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What changed in Lightwave Logic, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Lightwave Logic, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+249 added−501 removedSource: 10-K (2025-03-18) vs 10-K (2024-02-29)

Top changes in Lightwave Logic, Inc.'s 2024 10-K

249 paragraphs added · 501 removed · 197 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+36 added−257 removed68 unchanged
Biggest changeThe Patent is US patent number 9837794, EU patent number 3017489, China registration number 201480048236 & 201910230856, and is entitled, “Optoelectronic devices, methods of fabrication thereof and materials therefor.” ——————— 1 Set-up limited' indicates that the measurement was limited by the testing equipment. 2 University of Kiel, Germany supported the digital signal processor (DSP), and ETHZ supported the photodetector. 14 On December 12, 2022, we announced the receipt of U.S. patent number 11,506,918 B2 entitled “Hybrid electro-optic polymer modulator with atomic layer deposition (ALD) sealant layer,” which allows our proprietary polymers to be sealed to moisture and atmospheric gases in a very low temperature and quasi-hermetic environment through the use of a chip-scale packaging approach that can be applied in parallel at wafer level (i.e. in volume) and that eliminates the need for a separate hermetic enclosure or "gold box." Specifically, our electro-optic polymer modulators will be sealed with low-temperature conformal atomic layer deposition dielectric layers that are supported on a silicon substrate with passive silicon photonics waveguides.
Biggest changeOn December 12, 2022, we announced the receipt of U.S. patent number 11,506,918 B2 entitled “Hybrid electro-optic polymer modulator with atomic layer deposition (ALD) sealant layer,” which allows our proprietary polymers to be sealed to moisture and atmospheric gases in a very low temperature and quasi-hermetic environment through the use of a chip-scale packaging approach that can be applied in parallel at wafer level (i.e. in volume) and that eliminates the need for a separate hermetic enclosure or "gold box." Specifically, our electro-optic polymer modulators will be sealed with low-temperature conformal atomic layer deposition dielectric layers that are supported on a silicon substrate with passive silicon photonics waveguides.
We believe our proprietary and unique polymers have the potential to replace more expensive, higher power consuming, slower-performance materials such as semiconductor-based modulator devices that are used in fiber-optic communication networks today. 1 Our patented and patent pending molecular architectures are based on a well-understood chemical and quantum mechanical occurrence known as aromaticity .
We believe our proprietary and unique polymers have the potential to replace more expensive, higher power consuming, slower-performance materials such as semiconductor-based modulator devices that are used in fiber-optic communication networks today. Our patented and patent pending molecular architectures are based on a well-understood chemical and quantum mechanical occurrence known as aromaticity .
Our Company contemplates future applications in market verticals that may address the needs of semiconductor companies, optical network companies, Web 2.0/3.0 media companies, high performance computing companies, telecommunications companies, aerospace companies, automotive companies, as well as for example, government agencies and defense entities. Device Design and Development Electro-optic Modulators Our Company designs its own proprietary electro-optical modulation devices.
Our Company contemplates future applications in market verticals that may address the needs of semiconductor companies, optical network companies, Web 2.0/3.0 media companies, high performance computing companies, telecommunications companies, aerospace companies, automotive companies, as well as for example, government agencies and defense entities. Device Design and Development Electro-optic Modulators Our Company designs its own proprietary materials for electro-optical modulation devices.
The expected demands of increased traffic, information, and data driven by G-AI is changing the way the internet is being operated. G-AI is now creating new and interesting market opportunities to upgrade the internet. Three of these opportunities are important today: density, speed, and low power and these are very well aligned with our high performance electro-optic polymers modulator platform.
The expected demands of increased traffic, information, and data driven by AI is changing the way the internet is being operated. AI is now creating new and interesting market opportunities to upgrade the internet. Three of these opportunities are important today: density, speed, and low power and these are very well aligned with our high performance electro-optic polymers modulator platform.
Unless specifically stated otherwise, the use or display by us of such other parties’ names and trade names in this report is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, any of these other parties. Commencement of Commercial Operations We commenced commercial operations in May 2023.
Unless specifically stated otherwise, the use or display by us of such other parties’ names and trade names in this report is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, any of these other parties. 1 Commencement of Commercial Operations We commenced commercial operations in May 2023.
We also believe that the inherent flexibility of being able to apply our organic polymer materials in liquid thin-film form will accelerate the move toward ultra-miniaturization of Polymer Photonic Integrated Circuits (P 2 IC TM ) by increasing the number of photonic circuits on a single chip.
We also believe that the inherent flexibility of being able to apply our organic polymer materials in liquid thin-film form will accelerate the move toward ultra-miniaturization of Polymer Photonic Integrated Circuits (P 2 IC™) by increasing the number of photonic circuits on a single chip.
Aromatic compounds are stable because the electronic charge distributes evenly over a great area preventing hostile moieties, such as oxygen and free radicals, from finding an opening to attack. 5 Previous and Current Competitive Organic Electro-Optic Polymer Efforts For the past several decades, diverse corporate interests, including, to our knowledge, IBM, Lockheed Martin, DuPont, AT&T Bell Labs, Honeywell, Motorola, HP, 3M, and others in addition to numerous universities and U.S.
Aromatic compounds are stable because the electronic charge distributes evenly over a great area preventing hostile moieties, such as oxygen and free radicals, from finding an opening to attack. 4 Previous and Current Competitive Organic Electro-Optic Polymer Efforts For the past several decades, diverse corporate interests, including, to our knowledge, IBM, Lockheed Martin, DuPont, AT&T Bell Labs, Honeywell, Motorola, HP, 3M, and others in addition to numerous universities and U.S.
Our Company can make no assurances that we will be able to effectively protect our technologies and know-how or that third parties will not be able to develop similar technologies and know-how independently. 7 Recent Significant Events and Milestones Achieved During February and March 2018, we moved our Newark, Delaware synthetic laboratory and our Longmont, Colorado optical testing laboratory and corporate headquarters to office, laboratory and research and development space located at 369 Inverness Parkway, Suite 350, Englewood, Colorado.
Our Company can make no assurances that we will be able to effectively protect our technologies and know-how or that third parties will not be able to develop similar technologies and know-how independently. 6 Recent Significant Events and Milestones Achieved During February and March 2018, we moved our Newark, Delaware synthetic laboratory and our Longmont, Colorado optical testing laboratory and corporate headquarters to office, laboratory and research and development space located at 369 Inverness Parkway, Suite 350, Englewood, Colorado.
We are designing high performance polymer modulator optical engines to support the rise and growth of G-AI as it generates more information that will travel through the internet and optical network.
We are designing high performance polymer modulator optical engines to support the rise and growth of AI as it generates more information that will travel through the internet and optical network.
While our initial focus is to address data communications and telecommunications network applications along with cloud computing/data center needs, we believe that in the future we will have additional opportunities over and above G-AI to address other applications such as: backplane optical interconnects, photovoltaic cells, medical applications, satellite reconnaissance, navigation systems, radar applications, optical filters, spatial light modulators; and all-optical switches.
While our initial focus is to address data communications and telecommunications network applications along with cloud computing/data center needs, we believe that in the future we will have additional opportunities over and above AI to address other applications such as: chip-to-chip and backplane optical interconnects, photovoltaic cells, medical applications, satellite reconnaissance, navigation systems, radar applications, optical filters, spatial light modulators; and all-optical switches.
As a result, these competitors may: · Succeed in developing products that are equal to or superior to our products and future products or that achieve greater market acceptance than our products and future products. · Devote greater resources to developing, marketing or selling their products. · Respond quickly to new or emerging technologies or scientific advances and changes in customer requirements, which could render our technologies or products obsolete. · Introduce products that make the continued development of our products and/or future products uneconomical. · Obtain patents that block or otherwise inhibit our ability to develop and commercialize our future products. · Withstand price competition more successfully than we can. · Establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our prospective customers. · Take advantage of acquisition or other opportunities more readily than we can. 34 Employees and Human Capital We currently have 33 full-time employees, and we retain several independent contractors on an as-needed basis.
As a result, these competitors may: • Succeed in developing products that are equal to or superior to our products and future products or that achieve greater market acceptance than our products and future products. • Devote greater resources to developing, marketing or selling their products. • Respond quickly to new or emerging technologies or scientific advances and changes in customer requirements, which could render our technologies or products obsolete. • Introduce products that make the continued development of our products and/or future products uneconomical. • Obtain patents that block or otherwise inhibit our ability to develop and commercialize our future products. • Withstand price competition more successfully than we can. • Establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our prospective customers. • Take advantage of acquisition or other opportunities more readily than we can. 11 Employees and Human Capital We currently have 31 full-time employees, and we retain several independent contractors on an as-needed basis.
We make available on our website under “Investors” – “Financial & Filings,” free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such material with the SEC.
We make available on our website under “Investors” – “SEC Filings,” free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such material with the SEC.
NRZ – See PAM2. PAM2 – 2 level Pulse Amplitude Modulation, a modulation format in which the optical power in each symbol can assume either of two different levels, low or high, representing, respectively, a 0 or a 1. PAM2 supports 1 bit per symbol so the bit rate is equal to the baud rate or symbol rate.
PAM2 – 2 level Pulse Amplitude Modulation, a modulation format in which the optical power in each symbol can assume either of two different levels, low or high, representing, respectively, a 0 or a 1. PAM2 supports 1 bit per symbol so the bit rate is equal to the baud rate or symbol rate.
Included in our patent portfolio are the following nonlinear optic chromophore designs: · Stable Free Radical Chromophores, processes for preparing the same · Stable Free Radical Chromophores, processes for preparing the same · Tricyclic Spacer Systems for Nonlinear Optical Devices · Anti-Aromatic Chromophore Architectures · Heterocyclical Anti-Aromatic Chromophore Architectures · Heterocyclical Chromophore Architectures · Heterocyclical Chromophore Architectures with Novel Electronic Acceptor Systems · Multi-fiber/port hermetic capsule sealed by metallization and method Our patent portfolio includes patents not only on nonlinear optic chromophore designs, but also device designs and inventions, fabrication process inventions, packaging design inventions, as well as novel chemistry to enable high performance, low power, small footprint polymer PIC technology.
Included in our patent portfolio are the following nonlinear optic chromophore designs: • Stable Free Radical Chromophores, processes for preparing the same • Stable Free Radical Chromophores, processes for preparing the same • Tricyclic Spacer Systems for Nonlinear Optical Devices • Anti-Aromatic Chromophore Architectures • Heterocyclical Anti-Aromatic Chromophore Architectures • Heterocyclical Chromophore Architectures • Heterocyclical Chromophore Architectures with Novel Electronic Acceptor Systems • Multi-fiber/port hermetic capsule sealed by metallization and method • Device Design Fabrication Methods • Modulators and Waveguides • Hermetic Capsulation Our patent portfolio includes patents not only on nonlinear optic chromophore designs, but also device designs and inventions, fabrication process inventions, packaging design inventions, as well as novel chemistry to enable high performance, low power, small footprint polymer PIC technology.
While we are not directly a G-AI company designing electronic processors, we do see immediate benefits of enabling higher levels of information to cross the internet using our optical polymer modulator platform. Unless the context otherwise requires, all references to the “Company,” “we,” “our” or “us” and other similar terms means Lightwave Logic, Inc.
While we are not directly an AI company designing electronic processors, we do see immediate benefits of enabling higher levels of information to cross the internet using our optical polymer modulator platform. Unless the context otherwise requires, all references to the “Company,” “we,” “our” or “us” and other similar terms means Lightwave Logic, Inc.
Our Electro-Optic Photonic P 2 IC™ Device Approach Our electro-optic devices are built around our proprietary organic polymer material systems that we believe will enable better performance than the current embedded legacy technology built around inorganic materials.
Our Electro-Optic Photonic P 2 IC™ Device Approach Our electro-optic device designs are built around our proprietary organic polymer material systems that we believe will enable better performance than the current embedded legacy technology built around inorganic materials.
Specifically, our business strategy provides that our revenue stream will be derived from one or some combination of the following: (i) technology licensing for specific product application; (ii) joint venture relationships with significant industry leaders; and (iii) the production and direct sale of our own electro-optic device components.
Specifically, our business strategy provides that our revenue stream will be derived from one or some combination of the following: (i) technology licensing for specific product application; (ii) joint venture relationships with significant industry leaders; and (iii) the production and direct sale of our own electro-optic materials.
We model and simulate each new polymer material so that we can further understand how to optimize the material for device operation. · We integrate data from the material characterization and test results to fabricate devices. We analyze device-testing results to refine and improve fabrication processes and methods.
We model and simulate each new polymer material so that we can further understand how to optimize the material for device operation. • We integrate data from the material characterization and test results to fabricate sample devices for internal use. We analyze device-testing results to refine and improve fabrication processes and methods.
Our future devices will utilize silicon photonics (SiPh) technology, which can support highly miniaturized slot waveguides structures etched in large format (200mm), low cost, and less expensive silicon wafers coated with our organic electro-optic polymers.
Our future device designs will utilize silicon photonics (SiPh) technology, which can support highly miniaturized slot waveguides structures etched in large format (200mm), low cost, and less expensive silicon wafers coated with our organic electro-optic polymers.
Based on our current development plan we expect to add 2 additional full-time employees in 2024. People As a technology and innovation-driven company, we depend on a highly skilled workforce. Attracting, developing, advancing and retaining the best talent is critical for us to execute our strategy and grow our business.
Based on our current development plan we expect to add 4 additional full-time employees in 2025. People As a technology and innovation-driven company, we depend on a highly skilled workforce. Attracting, developing, advancing and retaining the best talent is critical for us to execute our strategy and grow our business.
Our goal is to have our unique polymer technology platform become ubiquitous across many market verticals over and above the optical fiber optic communications markets. Generative Artificial Intelligence (G-AI) has been integrating deeper within our daily activities with applications to make us more efficient and possibly smarter.
Our goal is to have our unique polymer technology platform become ubiquitous across multiple market verticals over and above the optical fiber optic communications markets. Artificial Intelligence (AI) has been integrating deeper within our daily activities with applications to make us more efficient and possibly smarter.
Our Company is also in various stages of photonic device and materials development and evaluation with potential customers and strategic partners. We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of our electro-optic device components.
Our Company is also in various stages of new materials development and evaluation with potential customers and strategic partners. We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of our electro-optic materials.
These companies are heavily invested in the production of crystalline-based semiconductor electro-optic modulator technologies, as well as the development of novel manufacturing techniques and modulator designs. Smaller companies that compete with us on optical modulators using new and novel technologies include: Hyperlite (who are developing thin film lithium niobate (TFLN) and Lumiphase (who are developing Barium Titanate or BTO).
