Lightwave Logic (LWLG) Stock: Recent 500%+ Runup Is Without Substance (2024)

Lightwave Logic (NASDAQ:LWLG) is a development stage company that focuses on the development of photonic devices and non-linear optical polymer materials systems for fiber-optic data communications and optical computing markets in the United States. LWLG only has 19 employees, which is tiny.

The company has about 104M shares outstanding with a current market cap of about $1B. As shown on Yahoo Finance, the percentage of LWLG outstanding shares held by institutions is only 0.41%, and insiders only hold 0.53%, which makes it an almost 100% retail owned stock.

There is no Wall Street coverage of LWLG. In 2014, Stonegate Capital published a report on the company but then dropped coverage only after three months. This shows that, historically, the Street doesn’t think of it as a legitimate company to follow for investors.

Lightwave Logic’s Recent Nonsensical 500%+ Rally

LWLG has been trading below $2 for almost its entire existence as a publicly traded company until 6/1/21, less than 2 months ago. This is shown in the 6-month chart below:

Source: LWLG 6-month price chart

As shown in the chart above, LWLG primarily traded between $1-$2 since the beginning of the year, with low volume. Then, on 6/1/21, it broke above $2 and hasn’t looked back since. There has been a sudden interest in the company over the past month and a half with increased volume, and the price has risen over 500% to double digits.

We haven’t found any fundamental reason for the move. The company has not shown any progress with its technology such as announcing collaborations or commercializing the technology for revenues. We believe the stock is purely up on investor speculation on message boards, press releases and investor presentations. The company is cashing in on this recent rocketing of its share price to do an offering by an S-3 filing on 7/2/21. The company is almost out of cash so it needs to raise cash and should at this price level. However, the filing states regarding the use of the proceeds:

We will retain broad discretion over the use of the net proceeds to us from the sale of our securities under this prospectus. Unless otherwise provided in the applicable prospectus supplement, we currently expect to use the net proceeds that we receive from this offering for working capital and other general corporate purposes. We may also use a portion of the net proceeds to acquire, license or invest in complementary technologies or businesses; however, we currently have no agreements or commitments to complete any such transaction.

The above statement is very broad, which tells us that the company is cashing in on this boon in the stock price. It is startling that a company with a technology as “promising” as LWLG does not state a specific use for the raise. Will the cash be used for R&D? Perhaps building out a commercialization team?

Lightwave Logic’s Scientific Research Is Not Unique

The research that LWLG is doing isn’t novel. For example, we did a Google search on the topic, as shown below:

You can find hundreds of tiny companies and universities doing the same work that LWLG is doing. The main difference is they don’t have a $500M+ valuation to their operations. And some of them are getting a small amount of revenues and grants for their work, whereas LWLG hasn’t received anything over the past five years.

For example, one of the above companies in the search we did is Ayar Labs. Its doing the same type of studies as LWLG. As shown from their website is Ayar Labs’ President:

Source: ayarlabs.com

Ayar Labs has revenues. It sells optical interconnect starter kits for foundries to develop new technologies to improve the performance of their chips.

Ayar Labs also has some big names for investors, as shown on their website:

Source: ayarlabs.com

Compare that to LWLG who can’t boast of having any well-known institutional investors. It’s over 99% retail, as we showed before.

Why Lightwave Logic Has Risen So Much In A Short Time Period

LWLG has added about $800M in market cap over the past two months. Quite a feat, without really accomplishing anything for its product or business that I can see. The company had the following announcements that we believe were the reasons for its fast and fierce uptrend. We emailed the company asking why the stock has gone up so much, but we didn’t receive a response.

As shown earlier in the stock chart, LWLG had its first significant jump on 6/1/21, it closed at $2.18, from $1.72 the previous day for a one-day gain of 27%. The company didn't release a PR that day. However, there was a series of company updates and appearances that likely caused the buying interest. LWLG presented a business update video with its CEO, Michael Lebby on 5/27/21. On 6/2/21, LWLG published another slide presentation.

