SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

(X)      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended:                September 30, 2000
                               -------------------------------------------------

(  )     TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from____________________________ to___________________

Commission File Number:    0-27977
                        -------------

                  Lumenon Innovative Lightwave Technology, Inc.
                  ---------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

                  Delaware                               98-0213257
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

8851 Trans-Canada Highway, Ville Saint-Laurent (QC) Canada           H4S 1Z6
----------------------------------------------------------           -------
(Address of Principal Executive Offices)                             (Zip Code)

                                 (514) 331-3738
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

Indicate by check whether the registrant:  (1) has filed all reports to be filed
by  Section 13 or 15(d) of the  Securities  Exchange  Act of 1934  during the 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.(X) Yes ( ) No


State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest  practicable  date:  36,069,153  shares of Common Stock,
$.001 par value, as of November 8, 2000.




<PAGE>

         LUMENON INNOVATIVE LIGHTWAVE TECHNOLOGY, INC. AND SUBSIDIARIES
                                TABLE OF CONTENTS


                                                                       Page No.
                                                                       --------

PART I.    FINANCIAL INFORMATION                                          3


Item 1.    Financial Statements                                           3

           Consolidated Balance Sheets as of September 30, 2000
           (unaudited) and June 30, 2000                                  3

           Consolidated Statements of Operations (unaudited) for the
           three months ended September 30, 2000 and 1999                 4

           Consolidated  Statements  of Cash  Flows
           (unaudited)  for the three  months ended
           September 30, 2000 and 1999                                    5

           Notes to Consolidated Financial Statements (unaudited)         6

Item 2.    Management's Discussion and Analysis of Financial Condition   13
           and Results of Operations

PART II.   OTHER INFORMATION                                             21

Item 2.    Change in Securities and Use of Proceeds                      21

Item 6.    Exhibits and Reports on Form 8-K                              24

Signatures                                                               25




                                       -2-

<PAGE>

PART 1. FINANCIAL INFORMATION

Item 1.  Financial Statements

LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Consolidated Balance Sheets
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------
                                                                September 30,           September 30,               June 30,
                                                                         2000                    2000                   2000
----------------------------------------------------------------------------------------------------------------------------
                                                                        (US$)                  (CAN$)                 (CAN$)
                                                                     (note 6)
Assets

Current assets:
<S>                                                          <C>                      <C>                      <C>
      Cash and cash equivalents                              $            304         $           458          $       1,125
      Term deposits                                                    30,866                  46,515                  4,300
      Interest and sales tax receivable                                 1,313                   1,979                    366
      Research tax credits receivable                                     201                     303                    191
      Prepaid expenses                                                     77                     116                     77
      ----------------------------------------------------------------------------------------------------------------------
                                                                       32,761                  49,371                  6,059

Deposits (note 7)                                                       1,229                   1,852                  1,525
Property and equipment (note 3)                                        12,618                  19,016                  4,603
Other assets                                                               11                      16                     13
----------------------------------------------------------------------------------------------------------------------------
                                                             $         46,619         $        70,255          $      12,200
============================================================================================================================

Liabilities and Stockholders' Equity

Current liabilities:
      Accounts payable                                       $          4,293         $         6,470          $       1,047
      Accrued liabilities                                                 387                     583                    325
      Obligations under capital leases                                    357                     538                    235
      ----------------------------------------------------------------------------------------------------------------------
                                                                        5,037                   7,591                  1,607

Convertible notes (note 4)                                             14,120                  21,278                     -
Obligations under capital leases                                          514                     775                    279

Stockholders' equity:
      Share capital (note 5)                                               35                      53                     49
      Additional paid-in capital (note 5)                             194,211                 292,676                234,864
      Accumulated deficit                                            (167,298)               (252,118)              (224,599)
      ----------------------------------------------------------------------------------------------------------------------
                                                                       26,948                  40,611                 10,314
Commitments (note 7)
Subsequent events (note 9)
----------------------------------------------------------------------------------------------------------------------------
                                                             $         46,619         $        70,255          $      12,200
============================================================================================================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

On behalf of the Board:

______________________ Director

______________________ Director

                                       -3-

<PAGE>


LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Consolidated Statements of Operations
(Unaudited)
(in thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                         Three months             Three months            hree months                        From
                                                ended                    ended                  ended                inception to
                                        September 30,            September 30,            ptember 30,               September 30,
------------------------------------------------------------------------------------------------------------------------------------
                                                 2000                     2000                   1999                        2000
------------------------------------------------------------------------------------------------------------------------------------
                                                (US$)                   (CAN$)                 (CAN$)                      (CAN$)
                                             (note 6)

<S>                                   <C>                     <C>                      <C>                  <C>
Expenses:
      Research and
         development                  $           966         $          1,457         $        2,069       $             220,926
      Research tax credits                        (75)                    (113)                   (35)                       (439)
------------------------------------------------------------------------------------------------------------------------------------
                                                  891                    1,344                  2,034                     220,487

      General and administrative
         expenses                               2,415                    3,639                    487                       8,519
      Depreciation                                364                      548                     91                       1,441
------------------------------------------------------------------------------------------------------------------------------------
                                                2,779                    4,187                    578                       9,960

Other expenses (income):
      Loss (gain) on foreign
         exchange                                (472)                    (711)                    55                        (782)
      Interest expense                            484                      729                     13                         771
      Interest income                            (526)                    (793)                   (16)                     (1,081)
------------------------------------------------------------------------------------------------------------------------------------
                                               14,591                   21,988                     52                      21,671

------------------------------------------------------------------------------------------------------------------------------------
Net loss                              $        18,261         $         27,519         $        2,664       $             252,118
------------------------------------------------------------------------------------------------------------------------------------

Net loss per share                    $          0.53         $           0.80         $         0.13
-----------------------------------------------------------------------------------------------------------

Weighted average number
   of shares outstanding                   34,511,352               34,511,352             21,116,992
-----------------------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to unaudited consolidated financial statements.