These companies are heavily invested in the production of crystalline-based semiconductor electro-optic modulator technologies, as well as the development of novel manufacturing techniques and modulator designs. 12 Smaller companies that compete with us on optical modulators using new and novel technologies include: Hyperlite (who are developing thin film lithium niobate (TFLN), NLM Photonics (organic hybrid polymer) and Lumiphase (who are developing Barium Titanate or BTO).
Materials based on polymers are used in a multitude of industrial and consumer products, from automotive parts to home appliances and furniture, as well as scientific and medical equipment. 3 Our Business Opportunity Lightwave Logic, Inc. is developing next generation proprietary photonic devices that are based on our advanced electro-optical polymer material systems.
Materials based on polymers are used in a multitude of industrial and consumer products, from automotive parts to home appliances and furniture, as well as scientific and medical equipment. 3 Our Business Opportunity Lightwave Logic, Inc. is developing our advanced electro-optical polymer material systems.
Our Company is also in various stages of photonic device and materials development and evaluation with potential customers and strategic partners. We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of our electro-optic device components.
Our Company is also in various stages of materials development and evaluation with potential customers and strategic partners. We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of our electro-optic Perkinamine® chromophore material.
Diversity, Inclusion and Equity We recognize and view equity as key to our success. We work to create a culture of diversity and inclusion so that all of our employees feel they are respected and treated equally, regardless of gender, race, ethnicity, age, disability, sexual orientation, gender identity, cultural background or religious belief.
Diversity and Inclusion We work to create a culture of diversity and inclusion so that all of our employees feel they are respected and treated equally, regardless of gender, race, ethnicity, age, disability, sexual orientation, gender identity, cultural background or religious belief.
In addition, we make available on our website under “Investors” – “Corporate Governance”, free of charge, our Audit Committee Charter, Compensation Committee Charter, Nominating And Corporate Governance Committee Charter, Operations Committee Charter and Code of Ethics and Business Conduct. In addition, the foregoing information is available in print, without charge, to any stockholder who requests these materials from us. 35
In addition, we make available on our website under “Leadership” – “Governance Documents”, free of charge, our Audit Committee Charter, Compensation Committee Charter, Nominating And Corporate Governance Committee Charter, Operations Committee Charter and Code of Ethics and Business Conduct. In addition, the foregoing information is available in print, without charge, to any stockholder who requests these materials from us. 12
We now have the capability to model, simulate and design photonic integrated circuits (PICs) in-house and we are currently developing 4 channel electro-optic polymer modulators. 6 Our Intellectual Property Our research and development efforts over the last 10+ years have yielded our Company an extensive patent portfolio as well as critical trade secrets, unpatented technology and proprietary knowledge related to our optical polymer materials.
We now have the capability to model, simulate and design photonic integrated circuits (PICs) in-house. 5 Our Intellectual Property Our research and development efforts over the last 10+ years have yielded our Company an extensive patent portfolio as well as critical trade secrets, unpatented technology and proprietary knowledge related to our optical polymer materials.
As we move forward to diligently meet our goals, we continue to work closely with our packaging and foundry partners for 112Gbaud prototypes, and we are advancing our reliability and characterization efforts to support our prototyping.
As we move forward to diligently meet our goals, we continue to work closely with our packaging and foundry partners for 200Gbps and 400Gbps/lane device designs and prototypes, and we are advancing our reliability and characterization efforts to support our prototyping.
Examples of our partners include: electro-optic device manufacturers, contract manufacturers, original equipment manufacturers, foundries, packaging and assembly manufacturers etc.
Examples of our partners include: electro-optic PIC and device design and manufacturing companies, contract manufacturers, original equipment manufacturers, foundries, packaging and assembly manufacturers etc.
Our business model includes the licensing of our strong IP and Patent portfolio, as well as technology transfer to entities such as foundries. Discussions with prospective customers are validating that our modulators are ideally suited for the datacenter and telecommunications markets that are over 10km in length.
Our business model includes the licensing of our strong IP and Patent portfolio, as well as technology transfer to entities such as foundries. Discussions with prospective customers are validating that our materials are ideally suited for the datacenter, AI connectivity and telecommunications markets.
We have demonstrated higher speed and lower power consumption in packaged devices, and during 2023, we continued to make advances in techniques to translate our world class material properties to efficient, reliable modulator devices with commercial foundries.
We have demonstrated the electro-optic polymers potential for higher speed and lower power consumption in packaged devices, and during 2024, we continued to make advances in techniques to translate our world class material properties to efficient, reliable modulator devices with commercial foundries.
Current semiconductor photonic technology today is struggling to reach faster device speeds. Our modulator devices, enabled by our electro-optic polymer material systems, work at extremely high frequencies (wide bandwidths) and possess inherent advantages over current crystalline electro-optic material contained in most modulator devices such as bulk lithium niobate (LiNbO3), indium phosphide (InP), silicon (Si), and gallium arsenide (GaAs).
Our modulator devices, enabled by our electro-optic polymer material systems, work at extremely high frequencies (wide bandwidths) and possess inherent advantages over current crystalline electro-optic material contained in most modulator devices such as bulk lithium niobate (LiNbO3), indium phosphide (InP), silicon (Si), and gallium arsenide (GaAs).
Having access to extremely low temperature ALD allows our Company's polymer modulators to be protected from the environment without the need for expensive and large footprint gold box packaging, propelling our Company forward with chip-scale packaging as required by major hyper-scaler end-users. The patent opens a new class of PICs which expands our variety of devices.
Having access to extremely low temperature ALD allows our Company's polymer modulators to be protected from the environment without the need for expensive and large footprint gold box packaging, propelling our Company forward with chip-scale packaging as required by major hyper-scaler end-users.
In order to meet this objective, we intend to continue to: · Further the development of proprietary organic electro-optic polymer material systems · Develop photonic devices based on our P 2 IC TM technology · Develop proprietary intellectual property · Grow our commercial device development capabilities · Partner with silicon-based foundries who can scale volume quickly · Grow our product reliability and quality assurance capabilities · Grow our optoelectronic packaging and testing capabilities · Grow our commercial material manufacturing capabilities · Maintain/develop strategic relationships with major telecommunications and data communications companies to further the awareness and commercialization of our technology platform · Add high-level personnel with industrial and manufacturing experience in key areas of our materials and device development programs.
In order to meet this objective, we intend to continue to: • Further the development of proprietary organic electro-optic polymer material systems. • Partner with PIC or packaged device design and manufacturing companies to further the development of PDKs for our polymer material. • Develop proprietary intellectual property. • Grow our commercial device design and development capabilities. • Partner with silicon-based foundries who can scale volume quickly and integrate our materials into their infrastructure. • Grow our product reliability and quality assurance capabilities. • Grow our optoelectronic and RF testing capabilities. • Grow our commercial material manufacturing capabilities. • Maintain/develop strategic relationships with major telecommunications and data communications companies to further the awareness and commercialization of our technology platform. • Add high-level personnel with industrial and manufacturing experience in key areas of our materials and process development programs .
As noted above, we are not currently partnered with or financially supported by any governmental agency at this time, however, we are exploring future opportunities as our Company grows and gains the additional resources and personnel necessary to support these efforts.
As noted above, we are not currently partnered with or financially supported by any governmental agency at this time, however, we are exploring future opportunities as our Company grows and gains the additional resources and personnel necessary to support these efforts. Our Competition Competitors The markets we are targeting for our electro-optic polymer technology are intensely competitive.
These approaches enable our Polymer Plus™ and Polymer Slot™ device platforms to not only be competitive but fully integrated with foundries. Our polymers are unique in that they are stable enough to seamlessly integrate into existing CMOS, Indium Phosphide (InP), Gallium Arsenide (GaAs), and other semiconductor manufacturing lines.
These approaches enable our device platforms to not only be competitive but fully integrated with foundries. Our polymers are unique in that they are stable enough to seamlessly integrate into existing CMOS, Indium Phosphide (InP), Gallium Arsenide (GaAs), and other semiconductor manufacturing lines. Of relevance are the integrated silicon photonics platforms that combine optical and electronic functions.
Our advanced electro-optic polymer platform is creating a new class of modulators such as the Polymer Stack™, Polymer Plus™, Polymer Slot™, and associated PIC platforms that can address higher data rates in a lower cost, lower power consuming manner, smaller footprint (size) with much simpler data encoding techniques.
Our advanced electro-optic polymer platform is creating a new class of modulators that can be easily integrated into various PIC platforms and can address higher data rates in a lower cost, lower power consuming manner, smaller footprint (size) with much simpler data encoding techniques.
We strive to provide our employees a diverse, equitable, and inclusive work environment. Compensation and benefits Our total rewards package includes market-competitive pay, stock option grants and bonuses, healthcare benefits, retirement savings plans, life insurance, disability insurance, paid time off and family leave, and flexible work schedules.
Compensation and benefits Our total rewards package includes market-competitive pay, stock option grants and bonuses, healthcare benefits, retirement savings plans, life insurance, disability insurance, paid time off and family leave, and flexible work schedules.
These include host polymers, poling methodologies, and molecular spacer systems that are customized to achieve specific optical properties. Our organic electro-optic polymer systems compounds are mixed into solution form that allows for thin film application. Our proprietary electro-optic polymers are designed at the molecular level for potentially superior performance, stability, and cost-efficiency.
Our organic electro-optic polymer systems compounds are mixed into solution form that allows for thin film application. Our proprietary electro-optic polymers are designed at the molecular level for potentially superior performance, stability, and cost-efficiency.
In polymer photonics, polymer devices such as modulators, waveguides, and multiplexers can be fabricated on to a silicon platform that acts as a package as well as a base for mounting lasers (which are needed to source the light). Our initial device, though highly miniaturized, utilizes conventional design and fabrication techniques in the industry.
In polymer photonics, polymer devices such as modulators, waveguides, and multiplexers can be fabricated on to a silicon platform that acts as a package as well as a base for mounting lasers (which are needed to source the light).
While there are no major multi-national companies that compete directly with us on electro-polymers, there are other companies that do manufacture optical modulators. These companies that have incumbent optical modulators using semiconductors include: Lumentum, Broadcom, Intel, Ciena, Fujitsu, and Coherent.
While there are no major multi-national companies that compete directly with us on electro-polymers, there are other companies that do manufacture optical modulators based on alternative material platforms such as Indium Phosphide, Silicon or Silicon Nitride and Lithium Niobate. These companies that have incumbent optical modulators using semiconductors include: Lumentum, Broadcom, Marvell, Cisco, Intel, Ciena, Fujitsu, and Coherent.
The Company’s Nasdaq listing will help to expand our potential shareholder base, improve liquidity, elevate our public profile within the industry and should ultimately enhance shareholder value.
On September 1, 2021, our Company's common shares began trading on the Nasdaq Capital Market (“Nasdaq”). The Company’s Nasdaq listing will help to expand our potential shareholder base, improve liquidity, elevate our public profile within the industry and should ultimately enhance shareholder value.
Our work with the foundries is being focused with the Polymer Plus™ and the Polymer Slot™ polymer modulators. 2 Glossary Glossary of select technology terms to provide you with a better understanding our Company’s technology and devices: Electro-optic devices - Electro-optic devices convert data from electric signals into optical signals for use in communications systems and in optical interconnects for high-speed data transfer.
One of the metrics for successful implementation of PDK is to receive working modulator chips. 2 Glossary Glossary of select technology terms to provide you with a better understanding our Company’s technology and devices: Electro-optic devices - Electro-optic devices convert data from electric signals into optical signals for use in communications systems and in optical interconnects for high-speed data transfer.
Our technology platform has the capability and potential to address 4 channels of 400Gbps utilizing PAM4 encoding schemes in the near future, thus creating a roadmap of increased performance for the industry. Furthermore, we are collaborating with industry partners to optimize the packaging our modulators so that potential customers can evaluate our high-performance modulators in their systems.
Our technology platform has the capability and potential to address 4 or more channels of 400Gbps utilizing PAM4 encoding schemes, thus creating a roadmap of increased performance for the industry. Furthermore, we are collaborating with industry partners to optimize device designs and packaging.
Our intellectual property portfolio has expanded significantly over the few years as we are developing our P 2 IC™ into prototypes. We have actively filed technical utility patents and are currently in the process of readying a number of other inventions for formal filings in 2024 and 2025.
Our intellectual property portfolio has expanded significantly over the few years. We have actively filed technical utility patents and are currently in the process of readying a number of other inventions for formal filings in 2025 and 2026. We expect to continue innovating our technology platform over the next decade.
This agreement recognizes market acceptance and competitive advantage of our technology and validates the first prong of our business model. Further, it represents tangible commercial progress for electro-optic polymers as part of our business plan.
Supplying licensed materials is one prong of our Company's three-prong revenue model and business strategy that includes polymer modulator products as well as technology transfer. This agreement recognizes market acceptance and competitive advantage of our technology and validates the first prong of our business model. Further, it represents tangible commercial progress for electro-optic polymers as part of our business plan.
Create Organic Polymer-Enabled Electro-Optic Modulators We intend to utilize our proprietary optical polymer technology to create an initial portfolio of commercial electro-optic polymer product devices with applications for various markets, including telecommunications, data communications and data centers. These product devices will be part of our proprietary photonics integrated circuit (PIC) technology platform .
Create Organic Polymer-Enabled Electro-Optic Modulators We intend to utilize our proprietary optical polymer technology to enable the creation by our customers of a portfolio of commercial electro-optic polymer product devices with applications for various markets, including telecommunications, data communications and data centers.
We expect to continue innovating with our P 2 IC platform over the next decade. We had additional patents issued or published over the past year indicating that our technology is being recognized as being unique.
We had additional patents issued or published over the past year indicating that our technology is being recognized as being unique.
We have already made extensive progress with our polymer materials on this front, and now we are integrating our robust polymer materials onto an integrated photonics platform to provide customers with a more miniaturized, higher performance solution for their data rich systems.
We have already made extensive progress with our polymer materials on this front, and now we are integrating our robust polymer materials onto an integrated photonics platform.
Electro-optical devices called modulators convert data from electric signals into optical signals for multiple applications. Our differentiation at the modulator device level is in higher speed, lower power consumption, simplicity of manufacturing, small footprint (size), and reliability.
Our differentiation at the modulator device level is in higher speed, lower power consumption, simplicity of manufacturing, small footprint (size), and reliability.
