UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM
____________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____________to _____________
Commission File Number
(Exact name of registrant as specified in its charter)
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
(Address of principal executive offices) |
(Zip Code) |
|
( (Registrant’s telephone number, including area code) | |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered |
| The
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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐
| The number of shares of the registrant’s common stock outstanding as of May 13, 2025 was . |
TABLE OF CONTENTS
| Page | |||
| Part I | Financial Information | 1 | |
| Item 1 | Financial Statements | 1 | |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 | |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 30 | |
| Item 4 | Controls and Procedures | 30 | |
| Part II | Other Information | 31 | |
| Item 1 | Legal Proceedings | 31 | |
| Item 1A | Risk Factors | 31 | |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 31 | |
| Item 3 | Defaults Upon Senior Securities | 31 | |
| Item 4 | Mine Safety Disclosures | 32 | |
| Item 5 | Other Information | 32 | |
| Item 6 | Exhibits | 32 | |
| Signatures | 33 | ||
i
Forward-Looking Statements
This report on Form 10-Q contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “continuing,” “ongoing,” “strategy,” “future,” “likely,” “may,” “should,” “could,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding expected operating results, such as anticipated revenue; anticipated levels of capital expenditures for our current fiscal year; our belief that we have, or will have, sufficient liquidity to fund our business operations during the next 12 months; strategy for gaining customers, growth, product development, market position, financial results and reserves.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: inability to generate significant revenue or to manage growth; lack of available funding; lack of a market for or market acceptance of our products; competition from third parties; general economic and business conditions; intellectual property rights of third parties; changes in the price of our stock and dilution; regulatory constraints and potential legal liability; ability to maintain effective internal controls; security breaches, cybersecurity attacks and other significant disruptions in our information technology systems; changes in technology and methods of marketing; delays in completing various engineering and manufacturing programs; changes in customer order patterns and qualification of new customers; changes in product mix; success in technological advances and delivering technological innovations; shortages in components; production delays due to performance quality issues with outsourced components; other risks to which our Company is subject; and other factors beyond the Company’s control.
The ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. We discuss our known material risks under Part I Item 1.A “Risk Factors” contained in our Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as amended, and Part II, Item 1.A “Risk Factors” in this report on Form 10-Q. Many factors could cause our actual results to differ materially from the forward-looking statements. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
ii
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
LIGHTWAVE LOGIC, INC.
FINANCIAL STATEMENTS
MARCH 31, 2025
(UNAUDITED)
CONTENTS
| PAGE | |
| BALANCE SHEETS | 2 |
| STATEMENTS OF COMPREHENSIVE LOSS | 3 |
| 4 | |
| 5 | |
| NOTES TO FINANCIAL STATEMENTS | 6- 22 |
| 1 |
LIGHTWAVE LOGIC, INC.
BALANCE SHEETS
(UNAUDITED)
| March 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts Receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| PROPERTY AND EQUIPMENT - net of accumulated depreciation of $ | ||||||||
| OTHER ASSETS | ||||||||
| Intangible assets - net of accumulated amortization of $ | ||||||||
| Operating Lease - Right of Use - Building | ||||||||
| TOTAL OTHER ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued bonuses and accrued expenses | ||||||||
| Accounts payable and accrued expenses - related parties | ||||||||
| Contract liability | ||||||||
| Operating lease liability | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| LONG TERM LIABILITIES | ||||||||
| Operating lease liability | ||||||||
| TOTAL LONG TERM LIABILITIES | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Preferred stock, $ par value, authorized, shares issued or outstanding |
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| Common stock $ par value, authorized, and issued and outstanding at March 31, 2025 and December 31, 2024 |
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| Additional paid-in-capital | ||||||||
| Deferred compensation | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | ||||||
See accompanying notes to these financial statements.
| 2 |
LIGHTWAVE LOGIC, INC.
STATEMENTS OF COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
| 2025 | 2024 | |||||||
| NET SALES | $ | $ | ||||||
| COST AND EXPENSE | ||||||||
| Cost of sales | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| TOTAL COST AND EXPENSE | ||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest income | ||||||||
| Commitment fee | ( | ) | ( | ) | ||||
| Gain (loss) on disposal of property and equipment | ( | ) | ||||||
| Other expense | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | | | ||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| LOSS PER SHARE | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
| WEIGHTED AVERAGE NUMBER OF SHARES | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
See accompanying notes to these financial statements
| 3 |
LIGHTWAVE LOGIC, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
| Additional | ||||||||||||||||||||||||
| Number of | Common | Paid-in | Deferred | Accumulated | ||||||||||||||||||||
| Shares | Stock | Capital | Compensation | Deficit | Total | |||||||||||||||||||
| BALANCE AT DECEMBER 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Common stock issued to institutional investor | ||||||||||||||||||||||||
| Common stock issued for commitment shares | ||||||||||||||||||||||||
| Common stock sales at the market by investment banking company | ||||||||||||||||||||||||
| Exercise of options | ||||||||||||||||||||||||
| Cashless exercise of 50,000 options | ||||||||||||||||||||||||
| Options issued for services | — | |||||||||||||||||||||||
| Options issued to settle accrued bonuses | — | |||||||||||||||||||||||
| Restricted stock awards issued for future services | ( | ) | ||||||||||||||||||||||
| Deferred compensation | — | |||||||||||||||||||||||
| Net loss for the three months ended March 31, 2025 | — | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE AT MARCH 31, 2025 (UNAUDITED) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Additional | ||||||||||||||||||||||||
| Number of | Common | Paid-in | Deferred | Accumulated | ||||||||||||||||||||
| Shares | Stock | Capital | Compensation | Deficit | Total | |||||||||||||||||||
| BALANCE AT DECEMBER 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Common stock issued to institutional investor | ||||||||||||||||||||||||
| Common stock issued for commitment shares | ||||||||||||||||||||||||
| Common stock sales at the market by investment banking company | ||||||||||||||||||||||||
| Exercise of options | ||||||||||||||||||||||||
| Exercise of warrants | ||||||||||||||||||||||||
| Options issued for services | — | |||||||||||||||||||||||
| Deferred compensation | — | |||||||||||||||||||||||
| Net loss for the three months ended March 31, 2024 | — | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE AT MARCH 31, 2024 (UNAUDITED) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
See accompanying notes to these financial statements
| 4 |
LIGHTWAVE LOGIC, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Stock options issued for services | ||||||||
| Amortization of deferred compensation | ||||||||
| Cashless option exercise | ||||||||
| Common stock issued for commitment shares | ||||||||
| Depreciation and amortization of patents | ||||||||
| Amortization of right of use asset | ||||||||
| (Gain) loss on disposal of property and equipment | ( | ) | ||||||
| Decrease (increase) in assets | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| (Decrease) increase in liabilities | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued bonuses, accrued expenses and other liabilities | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses-related parties | ( | ) | ||||||
| Contract liability | ( | ) | ( | ) | ||||
| Deferred lease liability | ( | ) | ||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Cost of intangibles | ( | ) | ( | ) | ||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Exercise of options and warrants | ||||||||
| Issuance of common stock, institutional investor | ||||||||
| Common stock sales at the market by investment banking company | ||||||||
| Net cash provided by financing activities | ||||||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | $ | ||||||
| Supplemental disclosure of non-cash activities: | ||||||||
| Options issued to settle accrued bonuses | $ | $ | ||||||
| Trade-in credit to acquire property and equipment | $ | $ | ||||||
| Restricted stock awards issued for future services | $ | $ | ||||||
See accompanying notes to these financial statements
| 5 |
LIGHTWAVE LOGIC, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2025 AND 2024
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statements
The accompanying unaudited financial statements have been prepared by Lightwave Logic, Inc. (the “Company”). These statements include all adjustments (consisting only of its normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting polices described in the Summary of Significant Accounting Policies included in the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as amended, as originally filed with the Securities and Exchange Commission on March 18, 2025 and Amendment No. 1 to the Form 10-K filed on March 28, 2025 (the “2024 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company firmly believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the 2024 Annual Report. The interim operating results for the three months ending March 31, 2025 may not be indicative of operating results expected for the full year.
