POET TECHNOLOGIES INC. (Form: F-10, Received: 10/17/2018 15:04:54)

As filed with the Securities and Exchange Commission on October 17, 2018

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-10

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

POET TECHNOLOGIES INC.

(Exact name of Registrant as specified in its charter)

Province of Ontario, Canada

3674

(Province or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number (if applicable))

120 Eglinton Avenue East, Ste. 1107

Toronto, Ontario

M4P 1E2, Canada

(Address and telephone number of Registrant’s principal executive offices)

CT Corporation System

111 Eighth Avenue

New York, New York 10011

(212) 894-8940

(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)

Copies to:

Katten Muchin Rosenman LLP
525 W. Monroe Street

Chicago, IL 60661-3693

Attn: Mark D. Wood

Farzad F. Damania
(312) 902-5200

Bennett Jones LLP

3400 One First Canadian Place

P.O. Box 130

Toronto, Ontario M5X 1A4, Canada

Attn: James Clare

(416) 777-6245

Approximate date of commencement of proposed sale of the securities to public:

From time to time after the effective date of this Registration Statement.

Province of Ontario, Canada

(Principal jurisdiction regulating this offering (if applicable))

It is proposed that this filing shall become effective (check appropriate box below):

A.	¨	upon filing with the Commission, pursuant to Rule 467(a) (if in connection with an offering being made contemporaneously in the United States and Canada).

B.	x	at some future date (check appropriate box below)

1.	¨	pursuant to Rule 467(b) on (date) at (time) (designate a time not sooner than 7 calendar days after filing).

2.	¨	pursuant to Rule 467(b) on (date) at (time) (designate a time 7 calendar days or sooner after filing) because the securities regulatory authority in the review jurisdiction has issued a receipt or notification of clearance on (date).

3.	x	pursuant to Rule 467(b) as soon as practicable after notification of the Commission by the Registrant or the Canadian securities regulatory authority of the review jurisdiction that a receipt or notification of clearance has been issued with respect hereto.

4.	¨	after the filing of the next amendment to this Form (if preliminary material is being filed).

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to the home jurisdiction’s shelf prospectus offering procedures, check the following box. x

CALCULATION OF REGISTRATION FEE


Title of each class of securities to be registered	Amount to be registered (1)	Proposed maximum offering price per unit (2)	Proposed maximum aggregate offering price (2)	Amount of registration fee (3)
Common Shares (no par value)
Debt Securities
Convertible Securities
Subscription Receipts
Warrants
Rights
Units
Total	US$ 21,041,273	(2)	US$21,041,273	US$2,550.20

(1)	There are being registered under this Registration Statement such indeterminate number of common shares, debt securities, convertible securities, subscription receipts, warrants, rights and units of the Registrant as shall have an aggregate initial offering price not to exceed US$50,000,000 (or its equivalent thereof in Canadian dollars). The proposed maximum initial offering price per security will be determined, from time to time, by the Registrant in connection with the sale of the securities under this Registration Statement.
(2)	Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(3)	The prospectus contained herein relates to an aggregate of US$50,000,000 of securities, including, pursuant to Rule 429 under the Securities Act, US$28,958,727 of unsold securities that were previously registered under the Registrant's Registration Statement on Form F-10 (File No. 333-213422), initially filed on September 1, 2016 (including common shares issuable upon exercise of warrants covered by the Registrant’s Prospectus Supplement dated October 31, 2016). Any securities registered under this Registration Statement may be sold separately or as units with, or upon exercise, exchange or conversion of, other previously registered securities or other securities registered under this Registration Statement.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registration Statement shall become effective as provided in Rule 467 under the Securities Act of 1933 or such date as the Commission, acting pursuant to Section 8(a) of the Act, may determine.

Pursuant to Rule 429 under the Securities Act, the prospectus contained in this Registration Statement also relates to Registration Statement 333-213422.

PART I

INFORMATION REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

Information has been incorporated by reference in this Prospectus from documents filed with securities commissions or similar authorities in Canada. 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.sedar.com.

Preliminary Short Form Base Shelf Prospectus

New Issue

October 15, 2018

POET Technologies Inc.
US$50,000,000

Common Shares
Debt Securities
Convertible Securities
Subscription Receipts
Warrants
Rights
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 satisfaction of certain release conditions, and for no additional consideration, one or more Common Shares or a combination of Common Shares and Warrants (" Subscription Receipts "), warrants to purchase Common Shares and/or warrants to purchase Debt Securities (together, " Warrants "), rights exercisable to acquire, or convertible into, Common Shares and/or other securities (" Rights "), and units comprised of a combination of any of the above (" Units " and, together with all of the foregoing, " Securities ") in an aggregate initial offering price of up to US$50,000,000 (or the equivalent thereof in other currencies based on the applicable exchange rate at the time of the offering) during the 25 month period that this short form prospectus (the " Prospectus "), including any amendments hereto, remains in effect. 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 herein, have been prepared in accordance with International Financial Reporting Standards, 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.

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 Rights, the designation, number and terms of the Common Shares, Warrants, Debt Securities or Convertible Securities purchasable upon exercise of the Rights, any procedures that will result in the adjustment of these numbers, the date of determining the shareholders entitled to the Rights distribution, the exercise price, the dates and periods of exercise and any other terms specific to the Rights being offered; (v) in the case of Warrants, the designation, number and terms of the Common Shares or Debt 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, Warrants, Debt Securities or Convertible 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.

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 may sell Securities to or through underwriters or dealers designated by the Corporation 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 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 short form Prospectus or performed any review of the contents of this short form Prospectus. See " Plan of Distribution ".

Subject to applicable securities legislation and except as set out in a Prospectus Supplement relating to a particular offering of Securities, in connection with any offering of Securities under this short form Prospectus, the underwriters may over-allot or effect transactions which stabilize or maintain the market price of the Securities offered at a level above that which might otherwise prevail in the open market. These transactions, if commenced, may be interrupted or discontinued at any time. See " Plan of Distribution ".

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, 2017 and March 31, 2018. 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, 2018 and the twelve-month period ended June 30, 2018 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 Corporation's issued and outstanding Common Shares are listed on the TSX Venture Exchange (" TSXV ") under the symbol " PTK " and quoted for trading on the OTCQX under the symbol " POETF ". The closing price of the Common Shares on the TSXV and on the OTCQX on October 12, 2018, the last trading day prior to the date of this Prospectus, was CAD$0.35 and US$0.2625, 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 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. Prospective investors should read the tax discussion, if any, in the applicable Prospectus Supplement and consult with an independent tax advisor. See " Risk Factors ".

Messrs. David E. Lazovsky, Jean-Louis Malinge, Suresh Venkatesan, Mohandas Warrior and Don Listwin are each directors of the Corporation that 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 Corporation believes that these sources are generally reliable, but the accuracy and completeness of this information is not guaranteed. The Corporation has not independently verified this information, and the Corporation does not make any representation as to the accuracy of this information.

The head office of the Corporation is Suite 1107, 120 Eglinton Avenue East, Toronto, Ontario M4P 1E2.

TABLE OF CONTENTS

	Page
INTERPRETATION	6
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION	6
DOCUMENTS INCORPORATED BY REFERENCE	7
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT	9
AVAILABLE INFORMATION	9
POET TECHNOLOGIES INC.	9
RECENT DEVELOPMENTS	10
PLAN OF DISTRIBUTION	12
USE OF PROCEEDS	13
DESCRIPTION OF SHARE CAPITAL	13
EARNINGS COVERAGE RATIO	14
DESCRIPTION OF DEBT SECURITIES	14
DESCRIPTION OF CONVERTIBLE SECURITIES	16
DESCRIPTION OF SUBSCRIPTION RECEIPTS	16
DESCRIPTION OF WARRANTS	17
DESCRIPTION OF RIGHTS	19
DESCRIPTION OF UNITS	20
PRIOR SALES	20
MARKET FOR SECURITIES	20
RISK FACTORS	21
CERTAIN INCOME TAX CONSIDERATIONS	25
ENFORCEABILITY OF CIVIL LIABILITIES	25
LEGAL MATTERS	26
AUDITORS, TRANSFER AGENT AND REGISTRAR	26
INTERESTS OF EXPERTS	26
PURCHASERS' STATUTORY RIGHTS	26

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 http://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.

Unless otherwise indicated, all dollar amounts in this Prospectus are expressed in United States dollars. Canadian dollars are stated as " CAD$ ". On October 12, 2018, 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$0.7674.

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 U.S. and Canadian securities laws. 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 Corporation's 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 limited operating history;

associated with the Corporation's need for additional financing, which may not be available on acceptable terms or at all;

that the Corporation will not be able to compete in the highly competitive semiconductor market;

that the Corporation's objectives will not be met within the time lines the Corporation expects or at all;

associated with research and development;

associated with the integration of recently acquired businesses;

associated with successfully protecting patents and trademarks and other intellectual property;

concerning the need to control costs and the possibility of unanticipated expenses;

associated with manufacturing and development;

that the trading price of the Common Shares of the Corporation will be volatile; and

that shareholders' interests will be diluted through future stock offerings or options and warrant exercises.

For all of the reasons set forth above, investors should not place undue reliance on forward-looking statements. Other than any obligation to disclose material information under applicable securities laws or otherwise as may be required by law, the Corporation undertakes no obligation to revise or update any forward-looking statements after the date hereof.

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 of British Columbia, Alberta, Ontario and Quebec 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 Document Analysis and Retrieval (" SEDAR ") at www.sedar.com 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 of British Columbia, Alberta, Ontario and Quebec are specifically incorporated by reference in this short form Prospectus:

(a)

annual information form for the year ended December 31, 2017 on United States Securities and Exchange Commission Form 20-F, dated April 27, 2018 (the " AIF ");

(b)

management information circular dated May 7, 2018 relating to the annual meeting of shareholders held on July 21, 2018;

(c)

consolidated audited financial statements for the years ended December 31, 2017, 2016 and 2015, together with the auditors' report thereon;

(d)

management's discussion and analysis for the year ended December 31, 2017;

(e)

interim consolidated financial statements for the six months ended June 30, 2018;

(f)

management's discussion and analysis for the six months ended June 30, 2018;

(g)

material change report dated March 21, 2018 concerning the entering into of an underwriting agreement with Cormark Securities Inc. on March 12, 2018 and the closing of a "bought deal" offering of units of the Corporation for total gross proceeds of CAD$13,799,885 on March 21, 2018;

(h)

material change report dated April 6, 2018 concerning the addition of Peter Charbonneau as a director of the Corporation and member of the Audit Committee as well as the granting of incentive stock options to him and certain members of the management team;

provided that these documents are not incorporated by reference to the extent their contents are modified or superseded by a statement contained in this short form Prospectus or in any other subsequently filed document that is also incorporated by reference in this short form 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 short form Prospectus and before the termination of the distribution, are deemed to be incorporated by reference in this short form Prospectus.

In addition, to the extent that any document or information incorporated by reference into this Prospectus is included in any report filed with or furnished to the SEC pursuant to the Exchange Act after the date of this Prospectus, such document or information shall be deemed to be incorporated by reference as an exhibit to the Registration Statement of which this Prospectus forms a part (in the case of documents or information deemed furnished on Form 6-K or Form 8-K, only to the extent specifically stated therein).

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 short form 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 short form 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 Company’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.

In addition, 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 short form 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 inspected and copied at the public reference facilities maintained by the SEC in the SEC’s public reference room at 100 F Street, N.E., Washington, D.C., 20549 by paying a fee. Prospective investors may call the SEC at 1-800-SEC-0330 or access its website at www.sec.gov for further information regarding the public reference facilities. The SEC also maintains a website that contains reports and other information regarding registrants that file electronically with the SEC. The address of the website is 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 Corporation 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 Corporation 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 New Brunswick Business Corporations Act. 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 British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.

The Corporation designs, develops, manufactures and sells both discrete and integrated opto-electronic solutions for the sensing, data communications and telecommunications markets. In addition to manufacturing a range of Indium Phosphide (InP)-based light sources, POET has developed and is marketing its proprietary POET Optical Interposer Ô platform. The POET Optical Interposer utilizes a novel dielectric waveguide technology that allows the integration of electronic and photonic devices into a single multi-chip module. The integration of devices into a single package is achieved by applying advanced wafer-level semiconductor manufacturing techniques and novel packaging methods developed by POET. POET’s “photonics in a package” eliminates costly components, assembly and testing methods employed in conventional photonics solutions. In addition to lowering costs compared to conventional devices, POET’s Optical Interposer provides a flexible and scalable platform for a variety of photonics applications ranging from data centers to consumer products.

RECENT DEVELOPMENTS

On July 17, 2017, the Corporation announced that that its Narrow Linewidth Laser products have demonstrated industry-leading performance with "super-wide" tunability for high resolution sensing applications, such as gas & chemical sensing, coherent communication, meteorological sensing and atmospheric LIDAR; additional developments, including the incorporation of dielectric waveguides and wafer-level packaging is expected to accelerate growth in the sensing product line in 2018 and beyond. The Corporation also announced that technical challenges related to the manufacturability of the monolithic GaAs platform, have delayed POET’s development of a Gallium Arsenide (GaAs)-based optical engine. The additional development time and cost associated with the GaAs platform will require the Corporation to secure a strategic partner in order to develop and commercialize this platform.

On September 5, 2017, the Corporation announced the appointment of Jean-Louis Malinge to the Board of Directors, who assumed the vacancy left by the resignation of Ajit Manocha. Mr. Malinge serves as partner with ARCH Venture Partners, an early-stage venture capital firm with nearly $2 billion under management. Additionally, he also serves as a managing director for YADAIS, a leading consulting firm in the photonics and telecommunications industries, and is a board member of EGIDE SA, which designs, manufactures and sells hermetic packages for the protection and interconnection of several types of electronic and photonic chips. Mr. Manocha resigned to pursue a new position as president and CEO of SEMI, a global industry organization serving the electronics manufacturing supply chain.

On September 5, 2017, the Corporation's wholly-owned subsidiary DenseLight Semiconductors (" DenseLight ") announced that it planned to commence sampling high-power, continuous wave 1310nm distributed feedback (DFB) lasers for 100G silicon photonics applications. The high-power continuous wave 1310nm DFBs are expected to generate peak power levels of 60mW across temperature, which is required for today's 100G Silicon Photonics applications.

On September 6, 2017, DenseLight announced that it had begun sampling Avalanche Photodiodes (APD) and PIN Photodiodes (PIN) for the 10G Datacom and Telecom markets. In addition, DenseLight has also begun sampling its Monitor Photodiode (MPD) arrays for applications in 100G Datacom applications. DenseLight's arrays are expected to provide a cost competitive alternative to current offerings, while meeting the performance needs of customers deploying systems in these markets.

On September 7, 2017, DenseLight announced its introduction of a suite of specialized external cavity narrow linewidth (NLW) laser products. DenseLight's NLW lasers are assembled in integrated laser modules (ILM) and provide feature rich extensions to the existing BF series ILMs. The new family will feature laser sources with lower Relative Intensity Noise (RIN) relative to current offerings and at the low-end include a standard CW capable light source (BF9C). A higher-end module will add power tuning capability, lower RIN and improved temperature range (BF15); the flagship product will offer highly integrated BF18 with even lower RIN and "super wide" tunability. These new product introductions primarily target a wide range of communication and sensing applications, including coherent communication, laser interferometry, LIDAR wind detection, long distance fiber, fiber array sensing and acoustic sensing.

On January 22, 2018, the Company appointed Don Listwin to the Board of Directors, replacing Todd DeBonis who served on the Board since April 2015. Listwin has over 30 years of technology investing and management experience, highlighted by a decade at Cisco Systems, where he served as executive vice president. During his tenure at Cisco, he built several multibillion-dollar lines of business, including the company’s Service Provider line of business that underpins much of today’s global Internet infrastructure. More recently, Listwin served as chief executive officer of both Sana Security and Openwave Systems.

On January 29, 2018, the Company announced the launch of its Optical Interposer Platform, which facilitates the copackaging of electronics and optics in a single Multi-Chip Module (MCM). Based on its previously announced Dielectric Waveguide technology, POET’s Optical Interposer may provide the ability to run electrical and optical interconnections side-by-side on the same interposer chip at a micrometer scale. The Optical Interposer represents an integral part of POET’s hybrid integrated Optical Engine and leverages the manufacturing processes and unique capabilities of its dielectric waveguides.

On January 30, 2018, the Company successfully demonstrated a high frequency waveguide integrated PIN Photodiode targeting 100G and 400G data center applications. The PIN Photodetector successfully demonstrated a 3dB optical bandwidth of 37GHz, which is a typical requirement for achieving 50GBaud data rates. The achieved native bandwidths are more than capable of supporting the requirements of a 100G Receive Optical Engine (4 lanes at 25Gb/s each), and they can be extended to support 200G/400G Optical Engines. Unlike more conventional top-entry PIN photodiodes, the Corporation utilizes an evanescently- coupled twin waveguide structure with integrated spot-size converters that is compatible with its recently announced Optical Interposer Platform and is designed to operate in the wavelength range from 1310nm to 1550nm.

On March 5, 2018, the Corporation announced that it had entered into a memorandum of understanding (MOU) with Accelink Technologies Co., Ltd. (" Accelink ") with respect to a preferred co-development partnership that outlines terms for mutual cooperation between the Corporation and Accelink for developing, qualifying and selling a family of transceiver products based on the Corporation's Optical Interposer Platform. The MOU seeks to rapidly commercialize a series of advanced multichannel (100/400G) transmit and receive devices for the datacom markets and low-cost single channel (10/25G) products for telecom applications.

On March 21, 2018, the Company completed a brokered "bought deal" public offering of 25,090,700 units at a price of $0.425 (CAD$0.55) per unit for gross proceeds of $10,663,548 (CAD$13,799,885). Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the Company at a price of $0.58 (CAD$0.75) per share until March 21, 2020.

On March 28, 2018, the Company announced the appointment of Peter Charbonneau to its Board of Directors. Charbonneau was a general partner at Skypoint Capital Corporation for almost 15 years, where he was jointly responsible for the placement of $100 million of capital in early-stage telecommunications and data communication companies. Charbonneau currently serves on the board of directors at Mitel Networks, a leading global provider of cloud and on-site business communications and collaboration solutions, and Teradici Corporation, the creator of PCoIP protocol technology and Cloud Access Software. He previously served as Chairman of the Board of Trustees for the CBC Pension Board and a director on the board of the Canadian Broadcasting Corporation as well as many technology and networking companies, including March Networks Corporation, TELUS Corporation, Breconridge Corporation and Dragonwave Incorporated.

On April 9, 2018, the Company announced a master collaboration agreement with SilTerra, a Malaysia-based semiconductor wafer foundry, for the co-development of certain fabrication processes and the manufacturing of POET’s Optical Interposer Platform. The partnership is expected to accelerate the path to commercial production of the Optical Interposer, which will enable Optical Engines for single-mode transceiver modules and other high bandwidth devices.

On June 21, 2018, the Company announced the Company has executed an agreement for the co-development of transmit device solutions with Almae Technologies SAS (" Almae "), a France-based manufacturer of advanced photonic products. The purpose of the agreement is to jointly develop, manufacture and sell a series of laser modules based on the POET Optical Interposer platform into high-speed data communication applications. The companies will collaborate on designs of lasers and modulators to be compatible with POET’s Optical Interposer and to provide foundry services for both epitaxial supply and device fabrication.

PLAN OF DISTRIBUTION

The Corporation may sell Securities to or through underwriters or dealers designated by the Corporation 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 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.

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. Without limiting the generality of the foregoing, the Corporation may also issue some or all of the Securities offered by this short form Prospectus in exchange for securities or assets of other entities which the Corporation may acquire in the future.

The offering of Securities under this Prospectus will be made only in Canada and to residents thereof. The Securities have not been, and will not be, registered under the U.S. Securities Act, or any state securities laws, and may not be offered, sold or delivered within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption therefrom is available. If specified in the applicable Prospectus Supplement, the Corporation or the underwriters, dealers or agents in an offering of Securities will be entitled to offer and sell those debt securities to accredited investors or qualified institutional buyers, as applicable, in the United States provided such offers and sales are made pursuant to an exemption from the registration requirements under the U.S. Securities Act and in compliance with applicable state securities laws. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the Securities in the United States. Terms used in this paragraph have the meanings given to them by Regulation S under the U.S. Securities Act.

Underwriters, dealers or agents who participate in the distribution of Securities under this short form 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.

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 does not have any agreements or commitments for any specific acquisitions at this time.

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 288,082,303 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.

On November 2, 2016, the Corporation completed a public offering of 34,800,000 units of the Corporation with each unit comprised of one Common Share and one Warrant, at a price of CAD$0.36 per unit, for aggregate gross proceeds of CAD$12,528,000 million (the " November 2016 Offering "). Of the 34,800,000 Warrants issued pursuant to the November 2016 Offering (the " November 2016 Warrants "), 32,199,500 remain outstanding as of the date of this prospectus. Each outstanding November 2016 Warrant is exercisable by the holder thereof to acquire one additional Common Share at a price of CAD$0.52 per Common Share, subject to adjustment in certain circumstances, until November 2, 2021. The issuance of the November 2016 Warrants was registered in the United States pursuant to the Corporation’s Registration Statement on Form F-10 (File No. 333-213422) and covered by the prospectus supplement dated October 28, 2016 filed as part thereof. The Registration Statement (as defined below) registers, and this Prospectus as filed as part of the Registration Statement covers, the issuance of the Common Shares upon exercise of the November 2016 Warrants under the United States Securities Act of 1933, as amended, in accordance with the multi-jurisdictional disclosure system adopted by the SEC. This Prospectus does not qualify the distribution of the Common Shares issuable upon exercise of the November 2016 Warrants in any of the provinces or territories of Canada.

On March 21, 2018, the Corporation completed a public offering of 25,090,700 units of the Corporation with each unit comprised of one Common Share and one-half of one Warrant, at a price of CAD$0.55 per unit, for aggregate gross proceeds of CAD$13,799,885 (the " March 2018 Offering "). Each of the 12,545,350 whole Warrants issued pursuant to the March 2018 Offering (the " March 2018 Warrants ") is exercisable by the holder thereof to acquire one additional Common Share at a price of CAD$0.75, subject to adjustment in certain circumstances, until March 21, 2020. The Corporation also issued 1,505,350 broker units at a price of CAD$0.55 per broker unit, which, if exercised, will result in the issuance of an additional 752,721 March 2018 Warrants with equivalent terms. The March 2018 Warrants are governed by a warrant indenture dated March 21, 2018 between the Corporation and TSX Trust Company, as warrant agent.

Further information regarding the November 2016 Warrants and the March 2018 Warrants can be found in the prospectus supplements of the Corporation dated October 28, 2016 and March 14, 2018, respectively, which are available electronically in Canada through SEDAR at www.sedar.com or in the United States through EDGAR at the website of the SEC at www.sec.gov.

As a result of the foregoing issuances, the Corporation has issued and outstanding 46,250,292 Warrants to purchase Common Shares at a weighted average exercise price of CAD$0.58 per Common Share.

In addition, the Corporation has issued and outstanding 44,268,729 options to acquire Common Shares at a weighted average exercise price of CAD$0.71 per Common Share and a weighted average remaining contractual life of 6.82 years, of which 20,104,668 options to acquire Common Shares with a weighted average exercise price of CAD$0.95 per Common Share have vested as of the date hereof.

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 of directors of the Corporation (the " Board of Directors ") 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 of Directors 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, 2017 and June, 2018. 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, 2017 and the twelve-month period ended June 30, 2018 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 ".

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 short form 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 (each, 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.sedar.com

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 short form 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 short form 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 short form Prospectus, the description of such terms set forth in this short form 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 Share 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.sedar.com.

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 RIGHTS

The Corporation may issue Rights to its shareholders for the purchase of Debt Securities, Common Shares or other Securities. These Rights may be issued independently or together with any other Security offered hereby and may or may not be transferable by the shareholder receiving the Rights in such offering. In connection with any offering of such Rights, the Corporation may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which the underwriters or other purchasers may be required to purchase any Securities remaining unsubscribed for after such offering.

Each series of Rights will be issued under a separate rights agreement which the Corporation will enter into with a bank or trust company, as rights agent, all as set forth in the applicable Prospectus Supplement. The rights agent will act solely as the Corporation’s agent in connection with the certificates relating to the Rights and will not assume any obligation or relationship of agency or trust with any holders of Rights certificates or beneficial owners of Rights.

The applicable Prospectus Supplement will describe the specific terms of any offering of Rights for which this Prospectus is being delivered, including the following:

the date of determining the shareholders entitled to the Rights distribution;

the number of Rights issued or to be issued to each shareholder;

the exercise price payable for each share of Debt Securities, Common Shares or other Securities upon the exercise of the Rights;

the number and terms of the shares of Debt Securities, Common Shares or other Securities which may be purchased per each Right;

the extent to which the Rights are transferable;

the date on which the holder’s ability to exercise the Rights shall commence, and the date on which the Rights shall expire;

the extent to which the Rights may include an over-subscription privilege with respect to unsubscribed Securities;

if applicable, the material terms of any standby underwriting or purchase arrangement entered into by the Corporation in connection with the offering of such Rights; and

any other terms of the Rights, including the terms, procedures, conditions and limitations relating to the exchange and exercise of the Rights.

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

During the twelve-month period prior to the date of this Prospectus, the Corporation issued the following Common Shares (all prices in CAD$):

Date	CAD$ per Common Share		Number of Common Shares		Date	CAD$ per Common Share		Number of Common Shares
February 22, 2018	$	0.28		281,250	February 22, 2018	$	0.44		40,000
March 6, 2018	$	0.52		160,000	March 7, 2018	$	0.44		26,000
March 7, 2018	$	0.52		1,320,000	March 8, 2018	$	0.52		370,000
March 12, 2018	$	0.52		500,000	March 15, 2018	$	0.52		250,000
March 21, 2018	$	0.55		25,090,700	April 30, 2018	$	0.52		500
September 10, 2018	$	0.30		25,000	-		-		-

MARKET FOR SECURITIES

The Common Shares are listed on the TSXV under the symbol " PTK ". The following table sets forth information relating to the trading and quotation of the Common Shares on the TSXV (in CAD$) for the months indicated.