Those presentations may have sparked the rally. But they don’t show any indication that LWLG has made any progress with its technology or attracting collaboration revenue or any other kind of revenue.

By far the most active forum has been Investor’s Hub (“IHUB”) in the past month since the stock started trending. There have been hundreds of posts discussing the stock. Most of these posts have come from a tight group of users that have appeared to just recently become bullish on LWLG after it started its rally.

This IHUB post from 6/20/21 mentions several reasons for LWLG’s meteoric rise, which are pretty much all speculative reasons without evidence:

In Lebby’s update video on 5/27/21, he mentioned the company’s uplist to the OTCQX, and its targeted uplisting to the NASDAQ. After that the forum was blown up with users being very excited and looking forward to the NASDAQ uplisting. For example, from this IHUB post from 6/7/21:

And this IHUB post from 6/11/21:

We think that a Nasdaq uplisting is actually bearish for the stock. Stocks that get uplisted to the Nasdaq from the OTC often at first rise from the excitement, but then fade closer to their fair value after the uplisting. Meta Materials (MMAT) is a recent example of this, as it was trading at over $10 before being traded on the Nasdaq, then opened at around $10 (from a previous high of $20), and then gradually fell to below $4 in about 10 days. This is shown in the following month chart:

Source: MMAT 1-Month Price Chart

Other than speculation on a NASDAQ uplisting, the focus of retail posters on IHUB and other forums were the company’s technology and possibilities of partnerships. Lebby was featured in this YouTube video, published on 5/31/21, where a GlobalFoundries VP was interviewed. This led to Investor’s Hub posters concluding that LWLG has signed on for testing with GlobalFoundries. From this IHUB post:

Global Foundries talked publicly with LWLG's CEO about PDKs in this video: Global Foundries, EPIC, and Lightwave Logic discuss bringing Photonics to Foundries on 4/12/2021. This VP from Global Foundries has his Ph.D. from Cornell in Materials Science. The plan is all coming into focus. The video is from April 12, 2021 at the Angeltech III Online Summit. In hindsight, they were already setting up for a collaboration. It is clear they are our foundry partner. I imagine GF is the partner Lebby referred to when talking about putting out a co-authored press release announcement. I can't wait until they make it official. -Richard

However, this video was just a fireside chat setup by the host with three technology executives from three different companies discussing bringing photonics to semiconductor manufacturing foundries. There is no mention that these companies are working with one another. The VP of GlobalFoundries also doesn’t show any interest in Lebby or LWLG in the video, he is just discussing GlobalFoundries’ plans. The video was recorded on 4/12/21, long before LWLG had its recent stock runup. If there was a meaningful connection between LWLG and GlobalFoundries due to this fireside chat, LWLG’s stock likely would’ve runup right away after this video was recorded. A screenshot of this video is below:

Source: YouTube

It has been almost five months since the above fireside chat happened. If anything is going on with GlobalFoundries and LWLG, it likely would be reported by now.

On 6/7/21, LWLG announced that it got included in the Solactive EPIC Core Photonics EUR Index. An index for photonics companies. This likely caused more buying. LWLG rose from $3.24 the previous day to closing at $4.32 on 6/7, for a 33% one-day gain.

Then, keeping the upward momentum going, LWLG published a PR on the morning of 6/16/21 titled: “Lightwave Logic Announces Breakthrough Test Results from New Super-Fast Optical Modulator”. The stock went up over the next three days from $4.97 on 6/15/21 to $7.00 on 6/21/21 for a gain of 41% over that period.

Then LWLG announced a new patent on 6/24/21. That launched the stock from $7.98 on 6/23 to close at $9.71 on 6/24, for a gain of 34% just off the patent news. The stock continued higher over the next 3 days to close on 6/29/21 at $14.93. The stock has settled back down since then to the $9-$10 range. But at its current price, it’s still up about 500% since late May, and up about 900% since the beginning of the year. LWLG has gone on an amazing run and has plenty of room to retrace back down, and we think it will since in my opinion the rally isn’t based on evidence of business accomplishment.