History and Nature of Business
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.
The Company's first revenue stream is from a technology material supply and licensing agreement that incorporates the Company's patented electro-optic polymer materials for use in manufacturing photonic devices. Currently, the Company is in various stages of materials development and evaluation with potential customers and strategic partners. The Company expects to continue to obtain revenue from technology licensing agreements, and to obtain additional revenue from technology transfer agreements and direct sale of its electro-optic materials.
The Company’s current development activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s technology now under development.
Lightwave Logic, Inc. was organized under the laws of the State of Nevada in 1997, and it commenced with its current business plan in 2004.
Fair Value of Financial Instruments
The carrying value of the Company’s short-term financial instruments such as cash, accounts receivable, prepaid expenses and other assets, accounts payable and accrued expenses approximate their fair values because of their short maturities.
Revenue Recognition and Contract Liability
The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Under ASC 606, revenue is recognized when control of goods or services is transferred to a customer in an amount that reflects the consideration to which the Company expects to be entitled.
| 6 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue Recognition and Contract Liability (Continued)
To achieve this, the Company applies the five-step model:
| 1. | Identify the contract with a customer. |
| 2. | Identify the performance obligations in the contract. |
| 3. | Determine the transaction price for the contract. |
| 4. | Allocate the transaction price to the performance obligations. |
| 5. | Recognize revenue as performance obligations are satisfied. |
The Company’s primary revenue stream includes technology license and material supply agreements.
Technology License and Material Supply Agreements
The Company enters into technology license and material supply agreements, under which it grants customers a non-exclusive, royalty-bearing license to use its patented electro-optic polymer technology (the “Licensed Product”). The Company also supplies proprietary polymers to licensees for use in their manufacturing of photonic devices.
The Company assesses whether the license and the supply of proprietary polymers represent distinct performance obligations. Based on this assessment, the Company has determined that the license and material supply are not distinct for financial reporting purposes because they are highly interdependent. Accordingly, the Company accounts for these as a single performance obligation.
Revenue under these agreements is recognized as follows:
Upfront License Fees – Nonrefundable upfront license fees are recorded as contract liability and recognized on a pro-rata basis over the contract term.
Minimum Annual Royalties – Fixed royalty payments required under the contract are also recognized on a pro-rata basis over the contract term.
Variable Royalties – Royalties exceeding the minimum annual amount are recognized when earned, typically when the licensee’s sales exceed the minimum threshold.
Milestone Payments – Recognized only when the contractual milestone is achieved, such as when the licensee sells a specified number of units of the Licensed Product.
Contract Costs
The Company capitalizes incremental costs to obtain contracts if they are expected to be recoverable, in accordance with ASC 340-40, Other Assets and Deferred Costs – Contracts with Customers. These capitalized costs are amortized over the expected contract term in a manner consistent with the related revenue recognition.
Contract Liability
Contract liability represents amounts received in advance for performance obligations not yet satisfied, including nonrefundable upfront license fees. The Company recognizes contract liability revenue as revenue when the related performance obligations are satisfied.
Cost of Sales
Cost of sales consists of labor costs, material costs and manufacturing overhead costs associated with the production of materials transferred to the customer under the technology license and material supply agreement at the Company’s facility.
| 7 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Company accounts for stock-based compensation under the provisions of FASB ASC 718, “Compensation - Stock Compensation,” which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The fair value of restricted stock awards is estimated by the market price of the Company’s common stock at the date of grant. Restricted stock awards are being amortized to expense over the shorter of the requisite service period or the actual vesting period. The Company estimates the fair value of option and warrant awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the shorter of the requisite service period or the actual vesting period, using the straight-line method. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.
The Company has elected to account for forfeiture of stock-based awards as they occur.
The Company follows FASB ASC 260, “Earnings per Share,” resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss in 2025 and 2024, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same.
Comprehensive Loss
The Company follows FASB ASC 220.10, “Reporting Comprehensive Income (Loss).” Comprehensive loss is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net loss. Since the Company has no items of other comprehensive loss, comprehensive loss is equal to net loss.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09 – Income Taxes (Topic 740), which requires disclosures related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The other amendments in this update improve the effectiveness and comparability of disclosures by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. The Company is adopting the guidance for the annual reporting period ended December 31, 2025 and does not expect this ASU to have a material impact on its year-end disclosures.
| 8 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recently Issued Accounting Pronouncements Not Yet Adopted (Continued)
ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses, such as the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, included in each relevant expense caption; disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and disclosure of the total amounts of selling expenses. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2026 and interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of this ASU on its financial statement disclosures.