Period	High (CAD$)		Low (CAD$)		Volume
October 2017	$	0.365	$	0.28		4,978,570
November 2017	$	0.295	$	0.225		5,814,255
December 2017	$	0.27	$	0.21		5,689,995
January 2018	$	0.40	$	0.19		9,359,290
February 2018	$	0.64	$	0.22		33,884,153
March 2018	$	0.79	$	0.465		31,406,462
April 2018	$	0.55	$	0.37		11,609,274
May 2018	$	0.40	$	0.295		6,779,896
June 2018	$	0.44	$	0.27		12,229,136
July 2018	$	0.34	$	0.23		8,311,478
August 2018	$	0.36	$	0.24		7,141,700
September 2018	$	0.44	$	0.30		6,090,800
October 1 – 12, 2018	$	0.40	$	0.315		2,160,000

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 business. POET has incurred losses since inception and expects to incur further losses in the foreseeable future.

In addition to the other information contained in this Prospectus, reference is made to the section entitled " Risk Factors " in the AIF which is incorporated herein by reference. 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.

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 Interposer platform.

Risks Related To Common Shares

Listing of the Common Shares

The listing of POET's Common Shares on the TSXV and the quotation for trading on OTCQX is conditional upon its ability to maintain the applicable minimum requirements for listing and quotation, as applicable, of the TSXV and OTCQX. 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 and quotation requirements of the TSXV and OTCQX, respectively, 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$0.19 and as high as CAD$0.79 on the TSXV. The Common Shares are also quoted on the OTCQX, a U.S. based over-the-counter trading facility. In addition to volatility associated with over-the-counter securities in general, 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;

rumours and collusion;

litigation;

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 of Directors has the authority to issue additional Common Shares to provide additional financing in the future and the issuance of any such 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, 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 of Directors 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 of Directors 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, Rights 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, Rights 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. Unless collateralized or guaranteed, 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, unless the Debt Securities are guaranteed by the Corporation's subsidiaries or collateralized in some other way, 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. Prospectus 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.

CERTAIN INCOME TAX CONSIDERATIONS

The applicable Prospectus Supplement will describe certain material Canadian federal income tax consequences to an investor who is a non-resident of Canada acquiring any Debt Securities offered thereunder, including whether payments of principal, premium, if any, and interest on Debt Securities will be subject to Canadian non-resident withholding tax. The applicable Prospectus Supplement may also describe certain U.S. federal income tax consequences of the acquisition, ownership and disposition of any of the Securities offered thereunder by an initial investor who is a U.S. person (within the meaning of the U.S. Internal Revenue Code of 1986, as amended), including, to the extent applicable, such consequences relating to Debt Securities payable in a currency other than the U.S. dollar, issued at an original issue discount for U.S. federal income tax purposes or containing early redemption provisions or other special items. 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 FX. 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.

Each of Messrs. David E. Lazovsky, Jean-Louis Malinge, Suresh Venkatesan, Mohandas Warrior and Don Listwin are directors of the Corporation who 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
David E. Lazovsky		Bennett Jones LLP
Jean-Louis Malinge		3400 One First Canadian Place,
Suresh Venkatesan		PO Box 130,
Mohandas Warrior		Toronto, ON
Don Listwin		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.

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 Marcum LLP, City Place II, 185 Asylum Street, 17th Floor, Hartford, Connecticut 06103.

The transfer agent and registrar of the Common Shares is TSX Trust Company Services Inc., 200 University Avenue, Suite 300, Toronto, Ontario M5H 4H1. The transfer agent and registrar for the outstanding Warrants is Capital Transfer Agency, Suite 401, 121 Richmond Street West, Toronto, Ontario, M5H 2K1.

INTERESTS OF EXPERTS

Marcum LLP has prepared the auditor’s report with respect to the Corporation’s annual financial statements for the year ended December 31, 2017, 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 certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a Prospectus and any amendment. In several of the provinces, the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the Prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revisions of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province for the particulars of these rights or consult with a legal adviser.

PART II

INFORMATION NOT REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS

INDEMNIFICATION

Section 136 of the Ontario Business Corporations Act and Section 6 of the Amended and Restated By-Law No. 1 of the Corporation (the “Bylaws” ) (as amended) provide for indemnification of directors and officers of the Corporation.

Section 136 of the Ontario Business Corporations Act provides as follows:

Indemnification

136. (1) A corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation or another individual who acts or acted at the corporation’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the corporation or other entity. 2006, c. 34, Sched. B, s. 26.

Advance of costs

(2) A corporation may advance money to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1), but the individual shall repay the money if the individual does not fulfil the conditions set out in subsection (3). 2006, c. 34, Sched. B, s. 26.

Limitation

(3) A corporation shall not indemnify an individual under subsection (1) unless the individual acted honestly and in good faith with a view to the best interests of the corporation or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or in a similar capacity at the corporation’s request. 2006, c. 34, Sched. B, s. 26.

Same

(4) In addition to the conditions set out in subsection (3), if the matter is a criminal or administrative action or proceeding that is enforced by a monetary penalty, the corporation shall not indemnify an individual under subsection (1) unless the individual had reasonable grounds for believing that the individual’s conduct was lawful. 2006, c. 34, Sched. B, s. 26.

Derivative actions

(4.1) A corporation may, with the approval of a court, indemnify an individual referred to in subsection (1), or advance moneys under subsection (2), in respect of an action by or on behalf of the corporation or other entity to obtain a judgment in its favour, to which the individual is made a party because of the individual’s association with the corporation or other entity as described in subsection (1), against all costs, charges and expenses reasonably incurred by the individual in connection with such action, if the individual fulfils the conditions set out in subsection (3). 2006, c. 34, Sched. B, s. 26.

Right to indemnity

(4.2) Despite subsection (1), an individual referred to in that subsection is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual’s association with the corporation or other entity as described in subsection (1), if the individual seeking an indemnity,

II- 1

(a) was not judged by a court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and

(b) fulfils the conditions set out in subsections (3) and (4). 2006, c. 34, Sched. B, s. 26.

Insurance

(4.3) A corporation may purchase and maintain insurance for the benefit of an individual referred to in subsection (1) against any liability incurred by the individual,

(a) in the individual’s capacity as a director or officer of the corporation; or

(b) in the individual’s capacity as a director or officer, or a similar capacity, of another entity, if the individual acts or acted in that capacity at the corporation’s request. 2006, c. 34, Sched. B, s. 26.

Application to court

(5) A corporation or a person referred to in subsection (1) may apply to the court for an order approving an indemnity under this section and the court may so order and make any further order it thinks fit. R.S.O. 1990, c. B.16, s. 136 (5).

Idem

(6) Upon an application under subsection (5), the court may order notice to be given to any interested person and such person is entitled to appear and be heard in person or by counsel. R.S.O. 1990, c. B.16, s. 136 (6).

Section Amendments with date in force (d/m/y)

Section 6 of the Bylaws contains the following provisions with respect to indemnification of the Corporation’s directors and officers with respect to certain insurance maintained by the Corporation with respect to its indemnification obligations:

6. PROTECTION OF DIRECTORS, OFFICERS AND OTHERS

6.1

Indemnification of Directors and Officers. The Corporation shall indemnify a director or officer, a former director or officer or a person who acts or acted at the Corporation’s request as a director or officer, or an individual acting in a similar capacity, of another entity, and the heirs and legal representatives of such a person to the fullest extent permitted by the Act.

6.2

Insurance. The Corporation may purchase and maintain insurance for the benefit of any person referred to in section 6.1 to the extent permitted by the Act.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Corporation pursuant to the foregoing provisions, the Corporation has been informed that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.

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EXHIBITS

The following exhibits have been filed as part of the Registration Statement:

Exhibit Number		Description

4.1		Annual Information Form for the year ended December 31, 2017, on Form 20-F filed with the Commission on April 30, 2018, as amended on Form 20-F/A filed with the Commission on May 18, 2018 (File No. 000-55135).

4.2*		Management Information Circular, dated May 7, 2018, relating to the annual meeting of the Corporation’s shareholders held on July 21, 2018.

4.3		Consolidated Audited Financial Statements for the years ended December 31, 2017, 2016, and 2015, together with the auditors' report thereon (incorporated by reference to the Corporation’s Annual Report on Form 20-F/A filed with the Commission on May 18, 2018 (File No. 000-55135)).

4.4*		Management’s Discussion and Analysis for the year ended December 31, 2017 (as amended).

4.5		Interim consolidated financial statements for the six months ended June 30, 2018 (incorporated by reference to Exhibit 99.1 to the Corporation’s Report on Form 6-K furnished to the Commission on August 15, 2018 (File No. 000-55135)).

4.6		Management’s Discussion and Analysis for the six months ended June 30, 2018 (incorporated by reference to Exhibit 99.2 to the Corporation’s Report on Form 6-K filed furnished to the Commission on August 15, 2018 (File No. 000-55135)).

4.7		Material Change Report dated March 21, 2018 concerning the entering into an underwriting agreement with Cormack Securities Inc. on March 12, 2018 and the closing of a “bought deal” offering of units of the Corporation (incorporated by reference to Exhibit 99.1 to the Corporation’s Report on Form 6-K furnished to the Commission on March 21, 2018 (File No. 000-55135)).

4.8		Material Change Report dated April 6, 2018 concerning the addition of Peter Charbonneau as a director of the Corporation and member of the Audit Committee (incorporated by reference to Exhibit 99.1 to the Corporation’s Report on Form 6-K furnished to the Commission on March 28, 2018 (File No. 000-55135)).

5.1*		Consent of Marcum LLP, independent registered public accounting firm.

6.1*		Power of Attorney (contained on the signature page of this Registration Statement).

7.1		Form of Indenture (incorporated by reference to Exhibit 7.1 to the Corporation’s F-10/A filed with the Commission on October 3, 2016 (File No. 333-213422).

______________________

*Filed herewith

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PART III

UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

Item 1. Undertaking

The Corporation undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to the securities registered pursuant to this Registration Statement on Form F-10 or to transactions in said securities.

Item 2. Consent to Service of Process

(a) Concurrent with the filing of the Registration Statement on Form F-10, the Corporation is filing with the Commission a written irrevocable consent and power of attorney on Form F-X.

(b) Any change to the name or address of the agent for service of the Corporation shall be communicated promptly to the Commission by amendment to Form F-X referencing the file number of this Registration Statement.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Corporation certifies that it has reasonable grounds to believe that it meets the requirements for filing on Form F-10 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Toronto, Province of Ontario, Canada, on October 17, 2018.


	POET Technologies Inc.

	By:	/s/ Suresh Venkatesan
		Name: Suresh Venkatesan
		Title: Chief Executive Officer

III- 2

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Suresh Venkatesan, Chief Executive Officer of POET Technologies Inc. and Thomas Mika, Chief Financial Officer of POET Technologies Inc., or either of them, his or her true and lawful attorneys-in-fact and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said attorneys-in-fact and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall constitute one instrument.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on October 17, 2018.

Signature		Title

/s/ Suresh Venkatesan		Chief Executive Officer and Director
Suresh Venkatesan		(Principal Executive Officer)

/s/ Thomas Mika		Chief Financial Officer
Thomas Mika		(Principal Financial Officer and Principal Accounting Officer)

/s/ David E. Lazovsky		Chairman of the Board of Directors
David E. Lazovsky

/s/ John O’Donnell		Director
John O’Donnell

/s/ Chris Tsiofas		Director
Chris Tsiofas

/s/ Jean-Louis Malinge		Director
Jean-Louis Malinge

/s/ Don Listwin		Director
Don Listwin

/s/ Mohandas Warrior		Director
Mohandas Warrior

/s/ Peter Charbonneau		Director
Peter Charbonneau

III- 3

AUTHORIZED REPRESENTATIVE

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, the undersigned has signed this Registration Statement, solely in the capacity of the duly authorized representative of POET Technologies Inc. in the United States, on October 17, 2018.


	POET Technologies Inc.

	By:	/s/ Suresh Venkatesan
		Name: Suresh Venkatesan
		Title: Chief Executive Officer

III- 4

EXHIBIT INDEX

Exhibit Number		Description

4.1		Annual Information Form for the year ended December 31, 2017, on Form 20-F filed with the Commission on April 30, 2018, as amended on Form 20-F/A filed with the Commission on May 18, 2018 (File No. 000-55135).

4.2*		Management Information Circular, dated May 7, 2018, relating to the annual meeting of the Corporation’s shareholders held on July 21, 2018.

4.3		Consolidated Audited Financial Statements for the years ended December 31, 2017, 2016, and 2015, together with the auditors' report thereon (incorporated by reference to the Corporation’s Annual Report on Form 20-F/A filed with the Commission on May 18, 2018 (File No. 000-55135)).

4.4*		Management’s Discussion and Analysis for the year ended December 31, 2017 (as amended).

4.5		Interim consolidated financial statements for the six months ended June 30, 2018 (incorporated by reference to Exhibit 99.1 to the Corporation’s Report on Form 6-K furnished to the Commission on August 15, 2018 (File No. 000-55135)).

4.6		Management’s Discussion and Analysis for the six months ended June 30, 2018 (incorporated by reference to Exhibit 99.2 to the Corporation’s Report on Form 6-K filed furnished to the Commission on August 15, 2018 (File No. 000-55135)).

4.7		Material Change Report dated March 21, 2018 concerning the entering into an underwriting agreement with Cormack Securities Inc. on March 12, 2018 and the closing of a “bought deal” offering of units of the Corporation (incorporated by reference to Exhibit 99.1 to the Corporation’s Report on Form 6-K furnished to the Commission on March 21, 2018 (File No. 000-55135)).

4.8		Material Change Report dated April 6, 2018 concerning the addition of Peter Charbonneau as a director of the Corporation and member of the Audit Committee (incorporated by reference to Exhibit 99.1 to the Corporation’s Report on Form 6-K furnished to the Commission on March 28, 2018 (File No. 000-55135)).

5.1*		Consent of Marcum LLP, independent registered public accounting firm.

6.1*		Power of Attorney (contained on the signature page of this Registration Statement).

7.1		Form of Indenture (incorporated by reference to Exhibit 7.1 to the Corporation’s F-10/A filed with the Commission on October 3, 2016 (File No. 333-213422).

______________________

*Filed herewith

III-5

Exhibit 4.2

POET TECHNOLOGIES INC. (the “Company”)

Suite 1107, 120 Eglinton Avenue East, Toronto, Ontario, Canada M4P 1E2
USA Office: 780 Montague Expressway, San Jose, CA 95131, USA

Facsimile: (416) 322-5075 Telephone: (416) 368-9411

INFORMATION CIRCULAR

(As at May 7, 2018 except as indicated)

The Company is providing this Information Circular in connection with the solicitation of proxies by the management (“Management”) of the Company for use at the annual and special meeting (the "Meeting") of the shareholders of the Company to be held at 10:00 a.m. (PDT) on June 21, 2018 and for the purposes set forth in the Notice of Annual and Special Meeting. It is expected that the solicitation of proxies will be primarily by mail or by “Notice and Access” to electronic materials available on the internet; however, proxies may also be solicited by directors, officers and certain employees of the Company, without receiving special compensation, by telephone, facsimile (“fax”) or by other personal contact. The cost of solicitation of proxies by Management will be borne by the Company.

The Company may pay the reasonable costs incurred by persons who are shareholders but not the beneficial owners of common shares of the Company (“Shares”) (such as brokers, dealers and other registrants under applicable securities law and nominees and custodians) in sending or delivering copies of the Notice of Meeting, the Management Information Circular, the form of proxy (the “Proxy”) and/or the voting instruction form (the “VIF”) to the beneficial owners. However, any such payments must be pre-approved by the Company. The Company will furnish to such persons, upon request to the Secretary of the Company, and without additional cost, additional copies of the Notice of Meeting, the Management Information Circular, and the Proxy and/or the VIF.

NOTICE AND ACCESS

In accordance with the Notice and Access rules adopted by the Ontario Securities Commission under NI 54-101, the Company is sending its proxy-related materials (the “Proxy Materials”) to shareholders using the Notice and Access method. Therefore, although shareholders will still receive the Proxy and/or VIF in paper copy, the additional Proxy Materials, including this Management Information Circular, the Notice of Meeting, the Annual Report (containing the annual audited consolidated financial statements and related MD&A) will not be physically delivered. Instead, shareholders may access or download the Proxy Materials from the Company’s registrar and transfer agent’s website http://docs.tsxtrust.com/2042 or may also access them from SEDAR at www.sedar.com under the Company's filed documents. The Company believes that this delivery method will expedite the receipt of the Proxy Materials by shareholders, reduce its printing and mailing expenses and reduce the environmental impact of disposing of the Proxy Materials after they are no longer useful.

Registered holders or beneficial owners may request paper copies of the Notice and Management Information Circular booklet be sent to them by postal delivery at no cost to them. Requests may be made up to one year from the date the Proxy Materials are posted on the Company's website. In order to receive a paper copy of the Proxy Materials or if you have questions concerning Notice and Access, please contact the Secretary of the Company, by telephone at 416-862-7330 or by e-mail at agm@poet-technologies.com or call the Company’s registrar and transfer agent, TSX Trust Company (“TSX Trust”) at 1-866-600-5869.

The purpose of the Proxy and/or VIF which were mailed to shareholders is to designate persons who will vote the Proxy on a shareholder’s behalf in accordance with the instructions given by the shareholder in the said form.

VOTING PROCESS – REGISTERED SHAREHOLDERS

Appointment of Proxies

The persons named in the Proxy are officers and/or directors of the Company (the “Management Proxyholders”). A registered shareholder can appoint a person other than the Management Proxyholders, who need not be a shareholder, to represent him or her at the Meeting by inserting such person’s name in the blank space provided in the Proxy or by completing another form of proxy.

A registered shareholder appointing a proxyholder may indicate the manner in which the appointed proxyholder can vote with respect to any specific item by checking the space opposite the item on the Proxy. If the shareholder giving the Proxy wishes to confer a discretionary authority with respect to any item of business, then the space opposite the item should be left blank. The Shares represented by the Proxy submitted by a shareholder will be voted or withheld from voting in accordance with the directions, if any, given in the Proxy.

If a shareholder does not specify a choice and the shareholder has appointed one of the Management Proxyholders as proxyholder, the Management Proxyholders will vote in favour of the matters specified in the Notice of Meeting and in favour of all other matters proposed by Management at the Meeting.

Voting Shares by Proxy

Registered shareholders at the close of business on May 10, 2018 may vote their proxies as follows:

Internet voting : Go to the website indicated on the Proxy (http://www.voteproxyonline.com) and follow the instructions on the screen. To appoint a proxyholder, other than Management Proxyholders, to represent you at the Meeting, inserting such person’s name in the blank space provided on the online Proxy. Then complete your voting instructions and submit the form. The time and date submitted will automatically be recorded.

Voting by mail or fax : Complete the Proxy in a legible manner. To appoint a proxyholder, other than the Management Proxyholders, to represent you at the Meeting, insert such person’s name in the blank space provided in the Proxy. Complete your voting instructions by checking the appropriate boxes on the Proxy, date and sign the form. You may either send the completed Proxy to TSX Trust by mail or by fax. Do not send by both methods. The address is Suite 301, 100 Adelaide Street West, Toronto, Ontario M5H 4H1 and the fax number is 416-595-9593.

Deadline for Receipt of Proxies

The deadline for receiving duly completed and executed forms of proxy or submitting your proxy by fax or over the internet is 10:00 a.m. (PDT) on June 19, 2018, or no later than 48 hours (excluding Saturdays, Sundays and holidays) before the time of any adjourned or postponed Meeting. A registered shareholder attending the Meeting has the right to vote in person, but he must, before the start of the Meeting, register with the scrutineer of the Meeting. If he had previously submitted a Proxy, he must specifically request that his proxy be nullified with respect to the matters and any subsequent matters thereafter to be voted upon at the Meeting or any adjournment or postponement thereof, thereby permitting him to vote in person. Notwithstanding the foregoing, the Chair of the Meeting has the sole discretion to accept proxies received after such deadline but is under no obligation to do so.

Revocation of Proxies

A proxy submitted pursuant to this solicitation may be revoked in any manner permitted by law and by written notice, signed by the shareholder or by the shareholder’s attorney authorized in writing (or, if the shareholder is a corporation, by a duly authorized officer or attorney), and deposited with the Company’s transfer agent, TSX Trust Company, Suite 301, 100 Adelaide Street West, Toronto, Ontario M5H 4H1, at any time up to and including the last business day preceding the date of the Meeting, or any adjournment or postponement thereof, at which the proxy is to be used.

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A proxy submitted pursuant to this solicitation may also be revoked prior to the commencement of voting by attending the Meeting in person and registering with the scrutineer as a registered shareholder personally present and requesting to nullify his proxy to allow him to vote in person.

A revocation of proxy does not affect any matter on which a vote has been taken before the revocation.

Exercise of Discretion by Proxies

The persons named in the enclosed Proxy will vote the Shares in respect of which they are appointed in accordance with the direction of the shareholders appointing them. In the absence of such direction, the relevant Shares will be voted in favour of the passing of all the resolutions described below.

The enclosed Proxy confers discretionary authority on the persons named in the Proxy with respect to amendments or variations to matters identified in the Notice of Meeting and with respect to other matters which may properly come before the Meeting. At the time of printing of this Circular, Management knows of no such amendments, variations or other matters to come before the Meeting. However, if amendments or variations to any other matters which are not now known to Management should properly come before the Meeting, the Proxy will be voted on such matters in accordance with the best judgment of the named proxyholder.

VOTING PROCESS – NON-REGISTERED SHAREHOLDERS

Only registered shareholders of the Company or the persons they appoint as their proxyholders are permitted to vote at the Meeting. Many shareholders of the Company are referred to as “non-registered” shareholders (“Non-Registered Shareholders”) because the Shares they own are not registered in their names but are instead registered in the name of the brokerage firm, bank or trust company through which they purchased the Shares. Shares held by brokers or their agents or nominees can only be voted (for or against resolutions) upon the instructions of the Non-Registered Shareholder. Without specific instructions, a broker and its agents and nominees are prohibited from voting Shares for their clients. Therefore, Non-Registered Shareholders should ensure that instructions respecting the voting of their Shares are communicated to the appropriate person or that the Shares are duly registered in their name.

Applicable regulatory policy requires intermediaries/brokers to seek voting instructions from Non-Registered Shareholders in advance of shareholders’ meetings. Every intermediary/broker has its own mailing procedures and provides its own forms and voting instructions to clients, which should be carefully followed by Non-Registered Shareholders in order to ensure that their Shares are voted at the Meeting. Shares beneficially owned by a Non-Registered Shareholder are registered either:

in the name of an intermediary (“Intermediary”) that the Non-Registered Shareholder deals with in respect of the Shares of the Company (Intermediaries include, amongst others, banks, trust companies, securities dealers or brokers, and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans); or

ii)

in the name of a clearing agency (such as CDS Clearing and Depository Services Inc. in Canada or The Depository Trust & Clearing Corporation in the United States) of which the Intermediary is a participant.

Unless you have previously informed your Intermediary/broker that you do not wish to receive material relating to the Meeting, you should have received a Proxy or a VIF. In either case you have the right to exercise voting rights attached to the Company’s Shares beneficially owned by you, including the right to attend and vote the Shares directly at the Meeting, assuming that you follow the instructions contained in the said Proxy or VIF.

The documents that you receive and from whom you receive them will vary depending upon whether you are a "non-objecting beneficial owner" ("NOBO") residing in Canada, which means you have provided instructions to your Intermediary that you do not object to the disclosure of the beneficial ownership information about you to the Company, or an "objecting beneficial owner" ("OBO") residing in Canada, which means that you have objected to the disclosure of such beneficial ownership information about you to the Company, or a non-registered shareholder residing outside of Canada (the “Other Non-Registered Shareholders”).

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NOBO Shareholders

TSX Trust is handling the mailing to NOBO’s in addition to mailing to the Registered Shareholders. All NOBO Shareholders of the Company will receive a VIF from TSX Trust.

If you are a NOBO shareholder of the Company, and TSX Trust has sent a VIF directly to you, your name and address and information about your holdings of Shares of the Company have been obtained in accordance with applicable securities regulatory requirements from the intermediary/broker holding Shares on your behalf. By choosing to send the VIF to you directly, the Company has assumed responsibility for (i) delivering the VIF to you, and (ii) executing your proper voting instructions.

Therefore a NOBO Shareholder of the Company can vote the Shares represented by his VIF in a similar manner as registered shareholders. The process to vote a VIF or to appoint a proxyholder are the same as that described under “Voting Process – Registered Shareholders” , except that:

the form received by such person is a VIF instead of a Proxy; and

a NOBO shareholder cannot attend the Meeting to vote in person unless, at least 48 hours (excluding Saturdays, Sundays and holidays) before the Meeting, he appoints himself as a proxyholder according to the instructions provided on the VIF and registers with the scrutineer upon arriving at the Meeting.

OBO Shareholders

In accordance with applicable securities law requirements, the Company will upon request distribute copies of the Proxy Materials to the clearing agencies and intermediaries for distribution to OBO Shareholders and to the Other Non-Registered Shareholders. Intermediaries are required to forward the Proxy Materials to Non-Registered Shareholders unless a Non-Registered Shareholder has waived the right to receive them. Intermediaries often use service companies to forward the Proxy Materials to Non-Registered Shareholders. Generally, Non-Registered Shareholders who have not waived the right to receive Proxy Materials will either:

be given a VIF which is not signed by the Intermediary and which, when properly completed and signed by the Non-Registered Shareholder and returned to the Intermediary or its service company, will constitute voting instructions which the Intermediary must follow. Typically, this VIF will consist of a one page pre-printed form; or

ii)

be given a Proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of Shares beneficially owned by the OBO shareholder but which is otherwise not completed by the Intermediary. Because the Intermediary has already signed the Proxy, the signature of the OBO shareholder is not required when submitting the Proxy.

In either case, the purpose of these procedures is to permit Non-Registered Shareholders to direct the voting of the Shares of the Company that they beneficially own. Since only registered shareholders and their proxyholders may attend and vote at the Meeting, if a Non-Registered Shareholder attends the Meeting, the Company will have no record of the Non-Registered Shareholder’s shareholding or of his/her or its entitlement to vote unless the Non-Registered Shareholder’s nominee has appointed the Non-Registered Shareholder as proxyholder. Therefore, a Non-Registered Shareholder who receives one of the above forms and wishes to vote at the Meeting in person (or have another person attend and vote on behalf of the Non-Registered Shareholder), the Non-Registered Shareholder should insert the Non-Registered Shareholder’s name or such other person’s name in the blank space provided, and depending on the design of the VIF, may need to strike out the names of the Management Proxyholders listed therein. The voting instructions given to the Non-Registered Shareholder, may provide for voting by telephone, on the Internet, by mail or by fax. In either case, Non-Registered Shareholders should carefully follow the instructions of their Intermediary, including those regarding when and where the Proxy or VIF is to be delivered.

