Lightwave Logic Inc (LWLG)

[tedpeele]

Here are 50 reasons to run the other way when your friend tells you LWLG is the greatest stock ever. Or at least to be cautious. I hope this is helpful.

For anyone who believes we all have the right to express our views on the company - and yes to even expect real accountability from the company, or if you are just sick and tired of being bombarded by constant cheerleading and misleading fantasy, I invite you to repost this regularly to help support the call for accountability and educate unsuspecting newcomers.


Yes, this company is working hard to do something very very difficult. But, have they been honest? Are they being honest now? Judge for yourself:


*THE BIG PICTURE REALITY: While dilution hasn't been very bad at all over the years, the fact is that money to run the company is raised by selling shares to Lincoln Park - who then sells it to the market. That only works if shareholders have very high expectations- year after year after year. The company has great incentive to continue to paint a picture that is a bright as possible, even if it is unrealistic. This has always been the case, and continues to be the case as the following items make abundantly clear to those who are willing to see it. "Open eyes", indeed.

*The Dec 4 '23 annual shareholder letter announces that deals are on the near term horizon - maybe even by year end. Shareholders get very excited and are unanimous in that this must happen as it is so definitively stated. A respected shareholder here writes "You can't say what he said and not deliver within 2 months". Nothing happened: Dec, Jan, Feb, Mar and now 10 days of April have come and gone.

*After much angst the explanation came on Mar 2, 2024: Reliability and Scalability aren't acceptable enough to customers. These are the 2 main issues skeptics have repeatedly said appear unresolved and impediments to commercialization - maybe EVER. Dr Lebby said:

In our conversations with potential customers, the biggest points are not performance related. ..They are asking to see more reliability data and the ability to produce at scale, as well as to ensure that we can sustain a long-term partnership. ..To that end, we continue to provide more reliability data.. We are actively working with foundries that supply 200mm silicon wafers so that we can showcase the ability to scale in volume.

*Problem #1: It makes no sense that reliability and scalability didn't come up in the very first discussions as blockages to deals with transceiver companies. What does make sense is the company said what they had to on Dec 4 to halt or reverse the freefall the stock was in at the time, even if it temporarily hurt their credibility. It worked, and some shareholders have already "fallen back in love" with Dr Lebby using whatever rationalizations they prefer.

*Problem #2: Despite the enormity of what is at stake the Company continues to avoid telling investors where reliability and scalability really stand./b] What exactly are the issues? The company never says all problems are completely solved, but often uses forward - looking statements to lead the naive to believe that is the case: "we CAN showcase" instead of "we HAVE showcased", for example. What will it take for reliability and scalability to no longer be an impediment to a commercial deal?

*Investor expectations are ALWAYS way too high: Transceiver demo expected at OFC 2023. Then OFC 2024. Reliability 'proven' at OFC 2023 because Dr Lebby said "we got this"!. Then "all doubts will be removed" at ECOC Oct, 2023. Then a "complete data set" by year end 2023. Scalability "not an issue" back in fall of 2022. Read the first data point again. BOTH are still up in the air.

*Company still has no transceiver demo despite leading investors to believe the tech is ready and they have been working with a Tier1 transceiver company. This is all that matters. No transceiver, no ubiquity. A respected poster recently said the transceiver company is highly supportive according to the COO, despite any evidence to support this.

*The demo they have and showed at OFC isn't what the market wants. It isn't a transceiver and apparently the tech doesn't yet have the endorsement of a transceiver company. The stock shows no strength whatsoever after OFC.

*Company admits in Mar 1 Benzinga interview they need to 're-set' expectations for shareholders, when expectations the company set for deals in Dec-Jan-Feb haven't gone through.

*A month later, in another interview, the Company resets expectations saying over the next 6 months they will by showing their demo to interested parties. Why say 6 months if deals can happen at any time? IMO it is so shareholders give them some more breathing room going into the ASM in May. Nobody wants to face an angry crowed.

*Showing a demo that isn't a transceiver demo for the next 6 months isn't what any end user wants. Therefore they are likely demoing their 'open eyes' to convince some other transceiver company to work with them. The fact that they still don't have even ONE transceiver company creating an actual transceiver demo is concerning. If they can't get the one they presumably have been working with for at least a year and a half to commit to making a demo (which presumably is EASY!), it makes one wonder how successful they will be in getting any others to commit.