NOTE 2 – MANAGEMENT’S PLANS
The Company’s future expenditures and capital
requirements will depend on numerous factors, including: the progress of our research and development efforts; the rate at which the
Company can, directly or through arrangements with original equipment manufacturers, introduce and sell its polymer materials technology;
the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; market acceptance
of the Company’s products and competing technological developments; and the Company’s ability to establish cooperative development,
joint venture and licensing arrangements. The Company expects that it will incur approximately $ of
expenditures per month over the next 12 months. The Company’s current cash position enables it to finance its operations through
May 2026. On March 17, 2025, the Company entered into a purchase agreement with an institutional investor to sell up to $
NOTE 3 – REVENUE
The Company's first commercial agreement occurred in May 2023, in the form of a four-year material supply and license agreement (the “License Agreement”) that incorporates the Company's patented electro-optic polymer materials for use in manufacturing of photonic devices (the “Licensed Product”). The licensee shall pay the Company a running royalty with a minimum royalty paid on an annual basis over the term of the License Agreement the minimum royalty payments and milestone license fees. The License Agreement is a non-exclusive material supply and license agreement.
| 9 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 3 – REVENUE (CONTINUED)
Additional future revenue will be generated from royalties from the licensee’s sale of Licensed Product that exceed the minimum royalty payments and milestone license fees.
During 2024, the Company performed device processing work for a customer.
Timing of Revenue Recognition and Contract Balances
Revenues related
to the initial license fee and a minimum annual royalty are recognized over time commencing with the License Agreement in May 2023. An
up-front license fee in the amount of $
In March 2024, the
Company completed device processing work on the devices supplied by a customer. Revenue for this contract was recognized at the time
of shipment of the devices back to the customer and amounted to $
Contract balances are as follows:
| March 31, 2025 | December 31, 2024 | |||||||
| Accounts receivable, net | $ | $ | ||||||
| Short-term contract assets | $ | $ | ||||||
| Long-term contract assets | $ | $ | ||||||
| Short-term contract liability | $ | $ | ||||||
Significant changes in the contract balances for the period ended March 31, 2025 are as follows:
| March 31, 2025 | ||||||||
| Assets | Liabilities | |||||||
| Balance at December 31, 2024 | $ | $ | ( | ) | ||||
| Revenue recognized that was previously included in contract liability | — | |||||||
| Decreases/increases due to cash received | ( | ) | — | |||||
| Billed receivables recorded | — | — | ||||||
| Transferred to receivables from unbilled receivables | — | — | ||||||
| Unbilled receivables recorded | — | |||||||
| Balance at March 31, 2025 | $ | $ | ( | ) | ||||
Assets Recognized for the Costs to Obtain a Contract
There are no assets recognized for the costs to obtain the License Agreement.
| 10 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Software licenses | $ | $ | ||||||
| Insurance | ||||||||
| Investor relations | ||||||||
| Rent | ||||||||
| Other | ||||||||
| Prototype Devices | ||||||||
| $ | $ | |||||||
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Office equipment | $ | $ | ||||||
| Lab equipment | ||||||||
| Furniture | ||||||||
| Leasehold improvements | ||||||||
| Software | ||||||||
| Less: Accumulated depreciation | ||||||||
| $ | $ | |||||||
Depreciation expense for the three months ended March 31, 2025 and 2024
was $
| 11 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 6 – INTANGIBLE ASSETS
Intangible assets represent legal fees and patent fees associated with the prosecution of patent applications. The Company has recorded amortization expense on patents granted, which are amortized over the remaining legal life. Maintenance patent fees are paid to a government patent authority to maintain a granted patent in force. Some countries require the payment of maintenance fees for pending patent applications. Maintenance fees paid after a patent is granted are expensed, as these are considered ongoing costs to “maintain a patent”. Maintenance fees paid prior to a patent grant date are capitalized to patent costs, as these are considered “patent application costs”. No amortization expense has been recorded on the remaining patent applications since patents on these applications have yet to be granted.
Intangible assets consist of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Patents | $ | $ | ||||||
| Less: Accumulated amortization | ||||||||
| Intangible assets - net | $ | $ | ||||||
Amortization expense for the three months ended March
31, 2025 and 2024 was $
| 12 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 7 – LEASES
On October 30, 2017, the Company entered into a lease
agreement (the “Lease”) to lease approximately
On November 22, 2022, the Company entered into an
amendment to the Lease (“the Amended Lease”) to lease an additional approximately 9,684 square feet of adjacent office and
warehouse space. The term of the Amended Lease is one hundred twenty (
For purposes of calculating operating lease liability, lease term includes the initial non-cancelable term plus any term under renewal options that are reasonably assured. Any rent escalations, along with rent abatements, are included in the computation of rent expense calculated on a straight-line basis over the lease term. The interest rate implicit in lease contracts is typically not readily determinable and as such the Company uses the appropriate incremental borrowing rate based on information available at the lease commencement date in determining the present value of the lease payments.
Undiscounted future minimum lease payments under the Amended Lease as of March 31, 2025, by year and in aggregate, including the extended term, are as follows:
| YEARS ENDED | |||
| DECEMBER 31, | AMOUNT | ||
| 2025 | | ||
| 2026 | | ||
| 2027 | | ||
| 2028 | | ||
| 2029 | | ||
| Thereafter | | ||
| | |||
| Less discounted interest | ( | ||
| TOTAL | $ | ||
The Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases. There are no other material operating leases.
| 13 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 7 – LEASES (CONTINUED)
The following table presents weighted average assumptions used to compute the Company’s right-of-use assets and lease liabilities:
| March 31, 2025 | ||||
| Weighted average remaining lease term (in years) | ||||
| Weighted average discount rate | % | |||
As of March 31, 2025, current operating leases had
remaining terms between
Current lease agreements do not contain any residual value guarantees or material restrictive covenants. As of March 31, 2025, the Company did not have any finance leases.
Operating and short-term lease costs totaling
$
NOTE 8 – INCOME TAXES
There is
The Company’s policy is to record interest and
penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2025,
the Company had
With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2021 and thereafter are subject to examination by the relevant taxing authorities. Net operating loss (NOL) carryforwards are subject to examination in the year they are utilized regardless of whether the tax year in which they are generated has been closed by the statute. The amount subject to disallowance is limited to the NOL utilized. Accordingly, the company may be subject to examination for prior NOLs generated as such NOLs are utilized.
| 14 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 9 – STOCKHOLDERS’ EQUITY
Preferred Stock
Pursuant to the Company’s Articles of Incorporation, the Company’s board of directors is empowered, without stockholder approval, to issue series of preferred stock with any designations, rights and preferences as they may from time to time determine. The rights and preferences of this preferred stock may be superior to the rights and preferences of the Company’s common stock; consequently, preferred stock, if issued could have dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the common stock. Additionally, preferred stock, if issued, could be utilized, under special circumstances, as a method of discouraging, delaying or preventing a change in control of the Company’s business or a takeover from a third party.
