Good afternoon, shareholders and guests. Welcome to this 2024 virtual annual and special meeting of the shareholders of POET Technologies, Inc. My name is Kevin Barnes. I'm the VP of Finance and Administration and Treasurer of the company. By holding this meeting virtually, we have allowed our geographically diverse shareholder base an equal opportunity to participate at this meeting. As noted in your information circular, today's meeting is conducted virtually via the Lumi platform, which will allow only registered shareholders to participate in voting. Please note, if you have already voted, you do not need to vote on the resolutions as they are read. The meeting today will be just about 2 hours long, where we will first handle the formal part of the meeting, chaired by Glenn Riley, Chair of the Compensation Committee, followed by a presentation by the CEO, and finally, the Q&A session.
With us today, we have management and board representation, namely Dr. Suresh Venkatesan, Vivek Rajagiah, Tom Mika, Kevin Barnes, Raju Kankipati, along with the chairs of the various committees, namely Glenn Riley and Chris Cioffi. The agenda for the formal part will cover the topics you see before you. If you haven't already done so, you will be asked to vote on the following agenda items: election of directors, the appointment of auditors, insider option amendment, and the approval of the amended omnibus plan. At this point, I'd like to turn the meeting over to Glenn Riley, chair of the Compensation Committee, to chair the formal part of the meeting. Glenn?
Thank you, Kevin. Welcome again to the annual general and special meeting of shareholders of POET Technologies Incorporated. My name is Glenn Riley, and I am chair of the Compensation Committee of POET Technologies Incorporated. This meeting will come to order. As noted in the notice of the meeting and accompanying management information circular, this year's annual and general and special meeting is available online using the Lumi meeting platform, which allows registered shareholders or their proxy holders to vote in real time, as well as submit questions and comments to be read and addressed at the meeting. If you have a question or a comment, please submit it through the Lumi meeting platform by clicking on the messaging icon. I will now ask Thomas Mika, the Chief Financial Officer and Secretary of the company, to act as Secretary of the meeting.
I wish to point out that only shareholders of the company or their appointees by proxy are allowed to move and second the adoption of resolutions and to vote at this meeting. To this end, shareholders who are in attendance or their proxy holders have been provided with an opportunity to electronically vote for, against, or withhold vote where applicable. The voting platform is now open for voting on all resolutions should any shareholder choose to change his or her vote. The voting platform will allow you to choose to vote on each resolution immediately or wait until conclusion of a discussion on each resolution prior to casting your vote. If you have already voted, you do not need to vote or do so again.
Once discussion on all items of business have concluded, I will give you a minute to enter your votes and then declare voting closed at the end when all formal business items have been discussed and voted on. There are several matters that must be dealt with at this meeting. In order to expedite these and leave more time for a presentation and questions after the formal meeting, I've arranged for certain persons to make and second the formal motions and will call on these persons at the appropriate time. The first item of business will be the appointment of a scrutineer to report on the shareholders present in person and the number of shares represented in person and by proxy at the meeting.
Mr. Chairman, I move that Billy Cho of Computershare Investor Services Inc. be hereby appointed scrutineer of the meeting.
Mr. Chairman, I second the motion.
Are there any questions or comments? I declare the motion carried. The next item of business is the formal notice of meeting. In accordance with the notice and access rules under NI 54-101, the company has made its proxy-related materials, including the notice of the meeting, available to shareholders using the notice and access method. As such, shareholders received a proxy form and or voting instruction form only. The notice of meeting and the management information circular are and have been accessible from the company's website or from SEDAR. The proof of mailing of the proxy form has been filed with me by the Secretary of the company. I direct that a copy of such proof of mailing be annexed to the minutes of the meeting as a schedule....
I will now ask someone to move and someone to second the adoption of a resolution dispensing with the reading of the formal notice of meeting.
Mr. Chairman, this is Raju Kankipati. I move that the reading of the notice of this meeting be dispensed with.
Mr. Chairman, this is Adrian Bridge Bassey, and I second the motion.
