Core Viewpoint - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - AGM Group Holdings Inc. (AGMH) increased by 185% to $6.36 [3] - AlphaVest Acquisition Corp (ATMV) rose by 77% to $26.80 [3] - Brera Holdings PLC (BREA) saw a 20% increase to $30.00 [3] - Asset Entities Inc. (ASST) gained 18% to $4.54 [3] - 22nd Century Group, Inc. (XXII) also increased by 18% to $2.08 [3] - Millennium Group International Holdings Limited (MGIH) rose by 16% to $2.84 [3] - Robo.ai Inc. (AIIO) increased by 11% to $2.17 [3] - Butterfly Network, Inc. (BFLY) saw a 10% rise to $2.10 [3] - GrafTech International Ltd. (EAF) increased by 9% to $13.91 [3] - Cardlytics, Inc. (CDLX) rose by 8% to $2.99 [3] Premarket Losers - ECD Automotive Design, Inc. (ECDA) decreased by 14% to $3.70 [4] - Champions Oncology, Inc. (CSBR) fell by 8% to $6.11 [4] - Beam Global (BEEM) saw an 8% decline to $2.79 [4] - Fathom Holdings Inc. (FTHM) decreased by 8% to $2.19 [4] - Ventyx Biosciences, Inc. (VTYX) fell by 7% to $2.20 [4] - SciSparc Ltd. (SPRC) decreased by 6% to $4.35 [4] - Lightwave Logic, Inc. (LWLG) fell by 6% to $3.45 [4] - Jasper Therapeutics, Inc. (JSPR) decreased by 6% to $2.43 [4] - StableX Technologies, Inc. (SBLX) fell by 5% to $5.67 [4] - Galecto, Inc. (GLTO) decreased by 5% to $2.70 [4]

Group 1 - The company has reached a definitive agreement to extend the employment term of CEO Yves LeMaitre [1] - CFO and COO Jim Marcelli will retire at the end of the year, prompting the company to initiate a search for his replacement [1] - Lightwave Logic, Inc. is recognized as a leading provider of high-performance electro-optic polymer materials [1]

Group 1 - The Value Lab focuses on long-only value investment ideas, aiming for a portfolio yield of approximately 4% and has performed well over the last five years by engaging in international markets [1][2] - Lightwave Logic (LWLG) has seen a resurgence in its stock price following a decline associated with the general market after Liberation Day, indicating potential recovery and interest from investors [2] - The Valkyrie Trading Society consists of analysts who share high conviction investment ideas that are expected to generate non-correlated and outsized returns in the current economic environment, emphasizing a long-only investment strategy [3]

[Cover Page](index=1&type=section&id=Cover%20Page) Report Filing Details | Item | Detail | | :--- | :--- | | Filing Type | Quarterly Report (Form 10-Q) | | Period Ended | June 30, 2025 | | Registrant | Lightwave Logic, Inc. | | State of Jurisdiction | Nevada | | Trading Symbol | LWLG | | Exchange | The Nasdaq Stock Market | | Common Stock Outstanding (as of Aug 14, 2025) | 129,439,986 shares | | Filer Status | Non-accelerated filer, Smaller reporting company | [Table of Contents](index=3&type=section&id=TABLE%20OF%20CONTENTS) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) - This report contains forward-looking statements, identifiable by words such as 'anticipate,' 'intend,' 'plan,' and 'expect,' which are based on current beliefs and assumptions about the future of the business[8](index=8&type=chunk)[9](index=9&type=chunk) - Actual results and financial conditions may differ materially due to inherent uncertainties and risks, including inability to generate significant revenue, lack of funding, market acceptance issues, competition, and changes in technology[9](index=9&type=chunk) - The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, except as required by law[11](index=11&type=chunk) [Part I. Financial Information](index=5&type=section&id=Part%20I%20Financial%20Information) [Item 1. Financial Statements](index=5&type=section&id=Item%201%20Financial%20Statements) Unaudited financial statements for Lightwave Logic, Inc. for Q2 and H1 2025 and 2024 are presented, adhering to GAAP and SEC regulations [Balance Sheets](index=7&type=section&id=BALANCE%20SHEETS) Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $32,436,267 | $37,807,983 | $(5,371,716) | | Total Liabilities | $3,602,097 | $4,384,078 | $(781,981) | | Total Stockholders' Equity | $28,834,170 | $33,423,905 | $(4,589,735) | | Cash and cash equivalents | $22,106,946 | $27,667,964 | $(5,561,018) | - Total assets decreased by **$5.37 million** from December 31, 2024, to June 30, 2025, primarily driven by a **$5.56 million** decrease in cash and cash equivalents[17](index=17&type=chunk) - Total liabilities decreased by **$0.78 million**, mainly due to reductions in accounts payable and accrued expenses[17](index=17&type=chunk) [Statements of Comprehensive Loss](index=8&type=section&id=STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) Comprehensive Loss Highlights | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $25,605 | $19,355 | $48,522 | $49,772 | | Total Cost and Expense | $5,631,287 | $6,258,930 | $10,559,585 | $12,140,217 | | Loss From Operations | $(5,605,682) | $(6,239,575) | $(10,511,063) | $(12,090,445) | | Net Loss | $(5,672,132) | $(6,019,684) | $(10,369,156) | $(11,699,595) | | Basic and Diluted Loss Per Share | $(0.05) | $(0.05) | $(0.08) | $(0.10) | - Net sales increased by **32.2%** for the three months ended June 30, 2025, compared to the same period in 2024, but decreased by **2.5%** for the six months ended June 30, 2025, compared to 2024[19](index=19&type=chunk) - Net loss decreased by **5.8%** for the three months ended June 30, 2025, and by **11.4%** for the six months ended June 30, 2025, compared to the respective periods in 2024, indicating a reduction in losses[19](index=19&type=chunk) - Research and development expenses decreased significantly by **39.5%** for the three months and **36.2%** for the six months ended June 30, 2025, compared to the prior year periods[19](index=19&type=chunk) [Statements of Stockholders' Equity](index=9&type=section&id=STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Stockholders' Equity Changes (Six Months Ended June 30, 2025) | Item | Number of Shares | Common Stock | Additional Paid-in Capital | Deferred Compensation | Accumulated Deficit | Total Equity | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at Dec 31, 2024 | 123,301,653 | $123,302 | $184,363,772 | $(656,735) | $(150,406,434) | $33,423,905 | | Common stock issued to institutional investor | 1,685,881 | $1,686 | $2,173,297 | — | — | $2,174,983 | | Common stock issued for commitment shares | 261,386 | $261 | $243,569 | — | — | $243,830 | | Common stock sales at the market | 368,411 | $368 | $506,880 | — | — | $507,248 | | Exercise of options | 282,500 | $283 | $203,717 | — | — | $204,000 | | Cashless exercise of 1,350,000 options | 434,148 | $434 | $533,140 | — | — | $533,574 | | Options issued for services | — | — | $1,282,692 | — | — | $1,282,692 | | Performance stock units (PSUs) issued for services | — | — | $384,925 | — | — | $384,925 | | Restricted stock units (RSUs) issued for services | — | — | $11,113 | — | — | $11,113 | | Net loss for the six months ended June 30, 2025 | — | — | — | — | $(10,369,156) | $(10,369,156) | | Balance at June 30, 2025 | 126,466,708 | $126,467 | $189,836,354 | $(353,061) | $(160,775,590) | $28,834,170 | - Total common stock outstanding