                                      -4-

<PAGE>

LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                            Three months            Three months            Three months                    From
                                                   ended                   ended                    ended           inception to
                                           September 30,           September 30,            September 30,          September 30,
------------------------------------------------------------------------------------------------------------------------------------
                                                    2000                    2000                     1999                   2000
------------------------------------------------------------------------------------------------------------------------------------
                                                   (US$)                  (CAN$)                   (CAN$)                 (CAN$)
                                                (note 6)
Cash flows from:

<S>                                     <C>                       <C>                    <C>                    <C>
Operating activities:
      Net loss                          $        (18,261)         $      (27,519)        $         (2,664)      $       (252,118)
      Adjustment for items not
         involving cash:
            Depreciation                             364                     548                       91                  1,441
            Interest expense on
               convertible notes                  15,587                  23,489                                          23,489
            Compensation cost                        469                     707                       -                     999
            Shares issuable for
               services                               -                       -                     1,892                217,359
            Unrealized loss on
               foreign exchange                      431                     650                       -                     650
      Net change in operating assets
         and liabilities (note 8)                   (805)                 (1,211)                    (231)                  (954)
------------------------------------------------------------------------------------------------------------------------------------
                                                  (2,215)                 (3,336)                    (912)                (9,134)
Financing activities:
      Proceeds from issuance of
         common shares                             3,911                   5,893                    3,985                 23,141
      Cash from the acquisition of a
         subsidiary                                   -                       -                        -                     814
      Share issue expenses                           (18)                    (27)                    (292)                (1,125)
      Principal repayments of
         capital lease                               (54)                    (81)                      -                    (171)
      Proceeds from issuance of
         convertible notes                        34,003                  51,243                       -                  51,542
      Debt issue costs                            (1,898)                 (2,861)                                         (2,861)
------------------------------------------------------------------------------------------------------------------------------------
                                                  35,944                  54,167                    3,693                 71,340
Investing activities:
      Additions to property and
         equipment                                (5,941)                 (8,953)                    (535)               (13,365)
      Deposits                                      (217)                   (327)                      -                  (1,852)
      Purchases of term deposits                 (38,594)                (58,162)                  (2,787)               (77,975)
      Disposals of term deposits                  10,582                  15,947                       -                  31,460
      Additions to other assets                       (2)                     (3)                      -                     (16)
------------------------------------------------------------------------------------------------------------------------------------
                                                 (34,172)                (51,498)                  (3,322)               (61,748)

------------------------------------------------------------------------------------------------------------------------------------
 (Decrease) increase in cash
   and cash equivalents                             (443)                   (667)                    (541)                   458

Cash and cash equivalents,
   beginning of period                               747                   1,125                    1,723                     -

------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
   end of period                        $            304          $          458         $          1,182       $            458
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                      -5-

<PAGE>

LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Notes to Consolidated Financial Statements
(Unaudited)

Three-month  periods ended September 30, 2000 and 1999 and period from inception
(March 2, 1998) to September 30, 2000 (in thousands of Canadian dollars,  except
per share amounts)

--------------------------------------------------------------------------------

      In the opinion of management, the accompanying unaudited interim financial
      statements,  prepared in accordance with US generally accepted  accounting
      principles,  contain  all  adjustments  (consisting  of  normal  recurring
      accruals) necessary to present fairly the Corporation's financial position
      as at September 30, 2000,  June 30, 2000,  its results of  operations  and
      cash flows for the three months ended September 30, 2000 and 1999 and from
      inception to September 30, 2000.

      While management  believes that the disclosures  presented are adequate to
      make  the  information  not  misleading,   these  consolidated   financial
      statements and notes should be read in conjunction with the  Corporation's
      Consolidated Financial Statements at June 30, 2000.


1.    Organization and business activities:

      The  Corporation's  principal  business  activity  is to develop  products
      related to the Dense  Wavelength  Division  Multiplexing  market and other
      photonics markets.

      The  Corporation  is  subject to a number of risks,  including  successful
      development  and marketing of its  technology and attracting and retaining
      key  personnel.   The   Corporation   has  entered  into  the  process  of
      establishing its production facilities during the three-month period ended
      September 30, 2000. In order to achieve its business plan, the Corporation
      anticipates the need to raise additional capital.


2.    Molex agreements:

      (a)   Stock Restriction Agreement:

            As part of financing  arrangements  of 1999 with Molex  Incorporated
            ("Molex"),   the  Corporation   entered  into  a  stock  restriction
            agreement  whereby  no  primary  stockholders  can sell any share to
            competitors of Molex without  Molex's prior  consent.  The agreement
            includes  Right of First Refusal and  Preemptive  rights except that
            Lumenon can issue  6,000  units (one common  share and a warrant for
            the  purchase  of one  common  share at a price not less than  $1.32
            (US$0.90)  per share) at a price not less than $0.74  (US$0.50)  per
            unit  to  raise  capital  within  24  months  from  the  date of the
            agreement.

            Certain rights or  restrictions  might be terminated upon completion
            of a Public Sale or a Public Offering as defined in the agreement.

                                      -6-

<PAGE>


LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Notes to Consolidated Financial Statements, Continued
(Unaudited)

Three-month  periods ended September 30, 2000 and 1999 and period from inception
(March 2, 1998) to September 30, 2000 (in thousands of Canadian dollars,  except
per share amounts)

--------------------------------------------------------------------------------


2.    Molex agreement (continued):

      (b)   Teaming Agreement:

            Under  the  terms of a  teaming  agreement,  Molex is  committed  to
            purchase a certain  number of  photonic  devices of Lumenon  for the
            first twelve months.  After the twelve-month period, Molex will have
            the option to purchase  up to 50% of the excess  capacity of Lumenon
            and both Lumenon and Molex will share Molex's  profit upon resale of
            those devices. Under certain circumstances, Molex may have the right
            to manufacture  all components of the devices in return of a royalty
            as defined in the agreement.

3.    Property and equipment:
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------
                                                                                September 30, 2000
--------------------------------------------------------------------------------------------------

                                                                 Accumulated             Net book
                                                    Cost         depreciation               value
--------------------------------------------------------------------------------------------------

<S>                                             <C>               <C>                <C>
      Computer equipment and software           $    672          $     91           $      581
      Office equipment and fixtures                  782                57                  725
      Leasehold improvements                       1,550               140                1,410
      Pilot plant equipment and
         laboratory installation                   6,601             1,153                5,448
      Production equipment and laboratory
         installation                             10,852                 -               10,852

-------------------------------------------------------------------------------------------------
                                                $ 20,457          $  1,441           $   19,016
-------------------------------------------------------------------------------------------------
</TABLE>


      Cost and net book value of pilot plant and production equipment held under
      capital  leases amount to $1,528 and $1,395  respectively  as at September
      30, 2000.

