Lightwave Logic(LWLG) - 2023 Q2 - Quarterly Report

Financial Performance - The net loss for the six months ending June 30, 2023, was $10,933,765, compared to a net loss of $7,358,359 for the same period in 2022, reflecting an increase in loss of about 48.5%[18] - Loss per share for the six months ending June 30, 2023, was $(0.10), compared to $(0.07) for the same period in 2022, indicating a worsening in per-share loss[18] - The net loss for the six months ending June 30, 2023, was $10,933,765, compared to a net loss of $7,358,359 for the same period in 2022, representing an increase in loss of approximately 49%[29] - Net cash used in operating activities for the six months ending June 30, 2023, was $7,004,008, compared to $5,298,715 for the same period in 2022, indicating a 32% increase in cash outflow[29] - The company commenced commercial operations in May 2023 and has not generated sufficient revenues to cover operating expenses, incurring substantial net losses since inception[210] Assets and Liabilities - Total assets increased to $40,552,039 as of June 30, 2023, up from $29,263,472 at December 31, 2022, representing a growth of approximately 38.5%[17] - Cash and cash equivalents rose to $32,635,787, an increase of 35.4% from $24,102,151 at the end of 2022[17] - Total liabilities decreased to $3,775,958 from $1,710,449, a reduction of approximately 78.5%[17] - The total stockholders' equity rose to $36,776,081 as of June 30, 2023, compared to $27,553,023 at the end of 2022, an increase of about 33.5%[17] - The company has no debt to service, which positions it favorably for future growth and operational expansion[48] Expenses - Research and development expenses for the three months ending June 30, 2023, were $4,166,110, up 49.8% from $2,781,215 in the same period of 2022[18] - General and administrative expenses increased to $1,174,590 for the three months ending June 30, 2023, compared to $987,137 in the same period of 2022, marking an increase of approximately 19%[18] - Total operating expenses for the three months ended June 30, 2023, were $5,340,700, a 42% increase from $3,768,352 in the prior year[212] - Research and development salary expenses increased by $498,383 in the three months ended June 30, 2023, compared to the same period in 2022[213] - Non-cash stock option amortization expenses increased by $204,269 in the three months ended June 30, 2023, compared to the same period in 2022[213] Capital Raising and Stock Issuance - The company issued 2,575,400 common shares to institutional investors, raising approximately $14,950,409 in additional paid-in capital during the six-month period ending June 30, 2023[21] - The company raised $14,950,409 from the issuance of common stock to an institutional investor during the six months ending June 30, 2023, compared to $6,705,693 in the same period of 2022, marking a 123% increase[29] - The institutional investor purchased 1,795,455 shares of common stock for proceeds of $11,103,102 from February 28, 2023, to June 30, 2023[81] - The company issued 37,670 shares of common stock as additional commitment fees, valued at $264,874 during the same period[81] Commercial Operations and Agreements - The first commercial agreement was established in May 2023, involving a four-year material supply and license agreement, with a minimum annual royalty of $50,000[49] - No revenues were recognized for the three and six months ending June 30, 2023, as the licensee did not requisition material; however, an up-front licensing fee of $50,000 was recorded as deferred revenue[50] - The company commenced commercial operations in May 2023 with a material supply license agreement to provide Perkinamine chromophore materials for polymer-based photonic devices and photonic integrated circuits (PICs)[116] Research and Development - The company is developing optical devices using proprietary electro-optical polymer material, with multiple generations of new materials being optimized for specific designs[119] - The company is actively engaging with test equipment manufacturers and industry bodies to promote its roadmap and fine-tune its business model[209] - The company has established an Advisory Board to enhance product positioning and support expansion into billion-dollar markets, leveraging the expertise of industry leaders[148] Market and Product Development - The company aims to scale high-performance polymer optical engines quickly and efficiently through partnerships with silicon-based foundries[103] - The company is targeting applications in fiber optic data communications and telecommunications markets, with plans to explore automotive/LIDAR and sensing applications[105] - The company has developed a polymer platform that is scalable, allowing for high-speed data rates while reducing costs and power consumption, which is crucial for competitive performance metrics[137] Intellectual Property and Patents - The company received U.S. Patent number 10,591,755, which allows electro-optic polymer modulators to operate with low power directly from CMOS IC chips, reducing the need for high-speed modulator driver ICs[162] - The company acquired polymer technology intellectual property assets from BrPhotonics, enhancing its patent portfolio with 15 new patents related to electro-optic polymer technology[144] - The company received U.S. patent number 11,042,051 for a new device design that lowers power consumption and enhances reliability for mass-volume manufacturing[168] Performance Metrics and Achievements - The company announced a world-record performance for a polymer modulator, achieving 220 Gbit/s OOK and 408 Gbit/s 8PAM in an optical transmission experiment[173] - Enhanced photostability results were reported, demonstrating no performance change after 3000 hours of high-intensity optical power exposure[181] - The company achieved a world record demonstration of a 250 GHz super high bandwidth electro-optical-electrical (EOE) link, showcasing a 500 GHz setup-limited bandwidth[187]