Item 1. Business
Item 1.
Business .
Overview
Lightwave
Logic, Inc. is a technology platform company leveraging its proprietary engineered electro-optic (EO) polymers, named Perkinamine®
to transmit data at higher speeds with less power in a small form factor. The Company’s high activity and high stability organic
polymers allow it to create next-generation photonic EO devices that convert data from electrical signals into light/optical signals
for applications in telecommunications, and for data transmission potentially used to support generative AI.
Our
differentiation at the modulator device level is in higher speed, lower power consumption, simplicity of manufacturing, small
footprint (size), and reliability. We have demonstrated the electro-optic polymers potential for higher speed and lower power
consumption in packaged devices, and during 2024, we continued to make advances in techniques to translate our world class material
properties to efficient, reliable modulator devices with commercial foundries. We are currently focused on: a) working with potential
and existing customers to integrate our proprietary materials into our customers’ specific PIC and device architecture; b)
testing and demonstrating the superior performance, simplicity of manufacturability and reliability of our devices, including in
conjunction with the silicon photonics manufacturing ecosystem; and c) providing our potential and existing customers with the
proper Process Development Kits (PDKs) to enable the efficient and fast integration of our materials into their own design and
manufacturing plans. Silicon-based foundries are semiconductor fabrication
plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput.
Partnering with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard
production lines using standard equipment, it also allows us to efficiently utilize our capital. The foundry partnerships will allow
us to scale our high-performance polymer optical engines quickly and efficiently. We have now received silicon wafers that range up
to 200mm in diameter, which aligns well with foundry manufacturing.
Our extremely
strong and broad patent portfolio allows us to optimize our business model in three areas: 1) Traditional focus on polymer materials development,
2) Patent licensing and 3) Technology transfer to foundries. We are continually looking to strengthen our patent portfolio both by internal
inventions and acquisition of intellectual property.
We are
initially targeting applications in fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth
optical connections deployed inside and between datacenters and/or AI clusters. In addition, we are exploring other applications that
include automotive/LIDAR, sensing, displays, storage, aerospace and defense, satellites, quantum computing etc., for our polymer technology
platform. Our goal is to have our unique polymer technology platform become ubiquitous across multiple market verticals over and above
the optical fiber optic communications markets.
Artificial
Intelligence (AI) has been integrating deeper within our daily activities with applications to make us more efficient and possibly smarter.
The impact on the internet is huge, and the internet is based on an optical network that utilizes data centers to route and switch traffic
or information to and from destinations. Data centers are being upgraded today in a fashion that the industry has not seen before with
significant investments of capital. The expected demands of increased traffic, information, and data driven by AI is changing the way
the internet is being operated. AI is now creating new and interesting market opportunities to upgrade the internet. Three of these opportunities
are important today: density, speed, and low power and these are very well aligned with our high performance electro-optic polymers modulator
platform. We are designing high performance polymer modulator optical engines to support the rise and growth of AI as it generates more
information that will travel through the internet and optical network. While we are not directly an AI company designing electronic processors,
we do see immediate benefits of enabling higher levels of information to cross the internet using our optical polymer modulator platform.
Unless the context otherwise requires,
all references to the “Company,” “we,” “our” or “us” and other similar terms means Lightwave
Logic, Inc. Also, this Form 10-K Annual Report includes the names of various government agencies and the trade names of other companies.
Unless specifically stated otherwise, the use or display by us of such other parties’ names and trade names in this report is not
intended to and does not imply a relationship with, or endorsement or sponsorship of us by, any of these other parties.
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Commencement of Commercial Operations
We commenced commercial operations
in May 2023. Presently, our commercial operations consist of a material supply license agreement
to provide Perkinamine ® chromophore materials for polymer based photonic devices and photonic integrated circuits
(PICs). The license agreement represents tangible commercial progress for electro-optic polymers as part of our Company's business plan.
Our Company is also in various stages of new materials development and evaluation with potential customers and strategic partners.
We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology
transfer agreements and direct sale of our electro-optic materials. We have seen increased interest in our materials during 2024, driven
by the need for higher speed connections to scale the AI-enabled network infrastructure and we are in discussions on future license agreements.
In December 2024, we made the decision to focus our commercial and R&D efforts on the EO Polymer materials development and manufacturing.
Although we continue to develop full Photonic Integrated Circuits and packaged device designs as part of our internal technology and process
development roadmap, we are not actively promoting the sale of such PICs and/or packaged devices to external customers, but rather EO
Polymer materials supply and license agreements.
Materials Development
Our Company
designs and synthesizes organic chromophores for use in its own proprietary electro-optic polymer systems and photonic
device designs. A polymer system is not solely a material but also encompasses various technical enhancements necessary for its implementation.
These include host polymers, poling methodologies, and molecular spacer systems that are customized to achieve specific optical properties.
Our organic electro-optic polymer systems compounds are mixed into solution form that allows for thin film application. Our proprietary
electro-optic polymers are designed at the molecular level for potentially superior performance, stability, and cost-efficiency. We believe
our proprietary and unique polymers have the potential to replace more expensive, higher power consuming, slower-performance materials
such as semiconductor-based modulator devices that are used in fiber-optic communication networks today.
Our patented
and patent pending molecular architectures are based on a well-understood chemical and quantum mechanical occurrence known as aromaticity .
Aromaticity provides a high degree of molecular stability that enables our core molecular structures to maintain stability under a broad
range of operating conditions.
We expect
our patented and patent-pending optical materials along with trade secrets and licensed materials, to be the core of and the enabling
technology for future generations of optical devices, modules, sub-systems, and systems that we will develop or enable our partners to
fully commercialize. Examples of our partners include: electro-optic PIC and device design and manufacturing companies, contract manufacturers,
original equipment manufacturers, foundries, packaging and assembly manufacturers etc. Our Company contemplates future applications in
market verticals that may address the needs of semiconductor companies, optical network companies, Web 2.0/3.0 media companies, high performance
computing companies, telecommunications companies, aerospace companies, automotive companies, as well as for example, government agencies
and defense entities.
