2 GRADIUM glass possesses internal light bending properties which allows it to do the work of multiple pieces of conventional glass or plastics, with dramatically improved performance. In developing GRADIUM glass, LightPath scientists succeeded where others had failed for decades; LightPath uses very high temperatures to melt glasses of different light-bending properties -- but with similar expansion properties -- into one piece of glass. Conventional glass limits advances in light-based technologies because current glass and plastic lens materials do not have sufficient focusing and color separating power to provide the performance required for the next generation of data storage and communications technologies. Priority markets for GRADIUM glass include manufacturers of: lasers for laboratory and industrial use; optical storage devices, such as compact disc technology, for computer data, video and audio; devices for band-width expansion of fiber optic networks; endoscopes and other medical imaging systems; scanners and photocopiers; HDTV and high-performance camera lenses; and high-performance microscopes and gun sights. GRADIUM lenses are practical and cost effective to manufacture, on any scale, and do not require elaborate equipment. Approximately 2,000 GRADIUM products have been shipped to date. Ongoing R&D efforts are geared toward the production and refinement of subsequent generations of GRADIUM glass lenses. Particularly significant are the GRADIUM product lines being developed in the areas of multiplexers and interconnects for the telecommunications field. .
SUMMARY AND RECOMMENDATION LightPath has achieved two breakthroughs : 1) proving that it can bend light within a lens in a very precise and controlled manner, and 2) proving that GRADIUM can be manufactured efficiently and quickly. The discovery of GRADIUM, using high temperatures to melt glasses of different light-bending properties, was an intuitive process. Scientists told the Company afterwards that had the LightPath founders been fully trained in material sciences, they would have never tried it because "we would have known it wasn't going to work." Once the Company had convinced the scientific community that it could indeed precisely bend light within a lens, strong resistance still remained. The big question was whether GRADIUM could be produced in quantity, cost effectively. LightPath has answered that question with a resounding YES. The Company has developed a set of proprietary GRADIUM software design tools which allow it to define the most efficient profile curve for a given application. These tools will enable LightPath to quickly develop new lenses for new markets.
The Company's growth strategy is to fully leverage the GRADIUM technology through strategic partnerships, direct sales to OEMs, licensing agreements and catalog sales. The optical components market currently estimated at $12 billion, is expected to grow to $22 billion by the year 2005 (Mitre Economic Analysis Center). In the past optics and optoelectronics problems have been solved by adding one or more additional lens elements or optical components. This usually results in adding bulk, weight, cost and inefficiency to the system. These components were tolerated because there was no other way to solve the problem. Yesterday's solutions are becoming increasingly unworkable as demand grows for smaller, more rugged, lighter, lower cost, and more efficient optical systems. The GRADIUM breakthrough is well-timed to take advantage of significant opportunities in this rapidly evolving market.
We recommend purchasing LPTHA at the current level. Our 12-month target is $10 based on a 20X multiple of our FY 2000E (June 30th) of $0.87, discounted at 30%. |
