OPEL Solar International Inc (OPL)

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OPEL International Inc.


NEWS RELEASE

OPEL Announces Third Party Valuation of its POET Technology

? Third Party Valuation of POET Technology over $1 Billion
Shelton, Ct. March 2, 2011 – OPEL Solar International Inc. (“OPEL” or “the Company”) announced today

that it is in receipt of a third party valuation of intellectual property developed by its U.S. affiliates OPEL, Inc.

and ODIS Inc. The Planar Opto Electronic Technology (“POET”), initially developed by Dr. Geoffrey Taylor

at the University of Connecticut and licensed to OPEL, Inc., is a semiconductor fabrication technology that

enables the dense packing of digital, analog, and optical circuits on a single gallium arsenide chip. The

technology now makes it possible to monolithically integrate a wide number of electronic and optoelectronic

functions in a single chip with higher speeds and reduced power consumption compared to Silicon CMOS. For

the same functionality, the chip size would be considerably reduced to approximately the size of half a person’s

thumb nail.

OPEL commissioned a valuation analysis of the POET Technology portfolio (“POET Technology”) by an

independent, third party valuation firm, Pellegrino & Associates, LLC. The Pellegrino firm performed an

analysis of the uses of the POET Technology, the sales it could achieve in its targeted end-markets and likely

margins if OPEL can complete its research and development activities successfully and the market adopts the

POET Technology. Using a number of valuation techniques and based on technical information provided to it

by the Company, the valuation firm has estimated that the POET Technology portfolio could be worth as much

as approximately $1 billion. This worth is derived from a range of values; the median value being $966.6

million, while the mean valuation was reported at $1.31 billion.

Using the income approach to value, Pellegrino & Associates, LLC built a valuation model to determine the

economic income that might be possible from the potential exploitation of the POET Technology in several

prospective markets. Pellegrino & Associates, LLC used market data, revenue projections, investment data, and

cost data as from various sources, including from ODIS representatives, to determine the economic income

attributable solely to the POET Technology. Pellegrino & Associates, LLC then integrated the information into

a valuation model, accounting for the economic life of the POET Technology. Pellegrino & Associates, LLC

performed a royalty rate analysis to determine what the market may bear as a reasonable royalty rate for the

exclusive use of the POET Technology. Pellegrino & Associates, LLC developed a risk-adjusted discount rate

to discount forecast future free cash flows to determine a nominal value indication as of the appraisal’s

effective date.

To account for the uncertainty inherent in the valuation process, Pellegrino & Associates, LLC captured the

complex model interactions in the face of uncertain estimating assumptions using Monte Carlo simulation

techniques. This did not constrain the valuation model to any single value predictions of key values such as

royalty rates or costs. Pellegrino & Associates, LLC programmed the valuation model to recalculate repeatedly

to create a distribution of outcomes that Pellegrino & Associates, LLC analyzed. Pellegrino & Associates, LLC

used the range of values calculated by the model to come to a final determination. In complex situations that

involve uncertainty, this methodology helps to generate meaningful estimates that would otherwise be

impossible to model using discrete methods such as best-, expected-, and worst-case modeling. Pellegrino &

Associates, LLC used the median value from this simulation process as the fair market value for the POET

Technology. The Company will post a copy of a redacted version of the valuation on its website at







www.opelinc.com, as well as on SEDAR at www.sedar.com, concurrent with the dissemination of this

press release. Disclosure of certain information in the valuation would be seriously prejudicial to the



OPEL Solar International Inc.

Head Office: Operations Office:

Suite 501, 121 Richmond Street West 3 Corporate Drive, Suite 204

Toronto, ON, M5H 2K1 Shelton, CT 06484

Phone: [phone] Phone: [phone]

Fax: [phone] Fax: [phone]

OPEL Solar International Inc. – News Release of March 2, 2011 Page 2

interests of the Company and its shareholders, or would violate confidentiality provisions with third

parties, and has been omitted or marked to be unreadable. The redactions have been done by the Company

and Pellegrino & Associates, LLC. The omitted information is that information necessary to protect

important proprietary and technical information of the Company and third parties, including Pellegrino &

Associates, LLC, and to protect against competitor infringement. Canadian Securities Administrators

National Instrument 52-103 provides that a reporting issuer that discloses material forward-looking

material information must include disclosure that states the material factors or assumptions used to

develop forward-looking information. As a consequence of the redactions, Pellegrino & Associates, LLC

has provided a detailed memorandum which sets out the key assumptions they used in the construction of

their valuation models. The memorandum is attached as a schedule to this press release and should be read

in conjunction with the redacted valuation which contains important information concerning the

methodology of the valuation and the credentials of Pellegrino & Associates, LLC.