A Non-Registered Shareholder, who has submitted a Proxy, may revoke it by contacting the Intermediary through which the Non-Registered Shareholder’s Shares are held and following the instructions of the Intermediary respecting the revocation of proxies. This procedure should be initiated sufficiently in advance of the Meeting to ensure there is sufficient time to implement your instructions.

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In all cases it is important that the Proxy or VIF be received by the Intermediary or its agent sufficiently in advance of the deadline set forth in the Notice of Meeting to enable the Intermediary or its agent to provide voting instructions on your behalf before the deadline.

Failing to follow the proper voting instructions described in the VIF may invalidate your vote and/or not allow you attend and vote in person at the Meeting.

VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

The Company is authorized to issue unlimited Shares without par value, of which 288,056,802 shares are issued and outstanding as at May 7, 2018. The Company has fixed the close of business on May 10, 2018 as the record date (the “Record Date”) for the purpose of determining shareholders entitled to receive notice of and vote at the Meeting. In accordance with the provisions of the Business Corporations Act (Ontario), the Company has prepared a list of shareholders on the Record Date. Each shareholder is entitled to one vote for each share held in respect to each matter to be voted at the Meeting. Only shareholders of record on the Record Date are entitled to vote at the Meeting.

To the knowledge of the directors and officers of the Company, no person beneficially owns, directly or indirectly, or controls or directs shares carrying 10% or more of the voting rights attached to all shares of the Company.

ELECTION OF DIRECTORS

The directors of the Company are elected at each annual general meeting and hold office until the next annual general meeting or until their successors are appointed. In the absence of instructions to the contrary, the enclosed Proxy will be voted for the nominees herein listed.

The Company is required to have an audit committee. Members of the audit committee and other committees of the Board of Directors of the Company (the “Board”) are as set out in the table below.

The number of directors of the Company to be elected at the Meeting is eight. Management of the Company proposes to nominate each of the following persons for election as a director. Information concerning such persons, as furnished by the individual nominees, is as follows:

Name, Jurisdiction of Residence and Position	Principal Occupation or employment and, if not a previously elected Director, occupation during the past 5 years	Date First Elected or Appointed as a Director	Number of Common Shares beneficially owned, directly or indirectly, or controlled or directed ⁽⁶⁾
David E. Lazovsky ⁽³⁾ Los Gatos, CA, USA	Executive Chairman of the Board of the Company since February 1, 2017; President and Chief Executive Officer of Intermolecular (NASDAQ: IMI) from September 2004 to October 2014.	April 8, 2015	181,000
Jean-Louis Malinge Paris, France	Partner with ARCH Venture Partners, managing director of YADAIS.	September 5, 2017	Nil
John F. O’Donnell ^{(2) (3)} Toronto, ON, Canada	Independent lawyer practising in Toronto, Ontario since 1973 (currently counsel to Stikeman Keeley Spiegel LLP).	February 13, 2012	30,000
Chris Tsiofas ^{(1) (2) (3)} Toronto, ON, Canada	Partner with Chartered Accountancy firm of Myers Tsiofas Norheim LLP since 1994.	August 21, 2012	25,000 ⁽⁴⁾
Suresh Venkatesan Los Gatos, CA, U.S.A.	CEO of the Company since June 11, 2015.	June 12, 2015	115,000
Mohandas Warrior ⁽¹⁾ Palo Alto, CA, U.S.A.	President and CEO of Alfalight Inc. from February 2004 to July 2016.	June 12, 2015	Nil
Don Listwin ⁽²⁾ Woodside, CA, U.S.A.	CEO of Canary Foundation	January 19, 2018	531,250 ⁽⁵⁾
Peter Dominic Charbonneau ⁽¹⁾ Ottawa, ON, Canada	Director of Mitel Networks and Teradici Corporation	March 27, 2018	Nil

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NOTES :

(1)

Current Member of the Audit Committee.

(2)

Current Member of Compensation Committee.

(3)

Current Member of Corporate Governance and Nominating Committee.

(4)

Mr. Tsiofas beneficially owned 25,000 common shares under RRSP.

(5)

These shares are held by The Donald J. Listwin Trust.

(6)

Shares beneficially owned, directly or indirectly, or over which control or direction is exercised, as at May 10, 2018, based upon information filed on SEDI by the individual directors or furnished to the Company by them. Unless otherwise indicated, such shares are held directly.

The following briefly describes the qualification and experience of the nominees to the Board:

Peter Dominic Charbonneau - Charbonneau was a general partner at Skypoint Capital Corporation for almost 15 years, where he was jointly responsible for the placement of $100 million of capital in early-stage telecommunications and data communication companies. Prior to Skypoint, he held a number of executive and operational roles at various networking companies including March Networks and Newbridge Networks, where he was president and chief operating officer. In 2000, representing Sir Terence Matthews, he facilitated the purchase of the communications business systems division of Mitel Corporation, which has operated as Mitel Networks since the acquisition.

David E. Lazovsky – Mr. Lazovsky is the founder of Intermolecular, Inc. (NASDAQ: IMI) and served as the company's President and Chief Executive Officer and as a member of the Board of Directors from September 2004 to October 2014. Mr. Lazovsky has an in-depth knowledge of the semiconductor industry, technology and markets. Prior to founding Intermolecular, Mr. Lazovsky held several senior management positions at Applied Materials Inc. (NASDAQ: AMAT). From 1996 through August 2004, Mr. Lazovsky held management positions in the Metal Deposition and Thin Films Product Business Group where he was responsible for managing more than $1 billion in Applied Materials' semiconductor manufacturing equipment business. Mr. Lazovsky holds a B.S. in mechanical engineering from Ohio University and, as of March 31, 2014, held 41 pending or issued U.S. patents.

Don Listwin - Mr. Don Listwin has over 30 years of technology investing and management experience, highlighted by a decade at Cisco Systems, where he served as executive vice president. During his tenure at Cisco, he built several multi-billion-dollar lines of business, including the company's Service Provider line of business that underpins much of today's global Internet infrastructure. More recently, Listwin served as chief executive officer of both Sana Security and Openwave Systems. In addition, Listwin founded and holds the role of chief executive officer of the Canary Foundation, a non-profit research organization focused on the early detection of cancer. He also serves as a director on the boards of AwareX, Calix, D-wave, iSchemaView, Robin Systems and Teradici. Previously, he also served on the boards or was an advisor to JDS Uniphase, PLUMgrid, Redback Networks, E-TEK Dynamics, the Cellular Telecommunications & Internet Association (CTIA) and the Business Development Bank of Canada (BDC).

Jean-Louis Malinge - Mr. Jean-Louis Malinge serves as partner with ARCH Venture Partners, an early-stage venture capital firm with nearly $2 billion under management. Additionally, he also serves as a managing director for YADAIS, a leading consulting firm in the photonics and telecommunications industries, and is a board member of EGIDE SA and CAILabs. EGIDE SA designs, manufactures and sells hermetic packages for the protection and interconnection of several types of electronic and photonic chips and CAIlabs is a venture-backed French innovative start-up founded in 2013 which has developed a unique spatial multiplexing platform. From 2004 to 2013 Jean-Louis was President and CEO of Kotura, a Silicon Photonics pioneer which was acquired in 2013 by Mellanox Technologies. Prior to Kotura Mr. Malinge was an executive with Corning Inc for 15 years. Jean-Louis hold an Executive M.B.A. from MIT Sloan School in Boston, Massachusetts. He also holds an engineering degree from the Institut National des Sciences Appliquées in Rennes, France.

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John F. O’Donnell – Mr. O’Donnell has a B.A. (Economics) and an LLB. He has practiced law in the City of Toronto since 1973 and has been on the Board of Directors of the Company since February 2012. He is currently counsel to Stikeman Keeley Spiegel LLP. His practice is primarily in the field of corporate and securities law and, as such, he is and has been counsel to several publicly traded companies. Mr. O’Donnell is currently Chairman of the Board of Peloton Minerals Corporation (CSE: PMC) and a director of African Metals Corporation (NEX: AFR.H).

Chris Tsiofas – Mr. Tsiofas is a Chartered Accountant (CA), Chartered Professional Accountant (CPA). He earned a Bachelor of Commerce Degree from the University of Toronto in 1991 and has been a member of the Institute of Chartered Accountants of Ontario since 1993. He has been on the Board of Directors since August 2012. He is a partner with the Toronto Chartered Professional Accountancy firm of Myers Tsiofas Norheim LLP, a position he has held since 1994.

Dr. Suresh Venkatesan – Dr. Venkatesan was most recently Senior Vice-President, Technology Development at Global Foundries and was responsible for the company’s Technology Research and Development. Dr. Venkatesan joined Global Foundries in 2009, where he led the development and ramp up of the 28nm node and was instrumental in the technology transfer and qualification of 14nm. In addition, he was responsible for the qualification and ramp up of multiple mainstream value added technology nodes.

Mohandas Warrior – Mr. Warrior was the President & CEO of Alfalight, Inc. from February 2004 to July 2016. Alfalight is a GaAs based high power diode laser manufacturing company with headquarters in Madison, Wisconsin. Alfalight serves military, telecom and industrial customers. Mr. Warrior established Alfalight as a leading provider of high powered laser diode solutions in both commercial and defense segments. Prior to joining Alfalight, Mr. Warrior’s career included 15 years at Motorola Semiconductors (now Freescale) where he led the test and assembly operations, a group of 3,500 employees, in the U.S., Scotland and Korea. Mr. Warrior successfully led the transactions to sell Alfalight’s commercial business to Compound Photonics in 2013 and its defense business to Gooch & Housego in 2016.

No proposed director is to be elected under any arrangement or understanding between the proposed director and any other person or company, except the directors and executive officers of the company acting solely in such capacity.

To the knowledge of the Company, except as noted below, no proposed director:

(a)

is, as at the date of the Information Circular, or has been, within 10 years before the date of the Information Circular, a director, chief executive officer (" CEO ") or chief financial officer (" CFO ") of any company (including the Company) that:

(i)

was the subject, while the proposed director was acting in the capacity as director, CEO or CFO of such company, of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days; or

(ii)

was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the proposed director ceased to be a director, CEO or CFO but which resulted from an event that occurred while the proposed director was acting in the capacity as director, CEO or CFO of such company; or

(b)

is, as at the date of this Information Circular, or has been within 10 years before the date of the Information Circular, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

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(c)

has, within the 10 years before the date of this Information Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director;

(d)

has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

(e)

has been subject to any penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

The following directors of the Company hold directorships in other reporting issuers as set out below:

*Name of Director*	*Name of Other Reporting Issuer*
Peter Dominic Charbonneau	Telus Corporation (TSX: T) CounterPath Corporation (TSX: PATH) Mitel Networks Corporation (TSX: MNW) March Networks Corporation (TSX: MN)
John F. O’Donnell ⁽¹⁾	Peloton Minerals Corporation (CSE: PMC) African Metals Corporation (NEX: AFR.H)
Don Listwin	Calix Inc. (NYSE: CALX)
Jean-Louis Malinge	EGIDE Group: (EURONEXT: GID)

NOTE :

(1)

Mr. O’Donnell is currently a director of African Metals Corporation (“AMC”) (NEX: AFR.H) for which a cease trade order was issued by reason of its failure to file its latest annual financial statements. AMC did not have sufficient funds to pay its auditors as well as other creditors. This financial situation existed prior to Mr. O’Donnell becoming a director in 2016 and he agreed to become a director to assist AMC to resolve its difficulties and on the understanding that a financing be completed. Mr. O’Donnell continues to act for AMC on a pro bono basis and negotiations are ongoing.

If there are more nominees for election as directors than there are vacancies to fill, those nominees receiving the greatest number of votes will be elected or appointed, as the case may be, until all such vacancies have been filled. If the number of nominees for election or appointment is equal to the number of vacancies to be filled, all such nominees will be declared elected or appointed by acclamation.

The Board has adopted a policy for majority voting for individual directors (“Majority Voting Policy”). Under the Majority Voting Policy, the Proxy for any shareholders meeting where directors are to be elected will enable each shareholder to vote for, or withhold from voting on, each director nominee (the “Nominee” or collectively the “Nominees”) separately. If votes “for” the election of a Nominee are fewer than the number voted “withheld”, the Nominee is expected to submit his or her resignation promptly after the meeting of shareholders for the consideration of the Corporate Governance and Nomination Committee (the “CGN Committee”). The CGN Committee will make a recommendation to the Board after reviewing the matter, and the Board will then decide whether to accept or reject the resignation. The Board’s decision to accept or reject the resignation will be disclosed to shareholders. The Nominee will not participate in any CGN Committee or Board deliberations as to whether to accept or reject the resignation. The Majority Voting Policy does not apply in circumstances involving contested director elections.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The purpose of this Compensation Discussion and Analysis (“CD&A”) is to provide information about the Company’s executive compensation objectives and processes and to discuss compensation decisions relating to the Company’s senior officers in 2017.

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Description and Explanation of Elements of Compensation Program

(i)

The objectives of the Company’s executive compensation program are:

to attract, retain and motivate quality executives;

to align the interests of executives with those of the Company’s shareholders;

to provide total compensation to executives that is competitive with that paid by other companies of comparable size engaged in similar business in appropriate regions;

to evaluate executive performance on the basis of targets determined by the Board;

to be cognizant of expense management in determination of compensation rewards.

(ii)

The executive compensation program has been designed to reward executives for:

the reinforcement of the Company’s business objectives and values;

the attainment of key development and financial milestones dependant on the executive; and their individual performance and significant achievements.

(iii)

The executive compensation program consists of the following elements: base salary, variable pay compensation and stock option incentives.

(iv)

In addition to his or her fixed base salary, each officer may be eligible to receive variable pay compensation or bonus meant to motivate him or her to achieve short-term goals. Currently, the Company does not have in place established procedures for determining variable pay compensation. Stock options are a very important element of the variable pay compensation and do not require cash disbursement from the Company. Stock options are also generally awarded to officers and consultants at the time of hire and are used as a recruitment tool to attract highly qualified and experienced executives and consultants to the Company. Stock options are also granted at other times during the year. The Company currently operates at a loss so the Company uses stock option grants as a means of managing its cash flow. As a result, the Board has to consider not only the financial situation of the Company at the time of the determination of the compensation, but also the estimated financial situation in the mid and long term. Also the granting of stock options aligns officers’ rewards with an increase in shareholder value over the long term. The use of stock options encourages and rewards performance by aligning an increase in each officer’s compensation with increases in the Company’s performance and in the value of the shareholders’ investments.

(v)

Determination of the Amount of Each Compensation Program Element - In order to assist the Board in fulfilling its oversight responsibilities with respect to human resources matters, the Board established a Compensation Committee. The Compensation Committee reviews and makes determinations with respect to senior officer compensation on a regular basis with any discretionary compensation used only for extraordinary projects or significant milestone results that advance the Company’s growth potential. When determining officer’s compensation, the Compensation Committee receives input from the Chairmen of the Board, and the Chief Executive Officer of the Company. From time to time, the Compensation Committee has engaged Compensia to conduct a Peer Group review. Compensia has given guidance to the Compensation Committee with respect to appropriate comparative terms for its incentive stock option plan and a salary review of various positions relative to the Peer Group. The Compensation Committee utilizes the comparative reviews to assist in making appropriate recommendations.

Base Salary - The base salary for officers, is reviewed by the Compensation Committee of the Board, within a reasonable time prior to the expiry of the current employment or consulting agreement, with input and direction being provided by the Chairman of the Board, and the Chief Executive Officer of the Company. The base salary review takes into consideration the current competitive market conditions, experience, proven and/or expected performance, and the particular skills of the officer.

For more information on salaries paid to the executives, refer to the Summary Compensation Table.

Variable Pay Compensation – The Company has no current procedure to assess each officer’s role in adding to the Company’s growth. However, there are occasions when there can be significant officer achievements that further the business potential of the Company or create vital successes to the Company. Therefore, there are times when a discretionary variable pay award may be made to an officer. This type of payment is done after presenting the achievement to the Compensation Committee. If deemed important to the success of POET’s business, the Committee can approve such an ad hoc variable payment. Stock Options are a non-cash component of the Variable Pay Compensation and are discussed below.

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Stock Options - The Board, based on recommendations of the Compensation Committee where appropriate, makes the following determinations:

it selects officers and other persons who are entitled to participate in the Stock Option Plan;

it determines, after assessing recommendations by management when appropriate, the number of options granted to such individuals;

it determines the date on which each option is granted and the corresponding exercise price; and

it determines the vesting schedule for the stock options granted.

The Board makes these determinations subject to the provisions of the existing Stock Option Plan. For more information refer to the section entitled “ B) Option-Based Awards”.

(vi) Each element of the compensation program has been designed to meet one or more objectives of the overall executive compensation plan. The fixed base salary of each officer, combined with the variable pay compensation and stock options, has been designed to provide the total compensation package which the Board believes is reasonably competitive with that provided by other companies in the peer group and others of comparable size engaged in similar business in appropriate regions. In addition, the variable pay compensation has been designed to align the interests of executives with those of the Company’s shareholders and to evaluate financial performance on basis of relevant technical or financial milestones. Option grants are designed to align executives’ and shareholders’ interests and to provide longer term compensation incentives.

Review and Approval

The Compensation Committee of the Board is responsible for making recommendations for approval by the Board with respect to remuneration of executives of the Company including the Chief Executive Officer of the Company and senior officers of the Company. All executive compensation components are reviewed by the Compensation Committee as needed and its recommendations are subject to approval of the Board, as appropriate.

Option-Based Awards

The Company’s stock option plan has been and will be used to provide share purchase options which are granted in consideration of the level of responsibility of the executive as well as his or her impact or contribution to the longer-term operating performance of the Company. In determining the number of options to be granted to the executive officers, the Compensation Committee and the Board take into account the number of options, if any, previously granted to each executive officer, and the exercise price of any outstanding options. With these guidelines, the Board ensures that such new grants are in accordance with the policies of the TSX Venture Exchange (“TSXV”), and closely align the interests of the executive officers with the interests of shareholders.

The exercise of options by an Optionee, who is an officer, employee or director of the Company, will generally create an immediate tax liability to the Optionee as follows:

If the said Optionee resides in Canada, he will be deemed, whether or not the shares were sold, to have received an employment income equal to the value of the option exercised and will be required to pay the Company, in addition to the cost of exercise, an amount equal to the tax liability of the deemed employment income, in order for the Company to remit withholding taxes to Canada Revenue Agency following the exercise. Subsequent capital gains or losses will be calculated based on the market price on the day of exercise, but capital losses cannot offset the deemed employment income.

- 10 -

If the said Optionee resides in the USA, he will be required, for the tax year of the exercise, to pay income tax on the value of the option exercised, equal to the amount of short-term or long-term Capital Gain tax rates when the shares are sold, or if applicable, according to Alternative Minimum Tax rates. Depending on the circumstances, the Company may be required to collect from the said Optionee, a withholding tax in order for the Company to remit to the IRS following the exercise.

Optionees can exercise their options at any time at their discretion, and, except for times when the officers, directors and employees are prohibited from trading under the corporate governance policies of the Company (when the “Trading Window” is closed), are also free to sell their shares acquired through exercising their options at any time at their discretion, subject to notification to Management. Options exercised while the Trading Window is closed can only be sold after the Trading Window reopens. The Company has entered into an agreement with Solium Capital Inc. to provide a broker assisted exercise program for Optionees under the Company’s Stock Option Plan.

C )

Summary Compensation Table

The following table (presented in accordance with National Instrument Form 51-102F6 - Statement of Executive Compensation (" Form 51-102F6 ") sets forth all annual and long term compensation for services in all capacities to the Company for the three most recently completed financial years of the Company (to the extent required by Form 51-102F6) earned by each Named Executive Officers (“NEO”). Form 51-102F6 defines “NEO” or “named executive officer” to mean each of the following individuals: (a) a CEO; (b) a CFO; (c) each of the three most highly compensated executive officers of the company, including any of its subsidiaries, or the three most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000 for that financial year; and (d) each individual who would be an NEO but for the fact that the individual was neither an executive officer of the Company or its subsidiaries, nor acting in a similar capacity, at the end of that financial year.

NEO Name and Principal Position	*Year*	*Salary* *(US$)*	Share- Based Awards ⁽¹⁾ *(US$)*	*Option-Based Awards* ^{(1) (2)}		*Non-Equity Incentive Plan Compensation* *(US$)* ⁽²⁾		Pension Value *(US$)*	All Other Compensation *(US$)* ⁽²⁾	Total Compen- sation *(US$)* ⁽²⁾
NEO Name and Principal Position	*Year*	*Salary* *(US$)*	Share- Based Awards ⁽¹⁾ *(US$)*	No. of Options	*(US$)*	Annual Incentive Plans	Long- term Incentive Plans	Pension Value *(US$)*	All Other Compensation *(US$)* ⁽²⁾	Total Compen- sation *(US$)* ⁽²⁾
Ajit Manocha ⁽³⁾ Executive Co-Chairman	2017 2016 2015 2014	35,417 481,250 500,000 250,000	N/A N/A N/A N/A	562,500 200,000 200,000 2,100,000	111,902 132,320 188,885 2,469,164	Nil Nil Nil Nil	Nil Nil Nil Nil	Nil Nil Nil Nil	Nil Nil Nil Nil	147,319 613,570 688,885 2,719,164
Kevin Barnes ⁽⁴⁾ Corporate Controller and Treasurer	2017 2016 2015 2014	146,509 88,335 84,596 76,087	N/A N/A N/A N/A	250,000 100,000 75,000 50,000	49,734 66,159 60,444 42,623	Nil Nil Nil Nil	Nil Nil Nil Nil	Nil Nil Nil Nil	Nil Nil Nil Nil	196,243 154,494 145,040 118,710
Suresh Venkatesan ⁽⁵⁾ Chief Executive Officer	2017 2016 2015	440,000 522,500 306,378	N/A N/A N/A	3,000,000 300,000 6,357,000	596,813 198,479 5,421,577	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil 450,000 Nil	1,036,813 1,170,979 5,727,955
Subhash Deshmukh ⁽⁶⁾ Chief Operating Officer	2017 2016 2015	27,384 310,000 141,186	N/A N/A N/A	- 550,000 1,500,000	- 383,170 1,508,884	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	27,384 693,170 1,650,070
Rajan Rajgopal ⁽⁸⁾ President of “DenseLight	2017	220,000	N/A	1,000,000	214,967	Nil	Nil	Nil	Nil	434,967
Thomas R. Mika ⁽⁷⁾ Chief Financial Officer	2017 2016	250,000 50,685	N/A N/A	1,500,000 1,000,000	320,430 462,954	Nil Nil	Nil Nil	Nil Nil	Nil Nil	570,430 513,639
David Lazovsky ⁽⁹⁾ Executive Chairman	2017	183,333	N/A	3,000,000	760,847	Nil	Nil	Nil	Nil	944,180

NOTES :

- 11 -

(1)

The Company used the Black-Scholes model as the methodology to calculate the grant date fair value. The fair value will be recorded as an operating expense as the stock options vest from the date of grant.

(2)

The exchange rate used in these calculations to convert CAD to USD is based on the exchange rate applicable on the date of grant.

(3)

Mr. Manocha was served as Executive Vice-Chairman from July 7, 2014 to November 17, 2014. He served as Executive Co-Chairman of the Board from November 17, 2014 to April 30, 2016. He served as Executive Chairman of the Board from May 1, 2016 to February 1, 2017.

(4)

Mr. Barnes has served as Controller of the Company since May 9, 2008. He served as Chief Financial Officer from December 1, 2012 to November 2, 2016. He has served as Treasurer since December 1, 2012.

(5)

Dr. Suresh Venkatesan was appointed Chief Executive Officer since June 11, 2015.

(6)

Dr. Subhash Deshmukh served as Chief Operating Officer from June 8, 2015 to January 13, 2017.

(7)

Mr. Thomas R. Mika was appointed Chief Financial Officer since November 2, 2016.

(8)

Mr. Rajan Rajgopal was appointed President of DenseLight Semiconductor Pte. Ltd. since January 23, 2017.

(9)

Mr. Lazovsky was appointed Executive Chairman since February 1, 2017.

D) Incentive Plan Awards

(i) Incentive Plan Awards

The following table sets forth information concerning all awards outstanding under the Stock Option Plan of the Company at the end of the most recently completed financial year, including awards granted before the most recently completed financial year, to each of the Named Executive Officers:

*NEO Name*	*Option-Based Awards*				*Share-Based Awards*
*NEO Name*	No. of Shares Underlying Unexercised Options *(#)*	Option Exercise Price *($/share)*	Option Expiration *Date*	Value of Unexercised In- The Money Options ⁽¹⁾ *(US$)*	Number of Shares or Units of Shares That Have Not Vested *(#)*	Market or Payout Value of Share-Based Awards That Have Not Vested *(US$)*
David Lazovsky	25,000	CA$1.54	12-Jun-2020	-	N/A	N/A
	250,000	CA$1.99	08-Apr-2020	-	N/A	N/A
	150,000	CA$0.86	07-Jul-2026	-	N/A	N/A
	3,000,000	CA$0.39	01-Feb-2027	-	N/A	N/A
Ajit Manocha	2,000,000	CA$1.75	03-Jul-2019	-	N/A	N/A
	100,000	CA$1.24	12-Aug-2019	-	N/A	N/A
	200,000	CA$1.54	12-Jun-2020	-	N/A	N/A
	200,000	CA$0.86	07-Jul-2026	-	N/A	N/A
	562,500	CA$0.28	13-Jul-2027	-	N/A	N/A
Kevin Barnes	25,000	CA$0.23	16-Feb-2022	1,860	N/A	N/A
	100,000	CA$0.44	14-Nov-2018	-	N/A	N/A
	100,000	CA$0.49	13-Aug-2018	-	N/A	N/A
	25,000	CA$0.51	28-Sep-2021	-	N/A	N/A
	50,000	CA$0.76	28-Feb-2021	-	N/A	N/A
	50,000	CA$1.24	12-Aug-2019	-	N/A	N/A
	50,000	CA$1.54	12-Jun-2020	-	N/A	N/A
	25,000	CA$1.08	13-Aug-2020	-	N/A	N/A
	100,000	CA$0.86	07-Jul-2026	-	N/A	N/A
	250,000	CA$0.28	31-Jul-2027	-	N/A	N/A

- 12 -

*NEO Name*	*Option-Based Awards*				*Share-Based Awards*
*NEO Name*	No. of Shares Underlying Unexercised Options *(#)*	Option Exercise Price *($/share)*	Option Expiration *Date*	Value of Unexercised In- The Money Options ⁽¹⁾ *(US$)*	Number of Shares or Units of Shares That Have Not Vested *(#)*	Market or Payout Value of Share-Based Awards That Have Not Vested *(US$)*
Thomas Mika	1,000,000	CA$0.62	02-Nov-2026	-	N/A	N/A
	500,000	CA$0.385	16-Jan-2027	-	N/A	N/A
	1,000,000	CA$0.28	113-Jul-2027	-	N/A	N/A
Dr. Suresh Venkatesan	6,357,000	CA$1.40	15-Jun-2020	-	N/A	N/A
	300,000	CA$0.86	07-Jul-2026	-	N/A	N/A
	3,000,000	CA$0.28	13-Jul-2027	-	N/A	N/A
Dr. Subhash Deshmukh	666,666	CA$1.62	30-Jun-2018	-	N/A	N/A
Dr. Subhash Deshmukh	78,125	CA$0.96	30-Jun-2018	-	N/A	N/A
Rajan Rajgopal	500,000	CA$0.36	23-Jan-2027	-	N/A	N/A
Rajan Rajgopal	500,000	CA$0.28	13-Jul-2027	-	N/A	N/A

This amount is calculated based on the difference between the market value of the shares underlying the vested and unvested options at the end of the most recently completed financial year, being CA$0.21 (US$0.17), and the exercise or base price of the option. The exchange rate used in these calculations to convert CAD to USD was 0.7953, being the rate on December 31, 2017.

