Lightwave Logic Inc

Previous wording

We commenced commercial operations in May 2023. Presently, our commercial operations consist of amaterial 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 photonic device and 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 device components. We have seen increased interest in our materials during 2023 and we are in discussions on future license agreements.

Current wording

We commenced commercial operations in May 2023. Presently, our commercial operations consist of amaterial 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 photonic device and 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 device components. We have seen increased interest in our materials during 2023, which has continued into 2024 and we are in discussions on future license agreements.

Previous wording

Our Company designs and synthesizes organic chromophores for use in its own proprietary electro-opticpolymer 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.

Current wording

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.

Previous wording

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. Our work with the foundries is being focused with the Polymer Plus™ and the Polymer Slot™ polymer modulators.

Current wording

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. Our work with the foundries is being focused with the Polymer Plus™ and the Polymer Slot™ polymer modulators. We are currently receiving 200mm silicon wafers with our Polymer Slot™ modulator designs from AMF, a silicon photonics foundry based in Singapore.

Previous wording

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 photonic device and 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 device components.

Current wording

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 photonic device and materials development and evaluation with potential customers and strategic partners that include Tier 1 players in the fiber optic communications industry. 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 device components.

Previous wording

In September 2019 at the prestigious European Conference on Communications (ECOC) in Dublin, Ireland, we showed measured material response over frequency and the resulting optical data bits stream on our clean technology polymer materials, the newest addition to our family of Perkinamine TM polymers, that meet and exceed of our near-term target speed of 80 GHz. We also released data demonstrating stability under elevated temperatures in the activated (poled to create data carrying capability) state.

Current wording

In September 2019 at the prestigious European Conference on Communications (ECOC) in Dublin, Ireland, we showed measured material response over frequency and the resulting optical data bits stream on our clean technology polymer materials, the newest addition to our family of Perkinamine™ polymers, that meet and exceed of our near-term target speed of 80 GHz. We also released data demonstrating stability under elevated temperatures in the activated (poled to create data carrying capability) state.

Previous wording

On June 24, 2021, we announced the receipt of U.S. patent number 11,042,051 that detailsa breakthrough new device design that enables mass-volume manufacturing when designed into advanced integrated photonic platforms. The device design enhances reliability, improves optical mode control and most important, lowers by consumption through the use of direct-drive, low-voltage operation. The patent is entitled, “Direct drive region-less polymer modulator methods of fabricating and materials therefor” and is expected to open the opportunity for low power consumption electro-optic polymers to be developed into large foundry PDKs (process development kits) and be ready for mass volume commercialization. The patent emphasizes our technology platform using fabrication techniques that would naturally fit into foundry PDKs.

Current wording

On June 24, 2021, we announced the receipt of U.S. patent number 11,042,051 that details a breakthrough new device design that enables mass-volume manufacturing when designed into advanced integrated photonic platforms. The device design enhances reliability, improves optical mode control and most important, lowers by consumption through the use of direct-drive, low-voltage operation. The patent is entitled, “Direct drive region-less polymer modulator methods of fabricating and materials therefor” and is expected to open the opportunity for low power consumption electro-optic polymers to be developed into large foundry PDKs (process development kits) and be ready for mass volume commercialization. The patent emphasizes our technology platform using fabrication techniques that would naturally fit into foundry PDKs.

Previous wording

During the three months ended March 31, 2024, we recognized $16,667 of licensing and royalty revenue and $13,750 of revenue for coating and poling work on the devices supplied by a customer. As a development stage company, during the three months ended March 31, 2023, we had no revenues. The Company is in various stages of photonic device and materials development and evaluation with potential customers and strategic partners, and commercialization. The Company expects to continue obtaining a revenue stream from technology licensing agreements, to obtain additional revenue streams from technology transfer agreements and direct sale of its own electro-optic device components.

Current wording

During the three months ended June 30, 2024, we recognized $19,355 of licensing and royalty revenue. As a development stage company, during the three months ended June 30, 2023, we had no revenues. The Company is in various stages of photonic device and materials development and evaluation with potential customers and strategic partners, and commercialization. The Company expects to continue obtaining a revenue stream from technology licensing agreements, to obtain additional revenue streams from technology transfer agreements and direct sale of its own electro-optic device components.

Previous wording

General and administrative expenses decreased for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, primarily due to increases in general and administrative salary expenses, depreciation expense, consulting fees, auditing fees, general and administrative recruiting fees, software expenses, investor expenses, and general and administrative rent expenses, offset by decreases in general and administrative non-cash stock option amortization and legal fees.