It is important to note that a third party valuation is not an indication of interest by any party, nor does it

represent an actual offer to purchase the POET intellectual property. As indicated in the report, the POET

Technology is still under development, and no assurances can be given that such development will be

successfully completed, that the technology will be brought to commercial realization or that the Company’s

target markets will adopt this technology. Commercial applications of the technology will likely not be

available for several years, if ever.

The fair market value estimate in the appraisal report does not necessarily reflect the actual price that OPEL

could realize from a true sale of its technology in a real market. Rather, the valuation reflects the notional

value of the technology in an assumed market. This assumed market considers, among other things, the

historic and prospective value of the technology in light of the associated business risk. The notional value

does not include possible synergistic benefits or economies of scale that might accrue to the potential purchaser

not already captured in the report. The notional value was also derived utilizing various assumptions and

estimates relating to growth, establishing new markets, expansion into new markets and related plans other than

statements of historical fact, which are forward-looking statements subject to a number of uncertainties that

could cause actual value to differ materially from the third party valuation. Pellegrino & Associates makes no

representations or assurances as to the Company's plans or ability to effect any planned and/or proposed

actions. Furthermore, Pellegrino & Associates derived its valuation based on certain technical information

provided by the Company and related sources believed by the valuation firm to be reliable, but the valuation

firm did not undertake an independent verification of the accuracy and completeness of this information, and

no representation, expressed or implied, is made as to its accuracy, completeness or correctness. Pellegrino &

Associates is not an investment advisor, and its report is not investment advice.

In the real market, the technology could generate as many prices as there are buyers in the market, with each

buyer having the ability to pay its own specific price based on its own specific set of circumstances. In the end,

the final price will be the result of a set of negotiations between buyers and sellers that the valuation firm could

not ascertain or forecast for the purpose of its engagement. However, Pellegrino & Associates did test its value

conclusions to ensure that there was a reasonable economic basis for its value opinion.

Pellegrino & Associates prepared its report in accordance with the Uniform Standards of Professional

Appraisal Practice (“USPAP”) adopted by the Appraisal Standards Board of the Appraisal Foundation, and the

Principles of Appraisal Practice and Code of Ethics of the American Society of Appraisers. OPEL paid

Pellegrino & Associates a flat fee for its analysis that was in no way contingent on achieving any

predetermined value conclusion. Further, Pellegrino & Associates has no current or contingent interest in

OPEL and has no duty to update its analysis to account for subsequent events.

The Board of Directors of OPEL engaged Pellegrino & Associate in order to assess the potential for the POET

Technology and is considering alternatives to realize the full value of the POET Technology. On February 28,

2011, the Board of Directors passed all of the necessary resolutions to authorize the sale of the POET

OPEL Solar International Inc. – News Release of March 2, 2011 Page 3

intellectual property portfolio. Currently, the Board of Directors is evaluating proposals from investment

banking firms specializing in this technology regarding an engagement to consider strategic alternatives for

OPEL’s future exploitation of the POET Technology, which may include the full or partial sale of the

technology.

OPEL will host a conference call to discuss the valuation, strategic alternatives and the POET Technology.

The call will occur on Friday, March 4, at 11:00 AM Eastern Standard Time. Interested parties can participate

by calling 1-888-510-1765, which is toll free in Canada and the U.S. (Other International callers can dial 1-

719-457-2624, which is not toll free.) The call will also be webcast, and can be accessed at

http://viavid.net/dce.aspx?sid=00008205. A replay of the call will be available on the OPEL website, in the

Investor Relations section, for one year after the call.

Leon M. Pierhal, Chief Executive Officer of OPEL, elaborates, “We are extremely proud and excited about the

work we are doing on the POET Technology. We control a revolutionary technology that we think can

fundamentally alter the landscape of the server, smart-device and computing industries. Never before has one

chip been able to integrate both electronic and optical circuits. By combining them in one part, we believe we

can eliminate the inefficiency and cost burden on systems that must use separate chips for each function. These

cost savings and performance improvements can be immense, potentially transforming the whole industry.”

Background on POET Technology

Known as the Planar Opto Electronic Technology (“POET”), POET fulfills a long-held objective of the

semiconductor industry, bypassing many of the physical limits of existing semiconductor technologies. Key

benefits of the POET platform include faster semiconductor operating frequencies-- up to 100GHz-- lower heat

losses, greater reliability, and total system cost. All components of the technology have been validated by third

parties, and the Company expects to have a fully integrated, operational chip within months. The technology is

protected by numerous U.S. and international patents issued and pending.