      The  Corporation  is  in  the  process  of  establishing   its  production
      facilities.  No  depreciation  was  recorded  with  respect to  production
      equipment and laboratory installation.


                                      -7-

<PAGE>
LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Notes to Consolidated Financial Statements, Continued
(Unaudited)

Three-month  periods ended September 30, 2000 and 1999 and period from inception
(March 2, 1998) to September 30, 2000 (in thousands of Canadian dollars,  except
per share amounts)

--------------------------------------------------------------------------------


4.    Convertible notes:

      On July 25,  2000,  the  Corporation  closed  a  financing  involving  the
      issuance of $51,243  (US$35,000,000)  five-year  convertible notes bearing
      interest at 7.5% per annum.  Interest is payable upon the earlier to occur
      of the repayment or conversion of the notes.  The notes are convertible at
      any time into the  Corporation's  common stock at a conversion price based
      on the  closing  bid price of the common  stock at the time of  conversion
      with a floor of US$7 and a ceiling of US$25.

      The  investors  also received  five-year  common stock  purchase  warrants
      entitling  them to acquire a total of 5,000,800  shares  exercisable on or
      after  January 25, 2002 and expiring on July 25, 2005.  Exercise  price of
      the warrants is based on a formula  whereby such price may vary from US$10
      to US$30.  In  addition,  the  exercise  price will be lower than the fair
      market value except if the fair market value is equal or lower than US$10.

      Related debt issue costs amounted to $2,861.

      The Corporation  applied APB-14 ("Accounting for Convertible Debt and Debt
      Issued  with Stock  Purchase  Warrants")  and EITF 98-5  ("Accounting  for
      Convertible Securities with Beneficial Conversion Features or Contingently
      Adjustable  Conversion  Ratios").  As a result, the convertible notes were
      discounted by $34,394 and are presented net of the debt discount  which is
      amortized over the term of the notes. Interest expense with respect to the
      beneficial  conversion  feature of convertible  notes and  amortization of
      debt  discount was recorded in the amount of $20,960.  Additional  paid-in
      capital was  increased  by $51,243 as a result of the amount  allocated to
      the stock purchase warrants and the beneficial  conversion  feature of the
      notes.

                                      -8-

<PAGE>
LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Notes to Consolidated Financial Statements, Continued
(Unaudited)

Three-month  periods ended September 30, 2000 and 1999 and period from inception
(March 2, 1998) to September 30, 2000 (in thousands of Canadian dollars,  except
per share amounts)

5.    Share capital:
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------
                                                                          September 30,            June 30,
                                                                                   2000                2000
-----------------------------------------------------------------------------------------------------------

<S>                                                                     <C>                      <C>
      Authorized:
            1,000,000 preferred shares, par value
               of US$0.001 per share
            100,000,000 common shares, par value
               of US$0.001 per share

      Issued and outstanding:
            35,452,739 common shares (June 30, 2000 - 32,970,039)       $           53           $    49
-----------------------------------------------------------------------------------------------------------
</TABLE>

      During the  three-month  period ended  September 30, 2000, the Corporation
      concluded the following share capital transactions:

      (a)   Issue of shares:

            2,482,700  common  shares  were issued for a cash  consideration  of
            $5,893 upon exercise of options and warrants.

      (b)   Stock option plan:

            Changes in  outstanding  options for the  three-month  period  ended
            September 30, 2000 were as follows:
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
                                                                                      Weighted average
                                                                Number          exercise price per share
--------------------------------------------------------------------------------------------------------

<S>                                                          <C>                <C>
            Options outstanding, June 30, 2000               2,277,150          $13.92 (US$9.24)
            Granted                                          1,105,000          $35.67 (US$23.67)
            Exercised                                         (144,500)         $1.53 (US$1.03)

--------------------------------------------------------------------------------------------------------
            Options outstanding, September 30, 2000          3,237,650          $21.90 (US$14.53)
--------------------------------------------------------------------------------------------------------
</TABLE>

            At September 30, 2000, 204,650  outstanding  options are exercisable
            and 3,033,000 outstanding options vest over a period of one to seven
            years.

                                      -9-

<PAGE>
LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Notes to Consolidated Financial Statements, Continued
(Unaudited)

Three-month  periods ended September 30, 2000 and 1999 and period from inception
(March 2, 1998) to September 30, 2000 (in thousands of Canadian dollars,  except
per share amounts)

5.    Share capital:

      (c)   Warrants:

            The following warrants are outstanding at September 30, 2000:

-----------------------------------------------------------------------------
                   Warrants         Expiry date      Exercise price per share
-----------------------------------------------------------------------------

                     10,000        October 2000        $23.36 (US$15.50)
                     43,011       December 2000        $45.21 (US$30.00)
                    700,000           June 2001        $2.26 (US$1.50)
                     14,000           July 2003        $37.68 (US$25.00)
                  5,000,800           July 2005                       *

-----------------------------------------------------------------------------
                  5,767,811
-----------------------------------------------------------------------------

            *     The exercise price per share,  to be established in 18 months,
                  may vary from $15.07 (US$10.00) to $45.21  (US$30.00)  subject
                  to the then traded value of the stock (note 4).

6.    Functional currency and convenience translation:

      The functional currency of the Corporation is the Canadian dollar.

      US  dollar  amounts  presented  on  the  balance  sheets,   statements  of
      operations  and cash flows are provided for  convenience of reference only
      and are based on the closing  exchange rate at September  30, 2000,  which
      was $1.507 Canadian dollar per US dollar.

                                      -10-

<PAGE>
LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Notes to Consolidated Financial Statements, Continued
(Unaudited)

Three-month  periods ended September 30, 2000 and 1999 and period from inception
(March 2, 1998) to September 30, 2000 (in thousands of Canadian dollars,  except
per share amounts)


7.    Commitments:

      (a)   Since July 1, 2000, the Corporation entered in new capital leases at
            interest rate varying from 11.75% to 13.96%.  Minimum lease payments
            under  capital  lease  agreements  for the next  four  years  are as
            follows:

--------------------------------------------------------------------------------

            2001                                              $           277
            2002                                                          279
            2003                                                          236
            2004                                                            3

--------------------------------------------------------------------------------
                                                              $           795
--------------------------------------------------------------------------------


      (b)   As at September 30, 2000,  the  Corporation is committed to purchase
            equipment in the amount of $2,469 for which $1,852 was disbursed and
            recorded under deposits.