In total, our patent portfolio currently consists of 67 granted patents that include 54 from the US, 1 from World International Property Organization (WIPO), 1 from Canada, 6 from the EU, 2 from Japan and 3 from China.
In total, our patent portfolio currently consists of 77 granted patents that include 46 from the US, 2 from Canada, 3 from the United Kingdom, 18 from the EU, 1 from Japan, 6 from China (including Hong Kong), and 1 from Australia.
Over the last several years, our Company has made various scientific breakthroughs that have allowed for the synthesis of proprietary organic polymer materials that can withstand extremely high process temperatures that exceed 175 0 C.
These early attempts also encountered difficulty synthesizing materials that could withstand photochemical bleaching (loss of sensitivity to specific frequencies) and material degradation due to high operating temperatures. Over the last several years, our Company has made various scientific breakthroughs that have allowed for the synthesis of proprietary organic polymer materials that can withstand extremely high process temperatures that exceed 175°C.
Data centers may also benefit from this technology through devices that could significantly increase bandwidth and speed while decreasing costs. Polymer E/O modulators can be designed and fabricated with multiple structures such as Ridge waveguide (Polymer™ Stack) and slot waveguide (Polymer Slot™).
Data centers may also benefit from this technology through devices that could significantly increase bandwidth and speed while decreasing costs. Polymer E/O modulators can be designed and fabricated with multiple structures. The waveguides allow the light to be efficiently coupled into and out of the modulators, and provide a basis for integrating modulators together.
Our Company has a fabrication facility in Colorado to apply standard fabrication processes to our electro-optic polymers which create modulator devices. While our internal fabrication facility is capable of manufacturing modulator devices, we have partnered with commercial silicon-based fabrication companies that are called foundries who can scale our technology with volume quickly and efficiently.
While our internal fabrication facility is capable of manufacturing modulator devices, we have partnered with commercial silicon-based fabrication companies that are called foundries who can scale our technology with volume quickly and efficiently. The process recipe for fabrication plants or foundries is called a ‘process development kit’ or PDK.
We have seen increased interest in our materials during 2023 and we are in discussions on future license agreements. Materials Development Our Company designs and synthesizes organic chromophores for use in its own proprietary electro-optic polymer systems and photonic device designs. A polymer system is not solely a material, but also encompasses various technical enhancements necessary for its implementation.
Materials Development Our Company designs and synthesizes organic chromophores for use in its own proprietary electro-optic polymer systems and photonic device designs. A polymer system is not solely a material but also encompasses various technical enhancements necessary for its implementation. These include host polymers, poling methodologies, and molecular spacer systems that are customized to achieve specific optical properties.
Of relevance are the integrated silicon photonics platforms that combine optical and electronic functions. These include a miniaturized modulator for ultra-small footprint applications in which we term the Polymer Slot™. This design is based on a slot modulator fabricated into semiconductor wafers that can include either silicon or indium phosphide.
These include a miniaturized modulator for ultra-small footprint applications in which we term the Polymer Slot™. This design is based on a slot modulator fabricated into semiconductor wafers that can include either silicon or indium phosphide. Our Company has a fabrication facility in Colorado to apply standard fabrication processes to our electro-optic polymers which create modulator devices.
Our Research and Development Process Our research and development process consist of the following steps: · We develop novel polymer materials utilizing our patented and patent pending technology to meet certain performance specifications.
Our devices are highly linear and can also enable the performance required to take advantage of more advanced complex encoding schemes if required. 11 Our Research and Development Process Our research and development process consists of the following steps: • We develop novel polymer materials utilizing our patented and patent pending technology to meet certain performance specifications.
Our Company is in the early feasibility stage of such a multichannel optical modem. 31 Our Past Government Program Participation Our Company has been a participant in several vital government sponsored research and development programs with various government agencies that protect the interests of our country.
Our research and development expenses were $16,806,548 and $15,903,689, for the years ended December 31, 2024, and 2023, respectively. Our Past Government Program Participation Our Company has been a participant in several vital government sponsored research and development programs with various government agencies that protect the interests of our country.
The waveguides allow the light to be efficiently coupled into and out of the modulators, and provide a basis for integrating modulators together. Gbaud - The rate of symbol changes in data transmission in billions of symbol changes per second. Each symbol can support one or more bits, the number of bits depending on the modulation format.
Gbaud - The rate of symbol changes in data transmission in billions of symbol changes per second. Each symbol can support one or more bits, the number of bits depending on the modulation format. NRZ – See PAM2.
Electro-optical modulators are expected to continue to be an essential element as the appetite and hunger for data increases every year as well as the drive towards lower power consumption, and smaller footprint (size). Polymer Photonic Integrated Circuits (P 2 IC™) Our Company also designs its own proprietary Photonic Integrated Circuits (otherwise termed a polymer PIC).
Electro-optical modulators are expected to continue to be an essential element as the appetite and hunger for data increases every year as well as the drive towards lower power consumption, and smaller footprint (size). Current semiconductor photonic technology today is struggling to reach faster device speeds.
Partnering with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard production lines using standard equipment, it also allows us to efficiently utilize our capital. The foundry partnerships will allow us to scale our high-performance polymer optical engines quickly and efficiently.
Silicon-based foundries are semiconductor fabrication plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput. Partnering with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard production lines using standard equipment, it also allows us to efficiently utilize our capital.
We are now further optimizing our high-performance modulators for additional specifications that are beginning to be required by the fiber communications industry for applications such as networks running at data rates of 800Gbps and 1600Gbps. 800Gbps will require combining 4 channels of 200Gbps utilizing PAM4 encoding schemes which will prove challenging for many existing modulator technologies.
We are now further optimizing our electro-optic (EO) polymer materials platform to meet additional specifications that are beginning to be required by the fiber communications industry for applications such as networks running at data rates of 800Gbps and 1600Gbps and 3200Gbps in the future.
The panel addressed the manufacturing plans of photonic integrated circuits (PICs) by semiconductor fabs and how the photonic industry can transfer their processes to the semiconductor industry. On March 22, 2023, we announced that our latest commercial-class electro-optic polymer material achieved breakthrough performance metrics at 1310 nanometers (nm), a wavelength popular in hyperscale datacenter applications.
The sealant process will enable lower cost system implementation in a high-volume foundry environment. On March 22, 2023, we announced that our latest commercial-class electro-optic polymer material achieved breakthrough performance metrics at 1310 nanometers (nm), a wavelength popular in hyperscale datacenter applications.
We expect our initial modulator products will operate at symbol rates at least 112 Gigabaud which is roughly 200Gbps when utilized with PAM4 encoding schemes. Our devices are highly linear, and can also enable the performance required to take advantage of more advance complex encoding schemes if required.
We expect our -polymer material to be used initially in modulator products that will operate at symbol rates at least 112 Gigabaud which is roughly 200Gbps when utilized with PAM4 encoding schemes.
We have now received silicon wafers that range up to 200mm in diameter, which aligns well with foundry manufacturing. Our extremely strong and broad patent portfolio allows us to optimize our business model in three areas: 1) Traditional focus on product development, 2) Patent licensing and 3) Technology transfer to foundries.
Our extremely strong and broad patent portfolio allows us to optimize our business model in three areas: 1) Traditional focus on polymer materials development, 2) Patent licensing and 3) Technology transfer to foundries. We are continually looking to strengthen our patent portfolio both by internal inventions and acquisition of intellectual property.
The process recipe for fabrication plants or foundries is called a ‘process development kit’ or PDK. We are currently working with commercial foundries to implement our electro-optic polymers into accepted PDKs by the foundries. One of the metrics for successful implementation of PDK is to receive working modulator chips.
We are currently working with commercial foundries to implement our electro-optic polymers into accepted PDKs by the foundries.
The graphic details improvements in Tg showing through the box plot extremely tight and improved material with Tg’s above 170C with tight control of the materials performance as measured in thin films. 28 Business Strategy Our first revenue stream was obtained from our entry into a material supply license agreement to provide Perkinamine ® chromophore materials for polymer based photonic devices and photonic integrated circuits (PICs).
Figure 3: Datacenter Power Consumption Forecast Source: “Investing in the Rising Data Center Economy”, McKinsey, January 17, 2023 10 Business Strategy Our first revenue stream was obtained from our entry into a material supply license agreement to provide Perkinamine® chromophore materials for polymer based photonic devices and photonic integrated circuits (PICs).
We are continually looking to strengthen our patent portfolio both by internal inventions and acquisition of intellectual property. We are initially targeting applications in fiber optic data communications and telecommunications markets and are exploring other applications that include automotive/LIDAR, sensing, displays etc., for our polymer technology platform.
We are initially targeting applications in fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth optical connections deployed inside and between datacenters and/or AI clusters. In addition, we are exploring other applications that include automotive/LIDAR, sensing, displays, storage, aerospace and defense, satellites, quantum computing etc., for our polymer technology platform.
Additionally, these materials have demonstrated photochemical stability, even after being subjected to high intensity light for over 5,000 hours and exhibited little electro optic degradation even after being continuously exposed at 110 0 C. This operating temperature exceeds the maximum commercial operating temperatures of approximately 85 0 C, found in large data centers.
Additionally, these materials have demonstrated photochemical stability in devices, even after being subjected to high intensity light for over 5,000 hours. These materials also exhibited stable electro-optic performance after being continuously aged at 85°C for over 12,000 hours. This exposure duration far exceeds industry standard stress conditions. These devices have performed with 3dB bandwidths that exceed 70GHz.
Data centers are confronted with the problem of moving vast amounts of data not only around a single data center building, but also between buildings in distributed data center architecture. Links within a single datacenter building may be shorter than 500 meters, though some will require optics capable of 2 km.
Regardless of the design, these datacenters will require transmitting and receiving vast amounts of data - not only around a single data center building – but often also between buildings in distributed data center architecture.
This patent is helping us move forward with our commercial discussions through the enabling of enhanced performance and simplified manufacturing of our polymer modulators with silicon photonics. On May 25, 2023, we announced our Company's first commercial material supply license agreement for our Perkinamine ® chromophore materials.
Additionally, the achievement of these results at the 1310nm bandwidth positions us for potential near-term licensing opportunities in datacenter applications. 7 On May 25, 2023, we announced our Company's first commercial material supply license agreement for our Perkinamine® chromophore materials. This agreement is to provide Perkinamine® chromophore materials for polymer based photonic devices and photonic integrated circuits (PICs).
We are currently focused on testing and demonstrating the simplicity of manufacturability and reliability of our devices, including in conjunction with the silicon photonics manufacturing ecosystem. In 2023 we worked with silicon-based foundry partners to help scale in volume our polymer modulator devices and we received working modulator chips from these foundries.
We are currently focused on: a) working with potential and existing customers to integrate our proprietary materials into our customers’ specific PIC and device architecture; b) testing and demonstrating the superior performance, simplicity of manufacturability and reliability of our devices, including in conjunction with the silicon photonics manufacturing ecosystem; and c) providing our potential and existing customers with the proper Process Development Kits (PDKs) to enable the efficient and fast integration of our materials into their own design and manufacturing plans.
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Item 1. Business . Overview Lightwave Logic, Inc. is a technology company focused on the development of next generation electro-optic photonic devices made on its P 2 IC™ 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.
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Item 1. Business . Overview Lightwave Logic, Inc. is a technology platform company leveraging its proprietary engineered electro-optic (EO) polymers, named Perkinamine® to transmit data at higher speeds with less power in a small form factor.
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We have advanced and matured our interactions with our foundry partners and we continue to receive working modulator chips for prototyping. Silicon-based foundries are large semiconductor fabrication plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput.
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The Company’s high activity and high stability organic polymers allow it to create next-generation photonic EO devices that convert data from electrical signals into light/optical signals for applications in telecommunications, and for data transmission potentially used to support generative AI.
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A polymer PIC is a photonic device that integrates several photonic functions on a single chip. We believe that our technology can enable an ultra-miniaturization footprint that is needed to increase the number of photonic functions residing on a semiconductor chip.
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The foundry partnerships will allow us to scale our high-performance polymer optical engines quickly and efficiently. We have now received silicon wafers that range up to 200mm in diameter, which aligns well with foundry manufacturing.
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We see this creating a progression like what was seen in the computer integrated circuits, commonly referred to as Moore’s Law. One type of integration is to combine several instances of the same photonic functions such as a plurality of modulators to create a multi-channel polymer PIC. The number of channels can be varied depending on application.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks include our potential inability to: · Establish significant product sales and marketing capabilities; · Establish and maintain significant markets for our products and future products; · Identify, attract, retain and motivate qualified personnel; · Continue to develop and upgrade our technologies to keep pace with changes in technology and the growth of markets using polymer based materials; · Develop expanded product production facilities, along with silicon-based foundry and other outside contractor relationships; · Maintain our reputation and build trust with customers; · Scale up from small pilot or prototype quantities to large quantities of product on a consistent basis; · Contract for or develop the internal skills needed to master large volume production of our products; and · Fund the capital expenditures required to develop volume production due to the limits of our available financial resources.
Biggest changeThese risks include our potential inability to: · Establish significant product sales and marketing capabilities; · Establish and maintain significant markets for our products and future products; · Identify, attract, retain and motivate qualified personnel; · Continue to develop and upgrade our technologies to keep pace with changes in technology and the growth of markets using polymer-based materials; · Develop expanded product production facilities, along with silicon-based foundry and other outside contractor relationships; and · Maintain our reputation and build trust with customers.
Our common stock will be subject to potential delisting if we do not maintain the listing requirements of the Nasdaq Capital Market. Our common stock commenced trading on The NASDAQ Capital Market on September 1, 2021. We cannot assure you that that an active trading market for our common stock will continue to be sustained.
Our common stock will be subject to potential delisting if we do not maintain the listing requirements of the Nasdaq Capital Market. Our common stock commenced trading on The NASDAQ Capital Market on September 1, 2021. We cannot assure you that an active trading market for our common stock will continue to be sustained.
The requirements of these rules and regulations increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and may also place undue strain on our personnel, systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.
The requirements of these rules and regulations increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and may also place undue strain on our personnel, systems and resources. 21 The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.
Our failure to compete successfully against these existing or future competitors could harm our business. 41 We may be unable to obtain effective intellectual property protection for our products and technology. Our intellectual property, or any intellectual property that we have or may acquire, license or develop in the future, may not provide meaningful competitive advantages.
Our failure to compete successfully against these existing or future competitors could harm our business. We may be unable to obtain effective intellectual property protection for our products and technology. Our intellectual property, or any intellectual property that we have or may acquire, license or develop in the future, may not provide meaningful competitive advantages.