Current wording

General and administrative expenses increased for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, primarily due to increases in general and administrative non-cash stock option amortization expenses, general and administrative salary expenses, consulting fees, sales and marketing expenses, legal fees, depreciation expense, general and administrative rent expenses, and general and administrative travel expenses, offset by decreases in auditing and accounting fees.

Previous wording

Other income increased for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, primarily due to a $284,718 decrease in commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement and a $211,174 increase in interest income on money market account.

Current wording

Other income increased for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, primarily due to a $148,044 increase in interest income on money market account and a $191,749 decrease in commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement.

Previous wording

Net loss was $5,679,911 and $5,476,018 for the three months ended March 31, 2024 and 2023, respectively, for an increase of $203,893 due primarily to increases in prototype device development expenses, salary expenses, laboratory and wafer fabrication materials and supplies expenses, rent expenses, depreciation expense, travel expenses, consulting and auditing fees, recruiting fees, internal and external testing expenses, software expenses, and investor relations expenses. These increases were offset by decreases in non-cash stock option amortization, commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement, and legal fees, and an increase in interest income on money market account.

Current wording

Net loss was $6,019,684 and $5,457,747 for the three months ended June 30, 2024 and 2023, respectively, for an increase of $561,937 due primarily to increases in salary expenses, non-cash stock option amortization expenses, depreciation expense, laboratory and wafer fabrication materials and supplies expenses, consulting fees, rent expenses, property taxes, sales and marketing expenses and legal fees. These increases were offset by decreases in prototype device development expenses, commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement, employee relocation expenses, recruiting fees, auditing expenses and accounting fees, and an increase in interest income on money market account.

Previous wording

During the three months ended March 31, 2024, we recognized $5,175 in Cost of Sales, and $0 in Cost of Sales during the three months ended March 31, 2023.

Current wording

During the six months ended June 30, 2024, we recognized $5,175 in Cost of Sales, and $0 in Cost of Sales during the six months ended June 30, 2023.

Previous wording

Research and development expenses increased for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, primarily due to increases in prototype device development expenses, research and development salary expenses, laboratory and wafer fabrication materials and supplies expenses, research and development travel expenses, research and development rent expenses, and internal and external testing expenses, offset by a decrease in research and development non-cash stock option amortization expenses.

Current wording

Research and development expenses increased for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, primarily due to increases in research and development salary expenses, prototype device development expenses, laboratory and wafer fabrication materials and supplies expenses, depreciation expense, research and development rent expenses, research and development travel expenses, property taxes, repair expenses and equipment rental expenses, offset by a decrease in research and development non-cash stock option amortization expenses, research and development employee relocation expenses, and research and development recruiting fees.

Previous wording

On July 2, 2021, the Company filed a $100 million universal shelf registration statement which became effective on July 9, 2021. On October 4, 2021, our Company entered into the 2021 purchase agreement with Lincoln Park to sell up to $33 million of common stock over a 36-month period. All of the registered shares under the October 4, 2021 purchase agreement with Lincoln Park have been issued as of December 31, 2023. On February 28, 2023, our Company entered into the 2023 purchase agreement with Lincoln Park to sell up to $30 million of common stock over a 36-month period, with $7.7 million remaining on the 2023 Purchase Agreement as of the date of this filing. On December 9, 2022, our Company entered into the at the market sale agreement with Roth Capital, as sales agent, whereby pursuant to the at the market sale agreement, our Company may offer and sell up to $35,000,000 in shares of our common stock, from time to time through Roth Capital. As of the date of this filing $33.1 million remains available to our Company pursuant to the at the market sale agreement.

Current wording

On July 2, 2021, the Company filed a $100 million universal shelf registration statement (the “2021 shelf registration statement”) which became effective on July 9, 2021. On October 4, 2021, our Company entered into the 2021 purchase agreement with Lincoln Park to sell up to $33 million of common stock over a 36-month period. All of the registered shares under the October 4, 2021 purchase agreement with Lincoln Park have been issued as of December 31, 2023. On February 28, 2023, our Company entered into the 2023 purchase agreement with Lincoln Park to sell up to $30 million of common stock over a 36-month period, with $6.4 million remaining on the 2023 Purchase Agreement as of the date of this filing. On December 9, 2022, our Company entered into the at the market sale agreement with Roth Capital, as sales agent, whereby pursuant to the at the market sale agreement, our Company may offer and sell up to $35,000,000 in shares of our common stock, from time to time through Roth Capital. As of the date of this filing $32.9 million remains available to our Company pursuant to the at the market sale agreement. The 2021 shelf registration statement expired in July 2024 and on July 26, 2024, and the Company filed a $100,000,000 universal shelf registration statement with the U.S. Securities and Exchange Commission which became effective on August 5, 2024 (the “2024 shelf registration statement”). The unsold securities relating to the 2023 purchase agreement with Lincoln Park and the at the market sale agreement with Roth Capital were carried over from the 2021 Shelf Registration to the 2024 Shelf Registration.