Are there any questions or comments? I declare the motion carried. The next item of business is the meeting attendance. The scrutineer has provided me with the preliminary report on shareholder attendance represented at this meeting. The scrutineer reports that there are present at this meeting, in person or by proxy, 515 shareholders holding 20,289,273 common shares, which represents 35.57% of the total issued and outstanding shares available to vote. Accordingly, I declare that the requisite quorum of shareholders is present and that the meeting is duly called and properly constituted for transaction of business. I direct that the scrutineer's final report on attendance be annexed to the minutes of the meeting. The next item of business is the reading of the minutes of the previous shareholder meeting.
The last meeting of shareholders of the company was the annual and special meeting held on October 25th, 2022, and the minutes of such meeting were filed in the minute book and are available for inspection. I will now ask someone to move and someone to second the adoption of a resolution dispensing with the reading of the minutes, and that the minutes be taken as read and verified as correct.
This is Kevin Barnes. Mr. Chairman, I move that the reading of the minutes of the last meeting of shareholders be dispensed with and that minutes be taken as read and verified as correct.
This is Chris Cioffi. Mr. Chairman, I second the motion.
Are there any questions or comments? I declare the motion carried. The next item of business is the presentation of the financial statements. I now present to the meeting the audited, consolidated financial statements of the company for the year ended December 31, 2023, together with the auditor's report thereon. Copies of such statements were filed on SEDAR, posted on the company's website, and mailed to those shareholders who had requested a copy. I will now ask someone to move and someone to second the adoption of a resolution dispensing with the reading of the auditor's report.
Mr. Chairman, I move the reading of the auditor's report be dispensed with.
Mr. Chairman, I second the motion.
Are there any questions or comments? I declare the motion carried. The next item of business is the election of directors of the company. It is now in order to proceed with the election of directors to hold office until the next annual meeting of shareholders, or until their successors are elected or appointed. The number of directors to be elected at this meeting have been set at five. Will someone please nominate those persons whose names appear as nominee directors in the management information circular of the company?
Mr. Chairman, this is Adrian Bridge Bassey, and I nominate Dr. Suresh Venkatesan, Glenn Riley, Theresa Lan Ende, Jean-Louis Malinge, Chris Cioffi, as directors of the company to hold office until the next annual meeting of shareholders or until their successors are elected or appointed.
The company's bylaws provide that in addition to any other applicable requirements, for a director nomination to be made by a shareholder, the nominating shareholder must have given timely notice thereof in proper written form to the corporate secretary of the corporation at the principal executive offices of the corporation, not less than 30 days prior to the date of the annual meeting of shareholders. No nominations were received from a nominating shareholder. 5 persons have been nominated to fill the 5 directors' positions. Since no further notices of further nominations have been received by the company, I would now ask someone to move and someone to second the adoption of a resolution approving the election of the nominees.
Mr. Chairman, I move for the election of the five nominees, whose names have been read as directors of the company for the ensuing year, to hold office until the next annual meeting or until their successors are elected or appointed.
Is there a second?
Mr. Chairman, I second the motion.
Are there any questions or comments? If you are entitled and intend to cast a vote on this resolution and have not done so already, please do so now. If you have already voted, a reminder, you do not need to do so again.... So we'll take a minute now for voting. Voting has concluded. I declare those five persons nominated to have been duly elected as directors of the company, to hold office until the next annual meeting of shareholders or until their successors are elected or appointed. Okay, the next item of business is the appointment of auditors and the authorization of the directors to fix the remuneration of such auditors.
I will now ask someone to move and someone to second the adoption of a resolution appointing Davidson & Company LLP as the auditors of the company until the close of the next annual meeting of shareholders or until its successor is appointed, and authorizing the directors to fix their remuneration during this period.
Mr. Chairman, I so move.
Mr. Chairman, I second the motion.
Are there any questions or comments? If you are entitled and intend to cast a vote on this resolution and have not already done so, please do so now. A reminder, if you have already voted, you do not need to do so again. We will now take a minute for voting. I declare that Davidson & Company LLP have been duly appointed auditors of the company to hold office until the next annual meeting of shareholders, and that the directors have been duly authorized to fix their remuneration. The next item of business is to consider and, if thought fit, to pass a resolution to approve the insider option amendment as described in the circular.
In accordance with the policies of the TSX Venture Exchange, insider option amendment must be approved by a majority of votes cast for such resolution, excluding 182,188 shares held by holders of the options subject to this insider option amendment and their associates and affiliates. The particulars of the insider option amendment are set out in the circular, and the resolution in respect of the amendment is defined in the circular as the insider option amendment resolution. I will now ask someone to move and someone to second the approval of the insider option amendment resolution, as more particularly described in the circular.
