POET Technologies Announces Intention to Amend Warrant Terms
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Insights
The decision by POET Technologies Inc. to amend the terms of their existing common share purchase warrants is a strategic move that could potentially incentivize warrant holders to exercise their options sooner rather than later. By reducing the exercise price from C$4.95 to C$1.80, the company is essentially lowering the entry cost for investors, which may lead to an increased cash flow for POET if a significant number of warrants are exercised. This could provide the company with additional capital to fund ongoing operations or invest in new projects.
Moreover, the introduction of an Acceleration Clause aligns with common practices intended to motivate a quicker conversion of warrants into shares. This clause might be triggered if the stock performs well, thus potentially shortening the duration for which these warrants are outstanding. It is essential to monitor the stock's performance to anticipate any rapid changes in the expiry date of the warrants, which could affect the liquidity and market dynamics of POET's stock.
POET Technologies' amendment to the warrant terms could be indicative of their current market positioning and future expectations. The significant reduction in exercise price may reflect an adjustment to market conditions since the initial private placement. It's important to consider the competitive landscape of the data center, telecommunication and artificial intelligence markets where POET operates. The capital influx from exercised warrants may provide the company with the means to invest in R&D or strategic initiatives to maintain or improve its competitive edge.
However, this move could also signal to the market that the company's shares were overvalued at the time of the original warrant issue, or that the company anticipates needing more capital than initially expected. Stakeholders should assess the potential dilutive effect of warrant exercises on their shareholdings and the impact on the company's earnings per share.
From a legal standpoint, the necessity for POET Technologies to obtain the consent of all warrant holders before the amendments can take effect is a critical procedural step. This requirement is in line with the policies of the TSX Venture Exchange and ensures fairness and transparency in the process. Investors should be aware that such amendments are subject to regulatory scrutiny and the final acceptance of the Exchange, which serves as a safeguard against potential abuses of corporate power.
The Acceleration Clause addition is a standard mechanism in warrant contracts, but it is important that warrant holders fully understand the implications of this clause. It essentially conditions the timing of their investment decision on the market performance of the underlying shares. Legal counsel for warrant holders might advise on the risks and benefits of consenting to such amendments, considering individual investment strategies and the potential for an accelerated expiry date.
TORONTO, March 22, 2024 (GLOBE NEWSWIRE) -- POET Technologies Inc. ("POET" or the "Corporation") (TSXV: PTK; NASDAQ: POET), the designer and developer of the POET Optical Interposer™, Photonic Integrated Circuits (PICs) and light sources for the data center, tele-communication and artificial intelligence markets, announced today, that it intends to amend the terms of 563,317 common share purchase warrants of the Corporation (the "Warrants") that were issued pursuant to a private placement that closed on December 2, 2022 (the "Private Placement"). Each Warrant is currently exercisable by the holder thereof to acquire one common share of the Corporation (each, a "Common Share") at an exercise price of C
Warrantholder Approval
In accordance with the terms of the Warrants and the policies of the Exchange, the Corporation must obtain the consent of all holders of Warrants in order to give effect to the Amendments. Therefore, in order to give effect to the Amendments, the Corporation will be promptly seeking the written consent of all holders of Warrants to such Amendments.
Upon the Amendments becoming effective, each Warrant will be exercisable until 5:00 p.m. (Toronto time) on December 2, 2025, at an exercise price of C
In addition, as required by the policies of the Exchange, an acceleration clause will be added to the Warrants such that, if for any 10 consecutive trading days during the unexpired term of the Warrants, the closing price of the Common Shares on the Exchange is equal to or greater than C
About POET Technologies Inc.
POET is a design and development company offering integration solutions based on the POET Optical Interposer™, a novel platform that allows the seamless integration of electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques and packaging methods. POET's Optical Interposer eliminates costly components and labor-intensive assembly, alignment, burn-in and testing methods employed in conventional photonics. The cost-efficient integration scheme and scalability of the POET Optical Interposer brings value to any device or system that integrates electronics and photonics, including some of the highest growth areas of computing, such as Artificial Intelligence (AI), the Internet of Things (IoT), autonomous vehicles and high-speed networking for cloud service providers and data centers. POET is headquartered in Toronto, with operations in Allentown, PA, Shenzhen, China and Singapore. More information may be obtained at www.poet-technologies.com.
| Company Contact: Thomas R. Mika, EVP & CFO tm@poet-technologies.com |
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this news release may be deemed "forward-looking information" (within the meaning of applicable Canadian securities laws) and "forward-looking statements" (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) (collectively, the "forward-looking statements"). These forward‐looking statements, by their nature, require the Corporation to make certain assumptions and necessarily involve known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward‐looking statements. Forward‐looking statements are not guarantees of performance. Words such as "may", "will", "would", "could", "expect", "believe", "plan", "anticipate", "intend", "estimate", "continue", or the negative or comparable terminology, as well as terms usually used in the future and the conditional, are intended to identify forward‐looking statements. Information contained in forward‐looking statements, including with respect to the timing and ability of the Corporation to obtain the requisite consent of warrantholders, the timing and ability of the Corporation to obtain the acceptance of the TSX Venture Exchange, management's expectations regarding the success of the Corporation's products (including the photonic modules for AI and related markets), the timing and ability of the Corporation to successfully complete of its development and production efforts (if at all), the capabilities of its operations, the ability of the Corporation to generate revenue from operations (or expand such revenue) (if at all), the focus of the Corporation's operations and future production, is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, industry and general economic conditions as well as other considerations that are believed to be appropriate in the circumstances. The Corporation considers its assumptions to be reasonable based on information currently available, but cautions the reader that their assumptions regarding future events, many of which are beyond the control of the Corporation, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect the Corporation, and its business.
For additional information with respect to these and other factors and assumptions underlying the forward‐looking statements made in this news release concerning the Corporation, see the public disclosure of the Corporation, including the annual report Form 20-F for the year ended December 31, 2022 and most recent management's discussion and analysis, which is available electronically under the Corporation's issuer profile on SEDAR+ (www.sedarplus.ca) and EDGAR (www.sec.gov). The forward‐looking statements set forth herein concerning the Corporation reflect management's expectations as at the date of this news release and are subject to change after such date. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. 120 Eglinton Avenue, East, Suite 1107, Toronto, ON, M4P 1E2- Tel: 416-368-9411 - Fax: 416-322-5075
FAQ
What is the purpose of amending the terms of the common share purchase warrants issued by POET Technologies Inc.?
When were the common share purchase warrants issued by POET Technologies Inc.?
What is the current exercise price of the warrants issued by POET Technologies Inc.?
What will be the new exercise price of the warrants after the proposed amendments?
What is the Acceleration Clause added to the warrants by POET Technologies Inc.?
