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Benzinga
  • 2 years ago
Dr. Michael Lebby, Chairman and CEO of Lightwave Logic, Inc., was recently a guest on Benzinga’s All-Access.

Lightwave Logic develops its proprietary engineered electro-optic (EO) polymers. These polymers transmit data at higher speeds with less power than current alternatives. The company’s high-activity and high-stability organic polymers allow it to create next-generation photonic EO devices, which convert data from electrical signals into optical signals, critical to the functioning of the internet.

The company recently announced a deal it says validates the technology in the market.

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Transcript
00:00 (upbeat music)
00:02 We've got a great interview coming up here.
00:06 It's gonna be with Dr. Michael Lebbe,
00:07 who is a chairman and CEO of Lightwave Logic.
00:11 Ticker on the NASDAQ is LWLG.
00:13 All access starts right now.
00:15 How's it going, doc?
00:16 Thank you so much for joining us.
00:17 - Oh, it's going very well, thank you.
00:20 - It's always great to talk to you.
00:21 So welcome back to all access.
00:23 There's so much to talk about.
00:24 I know you guys just recently announced some awesome news,
00:27 but before we kind of look under the hood,
00:29 if you could just explain it to me
00:30 in the audience like we're five,
00:31 what is it that your company does?
00:33 - So the company's name is Lightwave Logic,
00:36 and we make an electro optical polymers,
00:40 electro optic polymers.
00:41 And these are materials that actually switched light.
00:45 So if you now start thinking about the internet
00:48 and the internet is plumbed with fiber optic cables,
00:51 these are glass cables,
00:53 lasers send light down through those cables.
00:56 And we have the devices that go in front of the lasers
01:00 that actually switch the light.
01:02 And when you switch light, you generate the information.
01:04 So if you can switch light faster,
01:06 then it's a lot more information can be conveyed.
01:09 And so we do this with a polymer material
01:11 that has fantastic performance and is very low power.
01:15 It's really small and it's really exciting the industry.
01:18 - Yeah, I mean, you've already got folks
01:20 that are asking questions in the chat.
01:21 So we'll get to that here in a second,
01:22 but let's talk about the recent news,
01:25 'cause I wanna get right to it as well.
01:26 I believe you signed a four-year material supply
01:28 and licensing agreement.
01:30 Tell us a little bit more about that
01:31 and how it can impact your company in a positive direction.
01:34 - Yes, so we have a big portfolio of patents
01:37 and we've been doing this over the last few years.
01:40 And it's really good to see
01:41 that the patents are worth something.
01:43 And so when you start licensing your technology,
01:45 then clearly your patents are worth something.
01:48 And what we've now done for the first time in the industry,
01:53 not only in ourselves, but even previous companies
01:56 have tried to do electro-optic polymers
01:58 is we've licensed the technology.
02:00 And it's a four-year agreement.
02:01 It's a supply agreement for our material.
02:04 And to me, this is something that took quite a bit of time
02:09 to negotiate and discuss,
02:11 but we wanted to have a really strong licensing template,
02:16 if you like, so that we can follow this up
02:19 with other licensees of our technology.
02:22 - Yeah, I mean, I know you've already
02:23 kind of had those conversations, of course,
02:25 and you continue to have them as well.
02:27 Let's go ahead and kind of,
02:29 got a question from the chat here
02:30 that I'll go ahead and just kind of pull up.
02:32 And I'll kind of rephrase this question
02:34 'cause I know your stock's up about 4%
02:35 right before I checked on this interview.
02:38 The question's about your message to folks
02:39 that are short the stock.
02:40 I kind of wanted to ask you and rephrase that
02:42 in the sense of what are people missing of this story
02:45 and of this company that they are not a believer
02:48 in the management, the story, the industry, the market,
02:50 what are they getting wrong?
02:53 - I am not sure.
02:54 I mean, certainly, electro-optic polymers
02:56 have been tried a number of times before, 10, 20 years ago.
02:59 What we have done different,
03:01 and I believe we are unique in this,
03:03 is that we've really focused on the reliability,
03:06 the stability of the materials.
03:09 We've really focused on the positioning of the company
03:12 in the marketplace.
03:13 So for example, this license agreement,
03:14 what does it really mean?
03:16 It really means it's the first time
03:17 we've had market acceptance of our technology
03:20 in the marketplace.
03:22 Industry is looking for solutions today,
03:25 and industry wants to get comfortable with polymers.
03:28 Now, you ask me, well,
03:30 can industry become comfortable with polymers?
03:32 Well, we're all looking at TV screens and monitors
03:35 that have OLEDs.
03:36 That's polymers, that's OLED displays.