increased from **123,301,653 shares** at December 31, 2024, to **126,466,708 shares** at June 30, 2025, primarily due to issuances to institutional investors, commitment shares, and market sales[25](index=25&type=chunk) - Additional paid-in capital increased by approximately **$5.47 million** during the six months ended June 30, 2025, driven by stock issuances and stock-based compensation[25](index=25&type=chunk)[26](index=26&type=chunk) [Statements of Cash Flows](index=12&type=section&id=STATEMENTS%20OF%20CASH%20FLOWS) Cash Flow Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | Change (2025 vs 2024) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(7,260,222) | $(8,823,788) | $1,563,566 (less cash used) | | Net cash used in investing activities | $(1,002,226) | $(1,653,217) | $650,991 (less cash used) | | Net cash provided by financing activities | $2,701,430 | $8,240,733 | $(5,539,303) (less cash provided) | | Net decrease in cash and cash equivalents | $(5,561,018) | $(2,236,272) | $(3,324,746) (larger decrease) | | Cash and cash equivalents - End of Period | $22,106,946 | $29,195,815 | $(7,088,869) | - Net cash used in operating activities decreased by **$1.56 million** in the first six months of 2025 compared to 2024, primarily due to a lower net loss and changes in working capital[33](index=33&type=chunk) - Net cash provided by financing activities significantly decreased by **$5.54 million**, mainly due to lower proceeds from common stock sales to institutional investors in 2025[33](index=33&type=chunk) [Notes to Financial Statements](index=13&type=section&id=NOTES%20TO%20FINANCIAL%20STATEMENTS) [Note 1 – Nature of Business and Summary of Significant Accounting Policies](index=13&type=section&id=NOTE%201%20%E2%80%93%20NATURE%20OF%20BUSINESS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - Lightwave Logic, Inc. is a technology platform company leveraging proprietary electro-optic (EO) polymers (Perkinamine®) to transmit data at higher speeds with less power, targeting applications in telecommunications and data transmission for generative AI[36](index=36&type=chunk)[137](index=137&type=chunk) - The primary revenue stream is from technology material supply and licensing agreements for patented EO polymer materials, with expectations for additional revenue from technology transfer agreements and direct material sales[37](index=37&type=chunk)[43](index=43&type=chunk) - Revenue recognition follows ASC 606, treating technology licenses and material supply as a single performance obligation, with upfront fees and minimum royalties recognized pro-rata over the contract term, and variable royalties/milestones recognized when earned/achieved[40](index=40&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) [Note 2 – Management's Plans](index=16&type=section&id=NOTE%202%20%E2%80%93%20MANAGEMENT'S%20PLANS) - The Company expects monthly expenditures of approximately **$1.79 million** over the next 12 months and has sufficient cash to finance operations through October 2026[58](index=58&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - Additional funding sources include a **$30 million** common stock purchase agreement with an institutional investor (March 2025, **$27.8 million** remaining) and a **$35 million** at-the-market sales agreement with an investment banking company (December 2022, **$26.9 million** remaining)[58](index=58&type=chunk)[167](index=167&type=chunk) - The first commercial agreement, a material supply and license agreement, generated **$25,605** in revenue for Q2 2025 and **$48,522** for H1 2025, with cash requirements expected to increase with revenue growth from commercialization[58](index=58&type=chunk) [Note 3 – Revenue](index=16&type=section&id=NOTE%203%20%E2%80%93%20REVENUE) - The Company's first commercial agreement, a four-year non-exclusive material supply and license agreement, commenced in May 2023, generating running royalties, minimum annual royalties, and milestone license fees[59](index=59&type=chunk)[61](index=61&type=chunk) Revenue Recognition from License Agreement | Period | Revenue Recognized | | :--- | :--- | | Three months ended June 30, 2025 | $25,605 | | Three months ended June 30, 2024 | $19,355 | | Six months ended June 30, 2025 | $48,522 | | Six months ended June 30, 2024 | $36,022 | Contract Balances | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accounts receivable, net | $10,753 | $45,565 | | Short-term contract liability | $14,875 | $23,208 | [Note 4 – Prepaid Expenses and Other Current Assets](index=18&type=section&id=NOTE%204%20%E2%80%93%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) Prepaid Expenses and Other Current Assets | Category | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Insurance | $357,254 | $154,945 | +$202,309 | | Software licenses | $182,533 | $151,451 | +$31,082 | | Investor relations | $49,053 | $5,271 | +$43,782 | | Prototype devices | $0 | $44,134 | -$44,134 | | Total | $638,856 | $401,741 | +$237,115 | - Total prepaid expenses and other current assets increased by **$237,115** from December 31, 2024, to June 30, 2025, primarily due to increases in prepaid insurance, software licenses, and investor relations expenses, while prototype devices decreased to zero[67](index=67&type=chunk) [Note 5 – Property and Equipment](index=18&type=section&id=NOTE%205%20%E2%80%93%20PROPERTY%20AND%20EQUIPMENT) Property and Equipment, Net | Category | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Lab equipment | $11,819,801 | $10,953,487 | +$866,314 | | Total Property and equipment, net | $5,724,559 | $5,691,545 | +$33,014 | | Accumulated depreciation | $6,902,263 | $6,037,723 | +$864,540 | Depreciation Expense | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three months ended June 30 | $461,228 | $395,928 | | Six months ended June 30 | $889,680 | $761,491 | - The Company recorded a gain of **$28,800** on the trade-in of property and equipment during the six months ended June 30, 2025, compared to a loss of **$3,166** in the prior year period[70](index=70&type=chunk) [Note 6 – Intangible Assets](index=19&type=section&id=NOTE%206%20%E2%80%93%20INTANGIBLE%20ASSETS) Intangible Assets, Net | Category | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Patents | $2,235,408 | $2,127,076 | +$108,332 | | Accumulated amortization | $825,040 | $771,631 | +$53,409 | | Intangible assets, net | $1,410,368 | $1,355,445 | +$54,923 | Amortization Expense | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three months ended June 30 | $26,901 | $22,311 | | Six months ended June 30 | $53,409 | $43,246 | - Intangible assets primarily consist of legal and patent fees for patent applications, with amortization recorded only on granted patents over their remaining legal life[71](index=71&type=chunk) [Note 7 – Leases](index=20&type=section&id=NOTE%207%20%E2%80%93%20LEASES) - The Company's primary lease is for approximately **23,104 square feet** of office, chemistry, clean room, and R&D space in Colorado, with an amended lease term of **128 months** effective June 1, 2023, and annual base rent increases of approximately **3%**[74](index=74&type=chunk)[75](index=75&type=chunk) Undiscounted