      (c)   In addition,  the  Corporation  is  committed  to acquire  equipment
            through  capital  leases in the  amount of $1,464  repayable  over a
            period of approximately three years.

      (d)   On July 21,  2000,  the  Corporation  entered  into a  non-exclusive
            license  agreement  with a third  party.  Under  the  terms  of this
            agreement,  Lumenon  is  committed  to pay  royalties  on  sales  of
            products as defined in the agreement.


                                      -11-

<PAGE>
LUMENON INNOVATIVE LIGHTWAVE
TECHNOLOGY, INC.
(a Development Stage Enterprise)
Notes to Consolidated Financial Statements, Continued
(Unaudited)

Three-month  periods ended September 30, 2000 and 1999 and period from inception
(March 2, 1998) to September 30, 2000 (in thousands of Canadian dollars,  except
per share amounts)

--------------------------------------------------------------------------------
8.    Supplemental cash flow disclosure:

      (a)   Net change in operating assets and liabilities:
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                             Three months             Three months           Three months                   From
                                                    ended                    ended                  ended           inception to
                                            September 30,            September 30,          September 30,          September 30,
                                                     2000                     2000                   1999                   2000
------------------------------------------------------------------------------------------------------------------------------------
                                                    (US$)                   (CAN$)                 (CAN$)                 (CAN$)
            Interest and sales
<S>                                       <C>                      <C>                   <C>                  <C>
               tax receivable             $        (1,071)         $        (1,613)      $           (136)    $           (1,979)
            Research tax credits
               receivable                             (75)                    (113)                   (38)                  (303)
            Prepaid expenses                          (26)                     (39)                    23                   (116)
            Accounts payable and
               accrued liabilities                    367                      554                    (80)                 1,444

------------------------------------------------------------------------------------------------------------------------------------
                                          $          (805)         $        (1,211)     $            (231)    $             (954)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


      (b)   Non-cash investing and financing activities:

            Acquisition of property and equipment through capital leases amounts
            to $880 for the three- month period ended September 30, 2000.

            Capital  expenditures of $5,127 are included in accounts  payable at
            September 30, 2000.


9.    Subsequent events:

      (a)   On October 16, 2000,  $10,549  (US$7,000) of the principal amount of
            the  convertible  notes plus  interest were  converted  into 616,414
            common shares.

      (b)   In October  2000,  the  Corporation  granted  under its stock option
            incentive plan 352,500 options to certain employees for the purchase
            of 352,500 common shares at price varying from $23.92  (US$15.87) to
            $41.50 (US$27.54)




                                      -12-
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

            Certain statements  contained in this Quarterly Report on Form 10-Q,
including,  without  limitation,  statements  containing  the  words  "believe,"
"anticipate,"  "estimate"  "expect"  and  words of  similar  import,  constitute
"forward-looking  statements."  You should  not place  undue  reliance  on these
forward-looking  statements.  Our actual  results could differ  materially  from
those  anticipated  in  these  forward-looking   statements  for  many  reasons,
including  the  risks  faced by us as  described  below  and  elsewhere  in this
Quarterly Report, and in other documents we have filed with the SEC.

            All numbers in this management's  discussion  section are rounded to
the nearest thousand.

RESULTS OF OPERATIONS

            We are a  development  stage  company  that has not yet realized any
revenues from operations.

            Research and development  expenses for the three-month  period ended
September  30,  2000,  net  of  tax  credits  and  grants,   were  CDN$1,344,000
(US$891,000)  compared  to  CDN$2,034,000  during the same  period in 1999.  The
decrease  of  CDN$690,000  in  research  and  development  expenses  is due to a
CDN$1,892,000  non-cash expense  resulting from the issuance of our common stock
in consideration of certain services  rendered by Molex  Incorporated  under the
terms of a teaming  agreement  during the 1999  period.  The  exclusion of these
charges of CDN$1,892,000  from research and development  expenses in the quarter
ended September 30, 1999 would result in an effective  increase of CDN$1,202,000
compared to the 2000 period. This effective increase is due to the fact that the
Company increased its research and development  headcount by six to meet demands
of  increased  work volume as the  research  and  development  team  focused its
efforts  on  the  introduction  of  new  designs,   on  the  refinement  of  its
microfabrication  processes,  and on  the  transfer  of  process  technology  to
manufacturing.

            General   and    administrative    expenses    were    CDN$4,187,000
(US$2,779,000)   during  the  period  ended   September  30,  2000  compared  to
CDN$578,000  for the same  period in 1999,  an increase  of  CDN$3,609,000.  The
increase is mainly  attributable  to the fact that we hired 93 employees  during
the last twelve  months.  In addition to the increased  number of employees,  we
also moved our  headquarters  to a new  building  and  continued  to develop our
infrastructure.

            Other expenses, net of interest income and gain on foreign exchange,
amounted to CDN$21,988,000(US$14,591,000) during the quarter ended September 30,
2000  compared  to  CDN$52,000  during the same  period in 1999,  an increase of
CDN$21,936,000. The increase is mainly due to the CDN$51,243,000 (US$35,000,000)
convertible  notes the Company  issued on July 25, 2000.  The  interest  expense
portion of the other expenses are mainly made of the fact that this  convertible
notes bear  interest at 7.5% per annum.  The  financing  charge,  an expense not
involving cash and totaling  CDN$22,763,000  (US$15,105,000) is explained below.
Interest  income  during  this  quarter  amounted to  CDN$793,000  (US$526,000),
compared to CDN$16,000  in the same period in 1999, an increase of  CDN$777,000.
This increase is due to the fact that we had more cash and term deposits  during
this quarter as a result of capital  raised through the exercise of warrants and
options and the issuance of the convertible notes.

                                      -13-

<PAGE>

            As a result of the above expenses,  our net loss for the three-month
period ended September 30, 2000 was  CDN$27,519,000  (US$18,261,000) or CDN$0.80
(US$0.53)  per share,  compared to  CDN$2,664,000  or CDN$0.13 per share for the
same period in 1999.