Lightwave Logic’s CEO Lives 1200 Miles from The Company HQ and Has A Professional History of Failed StartUps

As shown on his LinkedIn profile below, LWLG’s CEO, Michael Lebby, lives in San Francisco, CA.

Source: LinkedIn

As shown on LWLG’s company website, the company is located in Englewood, CO, 1200 miles away from Lebby. That leads us to think that there’s not a lot happening in the company for the CEO not needing to be there and run operations hands on. We didn't hear back from the company regarding this inquiry, so it's possible that Lebby has a residence close to the HQ and a permanent residence in San Francisco. Or perhaps he flies to the office from time to time.

The following is the recent work history of Lebby, also shown on LinkedIn. Digging into his past jobs show mostly company failures where Lebby acted as an executive. He has jumped around a lot over the past 10 years.

Source: LinkedIn

First, Lebby's LinkedIn profile indicates he is still working at Oculi, LLC as the President and CEO. That suggests he likely isn’t devoting all his time to LWLG, he has a side job. Going to the Oculi, LLC LinkedIn page, it shows only 1 employee on LinkedIn, who is Lebby. Visiting the website link, oculi-llc.com, is very strange as it sends you to a Chinese Gambling website.

Moving down, the next two jobs he has had, for the European Commission, was a Government job, and the University of Southern California, was a university.

Next, it shows he was the President and CEO of OneChip Photonics Corp for two years. OneChip’s LinkedIn page doesn’t show a website. This news from 2013 shows its website as onechipphotonics.com, which isn’t active. This page shows that OneChip closed down in 2014 and all of its assets were sold. The company doesn’t appear to exist anymore.

Source: BajaBid.com

Next, Lebby’s profile shows he was a professor at Glyndwr University in Britain, another university.

Finally, Lebby worked at Translucent, Inc in Palo Alto, CA as GM and CTO. Translucent’s LinkedIn page shows the company website is translucentinc.com. That webpage is inactive. From a Google search, this company appears to not exist anymore.

Looking at Lebby’s work history over the past 10 years, a pattern constantly repeats itself. He works for a couple years at a technology company, primarily semiconductor manufacturing technology, for a year or two. Then, the company quickly goes out of business because it’s usually privately held and its technology isn’t commercialized. The company can’t support itself. Granted most tech startups end up failing. Likely the same would have happened with LWLG if it not for the ability to continue raising funds on retail investor support.

Lightwave Logic Is Being Financed by Lincoln Park Capital, an Infamous Vulture Fund

From LWLG’s June 2021 investor presentation, it states:

Source: Page 3, LWLG June 2021 Investor Presentation

As shown in the above slide, and mentioned by Lebby in the presentation, LWLG has a financing facility in place with Lincoln Park Capital. If Lincoln Park will be the investment bank solely in control of the upcoming offering, then I believe it will surely flip the shares into the open market to make a quick profit, as that is its modus operandi. This article describes the history of this infamous “vulture fund” and the many dead stocks it has left in its wake.

Lightwave Logic’s Seeking Alpha Article From 2010

Aside from another article published just a few days ago, LWLG has only had one Seeking Alpha article written on it 11 years ago on 8/22/10. This bullish article is titled:

Lightwave Logic: Ushering In a New Era of Data Communications.

The article states:

For the last 7 years or so a small company named Lightwave Logic (LWLG) has been developing a new electro optical polymer material (EO polymer) that promises increased life for Moore’s Law.

So that means that LWLG has started working on this EO polymer material 18 years ago, and still has failed to commercialize it. Another 18 years will pass and I believe still there could be nothing from the company.

The article also states:

At 10 Gb/sec that’s greater than 5-billion times per second! As astounding as this may sound, much higher speeds are possible using modulators made with EO. Lightwave Logic appears to be the company that will have the first product offering that can not only meet the demanding scientific and engineering specs, but also be able to do it at a price point that will make it economically feasible.