Device Design and Development
Electro-optic Modulators
Our Company
designs its own proprietary materials for electro-optical modulation devices. Electro-optical modulators convert data from electric signals
into optical signals that can then be transmitted over high-speed fiber-optic cables. Our modulators are electro-optic, meaning they work
because the optical properties of the polymers are affected by electric fields applied by means of electrodes. Modulators are key components
that are used in fiber optic telecommunications, data communications, and data centers networks etc., to convey the high data flows that
have been driven by applications such as pictures, video streaming, movies etc., that are being transmitted through the Internet. Electro-optical
modulators are expected to continue to be an essential element as the appetite and hunger for data increases every year as well as the
drive towards lower power consumption, and smaller footprint (size).
Current
semiconductor photonic technology today is struggling to reach faster device speeds. Our modulator devices, enabled by our electro-optic
polymer material systems, work at extremely high frequencies (wide bandwidths) and possess inherent advantages over current crystalline
electro-optic material contained in most modulator devices such as bulk lithium niobate (LiNbO3), indium phosphide (InP), silicon (Si),
and gallium arsenide (GaAs). Our advanced electro-optic polymer platform is creating a new class of modulators that can be easily integrated
into various PIC platforms and can address higher data rates in a lower cost, lower power consuming manner, smaller footprint (size) with
much simpler data encoding techniques. Our electro-optic polymer material will boost the performance of standard PIC platforms such as
silicon photonics and indium phosphide.
Our electro-optic
polymers can be integrated with other materials platforms because they can be applied as a thin film coating in a fabrication clean room
such as may be found in semiconductor foundries using standard clean room tooling. These approaches enable our device platforms to not
only be competitive but fully integrated with foundries. Our polymers are unique in that they are stable enough to seamlessly integrate
into existing CMOS, Indium Phosphide (InP), Gallium Arsenide (GaAs), and other semiconductor manufacturing lines. Of relevance are the
integrated silicon photonics platforms that combine optical and electronic functions. These include a miniaturized modulator for ultra-small
footprint applications in which we term the Polymer Slot™. This design is based on a slot modulator fabricated into semiconductor
wafers that can include either silicon or indium phosphide.
Our Company
has a fabrication facility in Colorado to apply standard fabrication processes to our electro-optic polymers which create modulator devices.
While our internal fabrication facility is capable of manufacturing modulator devices, we have partnered with commercial silicon-based
fabrication companies that are called foundries who can scale our technology with volume quickly and efficiently. The process recipe for
fabrication plants or foundries is called a ‘process development kit’ or PDK. We are currently working with commercial foundries
to implement our electro-optic polymers into accepted PDKs by the foundries. One of the metrics for successful implementation of PDK is
to receive working modulator chips.
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Glossary
Glossary of select technology
terms to provide you with a better understanding our Company’s technology and devices:
Electro-optic devices -
Electro-optic devices convert data from electric signals into optical signals for use in communications systems and in optical interconnects
for high-speed data transfer.
Electro-optic material - Electro-optic
material is the core active ingredient in high-speed fiber-optic telecommunication systems. Electro-optic materials are materials
that are engineered at the molecular level. Molecular level engineering is commonly referred to as “nanotechnology.”
Electro-optic modulators
- Electro-optic (E/O) modulators are electro-optic devices that perform electric-to-optic conversions within the infrastructure
of the internet. Data centers may also benefit from this technology through devices that could significantly increase bandwidth and speed
while decreasing costs. Polymer E/O modulators can be designed and fabricated with multiple structures. The waveguides allow the light
to be efficiently coupled into and out of the modulators, and provide a basis for integrating modulators together.
Gbaud - The rate of symbol
changes in data transmission in billions of symbol changes per second. Each symbol can support one or more bits, the number of bits depending
on the modulation format.
NRZ – See PAM2.
PAM2 – 2 level Pulse
Amplitude Modulation, a modulation format in which the optical power in each symbol can assume either of two different levels, low or
high, representing, respectively, a 0 or a 1. PAM2 supports 1 bit per symbol so the bit rate is equal to the baud rate or symbol rate.
For example, a modulator capable of supporting 100 Gbaud can transmit 100 Gbps with PAM2 modulation. This modulation format is often called
NRZ (Non Return to Zero).
PAM4 - 4 level Pulse Amplitude
Modulation, a modulation format in which the optical power in each symbol can assume any one of 4 different levels. PAM4 supports 2 bits
per symbol so the bit rate is equal to two times the baud rate or symbol rate. For example, a modulator capable of supporting 100 Gbaud
can transmit 200 Gbps with PAM4 modulation.
PAM8 - 8 level Pulse Amplitude
Modulation, a modulation format in which the optical power in each symbol can assume any one of 8 different levels. PAM4 supports 3 bits
per symbol so the bit rate is equal to three times the baud rate or symbol rate. For example, a modulator capable of supporting 100 Gbaud
can transmit 300 Gbps with PAM8 modulation.
Photonic Devices - Photonic
devices are components for creating, manipulating, or detecting light. This can include modulators, laser diodes, light-emitting diodes,
solar and photovoltaic cells, displays and optical amplifiers. Other examples are devices for modulating a beam of light and for combining
and separating beams of light of different wavelength.
Polymers - Polymers, also
known as plastics, are large carbon-based molecules that bond many small molecules together to form a long chain. Polymer materials can
be engineered and optimized using nanotechnology to create a system in which unique surface, electrical, chemical, and electro-optic characteristics
can be controlled. Materials based on polymers are used in a multitude of industrial and consumer products, from automotive parts to home
appliances and furniture, as well as scientific and medical equipment.
