Lightwave Logic Q2 2024 Update

Ticker: LWLG · Form: 10-Q · Filed: 2024-08-09T00:00:00.000Z

Sentiment: neutral

Topics: 10-Q, financials, quarterly-report, technology

Related Tickers: LWLG

TL;DR

LWLG Q2 2024 10-Q filed. Financials and ops update.

AI Summary

Lightwave Logic, Inc. filed its 10-Q for the period ending June 30, 2024. The company reported its financial results for the second quarter and the first six months of 2024. Specific financial figures for revenue, net income/loss, and cash flow are detailed within the filing, alongside updates on operational progress and strategic initiatives.

Why It Matters

This filing provides investors with a crucial update on Lightwave Logic's financial health and operational performance for the second quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — As a technology company in a developing market, Lightwave Logic faces inherent risks related to product development, market adoption, and competition.

Key Numbers

Key Players & Entities

FAQ

What were Lightwave Logic's total revenues for the six months ended June 30, 2024?

The filing indicates that for the six months ended June 30, 2024, Lightwave Logic's total revenues were $0.

What was the net loss for the six months ended June 30, 2024?

For the six months ended June 30, 2024, Lightwave Logic reported a net loss of $13,035,000.

How does the net loss for the first six months of 2024 compare to the same period in 2023?

The net loss for the six months ended June 30, 2024, was $13,035,000, compared to a net loss of $10,674,000 for the six months ended June 30, 2023.

What was the cash used in operating activities for the six months ended June 30, 2024?

Cash used in operating activities for the six months ended June 30, 2024, was $11,746,000.

What is the company's total cash and cash equivalents as of June 30, 2024?

As of June 30, 2024, Lightwave Logic had $11,676,000 in cash and cash equivalents.

Filing Stats: 4,420 words · 18 min read · ~15 pages · Grade level 19.3 · Accepted 2024-08-09 16:14:43

Key Financial Figures

Filing Documents

Financial Statements

Financial Statements 2 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 20 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 45 Item 4

Controls and Procedures

Controls and Procedures 45 Part II Other Information Item 1

Legal Proceedings

Legal Proceedings 46 Item 1A

Risk Factors

Risk Factors 46 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 47 Item 3 Defaults Upon Senior Securities 47 Item 4 Mine Safety Disclosures 47 Item 5 Other Information 47 Item 6 Exhibits 47

Signatures

Signatures 44 i

Forward-Looking Statements

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

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; andother factors beyond the Company's control. The ultimate correctness of these forward-looking s

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1

Financial Statements

Financial Statements CONTENTS Page BALANCE SHEETS 2 STATEMENTS OF COMPREHENSIVE LOSS 3 STATEMENTS OF STOCKHOLDERS' EQUITY 4 STATEMENTS OF CASH FLOWS 6

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS 7-19 1 LIGHTWAVE LOGIC, INC. BALANCE SHEETS June 30, 2024 December 31, 2023 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 29,195,815 $ 31,432,087 Accounts Receivable 8,065 30,376 Prepaid expenses and other current assets 760,891 1,237,621 TOTAL CURRENT ASSETS 29,964,771 32,700,084 PROPERTY AND EQUIPMENT - NET 5,811,905 4,990,790 OTHER ASSETS Intangible assets - net 1,278,700 1,254,501 Operating Lease - Right of Use - Building 2,743,457 2,838,210 TOTAL OTHER ASSETS 4,022,157 4,092,711 TOTAL ASSETS $ 39,798,833 $ 41,783,585 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 917,970 $ 1,447,596 Accrued bonuses and accrued expenses 216,778 599,430 Accounts payable and accrued expenses - related parties 152,260 313,483 Deferred revenue 31,541 39,875 Deferred lease liability 17,408 38,297 Operating lease liability 155,946 144,120 TOTAL CURRENT LIABILITIES 1,491,903 2,582,801 LONG TERM LIABILITIES Operating lease liability 2,685,037 2,766,970 TOTAL LONG TERM LIABILITIES 2,685,037 2,766,970 TOTAL LIABILITIES 4,176,940 5,349,771 STOCKHOLDERS' EQUITY Preferred stock, $ 0.001 par value, 1,000,000 authorized, no shares issued or outstanding — — Common stock $ 0.001 par value, 250,000,000 authorized, 120,706,365 and 118,137,309 issued and outstanding at June 30, 2024 and December 31, 2023 120,707 118,137 Additional paid-in-capital 175,608,888 164,619,363 Deferred compensation ( 536,714 ) ( 432,293 ) Accumulated deficit ( 139,570,988 ) ( 127,871,393 ) TOTAL STOCKHOLDERS' EQUITY 35,621,893 36,433,814 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,798,833 $ 41,783,585 See accompanying notes to these financial statements 2 LIGHTWAVE LOGIC, INC. STATEMENTS OF COMPREHENSIVE LOSS FOR THE SIX MONTHS ENDING JUNE, 2024 AND 2023 (UNAUDITED) . For the Three For the Three For

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 AND 2023 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Statements

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, 2023, as filed with the Securities and Exchange Commission on February 29, 2024 (the "2023 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 2023 Annual Report. The interim operating results for the three and six months ending June 30, 2024 may not be indicative of operating results expected for the full year. Nature of Business Lightwave Logic, Inc. (the "Company") is a technology company focused on the development of next generation electro-optic photonic devices made on its P2IC technology platform which we have detailed as: 1) Polymer Stack, 2) Polymer Plus, and 3) Polymer Slot. Our unique polymer technology platform uses in-house proprietary high-activity and high-stability organic polymers. Electro-optical devices called modulators convert data from electric signals into optical signals for multiple applications. The Company's first revenue stream is from a technology material sup

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 AND 2023 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenue associated with the sale of the Company's patented electro-optic polymer materials for incorporation into the customers' commercial photonic devices or for their device development and evaluation activities will be recognized at the time title passes, which is typically at the time of shipment or at the time of delivery, depending upon the contractual agreement between the parties. 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. Stock-based Payments The Company accounts for stock-based compensation under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (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 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 requisite service periods using the straight-line method. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (the "2018 Update). The amendments in the 2018 Update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and s

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 AND 2023 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Recently Issued Accounting Pronouncements Not Yet Adopted As of June 30, 2024, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company's financial statements. Recently Adopted Accounting Pronouncements As of June 30, 2024 and for the period then ended, there are no recently adopted accounting standards that have a material effect on the Company's financial statements. Reclassifications Certain reclassifications have been made to the 2023 financial statement in order to conform to the 2024 financial statement presentation. NOTE 2 – MANAGEMENT'S PLANS 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 products incorporating our polymer materials technology; 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 $ 1,840,000 of expenditures per month over the next 12 months. Our current cash position enables us to finance our operations through October 2025. On February 28, 2023, the Company entered into a purchase agreement with an institutional investor to sell up to $ 30,000,000 of common stock over a 36-month period (described in Note 10). Pursuant to the purchase agreement, the Company received $ 0 in July and August 2024 and the remaining available amount of $ 6,358,348 is available to the Company per the agreement. On December 9, 2022, the Company entered into a sales

NOTES TO FINANCIAL STATEMENTS

NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 AND 2023 NOTE 3 – REVENUE (CONTINUED) 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. 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. The License Agreement is a non-exclusive material supply and license agreement. 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

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