The above statement is representative of the article which is full of scientific theory. But there are plenty of scientific labs out there that don’t make a good business. And certainly don’t merit the $1B+ valuation that LWLG has.

Lightwave Logic Bull Case and Company Promotion

There is a party that has bullishly promoted LWLG, and that is Wide Moat Partners, website: widemoatpartners.com. Their website only has one link which is to their LWLG report, which is very short, only two pages, and lacking evidence for a bull case. This suggests that this investor is likely a small player, perhaps a retail investor, and the website was created to just promote LWLG.

Their LWLG report was published on 6/18/21, and they say it is their “best idea”. The report mentions their bull case is an opportunity today because “there is extreme demand for increased network capacity at lower power”. But that has always been true since the beginning of computer data transmission. It’s a broad statement, the equivalent of a statement like: “there is extreme demand for improved technology” or “water is wet”.

The report states that Wide Moat has faith in LWLG’s management and that they are of “superb quality”. Mainly because many have PhDs and have previously worked at large tech companies. We don’t find this impressive, as the company is basically a technology lab, and in our experience, we’ve found that having a PhD doesn’t equate to business excellence or efficiency.

The report mentions that management are paid in stock/options, which aligns their interest with shareholders. This is an obvious statement since the company has no revenues, how else would management get paid?

The report states that they believe at some point in the near future (6-18 months) the company will sign multiple partnerships with foundries. 6-18 months is a wide time horizon, why can’t it just as likely be 6-18 years? The report doesn’t show any evidence that LWLG is on the cusp of signing a partnership now compared to when the company was founded in 1991.

Wide Moat’s bull case is primarily based on LWLG’s own promotional material. One is LWLG’s Annual Shareholders Update Video from 5/27/21, the other is an LWLG investor presentation from June 2021.

The Annual Shareholders Update Video is a half hour long presentation by LWLG’s CEO Dr. Michael Lebby. It has most of the same slides as the investor presentation.

Dr. Lebby mentions that he’d like the company to be uplisted to the NASDAQ. As we showed earlier, IHUB retail investors have shown enthusiasm for a NASDAQ uplisting.

He presents a slide which shows the company’s “competitive advantages”, slide number 12.

Slide number 14 shows a bunch of big names and logos of equipment manufacturers and internet service provides like Huawei, Cisco, and Facebook. But it says "Sample actors" next to those names. Which means that those companies aren't customers or collaborators with LWLG, but just are "samples".

Then Lebby says the company has made "terrific progress towards deeper commercialization of its polymer plus platform". But commercializing in what way? We think this is a false statement.

Lebby says that CMOS fabrication plants want silicon photonics. This is stated from the presentation on page 24:

Source: LWLG May 2021 presentation

We’re not sure how LWLG can make this statement about its Polymer, because there’s no evidence that they work well with foundry process development kits since LWLG hasn’t received any collaborative revenue from a foundry. LWLG also hasn’t ever reported doing specific work with a partner for the last 9 years.

The next slide states that they are working with multiple integrated photonics/silicon photonics foundries. But who? They don’t mention any names.

We wanted to give the company an opportunity to explain itself before we published this report. We emailed asking a couple key questions that are concerns in this report. These questions are:

1. The CEO stated in the annual investor presentation on 5/27/21 that Lightwave Logic is commercializing its technology and is working with foundries. How is the company commercializing its technology, and which foundries is it working with?

2. Does the CEO work at company headquarters in Colorado or in San Francisco 1200 miles away?

It has now been three days since we emailed both the company's investor relations emails: LWLG@mzgroup.us and info@lightwavelogic.com.

We still haven't received a response.

Then on page 35 of the slide presentation, there are these anonymous quotes that could’ve came from a stock message board. This further shows that the company has no solid evidence whatsoever that any foundry has any interest in their polymer technology.

This point is further made looking at a slide the company shows typical questions they get from investors. The questions are good ones, and make sense that an investor would ask, however, the answers don’t give any evidence that LWLG is making any progress.