Previous wording

During the three months ended March 31, 2024, the Company received $5,152,350 in proceeds pursuant to the 2023 purchase agreement with Lincoln Park, $330,453 in proceeds pursuant to the at the market sale agreement with Roth Capital, and $194,850 in proceeds pursuant to the exercise of options and warrants. During the year ended December 31, 2023, the Company received $19,993,359 in proceeds pursuant to the 2021 purchase agreement and 2023 purchase agreement with Lincoln Park, $1,515,878 in proceeds pursuant to the at the market sale agreement with Roth Capital, $1,013,924 in proceeds pursuant to the exercise of options and warrants and $50,000 in a proceed received under a material supply and license agreement of which $39,875 is recorded as deferred revenue as of December 31, 2023.

Current wording

During the six months ended June 30, 2024, the Company received $7,495,600 in proceeds pursuant to the 2023 purchase agreement with Lincoln Park, $499,883 in proceeds pursuant to the at the market sale agreement with Roth Capital, and $245,250 in proceeds pursuant to the exercise of options and warrants and $63,884 in cash collections from customer contracts, of which $50,000 related to the proceeds received under a material supply and license agreement and $13,884 – to the proceeds received for a contract for processing work on the devices supplied by a customer. During the year ended December 31, 2023, the Company received $19,993,359 in proceeds pursuant to the 2021 purchase agreement and 2023 purchase agreement with Lincoln Park, $1,515,878 in proceeds pursuant to the at the market sale agreement with Roth Capital, $1,013,924 in proceeds pursuant to the exercise of options and warrants and $50,000 in a proceed received under a material supply and license agreement of which $39,875 is recorded as deferred revenue as of December 31, 2023.

Previous wording

During the three months ended March 31, 2024, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including prototypes development and foundries expenses, laboratory and wafer fabrication materials and supplies expenses, and third-party service providers. During the year ended December 31, 2023, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including prototypes development and foundries expenses and third-party service providers.

Current wording

During the six months ended June 30, 2024, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including prototypes development and foundries expenses, laboratory and wafer fabrication materials and supplies expenses, and third-party service providers. During the year ended December 31, 2023, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including prototypes development and foundries expenses and third-party service providers.

Previous wording

There are no trading volume requirements or restrictions under the 2023 purchase agreement, and we will control the timing and amount of any sales of our common stock to Lincoln Park. Lincoln Park has no right to require any sales by us, but is obligated to make purchases from us as we direct in accordance with each of the 2023 purchase agreement. We can also accelerate the amount of common stock to be purchased under certain circumstances. There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on the Company’s ability to enter into a similar type of agreement or equity line of credit during the term, excluding an at-the-market transaction with a registered broker-dealer), rights of first refusal, participation rights, penalties or liquidated damages under the 2023 purchase agreement.

Current wording

There are no trading volume requirements or restrictions under the 2023 purchase agreement, and we will control the timing and amount of any sales of our common stock to Lincoln Park. Lincoln Park has no right to require any sales by us, but is obligated to make purchases from us as we direct in accordance with the 2023 purchase agreement. We can also accelerate the amount of common stock to be purchased under certain circumstances. There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on the Company’s ability to enter into a similar type of agreement or equity line of credit during the term, excluding an at-the-market transaction with a registered broker-dealer), rights of first refusal, participation rights, penalties or liquidated damages under the 2023 purchase agreement.

Previous wording

Net cash used in operating activities was $4,772,208 for the three months ended March 31, 2024, primarily attributable to the net loss of $5,679,911 adjusted by $626,512 in options issued for services, $64,199 amortization of deferred compensation, $76,977 in common stock issued for services, $386,498 in depreciation expenses and patent amortization expenses, $47,011 amortization of right of use asset, $3,166 loss on disposal of property, plant and equipment, ($26,384) in accounts receivable, $540,932 in prepaid expenses and other current assets and ($811,208) in accounts payable, accrued bonuses, accrued expenses, deferred revenue and other liabilities. Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.