(ii) Outstanding Share-Based Awards and option-Based Awards – Value Vested or Earned During the Year

The value vested or earned during the most recently completed financial year of incentive plan awards granted to Named Executive Officers are as follows:

*NEO Name*	Option-Based Awards - Value Vested *During The Year ⁽¹⁾* *(US$)*	*Share-Based Awards -* *Value Vested* *During The Year ⁽²⁾* *(US$)*	Non-Equity Incentive Plan Compensation - Value Earned *During The Year* *(US$)*
Ajit Manocha	-	N/A	N/A
Kevin Barnes	-	N/A	N/A
Dr. Suresh Venkatesan	-	N/A	N/A
Dr. Subhash Deshmukh	-	N/A	N/A
Rajan Rajgopal	-	N/A	N/A
David Lazovsky	-	N/A	N/A

NOTES :

(1)

This amount is the dollar value that would have been realized computed by obtaining the difference between the market price of the underlying securities on the vesting date and the exercise or base price of the options under the option-based award. For the NEOs to have realized this value, they would have had to exercise their options and sell the shares on the day of vesting. The exchange rate used in these calculations to convert CAD to USD was 0.7953, being the rate on December 31, 2017.

(2)

This amount is the dollar value realized computed by multiplying the number of shares or units by the market value of the underlying shares on the vesting date.

- 13 -

(iii) Narrative Discussion

The current stock option plan of the Company is the 2016 Fixed Stock Option Plan (the "2016 Plan") which was approved by the disinterested shareholders of the Company on July 7, 2016 and accepted for filing by the TSXV). Under the 2016 Plan, the Company is required to reserve a number of shares eligible for granting under the Plan, which needs to be approved by shareholders and cannot exceed 20% of the issued and outstanding shares. The 2016 Plan reserved 44,352,885 shares as the maximum number (the "Fixed Number") of common shares which may be issued pursuant to options granted under the 2016 Plan and previous plans.

The purpose of the Plan is to allow the Company to grant options to directors, officers, employees and consultants, as additional compensation, and as an opportunity to participate in the success of the Company. The granting of such options is intended to align the interests of such persons with that of the shareholders. Options are exercisable over periods of up to ten (10) years as determined by the Board and are required to have an exercise price no less than the closing market price of the Company’s shares prevailing on the last trading day before the option is granted less a discount of up to 25%, the amount of the discount varying with market price in accordance with the policies of the TSXV. Generally, the Company does not grant options at a discount to the market price. Pursuant to the Plan, the Board may from time to time authorize the issue of options to directors, officers, employees and consultants of the Company and its subsidiaries or employees of companies providing management or consulting services to the Company or its subsidiaries. In addition, as a percentage of the issued and outstanding shares at the time of grant, the number of shares which may be reserved for issuance:

(a)

to all optionees under the Stock Option Plan in aggregate shall not exceed 20%;

(b)

to all insiders as a group may not exceed 20%; and

(c)

to any one individual may not exceed 2% on a yearly basis if the optionee is engaged in investor relations activities or is a consultant.

By resolution of the Directors dated February 25, 2016, it was resolved that, generally, the terms of stock options would be ten years with 25% of the stock options vesting on the first anniversary of the grant of the options and the balance vesting quarterly for three years thereafter. However, the Board can vary the vesting schedule for differing purposes, subject to complying with TSXV Policies.

The Plan provides that if a change of control, as defined therein, occurs, all shares subject to option shall immediately become vested and may thereupon be exercised in whole or in part by the option holder. The exercise price for options is generally set at the closing price of the common shares of the Company as of the last trading day prior to the date of the grant of the options, in accordance with TSXV Policies.

As at December 31, 2017, the number of outstanding options granted under the Stock Option Plan was 33,090,291. For more information, refer to Note 13 “Stock Options and Contributed Surplus” in the Company’s audited financial statements for the year ended December 31, 2017. The criteria for determining awards to the NEOs is described under the “Stock Options” subsection of “Description and Explanation of Elements of Compensation” . As of May 7, 2018, the number of outstanding options granted under the Stock Option Plan was 40,506,521.

The Company’s Non-Equity Incentive Plan for compensation to the NEOs along with the criteria for determining awards is described under the “Variable Pay Compensation” subsection of “Description and Explanation of Elements of Compensation” .

- 14 -

E) Pension Plan Benefits

(i)

Defined Benefit Plans

The Company does not provide a defined benefit plan to the NEOs or any of its employees.

(ii)

Defined Contribution Plans

The Company offers a defined contribution plan that is a 401K Plan for the US Subsidiary but does not contribute toward such plan.

(iii) Deferred Compensation Plans

The Company does not have any Deferred Compensation Plans other than that described above.

F) Termination and Change of Control Benefits

Other than disclosed below in “Written Management Agreements,” the Company has no plans or arrangements in respect of remuneration received or that may be received by the Officers of the Company to compensate such Officers, in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, other than immediate vesting of existing and outstanding stock options in the event of change of control.

Written Management Agreements

The Company and/or its subsidiaries entered into employment contracts with the following current and former officers as follows:

Mr. Barnes has an arrangement with the Company to provide consulting services starting January 1, 2013 for a period of one year with an automatic one year renewal at a monthly rate of CA$11,667. The Company may terminate the arrangement without cause on six months’ notice or equivalent compensation.

Dr. Venkatesan entered into an Executive Employment Agreement with an effective date of June 10, 2015 wherein Dr. Venkatesan (i) would be paid US$550,000 per year under at-will terms of employment; (ii) would be eligible for annual and special bonuses as determined by the Board of Directors; (iii) was granted 6,357,000 stock options vesting over 4 years; (iv) was eligible for a signing bonus of US$450,000 payable on the first anniversary of the effective date provided that the Executive Employment Agreement had not been terminated prior to that date; and (v) would receive a severance of twelve months on termination of employment by the Company, other than for cause. Dr. Venkatesan agreed to reduce his compensation by 20% effective October 2016. At Dr. Venkatesan’s request, the reduction subsequently became permanent.

Dr. Deshmukh entered into an Executive Employment Agreement with an effective date of June 8, 2015 wherein Dr. Deshmukh (i) would be paid US$250,000 (subsequently amended to US$300,000 effective January 1, 2016) per year under at-will terms of employment; (ii) would be eligible for annual and special bonuses as determined by the Board of Directors up to a maximum of US$250,000; (iii) was granted 1,500,000 stock options vesting over 4 years; and (iv) was to receive a severance of six months’ salary, if terminated during the first year of employment, plus two months’ salary additional per each full year of employment thereafter, up to a maximum of twelve months of termination of employment by the Company, other than for cause. Dr. Deshmukh agreed to reduce his compensation by 20% effective October 2016. On January 13, 2017, Dr. Deshmukh resigned as Chief Operating Officer of the Company. No termination payments were paid to Dr. Deshmukh.

Mr. Mika entered into an Executive Employment Agreement with an effective date of November 2, 2016 wherein Mr. Mika (i) would be paid US$250,000 per year under at-will terms of employment; (ii) would be eligible for annual and special bonuses as determined by the Board of Directors; (iii) was granted 1,000,000 stock options vesting over 4 years; (iv) would receive an additional 500,000 stock options vesting over 4 years in the first quarter of 2017; and (v) would be entitled to compensation of three months’ salary of employment by the Company, if termination is other than for cause.

- 15 -

On July 1, 2016, Mr. Lazovsky entered into a Consulting Agreement with the Company to provide strategic, technological, integration and other general consulting services. For his services, Mr. Lazovsky was paid US$150,000 for the term from July 1, 2016 to December 31, 2016. Mr. Lazovsky entered into an Executive Agreement to provide services as the Executive Chairman of the Board with an effective date of February 1, 2017 wherein Mr. Lazovsky (i) would be paid US$200,000 per year under at-will terms of employment; (ii) would be eligible for annual and special bonuses as determined by the Board of Directors; (iii) was granted 3,000,000 stock options vesting over 4 years; and (iv) would be entitled to compensation of six months’ salary on termination of employment within 2 years by the Company, if termination is other than for cause.

Effective December 30, 2016, Mr. Rajan Rajgopal entered into an Employment Agreement with DenseLight to provide services as the President and General Manager of DenseLight. As per the agreement, Mr. Rajgopal (i) would be paid US$220,000 per year; (ii) would be eligible for annual and special bonuses as determined by the Board of Directors; (iii) was granted 500,000 stock options vesting over 4 years; (iv) would be granted an additional 500,000 stock options no later than June 30, 2017; and (v) would be entitled to compensation of one month’s salary on termination of employment by the Company, if termination is other than for cause.

G) Compensation of Directors

(i) Director Compensation Table

The following table sets forth all amounts of compensation provided to the directors, who are not also a Named Executive Officer , for the Company’s most recently completed financial year:

*Director* *Name* ⁽¹⁾	*Fees or Salary* ⁽²⁾ *(US$)*	*Share-Based Awards* *(US$)*	*Option-Based Awards* ⁽²⁾⁽³⁾		Non-Equity Incentive Plan Compensation *(US$)*	*Pension Value* *(US$)*	All Other Compensation *(US$)*	*Total* *(US$)*
*Director* *Name* ⁽¹⁾	*Fees or Salary* ⁽²⁾ *(US$)*	*Share-Based Awards* *(US$)*	*No. of Options*	*Value* *(US$)*	Non-Equity Incentive Plan Compensation *(US$)*	*Pension Value* *(US$)*	All Other Compensation *(US$)*	*Total* *(US$)*
John F. O’Donnell ⁽⁴⁾	46,435	N/A	625,000	124,336	N/A	N/A	N/A	170,771
Todd A. DeBonis ⁽⁵⁾	35,750	N/A	562,500	111,902	N/A	N/A	N/A	147,652
Jean-Louis Malinge ⁽⁸⁾	10,000	N/A	525,500	115,099	N/A	N/A	N/A	125,099
Ajit Manocha ⁽⁷⁾	20,083	N/A	-	-	N/A	N/A	N/A	20,083
Chris Tsiofas	56,570	N/A	687,500	136,770	N/A	N/A	N/A	193,340
Mohandas Warrior ⁽⁶⁾	35,750	N/A	562,500	111,902	N/A	N/A	N/A	147,652

NOTES:

(1)

Relevant disclosure has been provided in the Summary Compensation Table above, for directors who are also Named Executive Officers.

(2)

The exchange rate used in these calculations to convert CAD to USD is based on the exchange rate applicable on the date of grant.

(3)

(4)

The firm of Stikeman Keeley Spiegel LLP of which Mr. O’Donnell is counsel was paid the sum of USD $115,660 for legal fees incurred in 2017 (2016 – USD $113,250).

(5)

Mr. DeBonis was appointed to the Board on April 8, 2015 and resigned from the Board on January 19, 2018.

(6)

Mr. Warrior was appointed to the Board on June 12, 2015.

(7)

Mr. Manocha resigned from the Board on September 4, 2017.

(8)

Mr. Malinge was appointed to the Board on September 5, 2017.

- 16 -

(ii)

Narrative Discussion

From January 1, 2017 to March 31, 2017, the outside, or non-management, directors were paid an annual fee of $32,000 for acting as a director, plus $1,500 per board meeting attended and $750 per committee meeting – paid quarterly. Committee Chairs were entitled to receive an additional $8,000 annually. Mr. O’Donnell serves as Chair of the Corporate Governance and Nominating Committee and Mr. Tsiofas serves as Chair of the Audit Committee and the Compensation Committee.

Effective April 1, 2017, non-executive directors are paid $120,000 annually, consisting of a cash retainer of $30,000, plus stock options equal to $90,000 (based on a Black-Scholes valuation). No additional fees are paid for attending board or committee meetings. An additional $10,000 in cash and $10,000 in value of options are granted to each standing committee chair. The options vest quarterly over the one-year term of service as directors. The 2017 director compensation reflects the compensation arrangement from January to March 2017 and the new arrangement that became effective April 1, 2017.

The directors participate in the Company’s Stock Option Plan for the granting of incentive stock options to the officers, employees and directors, which Plan is described under the subsection “Narrative Discussion” of “Incentive Plan Awards” . The purpose of granting such options is to assist the Company in compensating, attracting, retaining and motivating the directors of the Company and to closely align the personal interests of such persons to that of the shareholders.

(iii)

Incentive Plan Awards - Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth information as at December 31, 2017, the end of the most recently completed financial year, concerning all awards outstanding under incentive plans of the Company, including awards granted before the most recently completed financial year, to each of the directors who are not Named Executive Officers :

	*Option-Based Awards*				*Share-Based Awards*
*Director Name*	Number of Securities Underlying Unexercised Options *(#)*	Option Exercise Price *($)*	Option Expiration Date	Value of Unexercised In-The-Money Options ⁽¹⁾⁽²⁾ *(US$)*	Number of Shares or Units of Shares That Have Not Vested *(#)*	Market or Payout Value of Share- Based Awards That Have Not Vested *(US$)*
John F. O’Donnell	150,000	CA$0.23	16-Feb-2022	-	N/A	N/A
	12,500	CA$0.345	19-Aug-2020	-	N/A	N/A
	300,000	CA$0.49	13-Aug-2018	-	N/A	N/A
	300,000	CA$1.24	12-Aug-2019	-	N/A	N/A
	100,000	CA$1.54	12-Jun-2020	-	N/A	N/A
	150,000	CA$0.86	07-Jul-2026	-	N/A	N/A
	625,000	CA$0.28	13-Jul-2027	-	N/A	N/A
Chris Tsiofas	300,000	CA$0.49	13-Aug-2018	-	N/A	N/A
	300,000	CA$1.24	12-Aug-2019	-	N/A	N/A
	300,000	CA$1.54	12-Jun-2020	-	N/A	N/A
	150,000	CA$0.86	07-Jul-2026	-	N/A	N/A
	687,500	CA$0.28	13-Jul-2027	-	N/A	N/A
Todd A. DeBonis	275,000	CA$1.54	12-Jun-2020	-	N/A	N/A
	250,000	CA$1.99	08-Apr-2020	-	N/A	N/A
	150,000	CA$0.86	07-Jul-2026	-	N/A	N/A
	562,500	CA$0.28	13-Jul-2027	-	N/A	N/A

- 17 -

	*Option-Based Awards*				*Share-Based Awards*
*Director Name*	Number of Securities Underlying Unexercised Options *(#)*	Option Exercise Price *($)*	Option Expiration Date	Value of Unexercised In-The-Money Options ⁽¹⁾⁽²⁾ *(US$)*	Number of Shares or Units of Shares That Have Not Vested *(#)*	Market or Payout Value of Share- Based Awards That Have Not Vested *(US$)*
Jean-Louis Malinge	525,000	CA$0.30	05-Sep-2027	-	N/A	N/A
Mohandas Warrior	250,000	CA$1.54	12-Jun-2020	-	N/A	N/A
	150,000	CA$0.86	07-Jul-2026	-	N/A	N/A
	562,500	CA$0.28	13-Jul-2027	-	N/A	N/A

NOTES:

(1) This amount is calculated based on the difference between the market value of the securities underlying the options at the end of the most recently completed financial year, which was CA$0.21 (US$0.17), and the exercise or base price of the option.

(2) The exchange rate used in these calculations to convert CAD to USD was 0.7953, being the rate on December 31, 2017.

(iv)

Incentive Plan Awards - Value Vested or Earned During the Year

The value vested or earned during the most recently completed financial year of incentive plan awards granted to directors who are not Named Executive Officers are as follows:

*Director Name*	Option-Based Awards - Value Vested *During The Year ⁽¹⁾* *(US$)*	*Share-Based Awards -* *Value Vested* *During The Year* *(US$)*	Non-Equity Incentive Plan Compensation - *Value Earned* *During The Year* *(US$)*
Todd A. DeBonis	-	N/A	N/A
John F. O’Donnell	-	N/A	N/A
Jean-Louis Malinge	-	N/A	N/A
Chris Tsiofas	-	N/A	N/A
Mohandas Warrior	-	N/A	N/A

NOTES:

(1) This amount is the dollar value that would have been realized computed by obtaining the difference between the market price of the underlying securities on the vesting date and the exercise or base price of the options under the option-based award. For the directors to have realized this value, they would have had to exercise their options and sell the shares on the day of vesting. None of these options were exercised.

(2)

The exchange rate used in these calculations to convert CAD to USD was the exchange rate applicable on the vesting date.

- 18 -

H) Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth the Company's compensation plans under which equity securities are authorized for issuance as at December 31, 2017, being the end of the most recently completed financial year.

*Plan Category*	Number of securities to be issued upon exercise of outstanding options	Weighted-average exercise price of outstanding options *(US$)*	Number of securities remaining available for future issuance under equity compensation
Equity compensation plans approved by securityholders
2016 Stock Option Plan	33,090,291	$0.68	11,167,594

INDEBTEDNESS TO COMPANY OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS

As at the date hereof, there is no indebtedness of any current or former director, executive officer or employee of the Company or any subsidiaries which is owing to the Company or any of its subsidiaries or to another entity which is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or any of its subsidiaries, entered into in connection with a purchase of securities or otherwise.

No individual who is, or at any time during the most recently completed financial year was, a director or executive officer of the Company, no proposed nominee for election as a director of the Company and no associate of such persons:

(i)

is or at any time since the beginning of the most recently completed financial year has been, indebted to the Company or any of its subsidiaries; or

(ii)

whose indebtedness to another entity is, or at any time since the beginning of the most recently completed financial year has been, the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or any of its subsidiaries in relation to a securities purchase program or other program.

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Except as set out herein, no person who has been a director or executive officer of the Company at any time since the beginning of the Company's last financial year, no proposed nominee of Management of the Company for election as a director of the Company and no associate or affiliate of the foregoing persons, has any material interest, direct or indirect, by way of beneficial ownership or otherwise, in matters to be acted upon at the Meeting other than the election of directors and potentially, the amendment of the Company’s stock Option Plan.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

No informed person or proposed director of the Company and no associate or affiliate of the foregoing persons has or has had any material interest, direct or indirect, in any transaction since the commencement of the Company's most recently completed financial year or in any proposed transaction which in either such case has materially affected or would materially affect the Company or any of its subsidiaries, except for stock option grants.

APPOINTMENT OF AUDITORS

Marcum LLP, Certified Public Accountants, of New Haven, Connecticut, are the auditors of the Company.

At the Meeting, shareholders will be asked to re-appoint Marcum LLP as the auditors of the Company to hold office for the ensuing year at a remuneration to be fixed by the directors.

Unless otherwise instructed, the proxies given pursuant to this solicitation will be voted for the re-appointment of Marcum LLP as the auditors of the Company to hold office for the ensuing year at a remuneration to be fixed by the directors.

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MANAGEMENT CONTRACTS

No management functions of the Company or its subsidiaries are performed to any substantial degree by a person other than the directors or executive officers of the Company or its subsidiaries.

Corporate Governance Disclosure

A summary of the responsibilities and activities and the membership of each of the Committees is set out below.

National Instrument (“NI”) 58-201 establishes corporate governance guidelines which apply to all public companies. The Company has reviewed its own corporate governance practices in light of these guidelines. In certain cases, the Company’s practices comply with the guidelines, however, the Board considers that some of the guidelines are not suitable for the Company at its current stage of development and therefore these guidelines have not been adopted. NI 58-101 mandates disclosure of corporate governance practices which disclosure is set out below.

Independence of Members of Board

The Company's Board in 2017 consisted of seven (7) directors, four (4) of whom were independent based upon the tests for independence set forth in NI 52-110. Todd DeBonis, Ajit Manocha, Mohandas Warrior and Chris Tsiofas were the independent directors. David Lazovsky was not independent after he was appointed the Executive Chairman of the Company. Ajit Manocha resigned as the Executive Chairman of the Board on February 1, 2017 and was replaced by David Lazovsky. John O’Donnell is not independent as he acts as legal counsel to the Company. Dr. Suresh Venkatesan is not independent as he is the Chief Executive Officer of the Company. On March 27, 2018, the Board was increased to eight (8) directors, (five) of whom are independent. Jean-Louis Malinge, Chris Tsiofas, Mohandas Warrior, Don Listwin and Peter Dominic Charbonneau are the independent directors.

Management Supervision by Board

During 2017, independent supervision of Management was accomplished through its independent Board members. The Board considered that Management was effectively supervised by the independent directors as the independent directors were actively and regularly involved in reviewing and supervising the operations of the Company and had regular and full access to Management. The CEO and CFO reported upon the operations of the Company separately to the independent directors of the Board at such other times throughout the year as was considered necessary or advisable by the independent directors. The independent directors were encouraged to meet at any time they consider necessary without any members of Management including the non-independent directors being present, and generally did so several times per year by adjourning Board meetings and asking all persons who were not independent directors to leave the room. The Company's auditors, legal counsel and employees may have been invited to attend. Further supervision was performed through the Audit Committee currently composed of all independent directors, who meet with the Company's auditors without Management being in attendance, generally on a quarterly basis and at least once a year. Additional supervision was performed through the Compensation Committee and the Corporate Governance and Nominating Committee (the “CGNC”), both of which were composed of a majority of independent directors. The CGNC has determined that the current constitution of the Board of eight (8) directors is appropriate for the Company's current stage of development. The Board currently has a majority of independent directors.

Participation of Directors in Other Reporting Issuers

No director of the Company, nor any proposed nominee for election as a director, hold directorships in other reporting issuers, except for (i) John F. O’Donnell who is a director and Chairman of the Board of Peloton Minerals Corporation (CSE: PMC) and a director of African Metals Corporation (NEX: AFR.H), (ii) Peter Charbonneau who is a director of: Telus Corporation (TSX: T), CounterPath Corporation (TSX: PATH), Mitel Networks Corporation (TSX: MNW) and March Networks Corporation (TSX: MN), (iii) Don Listwin who is a director of Calix Inc. (NYSE: CALX) and, (iv) Jean-Louis Malinge who is a director of EGIDE Group (EURONEXT: GID).

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Orientation and Continuing Education

While the Company does not have formal orientation and training programs, new Board members are provided with:

information respecting the functioning of the Board, committees and copies of the Company's corporate governance policies;

access to recent, publicly filed documents of the Company, technical reports and the Company's internal financial information;

access to Management and technical experts and consultants; and

advice to consult on the internet the TSXV Policy relating to Corporate Governance and applicable regulations and policies and also the applicable securities laws, rules and regulations.

Board members are encouraged to communicate with Management, auditors and technical consultants; to keep themselves current with industry trends and developments and changes in legislation with Management’s assistance; and to attend related industry seminars and visit the Company’s operations. Board members have full access to the Company's records.

Ethical Business Conduct

The Board views good corporate governance as an integral component to the success of the Company and to meet responsibilities to shareholders. The Board has adopted a Code of Conduct which was updated on February 25, 2016 and has instructed its Management and employees to abide by the provisions of the Code. A copy of said code is posted on the Company’s website www.poet-technologies.com.

The directors of the Corporation are responsible for monitoring compliance with this Code, for regularly assessing its adequacy, for interpreting this Code in any particular situation and for approving any changes to this Code from time to time.

Investor Relations Disclosure Policy

The Board has established a Company Disclosure Policy related to disclosure and external communications, which applies to all officers, directors and employees of the Company. The purpose of the Policy is to ensure compliance with legal and regulatory requirements, when preparing public disclosure documents, answering investor inquiries and/or attending conferences or meetings with its analysts and institutional shareholders. This policy covers disclosures in documents filed with the securities regulators and written statements made in POET's annual and quarterly reports, news releases, letters to shareholders, presentations (both of a business or technical nature), marketing materials, advertisements, and information contained on POET's website and other electronic communications. It also extends to oral statements made in meetings and telephone conversations with analysts and investors, interviews with the media as well as speeches, press conferences, and conference calls.

Trading by Insiders

Insiders of the Company are expected to comply with all applicable Regulatory Laws, Rules and Regulations with respect to buying and selling shares of the Company. In addition, the Company has well-defined criteria for when the Trading Window for officers and directors opens and closes as per the Company’s Securities Trading Policy posted on its website www.poet-technologies.com, the purpose of which is to ensure that Insiders do not trade shares of the Company at inappropriate times. Insiders are expected to abstain from trading the shares of the Company when the Trading Window is closed.

Nomination of Directors

The Board established a Corporate Governance and Nominating Committee (the “CGNC”) currently composed of John O’Donnell (Chairman of the CGNC), David Lazovsky and Chris Tsiofas. The CGNC has the responsibility for identifying potential Board candidates. The CGNC assesses potential Board candidates to fill perceived needs on the Board for required skills, expertise, independence and other factors. Members of the Board and representatives of the semi-conductor and infrared industries are consulted for possible candidates. The Board has adopted a written charter that sets forth the responsibilities of the CGNC. In addition to its Board identification responsibilities, the CGNC is mandated to take a leadership role in shaping corporate governance by overseeing and assessing the functioning of the Board and the committees of the Board and developing, implementing and assessing effective corporate governance processes and practices. The Charter was recently amended and a copy is posted on the Company’s website www.poet-technologies.com.

