIT will design and supply the high-speed pluggable optical
transceivers.
On
July 19, 2024, the Corporation completed a registered direct offering in the United States with a single institutional investor pursuant
to which the Corporation issued 3,333,334 Common Shares and warrants exercisable to acquire 3,333,334 Common Shares (the “July
2024 Warrants”). The combined price of one Common Share and accompanying July 2024 Warrant in respect of one Common Share was US$3.00
(or approximately C$4.09). Each Warrant is exercisable to acquire one Common Share at an exercise price of US$4.00 (or approximately
C$5.45) per Common Share for a period of five years from the date of issuance.
Additional
information regarding the business of the Corporation can be found in the AIF and other documents incorporated by reference herein, copies
of which are available for review under the Corporation’s issuer profile on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.
See “Documents Incorporated by Reference.”
CONSOLIDATED
CAPITALIZATION
The
applicable Prospectus Supplement will describe any material change in, and the effect of such material change on, the share and loan
capitalization of the Corporation since the date of the Corporation’s financial statements for its most recently completed financial
period included in such Prospectus Supplement, including any material change that will result from the issuance of Securities pursuant
to such Prospectus Supplement.
SECONDARY
OFFERINGS BY SELLING SECURITYHOLDERS
Securities
may be sold under this Prospectus by way of a secondary offering by or for the account of Selling Securityholders; however, no such sale
of securities will compose any at-the-market distribution which may be offered pursuant to a Prospectus Supplement to this Prospectus.
The Prospectus Supplement for or including any offering of Securities by Selling Securityholders will include the following information,
to the extent required by applicable securities laws:
| ● | the
name or names of the Selling Securityholders: |
| ● | the
number or amount of Securities owned, controlled or directed by each Selling Securityholder; |
| ● | the
number or amount of Securities being distributed for the account of each Selling Securityholder; |
| ● | the
number or amount of Securities to be owned, controlled or directed by the Selling Securityholders
after the distribution and the percentage that number or amount represents of the total number
of the Corporation’s outstanding Securities; |
| ● | whether
the Securities are owned by the Selling Securityholders both of record and beneficially,
of record only, or beneficially only; |
| ● | if
the Selling Securityholder purchased any of the Securities in the 24 months preceding the
date of the applicable prospectus supplement, the date or dates the Selling Securityholder
acquired the Securities; |
| ● | if
the Selling Securityholder acquired any of the Securities in the 12 months preceding the
date of the applicable prospectus supplement, the cost thereof to the Selling Securityholder
in aggregate and on an average-cost-per-security basis; |
| ● | if
applicable, the disclosure required by item 1.11 of Form 41-101F1, and if applicable, the
Selling Securityholders will file a non-issuer’s submission to jurisdiction form with
the corresponding prospectus supplement; and |
| ● | all
other information that is required to be included in the applicable prospectus supplement. |
PLAN
OF DISTRIBUTION
General
The
Corporation may sell Securities by one or more of the following methods, or a combination thereof, or through any other method permitted
by law: to or through underwriters, brokers or dealers, whether with or without an underwriting syndicate, designated by the Corporation
from time to time; directly to one or more purchasers pursuant to applicable statutory exemptions or through agents. We reserve the right
to accept or reject, in whole or in part, any proposed purchase of Securities, whether the purchase is to be made directly or through
one or more agents.
Underwriters,
dealers or agents with respect to the Securities sold to or through underwriters, dealers or agents will be named in the Prospectus Supplement
relating to that particular offering of Securities. The Prospectus Supplement relating to a particular offering of Securities will also
set forth the terms of the offering of the Securities including, to the extent applicable, any fees, discounts or other remuneration
payable to the underwriters, dealers or agents in connection with the offering, the method of distribution of the Securities, the issue
price (in the event the offering is a fixed price distribution), the manner of determining the issue price(s) (in the event the offering
is a non-fixed price distribution), the proceeds that the Corporation will receive and any other material terms of the plan of distribution.
The
Securities may be sold from time to time in one or more transactions at a fixed price or prices or at prices which may be changed or
at market prices prevailing at the time of sale, at prices related to such prevailing prices or at negotiated prices, including sales
in transactions that are deemed to be “at-the-market distributions” as defined in National Instrument 44-102 – Shelf
Distributions (“NI 44-102”), including sales made directly on the TSXV, the Nasdaq or other markets or exchanges
on which the Common Shares may trade. The price at which the Securities will be offered and sold may vary from purchaser to purchaser
and during the period of distribution.
In
connection with the sale of the Securities, underwriters, dealers or agents may receive compensation from the Corporation or from other
parties, including in the form of underwriters’, dealers’ or agents’ fees, commissions or concessions. Underwriters,
dealers and agents that participate in the distribution of the Securities may be deemed to be underwriters for the purposes of applicable
Canadian securities legislation and any such compensation received by them from the Corporation and any profit on the resale of the Securities
by them may be deemed to be underwriting commissions. In connection with any offering of Securities, except as otherwise set out in a
Prospectus Supplement relating to a particular offering of Securities and other than in relation to an “at-the-market” distribution,
the underwriters, dealers or agents, as the case may be, may over-allot or effect transactions intended to fix, stabilize, maintain or
otherwise affect the market price of the Securities at a level other than those which otherwise might prevail on the open market. Such
transactions may be commenced, interrupted or discontinued at any time. A purchaser who acquires Securities forming part of the over-allocation
position of any underwriter, broker, dealer or agent, acquires those securities under this Prospectus, regardless of whether the over-allocation
position is ultimately filled through the exercise of the over-allotment option or secondary market purchases.
Any
offering of Securities other than Common Shares will be a new issue of securities with no established trading market. Unless otherwise
specified in the applicable Prospectus Supplement, the Securities will not be listed on any securities exchange. Unless otherwise specified
in the applicable Prospectus Supplement, there is no market through which the Securities other than Common Shares may be sold and purchasers
may not be able to resell such Securities purchased under this Prospectus or any Prospectus Supplement. This may affect the pricing of
the Securities in the secondary market (if any), the transparency and availability of trading prices, the liquidity of the Securities,
and the extent of issuer regulation. A prospective investor should be aware that the purchase of Securities may have tax consequences
both in Canada and the United States. This Prospectus does not discuss United States or Canadian tax consequences and any such tax consequences
may not be described fully in any applicable Prospectus Supplement with respect to a particular offering of Securities. Prospective investors
should read the tax discussion, if any, in the applicable Prospectus Supplement and consult with an independent tax advisor. See “Risk
Factors.”
Underwriters,
dealers or agents who participate in the distribution of Securities under this Prospectus may be entitled under agreements to be entered
into with the Corporation to indemnification by the Corporation against certain liabilities, including liabilities under securities legislation,
or contribution with respect to payments which the underwriters, dealers or agents may be required to make in respect thereof. The underwriters,
dealers or agents may be customers of, engage in transactions with, or perform services for, the Corporation in the ordinary course of
business.
Secondary
Offering
This
Prospectus may also, from time to time, relate to the offering of Common Shares by certain Selling Securityholders.
Common
Shares may be sold by the Selling Securityholders in one or more transactions at fixed prices, at prevailing market prices at the time
of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in any transaction
permitted pursuant to applicable law. The Selling Securityholders may, from time to time, sell, transfer or otherwise dispose of any
or all of their Common Shares included for public offering in this Prospectus on Nasdaq, the TSXV or any stock exchange, market or trading
facility on which the Common Shares are listed or quoted or in private transactions. The Selling Securityholders may sell all or a portion
of Common Shares beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, dealers
or agents. If Common Shares are sold through underwriters or dealers, the Selling Securityholders will be responsible for underwriting
discounts or commissions or agent’s commissions.
If
the Selling Securityholders effect such transactions by selling Common Shares to or through underwriters, dealers or agents, such underwriters,
dealers or agents may receive commissions in the form of discounts, concessions or commissions from the Selling Securityholders or commissions
from purchasers of Common Shares for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, dealers or agents may be in excess of those customary in the types of transactions involved).
The
Selling Securityholders may pledge or grant a security interest in some or all of the Common Shares owned by them, and, if they default
in the performance of their secured obligations, the pledgees or secured parties may offer and sell Common Shares from time to time pursuant
to this prospectus or any prospectus supplement filed under General Instruction II.L. of Form F-10 under the U.S. Securities Act,
amending, if necessary, the list of Selling Securityholders to include the pledgee, transferee or other successors in interest as Selling
Securityholders under this prospectus. The Selling Securityholders also may transfer and donate Common Shares in other circumstances
in which case the transferees, donees, pledgees or other successor in interest will be the selling beneficial owners for purposes of
this prospectus.