Mr. Chairman, I so move.
Mr. Chairman, I second the motion.
Are there any questions or comments? If you are eligible and intend to cast a vote on this resolution and have not done so already, please do so now. If you have already voted, you do not need to do so again. We will take 1 minute for voting.... Voting is concluded. I declare the motion carried. The next item of business is to consider, and if thought fit, to pass a resolution to approve and authorize, among other things, the adoption of an Omnibus Equity Incentive Plan, and as more particularly described in the circular.
In accordance with the policies of the TSX Venture Exchange, the Omnibus Incentive Plan must be approved by a majority of votes cast for such resolution, excluding 182,188 shares held by insiders of the company and their associates and affiliates, who would be considered eligible participants in such a plan if adopted. The full text of the resolution and the terms of the Omnibus Plan are as more particularly described in the circular. The resolution approving the Omnibus Plan is defined in the circular as the Omnibus Plan resolution. I will now ask someone to move and someone to second the adoption of the Omnibus Resolution Plan as set out in full in the circular.
Mr. Chairman, I so move.
Mr. Chairman, I second the motion.
Are there any questions or comments? Assuming no questions or comments, if you are eligible and intend to cast a vote on this resolution and have not done so already, please do so now. If you have already voted, you do not need to do so again. We will take one minute for voting. Voting is concluded. I declare the motion carried. At this point, I would like to go back to make a correction to a resolution about the prior minutes from the prior meeting. I incorrectly stated the date of that meeting. The correct date should be June 30th, 2023. So if the secretary could correct the meeting minutes, that would be excellent. At this point, all registered shareholders and duly appointed proxy holders should have submitted their votes on the motions brought forth at this meeting.
If you have not voted, already voted, please complete the electronic ballots on Lumi now. Voting has now closed on all items of business. I direct that the final tabulation of the voting results will be included in the meeting minutes, and that the final voting results be included in a report on voting results, which will be posted on SEDAR under the company's issuer's profile in due course, following today's meeting. The formal business of the meeting is now concluded. After the termination of the formal business of the meeting, our Chief Executive Officer, Dr. Suresh Venkatesan, will be providing updates on the affairs and business of the company and will be pleased to answer any questions from shareholders. Before the meeting is terminated, are there any additional formal business items to be considered?
As there is no additional business, I will now ask that someone move, that the formal part of this meeting be terminated, and that someone second the motion.
Mr. Chairman, I move the meeting be terminated.
Mr. Chairman, this is Thomas Mika. I second the motion.
Are there any questions or comments? I declare this meeting to be terminated. Thank you. As we move into the informal part of the meeting, we are pleased to have Dr. Suresh Venkatesan present the future of POET. The theme of his address is Pure Play AI Data Comm Hardware. His address will be followed by a question and answer session. If you have a question or a comment, please submit it through the Lumi Meeting Platform by clicking on the messaging icon. Please reserve all your questions until the conclusion of the presentation. And now, Dr. Venkatesan.
Thank you, Glen, and good day to all who are in this meeting platform with me. Last year at this time, I shared my enthusiasm and optimism for POET's future, and today, I have every reason to be even more optimistic. The reasons are many, but we start with the progress we've made in our financial stability and customer experiences and extend to our continued innovation and the remarkable opportunities in front of us. I would like to provide the shareholders with more insight into how we're thinking about the company, the businesses we are pursuing, our future opportunities, and what makes us tick. In 2024, POET has been able to add approximately $29 million to its balance sheet, significantly improving its financial stability, inclusive of private placements, ATM share sales, and warrant conversions.
This has enabled POET to reinvigorate its roadmap and make the necessary investments to transform its product roadmap to one explicitly dedicated to the growing demands placed by AI on hardware infrastructure. While we've made meaningful progress on our financial measures, what we are most pleased about is the continued product development and customer engagement across our business. But first, let's discuss the markets we serve. Generative AI may be the largest technology transformation since the cloud, which itself is still in the early stages, and perhaps since the internet. AI is what we at POET have dubbed the market driver for Photonics 3.0, a wave of photonics growth propelled by the insatiable data requirements of generative AI. Generative AI is typically an application built on what are called foundational models, and it is in the creation of these foundational models where the hardware pinch is felt.
