Lightwave Logic Inc (LWLG)

[Lewrock]

https://viavid.webcasts.com/viewer/event.jsp?ei=1544482&tp_key=3c8d96d340

To All:

I am sending this email to dozens of friends who have shown interest in stock market opportunities and in specific, Lightwave Logic. (symbol LWLG). The link above is to the Annual Shareholder Meeting presentation. Watch it more than once!! BTW, at the 1:22:50 mark, I am the one who asked the question about what portion of the transceiver market size is represented by the modulators inside.

One year ago over the Memorial Weekend, I sent out my first alert e-mail about Lightwave Logic. The stock price was $1.76. This year, the stock price is $7.98. The 52-week high reached $20.30 briefly as the index funds added the stock to their lists after Lightwave Logic uplisted to the NASDAQ. Last Thursday, I attended the Annual Shareholder Meeting in Denver where I had the opportunity to speak individually with the senior management team as well as a few members of the Board of Directors. In a nutshell, these guys are among the smartest technologists on the planet. They have all held Chief Technology Officer or similar positions at well known companies such as Corning, JDSU, Dupont, Motorola, Intel, AT&T, and more.

While Lightwave Logic is a pre-revenue company, it is far from a start-up! As you will quickly ascertain by watching the shareholder presentation, Lightwave Logic’s technology is currently being adopted by large foundries for mass production of polymer modulators. Once the PDKs are completed, the foundries can begin accepting orders from their customers. The timelines for milestone events range from the 2nd half of 2022 through mid 2023. The commercial ramp is expected to reach $10 billion in annual revenues by 2026 with extremely high margins. This puts the potential share price appreciation in the 30x to 50x category. So take this seriously and spend the time to come to your own investment decision.

What is a modulator? Computers work using binary code, which is a series of electronic signals using ones and zeros. This electronic code must be converted to photonic (light) signals to travel through fiber optic cables to their destination, where they are then converted from light signals back into electronic signals to operate your TV, computers, etc. When watching the shareholder presentation, you will see the phrase “switch light”. That means turning the laser light on and off to represent the binary code. The modulator is the device that converts the electronic signals into light signals. As you will see, Lightwave Logic’s polymer technology does this 3x faster than existing technology and with 66% less power consumption.

At a private cocktail party after the shareholder meeting, I was speaking with the Chairman, Rear Admiral Tom Zelibor, USN and Jim Marcelli, President & COO. I shared some power consumption information that I had found on the internet with them. The average Data Center consumes as much power as 200,000 homes in a year. Because the polymer slot modulators consume .5 volts versus the current electro-optic semi-conductor modulators consumption of 3 to 5 volts, the data centers would reduce their power consumption to the equivalent of only 80,000 homes. They both liked the analogy!

For the sake of brevity, I thought the rest of this email should provide bullet points that I garnered from my discussions with management.
• Management is keenly aware of the value their technology brings to the customers and they intend to price it accordingly. Gross margins are likely to be in the 80%+ range and royalties will be based on the selling prices from the foundry.

• The company has a burn rate of about $1.1 million per month. They intend to hire additional engineers as noted in the presentation, but the total eventual headcount will top out at about 50 people. Other than the admin staff of two, they all have PHDs. The company has a $100 million shelf offering in place. This shelf will be used if necessary to expedite production in their partner foundries of photonic devices sold directly by Lightwave Logic. In this case, LW has to pay the foundry to produce the product in the traditional “cost of goods sold” pathway. Most of the company’s future revenues will come from royalties from licensing agreements and technology transfer agreements. It is possible that the up front payments from these agreements may be enough to fund operations without using the shelf, but the financing is there if needed.

• They are working with foundries where the “trust” factor is very high. In other words, Chinese foundries such as HG Genuine, located in Wuhan, will be last on the list to gain access to the technology. One of the members of the Advisory Board stressed to another shareholder that the EO polymer/chromophore “Perkinamine” is not possible to reverse engineer.

• You will see from the presentation that LW is currently working with five foundries and two are slated for next year. What you won’t hear in the presentation is the fact that the engineers at LW have daily conference calls with each foundry to make sure every step taken is error free. This level of engagement is powerful evidence that mass commercialization is the mutual goal. In fact, Dr. Lebby confirmed there is a sense of urgency from the foundries as each one of them is looking for the first mover advantage. Exclusive deals are not part of Dr. Lebby’s vocabulary. He told me, “I don’t know that word.”

• While the company will not reveal the names of the foundries, all of the major stockholders with whom I met at the meeting have been collecting clues for quite some time. Global Foundries has a plant in Malta, NY and also Dresden, Germany and that aligns with Foundry D and Foundry E on slide #35. Global Foundries went public on the NYSE last year with the symbol GFS. Here is a link to a zoom call with ECOC and an interview with Anthony Yu from GFS. There is a lot of familiar language.

https://semiwiki.com/podcast/podcast-ep80-the-future-of-silicon-photonics-with-dr-anthony-j-yu/

The latter podcast confirms that PHOTONICS is the hottest sector in the tech world today and going forward for decades. Lightwave Logic is making all of this possible.