Future Minimum Lease Payments (as of June 30, 2025) | YEARS ENDING DECEMBER 31, | AMOUNT | | :--- | :--- | | 2025 | $194,305 | | 2026 | $399,199 | | 2027 | $411,174 | | 2028 | $423,612 | | 2029 | $436,300 | | Thereafter | $1,921,271 | | Total Undiscounted | $3,785,861 | | Less discounted interest | $(1,100,824) | | TOTAL | $2,685,037 | Weighted Average Lease Assumptions (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Weighted average remaining lease term | 8.58 Years | | Weighted average discount rate | 8.25% | [Note 8 – Income Taxes](index=21&type=section&id=NOTE%208%20%E2%80%93%20INCOME%20TAXES) - No income tax benefit was recognized for losses in Q2 and H1 2025 and 2024, as a valuation allowance was created for the entire net deferred tax asset due to uncertainty of realization[83](index=83&type=chunk) - The Company had no unrecognized tax benefits or related interest/penalties as of January 1, 2025, and does not anticipate significant changes in the next 12 months[84](index=84&type=chunk) - U.S. and state income tax returns from 2021 onwards are subject to examination, and Net Operating Loss (NOL) carryforwards are subject to examination when utilized[85](index=85&type=chunk) [Note 9 – Stockholders' Equity](index=22&type=section&id=NOTE%209%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) - The Company has preferred stock authorized but none issued or outstanding, with the board empowered to issue series with potentially superior rights to common stock[88](index=88&type=chunk) - A new **$100 million** universal shelf registration statement became effective on August 5, 2024[89](index=89&type=chunk) - The Company entered into a new **$30 million** purchase agreement with an institutional investor (Lincoln Park) on March 17, 2025, with **$27,846,150** remaining available as of the filing date[93](index=93&type=chunk)[167](index=167&type=chunk) - An at-the-market sales agreement with Roth Capital allows for the sale of up to **$35 million** in common stock, with **$26,949,862** remaining available as of the filing date[95](index=95&type=chunk)[167](index=167&type=chunk) [Note 10 – Stock Based Compensation](index=24&type=section&id=NOTE%2010%20%E2%80%93%20STOCK%20BASED%20COMPENSATION) - The Company operates under the 2025 Equity Incentive Plan (approved May 15, 2025), authorizing grants of up to **6,000,000 shares** for options and restricted stock, with **5,206,775 shares** remaining available as of June 30, 2025[101](index=101&type=chunk) Total Share-Based Compensation Expense | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three months ended June 30 | $1,101,401 | $1,850,270 | | Six months ended June 30 | $2,080,593 | $2,540,981 | - As of June 30, 2025, there was **$1,709,499** of unrecognized compensation expense related to non-vested market-based share awards, expected to be recognized through June 2028[107](index=107&type=chunk) - During the six months ended June 30, 2025, the Company granted **2,187,501 performance stock units (PSUs)** to executives, tied to commercialization goals, with a grant date fair value of **$2,029,126**[123](index=123&type=chunk) [Note 11 – Related Party Transactions](index=28&type=section&id=NOTE%2011%20%E2%80%93%20RELATED%20PARTY) - The Company engaged in related party transactions for legal services, accounting and IT services, director compensation, and consulting fees to advisory board members during the three and six months ended June 30, 2025 and 2024[125](index=125&type=chunk)[127](index=127&type=chunk) Related Party Expenses (Six Months Ended June 30, 2025) | Category | Amount | Related Accrual (June 30, 2025) | | :--- | :--- | :--- | | Legal fees and expense reimbursements | $69,643 | $68,750 | | Accounting and IT service fees | $39,740 | $4,920 | | Director fees and travel expenses | $108,636 | $51,250 | | Consulting fees to advisory board member | $165,000 | $22,500 | [Note 12 – Retirement Plan](index=28&type=section&id=NOTE%2012%20%E2%80%93%20RETIREMENT%20PLAN) - The Company established a 401(k) retirement plan for eligible employees, amended effective February 15, 2025, offering pre-tax and Roth deferrals[126](index=126&type=chunk) - The Company matches **100%** of participant contributions up to **4%** for all eligible employees, with matching contributions vesting immediately[126](index=126&type=chunk) 401(k) Matching Contributions Charged to Expense | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three months ended June 30 | $45,890 | $34,324 | | Six months ended June 30 | $85,477 | $59,092 | [Note 13 – Segment Reporting](index=29&type=section&id=NOTE%2013%20%E2%80%93%20SEGMENT%20REPORTING) - The Company operates as a single reportable segment, with the CEO acting as the Chief Operating Decision Maker (CODM) and evaluating the business as a whole based on operating loss[129](index=129&type=chunk) Segment Operating Loss and Net Sales | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $25,605 | $19,355 | $48,522 | $49,772 | | Segment Operating Loss | $(5,605,682) | $(6,239,575) | $(10,511,063) | $(12,090,445) | - For the three and six months ended June 30, 2025, **100%** of net sales were generated internationally. For the six months ended June 30, 2024, **28%** of net sales were from the U.S. and **72%** internationally[135](index=135&type=chunk) [Note 14 – Subsequent Events](index=30&type=section&id=NOTE%2014%20%E2%80%93%20SUBSEQUENT%20EVENTS) - On July 4, 2025, the U.S. enacted H.R. 1, a tax reform bill, which the Company is evaluating for its impact on the estimated annual effective tax rate and R&D expense deductibility; these impacts are not reflected in the current report[133](index=133&type=chunk) - On August 6, 2025, the Board's Compensation Committee approved a grant of **51,250 options** with a total value of **$87,907** to Technical Advisory Board members under the 2025 Plan, with an exercise price of **$2.04 per share**[134](index=134&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Lightwave Logic, Inc.'s financial condition and results of operations for Q2 and H1 2025 and 2024 [Overview](index=31&type=section&id=Overview) - Lightwave Logic, Inc. is a technology platform company utilizing proprietary electro-optic (EO) polymers (Perkinamine®) for high-speed, low-power data transmission in telecommunications and generative AI applications[137](index=137&type=chunk) - The Company's differentiation lies in higher speed, lower power consumption, manufacturing simplicity, small footprint, and reliability of its modulator devices, with ongoing advances in integrating materials with commercial foundries[138](index=138&type=chunk) - The Company is focused on integrating its materials into customer PIC and device architectures, demonstrating superior performance, and providing Process Development Kits (PDKs) to enable efficient integration, leveraging silicon-based foundry partnerships for scalability[138](index=138&type=chunk) - The Company's strong patent portfolio supports a business model focused on polymer materials development, patent licensing, and technology transfers to foundries, initially targeting fiber optic data