There is no assurance that problems will not be found in new products after commencement of commercial production, despite testing by our suppliers, our customers and us. If we decide to make commercial quantities of products at our facilities, we will be required to make significant capital expenditures to increase capacity.
There is no assurance that problems will not be found in new products after commencement of commercial production, despite testing by our suppliers, our customers and us. 19 If we decide to make commercial quantities of products at our facilities, we will be required to make significant capital expenditures to increase capacity.
We expect our patented and patent-pending optical materials along with trade secrets and licensed materials, to be the core of and the enabling technology for future generations of optical devices, modules, sub-systems and systems that we will develop or potentially out-license to electro-optic device manufacturers.
We expect our patented and patent-pending optical materials along with trade secrets and licensed materials, to be the core of and the enabling technology for future generations of optical devices, modules, sub-systems and systems that we will develop or out-license to electro-optic device manufacturers.
In the event we default on the debt, we could incur the loss of all of our intellectual property, which would materially and adversely affect our Company and cause you to lose your entire investment in our Company. Our failure to compete successfully could harm our business.
In the event we default on the debt, we could incur the loss of all of our intellectual property, which would materially and adversely affect our Company and cause you to lose your entire investment in our Company. 17 Our failure to compete successfully could harm our business.
As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders thereof the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock or other preferred stockholders and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock or existing preferred stock, if any. 48 Preferred stock could be used to dilute a potential hostile acquirer.
As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders thereof the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock or other preferred stockholders and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock or existing preferred stock, if any. 24 Preferred stock could be used to dilute a potential hostile acquirer.
They could also deter potential acquirers of our Company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition. 49
They could also deter potential acquirers of our Company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.
As the demands for high performance, low cost ($/Gbps) is implemented into next generation architectures, polymer modulators and polymer based PIC products may be subject to significant competition. Furthermore, there is a potential that technologies such as silicon photonics and Indium Phosphide might reach the metric of $1/Gbps at 400Gbps before ours .
As the demands for high performance, low cost ($/Gbps) is implemented into next generation architectures, polymer modulators and polymer based PIC products may be subject to significant competition. Furthermore, there is a potential that technologies such as silicon photonics and Indium Phosphide might reach the metric of $1/Gbps at 800Gbps before ours.
If our existing stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, including shares issued upon the exercise of outstanding options or warrants or pursuant to the 2023 Purchase Agreement with Lincoln Park, and the Roth Sales Agreement with Roth Capital, the market price of our common stock could decline.
If our existing stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, including shares issued upon the exercise of outstanding options or warrants or pursuant to the 2025 Purchase Agreement with Lincoln Park, and the Roth Sales Agreement with Roth Capital, the market price of our common stock could decline.
Additional dilution may result from the issuance of shares of our capital stock in connection with any collaboration (although none are contemplated at this time) or in connection with other financing efforts, including pursuant to the 2023 Purchase Agreement with Lincoln Park, and the Roth Sales Agreement with Roth Capital.
Additional dilution may result from the issuance of shares of our capital stock in connection with any collaboration (although none are contemplated at this time) or in connection with other financing efforts, including pursuant to the 2025 Purchase Agreement with Lincoln Park, and the Roth Sales Agreement with Roth Capital.
The market price of our common stock may be significantly affected by one or more of the following factors, many of which are beyond our control, including: · our Company’s ability to execute on its business plan; · the status of particular development programs and the timing of performance under specific development agreements; · actual or anticipated demand for our products and future products and technologies; · amount and timing of our costs related to our development and marketing efforts or other initiatives and expansion of our operations; · changes in anticipated commercial deployment of certain products and financial results; · our ability to enter into, renegotiate or renew key agreements or strategic relationships, · our ability to develop expanded product production facilities, along with silicon-based foundry and other outside contractor relationships; · issuance of new or updated research or reports by securities analysts; · the use by investors or analysts of third-party data regarding our business that may not reflect our operations; · fluctuations in the valuation of companies perceived by investors to be comparable to us; · share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; · large trades, block trades or short selling of our common stock, · actual or anticipated changes in our competitive position relative to our industry competitors; · announcements or implementation by our competitors of technological innovations or new products; · changes in laws or regulations applicable to our products or industry; · additions or departures of key personnel; · capital-raising activities or commitments; · product shortages requiring suppliers to allocate minimum quantities; · the commencement or conclusion of legal proceedings that involve us; · costs related to possible future acquisitions of technologies or businesses; · economic conditions specific to our industry, as well as general economic and market conditions; or · other events or factors, including those resulting from civil unrest, war, foreign invasions, terrorism, or public health crises or responses to such events.
The market price of our common stock may be significantly affected by one or more of the following factors, many of which are beyond our control, including: · our Company’s ability to execute on its business plan; · the status of particular development programs and the timing of performance under specific development agreements; · actual or anticipated demand for our products and future products and technologies; · amount and timing of our costs related to our development and marketing efforts or other initiatives and expansion of our operations; · changes in anticipated commercial deployment of certain products and financial results; · our ability to enter into, renegotiate or renew key agreements or strategic relationships; · our ability to develop expanded product production facilities, along with silicon-based foundry and other outside contractor relationships; · issuance of new or updated research or reports by securities analysts; · the use by investors or analysts of third-party data regarding our business that may not reflect our operations; · fluctuations in the valuation of companies perceived by investors to be comparable to us; · share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; · large trades, block trades or short selling of our common stock; · actual or anticipated changes in our competitive position relative to our industry competitors; · announcements or implementation by our competitors of technological innovations or new products; · changes in laws or regulations applicable to our products or industry; · additions or departures of key personnel; · capital-raising activities or commitments; · product shortages requiring suppliers to allocate minimum quantities; · the commencement or conclusion of legal proceedings that involve us; · costs related to possible future acquisitions of technologies or businesses; · economic conditions specific to our industry, as well as general economic and market conditions; or · other events or factors, including those resulting from civil unrest, war, foreign invasions, terrorism, or public health crises or responses to such events. 23 Furthermore, the stock markets frequently experience extreme price and volume fluctuations that affect the market prices of equity securities of many companies.
We cannot assure you that we will be able to achieve any of these objectives. 39 One of our significant target markets is the telecommunications market, which historically has not accepted polymer modulators. One of our significant target markets is the telecommunications market, which demands high reliability optical components.
We cannot assure you that we will be able to achieve any of these objectives. 16 One of our significant target markets is the telecommunications market, which historically has not accepted polymer modulators. One of our significant target markets is the telecommunications market, which demands high reliability optical components.
We cannot assure you that we will be able to accomplish these tasks effectively or otherwise effectively manage our growth. 36 We will require additional capital to continue to fund our operations and if we do not obtain additional capital, we may be required to substantially limit our operations.
We cannot assure you that we will be able to accomplish these tasks effectively or otherwise effectively manage our growth. 13 We will require additional capital to continue to fund our operations and if we do not obtain additional capital, we may be required to substantially limit our operations.
Other than with respect to (i) the purchase agreement for up to $30 million we entered into with Lincoln Park on February 28, 2023 (the " 2023 Purchase Agreement ”); and (ii) the sales agreement for up to $35 million we entered into with Roth Capital Partners, LLC (“ Roth Capital ”) on December 9, 2022 (the “ Roth Sales Agreement ”) ; we have no plans or arrangements with respect to the possible acquisition of additional financing, and such financing may be unavailable when we need it or may not be available on acceptable terms.
Other than with respect to (i) the purchase agreement for up to $30 million we entered into with Lincoln Park on February 28, 2023 (the “ 2023 Purchase Agreement ”); (ii) the purchase agreement for up to $30 million we entered into with Lincoln Park on March 17, 2025 (the “ 2025 Purchase Agreement "); and (iii) the sales agreement for up to $35 million we entered into with Roth Capital Partners, LLC (“ Roth Capital ”) on December 9, 2022 (the “ Roth Sales Agreement ”); we have no plans or arrangements with respect to the possible acquisition of additional financing, and such financing may be unavailable when we need it or may not be available on acceptable terms.
As a result, these competitors may: · succeed in developing products that are equal to or superior to our products and future products or that will achieve greater market acceptance than our products and future products; · devote greater resources to developing, marketing or selling their products; · respond more quickly to new or emerging technologies or scientific advances and changes in customer requirements, which could render our technologies or products obsolete; · introduce products that make the continued development of our products and future products uneconomical; · obtain patents that block or otherwise inhibit our ability to develop and commercialize our products and future products; · withstand price competition more successfully than we can; · establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our prospective customers.
As a result, these competitors may: · succeed in developing materials and product integration expertise that is equal to or superior to our offerings or that will achieve greater market acceptance than our offerings and future offerings; · devote greater resources to developing, marketing or selling their products; · respond more quickly to new or emerging technologies or scientific advances and changes in customer requirements, which could render our technologies obsolete; · introduce products that make the continued development of our materials and future materials uneconomical; · obtain patents that block or otherwise inhibit our ability to develop and commercialize our materials and future materials; · withstand price competition more successfully than we can; · establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our prospective customers.
Delivery of products with production defects or reliability, quality or compatibility problems could significantly delay or hinder market acceptance of our products or result in a costly recall and could damage our reputation and adversely affect our ability to sell our products.
Delivery and integration of materials with production defects or reliability, quality or compatibility problems could significantly delay or hinder market acceptance of our materials or result in a costly recall and could damage our reputation and adversely affect our ability to sell our materials.
Based on our current operating plan and budgeted cash requirements, we believe that we have sufficient funds to finance our operations through July 2025; however, we will need to obtain additional future financing after that time to finance our operations until such time that we can conduct profitable revenue-generating activities.
Based on our current operating plan and budgeted cash requirements, we believe that we have sufficient funds to finance our operations through April 2026; however, we will need to obtain additional future financing after that time to finance our operations until such time that we can conduct profitable revenue-generating activities.
If we fail to introduce products that meet the needs of our customers or penetrate new markets in a timely fashion our Company will be adversely affected. Our future growth will suffer if we do not achieve sufficient market acceptance of our organic nonlinear optical material products or our proprietary photonic devices.
If we fail to introduce products that meet the needs of our customers or penetrate new markets in a timely fashion our Company will be adversely affected. Our future growth will suffer if we do not achieve sufficient market acceptance of our organic nonlinear optical materials.
Most of our products are still in the development stage, and we do not know when a market for these products will develop, if at all. Our success depends, in part, upon our ability to gain market acceptance of our products. To be accepted, our products must meet the technical and performance requirements of our potential customers.
Most of our materials are still in the development stage, and we do not know when a market for our materials will develop, if at all. Our success depends, in part, upon our ability to gain market acceptance of our organic nonlinear optical materials. To be accepted, our materials must meet the technical and performance requirements of our potential customers.
If we are not able to develop and continue to improve on our manufacturing processes or to maintain stringent quality controls, or if contamination problems arise, our operating results would be harmed.
If we are not able to develop and continue to improve our manufacturing design processes, if stringent quality controls are not maintained, or if contamination problems arise, our operating results would be harmed.
This volatility, as well as general market conditions, may cause our stock price to fluctuate greatly and even potentially expose us to litigation. Our common stock may be subject to continued volatility. During the past 52 weeks, the share price for our common stock ranged from a low of $3.79 to a high of $9.18.
This volatility, as well as general market conditions, may cause our stock price to fluctuate greatly and even potentially expose us to litigation. Our common stock may be subject to continued volatility. During the past 52 weeks, the share price for our common stock ranged from a low of $1.00 to a high of $4.82.
OEMs, suppliers or government agencies may not accept polymer-based products. In addition, even if we achieve some degree of market acceptance for our products in one industry, we may not achieve market acceptance in other industries for which we are developing products.
OEMs, suppliers or government agencies may not accept polymer-based materials. In addition, even if we achieve some degree of market acceptance for our materials in one industry, we may not achieve market acceptance in other industries that we are targeting.
In the event of an actual or perceived breach of our security, or the security of one of our vendors, the market perception of the effectiveness of our security measures could be harmed and we could suffer damage to our reputation or our business.
In the event of an actual or perceived breach of our security, or the security of one of our vendors, the market perception of the effectiveness of our security measures could be harmed and we could suffer damage to our reputation or our business. Additionally, misappropriation of our proprietary business information could prove competitively harmful to our business.
If our products experience defects, we may need to undertake a redesign of the product, a process that may result in significant additional expenses. We may also be required to make significant expenditures of capital and resources to resolve such problems.
If our organic nonlinear optical materials experience defects, we may need to undertake a redevelopment of the materials, a process that may result in significant additional expenses. We may also be required to make significant expenditures of capital and resources to resolve such problems.
These markets change rapidly, and we cannot assure you that they will grow or that we will be able to accurately forecast market demand, or lack thereof, in time to respond appropriately.
We expect to continue to develop products for these markets and to seek to identify new markets. These markets change rapidly, and we cannot assure you that they will grow or that we will be able to accurately forecast market demand, or lack thereof, in time to respond appropriately.
Competition for highly educated qualified personnel in the polymer industry is intense. If we fail to hire and retain a sufficient number of qualified management, engineering, sales and technical personnel, we will not be able to attain our business objectives. If we fail to develop and maintain the quality of our manufacturing processes, our operating results would be harmed.
If we fail to hire and retain a sufficient number of qualified management, engineering, sales and technical personnel, we will not be able to attain our business objectives. If we fail to develop and maintain the quality of our manufacturing integration and design processes, our operating results would be harmed.
These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, elections, interest rate changes, or international currency fluctuations, may negatively impact the market price of our common stock.
These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, elections, interest rate changes, or international currency fluctuations, may negatively impact the market price of our common stock.
The manufacture of our products is a multi-stage process that requires the use of high-quality materials and advanced manufacturing technologies. Also, polymer-related device development and manufacturing must occur in a highly controlled, clean environment to minimize particles and other yield and quality-limiting contaminants.
The manufacture and integration of our materials for devices is a multi-stage process that requires the use of high-quality materials and advanced manufacturing technologies and design. Also, polymer-related device development and manufacturing, whether performed by a silicon photonics design house or elsewhere, must occur in a highly controlled, clean environment to minimize particles and other yield and quality-limiting contaminants.
We may be subject to patent infringement claims, which could result in substantial costs and liability and prevent us from selling our products. Third parties may claim that our products or related technologies infringe their patents.
Disclosure of any trade secret not protected by a patent could materially harm our business. 18 We may be subject to patent infringement claims, which could result in substantial costs and liability and prevent us from selling our products. Third parties may claim that our products or related technologies infringe their patents.