03:39 Now, those are different polymers,
03:41 but they had to go through the same sort of qualification,
03:44 lifetime, and testing process,
03:46 which is what we're doing right now.
03:47 So to answer that question,
03:49 how do you make people more comfortable?
03:52 Show prototypes, sample prototypes,
03:54 do reliability show the data?
03:56 We've been going to technical conferences,
03:58 we've been sharing the data recently.
04:00 And I think what's actually happening
04:02 is that the interest is growing.
04:04 So we're seeing a lot more momentum here,
04:06 which is incredibly exciting.
04:08 - You mentioned the interest growing,
04:10 and I know there's a question in the chat as well,
04:11 but I'm gonna ask one that we prepped here.
04:13 You recently completed laboratory production facilities,
04:16 I believe in Inglewood, Colorado.
04:18 How does this help for you to kind of meet the demands
04:21 on the production side of things?
04:23 - So that really helps with the demands
04:26 because it doubles our space.
04:28 I think the total now is close to 24,000 square feet,
04:32 but it also doubles our chemistry scale up space.
04:36 So our chemistry production facilities
04:38 where we actually make our own polymers ourselves.
04:42 We call them chromophores technically,
04:44 where we source all the more raw materials
04:46 from the US.
04:47 So we don't wait for supply chains to source our material.
04:51 And we generate that in Inglewood, Colorado.
04:54 Now, once we have the materials,
04:55 if we wanna put them into a device we use
04:58 and partner with foundries and different partners like that.
05:01 But ourselves for our plant in Inglewood, Colorado,
05:04 we've actually increased the space
05:07 so that we can scale up on.
05:08 - Now I'm gonna go ahead and bring this one back here.
05:12 I've got Harry asking this question.
05:14 What's the likelihood that we'll get a licensing agreement
05:16 or transfer of tech this year?
05:17 Now I know we've only got less than a month.
05:19 So I'll go ahead and leave it to you
05:21 on when you expect something like that to happen.
05:24 - So this is in progress.
05:25 And we said this in the shareholder letter today.
05:28 We also indicated that it's a long and deliberate process.
05:31 We want to make sure that the license agreements
05:34 we put in place have good structure and framework.
05:38 We don't just want to do a deal
05:40 just because we made it in the end of the year timeline.
05:42 That doesn't make any sense.
05:43 What you really want to do is to have good
05:46 commercial framework for licensing, multi-year agreements.
05:50 We want to make sure that people don't just try
05:52 the technology and then change their mind.
05:54 They're committed.
05:56 They want to use the technology over multi-years.
05:59 And so I can't predict when the next one's coming along.
06:02 But certainly what I can say today is
06:04 we're fully engaged in working that process.
06:08 - And then this is gonna be right
06:09 where I was actually gonna go with my own question.
06:11 So I'll go ahead and bring the chat into this one.
06:13 You've kind of mentioned the things that you're working on,
06:16 the good news and possibly what's gonna come
06:18 when you guys are working on it.
06:20 I want to kind of focus on,
06:21 are there any challenges that you're currently facing
06:24 or any challenges you foresee coming up?
06:26 And how has your company resourced enough
06:28 to go ahead and deal with those challenges
06:30 and overcome them?
06:31 - So I'll explain one.
06:33 And I've given this story
06:34 and I've given this message to technical conferences.
06:37 We've given a lot of technical talks
06:38 at major international conferences.
06:41 And the one thing that people ask is,
06:43 are the polymers reliable?
06:45 Are they stable?
06:46 Same question was asked to OLED displays 10 years ago.
06:50 And so we're now showing technical data in every talk,
06:54 every technical talk.
06:55 And we're improving upon that data.
06:57 And at some point we'll have a reliability dataset
07:00 that keeps the customers totally happy.
07:02 Now, every customer has slightly different requirements
07:05 and different questions,
07:06 but the big push right now is reliability and stability
07:10 and lifetime data of our materials.
07:13 And the more we show, the better it is.
07:15 And that I believe is one of the reasons
07:17 why we're seeing a little momentum,
07:19 a little bit of momentum in our space right now.
07:22 - I appreciate the insights on that.
07:24 And Chad, I do see your questions.
07:26 I also have to make sure I follow regulatory stuff,
07:28 but let me kind of just briefly
07:30 before I turn it over to you,
07:31 'cause we got a few minutes here.
07:33 I'd love to know the financial health of the company.
07:35 I know there are certain things
07:36 you may not be able to speak to with periods of time,
07:38 but I'd love to know the financial health
07:40 of the company if I can.
07:42 - So as a company, we don't have any loans.
07:44 We certainly have a shelf on the marketplace.
07:48 So we have access to tens of millions of dollars.
07:52 I think the last number,
07:53 I don't recall what was in the last financial report.
