LIGHTWAVE LOGIC, INC. Our future expenditures and capital requirements will depend on numerous
factors, including: the impact of the COVID-19 pandemic; 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. From late March through
NOTE 3 - PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following:
March 31, December 31,
2020 2019
Research & Development Credit $ 158,612 $ 158,612
Insurance 52,848 89,828
Other 73,497 58,756
Rent 36,525 36,525
Prototype Devices 57,737 27,810
Prepaid Material 2,207 1,018
$ 381,426 $ 372,549
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LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTSMARCH 31, 2020 AND 2019
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
March 31, December 31,
2020 2019
Office equipment $ 84,751 $ 84,751
Lab equipment 3,738,412 3,733,057
Furniture 33,128 33,128
Leasehold improvements 229,401 229,401
4,085,692 4,080,337Less: Accumulated depreciation 1,842,127 1,663,834
$ 2,243,565 $ 2,416,503
Depreciation expense for the three months ending
NOTE 5 - INTANGIBLE ASSETS
This represents legal fees and patent fees associated with the prosecution of patent applications. The Company has recorded amortization expense on patents granted, which are amortized over the remaining legal life. Maintenance patent fees are paid to a government patent authority to maintain a granted patent in force. Some countries require the payment of maintenance fees for pending patent applications. Maintenance fees paid after a patent is granted are expensed, as these are considered ongoing costs to "maintain a patent". Maintenance fees paid prior to a patent grant date are capitalized to patent costs, as these are considered "patent application costs". No amortization expense has been recorded on the remaining patent applications since patents have yet to be granted.
On
Patents consists of the following:
March 31, December 31,
2020 2019
Patents $ 1,275,226 $ 1,267,077
Less: Accumulated amortization 348,474 327,596
$ 926,752 $ 939,481 Amortization expense for the three months ending
8
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LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTSMARCH 31, 2020 AND 2019
NOTE 6 - LONG TERM EQUIPMENT PURCHASE PAYABLE
Outstanding long term equipment purchase payable is comprised of the following:
Final Year Interest March 31, December 31,
of Maturity Classification Rate 2020 2019
Current 0.00 % $ 445,204 $ 630,329
2021 Long term 0.00 % 13,107 52,427
$ 458,311 $ 682,756
NOTE 7 - COMMITMENTS
On
Due to the adoption of the new lease standard, the Company has capitalized the
present value of the minimum lease payments commencing
As of
There are no other material operating leases.
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LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTSMARCH 31, 2020 AND 2019
NOTE 7 - COMMITMENTS (CONTINUED)
The Company is obligated under an operating lease for office and laboratory space. The aggregate minimum future lease payments under the operating leases, including the extended term are as follows:
YEARS ENDING
DECEMBER 31 , AMOUNT
2020 $ 146,927
2021 201,501
2022 207,563
2023 213,781
2024 182,624
952,396
Less discounted interest (130,602 )
TOTAL $ 821,794 Rent expense approximating
NOTE 8 - INCOME TAXES
There is no income tax benefit for the losses for the three months ended
The Company's policy is to record interest and penalties associated with
unrecognized tax benefits as additional income taxes in the statement of
operations. As of
The Company did not recognize any interest or penalties during 2019 related to
unrecognized tax benefits. With few exceptions, the
NOTE 9 - STOCKHOLDERS' EQUITY
Preferred Stock
Pursuant to the Company's Articles of Incorporation, the Company's board of directors is empowered, without stockholder approval, to issue series of preferred stock with any designations, rights and preferences as they may from time to time determine. The rights and preferences of this preferred stock may be superior to the rights and preferences of the Company's common stock; consequently, preferred stock, if issued could have dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the common stock. Additionally, preferred stock, if issued, could be utilized, under special circumstances, as a method of discouraging, delaying or preventing a change in control of the Company's business or a takeover from a third party.