The
Selling Securityholders and any underwriter, agent or dealer participating in the distribution of Common Shares may be deemed to be “underwriters”
within the meaning of the U.S. Securities Act, and any commission paid, or any discounts or concessions allowed to, any such underwriter,
agent or dealer may be deemed to be underwriting commissions or discounts under the U.S. Securities Act. At the time a particular
offering of Common Shares is made, a prospectus supplement, if required, will be distributed which will identify the Selling Securityholders
and provide the other information set forth under “Selling Securityholders,” set forth the aggregate amount of Common Shares
being offered and the terms of the offering, including the name or names of any dealers or agents, any discounts, commissions and other
terms constituting compensation from the Selling Securityholders and any discounts, commissions or concessions allowed or re-allowed
or paid to dealers.
There
can be no assurance that any Selling Securityholder will sell any or all of Common Shares registered pursuant to the Registration Statement,
of which this prospectus forms a part. The Selling Securityholders may also sell any or all of their Common Shares under Rule 144 or
Rule 904 under the U.S. Securities Act, in each case, if available, rather than under this prospectus.
The
Selling Securityholders and any other person participating in such distribution will be subject to applicable provisions of Canadian
securities legislation and the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M under
the Exchange Act, which may limit the timing of purchases and sales of any Common Shares by the Selling Securityholders and any other
participating person. Regulation M may also restrict the ability of any person engaged in the distribution of Common Shares to engage
in market-making activities with respect to Common Shares. All of the foregoing may affect the marketability of Common Shares and the
ability of any person or entity to engage in market-making activities with respect to Common Shares.
Once
sold under the Registration Statement, of which this prospectus forms a part, Common Shares will be freely tradable in the hands of persons
other than our affiliates.
USE
OF PROCEEDS
Unless
otherwise indicated in a Prospectus Supplement relating to a particular offering of Securities, the net proceeds to be received by the
Corporation from the issue and sale from time to time of the Securities will be added to the general funds of the Corporation to be used
to for capital expansion, further product development, potential business or intellectual property acquisitions, working capital and
general corporate purposes. The Corporation selected a size of Prospectus designed to provide capital raising flexibility within reasonable
parameters for its expected growth and potential capital needs based on the Corporation’s product development stage and anticipated
industry growth over the next 25 months. The Corporation anticipates that the optical transceiver industry will undergo significant growth,
specifically, according to LightCounting’s September 2023 High Speed Ethernet Optics Report, the market for 800G optical transceivers
is expected to grow at a CAGR of 65% over the 2023-2028 period from US$432M to US$5.3B. In addition to expected organic growth, as the
Corporation operates in an evolving disruptive technology space, it hopes to be well-situated to adapt to market conditions and respond
quickly to potential strategic and mergers and acquisition opportunities if and as they arise. Overall, the Corporation expects to utilize
the Prospectus and proceeds from the offering of Securities from time to time to support its growth within the dynamic technology space
in order to ensure that it maintains a sufficient level of agility should it experience the explosive growth that is typical of the disruptive
technology industry. Although the Corporation is not currently taking any active steps to explore potential acquisition opportunities,
it expects to do so in the near term. Growth through acquisition is common in the technology sector, and often required in order to achieve
both technical and market penetration objectives. In terms of the Corporation’s long-term technical objectives, the Corporation
believes that it is essential to offer pluggable and other forms of transceivers to end-users, rather than to companies that design and
sell optical modules. This type of forward integration is currently achieved by collaborations with other small to medium-sized companies,
although the Corporation recognizes that this approach may not be suitable over the long-term. Similarly, backward integration into components,
including the manufacture of lasers, is a typical path that has been pursued by other companies in the transceiver sector and may also
be pursued by the Corporation in the future.
The
Corporation will not receive any proceeds from the sale of Securities by any Selling Securityholder.
There
may be circumstances where, on the basis of results obtained or for other sound business reasons, a re-allocation of funds may be necessary
or prudent. Accordingly, management of the Corporation will have broad discretion in the application of the proceeds of an offering of
Securities. The actual amount that the Corporation spends in connection with each intended use of proceeds may vary significantly from
the amounts specified in the applicable Prospectus Supplement and will depend on a number of factors, including those referred to under
“Risk Factors” and any other factors set forth in the applicable Prospectus Supplement.
The
Corporation had negative cash flow for the twelve months ended December 31, 2023. If the Corporation continues to have negative cash
flow in the future, net proceeds may need to be allocated to funding the negative cash flow.
As
at July 31, 2024, the Corporation has approximately US$28.7 million in cash and approximately US$29.2 million in working capital.
Based
on the Corporation’s cash on hand as at July 31, 2024, the Corporation’s operating and capital expenditures estimated by
the annual operating plan for the next 12 months represents approximately 74%-83% of the Corporation’s cash on hand and 58%-65%
of the Corporation’s working capital. At an estimated yearly burn rate of US$17 million – US$19 million, the Corporation’s
cash balance as of July 31, 2024, of US$28.7 million is sufficient to fund the Corporation’s cash requirements for approximately
19 months without raising additional capital.
The
following sets out the key milestones, estimated timing and costs of product development on the Corporation’s main projects in
2024, based on the Corporation’s reasonable expectations and intended courses of action and current assumptions and judgement.
The Corporation’s main objective is to advance the below products to its next milestone and the successful development and roll
out of these key products and projects in 2024.
Key Milestone | |
Stage | |
Timing | |
Expected Expenditures | |
Research & Development Programs: | |
| |
| |
| | |
Module Development | |
Development | |
Q1 – Q4 2024 | |
US$ | 1,500,000 | |
| |
Prototype | |
Q3 – Q4 2024 | |
US$ | 1,500,000 | |
| |
Production | |
Q1 2025 | |
US$ | 2,000,000 | |
| |
Total | |
US$ | 5,000,000 | |
Light Sources for Artificial Intelligence | |
Prototypes | |
Q1 2024 – Q1 2025 | |
US$ | 800,000 | |
| |
Total | |
US$ | 800,000 | |
800G Tx | |
Development | |
Q1 – Q4 2024 | |
US$ | 2,000,000 | |
| |
Prototypes | |
Q4 2024 | |
US$ | 1,600,000 | |
| |
Total | |
US$ | 3,600,000 | |
Total Research & Development: | |
| |
| |
US$ | 9,400,000 | |
The
Corporation approximates that it requires US$9.4 million for the next 12 months to take the above-noted projects to production, which
is included in its annual operating plan and yearly burn estimates. Based on the above projections, the Corporation expects that it has
sufficient cash on hand to meet the project milestones and take the projects to production stage.
Module
Development
We
anticipate that sales of optical engines to module makers will be the Corporation’s main business for the next two to three years.
This is due to the preference that major data center operators have for purchasing from established, large suppliers. However, this business
model, which is dependent on the success of the module makers to sell to end-users, is likely to be untenable over the longer term. Accordingly,
the Corporation believes it is essential to develop modules that are optimized to its own optical engines, and to be able to sell those
modules directly to end-users. In the short term, the Corporation’s strategy for modules will be to focus on niche markets within
the large data network market so as not to compete directly with existing customers in mainstream applications.
In
order to design and develop modules at increasingly higher speeds using the Corporation’s optical engines, it has chosen to collaborate
with MultiLane Inc., an established manufacturer of high-speed network test equipment. MultiLane possesses the skills and know-how for
the mechanical, firmware and other designs required for optical modules and has the testing equipment and capabilities to verify performance.
This collaboration saves the Corporation substantial time and expense that would be needed to match such capabilities internally.
Light
Sources for Artificial Intelligence
The
Optical Interposer platform has features that are ideal for the development of external light sources, expected to be used in so-called
“co-packaged optics” and in light-based chip-to-chip data communication links in high-speed computing. Both of these applications
are being driven largely by the increased bandwidth and speed requirements of artificial intelligence networks, but their implementation
at scale is not expected to take place for another two to three years.
The
Corporation’s first-generation light source product is being sold to Celestial AI, a venture-backed company that is designing certain
devices that would allow the use of light for data transmission between Graphics Processing Units (GPUs) and memory storage. Initial
shipments will begin in the second half of 2024 and will generate some revenue for the Corporation. The Corporation’s development
roadmap includes at least two more generations of this product, all intended to lower the cost of providing high bandwidth light sources
at a price that would make light-based chip-to-chip data communication commercially feasible.
800G
Tx
Virtually
all of the demand for 800G transceivers is being generated by companies that are establishing “AI Clusters” or networked
systems that run the most recent generations of artificial intelligence software and artificial intelligence software-based services.
The Corporation has developed and qualified an 800G Rx (receive) optical engine. Such optical engine is being designed-in to the optical
modules being produced by Luxshare, Inc., a Dongguan-based supplier of electronic components to major cell phone manufacturers.
The
Corporation is focusing its short-term development resources on completing an 800G Tx (transmit) optical engine. Once the development
is completed, which is scheduled for Q3 2024, samples will be provided to customers on “evaluation boards,” followed by individual
optical engines for use in prototype optical modules and then, assuming that the evaluation / qualification process is successful, production
orders. Several companies in addition to Luxshare, Inc., including Foxconn Optical Interconnect Technologies, Inc., have expressed interest
in receiving 800G Tx samples from the Corporation as soon as they are ready. Initial production of samples of 800G Tx (transmit) optical
engines are being assembled in a pilot line in Singapore by POET Singapore. The Corporation expects revenue in late 2024 and much of
2025 to be the result of the sale of such 800G transmit and receive optical engines samples to customers.