            Our activities are being ramped-up to our planned production levels.
The increased activities will require us to have additional employees, equipment
and resources to manage the organization.  This should increase our monthly burn
rate by approximately CDN$1,000,000 by the end of Fiscal 2001.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

            On July 25, 2000, we sold CDN$51,243,000  (US$35,000,000)  aggregate
principal  amount  of  five-year  convertible  notes  due July  25,  2005 to two
institutional investors. The notes bear interest at a rate of 7.5% per annum and
are convertible at any time into common stock at a conversion price based on the
closing bid price of the common stock at the time of conversion,  with a minimum
conversion  price of US$7 per share and a maximum  conversion price of US$25 per
share.  On  October  16,  2000,  notes  in the  aggregate  principal  amount  of
CDN$10,549,000  (US$7,000,000),  together with accrued interest,  were converted
into 616,414 shares of common stock at a price equal to US$11.55 per share.

            In  connection  with the  financing,  the  investors  also  received
five-year warrants to purchase an aggregate of 5,000,800 shares of common stock.
The warrants are exercisable on or after January 25, 2002. The exercise price of
the  warrants  is based on a formula  whereby  the price may vary from US$10 per
share to US$30  per  share.  Based on the  formula,  the  exercise  price of the
warrants  will be lower than the fair  market  value of the common  stock at the
time that the warrants  vest unless the fair market value of the common stock is
equal to or lower than US$10 per share.

            We will apply  APB-14  ("Accounting  for  Convertible  Debt and Debt
Issued with Stock Purchase Warrants") and EITF 98-5 ("Accounting for Convertible
Securities  with  Beneficial  Conversion  Features  or  Contingently  Adjustable
Conversion  Ratios") to determine the accounting  treatment of the notes and the
warrants.  These bulletins  require that we allocate the proceeds from the notes
among the notes and the warrants.  As a result, the notes will be discounted and
the  beneficial  conversion  feature  of notes  will be  recorded  as  financing
charges.

            Because the notes are convertible at any time,  financing charges of
CDN$21,581,000  (US$14,321,000)  are  recorded  as  expenses  at the date of the
transaction.  In addition,  amortization  of debt  discount for the period ended
September 30, 2000 amounting to  CDN$1,182,000  (US$784,000) is also recorded as
financing charges.  However,  these additional charges are non-cash transactions
and accordingly will have no effect on our cash flows.

                                      -14-

<PAGE>

            If the notes and unpaid interest  calculated at the rate of 7.5% are
not  converted  into common  stock,  we will be required to pay an  aggregate of
CDN$41,694,000  (US$28,000,000)  plus  accrued  interest to the  investors  upon
maturity.

            During the quarter ended  September  30, 2000, we actively  acquired
equipment in order to open our plant on October 6, 2000.  As such,  we disbursed
CDN$8,953,000 (US$5,941,000) in equipment as well as CDN$327,000 (US$217,000) in
related  deposits  and infused  CDN$3,336,000  (US$2,215,000)  in our  operating
activities. Finally, we raised CDN$5,893,000 (US$3,911,000) through the issuance
of shares from the conversion of warrants and the exercise of stock options.

            As of September  30, 2000, as a result of the above  activities,  we
had cash, cash equivalents and term deposits of CDN$46,973,000 (US$31,170,000).

            We do not believe that inflation has had a significant impact on our
results of operations.

RISK FACTORS

WE ARE A  DEVELOPMENT  STAGE COMPANY WITH NO  EXPERIENCE  IN  MANUFACTURING  AND
MARKETING OUR PRODUCTS.

            We have no history in manufacturing  and marketing our products.  We
are a  development  stage  company and, to date,  have not had any revenues from
sales of our products. Our operating history provides no basis for evaluating us
and our prospects.  We must successfully develop and commercialize our products,
meet competition,  attract, retain and motivate qualified employees,  expand our
operations  and  market  and  sell  products  using  our  licensed   proprietary
technology in volume to have significant revenues and to be profitable.

            Our future will depend on our  ability to develop,  manufacture  and
commercialize  products based upon our licensed  proprietary  technologies.  Our
first product,  the DWDM optical chip, has only recently  entered  production in
limited  quantities  and we expect to make only  limited  shipments of prototype
chips in 2000.  Potential  customers  may not accept our  products,  they may be
difficult to produce in large volumes at an acceptable  cost, fail to perform as
expected,  cost too much or be barred from production by the proprietary  rights
of others.

            We expect to spend  considerable  sums to develop and market our new
products.  We expect our  operating  expenses  to  increase  as we  develop  our
technology and products,  increase our sales and marketing activities and expand
our assembly  operations.  We will not have  revenues  from product sales before
2001.  The amount that we will lose and when,  if ever,  we will have profits is
highly uncertain.

WE MAY BE UNABLE TO OBTAIN FUNDING TO MEET OUR FUTURE CAPITAL NEEDS.



                                       -15-

<PAGE>

            We will require substantial additional funding over the next several
years to develop our technology,  to broaden and  commercialize our products and
to  expand  assembly  capacity.  Additional  funding  could  be  unavailable  on
favorable  terms, or at all. We may then have to delay or abandon some or all of
our anticipated spending, cut back our operations significantly, sell assets, or
license to third parties  potentially  valuable  technologies  that we currently
plan to  commercialize  ourselves.  Our capital needs will depend on a number of
factors, including:

            o     How many new products we develop
            o     How fast we develop and  commercialize our products and expand
                  our assembly operations
            o     The response of competitors
            o     The level of acceptance of our products
            o     Competing technological developments
            o     Changes in market demand.

            If we borrow funds,  we may become subject to restrictive  financial
covenants and our interest  obligations  will increase.  If we issue more stock,
our present stockholders may experience substantial dilution.

THERE ARE SIGNIFICANT RISKS ASSOCIATED WITH THE MANUFACTURE OF OUR PRODUCTS.

            We have never assembled  large amounts of products.  The manufacture
of our chips is a  complex,  sophisticated  process,  requiring  clean  room and
precision  assembly  equipment.  Very small amounts of contaminants in assembly,
defects in components, difficulties in the assembly process or other factors can
cause a significant  number of chips to be nonfunctional or to have unacceptable
defects.  This could  significantly  reduce  yields and increase the cost of our
products. Many of these problems are difficult to find and require much time and
expense to fix.

            We  must  effectively  transfer  production   information  from  our
research  and  development  department  to our new  manufacturing  facility  and
rapidly achieve volume production. If we fail to effectively manage this process
or if we  experience  delays,  disruptions  or quality  control  problems in our
manufacturing  operations,  our shipments of products to our customers  could be
delayed.  Unforeseen additional capital expenditures could be required to remedy
these problems.