We incurred a net loss of $21,038,032 for the year ended December 31, 2023, $17,230,480 for the year ended December 31, 2022, and $18,631,381 for the year ended December 31, 2021. We anticipate that we will continue to incur operating losses through at least 2024.
We incurred a net loss of $22,535,041 for the year ended December 31, 2024, and $21,038,032 for the year ended December 31, 2023. We anticipate that we will continue to incur operating losses through at least 2025.
Prior to purchasing our products, our potential customers will require that our products undergo extensive qualification processes. These qualification processes may continue for several months or more. However, qualification of a product by a customer does not assure any sales of the product to that customer.
These qualification processes may continue for several months or more. However, qualification of a product by a customer does not assure any sales of the product to that customer.
If we fail to effectively manage our growth, and effectively transition from our focus on research and development activities to commercially successful products, our business could suffer. Failure to manage growth of operations could harm our business.
Our failure to effectively manage our growth and effectively transition from our focus on research and development activities to commercial operations could harm our business. Failure to manage growth of operations could harm our business.
Any of these parties could breach the agreements and disclose our trade secrets or confidential information to our competitors, or these competitors might learn of the information in other ways. Disclosure of any trade secret not protected by a patent could materially harm our business.
Any of these parties could breach the agreements and disclose our trade secrets or confidential information to our competitors, or these competitors might learn of the information in other ways.
Additionally, misappropriation of our proprietary business information could prove competitively harmful to our business. 44 We conduct significantly all of our research and development activities at our Englewood, CO facility, and circumstances beyond our control may result in considerable business interruptions. We conduct significantly all of our research and development activities at our Englewood, CO facility.
We conduct significantly all of our research and development activities at our Englewood, CO facility, and circumstances beyond our control may result in considerable business interruptions. We conduct significantly all of our research and development activities at our Englewood, CO facility.
We currently have a remaining amount of $10.5 million that is available to our Company pursuant to the 2023 Purchase Agreement with Lincoln Park, and $33.4 million that is available to our Company pursuant to the Roth Sales Agreement with Roth Capital.
We currently have a remaining amount of $0 million and $30 million pursuant to the 2023 Purchase Agreement and 2025 Purchase Agreement with Lincoln Park, subject to the conditions set forth therein, respectively, and $31.5 million that is available to our Company pursuant to the Roth Sales Agreement with Roth Capital.
Also, certain large corporations may be predisposed against doing business with a company of our limited size and operating history. Failure to achieve broad acceptance of our products by customers and to compete effectively would harm our operating results. 38 Our potential customers require our products to undergo a lengthy and expensive qualification process, which does not assure product sales.
Also, certain large corporations may be predisposed against doing business with a company of our limited size and operating history. 15 Our potential customers require our products to undergo a lengthy and expensive qualification process, which does not assure product sales. Prior to purchasing our products, our potential customers will require that our products undergo extensive qualification processes.
If we are unable to continue to implement and maintain these requirements effectively or efficiently, it could harm our operations, financial reporting, or financial results and could result in an adverse opinion on our internal controls from our independent registered public accounting firm.
If we are unable to continue to implement and maintain these requirements effectively or efficiently, it could harm our operations, financial reporting, or financial results and could result in an adverse opinion on our internal controls from our independent registered public accounting firm. 22 The exercise of options and warrants and other issuances of shares of common stock or securities convertible into common stock will dilute your interest.
It may be difficult to monitor whether these third parties will limit their use of our technology to these licensed uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse. 42 The loss of certain of our key personnel, or any inability to attract and retain additional personnel, could impair our ability to attain our business objectives.
It may be difficult to monitor whether these third parties will limit their use of our technology to these licensed uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.
Another of our significant target markets is the data communications (datacenter and/or high performance computing) market, which may be subject to heavy competition from other PIC based technologies such as silicon photonics and Indium Phosphide.
Another of our significant target markets is the fiber optic data communications market, in particular ultra-high bandwidth optical connections deployed inside and between datacenters and/or AI clusters, which may be subject to heavy competition from other PIC based technologies such as silicon photonics and Indium Phosphide.
If we are unsuccessful in our collaborative efforts, our ability to develop and market products could be severely limited. 37 The failure to establish and maintain collaborative relationships may have a materially adverse affect on our business. We are initially targeting applications in data communications and telecommunications markets and are exploring other applications that include automotive/LIDAR, sensing, displays etc.
If we are unsuccessful in our collaborative efforts, our ability to develop and market products could be severely limited. 14 The failure to establish and maintain collaborative relationships may have a materially adverse affect on our business.
The requirements of these laws and regulations are complex, change frequently and could become more stringent in the future. Failure to comply with current or future environmental laws and regulations could result in the imposition of substantial fines, suspension of production, alteration of our production processes, cessation of operations or other actions, which could severely harm our business.
Failure to comply with current or future environmental laws and regulations could result in the imposition of substantial fines, suspension of production, alteration of our production processes, cessation of operations or other actions, which could severely harm our business. 20 Our data and information systems and network infrastructure may be subject to hacking or other cybersecurity threats.
If we cannot substantially lower our cost of production as we move into sales of products in significant commercial quantities, our financial results will be harmed. 43 We may be unable to export our products or technology to other countries, convey information about our technology to citizens of other countries or sell certain products commercially, if the products or technology are subject to United States export or other regulations.
We may be unable to export our products or technology to other countries, convey information about our technology to citizens of other countries or sell certain products commercially, if the products or technology are subject to United States export or other regulations.
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected. 45 In addition, we expect these laws, rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain appropriate levels of coverage.
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.
Further, contemplating or completing an acquisition and integrating an acquired business, product or technology could divert management and employee time and resources from other matters, which could harm our business, financial condition and operating results. 40 Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases have disrupted, and could in the future disrupt, our operations and materially and adversely affect our business, financial condition, and results of operations.
Further, contemplating or completing an acquisition and integrating an acquired business, product or technology could divert management and employee time and resources from other matters, which could harm our business, financial condition and operating results.
Additional equity offerings may dilute the holdings of existing stockholders or reduce the market price of our common stock. 46 As of December 31, 2023, we have outstanding options and warrants to purchase an aggregate of 7,967,605 shares of our common stock at exercise prices ranging from $0.51 to 16.81 per share with a weighted average exercise price of $2.49 per share.
As of December 31, 2024, we have outstanding options and warrants to purchase an aggregate of 8,848,908 shares of our common stock at exercise prices ranging from $0.51 to 16.81 per share with a weighted average exercise price of $3.00 per share.
In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation or derivative litigation. 47 A sale of a substantial number of shares of our common stock may cause the price of our common stock to decline and may impair our ability to raise capital in the future.
A sale of a substantial number of shares of our common stock may cause the price of our common stock to decline and may impair our ability to raise capital in the future.
As a result of such fluctuations, you may not realize any return on your investment in us and may lose some or all of your investment.
As a result of such fluctuations, you may not realize any return on your investment in us and may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation or derivative litigation.
The complexity of our products may lead to errors, defects and bugs, which could result in the necessity to redesign products and could negatively, impact our reputation with customers. Products as complex as those we market and intend to market might contain errors, defects and bugs when first introduced or as new versions are released.
The complexity of our organic nonlinear optical materials may lead to errors, defects and bugs, which could result in the necessity to redesign materials and could negatively impact our reputation with customers.
Our future success depends to a significant extent on the continued service of our key management personnel, particularly Dr. Michael Lebby, our Chief Executive Officer and James S. Marcelli our President, Chief Operating Officer, Secretary and Principal Financial Officer.
The loss of certain of our key personnel, or any inability to attract and retain additional personnel, could impair our ability to attain our business objectives. Our future success depends to a significant extent on the continued service of our key management personnel, particularly Yves LeMaitre, our Chief Executive Officer, Thomas E. Zelibor, our President and James S.
Accordingly, the loss of the services of either of these persons would adversely affect our business and our ability to continue to commercialize our products, and impede the attainment of our business objectives. Our future success will also depend on our ability to attract, retain and motivate highly skilled personnel to assist us with product development and commercialization.
Our future success will also depend on our ability to attract, retain and motivate highly skilled personnel to assist us with product development and commercialization. Competition for highly educated qualified personnel in the polymer industry is intense.
Removed
We are devoting significant resources to develop next generation proprietary photonic devices that are based on our advanced electro-optical polymer material systems for future applications in data communications and telecommunications markets and we are exploring other applications that include automotive/LIDAR, sensing, displays etc. We expect to continue to develop products for these markets and to seek to identify new markets.
Added
We are initially targeting applications in fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth optical connections deployed inside and between datacenters and/or AI clusters. In addition, we are exploring other applications that include automotive/LIDAR, sensing, displays, storage, aerospace and defense, satellites, quantum computing etc., for our polymer technology platform.
Removed
Achieving widespread market acceptance for our products will require marketing efforts and the expenditure of financial and other resources to create product awareness and demand by customers. We may be unable to offer products that compete effectively due to our limited resources and operating history.
Added
We are initially targeting applications in fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth optical connections deployed inside and between datacenters and/or AI clusters. In addition, we are exploring other applications that include automotive/LIDAR, sensing, displays, storage, aerospace and defense, satellites, quantum computing etc., for our polymer technology platform.
Removed
Widespread public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases, such as the COVID-19 pandemic, have had, and could in the future have, a material adverse effect on our business, financial condition, and results of operations.
Added
Marcelli our Chief Financial Officer, Chief Operating Officer, and Secretary. Accordingly, the loss of the services of any of these persons would adversely affect our business and our ability to continue to commercialize our products, and impede the attainment of our business objectives.
Removed
The full extent to which a global health crisis may impact our business and operating results would depend on future developments that are highly uncertain and cannot be accurately predicted, including new medical and other information that may emerge as a result and the actions by governmental entities or others to contain it or treat its impact.
Added
Organic nonlinear optical materials as complex as those we market and intend to market might contain errors, defects and bugs when first introduced or as new versions are released.
Removed
The impacts of a severe health crisis could pose the risk that we or our employees, suppliers, customers and others may be restricted or prevented from conducting, or adversely modify, our business activities for indefinite or intermittent periods of time, including as a result of employee health and safety concerns, shutdowns, shelter in place orders, travel restrictions and other actions and restrictions that may be prudent or required by governmental authorities.
Added
If we cannot substantially lower our cost of production as we move into sales of products in significant commercial quantities, our financial results will be harmed.
Removed
A global health crisis could also impact our customers’ purchasing behavior or decisions, including reduced demand for our products that could continue for an extended period of time.
Added
The requirements of these laws and regulations are complex, change frequently and could become more stringent in the future.
Removed
Any or all of the foregoing in jurisdictions where we or our customers, suppliers, or operations are located have had and could in the future have a material adverse effect on our business, results of operations, cash flows, and financial condition.
Added
In addition, we expect these laws, rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain appropriate levels of coverage.
Removed
In addition, fluctuations in demand and other implications associated with public health emergencies have resulted in, and could in the future result in, certain supply chain constraints and challenges.
Added
Additional equity offerings may dilute the holdings of existing stockholders or reduce the market price of our common stock.
Removed
Our data and information systems and network infrastructure may be subject to hacking or other cybersecurity threats.
Removed
The exercise of options and warrants and other issuances of shares of common stock or securities convertible into common stock will dilute your interest.
Removed
Furthermore, the stock markets frequently experience extreme price and volume fluctuations that affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed4 unchanged
Biggest changeWe have not experienced a cybersecurity incident that resulted in a material adverse impact to our business or operations; however, there can be no guarantee that we will not experience such an incident in the future.
Biggest changeOur information security policies and procedures are required to be reviewed on a regular basis. 25 We have not experienced a cybersecurity incident that resulted in a material adverse impact to our business or operations; however, there can be no guarantee that we will not experience such an incident in the future.
For a description of the risks from cybersecurity threats that may materially affect our Company and how they may do so, please see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K, including “ Our data and information systems and network infrastructure may be subject to hacking or other cyber security threats.
For a description of the risks from cybersecurity threats that may materially affect our Company and how they may do so, please see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K, including “Our data and information systems and network infrastructure may be subject to hacking or other cyber security threats.
Our Information Security Coordinator maintains a cyber incident reporting and response process and provides management notifications based on the seriousness of any incident. Our information security policies and procedures are required to be reviewed on a regular basis.
Our Information Security Coordinator maintains a cyber incident reporting and response process and provides management notifications based on the seriousness of any incident.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeOur total annual base rent during 2024 is expected to be approximately $376,364.
Biggest changeOur total annual base rent during 2024 is expected to be approximately $387,666.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Compensation Plan Information Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Plan category (a) (b) (c) Equity compensation plans approved by security holders (1) 8,290,807 $2.90 5,291,784 Equity compensation plans not approved by security holders (2) 519,000 $0.64 0 Total 8,809,807 $2.76 5,291,784 1.
Biggest changeEquity Compensation Plan Information Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Plan category (a) (b) (c) Equity compensation plans approved by security holders (1) 9,499,859 $3.17 3,480,845 Equity compensation plans not approved by security holders (2) 400,000 $0.60 — Total 9,899,859 $3.07 3,480,845 1.
This graph assumes the investment of $100 on December 31, 2018 in our common stock, the NASDAQ Composite Index and the Solactive EPIC Core Photonics USD Index NTR and assumes the reinvestment of dividends, if any. The graph assumes our closing sales price on December 31, 2018 of $.71 per share as the initial value of our common stock.
This graph assumes the investment of $100 on December 31, 2019 in our common stock, the NASDAQ Composite Index and the Solactive EPIC Core Photonics USD Index NTR and assumes the reinvestment of dividends, if any. The graph assumes our closing sales price on December 31, 2019 of $0.70 per share as the initial value of our common stock.
Comprised of common stock purchase warrants we issued for services. 51 Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between December 31, 2018 and December 31, 2023, with the cumulative total return of (a) the NASDAQ Composite Index and (b) Solactive EPIC Core Photonics USD Index NTR, over the same period.
Comprised of common stock purchase warrants we issued for services. 27 Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between December 31, 2019 and December 31, 2024, with the cumulative total return of (a) the NASDAQ Composite Index and (b) Solactive EPIC Core Photonics USD Index NTR, over the same period.
Securities Authorized for Issuance under Equity Compensation Plans Equity Compensation Plans as of December 31, 2023.
Securities Authorized for Issuance under Equity Compensation Plans Equity Compensation Plans as of December 31, 2024.
Holders of Common Stock On February 28, 2024, we had approximately 70 holders of our common stock, not including persons who hold our common stock in nominee or "street name” accounts through brokers or banks. Dividend Policy Our Company has never paid a cash dividend and has no present plans to pay cash dividends .