As
the process for developing new products is a continuous cycle of development and engineering, multiple rounds of revisions to the Optical
Interposer platform itself are often required before successful introduction of a new product. Given this continuous cycle of the research
and development as the Corporation refines its products, it is not possible to clearly and linearly define specific events that must
occur for the business objectives to be accomplished, other than as already described in this Prospectus and the documents incorporated
by reference herein.
Use
of Proceeds from Prior Financings
Between
January 25, 2024 and May 10, 2024, the Corporation completed the following private placements:
| (a) | On
January 25, 2024, the Corporation closed the January 2024 Offering. The aggregate gross proceeds
of the January 2024 Offering of approximately C$6.2 million were intended to be used towards
general corporate purposes, including revenue expansion and the development and production
of photonic modules for artificial intelligence and related markets. |
| (b) | On
May 3, 2024, the Corporation closed the May 2024 LIFE Offering. The aggregate gross proceeds
of the May 2024 LIFE Offering of approximately C$10 million were intended to be used towards
general working capital purposes. |
| (c) | On
May 10, 2024, the Corporation closed the May 2024 Offering. The aggregate gross proceeds
of the May 2024 Offering of approximately C$10 million were intended to be used towards general
corporate purposes, including revenue expansion and the development and production of photonic
modules for artificial intelligence and related markets. |
In
connection with the January 2024 Offering, the May 2024 LIFE Offering and the May 2024 Offering, the Corporation raised an aggregate
C$26.2 million in gross proceeds, of which C$6.2 million has been used by the Corporation for general corporate and working capital purposes
as of the date of this Prospectus.
DESCRIPTION
OF SHARE CAPITAL
The
authorized capital of the Corporation consists of an unlimited number of Common Shares, without par value, of which there are 61,092,291
Common Shares issued and outstanding as of the date hereof, and one special voting share, of which there are nil special voting shares
issued and outstanding as of the date hereof.
As
of the date hereof, the Corporation has issued and outstanding 12,383,242 Common Share purchase warrants with exercise prices between
CAD$1.52 and CAD$4.95. In addition, the Corporation has issued and outstanding 7,887,835 options to acquire Common Shares with exercised
prices between CAD$1.75 and CAD$1.79.
Holders
of Common Shares are entitled to one vote per Common Share at meetings of shareholders, to receive such dividends as may be declared
by the Board and to receive the residual property and assets of the Corporation upon dissolution or winding-up. The Common Shares are
not subject to any future call of assessment and there are no pre-emptive, conversion or redemption rights attached to such shares.
The
Corporation has not declared or paid any dividends on its Common Shares since the date of its incorporation. The Corporation’s
policy is to retain its earnings, if any, for the financing of future growth and development of its business and does not expect to pay
dividends or to make any other distributions in the near future. The Board will review this policy from time to time having regard to
the Corporation’s financing requirements, financial condition and other factors considered to be relevant.
EARNINGS
COVERAGE RATIO
This
Prospectus, together with an applicable Prospectus Supplement, qualifies the issuance of Debt Securities. The Corporation has no long-term
debt as of the date hereof and had no long-term debt as of December 31, 2023. Though the Corporation has no long-term debt to service,
the Corporation also has limited financial resources and negative cash flow. As a result of the foregoing, the earnings coverage ratios
for the year ended December 31, 2023, are less than one-to-one. Earnings coverage is calculated by dividing an entity’s profit
or loss by its borrowing costs and dividend obligations.
The
ability of the Corporation to satisfy any payment obligations under Debt Securities that may be issued pursuant to a Prospectus Supplement,
other than the conversion or payment of interest in Common Shares, as the case may be, will be dependent on its ability to generate cash
flows or its ability to raise additional financing. See “Risk Factors – Risks Related to the Securities – Credit
Risk.” The applicable Prospectus Supplement will provide, as required by applicable Canadian securities laws, the earnings
coverage ratios with respect to the issuance of Securities pursuant to such Prospectus Supplement.
DESCRIPTION
OF DEBT SECURITIES
The
following description of the terms of the Debt Securities sets forth certain general terms and provisions of the Debt Securities in respect
of which a Prospectus Supplement will be filed. The particular terms and provisions of the Debt Securities offered by any Prospectus
Supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in the Prospectus
Supplement filed in respect of such Debt Securities.
Debt
Securities may be offered separately or in combination with one or more other Securities. The Corporation may, from time to time, issue
debt securities and incur additional indebtedness other than through the issue of Debt Securities pursuant to this Prospectus.
Debt
securities will be issued under one or more indentures (each, a “Debt Indenture”), in each case between the Corporation
and an appropriately qualified entity authorized to carry on business as a trustee. The description below is not exhaustive and is subject
to, and qualified in its entirety by reference to, the detailed provisions of the applicable Debt Indenture. Accordingly, reference should
also be made to the applicable Debt Indenture, a copy of which will be filed by the Corporation with applicable provincial securities
commissions or similar regulatory authorities in Canada after it has been entered into and before the issue of any Debt Securities thereunder
and a copy of the form of which will be filed with the SEC as an exhibit to the Registration Statement, and will be available electronically
on SEDAR+ under the Corporation’s profile which can be accessed at www.sedarplus.ca and on EDGAR at www.sec.gov.
The
following description sets forth certain general terms and provisions of the Debt Securities and is not intended to be complete. The
particular terms and provisions of the Debt Securities and a description of how the general terms and provisions described below may
apply to the Debt Securities will be included in the applicable Prospectus Supplement. The following description is subject to supplement
in a Prospectus Supplement and the detailed provisions of any Debt Indenture.
General
The
Debt Securities may be issued from time to time in one or more series. The Corporation may specify a maximum aggregate principal amount
for the Debt Securities of any series and, unless otherwise provided in the applicable Prospectus Supplement, a series of Debt Securities
may be reopened for issuance of additional Debt Securities of such series.
Any
Prospectus Supplement for Debt Securities supplementing this Prospectus will contain the specific terms and other information with respect
to the Debt Securities being offered thereby, including:
| ● | the
designation, aggregate principal amount and authorized denominations of such Debt Securities; |
| ● | any
limit upon the aggregate principal amount of such Debt Securities; |
| ● | the
currency or currency units for which such Debt Securities may be purchased and the currency
or currency units in which the principal and any interest is payable (in either case, if
other than Canadian dollars); |
| ● | the
issue price (at par, at a discount or at a premium) of such Debt Securities; |
| ● | the
date or dates on which such Debt Securities will be issued and delivered; |
| ● | the
date or dates on which such Debt Securities will mature, including any provision for the
extension of a maturity date, or the method of determination of such date(s); |
| ● | the
rate or rates per annum (either fixed or floating, respectively) at which such Debt Securities
will bear interest (if any) and, if floating, the method of determination of such rate; |
| ● | the
date or dates from which any such interest will accrue and on which such interest will be
payable and the record date or dates for the payment of such interest, or the method of determination
of such date(s); |
| ● | if
applicable, the provisions for subordination of such Debt Securities to other indebtedness
of the Corporation; |
| ● | any
redemption term or terms under which such Debt Securities may be defeased whether at or prior
to maturity; |
| ● | any
repayment or sinking fund provisions; |
| ● | any
events of default applicable to such Debt Securities; |
| ● | whether
such Debt Securities are to be issued in registered form or in the form of temporary or permanent
global securities and the basis of exchange, transfer and ownership thereof; |
| ● | any
exchange or conversion terms and any provisions for the adjustment thereof; |
| ● | if
applicable, the ability of the Corporation to satisfy all or a portion of any redemption
of such Debt Securities, any payment of any interest on such Debt Securities or any repayment
of the principal owing upon the maturity of such Debt Securities through the issuance of
securities of the Corporation or of any other entity, and any restriction(s) on the persons
to whom such securities may be issued; and |
| ● | any
other specific terms or covenants applicable to such Debt Securities. |
The
Corporation reserves the right to include in a Prospectus Supplement specific terms pertaining to the Debt Securities which are not within
the options and parameters set forth in this Prospectus. In addition, to the extent that any particular terms of the Debt Securities
described in a Prospectus Supplement differ from any of the terms described in this Prospectus, the description of such terms set forth
in this Prospectus shall be deemed to have been superseded by the description of such differing terms set forth in such Prospectus Supplement
with respect to such Debt Securities.
Unless
otherwise specified in a Prospectus Supplement, the Debt Securities will be direct unsecured obligations of the Corporation and will
rank pari passu (except as to sinking funds) with all other unsubordinated and unsecured indebtedness of the Corporation, including other
debt securities issued under the Debt Indenture.
DESCRIPTION
OF CONVERTIBLE SECURITIES
This
description sets forth certain general terms and provisions that could apply to any Convertible Securities that the Corporation may issue
pursuant to this Prospectus. The Corporation will provide particular terms and provisions of a series of Convertible Securities, and
a description of how the general terms and provisions described below may apply to that series, in a Prospectus Supplement.