ODIS personnel are working with leading defense systems integrator companies and with military and

government agencies to develop important applications for the technology. With partners, ODIS is developing

infrared arrays for imaging, optoelectronic switches, compact ultra-low power memory, optical CDMA

communications chips, and radio frequency detection arrays. The Company believes that POET has numerous

applications in computing and communications technologies, and it will fundamentally alter the landscape of

those industries with heretofore unattainable functionality and price/performance.

###

About OPEL Solar International Inc., OPEL, Inc. and ODIS Inc.

With operations headquartered in Shelton, CT and the head office in Toronto, Ontario, Canada, the Company,

through OPEL, Inc., designs, manufactures and markets high performance concentrating photovoltaic

(“HCPV”) panels to transform solar energy into electricity for worldwide application. OPEL’s high

performance photovoltaic concentrating panels generate up to 40% more kilowatt-hours than conventional flat

plate silicon solar panels, resulting in more cost effective electricity generated from the sun. OPEL also

markets a complete line of dual and single axis solar trackers to mount either HCPV or flat solar panels for the

optimum power output. The Company, through ODIS Inc., a U.S. company, designs infrared sensor type

products for military, consumer, industrial and commercial applications. ODIS continues to develop gallium

arsenide-based processes and semiconductor microchip products having several potential major market

applications: infrared sensor arrays for Homeland Security monitoring and imaging along with the unique

combination of optical lasers, and electronic control circuits on the same microchip for potential applications in

various military programs and potentially telecom for, Fiber to The Home.

A leader in gallium arsenide and solar concentrating photovoltaic technology, the Company has been awarded

33 patents and has 17 more patents pending, including those related to POET. OPEL’s common shares trade on



OPEL Solar International Inc. – News Release of March 2, 2011 Page 4

the TSX Venture Exchange under the symbol “OPL”. For more information about OPEL, please visit the

Company’s website at www.opelinc.com.

Dated: March 2, 2011

ON BEHALF OF THE BOARD OF DIRECTORS

Michel Lafrance, Secretary

For further information:

OPEL ICR - Investor Relations ICR – Public Relations

Pat V. Agudow Gary Dvorchak, CFA James McCusker

Vice President, Public Relations Senior Vice President Vice President

Tel: [phone] x2612 Tel: [phone] Tel: [phone]



[e-mail] [e-mail] [e-mail]

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the

TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release contains "forward-looking information" (within the meaning of applicable Canadian

securities laws) and "forward-looking statements" (within the meaning of the U.S. Private Securities Litigation

Reform Act of 1995). Such statements or information are identified with words such as "anticipate", "believe",

"expect", "plan", "intend", "potential", "estimate", "propose", "project", "outlook", "foresee" or similar words

suggesting future outcomes or statements regarding an outlook. Such statements include, among others, those

concerning OPEL’s anticipated operational plans and activities including the revenue and growth outlook.

Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions

which may cause actual results or other expectations to differ materially from those anticipated and which may

prove to be incorrect.

The valuation report prepared by Pellegrino & Associates, LLC is subject to certain contingent and limiting

conditions, including the following:

? Valuations are based on future earnings potential that may or may not materialize. Therefore, the

actual results achieved during the projection period will likely vary from the projections utilized in this

valuation, and the variations may be material; and



? Some assumptions invariably will not materialize, and unanticipated events and circumstances may

occur. Therefore, the actual performance in any areas forecasted will vary from what was forecasted, and the

variations may be material.

Although OPEL believes that the expectations reflected in the forward-looking information or statements are

reasonable, prospective investors in OPEL's securities should not place undue reliance on forward-looking

statements because OPEL can provide no assurance that such expectations will prove to be correct. Forwardlooking

information and statements contained in this news release are as of the date of this news release and

OPEL assumes no obligation to update or revise this forward-looking information and statements except as

required by law. Canadian continuous disclosure requirements provide that a reporting issuer must discuss in

its MD&A events and circumstances that occurred during the period to which the MD&A relates that are

reasonably likely to cause actual results to differ materially from material forward-looking information for a

period that is not yet complete that the reporting issuer previously disclosed to the public and the expected

differences. However, the reporting issuer may disclose such information in a press release(s)before the filing

of such MD&A if the MD&A appropriately identifies such news release(s).



# 1809628

Technology Appraisal Services

www.pellegrinoandassociates.com Indianapolis

10333 North Meridian Street, Suite 150 • Indianapolis, IN 46290

317.566.8199 • 317.569.7144 fax



February 25, 2011

Mr. Lee Pierhal

ODIS, Inc.

Three Corporate Drive, Suite 204

Shelton, CT 06484

Dear Mr. Pierhal:

In accordance with your request, the following are the key assumptions that we used in the

construction of our valuation models.