            Changes in our  manufacturing  processes or the  inadvertent  use of
defective  materials could  significantly  reduce our  manufacturing  yields and
product  reliability.  Because most of our  manufacturing  costs are  relatively
fixed,  manufacturing  yields are critical to our results of  operations.  Lower
than expected  production  yields could delay  product  shipments and reduce our
gross margins. We may not obtain acceptable yields.

WE MAY BE UNABLE TO ADAPT TO RAPID TECHNOLOGICAL CHANGE AND CONTINUE NEW PRODUCT
DEVELOPMENT.



                                       -16-

<PAGE>

            We  must  become  a key  supplier  of  components  to the  photonics
industry to be successful.  The photonic market is highly competitive and marked
by rapidly changing technology. We may be unable to adapt to rapid technological
change and to continue new product development.

            We must

            o     Anticipate  what our clients and their end-users will need and
                  demand  in the  manufacture  of  products,  both  for  general
                  industry use and specific custom-made usage
            o     Incorporate those anticipated  features and functions into our
                  products o Meet specific and exacting design requirements
            o     Price our products  competitively
            o     Introduce  our  products  at the  right  time to  meet  market
                  demand.

            The life cycle of a product we make may be short.  We must introduce
new  products  on a timely  basis and we must spend a great deal to develop  new
products.  We could experience delays in introducing new products,  because they
are  complex.  The  success of our new  products  will  depend on many  factors,
including

            o     Proper   product   definition
            o     Timely   completion   and introduction   of  designs
            o     Ability of our  customers  to  incorporate  our  product  into
                  theirs
            o     Quality and performance of our products
            o     Differentiation of our products from those of our competitors
            o     Acceptance of our products and those of our customers.

OUR AGREEMENTS WITH MOLEX CONTAIN SIGNIFICANT RESTRICTIONS.

            We have entered into agreements with Molex Incorporated that contain
restrictions on our ability to sell our products and grant to Molex preferential
rights to acquire up to 50% of our production at favorable  prices. In the event
we are unable to supply Molex on a timely basis with a  commercially  reasonable
quantity of the devices or in the event we experience a change of control, Molex
has the  non-exclusive  right to  manufacture  all  components of the devices in
return for a royalty  equal to 50% of the  profits  from  sales of  functionally
unmodified  packaged  products  and 30% of the profits from sales of other final
products.

THE  SMALL  NUMBER  OF  POTENTIAL  CUSTOMERS  FOR OUR  PRODUCTS  WILL  GIVE THEM
CONSIDERABLE LEVERAGE OVER US.

            For the foreseeable future, we intend to market our products to only
a limited number of leading original equipment manufacturer  customers.  We will
rely on these  customers to develop their own systems,  creating  demand for our
products.  Our  customers  may be  expected  to exert  considerable  leverage in
negotiating purchases from us. The telecommunications equipment industry


                                       -17-

<PAGE>

is dominated by a small number of large  companies  with few optical  components
suppliers. Existing suppliers could exert pressure to keep out new entrants.

OUR  COMPETITION  MAY BE ABLE TO  MORE  EFFECTIVELY  DEVELOP  AND  MARKET  THEIR
PRODUCTS, MAKING OURS OBSOLETE.

            Our  competitors  include large  companies  that have  substantially
greater  financial,  technical,  marketing,  distribution  and other  resources,
broader   product  lines,   greater  name   recognition   and  longer   standing
relationships with customers than we do. Our competitors  include both companies
already   manufacturing   large  volumes  of  products   based  on   established
technologies,  as well as companies  selling emerging  technological  solutions.
Potential competitors could also include our own customers,  which may decide to
manufacture products competitive with ours, rather than purchasing our products.

WE ARE  DEPENDENT  ON KEY  PERSONNEL;  WE MAY NOT BE ABLE TO ATTRACT,  TRAIN AND
RETAIN SUFFICIENTLY QUALIFIED PERSONNEL.

            Our success will depend to a  significant  degree upon the continued
services of key management,  technical, and scientific personnel,  including Dr.
S. Iraj Najafi, our President and Chief Executive Officer, Dr. Mark Andrews, our
Chief Technical Officer, and Dr. Chia-Yen Li, our Chief Operating Officer. We do
not currently maintain key-man life insurance on any of our personnel.

            Our success  will also  depend on our ability to attract,  train and
retain additional management and other highly skilled personnel.  Currently,  we
are seeking to hire skilled engineers for our assembly process.  Our competitors
for qualified personnel are often long-established,  highly profitable companies
and the process of hiring qualified  personnel is often lengthy.  Our management
and other employees may voluntarily  leave us at any time. We may not be able to
meet our sales  forecasts  if we cannot  attract,  train and  retain  sufficient
qualified personnel.

            Our future  profitability will also depend on our ability to develop
an effective  sales force.  Competition  for employees  with sales and marketing
experience  is  intense.  We may be  unable  to  attract  and  retain  qualified
salespeople or build an effective sales and marketing  organization.  We require
sales  people with a good  technical  understanding  of our  products and of the
industry.

THERE ARE SIGNIFICANT  RISKS  ASSOCIATED WITH THE PROTECTION OF OUR INTELLECTUAL
PROPERTY.

            Problems associated with the protection of our intellectual property
or potential  infringement of the  intellectual  property of others could have a
significant negative impact on our business and our financial condition.

            The patent  positions of technology  companies,  including ours, are
uncertain and involve complex legal and factual questions.  The coverage claimed
in a patent application can be significantly  reduced before a patent is issued.
Our patent applications may not result in patents


                                       -18-

<PAGE>

being issued.  Patents issued to us may not provide protection against competing
technologies and may not be held valid if challenged.  Others may  independently
develop  products  similar to ours or design  around or otherwise  avoid patents
issued to us.

            Others may assert claims  against us that will result in litigation.
Litigation,  regardless of its outcome,  would result in significant cost to us,
as well as diversion of  management  time.  If we were to infringe  upon a valid
patent,  we might have to change our products or obtain licenses from the patent
owners.  Licenses may not be available on favorable terms. In addition, we could
be liable for significant monetary damages.

            We also rely on trade  secret and  copyright  law and  employee  and
third-party  nondisclosure  agreements  to  protect  our  intellectual  property
rights. We may be unable to secure  meaningful  protection of our trade secrets,
copyrights,   know-how  or  other  proprietary   information  in  the  event  of
infringement   by  others   and  others  may   independently   develop   similar
technologies.