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Compensation of Directors and the CEO

On December 14, 2007, the Company established a Compensation Committee (the “CC”) to be responsible for reviewing all overall compensation strategy, objectives and policies; annually reviewing and assessing the performance of the executive officers; recommending to the Board the compensation of the executive officers; reviewing executive appointments; and recommending the adequacy and form of directors' compensation. The CC also reviews and recommends incentive stock option awards under the Company’s Stock Option Plan. The current members of the CC are Chris Tsiofas (Chairman of the CC), Don Listwin and John O’Donnell. Mr. Manocha joined the CC on February 25, 2016 and resigned on March 22, 2017.

The CC discusses and makes recommendations to the Board for approval or disapproval of all compensation issues that pertain to the Company. The compensation programs of the Company are designed to reward performance and to be competitive with the compensation agreements of other comparable semiconductor companies. The CC is responsible for evaluating the compensation of the senior Management and assuring that they are compensated effectively in a manner consistent with the Company’s business, stage of development, financial condition and prospects, and the competitive environment. Specifically, the CC is responsible for: (i) reviewing the compensation practices and policies of the Company to ensure that they are competitive and that they provide appropriate motivation for corporate performance and increased shareholder value; (ii) overseeing the administration of the Company’s compensation programs, and reviewing and approving the employees who receive compensation and the nature of the compensation provided under such programs, and ensuring that all Management compensation programs are linked to meaningful and measurable performance targets; (iii) making recommendations to the Board regarding the adoption, amendment or termination of compensation programs and the approval of the adoption, amendment and termination of compensation programs of the Company, including for greater certainty, ensuring that if any equity-based compensation plan is subject to shareholder approval, and that such approval is sought; (iv) periodically surveying the executive compensation practices of other comparable companies; (v) establishing and ensuring the satisfaction of performance goals for performance-based compensation; (vi) annually reviewing and approving the annual base salary and bonus targets for the senior executives of the Company, other than the CEO; (vii) reviewing and approving annual corporate goals and objectives for the CEO and evaluating the CEO’s performance against such goals and objectives; (viii) annually reviewing and approving, based on the CC’s evaluation of the CEO, the CEO’s annual base salary, the CEO’s bonus, and any stock option grants and other awards to the CEO under the Company’s compensation programs (in determining the CEO’s compensation, the CC will consider the Company’s performance and relative shareholder return, the compensation of CEOs at other companies, and the CEO’s compensation in past years); and (ix) review the annual report on executive compensation required to be prepared under applicable corporate and securities legislation and regulation including the disclosure concerning members of the CC and settling the reports required to be made by the CC in any document required to be filed with a regulatory authority and/or distributed to shareholders.

Board Committees

In addition to its responsibility for nominating directors, the CGNC also has the responsibility for monitoring corporate governance compliance and setting corporate governance policy.

The Company also has a Disclosure Committee who meet periodically, as needed, to review the Company’s material news disclosure prior to dissemination. The current members of the Disclosure Committee are Suresh Venkatesan, John O’Donnell and Chris Tsiofas by reason of their positions as CEO, Chairman of the CGNC and Chairman of the Audit Committee respectively. On February 25, 2016, the Directors, on the advice of the CGNC resolved that the CGNC be authorized as it may determine, on a case by case basis, to add a supplemental member to the Committee as a subject matter expert, depending on the nature of the disclosure, to ensure the appropriateness of the disclosure.

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As the directors are actively involved in the operations of the Company, the Board has determined that additional committees, other than the AC, the CGNC and the CC, are not necessary at this stage of the Company’s development.

Assessments

The Board annually, at such times as it deemed appropriate, reviewed the performance and effectiveness of the Board, the directors and its committees to determine whether changes in size, personnel or responsibilities are warranted. To assist in its review, the Board conducted informal surveys of its directors, received reports from the CGNC on its assessment of the functioning of the Board and reports from each committee respecting its own effectiveness.

Audit Committee

A) The Audit Committee's Charter

The current Audit Committee Charter was put in place on December 14, 2007, a copy of which can be found in Appendix “A” and has been reviewed periodically since that time.

B) Composition of the Audit Committee

The following are the current members of the Committee:

Name	Independent / Not independent ⁽¹⁾	Financially literate / Not Financially literate ⁽¹⁾
Chris Tsiofas	Independent	Financially literate
Mohandas Warrior	Independent	Financially literate
Peter Dominic Charbonneau	Independent	Financially literate

NOTE:

(1) As defined by National Instrument 52-110 ("NI 52-110").

C) Relevant Education and Experience

The education and experience of each Audit Committee member that is relevant to the performance of his responsibilities are as follows:

Chris Tsiofas, the Chairman of the Audit Committee, holds B. Comm. from the University of Toronto. He has been a member of the Institute of Chartered Accountants of Ontario since 1993 and also a member of the Canadian Tax Foundation. He is a Partner with Myers Tsiofas Norheim Chartered Professional Accountants LLP.

Mohandas Warrior was the President & CEO of Alfalight, Inc. between February 2004 and July 2016 – a high power diode laser company which serves military and industrial customers. Mohan is a 30+ year semiconductor industry veteran with 15 years of experience at Motorola Semiconductors where he held senior executive responsibilities in engineering and operations. Following Motorola, he successfully launched two venture-backed companies in Austin, Texas. He was a founding charter member of the Austin chapter of TiE and served on the Texas Higher Education Panel. He has also served on the Electronics Materials panel of the National Science Foundation and has been an invited speaker/panelist to many semiconductor forums. He serves on the Boards of several opto-electronic and technology companies. Mohan’s academic credentials include a BS in Chemical Engineering from IIT Delhi, a MS in Chemical Engineering from Syracuse University and an MBA from the Kellogg School of Management at Northwestern University.

Peter Dominic Charbonneau holds a Bachelor of Science from the University of Ottawa and a Master of Business Administration from the University of Western Ontario. He is also a member and elected Fellow of the Institute of Chartered Professional Accountants of Ontario and has received the ICD.D designation from Institute of Corporate Directors of Canada. Mr. Charbonneau was a general partner at Skypoint Capital Corporation for almost 15 years, where he was jointly responsible for the placement of $100 million of capital in early-stage telecommunications and data communication companies.

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All members have an understanding of the accounting principles used by the Company to prepare its financial statements and have an understanding of its internal controls and procedures for financial reporting.

D) Audit Committee Oversight

At no time since the commencement of the Company's most recently completed financial year was a recommendation of the Committee to nominate or compensate an external auditor not adopted by the Board of Directors.

E) Reliance on Certain Exemptions

At no time since the commencement of the Company's most recently completed financial year has the Company relied on the exemption in Section 2.4 of NI 52-110 (De Minimis Non-audit Services) , or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110.

F) Pre-Approval Policies and Procedures

The Committee has adopted specific policies and procedures for the engagement of non-audit services as described above in paragraph 7 (e) of the Audit Committee Charter.

G) External Auditors Service Fees (By Category)

The aggregate fees billed by the Company's external auditors for each of the last two fiscal years for audit fees are as follows:

Financial Year Ending	Audit Fees ⁽¹⁾	Audit Related Fees	Tax Fees ⁽²⁾	All Other Fees
December 31, 2017	$165,000	Nil	$18,690	Nil
December 31, 2016 ⁽¹⁾	$97,000	Nil	$8,650	Nil

NOTE:

(1)

Audit fees consist of services that would normally be provided in connection with statutory and regulatory filings or engagements, including services that generally only the independent accountant can reasonably provide.

(2)

Tax fees relate to tax compliance, planning and advice.

Expectations of Management

The Board expects Management to operate the business of the Company in a manner that enhances shareholder value and is consistent with the highest level of integrity. Management is expected to execute the Company's business plan and to meet performance goals and objectives.

PARTICULARS OF OTHER MATTERS TO BE ACTED UPON

The Company is seeking shareholders’ approval for: (a) amendments to the Company’s Stock Option Plan.

Approval of Stock Option Plan

Introduction

On July 7, 2016, Shareholders of the Company approved the 2016 Plan whereby the number of Shares (the “Fixed Number”) issuable under the Plan was increased to 44,352,885, representing 20% of the issued and outstanding shares of the Company.

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On April 26, 2018, the directors resolved to increase the Fixed Number of shares reserved for issuance under the Company’s Stock Option Plan to such number equal to 20% of the issued and outstanding shares of the Company on the day prior to the Meeting, subject to shareholder and TSXV approval. (the “2018 Plan”). All other terms and conditions remain unchanged. As at May 7, 2018 were 288,056,802 Shares of the Company issued and outstanding. If approved by the shareholders, the Fixed Number issuable under the Plan will be increased to 57,611,360, an increase of 13,258,475 Shares reserved for issuance under the Plan.

To be effective, the Company must obtain approval of a simple majority of the shareholders at the Meeting, to the increase in the number of options, but excluding insiders and their associates, (the "disinterested shareholders") with respect to the adoption of the 2018 Plan. For the purposes hereof, an "Insider" is a director or senior of the Company, a director or senior officer of a company that is itself an Insider or subsidiary of the Company, or a person whose control, or direct or indirect beneficial ownership, or a combination thereof, over securities of the Company extends to securities carrying more than 10% of the voting rights attached to all the Company's outstanding voting securities.

Text of Resolution

Accordingly, at the Meeting, shareholders will be asked to pass an ordinary resolution in the following form:

RESOLVED to:

(a)

approve the amendment of the Company’s stock option plan pursuant to which the Board of Directors may, from time to time, grant stock options to directors, officers, employees and consultants of the Company and its subsidiaries (the "Plan") as follows:

(i)

to increase the number of common shares of the Company reserved for issuance under the Plan (the “Fixed Number”) from 44,352,885 to 57,611,360, being 20% of the number of issued and outstanding common shares of the Company; and

(b)

(with all Interested Parties abstaining from voting) to approve the adoption of the 2018 Plan incorporating the aforesaid amendment providing for the grant of the increased number of options under the Plan and under all other previously established share compensation arrangements.

Recommendation of Directors

The Board recommends that the holders of Common Shares vote in favour of the amendments to the Plan and the adoption of the 2018 Plan. Unless otherwise instructed, the persons named in the accompanying Proxy (provided the same is duly executed in their favour and is duly deposited) intend to vote FOR the approval of the Stock Option Plan.

Additional Information AND DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed with the securities commissions or similar regulatory authority of the Canadian provinces are specifically incorporated by reference into, and form an integral part of, this Information Circular: (i) the financial statements for the year ended December 31, 2017 (ii) the report of the auditors thereon, (iii) the related management’s discussion and analysis (MD&A), (iv) the Form 20-F filed on EDGAR as well as on the SEDAR website which constitutes the Company’s Annual Information Form, and (v) any other documents referred to herein which are filed including:

a. Code of Conduct;

b. Disclosure Policy;

c. Securities Trading Policy;

d. CGNC Charter;

e. Compensation Committee Charter;

f. Fraud and Embezzlement Policy; and

g. Whistleblower and Protected Disclosure Policy

Shareholders may contact the Company at Suite 1107, 120 Eglinton Avenue East, Toronto, Ontario M4P 1E2 to request copies of these documents or download them from the SEDAR website at www.sedar.com.

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Additional information relating to the Company is also available on SEDAR or from the Company’s website at www.poet-technologies.com.

Other Matters

Management of the Company is not aware of any other matter to come before the Meeting other than as set forth in the notice of Meeting. If any other matter properly comes before the Meeting, it is the intention of the persons named in the enclosed Proxy to vote the shares represented thereby in accordance with their best judgment on such matter.

DATED this 7th day of May, 2018.

	APPROVED BY THE BOARD OF DIRECTORS


	(signed) “ Suresh Venkatesan ”, CEO

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APPENDIX “A”

POET TECHNOLOGIES INC. (the “Company”)

The Audit Committee's Charter

1. Composition

The AC comprises three (3) or more directors as determined by the Board, each of whom shall be unrelated non-executive directors, free from any relationship that would interfere with the exercise of his or her independent judgment. The Board shall appoint one of the members of the AC as chairperson. Such appointment will be for a one (1) year term and will be ratified by the full Board. Each AC member must be, or must become, within a reasonable period of time after appointment, "financially literate," which qualification shall be determined by the Board. In addition, at least one (1) AC member shall have accounting or related financial management background/experience.

2. Authority

The AC may, at its own initiative or at the request of the Board, investigate any activity of the Company. All employees are directed to co-operate as requested by members of the AC. The AC is empowered to retain persons having special competence as necessary to assist the committee in fulfilling its responsibility.

3. Responsibility

The AC is to serve as a focal point for communication between non-committee directors, the independent (external) auditors and the Company’s Management Team as their duties relate to financial accounting, reporting, and controls. The AC is to assist the Board in fulfilling its fiduciary responsibilities as to accounting policies and reporting practices of the Company and all subsidiaries, and the sufficiency of auditing relative thereto. The AC is the Board’s principal agent in assuring the independence of the Company’s independent auditors, the integrity of financial management, and the adequacy of financial disclosures to shareholders. However, the opportunity for the independent auditors to meet with individual directors or the entire Board, as needed, is not to be restricted.

The Company’s independent (external) auditors are ultimately accountable to the AC and the Board. The AC and the Board have the ultimate authority and responsibility to select, evaluate, and nominate the independent (external) auditor to be proposed for any shareholder approval; and where appropriate, to replace the Company’s independent (external) auditors.

4. Meetings

The AC is to meet at least four (4) times per fiscal year or as many additional times as the committee deems necessary.

5. Attendance

A majority of the members of the AC must be present at all committee meetings and every effort should be made to hold meetings with all members present. As necessary or desirable, the chairperson may request that members of the Company’s Management Team and representatives of the independent (external) auditors be present at meetings of the committee.

6. Minutes

Minutes of each AC meeting are to be prepared summarizing the matters discussed.

7. Specific Mandate/Duties

Inform the independent (external) auditors and Management Team that the independent (external) auditors and the members of the AC may communicate with each other at any time.

Review with the CEO, CFO and independent (external) auditors, the Company’s policies and procedures to reasonably assure the adequacy of internal accounting and financial reporting controls.

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Have familiarity with the accounting and reporting principles and practices applied by the Company in preparing its financial statements and make, or cause to be made, all necessary inquiries of the Management Team and the independent (external) auditors concerning established standards of corporate conduct and performance and any deviations therefrom.

Review, prior to the annual audit, the scope and general extent of the independent (external) auditor’s audit examinations. The auditors’ fees are to be arranged with the Management Team and annually summarized for the AC’s review and approval.

Review with the Company’s Management Team the extent of non-audit services planned to be provided by the independent (external) auditors in relation to the objectivity needed in the audit.

Review with the Company’s Management Team and the independent (external) auditors, upon completion of their audit, financial results and MD&A at year end, together with any related press releases, prior to filing or distribution.

Evaluate the cooperation received by the independent (external) auditors during their audit examination, including their access to all requested records, data and information, and also inquire of the independent (external) auditors whether there have been any disagreements with the Company’s Management Team, which if not satisfactorily resolved would have caused the independent auditors to issue a non-standard report on the Company’s financial statements. Elicit the comments of the Management Team regarding the responsiveness of the independent auditors to the Company’s needs.

Recommend to the Board whether, based on the reviews and discussions referred to above, the annual financial statements and any related MD&A should be included in the Company’s Annual Report filed on SEDAR, distributed to shareholders and otherwise released.

Review with the Company’s Management Team and the independent (external) auditors (if required or determined necessary by the AC), interim financial results and MD&A, together with any related press releases, prior to filing or distribution.

Recommend to the Board whether, based on the reviews and discussions referred to above, the interim financial statements and any related MD&A should be filed on SEDAR, distributed to shareholders and otherwise released.

Discuss with the independent (external) auditors and the Company’s Management Team the quality of the Company’s financial and accounting personnel and any relevant recommendations the independent auditors (external) may have.

Discuss any significant changes to the Company’s accounting principles and any items required to be communicated to the independent (external) auditors.

Review and reassess the adequacy of the AC’s Charter at least annually and submit this same to the Board for approval.

Ensure that the independent (external) auditors submit, on a periodic basis to the AC, a formal written statement delineating all relationships between the independent auditors and the Company, actively engage in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors, and recommend that the Board take appropriate action in response to the independent auditors’ report to satisfy itself of the auditors’ independence.

Recommend to the Board the retention or replacement of the independent auditors.

Review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the present and former independent (external) auditors of the Company.

Apprise the Board, as necessary, through minutes and special presentations of significant developments in the course of performing the above duties.

Approve capital expenditures at levels up to the maximum amount of the AC’s authority as determined by the Board from time to time. Any decisions made by the AC will be reported to the full Board and ratified at its next meeting.

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Recommend to the Board any appropriate extensions or changes in the duties of the AC.

Establish and monitor procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or audit matters and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. The AC shall review periodically with the Company’s Management Team these procedures and any significant complaints received.

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Exhibit 4.4

POET

TECHNOLOGIES INC.

Management’s Discussion

and Analysis

For the Year Ended December 31, 2017

NOTICE TO READER

The attached Management’s Discussion and Analysis for POET Technologies Inc. for the year ended December 31, 2017 have been amended to correct December 31, 2016 comparative information contained on page 17 under the section “Segmented Information”. Amounts reported for Cost of sales, Selling, marketing and administration and Research and development have been updated to reflect the appropriate classifications. There have been no other changes. This change did not impact any other information reported in this Management’s Discussion and Analysis.

POET Technologies Inc.

Suite 1107 – 120 Eglinton Avenue East

Toronto, Ontario, Canada M4P 1E2

Tel: (416) 368-9411 Fax: (416) 322-5075

Management’s Discussion and Analysis

For the Year Ended December 31, 2017

The following discussion and analysis of the operations, results, and financial position of POET Technologies Inc., (the “Company”) for the year ended December 31, 2017 (the “Period”) should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2017 and the related notes thereto both of which were prepared in accordance with International Financial Reporting Standards (“IFRS”). The effective date of this report is April 27, 2018. All financial figures are in United States dollars (“USD”) unless otherwise indicated. The abbreviation “U.S.” used throughout refers to the United States of America.

Forward-Looking Statements

This management discussion and analysis contains forward-looking statements that involve risks and uncertainties. It uses words such as “may”, “would”, “could”, “will”, “likely”, “expect”, “anticipate”, “believe”, “intend”, “plan”, “forecast”, “project”, “estimate”, and other similar expressions to identify forward-looking statements. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to the early stage of the Company’s development and the possibility that future development of the Company’s technology and business will not be consistent with management’s expectations, difficulties in achieving commercial production or interruptions in such production if achieved, inherent risks of operating a manufacturing facility, including risks associated with supplier delays, factory uptime, inventory management and other operating uncertainties, the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses, the uncertainty of profitability and failure to obtain adequate financing on a timely basis. The Company undertakes no obligation to update forward-looking statements if circumstances or Management’s estimates or opinions should change, except to the extent required by law. The reader is cautioned not to place undue reliance on forward-looking statements.

The Company is incorporated under the laws of the Province of Ontario. The Company’s shares trade under the symbol “PTK” on the TSX Venture Exchange in Canada and under the symbol “POETF” on the OTCQX in the U.S.

BUSINESS

Overview

We are an advanced semiconductor development and manufacturing company dedicated to enabling the integration of photonics and electronics through novel approaches to device design and packaging. We have developed, or are in the process of developing, solutions that provide dramatic reductions in the cost of key components of photonic devices. Through integration and the adaptation of silicon processing methods to photonic device fabrication, we believe that the Company can capture a meaningful portion of the market for photonics devices that address the need for increased bandwidth, speed, sensitivity and cost across a range of high growth data communications and photonic sensing applications. We believe that the integration of discrete functions onto fewer devices is the optimal way to lower cost, reduce size, limit power consumption and increase the performance, scalability and value of photonics devices, making opto-electronics a more viable economic proposition.

The cost of building silicon-based devices today contrasts sharply with the cost of building photonics-based devices. While the majority of the cost of building silicon-based devices is in fabricating the device on the wafer, the majority of the cost of building photonics devices today is in the packaging and testing process. It is inevitable that these costs will be reduced through integration. In addition, integration opens up entirely new markets for photonics, including on-board and on-chip data transfer (“inside the box”).

Until early to mid-2017, our Company had been focused on “monolithic” integration, based on a proprietary design fabricated into a single Gallium Arsenide (GaAs) chip that has all of the elements needed to communicate data at the speed of light, yet with the lower cost profile of copper. POET’s GaAs design integrates at least three essential discrete devices onto a single GaAs chip: a vertical-cavity surface-emitting laser (VCSEL), a photodetector and an electronic circuit based on either a thyristor or a heterostructure field-effect transistor (HFET).

In 2017 we began to develop solutions based on a novel “hybrid” integration approach, which combines Indium Phosphide (InP)-based photonics chips and dielectric-based waveguide devices into a single package. This approach enables the replacement of high-cost optical components, such as mirrors and lenses, with embedded dielectric passive devices, dramatically lowering the cost of data communications transceiver solutions for data center operators and telecom companies. Our ability to address hybrid integration is a direct result of our acquisitions, in 2016, of DenseLight Semiconductor Pte. Ltd. (“DenseLight”) based in Singapore, and BB Photonics, Inc. based in New Jersey.

By mid-2017 it became apparent that the majority of transceiver applications in the data center market was biased strongly in favor of InP-based solutions. This, and the fact that our GaAs development efforts faced a number of challenges that could only be solved by working closely with a well-resourced strategic partner, we decided to focus our own resources on hybrid integration, utilizing the unique capabilities that we acquired with DenseLight and BB Photonics. By late-2017, we demonstrated that we could dramatically reduce the cost of conventional transceivers through the integration of discrete devices employing a novel approach that we call an “Optical Interposer”.

POET’s Optical Interposer Ô facilitates the co-packaging of electronics and optics in a single Multi-Chip Module (MCM), paving the way for “Photonics-in-a-package”. Based on our dielectric waveguide technology, the Optical Interposer provides the ability to run electrical and optical interconnections side-by-side on the same interposer chip at a micrometer scale. Hybrid Integrated Photonics Packaging (HiPP) enabled by the Optical Interposer plays a critical role in improving electrical and thermal performance, power consumption and form factor of photonics sub-assemblies. The Optical Interposer currently forms an integral part of POET’s hybrid integrated optical engines and leverages the manufacturing processes and unique capabilities of its dielectric waveguides.

Industry Background

In the ten years since the introduction of the smartphone, people have fundamentally changed the way they communicate, socialize, and interact with themselves and the data around them. Today, smartphones and other such devices allow us to capture, create and communicate enormous amounts of content. The explosion in data, storage and information distribution is driving extraordinary growth in internet traffic and cloud services.

The expected growth in the networking and data communication market is the result of many factors, among them being, the growth of wireless and mobile traffic (which will account for two-thirds of total IP traffic by 2021 ¹ ), social media activity, the progression of video transmission, the ramp of imaging such as virtual/augmented/mixed reality and 3D video, the continued migration to cloud storage, the propagation of sensors feeding the Internet of Everything, and the evolution of big data analytics and machine learning/artificial intelligence. These factors will continue to drive a long term increased demand for capacity and higher speeds.

Photonics has traditionally been employed to transmit data over long distances because light can carry considerably more content and data at faster speeds. Optical transmission becomes more energy efficient as compared to electronic alternatives when the transmission length and speed increase. As a natural consequence, optics are systematically replacing copper in much of the data center communication links.

Data center operators are increasing the size and scale of their facilities, while simultaneously looking to component suppliers for solutions capable of providing higher data transmission rates. Within data centers, data communications over distances of up to 2 km have already been transitioned from inherently lower speed copper cable to optical fibers. Furthermore, short reach communications, either rack-to-rack or within the rack as well as those requiring speeds of up to 100G, are now increasingly being converted from copper to optical cables.

Outside the Data Centers, future 5G build-out of mobile communications will drive speed and capacity requirements closer to the user with significant reduction in latency. Compared to 4G, 5G technology standard offers much faster download and upload speed, minimum delay in data communication and processing, as well as much higher density in device connections. 5G will enable advances in virtual reality, augmented reality, autonomous driving, high-definition video, and the Internet of Things, among others. 5G networks requires substantial capacity expansion for base stations, which is driven by three factors: more spectrum, higher density of base stations in each region, and higher spectral efficiency.

Photonics Markets

The two target markets in which we currently sell or plan to sell products near-term are Photonic Sensing and Data Communications. The global photonics market is forecasted to grow at a compound average growth rate (CAGR) of 8% to 12% through 2021, reaching an estimated $54 billion. ² This market includes Photonic Sensing (which consists of devices for test and measurement, navigation, LIDAR systems) and Data Communications (both telecom applications and optical data communications).

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¹ Cisco Visual Networking Index: Forecast and Methodology, 2016-2021 , June 6, 2017

² MarketsandMarkets Photonics Market by Application – Global Forecasts to 2021 , September 2016

The growth of the overall Data Communications market is forecasted to grow at a 27% CAGR over the period 2015 to 2020 and is being driven largely by cloud data centers, which have a forecasted CAGR of 29.6% over the same period. This compares to traditional data centers at only a 9% CAGR ³ . The expected growth in the networking and data communication market is the result of many factors, including smartphone use, over-the-top video consumption, social networking and the “Internet of Things”. Increased consumer demand for data requires both data storage and data communications at higher speeds. As a result, data center operators are increasing the size and scale of their facilities, while simultaneously looking to component suppliers for solutions capable of providing higher data transmission rates. Within data centers, data communications over distances of up to 2km have already been transitioned from inherently lower speed copper cable to optical fibers.

Photonic transceivers will represent a $25 billion market opportunity in 2025, according to Oculi, llc . The primary segments for photonic transceivers are Ethernet, wide area network (WAN) and dense wavelength division multiplexing (DWDM), all of which are predominantly addressed by InP-based optical technologies. Ethernet transceivers are forecasted to grow to $7.4 billion by 2025 with 100G driving a majority of the growth. Within Ethernet, singlemode transceivers based on InP devices are forecasted to outgrow multimode transceivers based on GaAs devices by a factor of 6:1. Segmented by distance, the majority of growth is expected in the <10km segment ($4.3 billion by 2025) . ⁴

Integrated photonic transceivers, incorporating approaches comparable to what POET has, are expected to overtake those using discrete components by 2021, growing from a current $3.2 billion to $20 billion in 2025 ⁵ . Within this market, POET is focused on the highest growth segments, including Wavelength Division Multiplexing (WDM) for medium-reach (500m – 2km) Ethernet datacom connections and Wide Area Network protocols for long-reach or metro applications (2km – 10km). The majority of today’s discrete transceiver suppliers are shipping 100G transceivers in a 4x25G format, having developed assembly methods for placing multiple laser chips on one substrate and coupling the output into one fiber using micro-optic filters and other elements. POET’s approach is to use the Optical Interposer to combine multiple active and passive devices into a single package, or “optical engine”, which when combined with control electronics and an outer housing, constitutes a pluggable optical transceiver. We plan to sell our optical engines to manufacturers and assemblers of optical transceiver modules. We believe our optical engine solution will be cost competitive with conventional modules as well as silicon photonics in the <2km data center market, and it should be scalable to 10km, and support 200G and 400G datacom speeds.