Common Stock
On July 26, 2024, 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.
On February 28, 2023, the Company entered
into a purchase agreement with an institutional investor to sell up to $
During the period February 28, 2023 through
March 31, 2025, the institutional investor purchased shares of common stock for proceeds of $
| 15 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 9 – STOCKHOLDERS’ EQUITY (CONTINUED)
Common Stock (Continued)
On March 17, 2025, the Company entered into
a purchase agreement with an institutional investor to sell up to $
During the period March 17, 2025 through March 31,
2025, the institutional investor did not purchase any shares of common stock under this agreement. During April and May 2025, pursuant
to the purchase agreement, the institutional investor purchased shares of common stock for proceeds of $
On December 9, 2022, the Company entered into a sales
agreement with an investment banking company. In accordance with the terms of this sales agreement, the Company may offer and sell shares
of its common stock having an aggregate offering price of up to $
During the three months period ended March 31,
2025, pursuant to the sales agreement, the investment banking company sold
shares of the Company’s common stock for proceeds of $
| 16 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
Common Stock Options and Warrants
During 2007, the Board of Directors of the Company adopted the 2007 Employee Stock Plan (“2007 Plan”) that was approved by the shareholders. Under the 2007 Plan, the Company is authorized to grant options to purchase up to shares of common stock to directors, officers, employees and consultants who provide services to the Company. The 2007 Plan is intended to permit stock options granted to employees under the 2007 Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the 2007 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options (“Non-Statutory Stock Options”).
Effective June 24, 2016, the 2007 Plan was terminated. As of March 31, 2025, options to purchase shares of common stock have been issued and are outstanding.
During 2016, the Board of Directors of the
Company adopted the 2016 Plan that was approved by the shareholders at the 2016 annual meeting of shareholders on May 20, 2016.
Under the 2016 Plan, the Company is authorized to grant awards of incentive and non-qualified stock options and restricted stock to
purchase up to
shares of common stock to employees, directors and consultants. On May 16, 2019, the Company’s shareholders approved an
increase to the number of shares of the Company’s common stock available for issuance under the 2016 Plan from
to
shares. On May 25, 2023, the Company’s shareholders approved an increase to the number of shares of the Company’s common
stock available for issuance under the 2016 Plan from
to
shares and awards of restricted stock units were authorized for issuance. As of March 31, 2025, options to purchase
shares of common stock have been issued and are outstanding and
Both plans are administered by the Company’s Board of Directors or its compensation committee which determines the persons to whom awards will be granted, the number of awards to be granted, and the specific terms of each grant. Subject to the provisions regarding Ten Percent Shareholders, (as defined in the 2016 Plan), the exercise price per share of each option cannot be less than 100% of the fair market value of a share of common stock on the date of grant. Options granted under the 2016 Plan are generally exercisable for a period of years from the date of grant and may vest on the grant date, another specified date or over a period of time.
The Company uses the option pricing model to calculate the grant-date fair value of an award, with the following assumptions for the period ended March 31, 2025: dividend yield, expected volatility, based on the Company’s historical volatility, to , risk-free interest rate between to and expected option life of years, which is based on the legal contractual life of the options.
The option pricing model assumptions for the period ended March 31, 2024 are as follows: dividend yield, expected volatility, based on the Company’s historical volatility, to , risk-free interest rate between to and expected option life of years.
As of March 31, 2025, there was $ of unrecognized compensation expense related to non-vested market-based share awards that is expected to be recognized through March 2028. As of March 31, 2024, there was $ of unrecognized compensation expense related to non-vested market-based share awards that is expected to be recognized through March 2027.
| 17 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 10 – STOCK BASED COMPENSATION (CONTINUED)
Common Stock Options and Warrants (Continued)
Share-based compensation was recognized as follows:
| For the Three Months Ending March 31, 2025 | For the Three Months Ending March 31, 2024 | |||||||
| 2007 Employee Stock Option Plan | $ | $ | ||||||
| 2016 Equity Incentive Plan | ||||||||
| 2016 Equity Incentive Plan restricted stock awards | ||||||||
| Warrants | ||||||||
| Total share-based compensation | $ | $ | ||||||
The following tables summarize all stock option and warrant activity of the Company during the three months ended March 31, 2025:
| Non-Qualified Stock Options and Warrants Outstanding and Exercisable | ||||||||||||||
| Number of | Exercise | Weighted Average | ||||||||||||
| Shares | Price | Exercise Price | ||||||||||||
| Outstanding, December 31, 2024 | $ - $ | $ | ||||||||||||
| Granted | $ - $ | $ | ||||||||||||
| Forfeited | ( | ) | $ - $ | $ | ||||||||||
| Exercised | ( | ) | $ - $ | $ | ||||||||||
| Outstanding, March 31, 2025 | $ - $ | $ | ||||||||||||
| Exercisable, March 31, 2025 | $ - $ | $ | ||||||||||||
The aggregate intrinsic value of options and warrants
outstanding and exercisable as of March 31, 2025 was $. The aggregate intrinsic value is calculated as the difference between
the exercise price of the underlying options and warrants and the closing stock price of $ for the Company’s common stock on
March 31, 2025. During the three-month period ended March 31, 2025, options were exercised for proceeds of $
| Non-Qualified Stock Options and Warrants Outstanding | ||||||||||||
| Range of Exercise Prices | Number Outstanding Currently Exercisable at March 31, 2025 | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price of Options and Warrants Currently Exercisable | |||||||||
| $ - $ | Years | $ | ||||||||||
| 18 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 10 – STOCK BASED COMPENSATION (CONTINUED)
Restricted Stock Awards
On June 18, 2024, the Compensation Committee of the
Board of Directors approved grants totaling Restricted Stock Awards to the Company’s five outside directors. Each RSA had
a grant date fair value of $ which shall be amortized on a straight-line basis over the vesting period into stock-based compensation
expenses within the Statement of Comprehensive Loss. Such RSAs were granted under the 2016 Equity Incentive Plan (“2016 Plan”)
and vested in total
On August 1, 2024, the Compensation Committee of
the Board of Directors approved a grant totaling
Restricted Stock Awards to one of the Company’s outside directors. Each RSA had a grant date fair value of $
which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the
Statement of Comprehensive Loss. Such RSA was granted under the 2016 Plan and vests in 9 equal quarterly installments of
On September 4, 2024, the Compensation Committee
of the Board of Directors approved a grant totaling
Restricted Stock Awards to one of the Company’s outside directors. Each RSA had a grant date fair value of $
which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the
Statement of Comprehensive Loss. Such RSA was granted under the 2016 Plan and vests in 8 equal quarterly installments of
On December 10, 2024, the Compensation Committee of the Board of Directors approved a grant totaling Restricted Stock Awards to two of the Company’s executives and 25,000 Restricted Stock Awards to an outside director for consulting services. Each RSA had a grant date fair value of $ which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss. The RSAs were granted under the 2016 Plan and cliff vest on March 10, 2025 for the outside director and on June 10, 2025 for the executives.
