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Lightwave Logic - >>> Open Letter to Lightwave Logic, Inc. Shareholders


https://b2icontent.irpass.com/2252/177075.pdf


April 24, 2019

Fellow Shareholders,

I would like to take the opportunity today to bring all of you up to date by summarizing a very busy first
quarter. If you have signed up for direct communications, you should have seen much of the activities via
press releases already. Here I am providing additional context and commentary around these
achievements as they add towards our terrific progress in 2019.
LPC deal: In January, we announced a new agreement with Lincoln Park Capital LLC. After both doing
due diligence in investigating alternatives, Jim and I confirmed that continuing the established
relationship with LPC is an attractive way to finance the company as we advance the development of our
proprietary polymer materials and modulator devices. Our history with this partner gives me confidence
that we can focus on customer engagement in 2019.
The terms of the agreement are available to you in the 8-K filed with the SEC but I will call out some
highlights here. The total amount available to the company over three years is $25M. The current rate of
expenditure, and absent any income, over three years happens to match this amount. At the same time, the
agreement states that drawing on funds is at the company’s sole discretion. That means the timing of any
drawing of funds is determined by the company in its best interests, there is no set amount per month or
per year that the company must take or even that it need to draw on the full amount by the end of the
agreement. All-in-all, I am very pleased with the headroom that this arrangement provides. It allows the
company to continue to make prudent decisions about its operations for best sustainable success rather
than out of short-term necessity.
Materials research breakthrough: In February, we announced that the chemistry team had successfully
engineered a new electro-optic polymer with higher efficiency. I am personally very excited about this
achievement because it achieves a number of goals. Firstly, the improved material characteristic supports
both lower voltage and higher speed in future devices. You may recall that our annual goals for 2018 –
2019 included “Evaluate polymer platform for lower voltage drive at 50Gbps” and “Continue to drive EO
coefficient higher (for lower Voltage drive)” and “Continue to file additional patents on polymer
photonics PIC platform.” Creating this new polymer material supports these three goals. Second, it
demonstrates that terrific as electro-optic polymers are already, they have even more untapped upside
potential. Third, but certainly not last, it demonstrates that our stellar team continues to generate valuable
intellectual property even as we work on commercialization. As I’ve indicated in public presentations and
videos, I feel strongly that there is a growing lack of commercially oriented R&D in materials and
hardware. By being one of the few companies focusing on unique electro-optic polymers, Lightwave
Logic puts itself in an unusual and enviable position. These observations are being echoed with industry
photonics roadmaps that now include polymers as a key enabling technology platform.
Advisory board: In March, we announced the formation of an Advisory Board. This entity is quite
different from a Board of Directors, which remains unchanged. It is a small group of advisors chosen to
be a valuable resource to management, providing strategic planning and tactical insights as the
company progresses towards industrial manufacturing. Commercializing technology requires a
wide portfolio of business and technical skill sets. Internally we already have close interactions between
the materials, devices, and packaging design. The challenge is to span these skill sets in the most efficient
path to market. One way that we believe we can increase efficiency is by leveraging top-level expertise at
crucial decision points in our platform technology development. Each of our first three Advisory Board
members has experience in several areas that we believe will be extremely helpful to us.
External meeting attendance: We attended the technical OFC Conference in San Diego in March. The
main takeaway is that people have started talking more openly the market gaps that we are targeting: runaway power consumption, a speed roadmap that runs out shortly, unceasing demand for more bandwidth,
and miniaturization. New at OFC this year is a more widespread belief that photonics will have to be “copackaged” with electronics in a multi-chip-module style technology platform. This trend perfectly fits in
the application and design of high performance electro-optic polymers. We left the conference excited
with the possibilities of further opportunities for our polymer technology. Furthermore, we see customer
trends towards greater density and miniaturization of electronics chips than optical chips, and we believe
this is a very favorable direction for photonic integrated circuit (PIC) platforms which shrink the size of
the optics.
PIC conference: We not only attended the PIC International conference in Brussels in March this year,
but were invited to speak on the performance of our polymer platform for high speed, low power
modulators. The conference was very well attended, actually a full-house with attendees from many
international countries. The audience was the type of audience we like to see: executives in our target
customer industries such as fiber communications. Attendees came from all levels of the value chain that
ranged from materials, epitaxy, devices, modules, linecards, systems to social media. We achieved a
number of productive meetings at the conference.
Company Award: While at the PIC conference, we attended the awards ceremony for industry based PIC
awards. We were please and delighted to hear that Lightwave Logic was both nominated and voted best
PIC technology platform for 2019. I received the award and personally thanked the community for voting
for Lightwave’s team, who have worked tirelessly over the past few years to develop our polymer
technology platform, and for the belief that like ourselves, polymers will enable ultimately a higher speed
and lower power internet.
Thank you for your continuing support. I look forward to meeting a number of you at the upcoming
Annual Shareholder Meeting on May 16 in Englewood, CO.

Michael Lebby
CEO

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