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Our Business Opportunity
Lightwave Logic, Inc. is developing
our advanced electro-optical polymer material systems. Current legacy technology is based on inorganic crystalline materials, which has
allowed for the proliferation of data over fiber optic cables. However, there are inherent molecular deficiencies that have prevented
this technology from scaling down in price and up in functionality, especially in terms of $/Gbps. This is primarily due to a closed valence
structure that does not allow for the molecular improvements. The valence or valency of an element is a measure of its combining power
with other atoms when it forms chemical compounds or molecules. Also, the physical properties of a crystal do not allow for its implementation
into highly miniaturize slot structures that are in simple terms the pathways that light travels through in the device.
Organic polymer materials have
free electrons that allow for limitless potential to combine with other molecular structures, which allows for multiple options and combinations
to improving performance characteristics. Importantly, because they can be applied to optical structures in thin-film liquid form, it
is possible to imbue electro-optic ability to highly miniaturized slot structures. Organic polymer materials are also more economic to
manufacture in comparison to growing exotic crystals that are prone to contamination and further must be sliced into thin wafers. Our
Company believes that the combination of less expensive manufacturing cost, ease of application, and better scalability, together with
a lower cost of ownership due to lower heat dissipation (requiring less cooling), will create enormous demand for our polymer material
through supply agreements as well as polymer-based products.
Many companies’ early attempts
at developing commercially reliable organic polymers were stymied due to the difficulty of creating organic molecules that could remain
electro-optically active after being subjected to the high heat of semiconductor manufacturing temperatures (such as silicon CMOS, InP,
GaAs etc.). These early attempts also encountered difficulty synthesizing materials that could withstand photochemical bleaching (loss
of sensitivity to specific frequencies) and material degradation due to high operating temperatures.
Over the last several years,
our Company has made various scientific breakthroughs that have allowed for the synthesis of proprietary organic polymer materials that
can withstand extremely high process temperatures that exceed 175°C. Additionally, these materials have demonstrated photochemical stability
in devices, even after being subjected to high intensity light for over 5,000 hours. These materials also exhibited stable electro-optic
performance after being continuously aged at 85°C for over 12,000 hours. This exposure duration far exceeds industry standard stress
conditions. These devices have performed with 3dB bandwidths that exceed 70GHz.
We are now further optimizing
our electro-optic (EO) polymer materials platform to meet additional specifications that are beginning to be required by the fiber communications
industry for applications such as networks running at data rates of 800Gbps and 1600Gbps and 3200Gbps in the future. Our technology platform
has the capability and potential to address 4 or more channels of 400Gbps utilizing PAM4 encoding schemes, thus creating a roadmap of
increased performance for the industry. Furthermore, we are collaborating with industry partners to optimize device designs and packaging.
We have already made extensive progress with our polymer materials on this front, and now we are integrating our robust polymer materials
onto an integrated photonics platform.
While our initial focus is to
address data communications and telecommunications network applications along with cloud computing/data center needs, we believe that
in the future we will have additional opportunities over and above AI to address other applications such as: chip-to-chip and backplane
optical interconnects, photovoltaic cells, medical applications, satellite reconnaissance, navigation systems, radar applications, optical
filters, spatial light modulators; and all-optical switches.
Electro-Optic Polymer Production – Our Approach vs. the BLA Approach
Our Electro-Optic Material Approach
Our core material expertise relates
to the production of high-performance, high-stability electro-optic polymers for high-speed (wide bandwidth) telecommunication and data
communications applications. More specifically, it lies in a less mainstream, yet firmly established, scientific phenomenon called aromaticity.
Aromaticity causes a high degree of molecular stability. It is a molecular arrangement wherein atoms combine into multi-membered rings
and share their electrons among each other. Aromatic compounds are stable because the electronic charge distributes evenly over a great
area preventing hostile moieties, such as oxygen and free radicals, from finding an opening to attack.
4
Previous and Current Competitive Organic Electro-Optic
Polymer Efforts
For the past several decades,
diverse corporate interests, including, to our knowledge, IBM, Lockheed Martin, DuPont, AT&T Bell Labs, Honeywell, Motorola, HP, 3M,
and others in addition to numerous universities and U.S. Government Agencies, have attempted to produce high-performance, high-stability
electro-optic polymers for high-speed (wide bandwidth) telecommunication applications. These efforts were largely unsuccessful due, in
our opinion, to the industry’s singular adherence to an industry pervasive engineering model known as the Bond Length Alternation
("BLA") theory model, which none of our patented molecular designs rely upon. The BLA model, like all other current industry-standard
molecular designs, consists of molecular designs containing long strings of atoms called polyene chains. Longer polyene chains provide
higher electro-optic performance, but are also more susceptible to environmental threats, which result in unacceptably low-performing,
thermally unstable electro-optic polymers.
As a result, high frequency modulators
engineered with electro-optic polymers designed on the BLA model or any other polyene chain design models are unstable over typical operating
temperature ranges, and often exhibit performance degradation within days, hours or even minutes. Similarly, lower frequency modulators
exhibit comparable failings, but to a lesser extent. These flaws, in most cases, have prevented commercial quality polymer-based modulators
from entering the commercial marketplace. The thermal stability of these devices does not generally meet the minimum Telcordia GR-468
operating temperature range (-40 degrees Celsius to +85 degrees Celsius) much less the harsher MILSPEC 883D (military specification) range
of -55 degrees Celsius to 150 degrees Celsius. While many new applications do not require meeting full military or Telcordia GR-468 specifications
for polymers, many potential customers prefer to see polymer operate at or near these conditions to convey confidence in the material
system. We understand from initial conversations with data center architects and designers that the temperature specifications that our
materials achieve are compliant with their equipment design needs.
We are aware of other academic
and commercial development efforts—some by larger companies with vastly more financial resources than we possess. However, we believe
that no one yet has developed organic polymer materials that have demonstrated the combination of thermal stability, photochemical stability
and reliability that can meet or exceed commercial specifications.