On February 17, 2025, executive leadership team approved a grant totaling Restricted Stock Awards a Company’s employee. Each RSA had a grant date fair value of $ which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss. Such RSAs were granted under the 2016 Plan and vest in 12 quarterly installments beginning April 1, 2025.
Upon the occurrence of a Change in Control, 100% of the unvested Restricted Stock shall vest as of the date of the Change in Control. Upon vesting, the restrictions on the shares lapse.
| 19 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 10 – STOCK BASED COMPENSATION (CONTINUED)
Restricted Stock Awards (Continued)
The fair value of restricted stock awards is estimated by the market price of the Company’s common stock at the date of grant. Restricted stock activity during the three-month period ended March 31, 2025 is as follows:
| |
|
|
Number of Shares |
|
|
Weighted Average Grant Date Fair Value per Share |
|
|||
| Non-vested, beginning of period | $ | |||||||||
| Granted | ||||||||||
| Vested | ( | ) | ||||||||
| Forfeited | ( | ) | ||||||||
| Non-vested, end of period | $ | |||||||||
Restricted stock awards are being amortized to expense over the shorter of the requisite service period or the vesting period. As of March 31, 2025 and 2024, the unamortized value of the restricted stock awards was $ and $, respectively.
NOTE 11 – RELATED PARTY
During the three months period ended March 31, 2025, and 2024, the Company engaged in transactions with related parties, including consultants, directors, and entities affiliated with members of the Board of Directors. These transactions primarily relate to legal services, consulting fees, director compensation, accounting services, and expense reimbursements.
Related Party Transactions for the Three Months Period Ended March 31, 2025
| • | The Company incurred $ |
| • | The Company incurred $ |
| • | The Company incurred $ |
| • | The Company incurred $ |
Related Party Transactions for the Three Months Period Ended March 31, 2024 and as of December 31, 2024
| • | The Company incurred $ |
| • | The Company incurred $ |
| 20 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 11 – RELATED PARTY (CONTINUED)
| • | The Company incurred $ |
| • | The Company incurred $ |
NOTE 12 – RETIREMENT PLAN
The Company established a 401(k)
retirement plan covering all eligible employees beginning November 15, 2013, which was amended effective February 15, 2025. The plan offers
two types of elected deferrals: pre-tax deferrals and Roth deferrals. The Company matches 100% of each participant contribution,
up to 4% for all eligible employees. Matching contributions vest immediately. Participants are entitled to receive distributions of all
vested amounts beginning at age 59 1/2. Matching contributions to all eligible participants charged to expense were $
NOTE 13 – SEGMENT REPORTING
The Company operates as a single reportable segment, as the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer (“CEO”), evaluates the business on a consolidated basis and does not receive discrete financial information for multiple business units.
Measure of Segment Profit or Loss
The CODM assesses the Company's financial performance based on operating loss, which aligns with the amount reported in the statements of comprehensive loss. The following table presents a reconciliation of segment operating loss to net loss for the three-months period ended March 31, 2025 and 2024:
| 2025 | 2024 | |||||||
| NET SALES | $ | $ | ||||||
| COST OF SALES | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Research and development | ||||||||
| General and administrative | ||||||||
| SEGMENT OPERATING LOSS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest income | ||||||||
| Commitment fee | ( | ) | ( | ) | ||||
| Gain (loss) on disposal of property and equipment | ( | ) | ||||||
| Other expense | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| 21 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2025 AND 2024 |
NOTE 13 – SEGMENT REPORTING (CONTINUED)
Significant Segment Expenses
The Company considers the following as significant expenses in evaluating its segment performance:
| • | Research and Development: includes costs related to personnel, laboratory and wafer fabrication materials and supplies, prototype device development and wafer fabrication expenses, and third-party consulting costs aimed at developing high-performance electro-optic polymer materials. |
| • | General and Administrative: includes personnel costs, professional fees, and other overhead expenses. |
| • | Cost of Sales: represents labor costs, material costs and manufacturing overhead costs associated with the production of materials transferred to the customer under the technology license and material supply agreement at the Company’s facility. |
Entity-Wide Disclosures
| • | Geographic Revenue Information: For the three months ended
March 31, 2025, |
| • | Major Customers: The Company has one customer that accounted
for |
Chief Operating Decision Maker (CODM)
The CODM of the Company is the Chief Executive Officer (CEO), who is responsible for evaluating financial results and making resource allocation decisions.
| 22 |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. This information should also be read in conjunction with our audited historical financial statements which are included in our 2024 Form 10-K for the fiscal year ended December 31, 2024, as amended (“2024 Form 10-K”).
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 and continuing into 2025, 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 more quickly and efficiently. We have now received silicon wafers that range up to 200mm in diameter, which aligns well with foundry manufacturing.
Our 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 transfers 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, and quantum computing, for our polymer technology platform. Our goal is to have our innovative 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 significant, 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-Q Quarterly Report may include 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.
| 23 |
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.
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.
Capital Requirements
We commenced commercial operations in May 2023, and we do not generate sufficient revenues to pay for our operating expenses. We have incurred substantial net losses since inception. We have satisfied our capital requirements since inception primarily through the issuance and sale of our common stock.
| 24 |
Results of Operations
Comparison of three months ended March 31, 2025 to three months ended March 31, 2024
Revenues
During the three months ended March 31, 2025, we recognized $22,917 of licensing and royalty revenue. During the three months ended March 31, 2024, we recognized $16,667 of licensing and royalty revenue and $13,750 of revenue for the device processing work on the device supplied by a customer.
During the three months ended March 31, 2025, 100% of the Company’s net sales were generated internationally. For the three months ended March 31, 2024, 45% of the Company's net sales were generated in the United States and 55% internationally. The Company has one customer that accounted for 10% or more of total revenue.
Cost of sales
During the three months ended March 31, 2025, we recognized $2,028 in cost of sales. During the three months ended March 31, 2024, we recognized $5,175 in cost of sales.