In addition to building optical engines for transceivers, we believe the Company has the opportunity to sell individual components to other suppliers of optical transceivers, including single-chip local area network (LAN) wavelength division multiplexing (WDM) lasers, receiver optical sub-assemblies (ROSA) and transmit optical sub-assemblies (TOSA) in advance of selling optical engines for transmit and receive assemblies (TXRX).

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³ Cisco Global Cloud Index, 2015-2020 , November 2016

⁴ Oculi, llc, Estimates for 2025 commissioned by POET Technologies, Inc. , March 2017

⁵ Ibid

The Photonics Sensing market ⁶ represents a Total Available Market (“TAM”) of approximately $23 billion of system sales and comprises the following segments: 1) Test & Measurement (TAM: $10 billion), which includes monitoring equipment for communication, components and material testing, as well as sensing equipment such as distributed temperature and strain measurement; 2) Structural Health Monitoring (TAM: $6 billion), which includes devices to monitor the power grid, and fiber optic-based sensors in rail lines, nuclear facilities, etc.; 3) Guidance and Navigation (TAM: $4.5 billion), which includes navigational guidance systems, gyrocompasses, and optical-based systems for navigating self-driving automobiles; and 4) Medical and Health Care (TAM: $2.5 billion), which includes devices for non-invasive blood glucose monitoring, pulse-oximeter devices, and ophthalmic examination. Component sales to systems providers typically represent approximately 10% of system market TAM’s. We plan to address these high growth markets with component sales in a combination of current and expected new products from our DenseLight subsidiary.

POET’s Optical Interposer Platform

The Optical Interposer extends the functionality of traditional electrical interposers – by adding a parallel lane of optical interconnections to an electrical interposer. Optical Interposers enable the concept of “photonics-in-a-package” by eliminating traditionally used micro-optics such as lenses, filters and prisms from the optical assembly and by further simplifying fiber alignment and coupling.

POET’s Optical Interposer utilizes our proprietary dielectric waveguide technology. The unique manufacturing process and capabilities of this technology enables us to fabricate an optical communication fabric within the context of a traditional CMOS process. Consequently, it enables a novel and differentiated extension to the more traditional electrical interposers.

The waveguides incorporated in POET’s Optical Interposers perform more than just waveguide transmission functions. They act as gratings, splitters, couplers and allow for manipulation of the light with built in functionality suited to the application. For example, POET’s 100G family of Optical Interposer would include gratings that both function to enable narrow line width operation of its light sources and to perform critical Wavelength Division Multiplexing (WDM) operations.

A Typical Electrical Interposer

Shown above is a typical cross-section of an electrical interposer that enables a closer placement of electronic chips and minimizes communication lengths.

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⁶ Global Market Insights Optical Sensors Market Size By Product, By Application, Industry Analysis Report, Regional Outlook, Application Potential, Price Trends, Competitive Market Share & Forecast, 2016 – 2024 , August 2016

POET’s Optical Interposer

In much the same way as the electrical interposer incorporates electrical passive functionality, the POET Optical Interposer incorporates passive optical functionality. Furthermore, the Optical Interposer enables the conversion of electrical signals to optical signals and the manipulation and transmission of these optical signals outside the package.

POET’s Optical Interposer provides the following advantages compared to conventional optical modules:

Wafer-level integration into silicon

Waveguides formed and integrated with embedded passive optical components (SSC, mux-demux, filters, waveguides) at chip level

Ultra-low loss waveguide dielectric with high coupling efficiency

Pick and place assembly and passive alignment of components

Elimination of lenses and active alignment

Athermal waveguide dielectric allows multi-channel scalability

Wafer-level hermetic sealing, testing and burn-in of active components to produce known good die

Small form factor and platform architecture readily scalable

High frequency metal traces managed in the dielectric platform

Fully compatible with conventional CMOS processing allowing integration with complex electronics at chip or module level

Compared to semiconductors, where packaging accounts for 10% of the final die cost, packaging and assembly is generally 80-90% for a photonic die. POET’s Optical Interposer represents a new and potentially disruptive approach to photonics packaging and assembly that could allow more functionality to be integrated into a single package, similar to the system-in-package (SiP) trends observable in the industry today.

Our Strategy

Our vision is to become a global leader in photonics by deploying an Optical Interposer-based approach to the integration of photonics devices into a wide variety of vertical market applications. Our strategy includes the following key elements:

· Introduce the Optical Interposer concept to suppliers of transceivers and data center operators and form commercial partnerships for product development. Because of the magnitude of the cost savings that may be derived from the use of POET’s optical engines for transceiver applications, we expect to generate significant interest among both the suppliers of transceiver modules and their ultimate customers, the data center operators. In addition, the POET Optical Interposer provides a straightforward and cost-effective path to higher speed transceivers, including up to 400G and higher, thus providing a single platform that can span several device generations. We anticipate that several companies will be interested in pursuing commercial partnerships with POET in order to qualify and design-in our optical engines.

· Promote the POET Optical Interposer as a true platform technology across several photonic applications and markets. The POET Optical Interposer is designed to be a flexible platform for the combination or integration of various photonic and electronic components. The anticipated low cost makes it suitable for applications like automotive LIDAR. The compatibility of the Optical Interposer manufacturing process with standard silicon CMOS processing opens up a wide variety of other applications where high-speed data communications is needed, such as integration with ASICs, graphics generators and high-speed switches.

· Pursue multiple potential sources of non-product revenue and strategic partnerships. In addition to product sales, we have been pursuing Non-Recurring Engineering (“NRE”) revenues from end-use customers and/or from strategic partners. In particular, we believe our 100/200/400G transceiver components represent a uniquely attractive opportunity for collaborative development with a strategic partner(s). We also believe that the continued development of our GaAs platform is dependent on securing a strategic partner.

· Continue to invest in our capabilities and infrastructure. We intend to continue to invest in new products, new technology and our production infrastructure and facilities to maintain and strengthen our competitive position. Our R&D programs in Singapore are partially reimbursed by the Singapore Economic Development Board, whose support will help to defer the costs associated with bringing innovative new products to market.

· Selectively pursue other opportunities that leverage our existing expertise. Our expertise in designing and manufacturing photonics devices, both discrete and integrated, positions us well to pursue applications in high growth markets and our Singapore operation is ideally located to support customers in Asia, where much of the growth in photonics is occurring.

· Pursue complementary strategic alliance or acquisition opportunities . We intend to evaluate and selectively pursue strategic alliances or acquisition opportunities that we believe will accelerate our penetration of specific applications or vertical markets with our technology or products.

Our Products

We are currently engaged in the development of 100Gbs ROSA (Receiver Optical Sub-Assemblies) and TOSA (Transmitter Optical Sub-Assemblies) for 100G Transceiver assemblies.

We expect our InP-based solutions from our DenseLight subsidiary will add to the Company’s current and future product portfolio, including:

Broadband Super-Luminescent LEDs (Light Emitting Diodes)

Narrow Linewidth Lasers

DFB (Distributed Feedback) Lasers for Data Communications

High Power ELEDs (Edge Emitting Light Emitting Diodes)

Integrated CWDM (Coarse Wavelength Division Multiplexing) Solutions

Intellectual Property

We have 57 issued patents and 12 patent applications pending, including seven related to our optical interposer platform. The patents cover device structures, underlying technology, applications of the technology and fabrication processes. We believe these patents provide a significant barrier to entry against competition, along with trade secrets and know-how acquired from DenseLight and BB Photonics. We intend to continue to apply for additional patents in the future. Currently, we are working on the design of integrated devices, manufacturing processes, and products for data communication applications in the data center market, along with products for photonic sensing markets that employ novel packaging technologies.

Fabrication and Assembly Capabilities

We provide one-stop design and manufacturing solutions, from photonics design and simulation, epitaxial growth, wafer fabrication, chip production, in-line optical coating, sub-mounting, photonic measurements, product testing and screening. We are operationally ready for responsive prototyping and quality production. The 50,000 sq. ft. purpose-built facility in Singapore houses our R&D, product design and manufacturing operations under one roof. Its 15,000 sq. ft. clean room is fully equipped for enabling vertically integrated volume manufacturing, from wafer fabrication to test and packaging. We are ISO9001 certified in Singapore processing Indium Phosphide (InP) and Gallium Arsenide (GaAs) based opto-electronic devices and photonic integrated circuits through our in-house wafer fabrication and assembly & test facilities.

We have an experienced team with deep know-how in GaAs and InP semiconductors wafer processing and we continue to build on this technical base. Together with our operationally ready manufacturing and photonics design center, various ODM and design-in programs can be supported for both discrete and integrated optical components.

Summary for 2017

Revenue was $2,794,044 for the year ended December 31, 2017 and gross margin for the Period was $1,451,353 or 52%. Reported revenue and gross margin for 2016 was $1,861,747 and $915,746 or 49% respectively. It is important to note, however, that revenue and gross margin for the comparable period in 2016 was only reported since the acquisition of DenseLight on May 11, 2016. Our net loss from operations, before taxes for the year ended December 31, 2017 was $13,095,737 compared to a net loss from operations, before taxes of $13,431,941 in 2016.

Significant Events and Milestones During 2017

In 2017, we continued to execute on our stated strategic plan. We achieved the following significant milestones during the first half of 2017:

On January 16, 2017, the Company announced certain organizational changes that included the addition of Rajan Rajgopal as the president and general manager of DenseLight and Soma Sankaran as vice president of sales for the Asia-Pacific region.

On January 31, 2017, the Company announced the development of micro multiplexer and de-multiplexer solutions. The Company also unveiled its next generation Constellation Series of Narrow Linewidth Laser solutions for test and measurement applications.

On February 1, 2017, the Company announced the appointment of David Lazovsky as Executive Chairman of the Board of Directors.

On April 3, 2017, the Company announced that it successfully demonstrated the functionality of the VCSEL for the integrated GaAs opto-electronic platform.

On August 8, 2017, the Company announced that announced that Rodman & Renshaw, a unit of H.C. Wainwright & Co. LLC, initiated research coverage on the Company in a detailed report published on August 7, 2017.

On September 5, 2017, the Company announced the appointment of Jean-Louis Malinge to the Board of Directors. The Company also announced that Ajit Manocha, who served on the Board from July 2014, resigned from the Board to devote his time to his new role as president and CEO of SEMI. Mr. Malinge currently serves as partner to ARCH Venture Partners an early-stage venture capital firm with nearly $2 billion under management. Additionally, he also serves as a managing director for YADAIS, a leading consulting firm in the photonics and telecommunications industries, and is a board member of EGIDE SA, which designs, manufactures and sells hermetic packages for the protection and interconnection of several types of electronic and photonic chips.

On September 6, 2017, the Company announced that it will start sampling high-power, continuous wave 1310nm Distributed Feedback (DFB) lasers for 100G Silicon Photonics applications in the fourth quarter of 2017. During this this time frame, the Company will also begin sampling long wavelength 1650nm DFB lasers for the Test and Measurement, Optical Time Domain Reflectometry (OTDR) and Photonics/Biomedical sensing markets.

On September 7, 2016, the Company announced the availability of Avalanche Photodiodes (APD) and PIN Photodiodes (PIN) for the 10G Datacom and Telecom markets. In addition, the Company also began sampling its Monitor Photodiode (MPD) arrays for applications in 100G datacom applications.

On September 8, 2017, the Company announced that it introduced a new family of its specialized external cavity narrow linewidth (NLW) laser products with enhanced capabilities. These new NLW lasers are assembled in integrated laser modules (ILM) and provide feature rich extensions to the existing BF series ILMs.

Summary of Quarterly Results

Following are the highlights of financial data of the Company for the most recently completed eight quarters, which have been derived from the Company’s consolidated financial statements prepared in accordance with IFRS:

	Dec. 31/17			Sep. 30/17			Jun. 30/17			Mar. 31/17			Dec. 31/16			Sep. 30/16			Jun. 30/16			Mar. 31/16
Sales	$	717,692		$	715,420		$	648,382		$	712,550		$	423,461		$	861,545		$	576,741		$	-
Cost of sales		385,456			348,187			320,857			288,191			346,462			318,976			280,563			-
Research and development		1,661,887			1,078,934			1,186,042			1,147,003			1,104,733			581,354			576,073			530,469
Depreciation and amortization		616,514			559,334			558,919			540,393			643,344			550,420			239,958			87,844
Professional fees		203,372			98,101			167,726			155,742			96,009			207,220			272,287			140,200
Wages and benefits		698,814			625,676			604,608			645,880			586,596			676,700			1,054,413			483,169
Management and consulting fees		42,439			42,877			40,330			103,931			51,303			230,352			172,401			157,805
Stock-based compensation ⁽¹⁾		1,032,158			1,088,170			159,783			894,813			903,253			1,019,970			887,990			1,259,051
General expenses and rent		591,462			567,721			653,933			547,052			758,947			508,178			546,626			260,764
Impairment and other loss		-			-			-			-			29,807			-			-			80,453
Change in fair values		-			-			-			-			-			(283,130	)		-			-
Other (income), including interest		(1,599,170	)		(4,990	)		(142,557	)		(19,807	)		(19,647	)		(11,473	)		(14,950	)		(20,802	)
Net loss before taxes	$	2,915,240		$	3,688,590		$	2,901,259		$	3,590,648		$	4,077,346		$	2,937,022		$	3,438,620		$	2,978,953

(1)

Stock based compensation allocated between General & Administrative and Research & Development issuances are combined for MD&A purposes. For financial statement presentation purposes, stock-based compensation is split between General & Administrative and Research & Development .

Explanation of Quarterly Results for the three months ended December 31, 2017 ("Q4 2017") compared to the same three-month period in the prior year (“Q4 2016”)

Net loss before taxes for Q4 2017 was $2,915,240 compared to a net loss before taxes of $4,077,346 in Q4 2016, a 29% decrease in net loss before taxes. The following discusses the significant variances between Q4 2017 and Q4 2016.

During Q4 2017, the Company reported revenue of $717,692 through its DenseLight subsidiary compared to $423,461 in Q4 2016, a 70% increase. Sales in Q4 2016 were unusually low due to backlog pushed into 2017 resulting from production challenges with one large customer. Expected Q4 2016 NRE was also delayed and was not recognized until 2017. Q4 2017 revenue represents the consistent quarter over quarter revenue for the Company’s sensing products. The unusually low revenue in Q4 2016 resulted in gross margin of 18% as compared to 46% in Q4 2017.

Research and development (“R&D”) increased by 50% or $557,154 to $1,661,887 in Q4 2017 from $1,104,733 in Q4 2016. Since the acquisition of DenseLight and BB Photonics in May and June of 2016 respectively, the Company has systematically increased its R&D activities in an effort to bring new products to market and expand its product portfolio. As a result of increased R&D spending in Q4 2017, the Company announced the development of its new POET Optical Interposer Platform and demonstrated the functionality of PIN photodetectors targeting 100G to 400G optical transceivers. New skilled technical human resource represents the largest area of increase in R&D.

Professional fees in Q4 2017 increased by 112% or $107,363 to $203,372 from $96,009 in Q4 2016. Increased professional services were required as the Company initiated co-development partnerships for activities disclosed in early 2018.

General expenses and rent decreased by 22% or $167,485 to $591,462 in Q4 2017 from $758,947 in Q4 2016, primarily resulting from lower repairs and maintenance during the quarter as compared to Q4 2016.

Wages and benefits increased by 19% or $112,218 from $586,596 in Q4 2016 to $698,814 in Q4 2017. The increase is a result of the new employees and other payroll related obligations.

Non-cash stock-based compensation increased by 14% or $128,905 to $1,032,158 during Q4 2017 from $903,253 in Q4 2016. The valuation of stock options is driven by a number of factors including the number of options granted, the strike price and the volatility of the Company’s stock. The stock option expense is dependent on the timing of the stock option grant and the amortization of the options as they vest. The stock options vest in accordance with the policies determined by the Board of Directors at the time of the grant consistent with the provisions of the Stock Option Plan, as amended (the “Plan”).

Other income in Q4 2017 was $1,599,170 as compared to $19,647 in Q4 2016. The Company is entitled to a recovery of certain qualifying expenses from the Economic Development Board (EDB) in Singapore. The increase is a result of both collected recoveries and an amount accrued during 2017 to be received in 2018. During Q4 2016 anticipated EDB recoveries were not accrued as the company did not have sufficient experience with the EDB recovery process to confidently accrue the recovery.

Explanation of the results for the year ended December 31, 2017 compared to the same twelve-month period in the prior year (the “prior-year”)

Net loss before taxes for the twelve-month period ended December 31, 2017 was $13,095,737 compared to net loss before taxes of $13,431,941 for the twelve months ended December 31, 2016, a 2.5% increase. The loss before taxes for the year ended December 31, 2017 includes the operations of DenseLight and BB Photonics for the entire year, while the loss for the prior-year reflected the operations of the Company with those subsidiaries for less than the full twelve months (i.e., from May 11, 2016 for DenseLight and June 22, 2016 for BB Photonics).

During the twelve-month period ended December 31, 2017, the Company reported revenue of $2,794,044 through its DenseLight subsidiary compared to revenue of $1,861,747 for the same period in 2016, a 50% increase. Revenue for the period ended December 31, 2017 was for twelve months, while the revenue in 2016 was only from May 11, 2016 through December 31, 2016.

R&D increased by 82% or $2,281,237 to $5,073,866 in 2017 from $2,792,629 in 2016. R&D costs in 2016 included the activities of POET for the full twelve-month period and R&D of DenseLight and BB Photonics only from May 11, 2016 and June 22, 2016, respectively. The twelve months of 2017 include R&D costs for the GaAs platform and the programs in InP integrated dielectrics and wafer-level packaging all associated with the Company’s efforts to expand its product portfolio in datacom. In addition to 2016 costs only representing R&D costs of a partial year for DenseLight and BB Photonics, increased HR and related costs in 2017 also contributed to the increase over the prior year.

General expenses and rent increased by 14% or $285,653 to $2,360,168 in 2017 from $2,074,515 in 2016. This increase was also a result of shortened activity during the prior-year related to the dates of acquisition of DenseLight and BB Photonics (i.e., May 11, 2016 and June 22, 2016, respectively).

Non-cash stock-based compensation decreased by 22% or $895,340 to $3,174,924 in 2017 from $4,070,264 in 2016. Departing employees and consultants who had unvested stock options contributed to the substantial reduction in 2017, as their unvested options were returned to the Company. The valuation of stock options is driven by a number of factors including the number of options granted, the strike price and the volatility of the Company’s stock. The stock option expense is dependent on the timing of the stock option grant and the amortization of the options as they vest. The stock options vest in accordance with the policies determined by the Board of Directors at the time of the grant consistent with the provisions of the Stock Option Plan, as amended (the “Plan”).

Management and consulting fees decreased by 62% or $382,284 from 2016. The expense in 2017 was $229,577 as compared to $611,861 in 2016. The resignation of Mr. Manocha from the position of Executive Chairman of the Board in February 2017 contributed to the decrease. This reduction in management and consulting fees was partially offset by an increase in wages and benefits for the compensation paid to Mr. Lazovsky who replaced Mr. Manocha as the Executive Chairman of the Board. Mr. Lazovsky is paid $200,000 annually in his capacity as Executive Chairman as compared to $500,000 that was previously paid to Mr. Manocha

Wages and benefits decreased by 8% or $225,900 to $2,574,978 in 2017 compared to $2,800,878 in the prior-year. Three principal factors contributed to the decrease: (1) 2016 wages included an accrued bonus of $550,000 to the CEO and the former COO which was deferred to 2017. $450,000 due to the CEO was paid in 2017 and $100,000 due to the former COO was subsequently reversed; (2) 2016 wages also included wages paid to the former Executive Co-Chairman of the Board of $136,655; and (3) 2016 wages included twelve months of wages for the former COO, Dr. Deshmukh who resigned in Q1 2017. These decreases were offset by: (1) the inclusion of the compensation of the new Executive Chairman of the Board; and (2) wages of DenseLight and BB Photonics for the entire 2017 as compared to only the period from May 11, 2016 and June 22, 2016 respectively.

Depreciation and amortization increased by 50% or $753,594 to $2,275,160 in 2017 from $1,521,566 in the prior-year. The increase was a result of depreciation and amortization related to the property and equipment, patents and licenses, and intangible assets acquired during and after the acquisition of DenseLight and BB Photonics in 2016. The Company acquired $11,118,460 of property and equipment, patents and licenses and intangible assets since May 2016.

Other income in 2017 was $1,766,524 as compared to $66,872 in 2016. The Company is entitled to a recovery of certain qualifying expenses from EDB in Singapore. The increase is a result of both collected recoveries and an amount accrued in 2017 to be received in 2018. During 2016 anticipated EDB recoveries were not accrued as the company did not have enough experience with the EDB recovery process to confidently accrue the recovery.

Explanation of Material Variations by Quarter for the Last Eight Quarters

Q4 2017 compared to Q3 2017

R&D increased by 54% or $582,953 to $1,661,887 in Q4 2017 from $1,078,934 in Q3 2017. Head count and recruitment costs were the largest contributing factors to the period over period increase. As a result of increased R&D spending in Q4 2017, the Company announced the development of its new POET Optical Interposer Platform and demonstrated the functionality of PIN photodetectors targeting 100G to 400G optical transceivers. Skilled technical human resource represents the largest area of increase in R&D.

Professional fees in Q4 2017 increased by 107% or $105,271 to $203,372 from $98,101 in Q3 2017. Increased professional services were required as the Company initiated co-development partnerships for activities disclosed in early 2018.

Wages and benefits increased by 12% or $73,138 from $625,676 in Q3 2017 to $698,814 in Q4 2017. The increase is a result of the new employees and other payroll related obligations as the Company ramped its technical resource and production-related capabilities.

Other income in Q4 2017 was $1,599,170 as compared to $4,990 in Q3 2017. The Company is entitled to a recovery of certain qualifying expenses from EDB in Singapore. The increase is a result of both collected recoveries and an amount accrued in 2017 to be received in 2018.

Q3 2017 compared to Q2 2017

Sales were $67,038 higher to $715,420 in Q3 2017 from $648,382 Q2 2017. The increase is a function of shipping more units in Q3 2017 than in Q2 2017.

Professional fees decreased by 42% or 69,625 to $98,101 in Q3 2017 from $167,726 in Q2 2017. The Company had less professional service activity in Q3 2017 than in Q2 2017, including lower recruitment fees, legal and audit-related expenses.

Non-cash stock-based compensation increased by $928,387 or 581% to $1,088,170 in Q3 2017 from $159,783 in Q2 2017. The departure of employees and consultants who had unvested stock options contributed to the unusually low expense in Q2 2017. The valuation of stock options is driven by a number of factors including the number of options granted, the strike price and the volatility of the Company’s stock. The stock option expense is dependent on the timing of the stock option grant and the amortization of the options as they vest. The stock options vest in accordance with the policies determined by the Board of Directors at the time of the grant consistent with the provisions of the Stock Option Plan, as amended (the “Plan”).

General expenses and rent decreased by $86,212 or 13% to $567,721 in Q3 2017 from $653,933 in Q2 2017. In Q2 2017, the Company had significant facility and factory maintenance costs. While the company continues to have facility and factory maintenance costs on a period over period basis, the expense was lower in Q3 2017 than Q2 2017.

Q2 2017 compared to Q1 2017

Gross margin was 51% in Q2 2017 as compared to 60% in Q1 2017. The reduced gross margin was a result of lower absorption of factory costs from reduced revenue of $648,382 in Q2 2017 compared to $712,550 in Q1 2017. Cost of sales includes certain fixed costs that do not change in a linear fashion with revenue.

Management and consulting fees decreased by $63,601 or 61% to $40,330 in Q2 2017 from $103,931 in Q1 2017. The resignation of Mr. Manocha as Executive Chairman of the Board contributed to this the decrease.

Non-cash stock-based compensation decreased by $735,030 or 82% to $159,783 in Q2 2017 from $894,813 in Q1 2017. The departure of employees and consultants who had unvested stock options contributed to the substantial reduction from Q1 2017.

General expenses and rent increased by $106,881 or 20% to $653,933 in Q2 2017 from $547,052 in Q1 2017. In Q2 2017, the Company had additional facility and factory maintenance.

Q1 2017 compared to Q4 2016

Sales in Q1 2017 were $712,550 as compared to $423,461 in Q4 2016. Backlog from 2016 contributed to increased Q1 sales, along with $80,000 of NRE revenue. Gross margin percent for the quarter was 60% compared to the 18% in Q4 2016.

R&D increased by $42,270 or 4% to $1,147,003 in Q1 2017 from $1,104,733 in Q4 2016. Development costs of $272,000, which were capitalized in prior periods, were expensed to R&D in Q4 2016 as the Company no longer felt those capitalized costs continued to meet the criteria for capitalization. The Company did not expense any capitalized R&D costs in Q1 2017.

Professional fees increased by $59,733 or 62% to $155,742 in Q1 2017 from $96,009 in Q4 2016. Professional fees relating the Company’s year-end audit contributed to the quarter over quarter increase.

Wages and benefits increased by 10% or $59,284 to $645,880 Q1 2017 from $586,596 in Q4 2016. Wages and benefits were lower in Q4 2016 due to the reversal of an accrued and unpaid retention bonus of $100,000 to the former COO in Q1 2017. Additionally, Q1 2017 wages and benefits included the wages of the new CFO, the new President of DenseLight, the new VP of Sales for the Asia-Pacific region and the new Executive Chairman of the Board.

General expenses and rent decreased by $211,895 or 28% to $547,052 in Q1 2017 from $758,947 in Q4 2016. General expenses were higher in Q4 2016 due to the ancillary costs such as travel, and other administrative costs associated with the $9.3 million equity financing in Q4 2016.

Management and consulting fees increased by $52,628 or 103% to $103,931 in Q1 2017 from $51,303 in Q4 2016. A reclassification of $75,000 of consulting fees paid to a director in Q4 2016 from management and consulting to the cost of financing resulted in the lower expense in this category in Q4 2016.

Q4 2016 compared to Q3 2016

Sales in Q4 2016 were $423,461 compared to $861,545 in Q3 2016. The reduction in Q4 sales was a result of backlog pushed into Q1 2017 resulting from production challenges with one large customer. Expected Q4 NRE was also delayed and was not recognized until Q1 2017.

