Lightwave Logic(LWLG) - 2020 Q1 - Quarterly Report

Financial Performance - The company reported a net loss of $1,827,174 for the three months ending March 31, 2020, compared to a net loss of $2,018,778 for the same period in 2019, indicating an improvement of about 9.5%[19] - Basic and diluted loss per share improved to $(0.02) for Q1 2020, compared to $(0.03) for Q1 2019[19] - The net loss decreased to $1,827,174 for the three months ended March 31, 2020, from $2,018,778 for the same period in 2019, a reduction of $191,604[144] - The company reported no revenues for the three months ended March 31, 2020, and March 31, 2019, as it is in various stages of photonic device and material development[127] Assets and Equity - Total assets decreased to $6,401,796 as of March 31, 2020, down from $6,824,856 as of December 31, 2019, representing a decline of approximately 6.2%[17] - The total stockholders' equity decreased to $4,697,022 as of March 31, 2020, down from $4,907,714 as of December 31, 2019, a decline of approximately 4.3%[17] - Cash and cash equivalents at the end of the period were $2,028,259, a decrease of 9.3% from $2,236,344 at the beginning of the period[24] Expenses - Operating expenses increased to $1,796,196 for the three months ended March 31, 2020, compared to $1,720,483 for the same period in 2019, marking an increase of $75,713[128] - Research and development expenses increased to $1,189,771 for Q1 2020, up from $1,152,053 in Q1 2019, reflecting a rise of approximately 3.3%[19] - General and administrative expenses increased to $606,425 for the three months ended March 31, 2020, compared to $568,430 for the same period in 2019, an increase of $37,995[139] Cash Flow - The company experienced a net cash used in operating activities of $1,322,249 for Q1 2020, compared to $1,146,584 for Q1 2019, indicating an increase of approximately 15.4%[24] - Net cash used by investing activities was $13,504, including $8,149 for intangibles and $5,355 for asset additions related to the new Colorado headquarters[155] - Net cash provided by financing activities was $1,127,668, consisting of $1,352,113 from common stock resale, offset by $224,445 for equipment repayment[155] Financing Activities - The company issued 2,125,000 shares of common stock to an institutional investor, raising $1,352,113 in financing activities[24] - The Company signed a Purchase Agreement in January 2019 to sell up to $25,000,000 of common stock, issuing 350,000 shares as an initial commitment fee valued at $258,125[59] - As of March 31, 2020, the institutional investor purchased 8,275,000 shares for proceeds of $5,979,487, with an additional 194,338 shares issued as commitment fees valued at $156,513[59] - The Company received $410,700 in loan funding from the Paycheck Protection Program on April 24, 2020, to cover payroll, rent, and utility costs[74] Business Operations - The ongoing COVID-19 pandemic has led to a temporary curtailment of business operations, which is expected to negatively impact financial results, although the exact impact is currently undetermined[30] - Monthly expenditures are expected to be approximately $586,000 over the next 12 months[37] - The company has a cash position that allows operations to be financed through August 2020[37] - The company plans to increase spending on research and development, marketing, and workforce expansion to support business growth[157] Research and Development - The company is focused on developing next-generation photonic devices and expects to generate revenue from datacom and telecom devices in the future[28] - The Company is focused on developing next-generation electro-optic photonic devices using proprietary high-activity and high-stability organic polymers[79] - The Company aims to lower power consumption and improve reliability in its devices, having developed new materials in 2019 to further this goal[80] - The Company designs proprietary electro-optical modulation devices that convert electric signals into optical signals for high-speed data transmission[85] Market Opportunities - The market opportunity for interconnect reach distances greater than 10 km is estimated to exceed $1 billion over the next decade[95] - The company is targeting the cloud computing and data center markets, which are increasingly demanding high-speed, high-bandwidth solutions[103] Intellectual Property - The company has acquired 15 polymer chemistry patents, enhancing its competitive position in the 400 Gbps integrated photonics marketplace[114] - The company’s polymer materials have more than doubled the electro-optic response compared to previous materials, enabling optical device performance exceeding 100 GHz[117] Miscellaneous - There is no income tax benefit for the losses for the three months ended March 31, 2020, due to a valuation allowance for deferred tax assets[53] - The company has no unrecognized tax benefits as of January 1, 2020[54] - The company has no off-balance sheet arrangements that could materially affect its financial condition as of March 31, 2020[159] - There were no changes in internal control over financial reporting that materially affected the company during Q1 2020[161]