Operating expenses
| |
|
For the Three Months Ended March 31, 2025 |
|
|
For the Three Months Ended March 31, 2024 |
|
|
Change from Prior Three Month Period |
|
|
Percent Change from Prior Three Month Period |
|
||||
| Research and development | $ | 3,089,218 | $ | 4,620,662 | $ | (1,531,444 | ) | -33 | % | |||||||
| General and administrative | 1,837,052 | 1,255,450 | 581,602 | 46 | % | |||||||||||
| $ | 4,926,270 | $ | 5,876,112 | $ | (949,842 | ) | -16 | % | ||||||||
Research and development expenses decreased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to decreases in prototype device development and wafer fabrication expenses, research and development salary and benefits expenses, research and development travel expenses, laboratory and wafer fabrication materials and supplies expenses, research and development testing expenses, and research and development non-cash stock option and restricted stock amortization expenses, offset by an increase in research and development equipment depreciation expense.
| · | Prototype device development and wafer fabrication expenses decreased by $1,044,987 in the three months ended March 31, 2025, compared to the same period in 2024. |
| · | Research and development salary and benefits expenses decreased by $198,792 in the three months ended March 31, 2025, compared to the same period in 2024. |
| · | Research and development travel expenses decreased by $131,524 in the three months ended March 31, 2025, compared to the same period in 2024. |
| · | Laboratory and wafer fabrication materials and supplies expenses decreased by $106,354 in the three months ended March 31, 2025, compared to the same period in 2024. |
| · | Research and development testing expenses decreased by $95,905 in the three months ended March 31, 2025, compared to the same period in 2024. |
| · | Research and development non-cash stock option and restricted stock amortization expenses decreased by $79,756 in the three months ended March 31, 2025, compared to the same period in 2024. |
| · | These decreases were offset by a $122,703 increase in depreciation expense in the three months ended March 31, 2025, compared to the same period in 2024. |
We expect to continue to incur substantial research and development expenses developing and commercializing our electro-optic materials platform. These expenses will increase as a result of accelerated development effort to support commercialization of our non-linear optical polymer materials technology and create next-generation photonic EO device designs; working with semiconductor foundries; hiring additional technical and support personnel; engaging senior technical advisors; pursuing other potential business opportunities and collaborations; customer testing and evaluation; and incurring related operating expenses.
| 25 |
General and administrative expenses increased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to increases in general and administrative non-cash stock option amortization expenses, general and administrative salary and benefits expenses, and legal expenses, offset by decreases in accounting and auditing expenses, depreciation expense, general and administrative recruiting expenses, travel expenses, consulting expenses, and insurance expenses.
| · | General and administrative non-cash stock option and restricted stock amortization expenses increased by $368,238 in the three months ended March 31, 2025, compared to the same period in 2024. |
| · | General and administrative salary and benefits expenses increased by $297,786 in the three months ended March 31, 2025, compared to the same period in 2024. |
| · | Legal fees increased by $105,385 in the three months ended March 31, 2025, compared to the same period in 2024. |
| · | These increases were offset by a $67,531 decrease in accounting and auditing expenses, $59,814 decrease in depreciation expense, $41,000 decrease in general and administrative recruiting expenses, $18,584 decrease in general and administrative travel expenses, $15,058 decrease in general and administrative consulting expenses, and $14,929 decrease in insurance expenses in the three months ended March 31, 2025, compared to the same period in 2024. |
Other Income
| |
|
For the Three Months Ended March 31, 2025 |
|
|
For the Three Months Ended March 31, 2024 |
|
|
Change from Prior Three Month Period |
|
|
Percent Change from Prior Three Month Period |
|
||||
| Other Income | $ | 208,357 | $ | 170,959 | $ | 37,398 | 22 | % | ||||||||
Other income increased for the three months ended March 31, 2025, as compared to three months ended March 31, 2024, primarily due to a recognition of a $28,800 gain on disposal of property, plant and equipment.
Net Loss
| For
the Three Months Ended March 31, 2025 | For
the Three Months Ended March 31, 2024 | Change from Prior Three Month Period | Percent Change from Prior Three Month Period | |||||||||||||
| Net Loss | $ | 4,697,024 | $ | 5,679,911 | $ | (982,887 | ) | -17 | % | |||||||
Net loss was $4,697,024 and $5,679,911 for the three months ended March 31, 2025 and 2024, respectively, for a decrease of $982,887 due primarily to decreases in in prototype device development and wafer fabrication expenses, travel expenses, laboratory and wafer fabrication materials and supplies expenses, research and development testing expenses, accounting and auditing expenses, recruiting expenses, a gain on disposal of property, plant and equipment, consulting expenses, and insurance expenses. These decreases were offset by increases in non-cash stock option and restricted stock amortization expenses, legal expenses, salary and benefits expenses, and depreciation expenses.
Liquidity and Capital Resources
Our primary source of operating cash inflows was (i) proceeds from the sale of common stock to Lincoln Park (institutional investor) pursuant to purchase agreements with Lincoln Park and proceeds from sale of common stock by Roth Capital (investment banking company) pursuant to the at the market sales agreement with Roth Capital as described in Note 9 to the Financial Statements and (ii) proceeds received pursuant to the exercise of options.
On July 26, 2024, the Company filed a $100 million universal shelf registration statement which became effective on August 5, 2024. On February 28, 2023, our Company entered into the 2023 purchase agreement with Lincoln Park to sell up to $30 million of registered common stock over a 36-month period. As of the date of this filing, $0 remains on the 2023 Purchase Agreement. On March 17, 2025, our Company entered into the 2025 purchase agreement with Lincoln Park to sell up to $30 million of registered common stock over a 36-month period. As of the date of this filing, $29,914,035 remains on the 2025 Purchase Agreement. On December 9, 2022, our Company entered into the at the market sales agreement with Roth Capital, as sales agent, pursuant to which our Company may offer and sell up to $35 million in shares of our registered common stock, from time to time through Roth Capital. As of the date of this filing, $31,482,032 remains available to our Company pursuant to the Roth Sales Agreement.
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During the three months ended March 31, 2025, the Company received $1,486,983 in proceeds pursuant to the 2023 Purchase Agreement, $0 in proceeds pursuant to the 2025 Purchase Agreement, $116,435 in proceeds pursuant to the Roth Sales Agreement, $163,500 in proceeds pursuant to the exercise of options, and $45,565 in cash collections from the material supply and license agreement.
During the year ended December 31, 2024, the Company received $12,366,965 in proceeds pursuant to the 2023 Purchase Agreement, $1,779,976 in proceeds pursuant to the Roth Sales Agreement, $337,350 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 contact for processing work on the devices supplied by a customer.