Our Electro-Optic Photonic P 2 IC™ Device Approach
Our electro-optic device designs
are built around our proprietary organic polymer material systems that we believe will enable better performance than the current embedded
legacy technology built around inorganic materials. We also believe that the inherent flexibility of being able to apply our organic polymer
materials in liquid thin-film form will accelerate the move toward ultra-miniaturization of Polymer Photonic Integrated Circuits (P 2 IC™)
by increasing the number of photonic circuits on a single chip. Polymer photonics is the application of polymers on to a platform such
as silicon where there are both active and passive photonic component designs. In polymer photonics, polymer devices such as modulators,
waveguides, and multiplexers can be fabricated on to a silicon platform that acts as a package as well as a base for mounting lasers (which
are needed to source the light). We continue to invest in R&D and process development to help accelerate the adoption of our polymer
materials by potential customers into their own PIC platforms, typically based on silicon photonics.
Our initial device, though highly miniaturized, utilizes conventional
design and fabrication techniques in the industry. Our future device designs will utilize silicon photonics (SiPh) technology, which can
support highly miniaturized slot waveguides structures etched in large format (200mm), low cost, and less expensive silicon wafers coated
with our organic electro-optic polymers. The low-cost structure compares well to compound semiconductor technologies such as GaAs (Gallium
arsenide) and InP (Indium Phosphide), which suffer from small format wafers that do not allow the economies of scale in high volume fabrication
plants. The degree of miniaturization possible of the slot modulator using SiPh is not technically feasible to accomplish with inorganic
crystalline materials. Although this may not always remain the case, presently there are nearly insurmountable technical difficulties
that are inherent to a crystalline molecule. We now have the capability to model, simulate and design photonic integrated circuits (PICs)
in-house.
5
Our Intellectual Property
Our research and development efforts
over the last 10+ years have yielded our Company an extensive patent portfolio as well as critical trade secrets, unpatented technology
and proprietary knowledge related to our optical polymer materials. Our intellectual property portfolio has expanded significantly over
the few years. We have actively filed technical utility patents and are currently in the process of readying a number of other inventions
for formal filings in 2025 and 2026. We expect to continue innovating our technology platform over the next decade. We had additional
patents issued or published over the past year indicating that our technology is being recognized as being unique.
In 2018, we acquired the polymer
technology intellectual property assets of BrPhotonics Productos Optoelectrónicos S.A., a Brazilian corporation, which significantly
advanced our patent portfolio of electro-optic polymer technology with 15 polymer chemistry materials, devices, packaging and subsystems
patents and further strengthened our design capabilities to solidify our market position as we prepare to enter the 400Gbps integrated
photonics marketplace with a highly competitive, scalable alternative to installed legacy systems.
In
2022, we acquired the polymer technology and intellectual property assets of Chromosol Ltd (UK), which significantly
strengthened our Company's design capabilities with foundry PDKs with extremely low temperature atomic layer deposition (ALD) processes
that effectively hermetically seal polymer devices that have been prepared for high volume manufacturing. The advanced fabrication processes
of ALD with temperatures below 100C will solidify our market position with both the Company's manufacturing foundry partners as well as
end-users as we prepare to enter the 800Gbps integrated photonics marketplace. The acquisition also advanced our Company’s patent
portfolio of electro-optic polymer technology with an innovative polymer chemistry device patent that has potential to increase the performance
of integrated modulators through optical amplification in a photonic integrated circuit (PIC) and enhance the functionality of the PIC
by integrating laser light sources made using the polymer-based gain and a laser optical cavity defined on the Silicon photonic platform,
with our Company’s high speed, high efficiency modulators.
In total, our patent portfolio
currently consists of 77 granted patents that include 46 from the US, 2 from Canada, 3 from the United Kingdom, 18 from the EU, 1 from
Japan, 6 from China (including Hong Kong), and 1 from Australia.
Our materials patent portfolio
has also strengthened significantly with the filing of additional new patent applications on our core Perkinamine® molecular compounds
as well as recent, innovative inventions that are expected to protect our P 2 IC polymer PIC platform from potential competition.
Included in our patent portfolio are the following
nonlinear optic chromophore designs:
•
Stable Free Radical Chromophores, processes for preparing the same
•
Stable Free Radical Chromophores, processes for preparing the same
•
Tricyclic Spacer Systems for Nonlinear Optical Devices
•
Anti-Aromatic Chromophore Architectures
•
Heterocyclical Anti-Aromatic Chromophore Architectures
•
Heterocyclical Chromophore Architectures
•
Heterocyclical Chromophore Architectures with Novel Electronic Acceptor Systems
•
Multi-fiber/port hermetic capsule sealed by metallization and method
• Device Design Fabrication
Methods
• Modulators and
Waveguides
• Hermetic Capsulation
Our patent portfolio includes
patents not only on nonlinear optic chromophore designs, but also device designs and inventions, fabrication process inventions, packaging
design inventions, as well as novel chemistry to enable high performance, low power, small footprint polymer PIC technology.
Our strategic plan is to utilize
our core proprietary technology and leverage our proprietary optical materials to be the core of and the enabling technology for future
generations of optical devices, modules, sub-systems and systems that we will develop or potentially out-license to electro-optic device
manufacturers. Our Company contemplates future applications that may address the needs of semiconductor companies, automotive/LiDAR companies,
sensing companies, aerospace companies and government agencies.
We rely on a combination of patents,
patent applications, trademarks, trade secrets and contractual provisions to protect our technologies. Further, employees are required
to surrender any inventions or intellectual property developed as part of their employment agreements. We also have a policy of requiring
prospective business partners to enter into non-disclosure agreements (NDAs) before disclosure of any of our confidential or proprietary
information. Our Company can make no assurances that we will be able to effectively protect our technologies and know-how or that third
parties will not be able to develop similar technologies and know-how independently.