Holders of Common Stock On March 18, 2025, we had approximately 67 holders of our common stock, not including persons who hold our common stock in nominee or "street name” accounts through brokers or banks. Dividend Policy Our Company has never paid a cash dividend and has no present plans to pay cash dividends .
Our stock price performance shown in the graph below is not indicative of future stock price performance. 52 Recent Sales of Unregistered Securities During the period covered by this report, our Company has sold the following securities without registering the securities under the Securities Act: Date Security Jan 5, 2023 Common Stock — 25,000 shares of Common Stock at $.75 per share pursuant to a warrant exercise.
Our stock price performance shown in the graph below is not indicative of future stock price performance. 28 Recent Sales of Unregistered Securities During the period covered by this report, our Company has sold the following securities without registering the securities under the Securities Act: Date Security January 2024 Common Stock — 19,000 shares of Common Stock at $0.75 per share pursuant to a warrant exercise.
Dec 14, 2023 Common Stock —100,000 shares of Common Stock at $.72 per share pursuant to a warrant exercise. No underwriters were utilized, and no commissions or fees were paid with respect to any of the above transactions. These persons were the only offerees in connection with these transactions.
December 2024 Common Stock — 100,000 shares of Common Stock at $0.77 per share pursuant to a warrant exercise. No underwriters were utilized, and no commissions or fees were paid with respect to any of the above transactions. These persons were the only offerees in connection with these transactions.
Removed
June 5, 2023 Common Stock — 100,000 shares of Common Stock at $1.15 per share pursuant to a warrant exercise. June 20, 2023 Common Stock — 25,000 shares of Common Stock at $.67 per share pursuant to a warrant exercise. July 18, 2023 Common Stock —19,000 shares of Common Stock at $.75 per share pursuant to a warrant exercise.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

3 edited+0 added−0 removed5 unchanged
Biggest changeItem 6. Reserved 53 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A . Quantitative and Qualitative Disclosures About Market Risk 61 Item 8. Financial Statements and Supplementary Data 61 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 61 Item 9A. Controls and Procedures 61 Item 9B.
Biggest changeItem 6. Reserved 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36 Item 8. Financial Statements and Supplementary Data 36 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 36 Item 9A. Controls and Procedures 36 Item 9B.
Other Information 62 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 62 PART III Item 10. Directors, Executive Officers and Corporate Governance 63 Item 11. Executive Compensation 63 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 63 Item 13. Certain Relationships and Related Transactions, and Director Independence 63 Item 14.
Other Information 37 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 38 PART III Item 10. Directors, Executive Officers and Corporate Governance 39 Item 11. Executive Compensation 39 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 39 Item 13. Certain Relationships and Related Transactions, and Director Independence 39 Item 14.
Principal Accountant Fees and Services 63 PART IV Item 15. Exhibit and Financial Statement Schedules 65 Item 16. Form 10-K Summary i Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events.
Principal Accountant Fees and Services 39 PART IV Item 15. Exhibits and Financial Statement Schedules 40 Item 16. Form 10-K Summary 42 i Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

55 edited+8 added−35 removed14 unchanged
Biggest changeOperating Expenses For the Year Ending December 31, 2023 For the Year Ending December 31, 2022 Change from Prior Year Percent Change from Prior Year Research and development 15,903,689 $ 12,805,374 $ 3,098,315 24 % General and administrative 5,359,565 4,334,290 1,025,275 24 % $ 21,263,254 $ 17,139,664 $ 4,123,590 24 % For the Year Ending December 31, 2022 For the Year Ending December 31, 2021 Change from Prior Year Percent Change from Prior Year Research and development $ 12,805,374 $ 12,476,040 $ 329,334 3 % General and administrative 4,334,290 4,520,403 (186,113 ) -4 % $ 17,139,664 $ 16,996,443 $ 143,221 1 % Research and development expenses increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to increases in research and development salary and bonus expenses, research and development non-cash stock option and RSA amortization, recruiting fees, employee relocation expenses, rent expense, chemistry and wafer fabrication materials and supplies, testing expenses, software expenses, research and development consulting expenses, and travel expenses, offset by a decrease in prototype expenses.
Biggest changeOperating expenses For the Year Ended December 31, 2024 For the Year Ended December 31, 2023 Change from Prior Year Percent Change from Prior Year Research and development 16,806,548 $ 15,903,689 $ 902,859 6 % General and administrative 6,370,805 5,359,565 1,011,240 19 % $ 23,177,353 $ 21,263,254 $ 1,914,099 9 % Research and development expenses increased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to increases in research and development salary and benefits expenses, research and development equipment depreciation expense, prototype device development and wafer fabrication expenses, research and development travel expenses, rent expenses, property tax expenses, research and development consulting expenses, software expenses, and laboratory and wafer fabrication materials and supplies expenses, offset by decreases in research and development non-cash stock option amortization expenses, research and development recruiting fees, and research and development employee relocation expenses in the year ended December 31, 2024, compared to the same period in 2023. · Research and development salary and benefits expenses increased by $1,472,979 in the year ended December 31, 2024, compared to the same period in 2023. · Depreciation expense increased by $424,232 in the year ended December 31, 2024, compared to the same period in 2023. · Prototype device development and wafer fabrication expenses increased by $341,555 in the year ended December 31, 2024, compared to the same period in 2023. · Research and development travel expenses increased by $107,351 in the year ended December 31, 2024, compared to the same period in 2023. · Research and development rent expenses increased by $99,898 in the year ended December 31, 2024, compared to the same period in 2023. · Property tax expenses increased by $98,181 in the year ended December 31, 2024, compared to the same period in 2023. · Research and development consulting expenses increased by $65,261 in the year ended December 31, 2024, compared to the same period in 2023. · Research and development software expenses increased by $64,318 in the year ended December 31, 2024, compared to the same period in 2023. · Laboratory and wafer fabrication materials and supplies expenses increased by $59,090 in the year ended December 31, 2024, compared to the same period in 2023. · These increases were offset by a $1,571,632 decrease in research and development non-cash stock option amortization expenses, a $216,115 decrease in research and development recruiting fees, and a $108,305 decrease in research and development employee relocation expenses in the year ended December 31, 2024, compared to the same period in 2023. 31 We expect to continue to incur substantial research and development expenses developing and commercializing our electro-optic materials platform.
Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.
Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.
Upon delivery of a placement notice based on our Company’s instructions and subject to the terms and conditions of the at the market sale agreement, Roth Capital may sell the shares by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through The Nasdaq Capital Market, on any other existing trading market for the Company’s common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or by any other method permitted by law, including negotiated transactions, subject to the prior written consent of our Company.
Upon delivery of a placement notice based on our Company’s instructions and subject to the terms and conditions of the at the market sale agreement, Roth Capital may sell the shares by methods deemed to be an "at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on or through The Nasdaq Capital Market, on any other existing trading market for the Company’s common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, or by any other method permitted by law, including negotiated transactions, subject to the prior written consent of our Company.
Sources and Uses of Cash 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, continue to 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 or continue to establish cooperative development, joint venture and licensing arrangements.
Sources and Uses of Cash 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.
Business Strategy Our first revenue stream was obtained from our entry into a material supply license agreement to provide Perkinamine ® chromophore materials for polymer based photonic devices and photonic integrated circuits (PICs). Our Company is also in various stages of photonic device and materials development and evaluation with potential customers and strategic partners.
Business Strategy Our first revenue stream was obtained from our entry into a material supply license agreement to provide Perkinamine ® chromophore materials for polymer based photonic devices and photonic integrated circuits (PICs). Our Company is also in various stages of photonic device designs and materials development and evaluation with potential customers and strategic partners.
Analysis of Cash Flows For the year ended December 31, 2023 Net cash used in operating activities was $12,236,024 for the year ended December 31, 2023, primarily attributable to the net loss of $21,038,032 adjusted by $6,459,387 in options issued for services, $262,697 amortization of deferred compensation, $673,578 in common stock issued for services, $1,119,141 in depreciation expenses and patent amortization expenses, $184,835 amortization of right of use asset, $215,509 gain on disposal of property and equipment, ($587,540) in prepaid expenses, $935,795 in accounts receivable, accounts payable, accrued bonuses, accrued expenses, deferred revenue and other liabilities.
For the year ended December 31, 2023 Net cash used in operating activities was $12,236,024 for the year ended December 31, 2023, primarily attributable to the net loss of $21,038,032 adjusted by $6,459,387 in options issued for services, $262,697 amortization of deferred compensation, $673,578 in common stock issued for services, $1,119,141 in depreciation expenses and patent amortization expenses, $184,835 amortization of right of use asset, $215,509 gain on disposal of property and equipment, ($587,540) in prepaid expenses, $935,795 in accounts receivable, accounts payable, accrued bonuses, accrued expenses, deferred revenue and other liabilities.
The expected demands of increased traffic, information, and data driven by AI is changing the way the internet is being operated. AI is now creating new and interesting market opportunities to upgrade the internet. Three of these are important today: density, speed, and low power and these are very well aligned with our high performance electro-optic polymers.
The expected demands of increased traffic, information, and data driven by AI is changing the way the internet is being operated. AI is now creating new and interesting market opportunities to upgrade the internet. Three of these opportunities are important today: density, speed, and low power and these are very well aligned with our high performance electro-optic polymers modulator platform.
At the Market Sale Agreement – Roth Capital On December 9, 2022, we entered into the at the market sale agreement with Roth Capital, as sales agent. Pursuant to the at the market sale agreement, our Company may offer and sell up to $35,000,000 in shares of our common stock, from time to time through Roth Capital.
At the Market Sale Agreement – Roth Capital On December 9, 2022, we entered into the at the market sale agreement with Roth Capital, as sales agent. Pursuant to the at the market sale agreement, our Company may offer and sell up to $35 million in shares of our common stock, from time to time through Roth Capital.
Our extremely strong and broad patent portfolio allows us to optimize our business model in three areas: 1) Traditional focus on product development, 2) Patent licensing and 3) Technology transfer to foundries. We are continually looking to strengthen our patent portfolio both by internal inventions and acquisition of intellectual property.
Our extremely strong and broad patent portfolio allows us to optimize our business model in three areas: 1) Traditional focus on polymer materials development, 2) Patent licensing and 3) Technology transfer to foundries. We are continually looking to strengthen our patent portfolio both by internal inventions and acquisition of intellectual property.
During the year ended December 31, 2023, the Company received $19,993,359 in proceeds pursuant to the 2021 purchase agreement and 2023 purchase agreement with Lincoln Park, $1,515,878 in proceeds pursuant to the at the market sale agreement with Roth Capital, $1,013,924 in proceeds pursuant to the exercise of options and warrants and $50,000 in a proceed received under a material supply and license agreement of which $39,875 is recorded as deferred revenue as of December 31, 2023.
During the year ended December 31, 2023, the Company received $19,993,359 in proceeds pursuant to the 2021 purchase agreement and 2023 Purchase Agreement with Lincoln Park, $1,515,878 in proceeds pursuant to the at the market sale agreement with Roth Capital, $1,013,924 in proceeds pursuant to the exercise of options and warrants and $50,000 in a proceed received under a material supply and license agreement of which $39,875 is recorded as a contract liability as of December 31, 2023.
We intend to use net proceeds from the at the market sale agreement for general corporate purposes, including, without limitation, sales and marketing activities, product development, making acquisitions of assets, businesses, companies or securities, capital expenditures, and for working capital needs. 59 We cannot assure you that we will meet the conditions of the 2023 purchase agreements with Lincoln Park in order to obligate Lincoln Park to purchase our shares of common stock, and we cannot assure you that we will be able to sell any shares under or fully utilize the at the market sale agreement with Roth Capital.
We intend to use net proceeds from the at the market sale agreement for general corporate purposes, including, without limitation, sales and marketing activities, product development, making acquisitions of assets, businesses, companies or securities, capital expenditures, and for working capital needs. 34 We cannot assure you that we will meet the conditions of the 2025 Purchase Agreement with Lincoln Park in order to obligate Lincoln Park to purchase our shares of common stock, and we cannot assure you that we will be able to sell any shares under or fully utilize the at the market sale agreement with Roth Capital.
There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on the Company’s ability to enter into a similar type of agreement or equity line of credit during the term, excluding an at-the-market transaction with a registered broker-dealer), rights of first refusal, participation rights, penalties or liquidated damages under the 2023 purchase agreement .
There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on the Company’s ability to enter into a similar type of agreement or equity line of credit during the term, excluding an at-the-market transaction with a registered broker-dealer), rights of first refusal, participation rights, penalties or liquidated damages in the 2025 Purchase Agreement.
On December 9, 2022, our Company entered into the at the market sale agreement with Roth Capital, as sales agent, whereby pursuant to the at the market sale agreement, our Company may offer and sell up to $35,000,000 in shares of our common stock, from time to time through Roth Capital.
On December 9, 2022, our Company entered into the at the market sale agreement with Roth Capital, as sales agent, whereby pursuant to the at the market sale agreement, our Company may offer and sell up to $35 million in shares of our registered common stock, from time to time through Roth Capital.
Our Company is also in various stages of photonic device and materials development and evaluation with potential customers and strategic partners. We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of our electro-optic device components.
Our Company is also in various stages of photonic proprietary device designs and materials development and evaluation with potential customers and strategic partners. We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and sale of our electro-optic proprietary device designs.
On October 4, 2021, our Company entered into the 2021 purchase agreement with Lincoln Park to sell up to $33 million of common stock over a 36-month period. All of the registered shares under the October 4, 2021 purchase agreement with Lincoln Park have been issued as of June 30, 2023.
On October 4, 2021, our Company entered into the 2021 purchase agreement with Lincoln Park to sell up to $33 million of registered common stock over a 36-month period. All of the registered shares under the October 4, 2021 purchase agreement with Lincoln Park have been issued as of December 31, 2023.
Specifically, our business strategy provides that our revenue stream will be derived from one or some combination of the following: (i) technology licensing for specific product application; (ii) joint venture relationships with significant industry leaders; and (iii) the production and direct sale of our own electro-optic device components.
Specifically, our business strategy provides that our revenue stream will be derived from one or some combination of the following: (i) technology licensing for specific product application; (ii) joint venture relationships with significant industry leaders; and (iii) the sale of our own proprietary electro-optic device designs.