R&D expenses increased by $523,379 or 90% to $1,104,733 in Q4 2016 compared to $581,534 in Q3 2016. Development costs of $272,000, which were capitalized in prior periods, were expensed to R&D in Q4 2016 as the Company no longer felt those capitalized costs continued to meet the criteria for capitalization. Q3 2016 R&D was also limited in scope because of certain export restrictions. Those restrictions were resolved, resulting in the Company incurring costs in Q4 2016 that would have been incurred more evenly throughout the year.

Q4 2016 professional fees were $96,009 compared to $207,220 in Q3 2016. The quarter over quarter reduction of $111,211 or 54% was a result of the Company settling most issues in Q3 and earlier periods relating to corporate acquisitions, financing and the export issues that required professional advisors.

Wages and benefits were $586,596 in Q4 2016 and $676,700 in Q3 2016. The reduction of $90,104 or 13% was from cost savings resulting from the 10-20% temporary non-recoverable reduction in US management compensation, a recovery of an accrued but unpaid retention bonus of $100,000 to the former COO, and staff reductions at DenseLight.

The reduction in management and consulting fees of $179,049 or 78% to $51,303 in Q4 2016 from $230,352 in Q3 2016 was a result of a 10% to 20% reduction in management fees to head-office-based executives, along with a reclassification of $75,000 of consulting fees paid to a director in Q3 2016. The fees were paid in Q3 2016 and classified as general consulting fees but were reclassified to financing cost in Q4 2016.

General expenses and rent increased by $250,769 or 49% to $758,947 in Q4 2016 from $508,178 in Q3 2016. The increase included ancillary costs such as travel and other administrative costs related to the $9.3M financing that were not included as finance costs.

Q3 2016 compared to Q2 2016

Sales in Q3 2016 were wholly related to the sales of products and services of DenseLight. Sales increased by $284,804 or 49% to $861,545 in Q3 2016 from $576,741 in Q2 2016. The increase in sales also resulted in increased gross margin to 63% in Q3 2016 from 51% in Q2 2016. The increase in gross margin resulted from better absorption of fixed costs with increased revenue.

Q3 2016 was the first full quarter since the acquisition of DenseLight and BB Photonics. Depreciation increased by $310,462 or 129% to $550,420 in Q3 2016 from $239,958 in Q2 2016 due primarily to the depreciation and amortization expense on property and equipment acquired through the acquisition of DenseLight and BB Photonics. The Company also acquired additional property and equipment during Q3 2016. Depreciation on the new property and equipment also contributed to the increase over Q2 2016.

Professional fees decreased by $65,067 or 24% to $207,220 in Q3 2016 from $272,287 in Q2 2016. Professional fees in Q2 2016 included the cost of acquiring both DenseLight and BB Photonics. Professional fees in Q3 2016 were also higher due to professional fees incurred in dealing with export issues and responding to regulatory inquiries.

Wages and benefits decreased by $377,713 or 36% to $676,700 in Q3 2016 from $1,054,413 in Q2 2016. The expense in Q3 2016 reflects a full quarter operating wages of DenseLight that was acquired on May 11, 2016, while representing only a partial quarter in Q2. Q2 2016 wages and benefits included the accrued but unpaid executive retention bonuses totaling $550,000 to the CEO and COO that were payable in mid-June 2016 at the one-year anniversary date of commencement of the respective employment terms, but voluntarily deferred by them and paid in 2017. The $100,000 bonus to the COO was reversed in Q1 2017.

Management and consulting fees increased by $57,951 or 34% to $230,352 Q3 2016 from $172,401 in Q2 2016. The Q3 2016 expense included $75,000 of fees paid to a director for consulting services, an expense which was later reclassified to financing costs in Q4 2016.

General expenses and rent decreased by $38,448 or 7% to $508,178 in Q3 2016 from $546,626 in Q2 2016. Q3 2016 included a full quarter of operating costs of DenseLight, while the Q2 2016 expense included all the ancillary costs relating to the acquisitions of both DenseLight and BB Photonics.

Non-cash stock-based compensation increased by $131,980 or 15% to $1,019,970 in Q3 2016 from $887,990 in Q2 2016. The valuation of stock options is driven by a number of factors including the number of options granted, the strike price and the volatility of the Company’s stock. The stock option expense is dependent on the timing of the stock option grant and the amortization of the options as they vest. The stock options vest in accordance with the policies determined by the Board of Directors at the time of the grant consistent with the provisions of the Stock Option Plan, as amended (the “Plan”).

Shareholders of DenseLight were entitled to an additional 1,000,000 shares of the Company if DenseLight met or exceeded a certain revenue target by December 31, 2016. On the date of the acquisition, this contingent consideration was valued at $283,130. As of September 30, 2016, it was determined that DenseLight would not meet the revenue target, so the contingent consideration was reclassified to earnings during Q3 2016.

Q2 2016 compared to Q1 2016

The Company had sales of $576,741 in Q2 2016 but no sales in Q1 2016. The sales in Q2 2016 were wholly related to DenseLight, which was acquired on May 11, 2016.

Depreciation and amortization in Q2 2016 increased by $152,114 or 173% to $239,958 from $87,844 in Q1 2016. The increase included $149,723 of depreciation relating to $8,706,029 of new property and equipment acquired from DenseLight and BB Photonics.

Professional fees increased by $132,087 or 94% to $272,287 in Q2 2016 from $140,200 in Q1 2016. The acquisition of DenseLight and BB Photonics contributed to the substantial increase from Q1 to Q2 2016. The Company required the services of various professional consultants including lawyers, accountants and appraisers to complete the acquisition of both companies.

Wages and benefits had a substantial increase of $571,244 or 118% to $1,054,413 in Q2 2016 from $483,169 in Q1 2016. The increase was a result of accrued executive retention bonuses totaling $550,000 to the CEO and COO that were payable in mid-June 2016, but voluntarily deferred by them and paid in 2017. Wages and benefits for Q2 2016 also included $261,721 for DenseLight from the May 11, 2016 acquisition date to the quarter end. The $100,000 bonus to the COO was reversed in Q1 2017.

General expenses and rent increased by $285,862 or 110% to $546,626 in Q2 2016 from $260,764 in Q1 2016. DenseLight contributed $203,402 to the increase during the period. The difference resulted from additional costs incurred relating to the acquisition of DenseLight and BB Photonics.

Non-cash stock-based compensation decreased by $371,061 or 29% to $887,990 in Q2 2016 from $1,259,051 in Q1 2016. This resulted from the timing of stock-based compensation expense relative to the vesting date of the historical granted stock options. The valuation of stock options is driven by a number of factors including the quantity of options granted, the strike price and the volatility of the Company’s stock. The stock option expense is dependent on the timing of the stock option grant and the amortization of the options as they vest.

Segment Disclosure

The Company and its subsidiaries operate in a single segment; the design, manufacture and sale of semi-conductor products and services for commercial applications. The Company’s operating and reporting segment reflects the management reporting structure of the organization and the manner in which the chief operating decision maker regularly assesses information for decision making purposes, including the allocation of resources. A summary of the Company's operations is below:

ODIS Inc. (“ODIS”)

Odis is the developer of the POET platform semiconductor process IP for fabrication of integrated circuit devices containing both electronic and optical elements on a single die ("monolithic integration") and in a

single package ("hybrid integration").

BB Photonics

BB Photonics develops photonic integrated components for the datacenter market utilizing embedded dielectric technology that is intended to enable on-chip athermal wavelength control and lower the total solution cost of datacenter photonic integrated circuits.

DenseLight

DenseLight designs, manufactures, and delivers photonic optical light source products and solutions to the communications, medical, instrumentations, industrial, defense, and security industries. DenseLight processes compound semiconductor-based optoelectronic devices and photonic integrated circuits through its in-house wafer fabrication and assembly & test facilities. The Company operates geographically in the United States, Canada and Singapore. Geographical information is as follows:

	2017

As of December 31,	Singapore		US		Canada		Consolidated
Current assets	$	3,190,298	$	4,621,318	$	139,096	$	7,950,712
Property and equipment		8,018,900		259,270		-		8,278,170
Patents and licenses		18,816		437,434		-		456,250
Goodwill and intangible assets		6,756,181		1,764,459		-		8,520,640

Total Assets	$	17,984,195	$	7,082,481	$	139,096	$	25,205,772

Year Ended December 31,	Singapore			US		Canada			Consolidated
Sales	$	2,794,044		$	-	$	-		$	2,794,044
Cost of sales		1,342,691			-		-			1,342,691
Selling, marketing and administration		4,955,497			4,872,902		1,042,342			10,870,741
Research and development		3,237,713			1,877,966		327,194			5,442,873
Other income		(1,748,244	)		-		(18,280	)		(1,766,524	)

Net loss from operations	$	4,993,613		$	6,750,868	$	1,351,256		$	13,095,737

	2016

As of December 31,	Singapore		US		Canada		Consolidated
Current assets	$	2,118,561	$	10,058,018	$	4,957,624	$	17,134,203
Property and equipment		9,039,069		322,633		2,508		9,364,210
Patents and licenses		-		449,676		-		449,676
Goodwill and intangible assets		6,793,409		1,764,459		-		8,557,868

Total Assets	$	17,951,039	$	12,594,786	$	4,960,132	$	35,505,957

Year Ended December 31,	Singapore			US		Canada			Consolidated
Sales	$	1,861,747		$	-	$	-		$	1,861,747
Cost of sales		946,001			-		-			946,001
Selling, marketing and administration		3,069,493			7,200,243		1,151,868			11,421,604
Research and development		1,042,842			2,122,983		-			3,165,825
Impairment loss		-			63,522		-			63,522
Loss on disposal of property and equipment		-			29,807		16,931			46,738
Other income		(14,027	)		-		(52,845	)		(66,872	)

Net loss from operations	$	3,182,562		$	9,416,555	$	1,115,954		$	13,715,071

Liquidity and Capital Resources

The Company had working capital of $7,140,119 on December 31, 2017 as compared to $15,509,859 on December 31, 2016.

The Company’s balance sheet as of December 31, 2017 reflects assets with a book value of $25,205,772, compared to $35,505,957 as of December 31, 2016. Thirty-two percent (32%) of the book value as of December 31, 2017, or $7,950,712, was in current assets consisting primarily of cash and other current assets, compared to 48%, or $17,134,203 as of December 31, 2016.

The Company is in a position to cover its liabilities as they come due, however, due to the continuation of losses, the Company will need to seek debt or equity financing to fund its operations. Consistent with its needs for additional financing, on March 21, 2018, the Company completed a public offering of 25,090,700 units at a price of $0.425 (CAD$0.55) per unit for gross proceeds of $10,663,548 (CAD$13,799,885). Additionally, subsequent to December 31, 2017 the Company raised $1,131,921 from the exercise of warrants and stock options. Refer to Subsequent Events for further details

Acquisitions

DenseLight

On May 11, 2016, the Company acquired all the issued and outstanding shares of DenseLight Semiconductors Pte. Ltd, a designer, manufacturer and provider of photonic sensing and optical light source products for consideration of $10,500,000. The all-stock purchase was accomplished with the issuance of 13,611,150 common shares of the Company at a price of $0.7714 per share. The Company also committed to issuing shares representing $1,000,000 to the sellers in the event that DenseLight met or exceeded a pre-determined revenue target during calendar 2016. The revenue targets were not met.

This acquisition provides the Company with direct and preferred access to a fab infrastructure for future product development, access to product sales and channel distribution networks and a broader product portfolio of photonic products, technology and know-how.

Upon closing the acquisition, the Company negotiated a settlement agreement relating to obligations that were due to past or current employees of DenseLight. As part of the settlement agreement, the Company issued 1,738,236 common shares at a price of $0.7714 per share for a total of $1,343,629. The Company also paid $240,266 to current and past employees as part of the debt settlement. Accounts payable and accrued liabilities included $184,570 that was due to past and current employees have been settled

The Company also settled a loan of $500,000 owing to EDB Investments Pte. Ltd., an investor in DenseLight, with the issuance of 648,150 shares at a price of 0.771 per share.

Former management shareholders of DenseLight agreed not to sell, transfer, pledge or otherwise dispose of the shares of the Company for a period of nine months, at which time they were each able to sell up to 25% of their shares. They were able to sell an additional 25% of the shares after twelve months. These restrictions expired on May 11, 2017. All management shareholders are able to sell any remaining shares after 24 months from closing (i.e., May 11, 2018). Former non-management shareholders of DenseLight are no longer restricted from selling their shares.

On acquisition, DenseLight held accounts receivable and unbilled revenue in the amount of $198,898 that reflected their fair value. The billed receivables at closing have been subsequently collected.

The acquisition has been accounted for using the acquisition method of accounting. Acquisition related costs of $197,284 were expensed in the year and included in selling, marketing and administrative expenses.

Fair value of consideration paid

Fair value of 13,611,150 shares issued	$	10,500,000
Contingent consideration payable		283,130

Total consideration	$	10,783,130


Recognised amounts of identifiable net assets:

Cash	$	2,971
Accounts receivables and unbilled revenue		198,898
Prepaid and other current assets		293,386
Inventory		319,257
Property and equipment		8,635,650
Customer relationships		186,131
Goodwill		6,630,544
Trade payables		(2,979,546	)
Loans and advances		(1,000,000	)
Deferred tax liability		(1,504,161	)

Net assets acquired	$	10,783,130

Loans and advances include $500,000 that was advanced to DenseLight by the Company prior to its acquisition. This advance was used by DenseLight to cover the expenses required for the development under the Development Services Agreement between DenseLight and the Company, based on the special pricing negotiated between the parties.

The purchase and sale agreement provided for an additional $1,000,000 worth of shares to be issued to the sellers should gross revenue from DenseLight exceed certain targets for 2016. The fair value of this contingent consideration payable was determined by estimating the probability of the Company making that future payment and then discounting it to present value using a discount rate of 9% being the estimated cost of debt for the Company. At December 31, 2016, DenseLight did not exceed the established revenue targets for 2016. The Company has therefore adjusted the fair value of contingent consideration to nil through earnings.

A deferred tax liability of $1,504,161 was created on the date of purchase relating to the fair value adjustment of the assets acquired. Deferred tax liability relating to the DenseLight acquisition at December 31, 2017 and 2016 was $1,005,627 and $1,303,567 respectively.

BB Photonics

On June 22, 2016, the Company acquired all the issued and outstanding shares of BB Photonics, a designer of integrated photonic solutions for the data communications market for consideration of $1,550,000. The all-stock purchase was accomplished with the issuance of 1,996,090 common share of the Company at a price of $0.777 per share.

The acquisition of BB Photonics provides the Company with additional differentiated intellectual property and know-how for product development, which will enable the Company to better reach its first identified commercial market, the data communications market, as well as to augment its sensing roadmap.

The acquisition has been accounted for using the acquisition method of accounting. Acquisition related costs of $59,930 were expensed in the year and included in selling, marketing and administrative expenses.

Fair value of consideration paid

Fair value of 1,996,090 shares issued	$	1,550,000


Recognised amounts of identifiable net assets:
Cash	$	15,820
Property and equipment		70,379
Intangibles		714,000
Goodwill		1,050,459
Trade payables		(7,918	)
Deferred tax liability		(292,740	)

Net assets acquired	$	1,550,000

A deferred tax liability of $292,740 was created on the date of acquisition and related to the value of the In-Process Research and Development (IPR&D). Externally generated IPR&D is subject to impairment whenever events or changes indicate that its carrying amount may not be recoverable. Since the Company is still in the process of completing its technology and related products, the IPR&D and related deferred tax liability have not been impaired or amortized.

Related Party Transactions

Compensation to key management personnel was as follows:

		2017		2016

Salaries	$	932,133	$	2,047,634
Share-based payments (1)		2,110,773		3,061,686

Total	$	3,042,906	$	5,109,320

(1) Share-based payments are the fair value of options granted to key management personnel and expensed during the various years as calculated using the Black-Scholes model.

In 2016, the Company paid or accrued $150,000 in consulting fees to a director for strategic, technology, integration and general business consulting services.

The Company paid or accrued $115,660 in fees for the year ended December 31, 2017 (2016 - $113,250) to a law firm, of which a director is counsel, for legal services rendered to the Company.

All transactions with related parties have occurred in the normal course of operations and are measured at the exchange amounts, which are the amounts of consideration established and agreed to by the related parties.

Critical Accounting Estimates

Accounts receivable

Accounts receivable are amounts due from customers from the sale of products or services in the ordinary course of business. Accounts receivables are classified as current (on the consolidated statements of financial position) if payment is due within one year of the reporting period date and are initially recognized at fair value and subsequently measured at amortized cost.

The provision policy for doubtful accounts of the Company is based on the ageing analysis and management's ongoing evaluation of the recoverability of the outstanding receivables. A considerable amount of judgment is required in assessing the ultimate realization of these receivables, including the assessment of the creditworthiness and the past collection history of each customer. If the financial conditions of these customers were to deteriorate , resulting in an impairment of their ability to make payments, additional allowances may be required. As at the balance sheet date, no provision was required for accounts receivable.

Inventory

Inventory consists of raw material inventory, work in process, and finished goods and are recorded at the lower of cost and net realizable value. Cost is determined on a first in first out basis and includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to its present condition.

An assessment is made of the net realizable value of inventory at each reporting period. Net realizable value is the estimated selling price less the estimated cost of completion and the estimated costs necessary to make the sale. When circumstances that previously caused inventory to be written down no longer exist or when there is clear evidence of an increase in net realizable value because of changed economic circumstances, the amount of any write down previously recorded is reversed so that the new carrying amount is the lower of the cost and the revised net realizable value. Raw materials are not written down unless the goods in which they are incorporated are expected to be sold for less than cost, in which case, they are written down by reference to replacement cost of the raw materials, as this is the best indicator of net realizable value.

Property and equipment

Property and equipment are recorded at cost. Depreciation is calculated based on the estimated useful life of the asset using the following method and useful lives:

Machinery and equipment	Straight Line, 5 years
Leasehold improvements	Straight Line, 5 years or life of the lease, whichever is less
Office equipment	Straight Line, 5 years

Patents and licenses

Patents and licenses are recorded at cost and amortized on a straight-line basis over 12 years. Ongoing maintenance costs are expensed as incurred.

Intangible assets

Internally generated intangible assets are recorded at cost and will be amortized on a straight-line basis based on the best estimate of the useful life of the asset developed from the point at which the asset is ready for use. Internally generated intangible assets are tested for impairment whenever events or changes indicate that its carrying amount may not be recoverable. Externally acquired intangible assets are amortized on a straight-line basis over 5 years commencing when the asset is ready for use. Externally generated intangible assets are tested for impairment whenever events or changes indicate that its carrying amount may not be recoverable.

Stock-based Compensation

Stock options and warrants awarded to non-employees are accounted for using the fair value of the instrument awarded or service provided, whichever is considered more reliable. Stock options and warrants awarded to employees are accounted for using the fair value method. The fair value of such stock options and warrants granted is recognized as an expense on a proportionate basis consistent with the vesting features of each tranche of the grant. The fair value is calculated using the Black-Scholes option-pricing model with assumptions applicable at the date of grant.

Other stock-based payments

The Company accounts for other stock-based payments based on the fair value of the equity instruments issued or service provided, whichever is more reliable.

Cumulative Translation Adjustment

IFRS requires certain gains and losses such as certain exchange gains and losses arising from the translation of the financial statements of a self-sustaining foreign operation to be included in comprehensive income.

Recent Accounting Pronouncements

The Company has considered all recently issued accounting pronouncements and does not believe the adopting of such pronouncements will have a material impact on its consolidated financial statements. Please see note 3 of the financial statements for additional information.

Financial Instruments and Risk Management

The Company's financial instruments consist of cash, short-term investments, accounts receivable, non-current assets held for sale, accounts payable and accrued liabilities and contingent consideration payable. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest risk arising from these financial instruments. The Company estimates that the fair value of these instruments approximates fair value due to their short-term nature.

Exchange Rate Risk

The Company is exposed to foreign currency risk with the Canadian dollar and Singapore dollar due to cash reserves and other current assets and liabilities that are maintained in those currencies, all of which are exposed to currency fluctuations. Most of the Company’s operations are transacted in US dollars and Singapore Dollars. A 10% change in the Canadian dollar and Singapore dollar would increase or decrease other comprehensive loss by $260,175.

Interest Rate Risk

Cash equivalents bear interest at fixed rates, and as such, are subject to interest rate risk resulting from changes in fair value from market fluctuations in interest rates. The Company does not depend on interest from its investments to fund its operations.

Credit Risk

The Company is exposed to credit risk associated with its accounts receivable. The Company has accounts receivable from both governmental and non-governmental agencies. Credit risk is minimized substantially by ensuring the credit worthiness of the entities with which it carries on business. Credit terms are provided on a case-by-case basis. The Company has not experienced any significant instances of non-payment from its customers. No provision has been made for potentially uncollectable amounts.

The Company's accounts receivable ageing at December 31 was as follows:

	2017		2016

Current	$	330,731	$	125,610
31 - 60 days		56,094		16,346
61 - 90 days		-		75,816
> 90 days		107,100		75,077

	$	493,925	$	292,849

World Economic Risk

Like many other companies, the world economic climate could have an impact on the Company's business and the business of many of its current and prospective customers. A slump in demand for electronic-based devices, due to a world economic crisis, may impact any anticipated licensing revenue.

Obsolescence Risk

The Company designs, manufactures and sells various highly technological electronic products that could become obsolete should lower priced competitors or new technology enter the market. This would expose the company to obsolescence risk in inventory balances, but also a risk of obsolescence in the product offering. The redesign of the product offering could take significant time or could never occur.

Liquidity Risk

The Company predominately relies on equity funding for liquidity to meet current and foreseeable financial requirements.

Subsequent Events

On March 21, 2018, the Company completed a brokered public offering of 25,090,700 units at a price of $0.425 (CAD$0.55) per unit for gross proceeds of $10,663,548 (CAD$13,799,885). Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the Company at a price of $0.58 (CAD$0.75) per share until March 21, 2020. The broker was paid a cash commission of $639,813 (6%) of the gross proceeds and received 1,505,442 compensation options. Each compensation option is exercisable into one compensation unit of the company at a price of $0.425 (CAD$0.55) per compensation option until March 21, 2020 with each compensation unit comprising one common share and one-half compensation share purchase warrant. Each compensation share purchase warrant entitles the broker to purchase one common share of the Company at a price of $0.425 (CAD$0.55) per share until March 21, 2020.

Subsequent to December 31, 2017 the Company also raised $1,131,921 from the exercise of warrants and stock options.

Strategy and Outlook

There are a number of projects that the Company expects will address the short-term and long-term growth plans of the Company including, but not limited to the following:

· Introduce the Optical Interposer concept to suppliers of transceivers and data center operators and form commercial partnerships for product development;

· Promote the POET Optical Interposer as a true platform technology across several photonic applications and markets ;

· Pursue multiple potential sources of non-product revenue and strategic partnerships;

· Continue to invest in our capabilities and infrastructure;

· Selectively pursue other opportunities that leverage our existing expertise; and

· Pursue complementary strategic alliance or acquisition opportunities .

Outstanding Share Data

Common Shares

Total common shares of the Company outstanding at December 31, 2017 and April 27, 2018 were 260,018,853 and 288,056,802 respectively.

Stock Options and Warrants

Total warrants outstanding to purchase common shares of the Company at December 31, 2017 and April 27, 2018 were 34,800,000 and 43,109,000 respectively priced between CA$0.52 and CA$0.75 per common share.

Total stock options outstanding as at December 31, 2017 and April 27, 2018 were 33,090,291 and 40,506,521 respectively, priced between CA$0.20 and CA$1.99 per common share.

Total compensation units due to brokers as at December 31, 2017 and April 27, 2018 were nil and 1,309,080 respectively, priced at CA$0.55. Each compensation unit is convertible into one common share and one half common share purchase warrant.

Additional detailed share data information is available in the Company’s Notes to Consolidated Financial Statement.

Off-Balance Sheet Arrangements

The Company has not entered into any off-balance sheet arrangements.

Key Business Risks and Uncertainties

The process of developing new, technologically advanced products in semiconductor manufacturing and photonics products is highly complex and uncertain, and we cannot guarantee a positive result.

The development of new, technologically advanced products is a complex and uncertain process requiring frequent innovation, highly-skilled engineering and development personnel and significant capital, as well as the accurate anticipation of technological and market trends. We cannot assure you that we will be able to identify, develop, manufacture, market or support new or enhanced products successfully or on a timely basis. Further, we cannot assure you that our new products will gain market acceptance or that we will be able to respond effectively to product introductions by competitors, technological changes or emerging industry standards. We also may not be able to develop the underlying core technologies necessary to create new products and enhancements, license these technologies from third parties, or remain competitive in our markets.

Customer demand is difficult to forecast accurately and, as a result, we may be unable to match production with customer demand.

We make planning and spending decisions, including determining the levels of business that we will seek and accept, production schedules, component procurement commitments, personnel needs and other resource requirements, based on our estimates of product demand and customer requirements. Our products are typically sold pursuant to individual purchase orders. While our customers may provide us with their demand forecasts, they are typically not contractually committed to buy any quantity of products beyond firm purchase orders. Furthermore, many of our customers may increase, decrease, cancel or delay purchase orders already in place without significant penalty. The short-term nature of commitments by our customers and the possibility of unexpected changes in demand for their products reduce our ability to accurately estimate future customer requirements. If any of our customers decrease, stop or delay purchasing our products for any reason, we will likely have excess manufacturing capacity or inventory and our business and results of operations would be harmed.

If our customers do not qualify our products for use on a timely basis, our results of operations may suffer.

Prior to the sale of new products, our customers typically require us to “qualify” our products for use in their applications. At the successful completion of this qualification process, we refer to the resulting sales opportunity as a “design win.” Additionally, new customers often audit our manufacturing facilities and perform other evaluations during this qualification process. The qualification process involves product sampling and reliability testing and collaboration with our product management and engineering teams in the design and manufacturing stages. If we are unable to accurately predict the amount of time required to qualify our products with customers, or are unable to qualify our products with certain customers at all, then our ability to generate revenue could be delayed or our revenue would be lower than expected and we may not be able to recover the costs associated with the qualification process or with our product development efforts, which would have an adverse effect on our results of operations.

The markets in which we operate are highly competitive, which could result in lost sales and lower revenues.

The market for optical components and modules is highly competitive and this competition could result in our existing customers moving their orders to our competitors. We are aware of a number of companies that have developed or are developing optical component products, including LEDs, lasers, pluggable components, modules and subsystems, photonic integrated circuits, among others, that compete directly with our current and proposed product offerings.

