Lightwave Logic, Inc. (LWLG) Earnings Call Transcript & Summary

Welcome everyone, if there is one thing that we love to do here at Benzinga is to bring on executives from publicly traded companies so that we can get your questions answered directly from them. We've got a great interview coming up here. It's going to be with Dr. Michael Lebby, who is the Chairman and CEO of Lightwave Logic, ticker on the NASDAQ is LWLG, All Access starts right now. How's it going, doc? Thank you so much for joining us.

It's going very well. Thank you.

It's always great to talk to you. So welcome back to All Access. There's so much to talk about. I know you guys just recently announced some awesome news. But before we kind of look under the hood, if you could just explain it to me and the audience, like we're 5, what is it that your company does?

So the company's name is Lightwave Logic, and we make electro-optical polymers, electro-optic polymers. And these are materials that actually switch lights. So if you now start thinking about the Internet and the Internet is plumbed with fiber optic cables, these are glass cables, lasers send light down through those cables and we have the devices that go in front of the lasers that actually switch the light, and when you switch light, you generate the information. So if you can switch light faster, then there's a lot more information can be conveyed. And so we do this with a polymer material that has fantastic performance and is very low power, it's really small, and it's really exciting the industry.

Yes. I mean you have already got folks that are asking questions on the chat. So we'll get to that here in a second. But let's talk about the recent news because I want to get right to it is why, I believe you signed a 4-year material supply and licensing agreement. Tell us a little bit more about that and how it can impact your company in a positive direction?

Yes. So we have a big portfolio of patents, and we've been doing this over the last few years. And it's really good to see that the patents are worth something. And so when you start licensing your technology, then clearly, your patents are worth something. And what we've now done for the first time in the industry, not only ourselves, but even previous companies who tried to do electro-optic polymers, is we've licensed the technology. It's a 4-year agreement, it's a supply agreement for our material. And to me, this is something that took quite a bit of time to negotiate and discuss, but we wanted to have a really strong licensing template, if you like, so that we can follow this up with other licensees of our technology.

Yes. I mean I know you've already kind of had those conversations, of course, and you continue to have them as well. Let's go ahead and -- we got a question from the chat here that I'll go ahead and just kind of pull up. And I'll kind of rephrase this question because I know your stock is up about 4% right before I checked on this interview. The question is about your message to folks that have short the stock. I kind of wanted to ask you and rephrase that in the sense of what are people missing of this story and of this company that they are not a believer in the management, the story, the industry, the market, what are they getting wrong?

I am not sure. I mean, certainly, electro-optic polymers have been tried a number of times before, 10, 20 years ago. What we have done different and I believe we are unique in this is that we're really focused on the reliability, the stability of the materials. We're really focused on the positioning of the company in the marketplace. So for example, this license agreement, what does it really mean? It really means it's the first time we've had market acceptance of our technology in the marketplace. Industry is looking for solutions today, and industry wants to get comfortable with polymers. Now you ask me, well, can industry become comfortable with polymers? Well, we're all looking at TV screens and monitors that have OLEDs. That's polymers, that's OLED displays. Now those are different polymers, but they had to go through the same sort of qualification, lifetime and testing process, which is what we're doing right now. So to answer that question, how do you make people more comfortable? Through prototypes, sample prototypes, through reliability, show the data. We've been going to technical conferences. We've been showing the data recently. And I think what's actually happening is that the interest is growing. So we're seeing a lot more momentum here, which is incredibly exciting.

You mentioned the interest growing. I know there's a question in the chat as well, but I'm going to ask one that we prepped here. You recently completed laboratory production facilities, I believe in Englewood, Colorado. How does this help for you to kind of meet the demands on the production side of things?

So that really helps with the demand because it doubles our space. I think the total now is close to 24,000 square feet. But it also doubles our chemistry scale-up space, so our chemistry production facilities, where we actually make our own polymers ourselves. We call them chromophores technically. But we source all the raw materials in the U.S. So we don't wait for supply chains to source our material and we generate that in Englewood, Colorado. Now once we have the materials, if we want to put them into a device we use and partner with foundries and different partners like that. But ourselves for our plant in Englewood, Colorado, we've actually increased the space so that we can scale up on.

Now I'm going to go ahead and bring this one back here. I've got Harry asking this question, what's the likelihood that we'll get a licensing agreement and/or transfer of tech this year. Now I know we've only got less than 1 month. So I'll go ahead and leave it to you on when you expect something like that to happen?

So this is in progress, and we said this in the shareholder letter today. We also indicated that it's a long and deliberate process. We want to make sure that the license agreements we put in place have good structure and framework. We don't just want to do a deal just because we're meeting the end of the year time line. That doesn't make any sense. What you really want to do is to have good commercial framework for licensing, multiyear agreements. We want to make sure that people don't just try the technology and then change their mind. They're committed. They want to use the technology over multi years. And so I can't predict when the next one is coming along. But certainly, what I can say today is that we're fully engaged in working that process.