communications and telecommunications, especially for AI-driven network infrastructure[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Commencement of Commercial Operations](index=32&type=section&id=Commencement%20of%20Commercial%20Operations) - Commercial operations began in May 2023 with a material supply license agreement for Perkinamine chromophore materials for polymer-based photonic devices and PICs[143](index=143&type=chunk) - Increased interest in the Company's materials in 2024 and 2025 is driven by the need for higher speed connections to scale AI-enabled network infrastructure, leading to discussions on future license agreements[143](index=143&type=chunk) - In December 2024, the Company decided to focus commercial and R&D efforts on EO Polymer materials development and manufacturing, rather than actively promoting the sale of full PICs or packaged devices to external customers[143](index=143&type=chunk) [Business Strategy](index=32&type=section&id=Business%20Strategy) - The Company's revenue strategy includes technology licensing for specific product applications, joint venture relationships with industry leaders, and direct production and sale of electro-optic materials[145](index=145&type=chunk) - Key objectives include further developing proprietary organic EO polymer material systems, partnering with PIC/device design and manufacturing companies for PDKs, developing intellectual property, and growing commercial device design, reliability, testing, and manufacturing capabilities[149](index=149&type=chunk) - The Company aims to maintain and develop strategic relationships with major telecommunications and data communications companies and add high-level personnel to support materials and process development[149](index=149&type=chunk) [Capital Requirements](index=32&type=section&id=Capital%20Requirements) - The Company commenced commercial operations in May 2023 and does not yet generate sufficient revenue to cover operating expenses, having incurred substantial net losses since inception[148](index=148&type=chunk) - Capital requirements are met primarily through the issuance and sale of common stock, with future expenditures dependent on R&D progress, product introduction rates, intellectual property costs, market acceptance, and ability to establish partnerships[148](index=148&type=chunk)[170](index=170&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) [Comparison of Q2 2025 to Q2 2024](index=33&type=section&id=Comparison%20of%20three%20months%20ended%20June%2030%2C%202025%20to%20three%20months%20ended%20June%2030%2C%202024) Q2 2025 vs Q2 2024 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | Percent Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $25,605 | $19,355 | $6,250 | 32.2% | | Cost of Sales | $3,463 | $0 | $3,463 | N/A | | Research and development expenses | $2,641,941 | $4,362,258 | $(1,720,317) | -39% | | General and administrative expenses | $2,985,883 | $1,896,672 | $1,089,211 | 57% | | Total Operating Expenses | $5,627,824 | $6,258,930 | $(631,106) | -10% | | Other (Expense) Income | $(66,450) | $219,891 | $(286,341) | -130% | | Net Loss | $(5,672,132) | $(6,019,684) | $347,552 | -6% | - Research and development expenses decreased by **39%** due to lower non-cash stock option/restricted stock amortization, salaries, lab materials, outside services, wafer fabrication, and consulting, partially offset by increased depreciation[153](index=153&type=chunk) - General and administrative expenses increased by **57%** primarily due to higher salaries and non-cash stock option/restricted stock amortization, offset by decreases in consulting, sales/marketing, and business insurance[155](index=155&type=chunk) - Other expense increased by **130%** due to a significant increase in commitment fees associated with institutional investor stock purchases and a decrease in interest income[156](index=156&type=chunk) [Comparison of H1 2025 to H1 2024](index=35&type=section&id=Comparison%20of%20six%20months%20ended%20June%2030%2C%202025%20to%20six%20months%20ended%20June%2030%2C%202024) H1 2025 vs H1 2024 Financial Performance | Metric | H1 2025 | H1 2024 | Change | Percent Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $48,522 | $36,022 | $12,500 | 34.7% | | Cost of Sales | $5,491 | $5,175 | $316 | 6.1% | | Research and development expenses | $5,731,159 | $8,982,920 | $(3,251,761) | -36% | | General and administrative expenses | $4,822,935 | $3,152,122 | $1,670,813 | 53% | | Total Operating Expenses | $10,554,094 | $12,135,042 | $(1,580,948) | -13% | | Other Income | $141,907 | $390,850 | $(248,943) | -64% | | Net Loss | $(10,369,156) | $(11,699,595) | $1,330,439 | -11% | - Revenues increased by **34.7%** for the six months ended June 30, 2025, compared to the same period in 2024, with **100%** of net sales generated internationally in H1 2025[158](index=158&type=chunk)[159](index=159&type=chunk) - Net loss decreased by **11%** for the six months ended June 30, 2025, compared to 2024, primarily due to reduced R&D expenses and other operational cost decreases, despite increases in salary expenses and commitment fees[165](index=165&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company's primary sources of operating cash inflows are proceeds from common stock sales to Lincoln Park Capital Fund, LLC and Roth Capital Partners, LLC, and proceeds from option exercises[166](index=166&type=chunk) - As of the filing date, **$27,846,150** remains available under the 2025 Purchase Agreement with Lincoln Park and **$26,949,862** remains available under the Roth Sales Agreement[167](index=167&type=chunk) - The Company expects to incur approximately **$1.79 million** of expenditures per month over the next 12 months and has sufficient cash to finance operations through October 2026[170](index=170&type=chunk)[171](index=171&type=chunk) - Cash requirements are expected to increase due to planned activities such as adding staff, expanding R&D, increasing marketing, partnering with foundries, developing strategic relationships, and improving manufacturing processes[171](index=171&type=chunk) [Analysis of Cash Flows](index=39&type=section&id=Analysis%20of%20Cash%20Flows) Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,260,222) | $(8,823,788) | | Net cash used in investing activities | $(1,002,226) | $(1,653,217) | | Net cash provided by financing activities | $2,701,430 | $8,240,733 | | Cash and cash equivalents - End of Period | $22,106,946 | $29,195,815 | - Net cash used in operating activities decreased in H1 2025 compared to H1 2024, primarily due to a lower net loss and adjustments for non-cash items like stock options and depreciation[177](index=177&type=chunk)[181](index=181&type=chunk) - Net cash provided by financing activities significantly decreased in H1 2025, mainly due to lower proceeds from common stock sales to institutional investors compared to the prior year[179](index=179&type=chunk)[183](index=183&type=chunk) [Contractual Obligations](index=39&type=section&id=Contractual%20Obligations) - There have been no material changes outside the ordinary course of business in the Company's contractual