Source: LWLG May 2021 presentation

None of the questions above are given any solid or satisfying answers. But the response to the first question is just comical. It’s a good question, if the company has any more info on its partners. The response says “yes – we are partnering more e.g. foundries” but fails to give any more info. Of course, foundries would be the partners. The answer also misinterprets the word “more” in the question. The question is asking for more details on the partners, not whether the company has more partners. So the company’s answer to this question, in reality, is “no it doesn’t have more info”.

Lightwave Logic Has Generated Almost Zero Revenues in Its 20-Year History

LWLG has had zero revenues for many years, and its technology has never been used in a commercial product. The following are the company’s annual revenues over the past nine years:

Source: SEC filings

As shown in the table above, LWLG revenues are a sad sight to see, not being able to get a dime of collaboration revenue from any collaborating foundry. It’s easy for a research company to receive collaboration dollars from a foundry research department. That’s what research departments do, research new technology that isn’t currently used. The fact that none have given LWLG anything is a big statement regarding their opinion on their technology. LWLG doesn’t state in the 2014 annual report what their $2,500 in revenues was from.

LWLG is just a technology lab without having a product to conduct a real business. Nothing has happened recently to suggest that the company will create a product anytime soon. We believe this has created a juicy shorting opportunity.

Scientific Articles Suggest Polymer Technology Has Reliability Issues That Make It Impractical

An article was published in Science Daily on 11/13/20 titled: Ultra-fast polymer modulators that can take the heat.

In this article, researchers from Kyushu University in Japan demonstrate a silicon-polymer hybrid modulator efficiently transmitting data. However, a quote in the article states:

"Polymers have great potential for use in modulators, but reliability issues still need to be overcome for many industry applications," explains Shiyoshi Yokoyama, professor of Kyushu University's Institute for Materials Chemistry and Engineering and leader of the research collaboration.

This article was recent, not even a year old, and states that polymers have reliability issues. That sounds like a technology that might work in a lab, but the reliability issues make it impractical in the real world. The idea that EO polymers enable modulators to transfer data faster and cheaper has been looked at by a number of different people and companies over the years.

LWLG’s most recent patent has a lot of detailed information, but it doesn’t show that their EO polymers actually work. On 6/24/21, LWLG announced that it received a US patent on a device design that enables mass-volume manufacturing. The PR states:

The device design, protected by U.S. Patent number 11,042,051, enhances reliability, improves optical mode control and most important, lowers by consumption through the use of direct-drive, low-voltage operation.

In August 2020, an article was published by three LWLG executives titled: titled Elector-Optic Polymers Improve Speed and Power Efficiency. The article states that EO Polymers have the potential for higher speed and low electricity consumption compared to the currently used technologies, but the authors admit that achieving it is challenging.

The article states:

As with any new material, reliability must be demonstrated.

And

Developing accurate metrology for the r33 has been a challenge. There is no industry standardized test methodology or commercial instrumentation for these materials, which makes comparisons across results difficult.

LWLG was trading far below $1 in August 2020, and through the end of the year. So this article being published at that time certainly didn’t create any improved investor sentiment for the stock or the technology.

On 6/16/21 LWLG published a PR stating: “Lightwave Logic Announces Breakthrough Test Results from New Super-Fast Optical Modulator”.

The article states:

Lightwave Logic…today announced test results from new modulators fabricated in 2021, which exceeded bandwidth design targets and achieved triple the data rate as compared to competing devices in use today.

But the company doesn’t include any diagrams or an in-depth scientific report to prove the findings.

On 8/4/21, LWLG published a PR titled “Lightwave Logic Breakthrough Thermal Design for Use in Ultra-High-Speed Polymers.”

Super. Another “breakthrough” for the company. Again, there's no diagram or scientific report linked to the PR. Lebby is quoted in the PR stating:

“We look forward to receiving feedback on this exciting new material from our potential customers.”