The
Convertible Securities will be convertible or exchangeable into Common Shares and/or other Securities. The Convertible Securities convertible
or exchangeable into Common Shares and/or other Securities may be offered separately or together with other Securities, as the case may
be. The applicable Prospectus Supplement will include details of the agreement, indenture or other instrument to which such Convertible
Securities will be created and issued. The following sets forth the general terms and provisions of such Convertible Securities under
this Prospectus.
The
particular terms of each issue of such Convertible Securities will be described in the related Prospectus Supplement. This description
will include, where applicable: (i) the number of such Convertible Securities offered; (ii) the price at which such Convertible Securities
will be offered; (iii) the procedures for the conversion or exchange of such Convertible Securities into or for Common Shares and/or
other Securities; (iv) the number of Common Shares and/or other Securities that may be issued upon the conversion or exchange of such
Convertible Securities; (v) the period or periods during which any conversion or exchange may or must occur; (vi) the designation and
terms of any other Convertible Securities with which such Convertible Securities will be offered, if any; (vii) the gross proceeds from
the sale of such Convertible Securities; and (viii) any other material terms and conditions of such Convertible Securities.
DESCRIPTION
OF SUBSCRIPTION RECEIPTS
The
Corporation may issue Subscription Receipts, independently or together with other securities. Subscription Receipts will be issued under
one or more subscription receipt agreements.
A
Subscription Receipt is a security of the Corporation that will entitle the holder to receive one or more Common Shares or a combination
of Common Shares and Warrants, upon the completion of a transaction, typically an acquisition by the Corporation of the assets or securities
of another entity. After the offering of Subscription Receipts, the subscription proceeds for the Subscription Receipts are held in escrow
by the designated escrow agent, pending the completion of the transaction. Holders of Subscription Receipts will not have any rights
of shareholders of the Corporation. Holders of Subscription Receipts are only entitled to receive Common Shares or Warrants or a combination
thereof upon the surrender of their Subscription Receipts to the escrow agent or to a return of the subscription price for the Subscription
Receipts together with any payments in lieu of interest or other income earned on the subscription proceeds.
Selected
provisions of the Subscription Receipts and the subscription receipt agreements are summarized below. This summary is not complete. The
statements made in this Prospectus relating to any subscription receipt agreement and Subscription Receipts to be issued thereunder are
summaries of certain anticipated provisions thereof and are subject to, and are qualified in their entirety by reference to, all provisions
of the applicable subscription receipt agreement.
The
Prospectus Supplement will set forth the following terms relating to the Subscription Receipts being offered:
| ● | the
designation of the Subscription Receipts; |
| ● | the
aggregate number of Subscription Receipts offered and the offering price; |
| ● | the
terms, conditions and procedures for which the holders of Subscription Receipts will become
entitled to receive Common Shares or Warrants or a combination thereof; |
| ● | the
number of Common Shares or Warrants or a combination thereof that may be obtained upon the
conversion of each Subscription Receipt and the period or periods during which any conversion
must occur; |
| ● | the
designation and terms of any other securities with which the Subscription Receipts will be
offered, if any, and the number of Subscription Receipts that will be offered with each security; |
| ● | the
gross proceeds from the sale of such Subscription Receipts, including (if applicable) the
terms applicable to the gross proceeds from the sale of such Subscription Receipts, plus
any interest earned thereon; |
| ● | the
material income tax consequences of owning, holding and disposing of such Subscription Receipts; |
| ● | whether
such Subscription Receipts will be listed on any securities exchange; |
| ● | any
terms, procedures and limitations relating to the transferability, exchange or conversion
of the Subscription Receipts; and |
| ● | any
other material terms and conditions of the Subscription Receipts. |
DESCRIPTION
OF WARRANTS
This
section describes the general terms that will apply to any Warrants for the purchase of Common Shares (the “Equity Warrants”)
or for the purchase of Debt Securities (the “Debt Warrants”).
Warrants
may be offered separately or together with other Securities, as the case may be. Each series of Warrants may be issued under a separate
warrant indenture or warrant agency agreement to be entered into between the Corporation and one or more banks or trust companies acting
as Warrant agent or may be issued as stand-alone contracts. The applicable Prospectus Supplement will include details of the Warrant
agreements governing the Warrants being offered. The Warrant agent is expected to act solely as the agent of the Corporation and will
not assume a relationship of agency with any holders of Warrant certificates or beneficial owners of Warrants. The following sets forth
certain general terms and provisions of the Warrants offered under this short form base shelf prospectus. The specific terms of the Warrants,
and the extent to which the general terms described in this section apply to those Warrants, will be set forth in the applicable Prospectus
Supplement. A copy of any warrant indenture or any warrant agency agreement relating to an offering of Warrants will be filed with applicable
provincial securities commissions or similar regulatory authorities in Canada after it has been entered into and before the issue of
any Warrants thereunder and will be available electronically on SEDAR+ under our profile which can be accessed at www.sedarplus.ca
and on EDGAR at www.sec.gov.
Equity
Warrants
The
particular terms of each issue of Equity Warrants will be described in the related Prospectus Supplement. This description will include,
where applicable:
| ● | the
designation and aggregate number of the Equity Warrants; |
| ● | the
price at which the Equity Warrants will be offered; |
| ● | the
currency or currencies in which the Equity Warrants will be offered; |
| ● | the
date on which the right to exercise the Equity Warrants will commence and the date on which
the right will expire; |
| ● | the
class and/or number of Common Shares that may be purchased upon exercise of each Equity Warrant
and the price at which and currency or currencies in which the Common Shares may be purchased
upon exercise of each Equity Warrant; |
| ● | the
terms of any provisions allowing for adjustment in (i) the class and/or number of Common
Shares or other securities or property that may be purchased, or (ii) the exercise price
per Common Share; |
| ● | whether
the Corporation will issue fractional shares; |
| ● | the
designation and terms of any Securities with which the Equity Warrants will be offered, if
any, and the number of the Equity Warrants that will be offered with each security; |
| ● | the
date or dates, if any, on or after which the Equity Warrants and the related Securities will
be transferable separately; |
| ● | whether
the Equity Warrants will be subject to redemption and, if so, the terms of such redemption
provisions; |
| ● | whether
the Corporation has applied to list the Equity Warrants and/or the related Common Shares
on a stock exchange; and |
| ● | any
other material terms or conditions of the Equity Warrants. |
Debt
Warrants
The
particular terms of each issue of Debt Warrants will be described in the related Prospectus Supplement. This description will include,
where applicable:
| ● | the
designation and aggregate number of Debt Warrants; |
| ● | the
price at which the Debt Warrants will be offered; |
| ● | the
currency or currencies in which the Debt Warrants will be offered; |
| ● | the
designation and terms of any Securities with which the Debt Warrants are being offered, if
any, and the number of the Debt Warrants that will be offered with each security; |
| ● | the
date or dates, if any, on or after which the Debt Warrants and the related Securities will
be transferable separately; |
| ● | the
principal amount of Debt Securities that may be purchased upon exercise of each Debt Warrant
and the price at which and currency or currencies in which that principal amount of Debt
Securities may be purchased upon exercise of each Debt Warrant; |
| ● | the
date on which the right to exercise the Debt Warrants will commence and the date on which
the right will expire; |
| ● | the
minimum or maximum amount of Debt Warrants that may be exercised at any one time; |
| ● | whether
the Debt Warrants will be subject to redemption, and, if so, the terms of such redemption
provisions; and |
| ● | any
other material terms or conditions of the Debt Warrants. |
DESCRIPTION
OF UNITS
The
Corporation may issue Units comprised of one or more of the other Securities described herein in any combination. The Prospectus Supplement
relating to the particular Units offered thereby will describe the terms of such Units and, as applicable, the terms of such other Securities.
Each
Unit is expected to be issued so that the holder of the Unit is also the holder of each Security included in the Unit. Thus, the holder
of a Unit is expected to have the rights and obligations of a holder of each included Security. The Unit agreement under which a Unit
is issued, as the case may be, may provide that the Securities included in the Unit may not be held or transferred separately, at any
time or at any time before a specified date.
The
applicable Prospectus Supplement may describe:
| ● | the
designation and terms of the Units and of the Securities comprising the Units, including
whether and under what circumstances those Securities may be held or transferred separately; |
| ● | any
provisions for the issuance, payment, settlement, transfer or exchange of the Units or of
the Securities comprising the Units; and |
| ● | any
other material terms and conditions of the Units. |
The
preceding description and any description of Units in an applicable prospectus supplement does not purport to be complete and is subject
to and is qualified in its entirety by reference to the Unit agreement and, if applicable, collateral arrangements and depositary arrangements
relating to such Units.
PRIOR
SALES
Information
regarding prior sales of Securities will be provided, as required, in a Prospectus Supplement with respect to the issuance of Securities
pursuant to such Prospectus Supplement.