commitments during the six months ended June 30, 2025, with operating lease obligations detailed in Note 7[184](index=184&type=chunk) [Significant Accounting Policies](index=39&type=section&id=Significant%20Accounting%20Policies) - The Company's significant accounting policies have not materially changed since the 2024 Form 10-K was filed[185](index=185&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's market risk exposure, primarily interest rate risk, concluding no material financial market risk - As of June 30, 2025, the Company held **$22.1 million** in cash and cash equivalents, with fair values determined based on 'Level 1' inputs (quoted prices for identical instruments in active markets)[186](index=186&type=chunk) - The Company does not use market risk sensitive instruments for hedging, trading, or speculative purposes[186](index=186&type=chunk) - A **10%** change in interest rates on June 30, 2025, would not have a material effect on the fair value of the Company's investment portfolio, indicating no material financial market risk exposure due to short holding periods and investment nature[187](index=187&type=chunk)[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204%20Controls%20and%20Procedures) This section reports on the effectiveness of the Company's disclosure controls and internal control over financial reporting - As of June 30, 2025, the Company's Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[189](index=189&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, these controls[190](index=190&type=chunk) [Part II. Other Information](index=41&type=section&id=Part%20II%20Other%20Information) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201%20Legal%20Proceedings) This section states that there are no material legal proceedings affecting the Company - The Company is not involved in any material legal proceedings[192](index=192&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A%20Risk%20Factors) This section highlights key risks, including substantial operating losses, capital needs, and uncertainties in revenue and financing - The Company has incurred substantial operating losses since inception, with a net loss of **$10.4 million** for the six months ended June 30, 2025, and an accumulated deficit of **$160.8 million**[194](index=194&type=chunk) - The Company anticipates continued operating losses through at least 2025 and requires additional capital to fund operations beyond October 2026, with no assurance of achieving profitability or securing future financing on acceptable terms[195](index=195&type=chunk)[196](index=196&type=chunk) - Failure to obtain adequate additional financing could lead to substantial limitations on operations, including reductions in capital expenditures, staff, and discretionary costs, and potential dilution for existing shareholders if equity or convertible debt is issued[198](index=198&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities or use of proceeds to disclose - There were no unregistered sales of equity securities or use of proceeds to report[199](index=199&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) This section indicates that the Company has no defaults upon senior securities to report - The Company has no defaults upon senior securities[200](index=200&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[201](index=201&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205%20Other%20Information) This section confirms no directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter - During the three months ended June 30, 2025, none of the Company's directors or officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 arrangements[202](index=202&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including articles of incorporation, bylaws, and certifications - The exhibits include the Company's Articles of Incorporation, Second Amended and Restated Bylaws, the 2025 Equity Incentive Plan, and certifications pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350[203](index=203&type=chunk) [Signatures](index=45&type=section&id=Signatures) - The report is signed by Yves LeMaitre, Chief Executive Officer (Principal Executive Officer), and James S. Marcelli, Chief Financial Officer and Chief Operating Officer (Principal Financial Officer), on August 14, 2025[207](index=207&type=chunk)

Summary of LightwaveLogic Inc. Update Conference Call Company Overview - **Company**: LightwaveLogic Inc. - **Date of Call**: July 31, 2025 Key Industry Insights - **Industry**: Organic LED and Electro-Optic Polymer (EOP) technology - **Market Trends**: Significant investments in semiconductor companies integrating photonics into their solutions, particularly in AI connectivity and hyperscale data centers [14][15][20] Core Points and Arguments 1. **Recent Developments**: Announcement of Perkinamine polymer reliability and advanced encapsulation technique, marking a significant milestone for polymer materials [5][12] 2. **Challenges in Organic LED Industry**: Historical reliability issues related to operational lifespan, moisture, and oxygen sensitivity have been addressed over the years, leading to mainstream adoption [6][5] 3. **Polymer Reliability**: LightwaveLogic has developed unique structures (chromophores) to enhance temperature performance and has made breakthroughs in oxygen protection through atomic layer deposition (ALD) [7][8][12] 4. **Testing and Validation**: Successful completion of reliability tests on polymers under elevated temperature and humidity conditions, with plans to extend testing to devices like silicon photonics chips [10][11][29] 5. **Market Opportunities**: Emergence of co-package optics (CPO) as a new trend replacing copper connectivity with optical technology, requiring high bandwidth and low power solutions [15][16][17] 6. **Customer Engagement**: Active collaborations with tier one customers, including a Fortune 500 company, to validate performance and design of silicon photonics chips [21][22] 7. **Future Expectations**: Anticipation of having three to five customers at stage three of the design win cycle by the end of 2025, indicating readiness for high-volume production [25][24] Additional Important Content - **Continuous Improvement Philosophy**: Emphasis on ongoing enhancements to materials and processes to meet increasing reliability demands driven by new applications [27] - **Foundry Partnerships**: Collaboration with foundries to ensure compatibility and performance of processes, with a focus on transitioning to larger wafer sizes in the future [32] - **Technical and Commercial Milestones**: Acknowledgment of the complex design win cycle process, which can take 18 to 24 months, involving multiple stakeholders [33] - **CPO Ecosystem**: Active involvement in defining the role of EOP materials in the emerging CPO market, which is still in the early stages of development [35] This summary encapsulates the key points discussed during the LightwaveLogic Inc. update conference call, highlighting the company's advancements, market opportunities, and strategic direction in the evolving landscape of electro-optic technologies.