6
Recent Significant Events and Milestones Achieved
During
February and March 2018, we moved our Newark, Delaware synthetic laboratory and our Longmont, Colorado optical testing laboratory and
corporate headquarters to office, laboratory and research and development space located at 369 Inverness Parkway, Suite 350, Englewood,
Colorado. The 13,420 square feet Englewood facility includes fully functional 1,000 square feet of class 1,000 cleanroom, 500 square feet
of class 10,000 cleanroom, chemistry laboratories, and analytic laboratories. The Englewood facility streamlines all of our Company’s
research and development workflow for greater operational efficiencies.
During
June 2018, our Company Acquired the Polymer Technology Intellectual Property Assets of BrPhotonics Productos Optoelectrónicos S.A.,
a Brazilian corporation, which significantly advanced our patent portfolio of electro-optic polymer technology with 15 polymer chemistry
materials, devices, packaging and subsystems patent and further strengthened our design capabilities to solidify our market position as
we prepare to enter the 400Gbps integrated photonics marketplace with a highly competitive, scalable alternative to installed legacy systems.
On September
1, 2021, our Company's common shares began trading on the Nasdaq Capital Market (“Nasdaq”). The Company’s Nasdaq listing
will help to expand our potential shareholder base, improve liquidity, elevate our public profile within the industry and should ultimately
enhance shareholder value.
On
November 29 , 2022, we announced our acquisition of the polymer technology and intellectual property assets
of Chromosol Ltd (UK). The acquisition significantly strengthened our Company's design capabilities with foundry PDKs with extremely
low temperature atomic layer deposition (ALD) processes that effectively hermetically seal polymer devices that have been prepared for
high volume manufacturing. Having access to extremely low temperature ALD allows our Company's polymer modulators to be protected from
the environment without the need for expensive and large footprint gold box packaging, propelling our Company forward with chip-scale
packaging as required by major hyper-scaler end-users.
Since
the acquisition, our Company has made substantially progress in the utilization of ALD to hermetically seal polymers for modulator applications.
On December 12, 2022, we announced the receipt of U.S. patent number 11,506,918
B2 entitled “Hybrid electro-optic polymer modulator with atomic layer deposition (ALD) sealant layer,” which allows our proprietary
polymers to be sealed to moisture and atmospheric gases in a very low temperature and quasi-hermetic environment through the use of a
chip-scale packaging approach that can be applied in parallel at wafer level (i.e. in volume) and that eliminates the need for a separate
hermetic enclosure or "gold box." Specifically, our electro-optic polymer modulators will be sealed with low-temperature conformal
atomic layer deposition dielectric layers that are supported on a silicon substrate with passive silicon photonics waveguides. The sealant
process will enable lower cost system implementation in a high-volume foundry environment.
On March
22, 2023, we announced that our latest commercial-class electro-optic polymer material achieved
breakthrough performance metrics at 1310 nanometers (nm), a wavelength popular in hyperscale datacenter applications. These
commercial-class improvements include a significantly higher electro-optic coefficient exceeding 200 pm/V, which allows for very
low drive power of 1 volt or less. Other characteristics include optimized chromophore loading, superior low optical loss, excellent temporal
stability at 85 0 Celsius, and extremely high thermal and photo stability. The breakthrough commercial-class electro-optic material is
expected to enable ultra-small footprint modulators with at least 100 GHz bandwidth as well as meeting all critical requirements for pluggable
transceivers, on-board optics and co-packaging solutions. Additionally, the achievement of these results at the 1310nm bandwidth positions
us for potential near-term licensing opportunities in datacenter applications.
7
On
May 25, 2023, we announced our Company's first commercial material supply license agreement for our Perkinamine® chromophore
materials. This agreement is to provide Perkinamine® chromophore materials for polymer based photonic devices and
photonic integrated circuits (PICs). Supplying licensed materials is one prong of our Company's three-prong revenue model and business
strategy that includes polymer modulator products as well as technology transfer. This agreement recognizes market acceptance and competitive
advantage of our technology and validates the first prong of our business model. Further, it represents tangible commercial progress for
electro-optic polymers as part of our business plan.
On
May 31, 2023, we announced the receipt of U.S. patent number 11,661,428 entitled "Nonlinear Optical Chromophores, Nonlinear Optical
Materials Containing the Same, and Uses Thereof in Optical Devices," which details an innovative organic chromophore design using
a novel 'thiophene bridge' to significantly improve material performance in a production environment. This is accomplished by designing
thiophene-containing bridging groups that are positioned between the electron-donating and electron-accepting ends of the chromophore.
These designs provide nonlinear optical chromophores with significantly improved optical properties and improved stability. We expect
this patent will help us progress our commercial discussions with potential customers.
On
August 21, 2023, we announced the completion of new laboratory production facilities, expanding our corporate headquarters by over 65%,
nearly 10,000 square feet, for a total of approximately 23,500 square feet to support new commercial activity, including enabling commercial
device testing and evaluation, production reliability testing, laser characterization, SEM analysis and the expansion of our Company's
chemical synthesis production line.
On
March 24, 2024, at the 2024 Optical Fiber Conference in San Diego, California (OFC 2024), we presented world-class results for our Company’s
200Gbps heterogeneous polymer/silicon photonic modulator at a record low drive voltage, which are based on a novel packaged heterogeneous
polymer EO modulator design leveraging silicon photonics devices from a 200mm production foundry process and Lightwave Logic’s proprietary
high temperature, high performance EO Polymer material. Each modulator was operated at 100GBaud PAM4 and achieved all drive voltages below
2V, and as low as 1V which is excellent for low power operation. We discussed the test set-up for the high-speed results, and how electro-optic
polymer-based modulators based on 200mm silicon foundry wafers are ideal for 4 lane 200Gbps per lane 800Gbps pluggable optical transceivers
for datacenter applications. We also shared updated lifetime and reliability data for both the electro-optic polymer materials and electro-optic
polymer devices. Our results demonstrate that a hybrid approach, leveraging the cost and integration benefits of silicon photonics along
with the unparalleled bandwidth and low power advantages of Lightwave Logic’s proprietary EO polymers, lays a clear path for competitive
performance and integration for today’s and future optical pluggable transceivers, and we expect these results will position our
Company to support the burgeoning demand of generative AI as datacenters around the world begin to upgrade their hardware faster than
expected to meet the demands of the future.