07:56 So I'm not gonna go into too many details there.
07:59 However, we have a runway until mid 2025.
08:04 So from that standpoint,
08:06 we're very comfortable with the way we manage our cash.
08:09 We're very conservative,
08:11 even though we've sort of doubled the company
08:13 in terms of headcount in the last 18 months.
08:16 So in the shareholder letter,
08:17 we did indicate we increased our headcount
08:20 significantly this year.
08:21 But this is to support, plug in the gaps
08:24 and poison ourself for the ramp of our technology.
08:29 And so we've done this slowly and carefully.
08:32 And we feel from a financial standpoint,
08:34 we're in a pretty strong position.
08:36 - And the last one for me,
08:38 it was what comes from Ruben.
08:40 You're gonna go ahead and just pull it up here.
08:41 In May, you'd announced the first commercial deal.
08:43 However, the financial statements
08:44 that resulted in about a $50,000 revenue.
08:47 Will we see a significant revenue increase in Q4
08:49 that you're able to speak on
08:51 and get an idea of the product's price?
08:52 And again, just a preface,
08:53 I'm reading the 50,000 revenue from the chat.
08:56 You can feel free to correct us if we're wrong.
08:58 - No, I think whoever wrote the question is correct on that.
09:02 We've certainly indicated this in our quarterly updates.
09:06 And we certainly will comment on this
09:10 in our fourth quarter update in the new year.
09:12 We haven't detailed too much about the license agreement.
09:17 And I think that is a question
09:18 that's come up a lot from shareholders.
09:20 But we are stepping very carefully here.
09:23 This is the first market acceptance of our technology.
09:26 We want to follow on with other license agreements
09:28 and we will detail the license agreement
09:31 when we feel comfortable
09:32 and it makes good commercial benefit
09:35 from both ourselves and the person we licensed it to.
09:39 And so when we see that mutual beneficial position,
09:44 we will go into more details.
09:45 - And I know I keep saying last question,
09:47 but I promise, last one.
09:49 And it's just the chat's active.
09:50 They wanna know and hear from you.
09:51 And the reason I'm bringing this one up
09:53 as I'm looking forward here
09:54 is because we had kind of talked about the production.
09:56 And I believe the question was somewhere along the lines
09:58 of the production team, you can go to pull it up.
10:00 But if you're able to meet the supply,
10:02 I believe it was like 10,000 modulators as an end user,
10:06 are you able to go ahead and meet those demands
10:08 with everything you have at your disposal?
10:12 - So there's two parts to this answer.
10:15 For something like 10,000 modulators,
10:17 and you think about the material,
10:19 the polymer material that goes in that,
10:21 yes, we can source that from our plant
10:23 in Englewood, Colorado.
10:25 And we have the capabilities to do that.
10:28 In terms of the modulators themselves,
10:30 we have a little fab in Colorado,
10:32 which won't really support that.
10:33 And that's why we're working with foundries.
10:35 We've indicated in a number of presentations
10:38 we're working with silicon-based foundries,
10:40 and they certainly have the capability
10:42 to address those types of numbers and a lot more.
10:45 - Well, I appreciate the insights.
10:47 I really do, Dr. Levy.
10:49 I will say, I can't remember the last time
10:51 our viewers were this active in the questions
10:53 that they keep firing away.
10:54 And I hope they appreciate the answers that you provide.
10:57 And before I kind of let you go,
10:59 I'll turn the floor over to you.
11:00 If there's anything else that you're hoping I'd bring up,
11:02 talk about, the floor is yours with our viewers.
11:04 - Oh, no, this is, as I said in the shareholder letter,
11:08 I mean, in the whole of my history,
11:10 I've never been this excited
11:11 about a new technology platform.
11:14 And in fact, one of the things I think about every day
11:16 is just like when you go and talk
11:18 to new prospective customers,
11:21 or they're showing a lot of interest,
11:22 or they're wanting sample prototypes and things,
11:26 the question that comes up is just like,
11:28 just think about how this technology will change
11:31 and enable your business.
11:33 Could you afford to live without this polymer technology?
11:36 And if you look at the performance
11:38 that's demonstrated so far,
11:39 both in our partners with other companies,
11:42 as well as ourselves, it's just truly exciting.
11:45 And so for a new technology platform,
11:48 yeah, 2024, to me, is gonna be a really exciting year.
11:53 - I mean, it definitely sounds exciting.
11:54 I was excited when I was reading
11:56 the press release earlier today,
11:58 but thank you so much, Dr. Labia.
12:00 I really do appreciate your time.
12:01 - Oh, no problem.
12:02 Really enjoyed it again.
12:03 (upbeat music)
12:06 (upbeat music)
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