Perkinamine® Reliability Breakthrough - The company's thin-film devices with second-generation proprietary encapsulation barrier successfully passed the Telcordia GR-468 85/85 environmental stress test, validating long-term reliability[6] - Absorbance measurements showed only a 1.6% average loss after 1,000 hours under 85°C and 85% relative humidity, exceeding Telcordia GR-468 requirements[7,8] - The oxygen transmission rate (OTR) of the fourth-generation atomic layer deposition (ALD) encapsulation material is 1.4 × 10⁻⁶ g/m²/day, approaching the measurement limit and far exceeding the "gold-box" standard of 7 × 10⁻⁶ g/m²/day[9,14] Commercial Impact & Next Steps - Positive reception from key customers, increasing industry confidence in materials readiness after sharing 85/85 success results[10,11] - The company is preparing the fourth-generation encapsulation material for its next-release back-end-of-line (BEOL) Process Design Kit (PDK) for integration into silicon photonics foundries[14] - The next step is to demonstrate reliability on devices in partnership with customers, focusing on continuous improvement of materials, process, and encapsulation[13] Market & Strategy - The company is focusing on execution and planning for production scale to seize growth opportunities presented by the AI market[15] - Co-Packaged Optics (CPO) is emerging as a new market requiring high density ports, high bandwidth (400G+), and low power, which is an excellent fit for Perkinamine® technology[17,21] - The company reaffirms its expectation to have 3-5 customers in Stage 3 by year-end 2025[26]

Summary of Lightwave Logic (LWLG) Conference Call - May 21, 2025 Company Overview - **Company**: Lightwave Logic (LWLG) - **Industry**: AI Hardware and Electro-Optic Polymers - **Market Size**: AI market valued at over $20 billion, projected to reach $30 billion by 2028 [2][3] Core Technology and Business Model - **Unique Material**: Lightwave Logic has developed electro-optic polymers with unique properties that enhance connectivity and bandwidth in AI data centers [2][3] - **Revenue Streams**: The company generates revenue through material sales and licensing/royalty fees, targeting gross margins exceeding 60% at scale [5][39] - **Modulator Functionality**: The electro-optic polymer acts as a modulator, enabling data transmission over fiber optics at speeds exceeding 100 billion times per second [7][8] Market Challenges and Opportunities - **AI Data Centers**: The need for high-speed interconnections in AI factories creates a demand for advanced optical solutions, with a projected market for optical transceivers exceeding $25 billion by 2028 [13][14] - **Competitive Landscape**: Traditional technologies are reaching their limits, creating an opportunity for Lightwave Logic's unique materials to fill the gap [35][36] - **Total Addressable Market**: The company estimates a serviceable market of $1 to $2.5 billion for its modulators within the broader optical communication market [14][39] Customer Engagement and Development Timeline - **Customer Traction**: The company is targeting multiple design wins by 2028, with a focus on major silicon photonics design houses [15][16] - **Development Cycle**: The typical cycle from customer engagement to revenue generation takes 18 to 24 months, with current progress indicating potential for three to five customers in prototype stage by the end of 2025 [21][22] Financial Position and Capitalization - **Financial Health**: Lightwave Logic has a solid balance sheet with no debt, having invested over $100 million in technology and production capabilities [3][41] - **Operational Expenses**: The company has been burning approximately $20 million annually, with adequate financing in place for the next couple of years [42][43] Investor Considerations - **Market Positioning**: The company is positioned to address a significant industry challenge with a unique material, which is rare in the market [48][49] - **Transparency and Credibility**: The CEO emphasizes the importance of transparency regarding customer traction and progress to rebuild investor confidence [45][49] Conclusion - **Value Proposition**: Lightwave Logic presents a compelling investment opportunity due to its innovative technology, strong market demand, and strategic positioning within the rapidly growing AI infrastructure sector [48][49]

Financial Data and Key Metrics Changes - The company reported significant engagement with 20 customers in the pipeline, with 10 in stages one or two of the design process, indicating a robust customer interest and potential revenue growth [60] - The company aims to have three to five customers in stage three by the end of 2025, which is critical for ramping up production in late 2027 to early 2028 [60] Business Line Data and Key Metrics Changes - The focus has shifted towards materials and licensing of technology, which is seen as the biggest opportunity for the company [43] - The company is targeting a serviceable market of $1 to $2.5 billion by 2028, primarily through supplying modulator materials to chip manufacturers [42] Market Data and Key Metrics Changes - The AI market for transceivers and co-packaged optics is estimated to reach $10 billion by 2028, with significant demand for high-speed optical connections [40] - The traditional data center market is projected to be around $7 billion, indicating a stable demand for high-speed transceivers [41] Company Strategy and Development Direction - The company is positioning itself to play a key role in the evolution of AI networks and optical communication markets, focusing on overcoming challenges such as bandwidth, connectivity, power consumption, and integration [24][26][30][33] - The strategy includes securing major design wins with chip manufacturers and maintaining competitiveness against alternative technologies [42][43] Management's Comments on Operating Environment and Future Outlook - Management highlighted the industry's recognition of the need for new technology, with a shift towards optical solutions for high-speed data transfer [73][86] - The company is optimistic about its material's performance and reliability, which are critical for meeting the demands of modern data centers and AI applications [70][72] Other Important Information - The company has made significant breakthroughs in the reliability of its materials, which is essential for long-term deployment in high-stress environments [71][72] - The competitive landscape includes traditional technologies like lithium niobate, which are seen as less capable of meeting future bandwidth demands [76][86] Q&A Session Summary Question: What is the current status of customer engagement? - The company has about 20 customers in the pipeline, with 10 in stages one or two, and aims to have three to five customers in stage three by the end of 2025 [60] Question: How does the company plan to address the competitive landscape? - The company is focused on securing major design wins and ensuring its technology remains relevant as the market transitions to higher bandwidth requirements [42][43] Question: What are the key challenges the industry is facing? - Key challenges include bandwidth limitations, power consumption, and the need for integration of optical components with existing semiconductor technologies [26][30][33]