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LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTSMARCH 31, 2020 AND 2019
NOTE 9 - STOCKHOLDERS' EQUITY (CONTINUED)
Common Stock Options and Warrants
2016 Purchase Agreement
In
The Company issued 350,000 shares of restricted common stock to the
institutional investor as an initial commitment fee valued at
2019 Purchase Agreement
In
NOTE 10 - STOCK BASED COMPENSATION
During 2007, the Board of Directors of the Company adopted the 2007 Employee
Stock Plan ("2007 Plan") that was approved by the shareholders. Under the Plan,
the Company is authorized to grant options to purchase up to 10,000,000 shares
of common stock to directors, officers, employees and consultants who provide
services to the Company. The Plan is intended to permit stock options granted
to employees under the 2007 Plan to qualify as incentive stock options under
Section 422 of the Internal Revenue Code of 1986, as amended ("Incentive Stock
Options"). All options granted under the 2007 Plan, which are not intended to
qualify as Incentive Stock Options are deemed to be non-qualified options
("Non-Statutory Stock Options"). Effective
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LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTSMARCH 31, 2020 AND 2019
NOTE 10 - STOCK BASED COMPENSATION (CONTINUED)
During 2016, the Board of Directors of the Company adopted the 2016 Equity
Incentive Plan ("2016 Plan") that was approved by the shareholders at the 2016
annual meeting of shareholders on
Both plans are administered by the Board of Directors or its compensation committee which determines the persons to whom awards will be granted, the number of awards to be granted, and the specific terms of each grant. Subject to the provisions regarding Ten Percent Shareholders, the exercise price per share of each option cannot be less than 100% of the fair market value of a share of common stock on the date of grant. Options granted under the 2016 Plan are generally exercisable for a period of 10 years from the date of grant and may vest on the grant date, another specified date or over a period of time.
The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award, with the following assumptions for 2020: no dividend yield in all years, expected volatility, based on the Company's historical volatility, 70.9%, risk-free interest rate 1.82% and expected option life of 10 years. The expected life is based on the estimated average of the life of options using the "simplified" method, as prescribed in FASB ASC 718, due to insufficient historical exercise activity during recent years.
As of
Share-based compensation was recognized as follows:
For the Three For the Three
Months Ending Months Ending
March 31, 2020 March 31, 2019
2007 Employee Stock Option Plan $ - $ -
2016 Equity Incentive Plan 206,437 187,383
Warrants 26,924 18,827
Total share-based compensation
The following tables summarize all stock option and warrant activity of the
Company during the three months ended
Non-Qualified Stock Options and Warrants
Outstanding and Exercisable
Number of Exercise Weighted Average
Shares Price Exercise Price
Outstanding, December
31, 2019 16,302,517 $0.57 - $1.69 $ 0.85
Granted 370,000 $0.80 $ 0.80
Expired (8,750 ) $1.10 $ 1.10
Outstanding, March 31,
2020 16,663,767 $0.57 - $1.69 $ 0.85
Exercisable, March 31,
2020 15,759,079 $0.57 - $1.69 $ 0.85
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LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTSMARCH 31, 2020 AND 2019
NOTE 10 - STOCK BASED COMPENSATION (CONTINUED)
There was no aggregate intrinsic value of options and warrants outstanding and
exercisable as of
Non-Qualified Stock Options and Warrants Outstanding
Number Outstanding Weighted Average Weighted Average
Range of Currently Exercisable Remaining Exercise Price of Options and
Exercise Prices at March 31, 2020 Contractual Life Warrants Currently Exercisable
$0.57 - $1.69 15,759,079 3.59 Years $0.85
NOTE 11 - RELATED PARTY
At
During
NOTE 12 - RETIREMENT PLAN
The Company established a 401(k) retirement plan covering all eligible employees
beginning
NOTE 13 - SUBSEQUENT EVENTS
On
The Company is currently operating under the Governor of
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Item 2
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our
financial statements, included herewith. This discussion should not be construed
to imply that the results discussed herein will necessarily continue into the
future, or that any conclusion reached herein will necessarily be indicative of
actual operating results in the future. Such discussion represents only the best
present assessment of our management. This information should also be read in
conjunction with our audited historical financial statements which are included
in our Annual Report on Form 10-K for the fiscal year ended
COVID-19
During this uncertain time, our critical priorities are the health and safety of
our employees and contractors, all of whom began working from home and reduced
travel to essential business needs starting in late March. We currently are