Some of our current competitors, as well as some of our potential competitors, have longer operating histories, greater name recognition, broader customer relationships and industry alliances and substantially greater financial, technical and marketing resources than we do. We may not be able to compete successfully with our competitors and aggressive competition in the market may result in lower prices for our products and/or decreased gross margins. Any such development could have a material adverse effect on our business, financial condition and results of operations.

Our products, including those sold by predecessor company, OPEL Solar, could contain defects that may cause us to incur significant costs or result in a loss of customers or subject us to claims for which we may not be fully insured.

Our predecessor company, Opel Solar, sold solar systems and products between 2007 and 2012, and some of those products may still be under warranty. We have not undertaken to quantify the size of that warranty obligation and it is not recorded on our balance sheet because it is not determinable. Although we carry product liability insurance, this insurance may not adequately cover our costs arising from defects or warranty claims related to those products.

Our current products sold by DenseLight are complex and undergo quality testing as well as formal qualification by our customers. Our customers’ testing procedures are limited to evaluating our products under likely and foreseeable failure scenarios and over varying amounts of time. For various reasons, such as the occurrence of performance problems that are unforeseeable in testing or that are detected only when products age or are operated under peak stress conditions, our products may fail to perform as expected long after customer acceptance. Failures could result from faulty components or design, problems in manufacturing or other unforeseen reasons. As a result, we could incur significant costs to repair or replace defective products under warranty, particularly when such failures occur in installed systems. Our products are typically embedded in, or deployed in conjunction with, our customers’ products, which incorporate a variety of components, modules and subsystems and may be expected to interoperate with modules produced by third parties. As a result, not all defects are immediately detectable and when problems occur, it may be difficult to identify the source of the problem. While we have not experienced material failures in the past, we will continue to face this risk going forward because our products are widely deployed in many demanding environments and applications worldwide. In addition, we may in certain circumstances honor warranty claims after the warranty has expired or for problems not covered by warranty to maintain customer relationships. Any significant product failure could result in litigation, damages, repair costs and lost future sales of the affected product and other products, divert the attention of our engineering personnel from our product development efforts and cause significant customer relations problems, all of which would harm our business. Although we carry product liability insurance, this insurance may not adequately cover our costs arising from defects in our products or otherwise.

The business that we acquired did not have a history of profitable operations. Our ability to successfully manage our manufacturing operations is essential to our overall success, and if we fail to do so, our financial results will suffer.

At the time of the acquisition of DenseLight Semiconductors, Pte. Ltd. in May of 2016, the company had been operating at a loss for several years and was at a minimum staffing level. Since the acquisition, we have committed substantial capital and management attention to improving the operation, increasing sales and driving to profitability. Even though substantial changes in the management and personnel have been made, the results to date have been less than anticipated and more improvement will be required in order to make the DenseLight operation profitable. We cannot guarantee that our efforts to improve the DenseLight operation will be successful, and if they are not, the operation will continue to need capital and attention from the senior management of the company and our financial results may suffer as a result.

If we encounter manufacturing problems or if manufacturing at our Singapore operation is discontinued for any reason, including an industrial or workplace accident, we may lose sales and damage our customer relationships, or be subject to claims for which we may not be fully insured.

We may experience delays, disruptions or quality control problems in our manufacturing operations. These and other factors may cause less than acceptable yields at our wafer fabrication facility. Manufacturing yields depend on a number of factors, including the quality of available raw materials, the degradation or change in equipment calibration and the rate and timing of the introduction of new products. Changes in manufacturing processes required as a result of changes in product specifications, changing customer needs and the introduction of new products may significantly reduce our manufacturing yields, resulting in low or negative margins on those products. In addition, because of our wafer size, we use equipment that is not readily available on the open market and for which spare parts and qualified service people may not be available. If any of our key equipment were to be damaged or destroyed for any reason, our manufacturing process would be severely disrupted. Any such manufacturing problems would likely delay product shipments to our customers, which would negatively affect our sales, competitive position and reputation.

Our operations in Singapore are subject to government regulations that protect the workplace safety of employees. We strive to maintain an accident-free workplace, but we cannot guarantee that industrial accidents will not take place, or that we will not be subject to liability for these and other workplace related claims. We have obtained insurance policies to protect the company against claims for workplace related claims, but we cannot guarantee that these and other insurance policies carried by the Company will be sufficient to cover the full costs of such claims, which could have a material adverse effect on the Company.

We have limited operating history in the datacom market, and our business could be harmed if this market does not develop as we expect.

The initial target market for our Optical Interposer-based optical engine is the datacom market and we have no experience in selling products in this market. We may not be successful in developing a product for this market and even if we do, it may never gain widespread acceptance by large data center operators. If our expectations for the growth of the datacom market are not realized, our financial condition or results of operations may be adversely affected.

We depend on a limited number of suppliers and key contract manufacturers who could disrupt our business and technology development activities if they stopped, decreased, delayed or were unable to meet our demand for shipments of their products or manufacturing of our products.

We depend on a limited number of suppliers of epitaxial wafers and contract manufacturers for both our GaAs and InP development and production activities. Some of these suppliers are sole source suppliers. We typically have not entered into long-term agreements with our suppliers. As a result, these suppliers generally may stop supplying us materials and other components at any time. Our reliance on a sole supplier or limited number of suppliers could result in delivery problems, reduced control over technology development, product development, pricing and quality, and an inability to identify and qualify another supplier in a timely manner. Some of our suppliers that may be small or under-capitalized may experience financial difficulties that could prevent them from supplying us materials and other components. In addition, our suppliers, including our sole source suppliers, may experience manufacturing delays or shut downs due to circumstances beyond their control such as earthquakes, floods, fires, labor unrest, political unrest or other natural disasters. A Change in supplier could require technology transfer that could require multiple iterations of test wafers. This could result in significant delays in resumption of production.

Any supply deficiencies relating to the quality or quantities of materials or equipment we use to manufacture our products could materially and adversely affect our ability to fulfill customer orders and our results of operations. Lead times for the purchase of certain materials and equipment from suppliers have increased and, in some cases, have limited our ability to rapidly respond to increased demand, and may continue to do so in the future. To the extent we introduce additional contract manufacturing partners, introduce new products with new partners and/or move existing internal or external production lines to new partners, we could experience supply disruptions during the transition process. In addition, due to our customers’ requirements relating to the qualification of our suppliers and contract manufacturing facilities and operations, we cannot quickly enter into alternative supplier relationships, which prevent us from being able to respond immediately to adverse events affecting our suppliers.

Our international business and operations expose us to additional risks.

Products shipped to customers located outside Canada and the United States account for a majority of our revenues. In addition, we have significant tangible assets located outside the United States. Our manufacturing facilities are located in Singapore. Conducting business outside Canada and the United States subjects us to a number of additional risks and challenges, including:

•	periodic changes in a specific country's or region's economic conditions, such as recession;
•	licenses and other trade barriers;
•	the provision of services may require export licenses;
•	environmental regulations;
•	certification requirements;
•	fluctuations in foreign currency exchange rates;
•	inadequate protection of intellectual property rights in some countries;
•	preferences of certain customers for locally produced products;
•	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;
•	Canadian and U. S. and foreign anticorruption laws;
•	seasonal reductions in business activities in certain countries or regions; and
•	fluctuations in freight rates and transportation disruptions.

These factors, individually or in combination, could impair our ability to effectively operate one or more of our foreign facilities or deliver our products, result in unexpected and material expenses, or cause an unexpected decline in the demand for our products in certain countries or regions. Our failure to manage the risks and challenges associated with our international business and operations could have a material adverse effect on our business.

If we fail to attract and retain key personnel, our business could suffer.

Our future success depends, in part, on our ability to attract and retain key personnel, including executive management. Competition for highly skilled technical personnel is extremely intense and we may face difficulty identifying and hiring qualified engineers in many areas of our business. We may not be able to hire and retain such personnel at compensation levels consistent with our existing compensation and salary structure. Our future success also depends on the continued contributions of our executive management team and other key management and technical personnel, each of whom would be difficult to replace. The loss of services of these or other executive officers or key personnel or the inability to continue to attract qualified personnel could have a material adverse effect on our business.

Our prior acquisitions created a large amount of goodwill, which may have to be impaired in the future and as a result may adversely affect our financial results. In addition, past and any future acquisitions may adversely affect our financial condition and results of operations.

As part of our business strategy, we have in the past and may in the future pursue acquisitions of companies that we believe could enhance or complement our current product portfolio, augment our technology roadmap or diversify our revenue base. Acquisitions involve numerous risks, any of which could harm our business, including:

•	difficulties integrating the acquired business;
•	unanticipated costs, capital expenditures, liabilities or changes to product development efforts;
•	difficulties integrating the business relationships with suppliers and customers of the acquired business with our existing operations;
•	acts or omissions by the acquired company prior to the acquisition that may subject us to unknown risks or liabilities;
•	risks associated with entering markets in which we have little or no prior experience;
•	potential loss of key employees, particularly those of the acquired organizations; and
•	diversion of financial and management resources from our existing business;

Our prior acquisitions have resulted, and future acquisitions may result in the recording of goodwill and other intangible assets subject to potential impairment in the future, adversely affecting our operating results. We may not achieve the anticipated benefits of an acquisition if we fail to evaluate it properly, and we may incur costs in excess of what we anticipate. A failure to evaluate and execute an acquisition appropriately or otherwise adequately address these risks may adversely affect our financial condition and results of operations.

Our subsidiaries receive and expect to receive in the future subsidies and other types of funding from government agencies in the locations in which we operate. The funding agreements stipulate that if we do not comply with various covenants, including eligibility requirements, and/or do not achieve certain pre-defined objectives, those government agencies may reclaim all or a portion of the funding provided. If this were to occur, we would either not be in a position to repay the claimed amounts or would have to borrow large sums in order to do so or refinance with dilutive financing, which would adversely affect our financial condition.

Our subsidiary ODIS received research and development grants from the United States Air Force and from NASA; our recently acquired subsidiary, DenseLight Semiconductor, Pte, Ltd. receives funding for new product development activities conducted in Singapore from the Economic Development Board; and we expect that our recently acquired subsidiary BB Photonics U.K., may also apply for certain grants to defer the cost of development in the U.K. The rules for eligibility vary widely across government agencies, are complex and may be subject to different interpretations. Furthermore, some of the grants set pre-defined development or spending objectives, which we may not achieve. We cannot guarantee that one or more agencies will not seek repayment of all or a portion of the funds provided, and if this were to occur, we would have to borrow large sums or refinance with dilutive financing in order to make the repayments, which would adversely affect our financial condition .

We may be subject to disruptions or failures in information technology systems and network infrastructures that could have a material adverse effect on our business and financial condition.

We rely on the efficient and uninterrupted operation of complex information technology systems and network infrastructures to operate our business. A disruption, infiltration or failure of our information technology systems as a result of software or hardware malfunctions, system implementations or upgrades, computer viruses, third-party security breaches, employee error, theft or misuse, malfeasance, power disruptions, natural disasters or accidents could cause a breach of data security, loss of intellectual property and critical data and the release and misappropriation of sensitive competitive information and partner, customer, and employee personal data. Any of these events could harm our competitive position, result in a loss of customer confidence, cause us to incur significant costs to remedy any damages and ultimately materially adversely affect our business and financial condition.

We have a history of large operating losses. We may not be able to sustain profitability in the future and as a result we may not be able to maintain sufficient levels of liquidity.

We have historically incurred losses and negative cash flows from operations since our inception. As of December 31, 2017, we had an accumulated deficit of $116,873,153. For the years ended December 31, 2017 and December 31, 2016, we incurred net losses before income taxes of $13,095,737 and $13,431,941 respectively.

As of December 31, 2017, we held $4,974,478 in cash, and we had working capital of $7,140,119.

The Company is currently in a position to cover its liabilities as they come due. However, we have sustained considerable operating losses in the past. Should such losses continue, the Company may need to seek debt or equity financing to fund its operations. Although the Company has been successful in obtaining such financings in the past, there is no assurance that it will be able do so in the future. If the Company is unable to obtain such financing, it may have an adverse effect on the Company’s ability to continue operations. Consistent with its needs for additional financing, on March 21, 2018, the Company completed a “bought deal” public offering of 25,090,700 units at a price of $0.425 (CAD$0.55) per unit for gross proceeds of $10,663,548 (CAD$13,799,885). Additionally, subsequent to December 31, 2017 the Company raised $1,131,921 from the exercise of warrants and stock options.

The optical data communications industry is subject to significant operational fluctuations. In order to remain competitive, we incur substantial costs associated with research and development, qualification, production capacity and sales and marketing activities in connection with products that may be purchased, if at all, long after we have incurred such costs. In addition, the rapidly changing industry in which we operate, the length of time between developing and introducing a product to market, frequent changing customer specifications for products, customer cancellations of products and general down cycles in the industry, among other things, make our prospects difficult to evaluate. As a result of these factors, it is possible that we may not (i) generate sufficient positive cash flow from operations; (ii) raise funds through the issuance of equity, equity-linked or convertible debt securities; or (iii) otherwise have sufficient capital resources to meet our future capital or liquidity needs. There are no guarantees we will be able to generate additional financial resources beyond our existing balances.

We may not be able to obtain additional capital when desired, on favorable terms or at all.

We operate in a market that makes our prospects difficult to evaluate and, to remain competitive, we will be required to make continued investments in capital equipment, facilities and technology. We expect that substantial capital will be required to continue technology and product development, to expand our manufacturing capacity if we need to do so and to fund working capital for anticipated growth. If we do not generate sufficient cash flow from operations or otherwise have the capital resources to meet our future capital needs, we may need additional financing to implement our business strategy.

If we raise additional funds through the issuance of our common stock or convertible securities, the ownership interests of our stockholders could be significantly diluted. These newly issued securities may have rights, preferences or privileges senior to those of existing stockholders. Additional financing may not, however, be available on terms favorable to us, or at all, if and when needed, and our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our infrastructure or respond to competitive pressures could be significantly limited. If we cannot raise required capital when needed, including under our Short Form Prospectus filed with the Canadian Securities Exchange and the U.S. SEC in October 2016, we may be unable to continue technology and product development, meet the demands of existing and prospective customers, adversely affecting our sales and market opportunities and consequently our business, financial condition and results of operations.

Our business could be negatively impacted as a result of shareholder activism.

In recent years, shareholder activists have become involved in numerous public companies. Shareholder activists frequently propose to involve themselves in the governance, strategic direction, and operations of the company. We may in the future become subject to such shareholder activity and demands. Such demands may disrupt our business and divert the attention of our management and employees, and any perceived uncertainties as to our future direction resulting from such a situation could result in the loss of potential business opportunities, be exploited by our competitors, cause concern to our current or potential customers, and make it more difficult to attract and retain qualified personnel and business partners, all of which could adversely affect our business. In addition, actions of activist shareholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

If we fail to protect, or incur significant costs in defending, our intellectual property and other proprietary rights, our business and results of operations could be materially harmed.

Our success depends on our ability to protect our intellectual property and other proprietary rights. We rely on a combination of patent, trademark, copyright, trade secret and unfair competition laws, as well as license agreements and other contractual provisions, to establish and protect our intellectual property and other proprietary rights. We have applied for patent registrations in the U.S. and in other foreign countries, some of which have been issued. We cannot guarantee that our pending applications will be approved by the applicable governmental authorities. Moreover, our existing and future patents and trademarks may not be sufficiently broad to protect our proprietary rights or may be held invalid or unenforceable in court. A failure to obtain patents or trademark registrations or a successful challenge to our registrations in the U.S. or other foreign countries may limit our ability to protect the intellectual property rights that these applications and registrations intended to cover.

Policing unauthorized use of our technology is difficult and we cannot be certain that the steps we have taken will prevent the misappropriation, unauthorized use or other infringement of our intellectual property rights. Further, we may not be able to effectively protect our intellectual property rights from misappropriation or other infringement in foreign countries where we have not applied for patent protections, and where effective patent, trademark, trade secret and other intellectual property laws may be unavailable or may not protect our proprietary rights as fully as Canadian or U.S. law. We may seek to secure comparable intellectual property protections in other countries. However, the level of protection afforded by patent and other laws in other countries may not be comparable to that afforded in Canada and the U.S.

We also attempt to protect our intellectual property, including our trade secrets and know-how, through the use of trade secret and other intellectual property laws, and contractual provisions. We enter into confidentiality and invention assignment agreements with our employees and independent consultants. We also use non-disclosure agreements with other third parties who may have access to our proprietary technologies and information. Such measures, however, provide only limited protection, and there can be no assurance that our confidentiality and non-disclosure agreements will not be breached, especially after our employees end their employment, and that our trade secrets will not otherwise become known by competitors or that we will have adequate remedies in the event of unauthorized use or disclosure of proprietary information. Unauthorized third parties may try to copy or reverse engineer our products or portions of our products, otherwise obtain and use our intellectual property, or may independently develop similar or equivalent trade secrets or know-how. If we fail to protect our intellectual property and other proprietary rights, or if such intellectual property and proprietary rights are infringed or misappropriated, our business, results of operations or financial condition could be materially harmed.

In the future, we may need to take legal actions to prevent third parties from infringing upon or misappropriating our intellectual property or from otherwise gaining access to our technology. Protecting and enforcing our intellectual property rights and determining their validity and scope could result in significant litigation costs and require significant time and attention from our technical and management personnel, which could significantly harm our business. We may not prevail in such proceedings, and an adverse outcome may adversely impact our competitive advantage or otherwise harm our financial condition and our business.

We may be involved in intellectual property disputes in the future, which could divert management’s attention, cause us to incur significant costs and prevent us from selling or using the challenged technology.

Participants in the markets in which we sell our products have experienced frequent litigation regarding patent and other intellectual property rights. While we have a policy in place that is designed to reduce the risk of infringement of intellectual property rights of others, there can be no assurance that third parties will not assert infringement claims against us. We cannot be certain that our products would not be found infringing on the intellectual property rights of others. Regardless of their merit, responding to such claims can be time consuming, divert management’s attention and resources and may cause us to incur significant expenses. Intellectual property claims against us could result in a requirement to license technology from others, discontinue manufacturing or selling the infringing products, or pay substantial monetary damages, each of could result in a substantial reduction in our revenue and could result in losses over an extended period of time.

If we fail to obtain the right to use the intellectual property rights of others that are necessary to operate our business, and to protect their intellectual property, our business and results of operations will be adversely affected.

From time to time, we may choose to or be required to license technology or intellectual property from third parties in connection with the development of our products. We cannot assure you that third party licenses will be available to us on commercially reasonable terms, if at all. Generally, a license, if granted, would include payments of up-front fees, ongoing royalties or both. These payments or other terms could have a significant adverse impact on our results of operations. Our inability to obtain a necessary third-party license required for our product offerings or to develop new products and product enhancements could require us to substitute technology of lower quality or performance standards, or of greater cost, either of which could adversely affect our business. If we are not able to obtain licenses from third parties, if necessary, then we may also be subject to litigation to defend against infringement claims from these third parties. Our competitors may be able to obtain licenses or cross-license their technology on better terms than we can, which could put us at a competitive disadvantage.

If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected.

Preparing our consolidated financial statements involves a number of complex manual and automated processes, which are dependent upon individual data input or review and require significant management judgment. One or more of these elements may result in errors that may not be detected and could result in a material misstatement of our consolidated financial statements. The Sarbanes-Oxley Act in the U.S. requires, among other things, that as a publicly traded company we disclose whether our internal control over financial reporting and disclosure controls and procedures are effective. As long as we qualify as an “emerging growth company” under the JOBS Act, which may be up to five years following the filing of our Form 20F Registration Statement, we will not have to provide an auditor’s attestation report on our internal controls. During the course of any evaluation, documentation or attestation, we or our independent registered public accounting firm may identify weaknesses and deficiencies that we may not otherwise identify in a timely manner or at all as a result of the deferred implementation of this additional level of review.

We have implemented internal controls that we believe provide reasonable assurance that we will be able to avoid accounting errors or material weaknesses in future periods. However, our internal controls cannot guarantee that no accounting errors exist or that all accounting errors, no matter how immaterial, will be detected because a control system, no matter how well designed and operated, can provide only reasonable, but not absolute assurance that the control system’s objectives will be met. If we are unable to implement and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results could be adversely impacted. This could result in late filings of our annual and quarterly reports under the Canadian Securities Act and the Securities Exchange Act of 1934, or the Exchange Act, restatements of our consolidated financial statements, a decline in our stock price, suspension or delisting of our common stock by the TSX Venture Exchange, or other material adverse effects on our business, reputation, results of operations or financial condition.

Our ability to use our net operating losses and certain other tax attributes may be limited.

As of December 31, 2017, we had accumulated net operating losses (NOLs), of approximately $124 million. Varying jurisdictional tax codes have restrictions on the use of NOLs, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs, R&D credits and other pre-change tax attributes to offset its post-change income may be limited. An ownership change is generally defined as a greater than 50% change in equity ownership. Based upon an analysis of our equity ownership, we do not believe that we have experienced such ownership changes and therefore our annual utilization of our NOLs is not limited. However, should we experience additional ownership changes, our NOL carry forwards may be limited.

We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.

We are subject to export and import control laws, trade regulations and other trade requirements that limit which raw materials and technology we can import or export and which products we sell and where and to whom we sell our products. Specifically, the Bureau of Industry and Security of the U.S. Department of Commerce is responsible for regulating the export of most commercial items that are so called dual-use goods that may have both commercial and military applications. A limited number of our products are exported by license under certain classifications. Export Control Classification requirements are dependent upon an item’s technical characteristics, the destination, the end-use, and the end-user, and other activities of the end-user. Should the regulations applicable to our products change, or the restrictions applicable to countries to which we ship our products change, then the export of our products to such countries could be restricted. As a result, our ability to export or sell our products to certain countries could be restricted, which could adversely affect our business, financial condition and results of operations. Changes in our products or any change in export or import regulations or related legislation, shift in approach to the enforcement or scope of existing regulations, or change in the countries, persons or technologies targeted by such regulations, could result in delayed or decreased sales of our products to existing or potential customers. In such event, our business and results of operations could be adversely affected.

Our manufacturing operations are subject to environmental regulation that could limit our growth or impose substantial costs, adversely affecting our financial condition and results of operations.

Our properties, operations and products are subject to the environmental laws and regulations of the jurisdictions in which we operate and sell products. These laws and regulations govern, among other things, air emissions, wastewater discharges, the management and disposal of hazardous materials, the contamination of soil and groundwater, employee health and safety and the content, performance, packaging and disposal of products. Our failure to comply with current and future environmental laws and regulations, or the identification of contamination for which we are liable, could subject us to substantial costs, including fines, cleanup costs, third-party property damages or personal injury claims, and make significant investments to upgrade our facilities or curtail our operations. Identification of presently unidentified environmental conditions, more vigorous enforcement by a governmental authority, enactment of more stringent legal requirements or other unanticipated events could give rise to adverse publicity, restrict our operations, affect the design or marketability of our products or otherwise cause us to incur material environmental costs, adversely affecting our financial condition and results of operations.

We are exposed to risks and increased expenses and business risk as a result of Restriction on Hazardous Substances, or RoHS directives.

Following the lead of the European Union, or EU, various governmental agencies have either already put into place or are planning to introduce regulations that regulate the permissible levels of hazardous substances in products sold in various regions of the world. For example, the RoHS directive for EU took effect on July 1, 2006. The labeling provisions of similar legislation in China went into effect on March 1, 2007. Consequently, many suppliers of products sold into the EU have required their suppliers to be compliant with the new directive. We anticipate that our customers may adopt this approach and will require our full compliance, which will require a significant amount of resources and effort in planning and executing our RoHS program, it is possible that some of our products might be incompatible with such regulations. In such events, we could experience the following consequences: loss of revenue, damages reputation, diversion of resources, monetary penalties, and legal action.

Failure to comply with the U.S. Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.

We are subject to the U.S. Foreign Corrupt Practices Act, which generally prohibits companies operating in the U.S. from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. In addition, we are required to maintain records that accurately and fairly represent our transactions and have an adequate system of internal accounting controls. Foreign companies, including some that may compete with us, may not be subject to these prohibitions, and therefore may have a competitive advantage over us. If we are not successful in implementing and maintaining adequate preventative measures, we may be responsible for acts of our employees or other agents engaging in such conduct. We could suffer severe penalties and other consequences that may have a material adverse effect on our financial condition and results of operations.

Natural disasters or other catastrophic events could harm our operations.

Our operations in the U.S., Canada and Singapore could be subject to significant risk of natural disasters, including earthquakes, hurricanes, typhoons, flooding and tornadoes, as well as other catastrophic events, such as epidemics, terrorist attacks or wars. For example, our wafer fabrication facility in Singapore is in an area that is susceptible to hurricanes. Any disruption in our manufacturing facilities arising from these and other natural disasters or other catastrophic events could cause significant delays in the production or shipment of our products until we are able to arrange for third parties to manufacture our products. We may not be able to obtain alternate capacity on favorable terms or at all. Our property insurance coverage with respect to natural disaster is limited and is subject to deductible and coverage limits. Such coverage may not be adequate or continue to be available at commercially reasonable rates and terms. The occurrence of any of these circumstances may adversely affect our financial condition and results of operation.

The Company may experience these factors in the future and these factors may have a material adverse effect on the Company’s business, operating results and financial condition.

Please refer to the Company's Annual Information Forms filed on SEDAR for a detailed discussion of Risks and Uncertainties most recently filed on April 17, 2017.

Additional Information

Additional information relating to the Company is available on SEDAR at www.sedar.com including the information contained in the Company's Annual Information Form filed on SEDAR on April 17, 2017.

POET TECHNOLOGIES INC.

Suite 1107, 120 Eglinton Ave. E 780 Montague Expy #107

Toronto, Ontario M4P 1E2 San Jose, CA 95131 USA

Tel: 416-368-9411 - Fax: 416-322-5075

http://www.poet-technologies.com

Exhibit 5.1

Independent Registered Public Accounting Firm’s Consent

We consent to the incorporation by reference in this Registration Statement of POET Technologies Inc. on Form F-10, of our report dated April 30, 2018, with respect to our audits of the consolidated financial statements of POET Technologies Inc. as of December 31, 2017, 2016 and 2015 and for the years ended December 31, 2017, 2016 and 2015 appearing in the Annual Report on Form 20-F of POET Technologies Inc. for the year ended December 31, 2017. We also consent to the reference to our firm under the heading “Experts” in the Prospectus, which is part of this Registration Statement.

/s/ Marcum llp

Marcum llp

New Haven, Connecticut

October 15, 2018