Lightwave Logic(LWLG) - 2021 Q3 - Quarterly Report

Financial Performance - Total assets increased to $16.13 million as of September 30, 2021, compared to $7.37 million at the end of 2020, representing a 118.9% increase[17] - Cash and cash equivalents rose to $12.19 million from $3.31 million, marking a 269.5% increase year-over-year[17] - Total liabilities decreased to $1.15 million from $1.59 million, a reduction of 27.6%[17] - The net loss for the nine months ending September 30, 2021, was $10.52 million, compared to a loss of $5.11 million for the same period in 2020, reflecting a 106.5% increase in losses[18] - Basic and diluted loss per share for the three months ended September 30, 2021, was $0.04, compared to $0.02 for the same period in 2020[18] - The total cost of expenses for the nine months ended September 30, 2021, was $9.60 million, an increase of 91.5% from $5.02 million in the same period of 2020[18] - The company reported no net sales for the three and nine months ending September 30, 2021, maintaining the same status as the previous year[18] - For the nine months ending September 30, 2021, the net loss was $10,522,651, compared to a net loss of $5,108,985 for the same period in 2020, representing a 106% increase in losses year-over-year[28] - Net cash used in operating activities for the nine months ending September 30, 2021, was $4,299,499, an increase from $3,524,612 in the same period of 2020[28] - The company reported a net cash increase of $8,888,154 for the nine months ending September 30, 2021, compared to a decrease of $36,033 in the same period of 2020[28] Research and Development - Research and development expenses for the three months ended September 30, 2021, were $3.63 million, up 213.5% from $1.16 million in the same period of 2020[18] - The company is focused on developing next-generation photonic devices and expects to generate revenue from datacom and telecom devices, as well as product development agreements[31] - The company is developing electro-optic polymer devices expected to operate at data rates of at least 50 Gbaud, with plans to scale to 100 Gbaud[95] - The ridge waveguide modulator, Polymer Stack™, is designed to enable 50 Gbaud modulation in fiber-optic communications, targeting a market opportunity worth over $1 billion over the next decade[99] - The company anticipates that its revenue will derive from technology licensing, joint ventures, and direct sales of electro-optic device components[93] - The polymer photonic integrated circuits (PIC) are expected to enable ultra-miniaturization, potentially increasing the number of photonic functions on a semiconductor chip[90] - Initial testing of the polymer photonics slot waveguide modulators demonstrated speeds exceeding 30-35 GHz, significantly lower operating voltages compared to traditional inorganic modulators[104] - The company aims to develop a multichannel polymer photonic integrated circuit platform targeting data rates of 100 Gbaud, 400 Gbaud, 800 Gbaud, and beyond, with a scaling philosophy to reach 1.6 Tbps[106][107] - Polymer-based modulators are currently under development, with a roadmap indicating progression from 50 Gbaud to 100 Gbaud and beyond, aiming for commercial viability in the 400 Gbps transceiver market[107] - The company achieved world-record performance for a polymer modulator, transmitting 220 Gbit/s OOK and 408 Gbit/s 8PAM in an optical transmission experiment[148] Capital and Financing - The company issued 8.06 million shares to institutional investors, raising approximately $13.97 million in additional paid-in capital[21] - The company filed a $100,000,000 universal shelf registration statement, which became effective on July 9, 2021, to support future financing needs[42] - The company entered into a purchase agreement to sell up to $33,000,000 of common stock over a 36-month period, receiving $3,449,650 in October 2021[42] - The company received approximately $13.97 million in proceeds from the sale of common stock to an institutional investor during the nine months ended September 30, 2021[170] - The company has no debt to service as of September 30, 2021[173] Operational Expenses - The company expects to incur approximately $865,000 in expenditures per month over the next 12 months, with current cash position allowing operations to be financed through March 2023[42] - Rent expenses for the nine months ended September 30, 2021, totaled $100,399 for R&D and $33,466 for general and administrative expenses[56] - General and administrative expenses rose by 16% to $1,841,066 for the nine months ended September 30, 2021, from $1,591,660 in the prior year[163] - Other expenses increased by 911% to $(920,484) for the nine months ended September 30, 2021, compared to $(91,020) in the prior year[164] Stock and Shareholder Information - The company’s common stock began trading on the Nasdaq Capital Market, which is expected to enhance shareholder value and improve liquidity[146] - As of September 30, 2021, options to purchase 3,785,000 shares of common stock were issued and outstanding under the 2007 Employee Stock Plan[65] - Share-based compensation for the nine months ended September 30, 2021, totaled $799,197, compared to $548,736 for the same period in 2020[72] - The aggregate intrinsic value of options and warrants outstanding as of September 30, 2021, was $69,549,879, calculated based on a closing stock price of $9.46[74] - As of September 30, 2021, the company had 8,108,687 non-qualified stock options and warrants outstanding, with a weighted average exercise price of $0.88 and a remaining contractual life of 4.91 years[75] Legal and Compliance - The company received $410,700 from the Paycheck Protection Program, which was fully forgiven on January 22, 2021[57] - There was no income tax benefit for losses for the nine months ended September 30, 2021, as management determined the realization of net deferred tax assets was not assured[59] - The company reported no legal proceedings, risk factors, or defaults upon senior securities during the reporting period[190][193] - The certifications pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002 were executed by the Principal Executive Officer and Principal Financial Officer of the company[196] Awards and Recognition - The company received the "Best Achievement in PIC Platform" award for its 100 GHz polymer platform, recognizing innovative advances in photonic integrated circuits[125] - The company received U.S. Patent number 10,591,755, enabling high-speed, low-power operation of electro-optic polymer modulators directly from CMOS IC chips, enhancing competitiveness in the market[136] - The company announced test results showing new modulators exceeded bandwidth design targets, achieving triple the data rate compared to competing devices, with bandwidths exceeding 100GHz[141] - The company received the 2021 Industry Award for Optical Integration from the European Conference on Optical Communications, recognizing significant innovation in photonics integration[147]