Replies to post #182184 on Lightwave Logic Inc (LWLG)

[redspinelpinktopaz]

dude: if he is in the process of "selling this thing", he wouldn't be doing deals, because the buyer might want to keep it all for himself, or decide whom he wants to do deals with.

[Pickle Power]

Dude,
I will preface this by saying I have never met Lebby or talked with him in person. I believe your questions on if/when LWLG should be sold, establish industry partnership(s), or go-it alone are the same questions the BOD and Lebby grapple with. I will attest based on my own experience that the vendor/supplier oversight of LWLG by its customers is/will be rigorous given its importance in the supply chain and how it is intertwined within the ecosystem. Crawling up every orifice of your organization's body so customers have complete assurances as to your management capabilities, product, financial stability, operating performance, corporate strategies, meet their continuity of business policy, is a standard course. That being said, LWLG is better prepared as a publicly-traded company to meet these demands given it allows a multitude of interested companies to access their SEC filings. LWLG files one document for all to see without have to dedicate resources to delivering a multitude of one-off requests with varying requirements. I think this may be one of the reasons LWLG beefed up the 2023 10K and will be more transparent with news events moving forward. Being publicly-traded on NASDAQ with audited financials and management infrastructure to meet SEC requirements is a big deal as is the quality of senior management, CEO and BOD. Credibility is priceless. I also believe the recent senior accountant hirings, purchasing manager, etc. were for future order ramp-up, but also could be to beef up the vendor management requirements these large foundries require. I have no idea what financial parameters these foundries have, but they know the burn rate and have some level of financial projections under NDA and that LWLG is a CAPEX-lite business with a very low break-even rate. This is elementary stuff for CFOs of GF, Nvidia, Broadcom, Amazon, Intel, etc. I also think OLED BOD influence helps set a framework here with some foundry discussions likely to include shared R&D expense, IP ownership, etc.

In the end it is all about control and how badly the industry giants want it. They can utilize contracts and vendor management to stay inside LWLG and wield control based on agreed upon contract terms, or next level, they can inject capital by purchasing a minority stake to financially solidify their investment, provide option to buy fully at some point, and gain board seats. Next level up, they could buy the entire company and own the goose that laid the golden egg. Nvidia is not waiting around per link below. If LWLG is indeed going to be woven into the fabric of this data ecosystem, then very exciting times ahead for all of us shareholders.

Nvidia pursues $30 billion custom chip opportunity with new unit
https://www.reuters.com/technology/nvidia-chases-30-billion-custom-chip-market-with-new-unit-sources-2024-02-09/

[KCCO7913]

I don't agree with this.

LWLG does not need to sell, nor are they trying to sell. They have ~$43 million left in available capital today beyond the cash on hand. If we assume a wafer costs $25,000 and you can get 800-1,000 PICs per wafer (that's not extremely high yields either)....LWLG would need to spend $12-15 million on wafers for 450,000 PICs (pulled that number out of the air...but that's a bit less than the projected quantity in 2026). This is just the base case SOM and Lebby mentioned they believe they can obtain much more than that 'if the foundries do a good job'. And he basically confirmed this past week that they're doing a good job.

At some point, I think they will do a large one-time raise with the remaining ROTH facility. Probably mid-end 2025.

Regarding the 200mm wafer topic...a bit confusing because it is common knowledge that the foundries LWLG has been using work with 200mm wafers and LWLG has been using them for some time. I am to believe that his comments mean they're at a point where their processes are repeatable (scalable) on these wafers. Remember, the December 2022 shareholder letter said a focus for 2023 was BEOL engineering and high volume poling. My guess is these new '200mm wafer' comments are saying that they achieved their goals there. Anyway...this has set up for some great questions to be asked at the May shareholder meeting.

FYI...in the weekend hangout on r/LWLG...I had a comment on my thoughts regarding the continued reliability testing. Copied below...

I finally listened to the interview today. I'm really not sure why anyone is upset. Nowhere did I hear that there were any delays. Lebby mentioned prototypes and demonstrations are going to happen. He also basically acknowledged the poor communication and said that this year they are going to be more public.

Regarding the reliability data still being needed/reviewed...my guess is that the partners want to see the data on not just one batch of devices that we saw data on last Fall. Recall those devices were at 4,300 hours in October and surely by now they're likely approaching 7,000 hours. These are the packaged modulators with the new ALD technology that was acquired in 2022. Remember that the 2023 timelines/goals provided end of 2022 ALL revolved around reliability/red flag/ALD with the new devices. Clearly this has been a success.

So, back to my guess. If I were about to rely on LWLG/its foundry for these modulators...I'd probably want LWLG/foundry to go through multiple runs to make sure everyone has their processes down and that all the devices over multiple runs have the same reliability. For example, poor polymer deposition/poling processes can create unreliable devices. So...the end-users want to know that LWLG/foundry can do it repeatedly.

If we're to assume LWLG receives wafers every 2 months (my guess based on typical turnaround combined with working with multiple foundries)…then there should be a second/third batch of devices approaching 2,000 and 5,000 hours.

Just speculation, but seems reasonable.

When is enough, enough? That's the big remaining question.

Second post...

Also, I was told by someone who spoke to the company very recently that their partners are requiring LWLG to have multiple sources of material production. The lab expansion is being used for material production and I'd bet there's a third party contract manufacturer who is also going to be making material. The point is that if one goes down for whatever reason, the end-user has security of supply.

Clearly there's a great deal happening behind the scenes. I don't think multiple parties would be doing a tango like this unless it's going to be big.

Taken from the letter today - "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."

[Ned4Flanders]

The moment the doc announces a first deal with a Tier 1, the FIs will be lining up to throw money at LWLG. Money is never an issue if you’re at the right side of history.