*Company announces they will show shareholders the demo a ASM in May. Dangle the carrot - wow them to keep them hoping.

*The company announces at PR impressive results obtained. However, their claims to 200gpbs 4 lane are clouded in more vague language /b] 'fits very well', test results 'based on designs..that leverage' modulators. Maybe it's legit but could easily have be direct. It is very easy for laymen shareholders to word things in a way that they like, but the company seems to always fall short of that..The PR language reminds one of prior language re reliability and scalability. What will be the next shoe to drop?

*Spanning years, investors find out about major hurdles after the fact - "kitchen recipe" for why PDK's didn't happen, "ADP deposition", "reliability and stability" are STILL issues/challenges. Company never wants to say directly what is going on.

*One month after company says they are "implementing" with foundries for 4 channel, they changed their wording that to "planning to implement". It's a no brainer as to why: it was a correction for the annual shareholder letter, which is more scrutinized than the prior PR would be.

*At ECOC 2023 the curtain was pulled back on the true industry engagement level when the company reported 'interest' by a wide range of companies in 'learning more', and that ECOC represented a change within the industry from 'debates' about various technologies to an attitude of 'we need to start doing something'. That totally BLEW A HOLE in the oft-repeated mantra that the "BIG BOYS TIER1'S" - the Amazons, Googles, Nvidias, etc.. were clamoring to get Lightwave to be used by major foundries.

*There are many many innovative competitors addressing roadblocks to bandwidth and power issues faced by data centers. Many are well known and publicize their partnerships openly.

*Hypercenters are biased toward keeping and improving the status quo. The claim that they are 'forced' to consider alternatives is -to date - playing out very slowly, and nobody is endorsing Lightwave's polymers to date. The leading material for photonic integration is thin film niobate. Many of the largest companies have weighed in on their opinions about TFNL, yet we have seen NO opinions on Lightwave's polymers from these companies.

*b] stock went bananas in 2021 after Dr Lebby said they will be going into foundries and mentioned PDKs..many expected PDKs to be done in 6 months or so and major deals to follow. Dr Lebby never explained that a PDK can take 3 years or more.

*The expense increase since working with foundries has been fairly small. Some have speculated that the Tier1s have funded the work. Besides sounding ridiculous at this point, it arguably would be a material event or required to be mentioned in the 10k.

*After OFC Investors are back to connecting breadcrumbs (ie Synopsis posted a Dr Lebby article!) to keep hope going. Never mind that they regularly post photonics related articles and nobody even commented on Dr Lebbys' article (of yet another supposedly major breakthrough).

*Company makes off the cuff remark at OFC about high volume poling on 200mm wafers 'all at once'. Provides no context, and no info about consistency of yields - a 'critical' issue per respected (by some) poster. More obfuscation about where it really stands.

*Company has never directly announced a single major company partner. The degree of work with or interest from companies that appear to be linked to Lightwave by some indirect association is unknown.

*NO analyst coverage. No encouragment to allow serous analyst probing at ASMs. For an analyst, this speaks volumes.

*No known large institutional investors of actively managed funds.

*The main salesperson is part time and has 2 other positions.

*The largest fund ownership - []bVanguard and Blackrock - have less than something like .005% in Lightwave, and are passive index funds, which mean they have no interest in making money off of the stock return - ie no interest in what the company does - their only objective is the match the index composition.

*COO and President (Marcelli) has made many predictions over the years that have been way off. Many longs don't believe his word is trustworthy.

*COO and Presidend claims Vanguard and Blackrock regularly check up on what the company is doing, which makes no sense at all. Perhaps they send a form or letter pushing their social agenda but it is not related to the company's business model.

*COO and President claims (second hand) Tier1 company has high hopes for Lightwave's modulators, yet they have never been named or confirmed, and again - bottom line - they have yet to announce a partnership or demo with a transceiver company.

*Investors expected PDKs by end of 2021, then end of 2022. 10k still says they are in development

*No known large investments from tech companies or individual investors

*Very weak stock price since last summer after expectations were not met on the commercial deal announced or for other deals to be announced in direct contrast to all of the indexes over the last year - Russell Growth, Russell 2000, AI indexes, Semi-conductor indexes, Nasdaq

*Stock, even after the weakness still trades with one of the highest premiums of all other stocks that are pre-revenue (for all practical purposes), with a $500 million market cap.