On
March 28, 2024, we announced world-class performance of the Company’s Perkinamine® EO polymer material operating in an optical
interconnect link, at 437.1Gbps employing a PAM8 178GBaud signal encoded by a plasmonic Mach Zehnder modulator (MZM). In this work, intensity
modulated, direct detection (IM/DD) techniques were utilized to drive higher performance. The paper, authored by our teammates ETH Zurich
and Polariton Technologies, demonstrated data rates beyond 400Gbps for a IM/Dd optical interconnect link for the first time. This world-class
result, achieving data rates of 400Gbps per lane, demonstrates that our Company’s EO polymers are capable of exceeding double the
current industry expectation. This has the potential to enable 4 lane 1.6Tbps (1600Gbps) pluggable transceiver modules, which is on the
roadmap of datacenter operators today.
On
May 21, 2024, we announced our collaboration with Advanced Micro Foundry (AMF), a leading Silicon Photonics volume foundry, to develop
state-of art polymer slot modulators utilizing AMF's silicon photonics platform. These modulators have been shown to achieve a record
low drive voltage below 1V and data rates of 200Gbps PAM4. This performance will enable a new generation of 800 Gb/s and 1.6T Gb/s pluggable
transceivers to address fast growing requirements for optical connectivity for large generative AI computing clusters. Lightwave Logic
and AMF have collaborated over the past year to develop the electro optic polymer slot modulators utilizing AMF's standard manufacturing
process flow on 200-mm wafers. This successful demonstration marked a significant milestone in integrated photonics, blending Silicon
photonics with polymer materials. Building on this demonstration, both parties are aiming to enhance the modulators to ensure these advanced
components are readily accessible to product companies on a manufacturing scale. This accomplishment puts our Company in a very strong
position to ramp volume both for our polymers as well as 200-mm silicon wafer volume with AMF. It also opens exciting opportunities to
develop novel solutions for commercial-grade-compatible EO polymer modulators seamlessly integrated with AMF's standard processes.
On
September 24, 2024, we announced a collaboration with Polariton Technologies to demonstrate a packaged device with over
110 GHz super high bandwidth packaged electro-optic polymer modulators using Polariton's plasmonic modulator device design that
contains Lightwave's proprietary Perkinamine® chromophores at the European Conference on Optical Communications (ECOC) held
in Frankfurt, Germany from September 22-26, 2024. The packaged device contains a plasmonic modulator using
electro-optic polymer material and platform chips have demonstrated 400 Gbps, which is the current specification that datacenters
are looking for in optical transceiver modules. This collaboration forms an important technology platform for scalability using
large silicon foundries for mass commercialization with 200mm silicon wafers. The combination of electro-optic polymers and
plasmonics can support datacenters around the world which are responding to high power consumption and the burgeoning demand for
higher speed data transmission from artificial intelligence, machine learning, and other cloud-based services. This device enables
ultra-high bandwidths, which are extremely well suited for next generation internet and optical networking transceivers that require
200Gbps per lane today, and 400Gbps per lane soon.
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On
December 11, 2024, we strengthened our Company's management team to reinforce our competitive position and accelerate product and commercial
strategic initiatives, including capitalizing on high-growth opportunities across the AI and datacenter networking sector, expediting
commercialization for our proprietary electro-optic materials, and opening new markets and applications for our advanced polymer-based
solutions. We named optical communications industry veteran Yves LeMaitre as our Chief Executive Officer and former CEO and
Chairman Thomas E. Zelibor as our President. Ronald Bucchi, lead independent director, was appointed as our new non-executive
independent Chairman, and James S. Marcelli, principal financial officer, was named as our Chief Financial Officer and continues to serve
as Chief Operating Officer. Dr. Michael Lebby retired as Chairman and Chief Executive Officer of Lightwave Logic, effective December
10, 2024.
On March 10, 2025, we announced the advancement of our technical collaboration
with Polariton Technologies, a technology leader of high-speed EO components for the communication market, and our transition from being
a material supplier to collaborating on market development through end-user engagement and technical cooperation. Lightwave Logic and
Polariton will work together to jointly develop technical solutions to enable the faster adoption and integration of combined plasmonics
and polymer-based products, with semiconductor fabrication plants, outsourced assembly, and test operations. In addition to manufacturing
transmitter PICs with inherent superior electro-optic performance, both teams will be working together on an extensive qualification and
reliability program, high-speed RF and optical testing and back-end manufacturing process integration.
As we
move forward to diligently meet our goals, we continue to work closely with our packaging and foundry partners for 200Gbps and 400Gbps/lane
device designs and prototypes, and we are advancing our reliability and characterization efforts to support our prototyping. Our partnership
with silicon-based foundries will allow us to scale commercial volumes of electro-optic polymer modulator devices using large silicon
wafers, and we are currently working to have our fabrication processes accepted into foundry PDKs (process development kits). These are
the recipes that foundries use to manufacture devices in their fabrication plants.
We are
actively engaged with test equipment manufacturers of the most advanced test equipment to test our state-of-the-art polymer devices. We
continue to engage with multiple industry bodies to promote our roadmap. We continue to fine tune our business model with target markets,
customers, and technical specifications. Our business model includes the licensing of our strong IP and Patent portfolio, as well as technology
transfer to entities such as foundries. Discussions with prospective customers are validating that our materials are ideally suited for
the datacenter, AI connectivity and telecommunications markets. Details and feedback of what these prospective customers are seeking from
a prototype are delivered to our technical team.