During the three months ended March 31, 2025, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including laboratory and wafer fabrication materials and supplies expenses, and third-party service providers.
During the year ended December 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.
Sources and Uses of Cash
Our future expenditures and capital requirements will depend on numerous factors, including: the progress of our research and development efforts; the rate at which we can, directly or through arrangements with original equipment manufacturers, introduce and sell our products; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; market acceptance of our products and competing technological developments; and our ability to establish cooperative development, joint venture and licensing arrangements. We expect that we will incur approximately $1,796,000 of expenditures per month over the next 12 months.
We expect the proceeds received pursuant to the 2025 purchase agreement and any future purchase agreements with Lincoln Park, the at the market sale agreement with Roth Capital, the exercise of options and warrants, and commercial operations to provide us with sufficient funds to maintain our operations over the next 12 months. Our current cash position enables us to finance our operations through May 2026 before we will be required to replenish our cash reserves. Our cash requirements are expected to increase at a rate consistent with our Company’s revenue growth as we expand our activities and operations with the objective of increasing our revenue stream from the commercialization of our electro-optic polymer technology. We currently have no debt to service. We expect that our cash used in operations will continue to increase during 2025 and beyond because of the following planned activities:
| · | The addition of management, sales, marketing, technical and other staff to our workforce; |
| · | Increased spending for the expansion of our research and development efforts, including purchases of additional laboratory and production equipment; |
| · | Increased spending in marketing as our products are introduced into the marketplace; |
| · | Partnering with commercial foundries to implement our electro-optic polymers into accepted PDKs by the foundries; |
| · | Developing and maintaining collaborative relationships with strategic partners; |
| · | Developing and improving our manufacturing processes and quality controls; and |
| · | Increases in our general and administrative activities related to our operations as a reporting public company and related corporate compliance requirements. |
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2023 and 2025 Purchase Agreements with Lincoln Park
On February 28, 2023, our Company entered into the 2023 Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $30 million of our common stock (subject to certain conditions) from time to time over a 36-month period. On March 17, 2025, our Company entered into the 2025 Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $30 million of our common stock (subject to certain conditions) from time to time over a 36-month period. Pursuant to the 2025 Purchase Agreement, subject to the conditions set forth therein, Lincoln Park is obligated to make purchases as the Company directs in accordance with the 2025 Purchase Agreement, which may be terminated by the Company at any time, without cost or penalty. Sales of shares will be made in specified amounts and at prices that are based upon a look back formula for market prices of our common stock immediately preceding the sales to Lincoln Park.
There are no trading volume requirements or restrictions on the 2025 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 2025 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 in the 2025 Purchase Agreement.
Roth Sales Agreement – Roth Capital
On December 9, 2022, we entered into the Roth Sales Agreement with Roth Capital, as sales agent. Pursuant to the at the market sale agreement, our Company may offer and sell up to $35 million in shares of our common stock, from time to time through Roth Capital. Upon delivery of a placement notice based on our Company’s instructions and subject to the terms and conditions of the Roth Sales Agreement, Roth Capital may sell the shares by methods deemed to be an "at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through The Nasdaq Capital Market, on any other existing trading market for the Company’s common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or by any other method permitted by law, including negotiated transactions, subject to the prior written consent of our Company. We are not obligated to make any sales of shares under this agreement. The Company or Roth Capital may suspend or terminate the offering of shares upon notice to the other party, subject to certain conditions. Roth Capital will act as sales agent on a commercially reasonable efforts basis consistent with its normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of Nasdaq. We have agreed to pay Roth Capital commissions for its services of acting as agent of 3.0% of the gross proceeds from the sale of the shares pursuant to the Roth Sales Agreement.
The amount of proceeds we receive from the Roth Sales Agreement, if any, will depend upon the number of shares of our common stock sold and the market price at which they are sold. There can be no assurance that we will be able to sell any shares under or fully utilize this agreement. Roth Capital is not required to sell any specific number of shares of our common stock under the agreement. We intend to use net proceeds from the Roth Sales Agreement for general corporate purposes, including, without limitation, sales and marketing activities, product development, making acquisitions of assets, businesses, companies or securities, capital expenditures, and for working capital needs.
We cannot assure you that we will meet the conditions of the 2025 Purchase Agreement with Lincoln Park in order to obligate Lincoln Park to purchase our shares of common stock, and we cannot assure you that we will be able to sell any shares under or fully utilize the Roth Sales Agreement with Roth Capital. In the event we fail to do so, and other adequate funds are not available to satisfy long-term capital requirements, or if planned revenues are not generated, we may be required to substantially limit our operations, which could result in our Company reducing some capital expenditures or reducing staff and discretionary costs.
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Analysis of Cash Flows
For the three months ended March 31, 2025
Net cash used in operating activities was $3,490,131 for the three months ended March 31, 2025, primarily attributable to the net loss of $4,697,024 adjusted by $749,042 in options issued for services, $230,150 amortization of deferred compensation, $20,500 cashless options exercise, $8,029 in common stock issued as commitment shares, $454,960 in depreciation expenses and patent amortization expenses, $50,043 amortization of right of use asset, $28,800 gain on disposal of property and equipment, $26,815 in accounts receivable, ($86,608) in prepaid expenses and other current assets, and ($217,238) in accounts payable, accrued bonuses, accrued expenses, contract liability and other liabilities. Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, salaries, rent and other expenditures necessary to develop our business infrastructure.
Net cash used by investing activities was $899,422 for the three months ended March 31, 2025, consisting of $45,878 in cost for intangibles and $853,544 in asset additions for the Colorado headquarter facility and labs.
Net cash provided by financing activities was $1,766,918 for the three months ended March 31, 2025, and consisted of $163,500 in proceeds from exercise of options, $1,486,983 in proceeds from the sale of common stock pursuant to the 2023 Purchase Agreement and $116,435 in proceeds from the sale of common stock pursuant to the Roth Sales Agreement.
On March 31, 2025, our cash and cash equivalents totaled $25,045,329, our assets totaled $35,639,560, our liabilities totaled $4,089,972 and we had stockholders’ equity of $31,549,588.
For the three months ended March 31, 2024
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 as commitment shares, $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.
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.
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 the sale of common stock pursuant to the 2023 Purchase Agreement and $330,453 in proceeds from the sale of common stock pursuant to the Roth Sales Agreement.
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.