TRADING
PRICE AND VOLUME
Information
regarding trading price and volume of the Securities will be provided, as required, in each Prospectus Supplement to this Prospectus.
RISK
FACTORS
An
investment in the Securities offered hereby involves a high degree of risk and should be regarded as speculative due to the nature of
the Corporation’s business. POET has incurred losses since inception and may not be able to achieve or sustain profitability in
the future. As a result, POET may not be able to maintain sufficient levels of liquidity.
In
addition to the other information contained in this Prospectus, investors should carefully consider the risk factors set out in the documents
incorporated by reference herein, including the disclosure in the section entitled “Risk Factors” in the AIF. Additional
risk factors relating to a specific offering of Securities will be described in the applicable Prospectus Supplement. Any one or more
of such risk factors could materially affect the Corporation’s future operating results and could cause actual events to differ
materially from those described in forward-looking statements relating to the Corporation. Some of the factors described herein, in the
documents incorporated by reference herein, and/or the applicable Prospectus Supplement are interrelated and, consequently, investors
should treat such risk factors as a whole. Additional risks and uncertainties of which the Corporation currently is unaware or that are
unknown or that it currently deems to be immaterial could have a material adverse effect on the Corporation’s business, financial
condition and results of operation. The Corporation can provide no assurance that it will successfully address any or all of these risks.
There is no assurance that any risk management steps taken will avoid future loss due to the occurrence of the risks described herein,
in the AIF, in the other documents incorporated by reference herein or in the applicable Prospectus Supplement or other unforeseen risks.
Prospective
investors should carefully consider the risks described herein, in a document incorporated by reference herein or in the applicable Prospectus
Supplement and consult with their professional advisors to assess any investment in the Corporation.
Risks
Related to the Offering
Loss
of Entire Investment
An
investment in the Securities of the Corporation is speculative and may result in the loss of an investor’s entire investment. Only
potential investors who are experienced in high-risk investments and who can afford to lose their entire investment should consider an
investment in the Corporation.
Allocation
of proceeds
POET
has discretion in the use of the net proceeds from the offering of Securities. The Corporation currently intends to allocate the net
proceeds expected to be received from the offering of Securities as described under “Use of Proceeds” of this Prospectus
or any Prospectus Supplement. However, the Corporation’s management will have discretion in the actual application of the net proceeds,
and POET may elect to allocate proceeds differently from that described in “Use of Proceeds” if POET believes it would be
in POET’s best interests to do so. The failure by the Corporation’s management to apply these funds effectively could have
a material adverse effect on its business.
Negative
cash flows from operations
The
Corporation currently generates negative cash flows from operations, due to the expenses incurred developing its technologies and developing
manufacturing infrastructure. Further, POET has not yet commercialized its optical engine products using its Optical Interposer platform.
Risks
Related to Common Shares
Listing
of the Common Shares
The
listing of the Common Shares on the TSXV and the Nasdaq is conditional upon its ability to maintain the applicable minimum requirements
for listing, as applicable, of the TSXV and the Nasdaq. There can be no assurance that there will be sufficient liquidity of the Common
Shares or that the Corporation will continue to meet the listing requirements of the TSXV and the Nasdaq or achieve listing on any other
public securities exchange.
The
TSXV may also consider the delisting of the Common Shares if, in its opinion, it appears the Corporation is in serious financial difficulty,
if there is significant doubt regarding its ability to continue as a going concern or the Corporation otherwise fails to meet the continued
listing requirements thereof. In such circumstances, the TSXV may place POET under a delisting review that could lead to the delisting
of its Common Shares from the TSXV.
If
the Common Shares are delisted from the TSXV, they may be eligible for listing on a substitute exchange, such as the Canadian Securities
Exchange; however, in the event that POET is not able to maintain a listing for the Common Shares on the TSXV or a substitute exchange,
it may be extremely difficult or impossible for shareholders to sell their Common Shares in Canada. Moreover, if POET is delisted from
the TSXV, but obtains a substitute listing for the Common Shares, the Common Shares may have less liquidity and more price volatility
than experienced on the TSXV. Shareholders may not be able to sell their Common Shares on any such substitute exchange in the quantities,
at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if
the Common Shares are delisted from the TSXV, the price of the Common Shares may decline and the Corporation’s ability to obtain
financing in the future could be materially impaired.
Trading
price fluctuations
The
trading price of the Common Shares has been and may continue to fluctuate significantly and shareholders may have difficulty reselling
their Common Shares.
During
the last 12 months, the Common Shares have traded as low as CAD$1.01 and as high as CAD$7.75 on the TSXV. Over the same period, the Common
Shares have traded as low as US$0.72 and as high as US$5.88 on the Nasdaq. The value of your investment could decline due to the impact
of any of the following or other factors upon the market price of the Common Shares:
| ● | changes
in the demand for semiconductors; |
| ● | announcements
of new products, partnerships or technological collaborations and announcements of the results
of further actions in respect of any products, partnerships or collaborations, including
termination of same; |
| ● | innovations
by the Corporation or competitors; |
| ● | development
in patent or other proprietary rights; |
| ● | disappointing
results from the Corporation’s marketing and sales efforts; |
| ● | the
results of technology and product development testing by the Corporation, its partners or
its competitors; |
| ● | failure
to meet the Corporation’s revenue or profit goals or operating budget; |
| ● | decline
in demand for the Common Shares; |
| ● | number
of shares available for trading (float); |
| ● | acquisitions
and dispositions completed by the Corporation; |
| ● | downward
revisions in securities analysts’ estimates or changes in general market conditions; |
| ● | lack
of funding generated for operations; |
| ● | short
selling, manipulation of the Common Shares and prohibited trades; |
| ● | investor
perception of the Corporation’s industry or its business prospects; |
| ● | government
regulations; and |
| ● | general
economic trends. |
In
addition, stock markets have experienced extreme price and volume fluctuations and the market prices of securities have been highly volatile.
These fluctuations are often unrelated to operating performance and may adversely affect the market price of the Common Shares.
Further,
shareholders may experience dilution of their shareholdings due to the exercise of outstanding Warrants or Convertible Securities that
may be issued.
Dilution
of existing shareholders
The
constating documents of the Corporation authorize the issuance of an unlimited number of Common Shares. The Board has the authority to
issue additional Common Shares (or Securities convertible or exchangeable for Common Shares) to provide additional financing in the future
and the issuance of any such Common Shares (or Securities convertible or exchangeable for Common Shares) may result in a reduction of
the book value (on a per share basis) or market price of the outstanding Common Shares. If POET does issue any such additional Common
Shares (or Securities convertible or exchangeable for Common Shares), such issuance may also cause a reduction in the proportionate ownership
and voting power of all other shareholders. Further, any such issuances could result in a change of control.
Capital-raising
constraints
A
decline in the price of the Common Shares could result in a reduction in the liquidity of the Common Shares and a reduction in the Corporation’s
ability to raise additional capital for its operations. Because POET’s operations to date have been principally financed through
the sale of equity securities, a decline in the price of the Common Shares could have an adverse effect upon the liquidity of the Common
Shares and POET’s continued operations. A reduction in POET’s ability to raise equity capital in the future would have a
material adverse effect upon the Corporation’s business plan and operations, including its ability to continue its current operations.
If the price for the Common Shares declines, the Corporation may not be able to raise additional capital or generate funds from operations
sufficient to meet its obligations.
No
payment of dividends
The
Corporation has never declared nor paid any dividends on the Common Shares. The Corporation intends, for the foreseeable future, to retain
future earnings, if any, to finance development activities. The payment of future dividends, if any, will be reviewed periodically by
the Board and will depend upon, among other things, conditions then existing including earnings, financial conditions, cash on hand,
development and growth, and other factors that the Board may consider appropriate in the circumstances.
Risks
Related to the Securities
Unlisted
Securities
The
Securities (other than the Common Shares) may not be listed and there may not be an established trading market for those Securities.
Investors may be unable to sell the Securities at the prices desired or at all. There is no existing trading market for the Debt Securities,
Convertible Securities, Subscription Receipts, Warrants or Units. As a result, there can be no assurance that a liquid market will develop
or be maintained for those Securities, or that an investor will be able to sell any of those Securities at a particular time (if at all).
The Corporation may not list the Debt Securities, Convertible Securities, Subscription Receipts, Warrants or Units on any Canadian or
other securities exchange, and the Common Shares may be delisted or suspended. The liquidity of the trading market in those Securities,
and the market price quoted for those securities, may be adversely affected by, among other things:
| ● | changes
in the overall market for those Securities; |
| ● | changes
in the Corporation’s financial performance or prospects; |
| ● | changes
or perceived changes in the Corporation’s creditworthiness; |
| ● | the
prospects for companies in the industry generally; |
| ● | the
number of holders of those Securities; |
| ● | the
interest of securities dealers in making a market for those Securities; and |
| ● | prevailing
interest rates. |
Unsecured
Debt Securities
The
Debt Securities may be unsecured debt of the Corporation and, if so, will rank equally in right of payment with all other existing and
future unsecured debt of the Corporation. In such cases, the Debt Securities will be effectively subordinated to all existing and future
secured debt of the Corporation to the extent of the assets securing such debt. If the Corporation is involved in any bankruptcy, dissolution,
liquidation or reorganization, the secured debt holders would, to the extent of the value of the assets securing the secured debt, be
paid before the holders of unsecured debt securities, including if applicable, the Debt Securities. In that event, a holder of Debt Securities
may not be able to recover any principal or interest due to it under the Debt Securities.