WE ARE  CONTROLLED  BY INSIDERS,  WHICH MAY PREVENT A CHANGE OF CONTROL OR OTHER
CORPORATE TRANSACTIONS.

            As of the date hereof, our management,  Molex,  Polyvalor and McGill
University  collectively  own in excess of 50% of our outstanding  common stock.
Together,  they determine the  composition of the Board of Directors and will be
able to  determine  the  outcome  of  corporate  actions  requiring  stockholder
approval.  This  ability may have the effect of  preventing  a change in control
that may be favorable to other  stockholders or causing a change of control that
may not be favorable to other stockholders.

            Under  the   agreements   with   Molex,   Molex  will   acquire  the
non-exclusive  right to  manufacture  and sell  jointly  developed  optical chip
products in the event we  experience a change of control.  Molex also has rights
of  first  refusal  with  respect  to most  sales of  stock  by  members  of our
management.  Their rights may have the effect of  preventing a change of control
that may be favorable to other stockholders.

PROVISIONS OF OUR CORPORATE DOCUMENTS AND APPLICABLE LAW MAY PREVENT OR HINDER A
CHANGE OF CONTROL.

            Provisions of our  certificate of  incorporation  and by-laws and of
applicable  law could make it more  difficult for another party to acquire us or
discourage  another  party from  attempting  to acquire  us. This may reduce the
value of our common  stock.  For example,  we could issue  preferred  stock with
rights  senior  to the  common  stock  without  any  further  vote or  action by
stockholders.  The  issuance of  preferred  stock as part of a future  financing
could have the effect of  preventing  a change of control and could make it more
difficult  for holders of our common  stock to take certain  corporate  actions,
including the replacement of incumbent directors. Additionally,  preferred stock
may have preference over and harm the rights of the holders of common stock.



                                      -19-

<PAGE>

WE HAVE A SIGNIFICANT  NUMBER OF OUTSTANDING  WARRANTS AND OPTIONS,  WHICH COULD
ADVERSELY  AFFECT  THE  PRICE  OF OUR  COMMON  STOCK  AND  OUR  ABILITY  TO SELL
ADDITIONAL COMMON STOCK.

            As of October 31,  2000,  we had  outstanding  options to purchase a
total of 3,590,150  shares of common stock at a weighted  average exercise price
of US$ 7.84 per share and  outstanding  warrants  to purchase  an  aggregate  of
757,011  shares of our common  stock at a  weighted  average  exercise  price of
US$3.55 per share. We also have outstanding warrants to purchase an aggregate of
5,000,800  shares of common stock,  subject to  anti-dilution  provisions,  at a
price to be  determined in the future.  The  $28,000,000  five-year  convertible
notes  issued in July 2000 and still  outstanding  are also  convertible  into a
maximum of 5,000,000  shares of common  stock,  unless a default under the notes
has occurred.

            No holder may convert any portion of the July 2000 notes or exercise
any  portion of the July 2000  warrants  to the extent  that the  conversion  or
exercise  would  result  in that  holder or any of its  affiliates  beneficially
owning more than 4.99% of our outstanding common stock.  Therefore, a holder may
have to sell  shares of  common  stock in order to be able to  convert  notes or
exercise warrants. The following table sets forth the number of shares of common
stock  issuable upon  conversion of the July 2000 notes and exercise of the July
2000  warrants  at  various  prices  and  the  percentage  of our  common  stock
represented by the shares of common stock issuable upon  conversion of the notes
and  exercise of the warrants at such prices  assuming we have not  defaulted on
the notes:

<TABLE>
<CAPTION>

                                                                                % of total
                                                                                warrants vs.     Number of        % of total
                          Share   Number of    % of shares vs.    Number of     outstanding      shares and      warrants and
                          Price    Shares     outstanding shares  Warrants         shares         warrants          shares
                          -----    ------     ------------------  --------         ------         --------          ------
Outstanding   $28,000,000
Note
Amount
<S>                                                <C>                             <C>             <C>           <C>
                                                   36,069,153                      36,069,153                    36,069,153
Maximum                  $25.00    1,120,000            3.11%     5,000,800            13.86%      6,120,800         16.97%
Exercise
Price
Minimum                   $7.00    4,000,000           11.09%                                      9,000,800         24.95%
Exercise
Price

Variable                 $24.00    1,166,667            3.23%                                      6,167,467         17.10%
                         $23.00    1,217,391            3.38%                                      6,218,191         17.24%
                         $22.00    1,272,727            3.53%                                      6,273,527         17.39%
                         $21.00    1,333,333            3.70%                                      6,334,133         17.56%
                         $20.00    1,400,000            3.88%                                      6,400,800         17.75%
</TABLE>



                                       20

<PAGE>

<TABLE>
<CAPTION>

                                                                                % of total
                                                                                warrants vs.     Number of        % of total
                          Share   Number of    % of shares vs.    Number of     outstanding      shares and      warrants and
                          Price    Shares     outstanding shares  Warrants         shares         warrants          shares
                          -----    ------     ------------------  --------         ------         --------          ------

<S>                      <C>       <C>                  <C>                                        <C>               <C>
                         $19.00    1,473,684            4.09%                                      6,474,484         17.95%
                         $18.00    1,555,556            4.31%                                      6,556,356         18.18%
                         $17.00    1,647,059            4.57%                                      6,647,859         18.43%
                         $16.00    1,750,000            4.85%                                      6,750,800         18.72%
                         $15.00    1,866,667            5.18%                                      6,867,467         19.04%
                         $14.00    2,000,000            5.54%                                      7,000,800         19.41%
                         $13.00    2,153,846            5.97%                                      7,154,646         19.84%
                         $12.00    2,333,333            6.47%                                      7,334,133         20.33%
                         $11.00    2,545,455            7.06%                                      7,546,255         20.92%
                         $10.00    2,800,000            7.76%                                      7,800,800         21.63%
                         $ 9.00    3,111,111            8.63%                                      8,111,911         22.49%
                         $ 8.00    3,500,000            9.70%                                      8,500,800         23.57%
                         $ 7.00    4,000,000           11.09%                                      9,000,800         24.95%
</TABLE>


            The exercise of outstanding  options and warrants and the conversion
of  outstanding  notes will dilute the then current  stockholders'  ownership of
common stock.  Sales in the public market of common stock acquired upon exercise
of options and warrants and  conversion  of notes could depress the price of our
common stock. This may adversely affect our ability to sell common stock.