General Key Valuation Assumptions

The following are key assumptions that are common to all of our valuation models:

• It will take between 6 and 18 months for POET to pass through technical readiness level

(“TRL”), making POET then desirable for licensing transactions.



• All revenue models rely on technology licensing fees; thus, there is no cost of goods sold

• ODIS will incur cumulative nominal monthly expenses that current grant revenues

satisfy.



• The nominal discount rate for future cash flows is 32.04%

• The base target rate of return used for the discount rate determination is 23.98%.

• The success rate used for the discount rate determination is 25%.

• The holding period used for the discount rate determination would reflect an investment

of 22 years (i.e., ODIS is a strategic acquisition, not a financial acquisition).



• The nominal remaining economic life for the technology is 22 years.

• ODIS will incur a 40% nominal income tax rate.

• ODIS will incur a 5% royalty payment to UCONN for the technology licensing.

• ODIS will enjoy an average of 20 remaining years for statutory protection for POET

patent portfolio.



• A per-unit royalty would constitute 8.17% of the total value basis for the product.

• Once deployed, it will take 48 months for penetration of the market to the nominal ending

market share.



• Product adoption will occur along a Fisher-Pry market adoption curve with a market

shape of 0.2000



Defense Market Key Valuation Assumptions

The following are key assumptions that we integrated into the valuation model for the defense

market:

• ODIS will continue to receive annual revenues from Small Business Innovation Research

(SBIR) grants and other awards, in accordance with a projected schedule provided by

ODIS representatives



• ODIS will likely license POET to one or all of the top ten defense contractors.

SCHEDULE “A”

Page 2 of 3

• Each defense contractor’s licensing decision is an equally probable binary outcome (i.e.,

they will either license it or not, each occurrence having equal probability).



• Each defense contractor’s licensing decision is independent of other defense contractors

(i.e., we modeled no conditional licensing probabilities).



• A time gap that ranges between 2 and 18 months exists that captures when each defense

contractor considers executing a license.



• The defense contractors would pay an initial, nonexclusive license fee that may range

between $20 million and $50 million



• Defense contractors would make monthly royalty payments thereafter of $250,000 to

account for any product-specific royalties.



Commercial Market Key Valuation Assumptions

The following are key assumptions that we integrated into the valuation model for the

commercial market:

• The first market application for POET in the commercial market would be for generalpurpose

microprocessors for server computers.



• The second market application for POET in the commercial market would be for generalpurpose

microprocessors for desktop computers.



• The third market application for POET in the commercial market would be for generalpurpose

microprocessors for laptop computers.



• ODIS will likely license POET to one or all of the top general computer microprocessor

manufacturers on an exclusive basis.



• In each target market, POET platform would nominally allow a manufacturer to capture

its current nominal market share deploying it.



• The server processor market would start at 6,939,877 annual units, growing at 0% per

year.



• Server processors would enter the market 48 months from the effective date of the

valuation.



• Server processors average $828.89 per unit, which would serve as a basis for a negotiated

royalty payment.



• Each server would require two processors.

• The desktop processor market would start at 128,200,000 annual units, growing at 1.13%

per year.



• Desktop processors would enter the market 48 months from the effective date of the

valuation.



• Desktop processors average $93.22 per unit, which would serve as a basis for a

negotiated royalty payment.



• Each desktop would require one processor.

• The laptop processor market would start at 231,900,000 annual units, growing at 12.43%

per year.



• Laptop processors would enter the market 48 months from the effective date of the

valuation.



• Laptop processors average $93.22 per unit, which would serve as a basis for a negotiated

royalty payment.



• Each laptop would require one processor.

Page 3 of 3



Smartphone Market Key Valuation Assumptions

The following are key assumptions that we integrated into the valuation model for the

smartphone market:

• The POET platform would nominally allow a smartphone microprocessor manufacturer

to capture its current nominal market share deploying it.



• ODIS will likely license POET to one or all of the top smartphone microprocessor

manufacturers on an exclusive basis.



• The desktop processor market would start at 188,100,000 annual units, growing at

10.00% in Year 1, 18.18% in Year 2, 15.38% in Year 3, 13.33% in Year 4, 11.28% in

Year 5, 9.23% in Year 6, 7.18% in Year 7, 5.13% in Year 8, 3.08% in Year 9, and 1.03%

in Year 10.



• Smartphone processors would enter the market 48 months from the effective date of the

valuation.



• Smartphone value creation averages $78.96 per unit, which would serve as a basis for a

negotiated royalty payment.



• Each smartphone would require one processor.

Should you have any questions regarding this memorandum, please feel welcome to contact me.

Very truly yours,

Mike Pellegrino

President

Pellegrino & Associates, LLC