operating under the Governor of
The COVID-19 pandemic has had and continues to have a significant impact on local, state, national and global economies. The actions taken by governments, as well as businesses and individuals, to limit the spread of the disease has significantly disrupted the Company's normal activities. Numerous businesses, including some of our contractors, collaborative partners and suppliers, have either shut down or are operating on a limited basis with employees working from home, some employees have been furloughed or laid off and social distancing has been mandated through stay-at-home orders, and continues with the Safer-at-Home orders. The Company expects these actions to have a significant impact on the Company's results of operations, particularly with respect to research and development, and financial position. The full extent of the impact to the Company due to the impact of the COVID-19 pandemic cannot be currently determined. The extent to which the COVID-19 pandemic will impact the Company will depend on future developments, which are highly uncertain and cannot be reasonably predicted, including the duration of the outbreak, the increase or reduction in governmental restrictions to businesses and individuals, the potential for a resurgence of the virus and other factors. The longer the COVID-19 pandemic continues, the greater the potential negative financial effect on the Company.
Overview
Our differentiation at the device level is in higher speed, lower power consumption, simplicity of manufacturing and reliability. We have demonstrated higher speed and lower power consumption in packaged devices, and during 2019, we developed new materials that promise to further lower power consumption. We are currently focused on testing and demonstrating the simplicity of manufacturability and reliability of our devices.
We are initially targeting applications in data communications and telecommunications markets and are exploring other applications for our polymer technology platform.
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. 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. We believe they have the potential to replace more expensive, higher power consuming, slower-performance materials and devices used in fiber-optic communication networks.
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Our patented and patent pending molecular architectures are based on a well-understood chemical and quantum mechanical occurrence known as aromaticity. Aromaticity provides a high degree of molecular stability that enables our core molecular structures to maintain stability under a broad range of operating conditions.
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. Our Company contemplates future applications that may address the needs of semiconductor companies, optical network companies, Web 2.0 media companies, high performance computing companies, telecommunications companies, aerospace companies, and government agencies.
Device Design and Development Electro-optic Modulators
Our Company designs its own proprietary electro-optical modulation devices. Electro-optical modulators convert data from electric signals into optical signals that can then be transmitted over high-speed fiber-optic cables. Our modulators are electro-optic, meaning they work because the optical properties of the polymers are affected by electric fields applied by means of electrodes. Modulators are key components that are used in fiber optic telecommunications, data communications, and data centers networks etc., to convey the high data flows that have been driven by applications such as pictures, video streaming, movies etc., that are being transmitted through the Internet. Electro-optical modulators are expected to continue to be an essential element as the appetite and hunger for data increases every year.
Polymer Photonic Integrated Circuits (P2ICTM)
Our Company also designs its own proprietary polymer photonic integrated circuits (otherwise termed a polymer PIC). A polymer PIC is a photonic device that integrates several photonic functions on a single chip. We believe that our technology can enable the ultra-miniaturization needed to increase the number of photonic functions residing on a semiconductor chip to create 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 4 channel polymer PIC. In this case, the number of photonic components would increase by a factor of 4. Another type is to combine different types of devices including from different technology bases such as the combination of a semiconductor laser with a polymer modulator. Our P2IC™ platform encompasses both these types of architecture.
Current 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 lithium niobate (LiNbO3), indium phosphide (InP), silicon (Si), and gallium arsenide GaAs). Our advanced electro-optic polymer platform is creating a new class of modulators and associated PIC platforms that can address higher data rates in a lower cost, lower power consuming manner, with much simpler modulation techniques.