Subordination
to subsidiary indebtedness
The
Corporation conducts its operations through subsidiaries and to the extent any such subsidiary has or incurs indebtedness with a third
party, the holders of the Debt Securities will be effectively subordinated to the claims of the holders of such third party indebtedness,
including in the event of liquidation or upon a realization of the assets of any such subsidiary.
Credit
Risk
The
likelihood that purchasers of Debt Securities will receive payments owing to them under the terms of the Debt Securities will depend
on the financial health of the Corporation and its creditworthiness. The Corporation has limited financial resources and negative flow
from its operations. The ability of the Corporation to satisfy its payment obligations under the Debt Securities, other than the conversion
or payment of interest in Common Shares, as the case may be, will be dependent on its ability to generate cash flows or its ability to
raise additional financing.
Tax
Risk
Prospective
investors should be aware that the purchase of Securities may have tax consequences both in Canada and the United States. This Prospectus
does not discuss United States or Canadian tax consequences and any such tax consequences may not be described fully in any applicable
Prospectus Supplement with respect to a particular offering of Securities. Prospective investors should read the tax discussion, if any,
in the applicable Prospectus Supplement and consult with an independent tax advisor.
Inability
to enforce actions
The
Corporation is incorporated under the laws of the Province of Ontario. Some of the directors and officers of the Corporation, reside
principally in Canada. Because all or a substantial portion of the assets of the Corporation and the assets of these persons are located
outside of the United States, it may not be possible for investors to effect service of process within the United States upon the Corporation
or those persons. Furthermore, it may not be possible to enforce in the United States, judgments obtained in U.S. courts based upon the
civil liability provisions of the U.S. federal securities laws or other laws of the United States. There is doubt as to the enforceability,
in original actions in Canadian courts, of liabilities based upon U.S. federal securities laws and as to the enforceability in Canadian
courts of judgments of U.S. courts obtained in actions based upon the civil liability provisions of the U.S. federal securities laws.
Therefore, it may not be possible to enforce those actions against the Corporation and certain of the directors and officers.
Additional
Risks Related to the Business
Exchange
Rate Fluctuations
Exchange
rate fluctuations may adversely affect the Corporation’s financial position and results of operations. The functional currency
of each of the POET entities is the local currency where the entity is domiciled. Functional currencies include the RMB, United States
dollar, Singaporean dollar, and Canadian dollar. Most transactions within the entities are conducted in functional currencies and as
such, none of the entities engage in hedging activities. The Corporation currently does not have in place a policy for managing or controlling
foreign currency risks. Even if such a policy exists, there is no assurance that such policy would eliminate this risk.
The
Corporation’s financial statements will be expressed in United States dollars, while a portion of revenue and transactions will
be denominated in Canadian dollars, Singaporean dollars, RMB, or other currencies.
Difficulty
in Enforcement of Judgments
The
Corporation has subsidiaries incorporated in the U.S., Singapore and China. Certain directors and officers reside outside of Canada and
substantially all of the assets of these persons are located outside of Canada. It may not be possible for shareholders to effect service
of process against the Corporation’s directors, officers and subsidiaries who are not resident or located in Canada. In the event
a judgment is obtained in a Canadian court against one or more of the Corporation’s directors or officers for violations of Canadian
securities laws or otherwise, it may not be possible to enforce such judgment against those directors and officers not resident in Canada.
Additionally, it may be difficult for an investor, or any other person or entity, to assert Canadian securities law claims or otherwise
in original actions instituted in the jurisdictions where the Corporation’s subsidiaries are located. Courts in these jurisdictions
may refuse to hear a claim based on a violation of Canadian securities laws or otherwise on the grounds that such jurisdiction is not
the most appropriate forum to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that the local law,
and not Canadian law, is applicable to the claim. If Canadian law is found to be applicable, the content of applicable Canadian law must
be proven as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by foreign
law.
Difficulty
in Enforcement of Judgments in Singapore
There
is uncertainty as to whether judgments of courts in Canada based upon the civil liability provisions of applicable Canadian securities
laws will be recognized or enforced by the Singapore courts, and there is doubt as to whether the Singapore courts will enter judgments
in original actions brought in the Singapore courts based solely on the civil liability provisions of these securities laws. In general,
an in personam foreign judgment that is final and conclusive (that is, in general, a judgment that makes a final determination of rights
between the parties and cannot be re-opened or altered by the court that delivered it, or be overridden by another body not being an
appellate or supervisory body, although it may be subject to an appeal), given by a competent court of law, for a fixed or ascertainable
sum of money , may generally be enforced as a debt in the Singapore courts under the common law as long as it is established that the
Singapore courts have jurisdiction over the judgment debtor. However, the Singapore courts are unlikely to enforce a foreign judgment
if (a) the foreign judgment is inconsistent with a prior local judgment from Singapore or recognized in Singapore that is binding on
the same parties; (b) the enforcement of the foreign judgment would contravene the public policy of Singapore; (c) the proceedings in
which the foreign judgment was obtained were contrary to principles of natural justice; (d) the foreign judgment was obtained by fraud;
or (e) the enforcement of the foreign judgment amounts to the direct or indirect enforcement of a foreign penal, revenue or other public
law. In particular, the Singapore Courts may potentially not allow the enforcement of any foreign judgment for a sum payable in respect
of taxes, fines, penalties or other similar charges, including the judgments of courts in Canada based upon the civil liability provisions
of applicable Canadian securities laws. In respect of civil liability provisions of Canadian securities law which permit punitive damages
against us and our directors or executive officers, we are unaware of any decision by the Singapore courts which has considered the specific
issue of whether a judgment of a Canada court based on such civil liability provisions of applicable Canadian securities laws is enforceable
in Singapore.
Risks
related to strategic and joint venture partners.
The
Corporation has with Sanan, and may in the future have, partnerships or joint ventures with domestic and international companies through
which research, development and operating activities for particular technology, product lines and businesses are conducted. The benefits
from such partnerships and joint ventures include the ability to source and secure access to technology, intellectual property, capital
and a strategic or joint venture partner’s market knowledge, relationships and the mitigation of some of the development, technological
or financial risk inherent in the Corporation’s business. A deterioration in such relationships, disagreements with existing partners
or a failure to identify suitable partners may have an adverse impact on the Corporation’s existing operations or affect its ability
to grow its business.
Risks
Relating to Operations in Emerging Market Jurisdictions
The
Corporation has operating subsidiaries located in Singapore and China. Although Singapore is considered to be a relatively stable jurisdiction
for business, it is possible that operating in China may expose the Corporation to a certain degree of political, economic and other
risks and uncertainties. See “POET Technologies Inc. – Operations in Emerging Market Jurisdictions.”
Conditions
in China
The
Corporation’s business, financial condition and financial performance may be influenced by the political, economic and legal environments
in China, and by the general state of the Chinese’s economy on an increasing basis over the next several years. The Corporation’s
business may be influenced by, among other things, changes in laws, governmental policies and regulations, changing political conditions,
anti-inflationary measures, restrictions on foreign exchange and currency controls, and changes in taxation policies.
The
Chinese government imposes controls on the convertibility of Renminbi (“RMB”) into foreign currencies and, in certain
cases, the remittance of currency out of China. The Corporation anticipates that, in future, a portion of its revenues will be in RMB,
which is currently not a freely convertible currency. Under existing Chinese foreign exchange regulations, payment of current account
items, including profit distributions, interest payments and expenditures, can be made in foreign currencies without prior approval from
the Chinese State Administration of Foreign Exchange by complying with certain procedural requirements. However, approval from appropriate
governmental authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital account
items, such as the repayment of loans denominated in foreign currencies. The Chinese government may also at its discretion restrict access
in the future to foreign currencies for current account transactions.
The
Chinese legal system is a system based on written statutes and government regulations. They are interpreted by the Supreme Peoples’
Court and the state organ which has issued them, e.g. the responsible department of the State Council, China’s national level government.
Prior court decisions may be cited for reference. Since 1979, the Chinese government has been developing a comprehensive system of commercial
laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such as foreign investment,
corporate organization and governance, commerce, taxation and trade. However, because these laws and regulations are relatively new and
often lacking the details required to understand their practical impact in particular situations, and because of the limited volume of
published cases and their non-binding nature, the interpretation and enforcement of these laws and regulations involve uncertainties.
This may result in the outcome of dispute resolutions not being consistent or predictable as compared to more developed jurisdictions.