[Part I Financial Information](index=1&type=section&id=Part%20I%20Financial%20Information) This section presents the company's unaudited financial statements, management's analysis of financial condition, market risk disclosures, and internal controls for the reporting period [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Lightwave Logic's unaudited financial statements for Q1 2025 and 2024, detailing a **$4.7 million** net loss and **$25.0 million** cash position [Balance Sheets](index=7&type=section&id=BALANCE%20SHEETS) This subsection details the company's financial position, including assets, liabilities, and equity, as of March 31, 2025, and December 31, 2024 Balance Sheet Summary | Category | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $25,045,329 | $27,667,964 | | Total Current Assets | $25,552,428 | $28,115,270 | | Property and Equipment - net | $6,116,637 | $5,691,545 | | Total Assets | $35,639,560 | $37,807,983 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total Current Liabilities | $1,537,763 | $1,785,396 | | Total Long Term Liabilities | $2,552,209 | $2,598,682 | | Total Liabilities | $4,089,972 | $4,384,078 | | Total Stockholders' Equity | $31,549,588 | $33,423,905 | [Statements of Comprehensive Loss](index=8&type=section&id=STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) This subsection presents the company's revenues, expenses, and net loss for the three months ended March 31, 2025, and 2024 Statements of Comprehensive Loss (Three Months Ended March 31) | Metric | 2025 | 2024 | | :-------------------------- | :----------- | :----------- | | NET SALES | $22,917 | $30,417 | | COST AND EXPENSE | $4,928,298 | $5,881,287 | | LOSS FROM OPERATIONS | $(4,905,381) | $(5,850,870) | | OTHER INCOME (EXPENSE) | $208,357 | $170,959 | | NET LOSS | $(4,697,024) | $(5,679,911) | | Basic Loss Per Share | $(0.04) | $(0.05) | | Diluted Loss Per Share | $(0.04) | $(0.05) | | Weighted Average Shares (Basic) | 123,931,841 | 118,950,591 | | Weighted Average Shares (Diluted) | 123,931,841 | 118,950,591 | [Statements of Stockholders' Equity](index=9&type=section&id=STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) This subsection outlines changes in stockholders' equity, reflecting net loss and common stock issuances, for the three months ended March 31, 2025 - Total stockholders' equity decreased from **$33,423,905** at December 31, 2024, to **$31,549,588** at March 31, 2025, primarily due to the net loss of **$4,697,024**, partially offset by common stock issuances[21](index=21&type=chunk) Changes in Stockholders' Equity (Three Months Ended March 31, 2025) | Item | Amount | | :------------------------------------------------ | :------------- | | Balance at December 31, 2024 | $33,423,905 | | Common stock issued to institutional investor | $1,486,983 | | Common stock issued for commitment shares | $8,029 | | Common stock sales at the market by investment banking company | $116,435 | | Exercise of options | $163,500 | | Cashless exercise of options | $20,500 | | Options issued for services | $749,042 | | Options issued to settle accrued bonuses | $48,068 | | Restricted stock awards issued for future services | $0 | | Deferred compensation | $230,150 | | Net loss for the three months ended March 31, 2025 | $(4,697,024) | | Balance at March 31, 2025 | $31,549,588 | [Statements of Cash Flows](index=10&type=section&id=STATEMENTS%20OF%20CASH%20FLOWS) This subsection summarizes cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025, and 2024 Cash Flow Summary (Three Months Ended March 31) | Activity | 2025 | 2024 | | :----------------------------------- | :------------- | :------------- | | Net cash used in operating activities | $(3,490,131) | $(4,772,208) | | Net cash used in investing activities | $(899,422) | $(828,474) | | Net cash provided by financing activities | $1,766,918 | $5,677,653 | | Net (Decrease) Increase in Cash | $(2,622,635) | $76,971 | | Cash and Cash Equivalents - End of Period | $25,045,329 | $31,509,058 | [Notes to Financial Statements](index=11&type=section&id=NOTES%20TO%20FINANCIAL%20STATEMENTS) This subsection provides detailed explanations of the company's accounting policies, business operations, and financial position - The accompanying unaudited financial statements include all adjustments necessary for a fair presentation and are prepared on a consistent basis with the Company's 2024 Annual Report on Form 10-K, with interim operating results for Q1 2025 not indicative of full-year results[25](index=25&type=chunk) - Lightwave Logic, Inc. is a technology platform company utilizing proprietary electro-optic (EO) polymers, Perkinamine®, for high-speed, low-power data transmission in photonic EO devices, targeting telecommunications and generative AI applications[26](index=26&type=chunk) - The company's primary revenue stream is from technology material supply and licensing agreements for its patented electro-optic polymer materials, with future revenue expected from technology transfer agreements and direct material sales[27](index=27&type=chunk) - The company expects monthly expenditures of approximately **$1,796,000** over the next 12 months and has sufficient cash to finance operations through May 2026, supplemented by available funds from purchase agreements with institutional investors and at-the-market sales agreements[48](index=48&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) Key Financial Highlights (Three Months Ended March 31) | Metric | March 31, 2025 | March 31, 2024 | | :-------------------------------- | :------------- | :------------- | | Net Sales | $22,917 | $30,417 | | Total Cost and Expense | $4,928,298 | $5,881,287 | | Loss from Operations | $(4,905,381) | $(5,850,870) | | Other Income (Expense) | $208,357 | $170,959 | | Net Loss | $(4,697,024) | $(5,679,911) | | Basic Loss Per Share | $(0.04) | $(0.05) | | Diluted Loss Per Share | $(0.04) | $(0.05) | | Cash and Cash Equivalents (End of Period) | $25,045,329 | $31,509,058 | | Total Assets | $35,639,560 | $41,737,807 | | Total Liabilities | $4,089,972 | $4,538,563 | | Total Stockholders' Equity | $31,549,588 | $37,199,244 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Lightwave Logic's Q1 2025 financial condition, highlighting improved net loss from reduced operating expenses and ongoing reliance on equity financing - Lightwave Logic leverages its proprietary Perkinamine® electro-optic polymers to create next-generation photonic EO devices for high-speed, low-power data transmission, targeting telecommunications and generative AI applications[120](index=120&type=chunk) - The company's differentiation lies in higher speed, lower power consumption, manufacturing simplicity, small footprint, and reliability of its modulator devices, with ongoing advances in integrating materials with commercial foundries[121](index=121&type=chunk) - The company's business model includes polymer materials development, patent licensing, and technology transfers to foundries, with a strategic focus on EO Polymer materials development and manufacturing since December 2024[122](index=122&type=chunk)[126](index=126&type=chunk) Revenue and Cost of Sales (Three Months Ended March 31) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :---------------- | :------- | :------- | :--------- | :--------- | | Licensing & Royalty Revenue | $22,917 | $16,667 | $6,250 | 37.5% | | Device Processing Revenue | $0 | $13,750 | $(13,750) | -100% | | Total Net Sales | $22,917 | $30,417 | $(7,500) | -24.6% | | Cost of Sales | $2,028 | $5,175 | $(3,147) | -60.8% | Operating Expenses (Three Months Ended March 31) | Expense Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------ | :----------- | :----------- | :----------- | :--------- | | 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% | | Total Operating Expenses | $4,926,270 | $5,876,112 | $(949,842) | -16% | - Research and development expenses decreased by **33%** primarily due to reductions in prototype device development, wafer fabrication, salary and benefits, travel, materials and supplies, testing, and non-cash stock option/restricted stock amortization expenses, partially offset by increased depreciation[136](index=136&type=chunk)[138](index=138&type=chunk) - General and administrative expenses increased by **46%** mainly due to higher non-cash stock option amortization, salary and benefits, and legal expenses, partially offset by decreases in accounting, depreciation, recruiting, travel, consulting, and insurance expenses[139](index=139&type=chunk)[144](index=144&type=chunk) - Net loss decreased by **17%** from **$5,679,911** in Q1 2024 to **$4,697,024** in Q1 2025, driven by reduced R&D and other operating expenses, and a gain on disposal of