We currently have no debt to service. 58 We expect that our cash used in operations will continue to increase during 2024 and beyond as a result of the following planned activities: · The addition of management, sales, marketing, technical and other staff to our workforce; · Increased spending for the expansion of our research and development efforts, including purchases of additional laboratory and production equipment; · Increased spending in marketing as our products are introduced into the marketplace; · Partnering with commercial foundries to implement our electro-optic polymers into accepted PDKs by the foundries; · Developing and maintaining collaborative relationships with strategic partners; · Developing and improving our manufacturing processes and quality controls; and · Increases in our general and administrative activities related to our operations as a reporting public company and related corporate compliance requirements. 2023 Purchase Agreement with Lincoln Park On February 28, 2023, our Company entered into the 2023 purchase agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $30 million of our common stock (subject to certain limitations) from time to time over a 36-month period.
We expect that our cash used in operations will continue to increase during 2025 and beyond because of the following planned activities: · The addition of management, sales, marketing, technical and other staff to our workforce; · Increased spending for the expansion of our research and development efforts, including purchases of additional laboratory and production equipment; · Increased spending in marketing as our products are introduced into the marketplace; · Partnering with commercial foundries to implement our electro-optic polymers into accepted PDKs by the foundries; · Developing and maintaining collaborative relationships with strategic partners; · Developing and improving our manufacturing processes and quality controls; and · Increases in our general and administrative activities related to our operations as a reporting public company and related corporate compliance requirements. 2023 and 2025 Purchase Agreements with Lincoln Park On February 28, 2023, our Company entered into the 2023 Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $30 million of our common stock (subject to certain conditions) from time to time over a 36-month period.
The impact on the internet is huge, and the internet is based on an optical network that utilizes data centers to route and switch traffic or information to and from destinations. Data centers are being upgraded today in a fashion that the industry has not seen before.
The impact on the internet is huge, and the internet is based on an optical network that utilizes data centers to route and switch traffic or information to and from destinations. Data centers are being upgraded today in a fashion that the industry has not seen before with significant investments of capital.
These expenses will increase as a result of accelerated development effort to support commercialization of our non-linear optical polymer materials technology; to build photonic device prototypes; working with semiconductor foundries; hiring additional technical and support personnel; engaging senior technical advisors; pursuing other potential business opportunities and collaborations; customer testing and evaluation; and incurring related operating expenses.
These expenses will increase as a result of accelerated development effort to support commercialization of our non-linear optical polymer materials technology and create next-generation photonic EO device designs; working with semiconductor foundries; hiring additional technical and support personnel; engaging senior technical advisors; pursuing other potential business opportunities and collaborations; customer testing and evaluation; and incurring related operating expenses.
Our cash requirements are expected to increase at a rate consistent with our Company’s revenue growth as we expand our activities and operations with the objective of increasing our revenue stream from the commercialization of our electro-optic polymer technology.
Our cash requirements are expected to increase at a rate consistent with our Company’s revenue growth as we expand our activities and operations with the objective of increasing our revenue stream from the commercialization of our electro-optic polymer technology. We currently have no debt to service.
On February 28, 2023, our Company entered into the 2023 purchase agreement with Lincoln Park to sell up to $30 million of common stock over a 36-month period, with $10.5 million remaining on the 2023 purchase agreement as of the date of this filing.
On February 28, 2023, our Company entered into the 2023 Purchase Agreement with Lincoln Park to sell up to $30 million of registered common stock over a 36-month period. As of the date of this filing, $0 remains on the 2023 Purchase Agreement.
Our objective is to be a leading provider of proprietary technology and know-how in the electro-optic device market.
Our objective is to be a leading provider of proprietary technology and know-how in the electro-optic materials and devices.
As of the date of this filing $33.4 million remains available to our Company pursuant to the at the market sale agreement.
As of the date of this filing, $31.5 million remains available to our Company pursuant to the at the market sale agreement.
We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of our electro-optic device components.
We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and sale of our proprietary electro-optic devices.
Pursuant to the 2023 purchase agreement, Lincoln Park is obligated to make purchases as the Company directs in accordance with the purchase agreement, which may be terminated by the Company at any time, without cost or penalty.
Pursuant to the 2025 Purchase Agreement, subject to the conditions set forth therein, Lincoln Park is obligated to make purchases as the Company directs in accordance with the 2025 Purchase Agreement, which may be terminated by the Company at any time, without cost or penalty.
We are designing high performance polymer modulator optical engines to support the rise and growth of AI as it generates more information that will travel through the internet and optical network. Commencement of Commercial Operations We commenced commercial operations in May 2023.
We are designing high performance polymer modulator optical engines to support the rise and growth of AI as it generates more information that will travel through the internet and optical network.
In order to meet this objective, we intend to continue to: • Further the development of proprietary organic electro-optic polymer material systems • Develop photonic devices based on our P 2 IC TM technology • Develop proprietary intellectual property • Grow our commercial device development capabilities • Partner with silicon-based foundries who can scale volume quickly • Grow our product reliability and quality assurance capabilities • Grow our optoelectronic packaging and testing capabilities • Grow our commercial material manufacturing capabilities • Maintain/develop strategic relationships with major telecommunications and data communications companies to further the awareness and commercialization of our technology platform • Add high-level personnel with industrial and manufacturing experience in key areas of our materials and device development programs.
In order to meet this objective, we intend to continue to: • Further the development of proprietary organic electro-optic polymer material systems • Develop photonic device designs based on our P 2 IC™ technology • Develop proprietary intellectual property • Grow our device design development capabilities • Partner with silicon-based foundries who can scale volume quickly • Grow our product reliability and quality assurance capabilities • Grow our optoelectronic packaging and testing capabilities • Grow our commercial material manufacturing capabilities • Maintain/develop strategic relationships with major telecommunications and data communications companies to further the awareness and commercialization of our technology platform • Add high-level personnel with industrial and manufacturing experience in key areas of our materials and device development Create Organic Polymesr-Enabling design and production of Electro-Optic Modulators We intend to utilize our proprietary optical polymer technology to create an initial portfolio of commercial electro-optic polymer product devices designs with applications for various markets, including telecommunications, data communications and data centers.
In the event we fail to do so, and other adequate funds are not available to satisfy long-term capital requirements, or if planned revenues are not generated, we may be required to substantially limit our operations. This limitation of operations may include reductions in capital expenditures and reductions in staff and discretionary costs.
In the event we fail to do so, and other adequate funds are not available to satisfy long-term capital requirements, or if planned revenues are not generated, we may be required to substantially limit our operations, which could result in our Company reducing some capital expenditures or reducing staff and discretionary costs.
We expect the proceeds received pursuant to the 2023 purchase agreement and future purchase agreements with Lincoln Park, the at the market sale agreement with Roth Capital, the exercise of options and warrants and commercial operations to provide us with sufficient funds to maintain our operations over the next 12 months.
We expect that we will incur approximately $1,727,000 of expenditures per month over the next 12 months. 33 We expect the proceeds received pursuant to the 2023 and the 2025 Lincoln Park purchase agreements and, the at the market sale agreement with Roth Capital, the exercise of options and warrants, and commercial operations to provide us with sufficient funds to maintain our operations over the next 12 months.
During the year ended December 31, 2022, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including prototypes development and foundries expenses, third-party service providers and payroll taxes related to cashless option exercise.
During the year ended December 31, 2024, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including prototypes development and foundries expenses, laboratory and wafer fabrication materials and supplies expenses, and third-party service providers.
We have demonstrated higher speed and lower power consumption in packaged devices, and during 2022 and 2023, we continued to make advances in techniques to translate material properties to efficient, reliable modulator devices with commercial foundries.
We have demonstrated the electro-optic polymers potential for higher speed and lower power consumption in packaged devices, and during 2024, we continued to make advances in techniques to translate our world class material properties to efficient, reliable modulator devices with commercial foundries.
Our goal is to have our unique polymer technology platform become ubiquitous. 53 Artificial Intelligence (AI) has been integrating deeper within our daily activities with applications to make us more efficient and possibly smarter.
Our goal is to have our unique polymer technology platform become ubiquitous across multiple market verticals over and above the optical fiber optic communications markets. 29 Artificial Intelligence (AI) has been integrating deeper within our daily activities with applications to make us more efficient and possibly smarter.
Liquidity and Capital Resources Our primary source of operating cash inflows was proceeds from the sale of common stock to Lincoln Park (institutional investor) pursuant to purchase agreements with Lincoln Park and proceeds from sale of common stock by Roth Capital (investment banking company) pursuant to the at the market sale agreement with Roth Capital as described in Note 11 to the Financial Statements and below, proceeds received pursuant to the exercise of options and warrants and a proceed received under a material supply and license agreement of which $39,875 is recorded as deferred revenue as of December 31, 2023.
Liquidity and Capital Resources Our primary source of operating cash inflows was (i) proceeds from the sale of common stock to Lincoln Park (institutional investor) pursuant to purchase agreements with Lincoln Park and proceeds from sale of common stock by Roth Capital (investment banking company) pursuant to the at the market sale agreement with Roth Capital as described in Note 10 to the Financial Statements and (ii) proceeds received pursuant to the exercise of options and warrants.
Capital Requirements We commenced commercial operations in May 2023, and we do not generate sufficient revenues to pay for our operating expenses. We have incurred substantial net losses since inception.
These product devices will be part of our proprietary photonics integrated circuit (PIC) technology platform . Capital Requirements We commenced commercial operations in May 2023, and we do not generate sufficient revenues to pay for our operating expenses. We have incurred substantial net losses since inception.
General and administrative travel expenses increased by $75,652 in the year ended December 31, 2022, compared to the same period in 2021. 56 Other Income (Expense) For the Year Ending December 31, 2023 For the Year Ending December 31, 2022 Change from Prior Year Percent Change from Prior Year Other Income (Expense) $ 187,233 $ (90,816 ) $ 278,049 -306 % For the Year Ending December 31, 2022 For the Year Ending December 31, 2021 Change from Prior Year Percent Change from Prior Year Other Expense $ (90,816 ) $ (1,634,938 ) $ 1,544,122 -94 % Other income increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in interest income earned on money market account of $568,137 and a gain on disposal of fixed assets of $215,509, offset by an increase in commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement in the amount of $463,869.
Other income increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in interest income earned on money market account of $568,137 and a gain on disposal of fixed assets of $215,509, offset by an increase in commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement in the amount of $463,869.
On December 31, 2021, our cash and cash equivalents totaled $23,432,612, our assets totaled $27,228,575, our liabilities totaled $2,024,303 and we had stockholders’ equity of $25,204,272. Contractual Obligations See “Note 8–Commitments” of the notes to the financial statements contained elsewhere within this Annual Report on Form 10-K for a discussion of our operating lease for office and laboratory space.
On December 31, 2023, our cash and cash equivalents totaled $31,432,087, our assets totaled $41,783,585, our liabilities totaled $5,349,771 and we had stockholders’ equity of $36,433,814. Contractual Obligations See “Note 8–Leases” of the notes to the financial statements contained elsewhere within this Annual Report on Form 10-K for a discussion of our operating lease for office and laboratory space. 35
We have satisfied our capital requirements since inception primarily through the issuance and sale of our common stock. 54 Results of Operations Comparison of year ended December 31, 2023 to year ended December 31, 2022 and year ended December 31, 2022 to year ended December 31, 2021 Revenues During the year ended December 31, 2023, we recognized $40,502 of licensing and royalty revenue.
We have satisfied our capital requirements since inception primarily through the issuance and sale of our common stock. 30 Results of Operations Comparison of year ended December 31, 2024 to year ended December 31, 2023 Revenues During the year ended December 31, 2024, we recognized $81,855 of licensing and royalty revenue and $13,750 of revenue for the device processing work on the device supplied by a customer.
We are initially targeting applications in fiber optic data communications and telecommunications markets and are exploring other applications that include automotive/LIDAR, sensing, displays etc., for our polymer technology platform.
We are initially targeting applications in fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth optical connections deployed inside and between datacenters and/or AI clusters. In addition, we are exploring other applications that include automotive/LIDAR, sensing, displays, storage, aerospace and defense, etc., for our polymer technology platform.
Electro-optical devices called modulators convert data from electric signals into optical signals for multiple applications. Our differentiation at the modulator device level is in higher speed, lower power consumption, simplicity of manufacturing, small footprint (size), and reliability.
Our differentiation at the modulator device level is in higher speed, lower power consumption, simplicity of manufacturing, small footprint (size), and reliability.
Net cash used by investing activities was $1,116,179 for the year ended December 31, 2021, consisting of $18,649 in cost for intangibles and $1,097,530 in asset additions primarily for the Colorado headquarter facility and labs.
Net cash used by investing activities was $2,697,899 for the year ended December 31, 2024, consisting of $430,501 in cost for intangibles and $2,267,398 in asset additions for the Colorado headquarter facility and labs.
Sales of shares will be made in specified amounts and at prices that are based upon the market prices of our common stock immediately preceding the sales to Lincoln Park. We expect this and any future purchase agreements with Lincoln Park to provide us with sufficient funds to maintain our operations for the foreseeable future.
Sales of shares will be made in specified amounts and at prices that are based upon a look back formula for market prices of our common stock immediately preceding the sales to Lincoln Park.
Our current cash position enables us to finance our operations through July 2025 before we will be required to replenish our cash reserves pursuant to the 2023 Purchase Agreement or the Roth Sales Agreement.
Our current cash position enables us to finance our operations through April 2026 before we will be required to replenish our cash reserves.
Cost of Sales During the year ended December 31, 2023, we recognized $2,513 in Cost of Sales, and $0 in Cost of Sales during the years ended December 31, 2022 and 2021.
During the year ended December 31, 2023, we recognized $40,502 of licensing and royalty revenue. Cost of sales During the year ended December 31, 2024, we recognized $7,395 in cost of sales. During the year ended December 31, 2023, we recognized $2,513 in cost of sales.
There are no trading volume requirements or restrictions under the 2023 purchase agreement, and we will control the timing and amount of any sales of our common stock to Lincoln Park.
There are no trading volume requirements or restrictions on the 2025 Purchase Agreement, and we will control the timing and amount of any sales of our common stock to Lincoln Park. Lincoln Park has no right to require any sales by us, but is obligated to make purchases from us as we direct in accordance with the 2025 Purchase Agreement.
Partnering with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard production lines using standard equipment, it also allows us to efficiently utilize our capital. The foundry partnerships will allow us to scale our high-performance polymer optical engines quickly and efficiently.
Silicon-based foundries are semiconductor fabrication plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput. Partnering with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard production lines using standard equipment, it also allows us to efficiently utilize our capital.
General and administrative expenses increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to increases in general and administrative salary and bonus expenses, accounting fees, general and administrative consulting fees, general and administrative non-cash stock option and RSA amortization, D&O insurance expenses, investor relations expenses, travel expenses, office expenses, rent expense, general and administrative recruiting fees, and software expenses, offset by a decrease in legal fees.