Furthermore, laws and regulations may have a retroactive effect such that the Corporation is not aware of any violation by it until sometime
after the violation has occurred. As the Chinese legal system develops, changes in such laws and regulations, their interpretation, or
their enforcement, may have a material effect on the Corporation.
Intellectual
property rights in China are still developing and there are uncertainties involved in intellectual property rights protection and the
enforcement of such protection. The Corporation must protect its intellectual property and trade secrets within this evolving framework,
particularly given that the Corporation’s projects, operations and success relies upon the intellectual property and technology
it possesses. Failure to do so could lead to the loss of a competitive advantage that may not be compensated for by a damages award.
In
China, companies with a foreign ownership component are required to work within a framework which is in certain aspects different from
that imposed on local companies. The Chinese government has been opening up opportunities for foreign investment, as a result of China’s
entry into the World Trade Organization in 2001. However, particularly in some sectors, substantial restrictions on foreign investors
and their local subsidiaries continue to exist. If the Chinese government reverses the current trend of permitting foreign investment
and imposes greater restrictions on foreign companies, the Corporation’s ability to conduct business in China could be negatively
affected.
Changes,
if any, in investment policies or shifts in political attitude in China may adversely affect the Corporation’s business, results
of operations and financial condition. Operations may be affected in varying degrees by government regulations with respect to, but not
limited to price controls, income taxes, restrictions on production, foreign investment, bank lending, intellectual property, export
controls, and usage and costs of state-controlled transportation services and nationalization or expropriation of property or business.
Any events resulting in an adverse impact on the Chinese economy may have an adverse effect on the Corporation’s profitability
and prospects.
The
economy of China has experienced significant growth in the past few decades; however, growth has been uneven, both geographically and
among various sectors of the economy. The Chinese government has implemented various measures from time to time in order to try and encourage
or control economic growth and guide the allocation of resources, including certain measures which were put in place to restrict bank
lending. Some of these measures may negatively affect the Corporation. In addition, such control measures may have an adverse impact
on the Chinese economy that would, in turn, likely have an adverse impact on the Corporation’s business, results of operations
and financial condition.
Permits
and Business Licenses by POSC and SPX
POSC
and SPX hold various permits, business licenses and approvals authorizing their operations and activities, which are subject to periodic
review and reassessment by the Chinese authorities. Standards of compliance necessary to pass such reviews change from time to time and
differ from jurisdiction to jurisdiction. If renewals, or new permits, business licenses or approvals required in connection with existing
or new facilities or activities, are not granted or are delayed, or if existing permits, business licenses or approvals are revoked or
substantially modified, the Corporation could suffer a material adverse effect. If new standards are applied to renewals or new applications,
it could prove costly to the Corporation to meet any new level of compliance.
Misuse
of POSC and SPX Chops
The
chops of POSC and SPX are essential to the ability of these entities to enter into contracts, conduct banking activities and undertake
day-to-day corporate and business activities. POSC has a Company Chop, Legal Representative Chop, Financial Chop and Invoice Chop while
SPX has a Company Chop, Legal Representative Chop and Financial Chop. See “POET Technologies Inc. – Operations in Emerging
Market Jurisdictions – Laws, Language, Cultural and Business Practices – China.”
Other
than as described herein, POSC and SPX may also adopt other measures from time to time to protect the chops. Although the Corporation,
its Chinese subsidiary and SPX (the joint venture entity) have implemented such internal control procedures as it feels necessary to
monitor the authorized personnel and the use of the chops, there is no assurance that such procedures will prevent all instances of abuse
or negligence. Accordingly, if either of POSC and SPX’s personnel misuse or misappropriate the chops, or an outsider person obtains
unauthorized access to the chops, the Corporation could experience significant financial or other disadvantages and/or disruption to
operations until the chops are replaced.
Under
Chinese laws, in the event a chop is lost, stolen or misplaced, the Legal Representative will: (i) cause the company who owned the lost
chop in China to publish an announcement of the loss of chops in designated newspapers; (ii) apply to the local Public Security Bureau
for the carving of new chops; and (iii) carve the new chops at places designated by the Public Security Bureau. While the Corporation
and its Chinese subsidiary, POSC, have procedures and recourse available to remedy any misuse or misappropriation of the chops, as the
use of the chops, although unauthorized, is in all aspects valid and binding on POSC or SPX, as the case may be, and the chop replacement
process would take approximately five business days, there can be no assurance that there would be no adverse effect on the business,
results of operations or financial condition of the Corporation due to such disruptions.
If,
in particular, during any period, the Corporation loses effective control of POSC as a result of such misuse or misappropriation, the
business activities and economic contribution of such entity could be severely disrupted and the Corporation may not be able to recover
corporate assets that are sold or transferred out of the Corporation’s control in the event of such misappropriation and the Corporation
may not have the financial resources to recover such assets or take appropriate legal action. The majority of the Corporation’s
funds are kept in a bank account at HSBC. The Corporation transfers funds to POSC as and when needed, and in alignment with the Corporation’s
corporate controls for items ranging from working capital to research and development. The Corporation currently estimates that not more
than US$100,000 will be kept in POSC bank accounts in China at any given time, except as may be related to loans received or profits
generated by POSC in excess of such amount in the ordinary course of business, to ensure that the Corporation is able to continue as
a going concern should they need to recover corporate assets of POSC. In addition, while the Corporation has procedures in place with
its bank in China such that no funds can be transferred with the use of the Financial Chop alone (as the Legal Representative Chop is
also required), if the Corporation loses effective control of the Financial Chop, the Legal Representative will promptly notify the relevant
bank that the Financial Chop has been lost, misplaced or stolen and if one of the authorized signatories is implicated, that such individual
is no longer an authorized signatory. In addition, the Corporation (or in the case of SPX, the Corporation and Sanan) can assume control
over the Chinese entity’s bank accounts through the combined use of the Company Chop and the Legal Representative Chop. Despite
the foregoing; however, POSC and/or SPX may experience temporary delays in accessing bank accounts in China. This risk is significantly
mitigated by the requirement for the signatures in conjunction with the use of the Financial Chop in banking matters. Additionally, the
Corporation’s external auditor may be unable to access documents and information from such entities that may be necessary to complete
an audit of the consolidated financial statements of the Corporation.
Cost
of Labour
The
labour and employment market in China is dynamic. Labour costs in China have traditionally been significantly less than those in other
more developed countries; however, such costs have begun to rise and there is no guarantee that they will not continue to rise. Any such
increased cost could have an adverse effect on the Corporation as a result of manufacturing operations in China. Furthermore, in the
future, changes in the labour and employment market in China may be imposed or labour disputes may arise. Such events may increase costs
of operation and affect the Corporation’s business, results of operations and financial condition.
Enforcing
Rights and Judgments in China
As
Chinese legal entities, both POSC and SPX are subject to Chinese company law and regulations. The Chinese company law in general and,
in particular, provisions for the protection of shareholder’s rights and access to information are less developed than those applicable
to companies in some other countries. A portion of the Corporation’s assets, through its subsidiary, POSC and its joint venture
investment in SPX, are located in China. China does not have a treaty with Canada providing for the reciprocal recognition and enforcement
of judgments of courts and as such, recognition and enforcement in China of judgments of a Canadian court in relation to any matter not
subject to a binding arbitration provision may be difficult or impossible. Investors may be effectively prevented from pursuing remedies
against the Corporation under Canadian securities laws or otherwise.
CERTAIN
INCOME TAX CONSIDERATIONS
The
applicable Prospectus Supplement may describe certain material Canadian federal income tax consequences to an investor acquiring any
Securities offered thereunder. Prospective investors should read the tax discussion in any Prospectus Supplement with respect to a particular
offering and consult their own tax advisors with respect to their own particular circumstances.
The
applicable Prospectus Supplement may also describe certain U.S. federal income tax consequences to an investor acquiring any Securities
offered thereunder. Prospective investors should read the tax discussion in any Prospectus Supplement with respect to a particular offering
and consult their own tax advisors with respect to their own particular circumstances.
ENFORCEABILITY
OF CIVIL LIABILITIES
The
Corporation is a corporation incorporated under and governed by the OBCA. Some of the directors and officers of the Corporation, and
some of the experts named in this Prospectus, are residents of Canada or otherwise reside outside Canada and all or a substantial portion
of their assets are located outside Canada. The Corporation has appointed an agent for service of process in Canada, but it may be difficult
for holders of Securities who reside in Canada to effect service within Canada upon those directors who are not residents of Canada.
It may also be difficult for holders of Debt Securities who reside in Canada to realize in Canada upon judgments of courts of Canada
predicated upon the Corporation’s civil liability and the civil liability of the directors and officers of the Corporation under
applicable securities laws.
The
Corporation filed with the SEC, concurrently with the Registration Statement, an appointment of agent for service of process on Form
F-X. Under the Form F-X, the Corporation appointed CT Corporation System, with an address at 111 Eighth Avenue, New York, New York, 10011,
United States of America, as its agent for service of process in the United States in connection with any investigation or administrative
proceeding conducted by the SEC, and any civil suit or action brought against or involving the Corporation in a United States court,
arising out of or related to or concerning the offering of Securities under this Prospectus.