And then this is going to be right where I was actually going to go with my own question, so I'll go ahead and bring the chat into this one. You've kind of mentioned the things that you're working on, the good news and possibly what's going to come when you -- as you're working on it. I want to kind of focus on, are there any challenges that you're currently facing or any challenges you foresee coming up? And how is your company resourced enough to go ahead and deal with those challenges and overcome them?

So I'll explain one. And I've given this story, and I've given this message to technical conferences, we've given a lot of technical talks at major international conferences. And the one thing that people ask is are the polymers reliable? Are they stable? Same question was asked to OLED displays 10 years ago. And so we're now showing technical data in every talk -- every technical talk. And we're improving upon that data. And at some point, we'll have a reliability data set, the case the customer is totally happy. Now every customer has slightly different requirements and different questions. But the big push right now is reliability and stability and lifetime data of our materials. And the more we show, the better it is. And that, I believe, is one of the reasons why we've seen a little momentum, a little bit of momentum in our space right now.

I appreciate the insights on that. And Chad, I do see your questions. I also have to make sure I follow regulatory stuff. But let me only kind of just briefly before I turn it over to you because we've got a few minutes here, I'd love to know the financial health of the company. I know there are certain things that you're not able to speak to, with periods of time, but I'd love to know the financial health of the company, if I can?

So as a company, we don't have any loans. We certainly have a shelf on the marketplace. So we have access to tens of millions of dollars. I think the last number -- I don't recall what was in the last financial report, so I'm not going to go into too many details there. We have a runway until mid-2025. So from that standpoint, we're very comfortable with the way we manage our cash. We're very conservative, even though we've sort of doubled the company in terms of head count in the last 18 months. So in the shareholder letter, we did indicate we increased our head count significantly this year. But this is to support, plug-in the gaps and poising ourselves for the ramp of our technology. And so we've done this slowly and carefully. And we feel from a financial standpoint, we're in a pretty strong position.

And the last one for me, it also comes from Ruben, I'm going ahead and just pull it up here. In May, you had announced the first commercial deal. However, in the financial statements it results in about a $50,000 revenue. Will we see a significant revenue increase in Q4 that you're able to speak on and get an idea of the product's price? And again, just to preface, I'm reading the $50,000 revenue from the chat, you can feel free correct us if we're wrong.

No. I think whoever wrote the question is correct on that. We certainly indicated this in our quarterly updates. And we certainly will comment on this in our fourth quarter update in the new year. We haven't detailed too much about the license agreement, and I think that is a question that has come up a lot from shareholders. But we are stepping very carefully here. This is the first market acceptance of our technology. We want to follow on with other license agreements. And we will detail the license agreement when we feel comfortable and makes good commercial benefit for both ourselves and the person we license it to. And so when we see that mutual beneficial position, we will go into more details.

And I know I keep saying last question, but I promise, last one. And it's just, the chat is active. They want to know and hear from me and the reason I'm bringing this one up as I'm looking forward here is because we had kind of talked about the production, and I believe the question was somewhere along the lines of, if the production team can go ahead and pull it up. But if you're able to meet the supply, I believe it was like 10,000 modulators as a end user, are you able to go ahead and meet those demands with everything you have at your disposal?

So there's two parts to this answer. For something like 10,000 modulators and you think about the material, the polymer material that goes in there, yes, we can source that from our plant in Englewood, Colorado, and we have the capabilities to do that. In terms of the modulators themselves, we have a little fab in Colorado, which won't really support that. And that's why we're working with foundries. We've indicated in a number of presentations, we're working with silicon-based foundries, and they certainly have the capability to address those types of numbers and a lot more.

Well, I appreciate the insights. I really do. Dr. Lebby, I will say, I can't remember the last time our viewers are this active in the questions that they keep firing away. And I hope they appreciate the answers that you provide. And I -- before I kind of let you go, I'll turn the floor over to you if there's anything else that you're hoping I'd bring up, talk about, the floor is yours with our viewers.

Oh, no, this is, as I said in the shareholder letter, I mean, in the whole of my history, I've never been this excited about a new technology platform. And in fact, one of the things I think about every day is just like when you go and talk to new prospective customers or they're showing a lot of interest or they're wanting to sample prototypes and things, the question that comes up is, is like just think about how this technology will change and enable your business? Could you afford to live without this polymer technology? And if you look at the performance it's demonstrated so far, both in our partners, with other companies as well as ourselves, it's just truly exciting. And so for a new technology platform, yes, 2024 to me is going to be a really exciting year.

I mean, it definitely sounds exciting. I was excited when I was reading the press release earlier today. But thank you so much, Dr. Lebby. I really do appreciate your time.

No problem, really enjoyed it again.

Absolutely. Thank you. Once again, I'm sure we'll talk soon. And chat, I've got to appreciate you guys. It's, I mean I said it at the beginning of the show. We do this for you all, the viewers, the retail traders so that we can go ahead and get your questions answered directly from the executives. And I want to thank Dr. Lebby for answering them straightforward, there are some things because of regulatory purposes and different things like that, can't answer them. But I hope you appreciate the fact that we did go in and ask like, well 4 or 5 of them. And as always, do your own due diligence. You work hard for your money, do your own due diligence, see if it's worth investing your hard-earned money. But on that note, thank you for watching All Access.