Contractual Obligations
There have been no material changes outside the ordinary course of business in our contractual commitments during the three months ended March 31, 2025. See Note 8 - Leases to the financial statements herein for a discussion of our operating lease for office and laboratory space.
Significant Accounting Policies
We believe our significant accounting policies affect our more significant estimates and judgments used in the preparation of our financial statements. Our 2024 Form 10-K contains a discussion of these significant accounting policies. The Company’s significant accounting policies have not materially changed since that report was filed.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
At March 31, 2025, we had $25.0 million in cash and cash equivalents. For the purposes of this Item 3 we consider all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents. The fair value of all of our cash equivalents is determined based on “Level 1” inputs, which are based upon quoted prices for identical or similar instruments in markets that are active. We do not use any market risk sensitive instruments to hedge any risks, and we hold no market risk sensitive instruments for trading or speculative purposes. We place our cash investments in instruments that meet credit quality standards. At March 31, 2025, we had deposits with a financial institution that exceeded the Federal Depository Insurance coverage.
Market Interest Rate Risk
We are exposed to market risk related to changes in interest rates. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. If a 10% change in interest rates had occurred on March 31, 2025, this change would not have had a material effect on the fair value of our investment portfolio as of that date.
Due to the short holding period of our investments and the nature of our investments, we have concluded that we do not have a material financial market risk exposure.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2025. Based on this evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that, as of March 31, 2025 the Company’s disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
No material legal proceedings.
Item 1A. Risk Factors
In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors in our 2024 Form 10-K, which could materially affect our business, financial condition or future results. The risks described in this Form 10-Q and in our 2024 Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or future results .
We have incurred substantial operating losses since our inception and will continue to incur substantial operating losses for the foreseeable future.
Since our inception, we have been engaged primarily in the research and development of our electro-optic polymer materials technologies and products. As a result of these activities, we have incurred significant losses and experienced negative cash flow since our inception. We incurred a net loss of $4.7 million for the three months ended March 31, 2025, and a net loss of $22.5 million for the year ended December 31, 2024, and $21.0 million for the year ended December 31, 2023. As of March 31, 2025, we had an accumulated deficit of $155.1 million. We anticipate that we will continue to incur operating losses through at least 2025.
We may not be able to generate significant revenue either through customer contracts for our existing or future products or technologies or through development contracts from the U.S. government or government subcontractors. We expect to continue to make significant operating and capital expenditures for research and development and to improve and expand production, sales, marketing and administrative systems and processes. As a result, we will need to generate significant revenue to achieve profitability. We cannot assure you that we will ever achieve profitability.
We will require additional capital to continue to fund our operations and if we do not obtain additional capital, we may be required to substantially limit our operations.
Our business does not presently generate the cash needed to finance our current and anticipated operations. Based on our current operating plan and budgeted cash requirements, we believe that we have sufficient funds to finance our operations through May 2026; however, we will need to obtain additional future financing after that time to finance our operations until such time that we can conduct profitable revenue-generating activities. We expect that we will need to seek additional funding through public or private financings, including equity financings, and through other arrangements, including collaborative arrangements. Poor financial results, unanticipated expenses or unanticipated opportunities could require additional financing sooner than we expect. Other than with respect to (i) the 2025 Purchase Agreement for up to $30 million we entered into with Lincoln Park on March 17, 2025; and (ii) Roth Sales Agreement for up to $35 million we entered into with Roth Capital Partners, LLC on December 9, 2022; we have no plans or arrangements with respect to the possible acquisition of additional financing, and such financing may be unavailable when we need it or may not be available on acceptable terms. We currently have a remaining amount of $29.9 million pursuant to the 2025 Purchase Agreement with Lincoln Park, subject to the conditions set forth therein, and $31.5 million that is available to our Company pursuant to the Roth Sales Agreement with Roth Capital.
Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed in our 2024 Form 10-K and in this Form 10-Q. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
Additional financing may not be available to us, due to, among other things, our Company not having a sufficient credit history, income stream, profit level, asset base eligible to be collateralized, or market for its securities. If we raise additional funds by issuing equity or convertible debt securities, the percentage ownership of our existing shareholders may be reduced, and these securities may have rights superior to those of our common stock. If adequate funds are not available to satisfy our long-term capital requirements, or if planned revenues are not generated, we may be required to substantially limit our operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities
None.
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Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
During
the three months ended March 31, 2025,
Item 6. Exhibits
The following exhibits are included herein:
| Exhibit No. | Description of Exhibit | Location | |||
| 3.1 | Articles of Incorporation | Incorporated by reference to Company’s Form 10-SB as filed with the SEC on April 13, 2007 (File No. 000-52567). | |||
| 3.2 | Certificate of Amendment to Articles of Incorporation | Incorporated by reference to Exhibit B of the Company’s Definitive Schedule 14C Information Statement as filed with the SEC on February 19, 2008 (File No. 000-52567). | |||
| 3.3 | Certificate of Amendment to Articles of Incorporation | Incorporated by reference to Exhibit 3.3 of the Company’s Form S-1 Registration Statement as filed with the SEC on August 3, 2015 (File No. 333-206059). | |||
| 3.4 | Second Amended and Restated Bylaws | Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, as filed with the SEC on June 25, 2024 (File No. 001-40766). | |||
| 10.1 | Purchase Agreement, dated March 17, 2025, by and between the Company and Lincoln Park | Incorporated by reference to Exhibit 10.33 of the Company’s Annual Report on Form 10-K, as filed with the SEC on March 18, 2025 (File No. 001-40766). | |||
| 10.2 | Registration Rights Agreement, dated March 17, 2025, by and between the Company and Lincoln Park | Incorporated by reference to Exhibit 10.34 of the Company’s Annual Report on Form 10-K, as filed with the SEC on March 18, 2025 (File No. 001-40766). | |||
| 31.1 | Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Executive Officer of the Company. | Filed herewith | |||
| 31.2 | Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Financial Officer of the Company. | Filed herewith | |||
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Executive Officer of the Company. | Furnished herewith | |||
| 32.2 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Financial Officer of the Company | Furnished herewith | |||
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | Filed herewith | |||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed herewith | |||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | |||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith | |||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Filed herewith | |||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith | |||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | Filed herewith | |||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
LIGHTWAVE LOGIC, INC.
Registrant
| By: | /s/ Yves LeMaitre | |
| Yves LeMaitre, | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Date: May 13, 2025
| By: | /s/ James S. Marcelli | |
| James S. Marcelli, | ||
|
Chief Financial Officer, Chief Operating Officer |
||
| (Principal Financial Officer) |
Date: May 13, 2025
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