Our electro-optic polymers can be integrated with other materials platforms
because they can be applied as a thin film coating in a fabrication clean room
such as may be found in semiconductor foundries. Our polymers are unique in that
they are stable enough to seamlessly integrate into existing CMOS, Indium
Phosphide (InP),
Business Strategy
Our business strategy anticipates 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; or (iii) the production and direct sale of our own electro-optic device components. Our objective is to be a leading provider of proprietary technology and know-how in the electro-optic device market. In order to meet this objective, we intend to:
· Further the development of proprietary organic electro-optic polymer
material systems
· Develop photonic devices based on our P2ICTM technology
· Continue to develop proprietary intellectual property
· Grow our commercial device development capabilities
· Grow our product reliability and quality assurance capabilities
· Grow our optoelectronic packaging and testing capabilities
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· 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
· Continue to add high-level personnel with industrial and manufacturing
experience in key areas of our materials and device development
programs.
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.
We expect our initial modulator products will operate at data rates at least 50 Gbaud (capable of 50 Gbps with standard data encoding of NRZ and 100 Gbps with more complex PAM-4 encoding). Our devices are highly linear, enabling the performance required to take advantage of the more advance complex encoding schemes. We are currently developing our polymer technology to operate at the next industry node of 100Gbaud.
Our Proprietary Products in Development
As part of a two-pronged marketing strategy, our Company is developing several optical devices, which are in various stages of development and that utilize our polymer optical materials. They include:
Ridge Waveguide Modulator
Our ridge electro-optic waveguide modulator was designed and fabricated in our
in-house laboratory. The fabrication of our first in-house device is significant
to our entire device program and is an important starting point for modulators
that are being developed for target markets. We have multiple generations of new
materials that we will soon be optimizing for this specific design. In
These prototype packages will enable potential customers to evaluate the performance at 50 Gbaud. Once a potential customer generates technical feedback on our prototype, we expect to be asked to optimize the performance to their specifications. Assuming this is successful, we expect to enter a qualification phase where our prototypes will be evaluated more fully.
In parallel, we are developing modulators for scalability to higher data rates
above 50 Gbaud. In
We believe the ridge waveguide modulator represents our first commercially
viable device and targets the fiber optics communications market. We have
completed internal market analysis and are initially targeting interconnect
reach distances of greater than 10km. In these markets, the system network
companies are looking to implement modulator-based transceivers that can handle
aggregated data rates 100 Gbps and above. The market opportunity for greater
than 10km is worth over
Advanced Modulator Structures
As part of supporting further improvement and scalability of our platform, we continue to explore more advanced device structures. Our functional polymer photonics slot waveguide modulator utilizes an existing modulator structure with one of our proprietary electro-optic polymer material systems as the enabling material layer and is functional as an operating prototype device.
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Preliminary testing and initial data on our polymer photonics slot waveguide modulators demonstrated several promising characteristics. The tested polymer photonic chip had a 1-millimeter square footprint, enabling the possibility of sophisticated integrated optical circuits on a single silicon substrate. In addition, the waveguide structure was approximately 1/20 the length of a typical inorganic-based silicon photonics modulator waveguide.
With the combination of our proprietary electro-optic polymer material and the extremely high optical field concentration in the slot waveguide modulator, the test modulators demonstrated less than 2.2 volts to operate. Initial speeds exceeded 30-35 GHz in the telecom, 1550 nanometer frequency band. This is equivalent to 4 x 10Gbps, inorganic, lithium niobate modulators that would require approximately 12-16 volts to move the same amount of information.
We are continuing our collaborative development of our polymer photonic slot waveguide modulators with an associated third-party research. We are now designing slot modulators to operate at data rates greater than 50 Gbaud.
Our Long-Term Device Development Goal - Multichannel Polymer Photonic Integrated Circuit (P2IC™)
Our P2IC™ platform is positioned to address markets with aggregated data rates of 100 Gbaud, 400 Gbaud, 800 Gbaud and beyond. Our P2IC™ platform will contain a number of photonic devices that may include, over and above polymer-based modulators, photonic devices such as lasers, multiplexers, demultiplexers, detectors, fiber couplers.