*Stock has one of the highest short percentages of all stocks, even at $4 a share. They are in the top 3% last time checked.

*No insider investment of personal funds with one bizarre exception: After taking a $2.6m cash bonus 2 year ago, the CEO bought 1,000 shares of stock. He later said he thought it "was the right thing to do". The COO and President also got a $2.6m cash bonus, which it is rumored he used to buy a beach house in Florida.

*self-DD found analyst who said his/her "best contact in the world" said polymers will never happen and that within the optical community Lightwave's name almost never comes up - despite Dr Lebby's prominent standing at some of the conferences.

*Company touts "world record achievements" that occur on plasmonic devices - and NOT on devices the company expects to become 'ubiquitous' - so it's apples and oranges - even the respected poster says plasmonics has quite a ways to go.

*In their annual shareholder letter in Dec '22, the Company misleadingly announced they had expanded into a much larger space, and hired people to do the work in that space. They didn't announce that a tenant was still in the space and their lease wasn't up until August. That was only later revealed in the 10k. They also announced they were "on-track" to meet their stated goals for the year. Very doubtful that they really thought that, and in that same later they stretched out some of those timeliness to be for "2023" instead of the previously expectation for 1H23.

*Mid-way In the year 2022 in which investors expected their first deal announcement all of the directors sold option shares, several banking millions since the price had gone up so much in anticipation of "any day" major deal announcements. They apparently knew what wasn't being shared with investors about where things really stood.

*Investors were convinced 2 years ago that the ONLY reason the COO and Dr Lebby would each take a $2.6m bonus was because they would be announcing a major deal at the 2022 ASM since the company was so small and nothing definitive had yet been accomplished despite going to Nasdaq on the hopes.

*Investors have almost no idea what the status is of any of their 3 products: materials for plasmonics and other devices, Polymer Plus, Polymer Slot. Company often doesn't clarify which one they are talking about.

*Company is very evasive about the foundry work. They previously said they would name a Foundry partner by ASM 2023 (one of the goals). Didn't happen. In 2022 ASM a slide showed they were working with 5 foundries and had plans to add 2 more, and broke down by type and country. By end of Dec 22 a slide showed no such breakdown - just N. America and Europe. By ASM 2023 when asked CEO said he wouldn't say how many, but that some are more prioritized than others and relationships had tightened. Some of us can figure that out.

*Company, with great pressure to avoid a stock collapse due to expectations for a technology license transfer agreement at the ASM last May announces a surprise and very questionable 'first commercial agreement' that very same morning! Very few details given and nearly a year later the revenues are minimal.

*Multiple signs point to the commercial agreement being with Polariton - which would be no more impressive than a typical university research agreement. Perhaps the company knew that would not impress...so even to this date they have not revealed the partner. HOWEVER, Polaritan announced about the same time last may commercial products that included Lightwave's materials. 2+2...

*Company REFUSED to review annual goals at last ASM. Used the 'commercial agreement' as the excuse.

*Status of foundry work was covered up at last ASM -- now we know why. A full 9 months later the company announced receipt of 200mm wafer from a foundry for the first time. Shareholders had thought that was achieved over a year prior.

*CEO enjoys perks of travel, fine hotels, speaking engagements. He's a good speaker with an authoritative British accept. Jose Pozo seems to love him. He also enjoys writing articles to drum up interest. But, he doesn't (reportedly) live in the same city or state where the employees work. Perhaps he isn't as in touch as shareholders would like to believe: He was directly quoted a year ago as praising the approval of a patent that later turned out to just be a patent application. hmmm...

*Historically the company - with the same COO and President throughout - reported expectations to be a commercial entity during the year, for 10 years in a row. This changed when Dr Lebby came on board, but the practice of raising great hopes that are missed and revised later appears to have remained consistent.[ The COO and President is a common denominator.

*No transceiver demo - no transceiver product - no transceiver sales. No clear prospects. No clarity on hurdles. No stock strength at all. No fun.


NOTE: These are FACTS. They are NOT silly personal comments about people or serious ones like making light of my father's ill condition. This is all about the company not doing what they say they will do or what investors are led to think they have done already.

I think too many people have gotten a distorted view here - and continue to get a very distorted view. This is to help those trying to decide with their decision.

Good luck.