The Global Photonic Device Market and Our Target Markets
Our initial
target market is the AI focused datacenter eco-system that is exponentially expanding to address the need for accurate Large Language
Models – LLMs - for a variety of applications. To address these requirements, datacenters have grown in number and scope to include
hundreds of thousands of servers, switches and associated equipment per datacenter to address the computing needs required for LLMs –
a process often known as “scaling up and scaling out”. The number of “hyperscale” datacenters are expected to
continue to increase in number both in the US, but also in the rest of the world.
Figure 1: Number of Data
Center Sites (by Size)
Source: “How Many
Data Centers Are There and Where Are They being Built”, Yih-Khai Wong, ABI Research, July 16, 2024
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A “single”
hyperscale datacenter may consist of multiple large warehouse-size buildings on a campus or even several locations distributed around
a metropolitan area. Regardless of the design, these datacenters will require transmitting and receiving vast amounts of data - not only
around a single data center building – but often also between buildings in distributed data center architecture. The connectivity
required between servers, switches and related electronics within a single datacenter building is often shorter than 500 meters, with
a growing requirement for opto-electronics for connecting equipment that may be in facilities that are up to 10km apart. The ideal method
for addressing these links has been – and will continue to be - single mode fiber cabling. Correspondingly, the minimum “speeds”
or bandwidth required for transmitting data on these connections is expected to be 800Gigabits/second – a speed that eventually
be supplanted with 1.6Terabit/second and 3.2 Terabit/second connections, (2 times and 4 times faster than 800Gibaits/second), as shown
in Figure 2. Each connection speed will require either 4 or 8 modulators which results in a multimillion unit opportunity on a yearly
basis.
Figure 2: Number of Opto-Electronic
Connectivity Requirements (by “speed”)
Source: “Optical
Communications market Forecast”, Lightcounting, October, 2024
The combined
growth in number of datacenters and speed requirements has generated considerable discussion of the need for reduction in the growth of
energy demands needed for operations. Our polymers will enable low power modulators that will be required for the opto-electronics utilized
for interconnecting the switches and servers deployed at these required speeds on this cabling infrastructure.
Figure 3: Datacenter
Power Consumption Forecast
Source: “Investing
in the Rising Data Center Economy”, McKinsey, January 17, 2023
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Business Strategy
Our first revenue stream was obtained
from our entry into a material supply license agreement to provide Perkinamine® chromophore
materials for polymer based photonic devices and photonic integrated circuits (PICs). Our Company is also in various stages
of materials development and evaluation with potential customers and strategic partners. We expect to continue to obtain a revenue stream
from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of
our electro-optic Perkinamine® chromophore material.
Specifically,
our business strategy provides that our revenue stream will be derived from one or some combination of the following: (i) technology licensing
for specific product application; (ii) joint venture relationships with significant industry leaders; and (iii) the production and direct
sale of our own electro-optic materials. Our objective is to be a leading provider of proprietary technology and know-how in the electro-optic
device market. In order to meet this objective, we intend to continue to:
•
Further
the development of proprietary organic electro-optic polymer material systems.
•
Partner with PIC or packaged device design and manufacturing companies to further the development of PDKs for our polymer material.
•
Develop proprietary intellectual property.
•
Grow
our commercial device design and development capabilities.
•
Partner with silicon-based foundries who can scale volume quickly and integrate our materials into their infrastructure.
•
Grow our product reliability and quality assurance capabilities.
•
Grow our optoelectronic and RF testing capabilities.
•
Grow
our commercial material manufacturing capabilities.
•
Maintain/develop
strategic relationships with major telecommunications and data communications companies to further the awareness and commercialization
of our technology platform.
•
Add
high-level personnel with industrial and manufacturing experience in key areas of our materials and process development programs .
Create Organic Polymer-Enabled Electro-Optic Modulators
We
intend to utilize our proprietary optical polymer technology to enable the creation by our customers of a portfolio of commercial electro-optic
polymer product devices with applications for various markets, including telecommunications, data communications and data centers.
We expect our -polymer material
to be used initially in modulator products that will operate at symbol rates at least 112 Gigabaud which is roughly 200Gbps when utilized
with PAM4 encoding schemes. Our devices are highly linear and can also enable the performance required to take advantage of more advanced
complex encoding schemes if required.
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Our Research and Development Process
Our research and development process consists of the
following steps:
•
We develop novel polymer materials utilizing our patented and patent pending technology to meet certain performance specifications. We then develop methods to synthesize larger quantities of such material.
•
We conduct a full battery of tests at the completion of the synthesis of each new polymer material to evaluate its characteristics. We also create development strategies to optimize materials to meet specifications for specific applications. We model and simulate each new polymer material so that we can further understand how to optimize the material for device operation.
•
We integrate data from the material characterization and test results to fabricate sample devices for internal use. We analyze device-testing results to refine and improve fabrication processes and methods. In addition, we investigate alternative material and design variations to possibly create more efficient fabrication processes.
•
We create an initial device design using simulation software. Following device fabrication, we run a series of optical and electronic tests on the device.
•
We are developing PDKs with commercial silicon-based foundries so that our technology can transfer seamlessly to larger silicon wafer fabrication plants, and scale in volume quickly.
We have and expect to continue to make significant operating and capital
expenditures for research and development. Our research and development expenses were $16,806,548 and $15,903,689, for the years ended
December 31, 2024, and 2023, respectively.