Is this how a $500M+ company with a “breakthrough” technology speaks? They are going to “receive feedback”? What about how much they are going to charge for it? And why did they feel the need to rush the PR out without showing this technology to potential customers first? The answer, in our opinion, is that there is nothing happening for this company, nor will anything happen.

Lightwave Logic Is Stagnant While Its Competition Is Making Progress

While LWLG is still trying to develop their polymer-based technology for higher speed and lower power consumption, their competition is on its way to capture the growing market with devices based on Indium Phosphide (INP) for high-performance optics.

Lumentum Holdings, Inc. (LITE), one of LWLG’s direct competitors, is valued at $6.2B in market cap that has generated $419.5 million in revenues with $2.85 in EPS in Q221. As of 2019, LITE discontinued its operation in Lithium Niobate modulators and is focusing on Indium Phosphide based Photonic integrated circuits after acquiring Oclaro for $1.8B, whose technology and devices are expected to be suitable for Datacom and 5G wireless markets.

Indium Phosphide Photonic integrated circuits use an electro-optic effect resulting in more compact and power-efficient modulators geared for high-performance applications. Indium Phosphate is the most preferred material used in photonic integrated circuits and has captured 30% of the global market revenue with projections to be the first-choice material in photonic integration from 2020-2028.

Oclaro is actually able to create sellable devices and had an attractive Indium Phosphide (INP) patented technology, with an overall company portfolio of approximately 1000 issued patents as compared to 71 for LWLG and still no product after 20 years of operations. Evidence suggests that polymer materials-based technology, even with the possibility of higher efficiency than the Indium Phosphide (INP), or Silicon, is too far-fetched and full of development viability uncertainties to be invested in by major players in the market.

Another competitor of LWLG is NeoPhotonics Corporation (NPTN), whose products are based on Indium Phosphate, Silicon, and are packaged as combinations with different materials platform, an Advance Hybrid Photonic Integration. It sells high performance module products and Ultra-Pure Light Laser products among others. The company is not profitable but is revenue generating. In Q121 they made $60.9M in revenues and is only valued at $460M in market capitalization. LWLG is currently worth $1B in market capitalization and has no product nor revenues.

Lightwave Logic’s History

LWLG was incorporated in 1997 as an Eastern Idaho Internet Services, Inc., and in 2004 acquired PSI-TEC Corporation. In 2006 they changed their name to Third-Order Nanotechnologies, Inc and became Lightwave Logic in 2008.

The company has been in the development stage status since inception, trying to develop a workable device, but all they were able to develop were prototypes and additional polymer photonics materials that never turned out into sellable products.

However, the patent portfolio grew substantially from one issued patent in 2008 to 71 in 2021, with a recent one issued on June 24th. Despite adding more patents, their intangible assets don’t seem to be worth much, as of the Q121 10-Q total intangible assets are valued at $900,659.

For the last thirteen years, LWLG management consistently promised that the product is right around the corner and then kept updating their prototypes and adding and developing new materials accumulating more, and more patents.

To date, none of their new and updated versions of prototypes and additional materials and patents ended up in a product.

Here is a statement by Michael Lebby from the Shareholder Letter issued in September 2019:

While we had our first prototypes through all three phases (material, device and package) in March 2018, we clearly stated at the time that we aspired to improve further all three of these areas. What the first prototypes accomplished was to give us and our prospective customers confidence that we could see the path through to productization. Since that time, we have been executing on that path. For example, we have been steadily working on making our current 50 Gbaud devices easier to fabricate than the initial prototypes. Ultimately, that will translate to more throughput and lower cost. Our 50 Gbaud polymer modulator aims to compete against other modulator designs for the current generation of fiber optic transceivers based on the combination of higher speed, lower power consumption while maintaining small size and high reliability.

Prototype to production theme is a common promise that has been made by the executives of LWLG since at least 2008, with no tangible results.

In the February 2010 Shareholders' Letter, Jim Marcelli, who was LWLG’s CEO at the time, outright promised product production and revenues in the 3rd and 4th quarter of 2010 with the expectation of meaningful revenue in 2011. He stated:

As Lightwave Logic evolves from a developmental/technology stage to a material and product production stage, we expect that the company will report initial revenues in the 3rd and 4th quarter of 2010 and see meaningful revenues in 2011.