property and equipment[141](index=141&type=chunk) - The company's liquidity is supported by proceeds from common stock sales through purchase agreements with Lincoln Park (up to **$30 million** remaining on 2025 agreement) and an at-the-market sales agreement with Roth Capital (up to **$31.5 million** remaining), and exercise of options[142](index=142&type=chunk)[143](index=143&type=chunk) - Cash and cash equivalents totaled **$25,045,329** as of March 31, 2025, with the company anticipating sufficient funds to finance operations through May 2026, but requiring additional financing thereafter to support increasing operational and R&D expenditures[149](index=149&type=chunk)[150](index=150&type=chunk)[160](index=160&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section assesses the company's market risk, primarily interest rate sensitivity, concluding a 10% interest rate change would not materially affect its **$25.0 million** cash portfolio - As of March 31, 2025, the company held **$25.0 million** in cash and cash equivalents, primarily in highly liquid instruments with maturities of three months or less[167](index=167&type=chunk) - The company's primary market risk exposure is interest rate sensitivity, but it does not use market risk sensitive instruments for hedging or speculative purposes[168](index=168&type=chunk) - A hypothetical **10%** change in interest rates as of March 31, 2025, would not have a material effect on the fair value of the company's investment portfolio, indicating a low material financial market risk exposure[168](index=168&type=chunk)[169](index=169&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of March 31, 2025, with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were evaluated as effective as of March 31, 2025, ensuring timely and accurate reporting of information[170](index=170&type=chunk) - There were no material changes in the company's internal control over financial reporting during the quarter ended March 31, 2025[171](index=171&type=chunk) [Part II Other Information](index=36&type=section&id=Part%20II%20Other%20Information) This section provides additional information including legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms the absence of any material legal proceedings affecting the company - No material legal proceedings were reported[173](index=173&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks, including ongoing operating losses, the need for additional capital beyond May 2026, and potential shareholder dilution or operational limitations - The company has incurred substantial operating losses since inception, with a net loss of **$4.7 million** for Q1 2025, and expects to continue incurring losses through at least 2025[175](index=175&type=chunk) - Additional capital will be required to fund operations beyond May 2026, and there is no assurance that sufficient financing will be available on acceptable terms, potentially leading to substantial limitations on operations or shareholder dilution[177](index=177&type=chunk)[179](index=179&type=chunk) - The company currently has **$29.9 million** available under the 2025 Purchase Agreement with Lincoln Park and **$31.5 million** available under the Roth Sales Agreement, but cannot assure full utilization of these agreements[177](index=177&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities or use of proceeds during the reporting period - No unregistered sales of equity securities or use of proceeds were reported[180](index=180&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults upon senior securities occurred during the reporting period - No defaults upon senior securities were reported[181](index=181&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company's operations - Mine Safety Disclosures are not applicable[183](index=183&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) This section reports no adoption or termination of Rule 10b5-1 trading plans by directors or officers during Q1 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 arrangements during Q1 2025[184](index=184&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications, organizational documents, and key agreements - The exhibits include certifications (Rule 13a-14(a), 18 U.S.C. Section 1350), organizational documents (Articles of Incorporation, Bylaws), key agreements (Purchase Agreement and Registration Rights Agreement with Lincoln Park), and Inline XBRL documents[185](index=185&type=chunk)

Revenue and Income - For the year ended December 31, 2024, the company recognized $81,855 in licensing and royalty revenue and $13,750 in revenue for device processing work, compared to $40,502 in licensing and royalty revenue for the year ended December 31, 2023, indicating a significant increase in revenue [220]. - Other income increased by 196% to $554,102 in 2024, compared to $187,233 in 2023, mainly due to increased interest income and a decrease in commitment fees [226]. Operating Expenses - The company's total operating expenses for the year ended December 31, 2024, were $23,177,353, up 9% from $21,263,254 in 2023, driven by increases in research and development and general administrative expenses [222]. - Research and development expenses increased by $902,859 (6%) to $16,806,548 in 2024, primarily due to higher salary and benefits, equipment depreciation, and prototype development costs [222]. - General and administrative expenses rose by $1,011,240 (19%) to $6,370,805 in 2024, attributed to increases in salary, consulting fees, and investor relations expenses [225]. Net Loss - The net loss for the year ended December 31, 2024, was $22,535,041, an increase of $1,497,009 (7%) from the net loss of $21,038,032 in 2023, primarily due to rising operational costs [227]. Cash Flow and Financing - Net cash used in operating activities was $15,550,515 for the year ended December 31, 2024, primarily due to a net loss of $22,535,041 [240]. - Net cash provided by financing activities was $14,484,291 for the year ended December 31, 2024, including $12,366,965 from the resale of common stock [242]. - The company received $12,366,965 in proceeds from the 2023 Purchase Agreement with Lincoln Park during the year ended December 31, 2024 [231]. - The company has entered into a 2025 Purchase Agreement with Lincoln Park to sell up to $30 million of common stock over a 36-month period [235]. Assets and Liabilities - As of December 31, 2024, the company's cash and cash equivalents totaled $27,667,964, with total assets of $37,807,983 and stockholders' equity of $33,423,905 [243]. - The company had total liabilities of $4,384,078 as of December 31, 2024 [243]. - The company has a cash position that allows it to finance operations through April 2026 without needing to replenish cash reserves [234]. Strategic Focus and Growth - The company commenced commercial operations in May 2023, with a material supply license agreement for Perkinamine® chromophore materials, marking a significant step in its business strategy [215]. - The company is focusing on scaling its polymer modulator devices through partnerships with silicon-based foundries, which will enhance production efficiency and capital utilization [210]. - The company aims to expand its applications beyond telecommunications to sectors such as automotive, aerospace, and defense, leveraging its proprietary polymer technology [212]. - The company plans to continue incurring substantial research and development expenses to support the commercialization of its electro-optic materials platform and enhance its product offerings [224]. - The company plans to increase spending on research and development, marketing, and workforce expansion as part of its growth strategy [238]. Future Expenditures - The company expects to incur approximately $1,727,000 in expenditures per month over the next 12 months [233]. - Net cash used by investing activities was $2,697,899 for the year ended December 31, 2024, primarily for asset additions for the Colorado headquarters facility and labs [241].