Foundational models require compute that are needed to train models and generate inferences or predictions, and the software that makes it easier to build these models. But the invisible link that makes the compute tick is the data communications fabric that is required to move vast quantities of data with low latency across the compute servers. This is the market that POET plays in. As we go through 2024 and into 2025, it is now unmistakably clear that AI has established itself as an overarching catalyst, propelling our vectors of growth. From high-speed 800G to 3.2 terabits per second optical engines and modules, and technically differentiated remote light sources that support short-reach data communication links within compute clusters, our products provide foundational hardware to the AI ecosystem. You can see in this mock-up of a typical NVIDIA DGX box.
A DGX box is an AI server, which has in it multiple GPUs, memories, and other, compute elements. Each DGX box represents a vast number of optical OSFP transceivers, and these are used for server-to-server transfer within an AI cluster. All the other links inside of the DGX box are still copper today, but soon these will also be converted into optical links, and there are numerous companies vying to penetrate this space with distinct solutions. POET targets solutions both within the AI server and for server-to-server connectivity. The primary solution for optical connectivity for AI clusters is pluggable transceivers. This is like data center networks, except that the data rate and the unit volume requirements for AI clusters is much higher.
POET optical engines are highly integrated solutions that address higher speeds of 1.6 and 3.2 T soon, and can scale to high volume because of its wafer scale, assembly, and test. The other part of the AI market that we are addressing is the chip-to-chip optical communication. A majority of the GPU and memory links today are still electrical, but optical connectivity has benefits, and which is why large AI hardware companies are investing in this technology. POET has its external light source product line that addresses this market and offers a cost-effective and highly scalable solution. We are fortunate to participate in markets of remarkable opportunity.
Not only are they vast and constantly expanding, but they also manifest unique attributes where we tackle complex challenges requiring feature-rich solutions that preclude any chance of commoditization, giving rise to high barriers of entry that keep potential competitors at bay. Coming soon, you'll learn about a notable AI industry award that we've won, highlighting POET's architectural advantages in AI and providing more third-party validation and exposure. With that backdrop, what we're doing now sets the foundation for rapid revenue growth in 2025 and 2026. Any successful business requires execution around three vectors: key customers, key partners, and key products and development. We announced our engagement with Luxshare last year with a design-in of our 2×FR4 800G RX engines. This year, we've expanded that relationship to include our differentiated EML-based transmit solutions.
Likewise, this year, we announced an agreement with Foxconn, one of the premier module suppliers in the world. Both these engagements are around the 800G transceiver products, with an extension to 1.6T as the market prepares for that transition. Companies like Foxconn and Luxshare are rushing to address the gaps in supply chain for optical transceivers for the AI market. With Foxconn, we're collaborating on developing 800G and 1.6T optical transceiver modules that address the demands of the AI industry. Both Foxconn and Luxshare are already established suppliers in the hyperscale data center market, and now they are gearing up to address the AI demand. Particularly with Foxconn, we're working in parallel on both conventional transceivers and solutions for linear pluggable optics, called LPO, which eschews the DSP and saves significant power consumption.
We believe LPO will be the future of optical transmission once the kinks are worked out, due to the large reduction in power consumption for LPO modules. We also announced a partnership with MultiLane to develop optical transceiver modules using POET's optical engines. MultiLane is one of the leaders in the optical test equipment segment and have direct ties to the hyperscalers. MultiLane has a desire to expand their product lines to include optical transceivers and have established an internal production capability for modules. MultiLane's choice to work with POET was influenced by the low CapEx costs for module manufacturing when using our highly integrated optical engines. MultiLane has some unique capability that complement our technology and products. We're collaborating with them to design pluggable optical transceivers using our optical engines that will help our customers to accelerate their design cycles even further.
The objective is to design cost-optimized 800 gig modules that offer superior power and performance. This collaboration helps reduce POET's development outlay by nearly $5 million annually, as we can leverage MultiLane's expertise versus building capability in-house. A year ago, POET was pursuing a DML-based optical engine approach for 800 gig solutions. Despite successfully sampling optical engines with DML lasers, several factors necessitated a change, primary among them being a very large adoption of EML lasers worldwide. This large adoption helped drop prices and also caused vendors to prioritize EML lasers over other solutions. We quickly retooled the interposer architecture and process and transitioned to developing EML-based solutions in Q4 of last year. We were able to generate first-time right designs, which resulted in a very successful demonstration of our solutions at the OFC in 2024.
