Fortunately for investors you don’t always have to have a complete understanding of what it is that a company does to recognize that an opportunity exists for potential gains. It would seem like a safe bet to say most investors who have jumped aboard Lightwave Logic, Inc. (OTCBB: LWLG) would struggle to define what a Next Generation Non Linear Optical Polymer Materials Platform is or how its integration into applications in high speed fiber-optic tele- and data communications creates value yet trading volume in the company is gaining momentum as shares reached a 52-week high of 1.92 on Tuesday.
Essentially what LWLG is doing is producing prototype electro-optic demonstration devices and is moving toward commercialization of its high-activity, high-stability organic polymers for applications in electro-optical device markets. These electro-optical devices convert data from electric signals into optical signals for use in high-speed fiber-optic telecommunications systems and optical computers, a significant advancement that the company believes will “broadly replace more expensive, lower-performance materials that are currently used in, telecommunication, data communications, computing, photovoltaic cells, wireless and satellite communication networks.”
Again, you don’t necessarily have a firm grasp on how this all works but rather understand the implications this may have on the markets that LWLG is targeting. LWLG tried to convey this impact in a December 23, 2011 press release in which they referenced an article published by Bloomberg News Service concerning “the enormous costs incurred to cool the world’s data centers.” LWLG then pointed to their recent advancements in organic nonlinear optical material technology that have “the potential to dramatically reduce power consumption in telecom, datacom and computing operations.”
Jim Marcelli, CEO of LWLG, provided investors with a glimpse into what the company’s advancements could mean saying, “As companies like Facebook and Google continuously add servers to keep up with the almost limitless supply of data, they are generating enormous power requirements related to both running the equipment and keeping the environment cool. This creates a substantial business opportunity for us as we begin fabricating devices that can offer better performance, operating at lower voltage and at reduced cost.”
Making these advancements all the more attractive to investors is the company’s belief that they will likely move out of the research and development phase in 2012 and move one step closer to becoming a product vendor, something that would finally generate revenue for the company which, up to this point, has incurred significant net losses and relied on the sale of securities to meet their capital requirements.
Ultimately the success of LWLG may come down to their ability to “develop and maintain collaborative relationships with strategic partners,” something they stated in their most recent quarterly filing. One way of doing this is by aligning themselves with well-known names in the field of organic nonlinear optical materials and the company’s recent announcement that Fred J. Leonberger will serve as a senior advisor to the LWLG is one such move. Leonberger previously served as senior vice president and chief technology officer of JDS Uniphase Corporation where he was responsible for strategic technology and was closely involved with mergers and acquisitions and intellectual property activities.
Included in Leonberger’s bio; “he is currently the principal of EOvation Advisors LLC, a technology and business advisory firm that he founded in 2003. He serves on the Board of Directors of several venture-funded photonics companies and has been a senior advisor at the MIT Center for Integrated Photonic Systems. He is a member of the National Academy of Engineering, a fellow of OSA and IEEE and has been awarded the IEEE Quantum Electronics Award, Photonics Award and Millennium Medal. He has also served as Chairman of a number of photonics conferences.”
Formally adding such a name as Leonberger should certainly provide some credibility to LWLG when they look to “develop and maintain collaborative relationships with strategic partners.”
While Leonberger should help on the partnership front LWLG will also have to prove that they can stay ahead of the technology curve and prove they can respond to advancements in a timely fashion while controlling research and development costs while producing commercial quantities of products at commercially acceptable prices.
What should be noted by investors is that while there is incredible potential for what LWLG plans to offer the fact is the company will have to invest a significant portion of their revenues right back into the research and development phase of their business in order to survive. With shares moving around the 1.70 – 1.80 range they might seem a bit pricey, especially knowing that profits aren’t exactly right around the corner.