Messrs.
Jean-Louis Malinge, Suresh Venkatesan, Theresa Lan Ende, Glen Riley, each a director of the Corporation, and Thomas Mika, the Chief Financial
Officer of the Corporation, reside outside of Canada and have appointed the following agent as their agent for service of process:
Name
of Person |
|
Name
and Address of Agent |
Jean-Louis
Malinge
Suresh Venkatesan
Theresa Lan Ende
Glen Riley
Thomas Mika |
|
Bennett
Jones LLP
3400 One First Canadian Place,
PO Box 130,
Toronto, ON
M5X 1A4 |
Purchasers
are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated,
continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed
an agent for service of process.
EXEMPTION
AND UNDERTAKING
Exemption
Pursuant
to a decision of the Autorité des marchés financiers dated June 11, 2024, the Corporation was granted a permanent exemption
from the requirement to translate into French this Prospectus, as well as the documents incorporated by reference herein, and any Prospectus
Supplement to be filed in relation to an “at-the-market distribution.” This exemption is granted on the condition that this
Prospectus and any Prospectus Supplement (other than in relation to an “at-the-market distribution”) be translated into French
if the Corporation offers the Securities to Québec purchasers in connection with an offering other than in relation to an “at-the-market
distribution.”
Undertaking
In
connection with the filing of this Prospectus, the Corporation filed an undertaking (the “Material Operating Entity Undertaking”)
with the securities regulatory authorities in each of the provinces and territories of Canada in accordance with sections 6.1 and 6.4
of National Policy 41-201 – Income Trusts and Other Indirect Offerings (“NP 41-201”) pursuant to which it agreed
that: (a) in the event that (i) any material operating entity of the Corporation becomes involved in the design, development, manufacturing
or sale of the Optical Interposer and/or any 800G and higher speed optical engines or modules (each such entity, the “Material
Operating Entity”), and such Material Operating Entity is not required to be consolidated under IFRS or generally accepted
accounting principles used by the Corporation (the “Accounting Principles”), the Corporation will provide separate
audited annual financial statements and interim financial reports, prepared in accordance with the same Accounting Principles, and related
management’s discussion and analysis, prepared in accordance with National Instrument 51-102 – Continuous Disclosure Obligations,
for such Material Operating Entity; and (b) for so long as the Corporation is a reporting issuer, the Corporation will take appropriate
measures to require each person who would be an “insider” of a Material Operating Entity, or a “person or company in
a special relationship” (as defined in the Securities Act (Ontario)) with such Material Operating Entity if the Material
Operating Entity were a reporting issuer, to: (i) file insider reports about trades in the securities of the Corporation; and (ii) comply
with statutory prohibitions against insider trading under applicable Canadian securities laws. Furthermore, the Corporation has undertaken
to annually certify that it has complied with this undertaking and file such certificate on SEDAR+ concurrently with the filing of its
annual financial statements.
LEGAL
MATTERS
Unless
otherwise specified in the Prospectus Supplement relating to the Securities, certain legal matters relating to Canadian law in connection
with the offering of Securities will be passed upon on behalf of POET by Bennett Jones LLP and certain legal matters relating to United
States law in connection with the offering of Securities will be passed upon on behalf of POET by Katten Muchin Rosenman LLP. In addition,
certain legal matters in connection with any offering of Securities will be passed upon for any underwriters, dealers or agents by counsel
to be designated at the time of the offering by such underwriters, dealers or agents.
AUDITORS,
TRANSFER AGENT AND REGISTRAR
POET’s
auditors are Davidson & Company LLP, 1200-609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, British Columbia, V7Y
1G6, which were appoint by the Corporation effective as of April 23, 2024. The Corporation accepted the resignation of Marcum LLP, Certified
Public Accountants, the predecessor auditor of the Corporation on April 22, 2024.
The
transfer agent and registrar of the Common Shares is Computershare Investor Services Inc., 510 Burrard St. 3rd Floor, Vancouver, British
Columbia, V6C 3B9.
INTERESTS
OF EXPERTS
Marcum
LLP, Certified Public Accountants, has prepared the auditor’s report with respect to the Corporation’s annual financial statements
for the year ended December 31, 2023, which is incorporated by reference into this Prospectus. Marcum LLP has advised that they are independent
in accordance with and within the meaning of the applicable rules and related interpretations prescribed by the relevant professional
bodies in Canada and the rules and standards of the United States Public Company Accounting Oversight Board and the securities laws and
regulations administered by the SEC.
As
of the date hereof, the partners and associates of Bennett Jones LLP own, beneficially, directly or indirectly, less than 1% of any securities
of the Corporation or any associate or affiliate of the Corporation.
PURCHASERS’
STATUTORY RIGHTS
Securities
legislation in some provinces and territories of Canada provides purchasers of securities with the right to withdraw from an agreement
to purchase securities and with remedies for rescission or, in some jurisdictions, revisions of the price, or damages if the prospectus,
prospectus supplement, and any amendment relating to securities purchased by a purchaser are not sent or delivered to the purchaser.
However, purchasers of the Securities distributed under an at-the-market distribution by the Corporation do not have the right to withdraw
from an agreement to purchase the Securities and do not have remedies of rescission or, in some jurisdictions, revisions of the price,
or damages for non-delivery of the prospectus, prospectus supplement, and any amendment relating to the Securities purchased by such
purchaser because the prospectus, prospectus supplement, and any amendment relating to the Securities purchased by such purchaser will
not be sent or delivered, as permitted under Part 9 of NI 44-102.
Securities
legislation in some provinces and territories of Canada further provides purchasers with remedies for rescission or, in some jurisdictions,
revisions of the price or damages if the Prospectus, Prospectus Supplement, and any amendment relating to securities purchased by a purchaser
contains a misrepresentation. Those remedies must be exercised by the purchaser within the time limit prescribed by securities legislation.
Any remedies under securities legislation that a purchaser of the Securities distributed under an at-the-market distribution by the Corporation
may have against the Corporation or its agents for rescission or, in some jurisdictions, revisions of the price, or damages if the prospectus,
prospectus supplement, and any amendment relating to securities purchased by a purchaser contain a misrepresentation will remain unaffected
by the non-delivery of the prospectus referred to above.
A
purchaser should refer to applicable securities legislation for the particulars of these rights and should consult a legal adviser.
PURCHASERS’
CONTRACTUAL RIGHTS
Original
purchasers of Debt Securities, Convertible Securities, Subscription Receipts and Warrants (including any of the foregoing contained in
any Units), which are convertible into other securities of the Corporation will have a contractual right of rescission against the Corporation
in respect of the conversion, exchange or exercise of such Debt Securities, Convertible Securities, Subscription Receipts and Warrants.
The contractual right of rescission will entitle such original purchasers to receive the amount paid upon conversion, exchange or exercise,
upon surrender of the underlying securities gained thereby, in the event that this Prospectus (as supplemented or amended) contains a
misrepresentation, provided that: (i) the conversion, exchange or exercise takes place within 180 days of the date of the purchase of
the convertible, exchangeable or exercisable security under this Prospectus; and (ii) the right of rescission is exercised within 180
days of the date of the purchase of the convertible, exchangeable or exercisable security under this Prospectus. This contractual right
of rescission will be consistent with the statutory right of rescission described under section 130 of the Securities Act (Ontario),
and is in addition to any other right or remedy available to original purchasers under section 130 of the Securities Act (Ontario)
or otherwise at law.
Original
purchasers are further advised that in certain provinces or territories the statutory right of action for damages in connection with
a prospectus misrepresentation is limited to the amount paid for the convertible, exchangeable or exercisable security that was purchased
under a prospectus, and therefore a further payment at the time of conversion, exchange or exercise may not be recoverable in a statutory
action for damages. The purchaser should refer to any applicable provisions of the securities legislation of the province in which the
purchaser resides for the particulars of these rights, or consult with a legal advisor.
CERTIFICATE
OF THE CORPORATION
Dated:
September 6, 2024.
This
short form base shelf prospectus, together with the documents incorporated in this prospectus by reference, will, as of the date of the
last supplement to this prospectus relating to the securities offered by this prospectus and the supplement(s), constitute full, true
and plain disclosure of all material facts relating to the securities offered by this prospectus and the supplement(s) as required by
the securities legislation of each of the provinces and territories of Canada.
(signed)
“Suresh Venkatesan” |
|
(signed)
“Thomas Mika” |
Suresh
Venkatesan
Chief Executive Officer |
|
Thomas
Mika
Chief Financial Officer |
On
behalf of the Board of Directors:
(signed)
“Chris Tsiofas” |
|
(signed)
“Glen Riley” |
Chris
Tsiofas
Director |
|
Glen
Riley
Director |
POET Technologies (NASDAQ:POET)
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