PART II.  OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

            The following unregistered securities were issued by us from July 1,
2000 to September 30, 2000:

<TABLE>
<CAPTION>
                                                     Number of Shares
                                                      Issued/Subject        Offering/
      Date of              Description of             To Options or          Exercise
   Sale/Issuance          Securities Issued          Warrants & Notes    Price Per Share
   -------------          -----------------          ----------------    ---------------
<S>                    <C>                                <C>                  <C>
  July  18, 2000      Common Stock issued to              210,000             US$0.90
                         Lavery, de Billy as
                               nominee
                           for Consultants
                           Alconsultex, an
                      accredited investor, upon
                        exercise of warrants
</TABLE>


                                      -21-
<PAGE>
<TABLE>
<CAPTION>

<S>                    <C>                                <C>                  <C>
   July 20, 2000       Common Stock issued to              50,000             US$0.90
                     Lavery, de Billy as nominee
                      for Jean-Louis Pulin, an
                      accredited investor, upon
                        exercise of warrants

   July 20, 2000       Common Stock issued to              50,000             US$0.90
                     Lavery, de Billy as nominee
                        for 2973-9711 Quebec,
                              Inc., an
                      accredited investor, upon
                        exercise of warrants

   July 24, 2000       Common stock issued to             500,000             US$0.90
                      Pinetree Capital Corp., a
                      accredited investor, upon
                        exercise of warrants

   July 25, 2000        Warrants to purchase           10,000,800              to be
                              shares of                                      determined
                          common stock and
                             convertible
                     notes into shares of common
                       stock issued to Capital
                     Ventures International and
                       Castle Creek Technology
                            Partners LLC

   July 25, 2000       Common stock issued to             400,000             US$0.90
                                Brant
                     Investments Limited Global
                       Securities Services, an
                      accredited investor, upon
                        exercise of warrants

  August 1, 2000       Common stock issued to              60,000             US$1.50
                     Lavery, de Billy as nominee
                      for accredited investor,
                                upon
                        exercise of warrants

  August 1, 2000      Common  Stock issued to             175,000             US$0.90
                     Lavery, de Billy as nominee
                         for Rush & Co., an
                             accredited
                     investor, upon exercise of
                              warrants

  August 1, 2000       Common Stock issued to              39,750             US$0.90
                     Lavery, de Billy as nominee
                      for Jacques Paul-Hus, an
                      accredited investor, upon
                        exercise of warrants

</TABLE>

                                      -22-

<PAGE>
<TABLE>
<CAPTION>
<S>                    <C>                                <C>                  <C>
  August 1, 2000       Common Stock issued to              25,000             US$0.90
                     Lavery, de Billy as nominee
                        for Pierre Genest, an
                             accredited
                     investor, upon exercise of
                              warrants

  August 11, 2000      Common Stock issued to             300,000             US$0.90
                     Lavery, de Billy as nominee
                      for Klug Investments, an
                      accredited investor, upon
                        exercise of warrants

  August 25, 2000      Common Stock issued to             160,000             US$0.90
                     Lavery, de Billy as nominee
                     for Pierre L. Baribeau, an
                      accredited investor, upon
                        exercise of warrants

  August 25, 2000      Common Stock issued to              50,000             US$0.90
                     Lavery, de Billy as nominee
                         for Diane Nadau, an
                             accredited
                     investor, upon exercise of
                              warrants

  August 29, 2000    Common Stock issued to MDL           100,000             US$6.00
                        Investments Ltd., an
                             accredited
                     investor, upon exercise of
                              warrants

 September 5, 2000     Common Stock issued to              26,000             US$6.00
                                Egger
                        & Co., an accredited
                              investor,
                      upon exercise of warrants

 September 6, 2000     Common Stock issued to              40,700             US$6.00
                     National Bank Financial, an
                      accredited investor, upon
                        exercise of warrants

 September 6, 2000   Common Stock issued to NBC            26,000             US$6.00
                     Clearing Services Inc., an
                      accredited investor, upon
                        exercise of warrants

 September 6, 2000   Common Stock issued to NBC            26,000             US$6.00
                     Clearing Services Inc., an
                      accredited investor, upon
                        exercise of warrants

 September 6, 2000     Common Stock issued to              26,000             US$6.00
                                First
                       Marathon, an accredited
                     investor, upon exercise of
                              warrants
</TABLE>



                                      -23-
<PAGE>
<TABLE>
<CAPTION>

<S>                    <C>                                <C>                  <C>
 September 6, 2000   Common Stock issued to NBC            26,000             US$6.00
                     Clearing Services Inc., an
                      accredited investor, upon
                        exercise of warrants

 September 7, 2000     Common Stock issued to              26,000             US$6.00
                        Sassoon Shahmoun, an
                      accredited investor, upon
                        exercise of warrants

September 20, 2000     Common stock issued to              21,500             US$9.00
                     accredited  investors upon
                        exercise of warrants
</TABLE>

            The  issuances of all of the  securities  listed in this Item 2 were
exempt from  registration  pursuant  to Section  4(2) of the  Securities  Act as
transactions  not involving a public offering.  All of the securities  listed in
this Item 2 were deemed by us to be restricted securities and were appropriately
legended and restricted as to subsequent  transfer.  No underwriter was involved
in these  transactions.  For each of the issuances  listed in this Item 2, there
were no  solicitations  or  advertising by Lumenon,  and investors  completed an
investor questionnaire as to their qualifications and level of experience.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits:
              27.1 Financial Data Schedule - September 30, 2000

Reports on Form 8-K:

              The Registrant filed a Current Report on Form 8-K on July 28, 2000
              reporting  under Item 5 - "Other Events" - the sale of convertible
              notes to two institutional investors.






                                      -24-

<PAGE>


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                        LUMENON INNOVATIVE LIGHTWAVE
                                        TECHNOLOGY,  INC.


                                        By: /s/ S. Iraj Najafi
                                           -------------------------------------
                                           S. Iraj Najafi
                                           President and Chief Executive Officer


                                        By:/s/ Vincent Belanger
                                           -------------------------------------
                                           Vincent Belanger
                                           Vice President Finance,
                                           Chief Financial Officer and
                                           Treasurer (Principal Financial
                                           Officer and Chief Accounting Officer)



Dated: November 14, 2000



                                      -25-