Current wording

Net cash used in operating activities was $8,823,788 for the six months ended June 30, 2024, primarily attributable to the net loss of $11,699,595 adjusted by $2,337,460 in options issued for services, $203,521 amortization of deferred compensation, $105,960 in common stock issued for services, $804,737 in depreciation expenses and patent amortization expenses, $94,753 amortization of right of use asset, $3,166 loss on disposal of property and equipment, $22,311 in accounts receivable, $476,730 in prepaid expenses and other current assets and ($1,172,831) in accounts payable, accrued bonuses, accrued expenses, deferred revenue and other liabilities. Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.

Previous wording

Net cash used by investing activities was $828,474 for the three months ended March 31, 2024, consisting of $53,097 in cost for intangibles and $775,377 in asset additions for the Colorado headquarter facility and labs.

Current wording

Net cash used in investing activities was $1,653,217 for the six months ended June 30, 2024, consisting of $67,445 in cost for intangibles and $1,585,772 in asset additions for the Colorado headquarter facility and labs.

Previous wording

Net cash provided by financing activities was $5,677,653 for the three months ended March 31, 2024 and consisted of $194,850 in proceeds from exercise of options and warrants, $5,152,350 in proceeds from sale of common stock to an institutional investor and $330,453 in proceeds from at the market sale of common stock by an investment banking company.

Current wording

Net cash provided by financing activities was $8,240,733 for the six months ended June 30, 2024 and consisted of $245,250 in proceeds from exercise of options and warrants, $7,495,600 in proceeds from resale of common stock to an institutional investor and $499,883 in proceeds from at the market sale of common stock by an investment banking company.

Previous wording

On March 31, 2024, our cash and cash equivalents totaled $31,509,058, our assets totaled $41,737,807, our liabilities totaled $4,538,563 and we had stockholders’ equity of $37,199,244.

Current wording

On June 30, 2024, our cash and cash equivalents totaled $29,195,815, our assets totaled $39,798,833, our liabilities totaled $4,176,940 and we had stockholders’ equity of $35,621,893.

Previous wording

Net cash used in operating activities was $3,748,656 for the three months ended March 31, 2023, primarily attributable to the net loss of $5,476,018 adjusted by $1,795,842 in options issued for services, $73,498 amortization of deferred compensation, $361,694 in common stock issued for services, $275,276 in depreciation expenses and patent amortization expenses, $46,381 amortization of right of use asset, ($91,853) in prepaid expenses and ($733,476) in accounts payable, accrued bonuses and accrued expenses. Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.

Current wording

Net cash used in operating activities was $7,004,008 for the six months ended June 30, 2023, primarily attributable to the net loss of $10,933,765 adjusted by $3,389,804 in options issued for services, $133,854 amortization of deferred compensation, $582,426 in common stock issued for services, $531,046 in depreciation expenses and patent amortization expenses, $92,812 amortization of right of use asset, $581 loss on disposal of property and equipment, ($162,748) in prepaid expenses and ($638,019) in accounts payable, accrued expenses, deferred revenue and other liabilities. Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.

Previous wording

Net cash used by investing activities was $289,592 for the three months ended March 31, 2023, consisting of $106,475 in cost for intangibles, $246,053 in asset additions for the Colorado headquarter facility and labs offset by $642,120 in a loan repayment.

Current wording

Net cash used by investing activities was $513,095 for the six months ended June 30, 2023, consisting of $177,245 in cost for intangibles, $978,560 in asset additions for the Colorado headquarter facility and labs offset by $642,120 in a loan repayment and $590 in proceeds on sale of property and equipment.

Previous wording

Net cash provided by financing activities was $5,525,127 for the three months ended March 31, 2023 and consisted of $25,750 in proceeds from exercise of options and warrants and $5,499,377 in proceeds from sale of common stock to an institutional investor.

Current wording

Net cash provided by financing activities was $16,050,739 for the six months ended June 30, 2023 and consisted of $456,801 in proceeds from exercise of options and warrants, $14,950,409 in proceeds from resale of common stock to an institutional investor and $643,529 in proceeds from at the market sale of common stock by an investment banking company.

Previous wording

On March 31, 2023, our cash and cash equivalents totaled $26,168,214, our assets totaled $30,810,139, our liabilities totaled $976,973 and we had stockholders’ equity of $29,833,166.

Current wording

On June 30, 2023, our cash and cash equivalents totaled $32,635,787, our assets totaled $40,552,039, our liabilities totaled $3,775,958 and we had stockholders’ equity of $36,776,081.

Previous wording

There have been no material changes outside the ordinary course of business in our contractual commitments during the three months ended March 31, 2024. See Note 8 to the financial statements herein for a discussion of our contractual commitments.

Current wording

There have been no material changes outside the ordinary course of business in our contractual commitments during the six months ended June 30, 2024. See Note 8 to the financial statements herein for a discussion of our contractual commitments.