Our Past Government Program Participation
Our Company has been a participant
in several vital government sponsored research and development programs with various government agencies that protect the interests of
our country. The following is a list of some of the various divisions of government agencies that have provided us with advisory, financial
and/or materials support in the pursuit of high-speed electro-optic materials. Our previous relationships included:
•
National Reconnaissance Office (NRO)
•
Properties Branch of the Army Research Laboratory on the Aberdeen Proving Grounds in Aberdeen, Maryland
•
Defense Advance Research Project Agency (DARPA)
•
Naval Air Warfare Center Weapons Division in China Lake, California
•
Air Force Research Laboratory at Wright-Patterson Air Force Base in Dayton, Ohio
We are aware of a multitude of
government programs that include for example the Chips and Science Act amongst others. As noted above, we are not currently partnered
with or financially supported by any governmental agency at this time, however, we are exploring future opportunities as our Company grows
and gains the additional resources and personnel necessary to support these efforts.
Our Competition
Competitors
The markets we are targeting for
our electro-optic polymer technology are intensely competitive. While there are no major multi-national companies that compete directly
with us on electro-polymers, there are other companies that do manufacture optical modulators based on alternative material platforms
such as Indium Phosphide, Silicon or Silicon Nitride and Lithium Niobate. These companies that have incumbent optical modulators using
semiconductors include: Lumentum, Broadcom, Marvell, Cisco, Intel, Ciena, Fujitsu, and Coherent. These companies are heavily invested
in the production of crystalline-based semiconductor electro-optic modulator technologies, as well as the development of novel manufacturing
techniques and modulator designs.
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Smaller companies that compete
with us on optical modulators using new and novel technologies include: Hyperlite (who are developing thin film lithium niobate (TFLN),
NLM Photonics (organic hybrid polymer) and Lumiphase (who are developing Barium Titanate or BTO).
Our Plan to Compete
We believe that as our organic
polymer technology gains industry acceptance, we will be poised to obtain a significant portion of the component manufacturing market
and have our technology become ubiquitous. Electro-optic polymers demonstrate several advantages over other technologies, such as inorganic-based
technologies, due to their reduced manufacturing and processing costs, higher performance, and lower power requirements. Our patented
organic polymers and future electro-optic photonic devices have demonstrated significant stability advantages over our known competitor’s
materials.
We believe the principal competitive factors in our
target markets are:
•
The ability to develop and commercialize highly stable optical polymer-based materials and optical devices in commercial quantities.
•
The ability to obtain appropriate patent and proprietary rights protection.
•
The ability to create commercial silicon-based PDKs for our electro-optic polymers.
•
Lower cost, high production yield for these products.
•
The ability to enable integration and implement advanced technologies.
•
Strong sales and marketing, and distribution channels for access to products.
We believe that our current business
planning will position our Company to compete adequately with respect to these factors. Our future success is difficult to predict because
we are an early-stage company with most of products still in development.
Many of our existing and potential
competitors have substantially greater research and product development capabilities and financial, scientific, marketing and human resources
than we do. As a result, these competitors may:
•
Succeed in developing products that are equal to or superior to our products and future products or that achieve greater market acceptance than our products and future products.
•
Devote greater resources to developing, marketing or selling their products.
•
Respond quickly to new or emerging technologies or scientific advances and changes in customer requirements, which could render our technologies or products obsolete.
•
Introduce products that make the continued development of our products and/or future products uneconomical.
•
Obtain patents that block or otherwise inhibit our ability to develop and commercialize our future products.
•
Withstand price competition more successfully than we can.
•
Establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our prospective customers.
•
Take advantage of acquisition or other opportunities more readily than we can.
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Employees and Human Capital
We currently have 31 full-time
employees, and we retain several independent contractors on an as-needed basis. Based on our current development plan we expect to add
4 additional full-time employees in 2025.
People
As a technology and innovation-driven
company, we depend on a highly skilled workforce. Attracting, developing, advancing and retaining the best talent is critical for us to
execute our strategy and grow our business. Individuals with technical, engineering, chemistry and other science backgrounds, experience,
or interests are particularly important for us to succeed. We strive to advance a diverse, equitable and inclusive work environment.
Technical Team
Our team is composed of world-class
technologists, including materials scientists, design engineers, device engineers, synthetic organic chemists, test and material engineers
and technicians.
Diversity and Inclusion
We work to create a culture of diversity and inclusion so that all of our employees feel they are respected and treated
equally, regardless of gender, race, ethnicity, age, disability, sexual orientation, gender identity, cultural background or religious
belief.
Compensation and benefits
Our total
rewards package includes market-competitive pay, stock option grants and bonuses, healthcare benefits, retirement savings plans, life
insurance, disability insurance, paid time off and family leave, and flexible work schedules.
The principal
purposes of our equity incentive plan is to attract and retain employees who will contribute to our Company’s long range success,
to provide incentives that align the interests of our employees with those of our shareholders, and to promote the success of our Company’s
business.
Health
and Safety
We are
committed to providing a healthy environment and safe workplace by operating in accordance with established health and safety protocols
within our facility and maintaining a strong health and safety compliance program. We prioritize, manage, and carefully track safety performance
at our facility and integrate sound safety practices in every aspect of our operations. We regularly conduct self-assessments to examine
our safety culture and processes.
Available Information
We maintain
a website at www.lightwavelogic.com. We make available on our website under “Investors” – “SEC Filings,”
free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those
reports as soon as reasonably practicable after we electronically file or furnish such material with the SEC. References to our website
in this report are provided as a convenience, and the information on our website is not, and shall not be deemed to be a part of this
Annual Report on Form 10-K or incorporated into any other filings we make with the SEC. The SEC maintains an Internet site (www.sec.gov)
that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
In addition, we make available on our website under “Leadership” – “Governance Documents”, free of charge,
our Audit Committee Charter, Compensation Committee Charter, Nominating And Corporate Governance Committee Charter, Operations Committee
Charter and Code of Ethics and Business Conduct. In addition, the foregoing information is available in print, without charge, to any
stockholder who requests these materials from us.
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