Lightwave Logic Inc (LWLG)

[tedpeele]

RED FLAGS UPDATE PREVIEW:

The Red Flags post that became a sticky contains numerous facts to support unfavorable conclusions in 3 areas:

1. Credibility: Questionable Company Practices
2. Viability: Missing Evidence for Commercial Viability
3. Validation: Lack of Validation by the Marketplace

That lengthy review is found here: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=172611173
 
I don't have the desire or motivation to do this justice by taking a lot of time, but off the top of my head here are the newest red flags since Aug of last year, broken down by the same categories:


Credibility: Questionable Company Practices

1. ECOC, fall of 2023. The messaging from that meeting was that previously the industry was engaged in debating how the future should unfold but not taking any action, as though it was an intellectual exercise only, and that this was the first time the industry was saying - we need to take action and put together standards for the future. This was a strong refutation of the idea that Tier1s had been coordinating since 2020 with Lightwave and Foundries to get their solution as soon as possible. That idea came in part from statements by the company which were exaggerated and repeated ad nauseum by Proto . Rather, the company stressed that at ECOC many companies 'expressed interest in learning' more about what Lightwave does. After 15 years the company is only in the first inning.

2. ECOC, fall of 2023 - reliability data set. Expectations were for a completed data reliability set that would blow the industry away, as several thousand hours of packaged modulator testing would have been completed by then. The company was happy to not correct any misunderstandings along those lines. Deals were expected to occur immediately (ie part of the TIer1-Lightwave-Foundry mindset). This never happened.

3. Dec 4, 2023 letter mentioned imminent deals - possibly by year end even. Nearly 8 months later and no deal. Since the letter came out as the share price was dropping strongly - it appears the company strongly and knowingly misled shareholders in order to manipulate the share price.

4.Early March, 2024 4th quarter commentary explained the lack of deals as being related to the demand for more reliability and scalability data. A few months later the message changed to the company deciding to focus on the Tier1s. These aren't mutually exclusive, but the messaging regarding reliability and scalability became buried and lost under the new Tier1 message. Additionally one wonders how they could not have known reliability and scalability concerns were a deal-breaker issue when they released the Dec 4 letter?

5. Early March, 2024 company reveals the first 200mm wafer, which for the for the first time was evidence of the ability - in theory - to produce in high volume in a foundry. The company had led investors to believe over a year prior that 200mm was not a problem at that time, and that scalability was not a problem at that time. PDKs will not be considered 'commercial ready' unless scalability is possible. All of this was supposed to have been completed by ASM 2023, and the company made it sound like all was on-track and on-board ("focused 100% on commercialization") with completed PDKs and high volume ready to go at that time. This we now know was highly misleading.

6. Company announces progress with 200x4 but is intentionally very vague about all kinds of details. They claim they showed a demo at OFC having 'world class results', that has opened many doors and caused engineer teams from various companies to visit Lightwave;s building, etc... The true status remains highly suspect.

7. After OFC the company says they shifted focus on Tier1s, away (presumably) from smaller, interested companies (the ones they supposedly were working with when he wrote the Dec 4 letter). This implied drop of potential deals simply to go after larger companies is hard to believe.


2. Viability: Missing Evidence for Commercial Viability

1. The company still has not validated that any potential customers are testing anything from Lightwave, only that their modulators are 'suitable' for trials. (I think - it would NOT be surprising though if the engineers are running some kinds of tests), but I don't recall any granularity along these lines - just implications from those who took the lab tour.

2. The company has not validated that any potential transceiver companies are currently even working on a demo with them. They have said in the past that they are 'working with' transceiver companies, but that doesn't mean they are working on creating a demo now, or even have in the past. When K directly asked Dr Lebby to verify that they were working on a demo - he did not do so.

3. The company said at ASM 2024 that in another 6-9 months the transceiver companies would have more of the kinds of data they are looking for, but the company doesn't tell investors what they are looking for. The company also doesn't provide metrics that prove scalability other than what seemed like an off-the-cuff statement at the end of their OFC presentation about being able to pole 1000 modulators quickly. No summary of vital technical stats - like yield rates, insertion loss,etc....The continued ongoing and obvious obfuscation cannot be denied.

4. A photonics leader at ETH(or was it Zurich) announced that plasmonics (with Lighwave's perk) was leading the way in the race for 400 4 lane commercialization. Since this company had worked closely with Lightwave previously this begs the question: Why is he touting plasmonics which is considered to be years off - and not Lighwave's own polymer modulator technology solution, if LIghwave were as close as they lead investors to think?


3. Validation: Lack of Validation by the Marketplace

1. There are no new indications in the last year that validate the company's technology as being taken seriously by the industry, even after supposedly showing a 'world class' result at OFC. Still no signs in the stock price movement, still no known actively-managed funds taking a big stake, still no big private investments from tech first or wealthy investors 'in the know'. Still no insider purchases suggesting a big announcement or breakthrough is anywhere close - still no legal, automatic share purchase arrangements from insiders.

2. An analyst told me that in the optical world that he/she knows Lightwave's name just doesn't come up, and that his/her best source says polymers will never be accepted by the industry, even that it is a million to 1 shot. Analysts can be wrong - operating on old ideas and data, but Dr Lebby himself said that polymers have a bad rep (or rap) in the industry. Meanwhile it is reported that GFS - the most promising potential partner - has revealed the materials being used for their FOTONIX program to be BTO and something else, but not perkanimine.

3. Stil no analyst report other than words of skepticism by Mark Lutkowitz who posted on LInkedin that until a (single) high level engineer at a hyperscaler says something positive to him about Lightwave's technology he can't get on board. This is in contrast to his knowledge from MANY hyperscalers in the industry who has said positive things about the potential of TFLN.

The facts - which include many new facts continue to strongly support negative conclusions in each of the 3 areas There are even more red flags now than before. . That doesn't mean they aren't making progress. It does mean that skepticism is not only warranted but is the most logical position to take.

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