The company generated miniscule revenues in 2010, only $3,200, and no revenue in 2011.

In the July 2011 Shareholders' Letter, Marcelli again emphasized that revenues are expected in 2011:

We are still on track to generate revenues in the second half of 2011, but our shareholders should understand that because the markets we address are so large, our customers are necessarily large.

After no revenues were generated, even though Jim Marcelli said there would be in 2011, he was replaced as CEO by Tom Zelibor in 2012, who oversaw streamlining efficiency and a new direction for the company. Zelibor is still Chairman of LWLG. His previous company, Nuvectra, went bankrupt in 2019.

With his first Shareholders' Letter, Zelibor admitted that LWLG management did not have enough time for their day-to-day operations, and he is there to fix that. In other words, James Marcelli did not do an outstanding job as a CEO at managing the company on a day-to-day basis and was moved to be a Chief Operating Officer. Zelibor stated:

The next issue that needs redirection is our product testing. As Joe Miller mentioned at last year's annual meeting, testing has always been a hindrance to scientific development. And for us, relying on outside testing entities has magnified the problem. It has severely limited our ability to respond effectively to our potential customers and partners. This is not ideal for us and my intent is to make a concerted effort to obtain our own internal testing capability, hence the search for an optical engineer I mentioned above.

I want to make sure you all understand that the demands of running the Company were getting increasingly complicated and it had become clear that there was not enough time in the day to manage scientific development, day-to-day administration, financial management and shareholder communications. This generated frustration about the seemingly slow progress we have been making as a company. Now that I am the Chairman and CEO, I will have the opportunity to be engaged full-time in the Company's efforts. In addition, having Jim focus on the operational side of our business will give the Company increased efficiency and help us achieve our commercialization goals more rapidly. This is a huge win for you, our shareholders and as we previously announced, he has taken over the responsibilities as the Company's President and Chief Operating Officer. This change will allow us to operate more effectively as a team and be more proactive, vice reactive.

Zelibor also announced the transition from relying on Universities Lab testing their equipment and announced opening their new laboratory in Delaware Technology Park on May 1st, which will allow LWLG to do their own testing and get faster to the commercialization stage.

However, Zelibor also wasn’t able to produce any revenues for the company. He was replaced by Lebby on 3/30/17.

Risks to The Bear Case

The biggest risk to the bear case is the company putting out PRs that cause a stock rally. For reasons stated in this report, we don’t believe the company will put out PRs regarding revenues. We think it will remain at zero. However, it is a possibility which would cause the stock to rise. Other PR news about LWLG developing technology such as patents, investor conferences, white papers, etc, could cause a small rally. But we don’t think that’s a big risk, the market cap has reached a point where the company needs to report solid partnership results for it to go much higher.

Conclusion

In today’s Wall Street Bets inhabited stock market, retail investors have lots of power to move a small cap stock, even when it isn’t warranted. The evidence we’ve uncovered indicates to us that LWLG is a case of an enormous, empty rally of a company that has experienced 20 years of failure. There’s nothing to suggest that success is finally right around the corner. We do not see any evidence of technological progress or potential.

Even if the company was closer to success, its $500M+ valuation would still be egregious. As we documented, its competitors that actually have revenues and noted interest from foundries and institutions, have market caps considerably smaller. Retail investors of this type of an investment we call “unproven tech”, have shown to have a lot of patience. However, we don’t believe this valuation will be held up for long. That type of valuation requires results.

As doubt starts to seep in, we believe LWLG will begin to fade back down, diving deep into the single digits. While it may take awhile for LWLG to return to sub $2, perhaps a year or more, we believe it will take much less time for it to return to sub $5. Its upcoming equity raise should accelerate the fade, as we believe the accredited investors that will take part in the raise will just go for a quick flip, and won’t become long term holders.