The ability to now produce 400 gig and 800 gig transmit solutions based on EMLs has been truly transformational in terms of customer interest. EML lasers comprise 80+% of the optical transceiver usage worldwide, and we've developed the world's one and only integration platform for EML lasers. At the OFC, we simultaneously showcased both 100 gig per lane and 200 gig per lane solutions as 400 gig and 800 gig chiplets. One of the many advantages of the POET platform is its speed of development. If the building blocks are done well, we can generate rapid transitions in its products. We've also expanded our supply of EML lasers to include Mitsubishi Electric and Yonge, in addition to Lumentum. With regards to 1.6T, two things need to happen for AI to deploy it.
First, the 200 gig per lane on the electrical side has to be available for deployment. Large players like NVIDIA and Broadcom have already announced products with 200 gig per lane, and the expectation is that it'll be available for deployment late in 2025 and into 2026. The second thing is the availability of 1.6 T optical transceivers. This is where POET is collaborating with several customers to use our optical engines and bring 1.6 T transceivers to the market in 2025. Perhaps for the first time since I've been at POET, we talk to customers about 1.6 T, and they tell us we're early. This has never happened before. We've always been playing catch-up.
So our transition over the past 6 months to the EML platform and the significant leapfrog in capability is really positioning us at the forefront of optical transceiver adoption. But we're not stopping there. OSFP-XD is an industry standard that is already defined. It can carry 16 lanes of 200 gig, which gets us to 3.2 T. The challenge is to fit all the high-speed optical and electrical components inside this package. POET already has a solution today for 16 lanes of 25 gig that fits inside a QSFP-DD that we're building for ADVA. That's a package that's even smaller than an OSFP-XD. One of the benefits of our interposer technology is its scalability. We can scale our designs from 16 lanes of 25 gig to 16 lanes of 200 gig.
Of course, there are several challenges that come with higher speed, which our engineers are working on now. We're also collaborating with some industry leaders to come up with innovative solutions for 3.2T, with a goal to showcase our solution at the OFC next year. Likewise, we're transcending our remote light sources to one that provides immense technical superiority. Stickiness in the market and with customers doesn't only come with cost. There needs to be a plus one feature that results in stickiness, and that is what we're striving to do, to capture a disproportionate share of the remote light source market as that market develops and matures. We're developing brand-new architectures and concepts around the interposer that can build multiple lanes of lasers on the interposer, with frequency spacings down to 50 gigahertz in an uncooled application, which is unheard of.
So these are things that we're working on now, and more to follow. We will begin sampling our 100 gig per lane, 800 gig transmitter solutions in July to accompany our already developed receiver solutions to multiple customers, with three committed to module design across multiple form factors in addition to our multi-lane collaboration. In parallel, we continue to mature our 200 gig per lane solutions, and we will be demonstrating RX and TX configurations at the CIOE in September. We will also be in production on our first generation of the remote light source product, the StarLight, by the end of this year. We also need to constantly look at our business model as the demands on our product are evolving with successive generations.
While the demand for optical engines versus modules was muted at lower speeds, the transition to EML architectures has completely transformed this demand picture. We now see significant demand picking up for our optical engines at 800G in various form factors, DR8, 2×FR4, LPO, and especially with large suppliers. So we are now adopting a dual model: optical engines to large suppliers and optical modules in niche applications. This prevents direct conflict with our customers and also enables POET to proliferate its solutions outside the mainstream. Given this shift in demand, especially with the likes of Foxconn, Luxshare, and a third-to-be-named supplier, we are working to consolidate our subsidiaries in China to allow more operational control and to be able to recognize revenue sooner. And then there is the issue of coping with the China-West split, especially as it relates to AI and high-speed transmission.