General and administrative expenses increased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to increases in general and administrative salary and benefits expenses, consulting fees, depreciation expense, investor relations expenses, and sales and marketing expenses, offset by decreases general and administrative non-cash stock option amortization expenses, and accounting expenses. · General and administrative salary and benefits expenses increased by $866,829 in the year ended December 31, 2024, compared to the same period in 2023. · General and administrative consulting fees increased by $215,707 in the year ended December 31, 2024, compared to the same period in 2023. · Depreciation expense increased by $103,624 in the year ended December 31, 2024, compared to the same period in 2023. · Investor relations expenses increased by $54,259 in the year ended December 31, 2024, compared to the same period in 2023. · Sales and marketing expenses increased by $52,623 in the year ended December 31, 2024, compared to the same period in 2023. · These increases were offset by a $263,822 decrease in general and administrative non-cash stock option amortization expense and a $183,722 decrease in accounting fees in the year ended December 31, 2024, compared to the same period in 2023.
Net cash provided by financing activities was $31,280,827 for the year ended December 31, 2021 and consisted of $2,379,225 in proceeds from exercise of options and warrants, $30,350,674 in proceeds from resale of common stock to an institutional investor offset by $1,435,965 in cashless option exercise tax payments and $13,107 repayment of equipment purchased.
Net cash provided by financing activities was $14,484,291 for the year ended December 31, 2024, and consisted of $337,350 in proceeds from exercise of options and warrants, $12,366,965 in proceeds from resale of common stock to an institutional investor and $1,779,976 in proceeds from at the market sale of common stock by an investment banking company.
Net loss was $17,230,480 and $18,631,381 for the year ended December 31, 2022 and 2021, respectively, for a decrease of $1,400,901 due primarily to decreases in expense for cashless option exercises, bonus expenses and commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement offset by increases in non-cash stock option amortization, prototype device development expenses, research and development salary expenses, legal expenses, the forgiveness by the Small Business Administration during 2021 of a loan funding from the Paycheck Protection Program, laboratory and wafer fabrication materials and supplies, research and development consulting fees, travel expenses, depreciation, director fees and insurance expenses. 57 Significant Accounting Policies Our Company’s accounting policies are more fully described in Note 1 of Notes to Financial Statements.
These increases were offset by decreases in non-cash stock option amortization expense, commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement, recruiting fees, accounting fees, and employee relocation expenses, and an increase in interest income on money market account. 32 Significant Accounting Policies Our Company’s accounting policies are more fully described in Note 1 of Notes to Financial Statements.
On December 31, 2022, our cash and cash equivalents totaled $24,102,151, our assets totaled $29,263,472, our liabilities totaled $1,710,449 and we had stockholders’ equity of $27,553,023.
On December 31, 2024, our cash and cash equivalents totaled $27,667,964, our assets totaled $37,807,983, our liabilities totaled $4,384,078 and we had stockholders’ equity of $33,423,905.
All of the registered shares under the January 21, 2019 purchase agreement with Lincoln Park have been issued as of June 30, 2021. On July 2, 2021, the Company filed a $100 million universal shelf registration statement which became effective on July 9, 2021.
On July 2, 2021, our Company filed a $100 million universal shelf registration statement which became effective on July 9, 2021, and expired on July 8, 2024. On July 26, 2024, the Company filed a new $100 million universal shelf registration statement which became effective on August 5, 2024.
We are currently focused on testing and demonstrating the simplicity of manufacturability and reliability of our devices, including in conjunction with the silicon photonics manufacturing ecosystem. In 2022 we discussed the addition of several silicon-based foundry partners to help scale in volume our polymer modulator devices and we started to receive working modulator chips from the foundries.
In 2024 we continued to work with silicon-based foundry partners to help scale in volume our polymer modulator devices and we received working modulator chips from these foundries. We have advanced and matured our interactions with our foundry partners and we continue to receive working modulator chips for prototyping.
Lincoln Park has no right to require any sales by us, but is obligated to make purchases from us as we direct in accordance with each of the 2023 purchase agreement. We can also accelerate the amount of common stock to be purchased under certain circumstances.
We can also accelerate the amount of common stock to be purchased under certain circumstances.
For the year ended December 31, 2022 Net cash used in operating activities was $10,465,880 for the year ended December 31, 2022, primarily attributable to the net loss of $17,230,480 adjusted by $5,813,628 in options issued for services, $91,713 amortization of deferred compensation, $209,709 in common stock issued for services, $1,045,208 in depreciation expenses and patent amortization expenses, ($379,037) in prepaid expenses, ($135,661) in accounts payable, accrued bonuses and accrued expenses and $119,040 in cashless option exercise expense.
Analysis of Cash Flows For the year ended December 31, 2024 Net cash used in operating activities was $15,550,515 for the year ended December 31, 2024, primarily attributable to the net loss of $22,535,041 adjusted by $4,440,003 in options issued for services, $446,628 amortization of deferred compensation, $154,210 in common stock issued for services, $1,682,760 in depreciation expenses and patent amortization expenses, $192,487 amortization of right of use asset, $213,440 loss on disposal of property and equipment and retirement of certain expired patent applications and patents, $(15,189) in accounts receivable, $835,880 in prepaid expenses and other current assets, and ($965,693) in accounts payable, accrued bonuses, accrued expenses, contract liability and other liabilities.
Net Loss For the Year Ending December 31, 2023 For the Year Ending December 31, 2022 Change from Prior Year Percent Change from Prior Year Net Loss $ 21,038,032 $ 17,230,480 $ 3,807,552 22 % For the Year Ending December 31, 2022 For the Year Ending December 31, 2021 Change from Prior Year Percent Change from Prior Year Net Loss $ 17,230,480 $ 18,631,381 $ (1,400,901 ) -8 % Net loss was $21,038,032 and $17,230,480 for the year ended December 31, 2023 and 2022, respectively, for an increase of $3,807,552 due primarily to increases in salary and bonus expense, non-cash stock option and RSA amortization, commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement, consulting fees, recruiting fees, rent expense, accounting fees, research and development employee relocation costs, software costs, research and development travel expenses, chemistry and wafer fabrication materials and supplies, testing expenses, D&O insurance, investor relations fees, and office expenses, offset by decrease primarily related to prototype and legal expenses, a higher interest income earned on money market account, and a gain on property and equipment disposal.
Net Loss For the Year Ended December 31, 2024 For the Year Ended December 31, 2023 Change from Prior Year Percent Change from Prior Year Net Loss $ 22,535,041 $ 21,038,032 $ 1,497,009 7 % Net loss was $22,535,041 and $21,038,032 for the year ended December 31, 2024 and 2023, respectively, for an increase of $1,497,009 due primarily to increases in salary and benefits expenses, depreciation expense, prototype device development and wafer fabrication expenses, and consulting fees, recognition of loss on retirement of certain expired patent applications and patents, travel expenses, rent expense, property tax expenses, software expenses, laboratory and wafer fabrication materials and supplies expenses, investor relations expenses, and sales and marketing expenses.
Other expenses decreased for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to a decrease in commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement in the amount of $1,849,755 offset by the forgiveness by the Small Business Administration during 2021 of a loan funding from the Paycheck Protection Program in the amount of $410,700.
Other Income For the Year Ended December 31, 2024 For the Year Ended December 31, 2023 Change from Prior Year Percent Change from Prior Year Other Income $ 554,102 $ 187,233 $ 366,869 196 % Other income increased for the year ended December 31, 2024, as compared to year ended December 31, 2023, primarily due to a $519,368 decrease in commitment fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement, a $280,433 increase in interest income on money market account, and a recognition of a $210,274 loss on retirement of certain expired patent applications and patents.
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Overview Lightwave Logic, Inc. is a technology company focused on the development of next generation electro-optic photonic devices made on its P 2 IC™ 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.
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Overview Lightwave Logic, Inc. is a technology platform company leveraging its proprietary engineered electro-optic (EO) polymers to transmit data at higher speeds with less power in a small form factor.
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We have advanced our interactions with our foundries, and we continue to receive working modulator chips for prototyping. Silicon-based foundries are large semiconductor fabrication plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput.
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The Company’s high activity and high stability organic polymers allow it to create next-generation photonic EO devices that convert data from electrical signals into light/optical signals for applications in telecommunications, and for data transmission potentially used to support generative AI.
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Create Organic Polymer-Enabled Electro-Optic Modulators We intend to utilize our proprietary optical polymer technology to create an initial portfolio of commercial electro-optic polymer product devices with applications for various markets, including telecommunications, data communications and data centers. These product devices will be part of our proprietary photonics integrated circuit (PIC) technology platform .
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We are currently focused on a) working with potential and existing customers to integrate our proprietary materials into our customers’ specific PIC and device architecture. b) testing and demonstrating the superior performance, simplicity of manufacturability and reliability of our devices, including in conjunction with the silicon photonics manufacturing ecosystem c) providing our potential and existing customers with the proper Process Development Kits (PDKs) to enable the efficient and fast integration of our materials into their own design and manufacturing plans.
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We expect our initial modulator products will operate at symbol rates at least 112 Gigabaud which is roughly 200Gbps when utilized with PAM4 encoding schemes. Our devices are highly linear and can also enable the performance required to take advantage of more advance complex encoding schemes if required.
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The foundry partnerships will allow us to scale our high-performance polymer optical engines quickly and efficiently. We have now received silicon wafers that range up to 200mm in diameter, which aligns well with foundry manufacturing.
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As a development stage company during the years ended December 31, 2022 and December 31, 2021, we had no revenues. The Company is in various stages of photonic device and materials development and evaluation with potential customers and strategic partners, and commercialization.
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While we are not directly an AI company designing electronic processors, we do see immediate benefits of enabling higher levels of information to cross the internet using our optical polymer modulator platform. Commencement of Commercial Operations We commenced commercial operations in May 2023.
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The Company expects to continue obtaining a revenue stream from technology licensing agreements, to obtain additional revenue streams from technology transfer agreements and direct sale of its own electro-optic device components.
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On March 17, 2025, our Company entered into the 2025 Purchase Agreement with Lincoln Park to sell up to $30 million of registered common stock over a 36-month period, subject to the conditions set forth therein. As of the date of this filing, $30 million remains on the 2025 Purchase Agreement.
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Research and development salary and bonus expenses increased by $1,636,577 in the year ended December 31, 2023, compared to the same period in 2022. Research and development non-cash stock option and RSA amortization expenses increased by $690,879 in the year ended December 31, 2023, compared to the same period in 2022.
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During the year ended December 31, 2024, the Company received $12,366,965 in proceeds pursuant to the 2023 Purchase Agreement with Lincoln Park, $1,779,976 in proceeds pursuant to the at the market sale agreement with Roth Capital, $337,350 in proceeds pursuant to the exercise of options and warrants and $63,884 in cash collections from customer contracts, of which $50,000 related to the proceeds received under a material supply and license agreement and $13,884 – to the proceeds received for a contact for processing work on the devices supplied by a customer.
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Recruiting fees increased by $195,697 in the year ended December 31, 2023, compared to the same period in 2022. Employee relocation expenses increased by $178,626 in the year ended December 31, 2023, compared to the same period in 2022. Rent expense increased by $153,949 in the year ended December 31, 2023, compared to the same period in 2022.
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On March 17, 2025, our Company entered into the 2025 Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $30 million of our common stock (subject to certain conditions) from time to time over a 36-month period.
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Chemistry and wafer fabrication materials and supplies increased by $143,581 in the year ended December 31, 2023, compared to the same period in 2022. Research and development testing expenses increased by $129,593 in the year ended December 31, 2023 compared to the same period in 2022.
Removed
Software expenses increased by $126,854 in the year ended December 31, 2023, compared to the same period in 2022. Research and development consulting expenses increased by $112,261 in the year ended December 31, 2023, compared to the same period in 2022.
Removed
Research and development travel expenses increased by $96,923 in the year ended December 31, 2023, compared to the same period in 2022.
Removed
These increases were offset by a $483,617 decrease in prototype expenses in the year ended December 31, 2023, compared to the same period in 2022. 55 Research and development expenses increased for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to increases in research and development non-cash stock option amortization, prototype device development expenses, research and development salary expenses, laboratory and wafer fabrication materials and supplies, research and development consulting expenses, depreciation and research and development travel expenses offset by a decrease in expense for cashless option exercises and research and development bonus expenses.
Removed
Research and development non-cash stock option amortization expenses increased by $3,732,646 in the year ended December 31, 2022, compared to the same period in 2021. Prototype device development expenses increased by $1,460,419 in the year ended December 31, 2022, compared to the same period in 2021.
Removed
Research and development salary expenses increased by $617,627 in the year ended December 31, 2022, compared to the same period in 2021. Laboratory and wafer fabrication materials and supplies increased by $242,737 in the year ended December 31, 2022, compared to the same period in 2021.
Removed
Research and development consulting expenses increased by $224,435 in the year ended December 31, 2022, compared to the same period in 2021. Depreciation expenses increased by $173,206 in the year ended December 31, 2022, compared to the same period in 2021.
Removed
Research and development travel expenses increased by $147,136 in the year ended December 31, 2022, compared to the same period in 2021. The expense for research and development cashless option exercises decreased by $3,382,582 in the year ended December 31, 2022, compared to the same period in 2021.
Removed
Research and development bonus expenses decreased by $3,003,169 in the year ended December 31, 2022, compared to the same period in 2021. We expect to continue to incur substantial research and development expense developing and commercializing our photonic devices, and electro-optic materials platform.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk At December 31, 2023, we had $31.4 million in cash and cash equivalents. For the purposes of this Item 7A. we consider all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk At December 31, 2024, we had $27.6 million in cash and cash equivalents. For the purposes of this Item 7A. we consider all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents.
Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. If a 10% change in interest rates had occurred on December 31, 2023, this change would not have had a material effect on the fair value of our investment portfolio as of that date.
Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. If a 10% change in interest rates had occurred on December 31, 2024, this change would not have had a material effect on the fair value of our investment portfolio as of that date.
We place our cash investments in instruments that meet credit quality standards. At December 31, 2022, we had deposits with a financial institution that exceeded the Federal Depository Insurance coverage. Market Interest Rate Risk We are exposed to market risk related to changes in interest rates.
We place our cash investments in instruments that meet credit quality standards. At December 31, 2024, we had deposits with a financial institution that exceeded the Federal Depository Insurance coverage. Market Interest Rate Risk We are exposed to market risk related to changes in interest rates.

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