While no one explicitly says, "No China," it is implicit. InnoLight, Eoptolink, and several module companies in China have established operations in Thailand over the past year. Customers are dictating component choices based on geography. While it's not clear where this is headed, it would be prudent to project that we will require optical engine manufacturing outside Super Photonics and outside China. We're working on this issue with renewed urgency. We believe in the not-too-distant future, we would need to adopt a bifurcated manufacturing and sales strategy. Within China, we will be setting up a sales and marketing company with external investment, dedicated to winning and growing in China, leveraging Chinese manufacturing and Chinese components. Whereas outside China, we will use our internal sales and marketing engine and establish manufacturing potentially in the Singapore-Malaysia corridor. In both cases, our collaboration with MultiLane provides us a source of optical module manufacturing.
In closing, I'm grateful to our collective teams who have delivered on behalf of our shareholders and customers. These results represent a lot of invention, collaboration, discipline, execution, and re-imagination across POET. There is nothing so limiting as viewing opportunities through the same lens as yesterday's challenges. We at POET strive to innovate with out-of-the-box solutions to challenges versus incremental improvements, which do not sustain in the long term. We will continue to focus on hiring and retaining versatile and talented employees with a marginal expansion across the sites in specific areas. We know our success will be largely dictated by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be an owner. The past year's development progress is the product of a talented, smart, hardworking group, and I take great pride in being part of this team.
Thank you for your time.
Okay, so I think we're moving to the Q&A now. And Suresh, the first question is: when do you expect to be able to announce details of orders from Celestial AI, and will product be shipped to Celestial in 2024?
Yeah, as I mentioned in the presentation, we will be starting shipments at the end of 2024.
Okay. Next, this question is actually for Tom Mika. What percentage of shares are owned in the USA, in Canada, and elsewhere, say, Europe?
It's roughly about a 40-60 split in terms of actual shareholding. The number of shareholders may be greater in Canada, but their shareholding is actually less per holder. What is interesting is that we get a lot more trading volume on the NASDAQ than we do on the venture exchange in recent months.
Yes. Okay. And back to Suresh for this one. Suresh, how has the relationship with Luxshare evolved?
Yeah, as I alluded to in my talk, I think last year we had announced that we had won a socket with Luxshare using our receivers. So, you know, our receivers were designed into their products. At that time, we did not have a transmit solution available. This year, we've now expanded our relationship with Luxshare, in a couple of different sockets with our transmitters as well. So, you know, we're becoming, you know, increasing wallet share, in the Luxshare ecosystem, which is always good, and, we're getting designed into multiple sockets, not just a single one. So that's also good. So I think owning the chipset, which is transmit and receive, is something that we're now starting to do.
Okay. And, will the company be replacing the two directors that have resigned?
We expect that there will be additional directors appointed in the company, and that'll follow the normal course of business through the nomination committee and then an eventual appointment.
Okay. A question on Foxconn. Why is Foxconn Interconnect Technology such an important customer for POET?
Well, you know, it's always important to have customers that already have significant engagements and significant sales. Foxconn, among, among our entire customer base, represents the largest module maker, and therefore, they are a premier supplier with one degree of separation from the end users, primarily the hyperscalers. You know, I think, with, especially with our EML platforms now, I, I think the customers we engage with have that presence, which then gives us more exposure directly to some really large companies. And so it's a very, very important project for us, and it's, you know, obviously a critical execution play for POET so that, you know, we cement our position in the multiple sockets at Foxconn.
Okay, great. Thanks, Suresh. That is the last question, if you have any final remarks.
No, thanks. I mean, you know, look, it's been a bit of a rollercoaster over the past, you know, year. And I can't tell you how excited I am with the opportunities ahead of us. I think the team has just kind of put its head down and executed. I think we've delivered, you know, some amazing products at the OFC. We were one of a handful of companies at 1.6. This year, I think we'll be, again, one of a handful at 3.2T next year, right? So we are showcasing the scalability of our platform and partnering with some of the most influential component manufacturers in the world, and that's just gonna elevate our profile considerably over this coming year.
I'm really excited about that, and I think you all should be as well. I think, you know, we look forward to the developments over the coming year.
Good. Thank you, Suresh. Appreciate your comments, and appreciate the thoughts that you've presented to us. Also want to thank all the participants. So ladies and gentlemen, we have come to the end of the meeting. Again, we want to extend our gratitude to you for your continued support, and we look forward to joining with you again at future meetings. Have yourselves a wonderful weekend.