While our polymer-based ridge waveguide and slot modulators are currently under development to be commercially viable products, our long-term device development goal is to produce a platform for the 400 Gbps and beyond transceiver market. This has been stated in our photonics product roadmap that is publicly available on our website. The roadmap shows a progression in speed from 50 Gbaud based ridge waveguide modulators to 100 Gbaud based ridge waveguide modulators. The roadmap shows a progression in integration in which the modulators are arrayed to create a flexible, multichannel P2IC™ platform that spans 100 Gbps, 400 Gbps, 800 Gbps, and potentially 1.6 Tbps aggregated data-rate markets.
We showed bandwidths of polymer-based modulator devices at a major international
conference (ECOC -
Our Target Markets
Cloud computing and data centers
Big data is a general term used to describe the voluminous amount of unstructured and semi-structured data a Company creates -- data that would take too much time and cost too much money to load into a relational database for analysis. Companies are looking to cloud computing in their data centers to access all the data. Inherent speed and bandwidth limits of traditional solutions and the potential of organic polymer devices offer an opportunity to increase the bandwidth, reduce costs and improve speed of access.
Datacenters have grown to enormous sizes with hundreds of thousands and even millions of servers in a single datacenter. The number of so-called "hyperscale" datacenters are expected to continue to increase in number. Due to their size, a single "datacenter" may consist of multiple large warehouse-size buildings on a campus or even several locations distributed around a metropolitan area. 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. Between datacenter buildings, there is an increasing need for high performance interconnects over 10km in reach.
Our modulators are suitable for single-mode fiber optic links. We believe that our single mode modulator solutions will be competitive at 500m to 10km link distances, but it will be ideally suited at greater than 10km link distances.
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The telecommunications industry has evolved from transporting traditional analogue voice data over copper wire into the movement of digital voice and data. Telecommunication companies are faced with the enormous increasing challenges to keep up with the resulting tremendous explosion in demand for bandwidth. The metropolitan network is especially under stress now and into the near future. Telecommunications companies provide services to some data center customers for the inter-data center connections discussed above. 5G mobile upgrade, autonomous driving and IoT are expected to increase the need for data stored and processed close to the end user in edge data centers. This application similarly requires optics capable of very high speeds and greater than 10 km reach.
Industry issues of scaling
The key issues facing the fiber-optic communications industry are the economic progress and scalability of any PIC based technological platform. The polymer platform is unique in that it is truly scalable. Scalable means being able to scale up for high speed data rates, while simultaneously being able to scale down in cost. This allows a competitive cost per data rate or cost per Gbps metric to be achieved.
Fiber optic datacenter and high-performance computing customers want to achieve
the metric of
[[Image Removed: [lwlg_10q002.gif]]]
In the above figures that forecast $/Gbps to 2025 (where the left-hand graph is a linear vertical scale, and the right-hand graph is a log scale), it can be seen that the orange curve plots the customer expectation, while the other color curves show $/Gbps improvement over time for various high-speed data rate transceivers using PIC based technologies. A gap is appearing between what customer expect and what the technologists can produce.
Polymers play an important role in PICs over the next decade as they can reduce or close the gap between customer expectations and technical performance through effective scaling increase of high performance with low cost. This is shown below how polymers have the potential to scale to the needs of the customers over the next 5years.
[[Image Removed: [lwlg_10q004.gif]]]
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Some of the things needed to achieve the scaling performance of polymers in integrated photonics platform is within sight today:
1) Increased r33 (which leads to very low Vpi in modulator devices) and
we are currently optimizing our polymers for this.
2) Increase temperature stability so that the polymers can operate at
broader temperature ranges effective, where we have made significant
progress over the past few years.
3) Low optical loss in waveguides and active/passive devices for improved
optical budget metrics which is currently an ongoing development
program at our Company.
4) Higher levels of hermeticity for lower cost packaging of optical
sub-assemblies within a transceiver module, where our advanced designs
are being implemented into polymer-based packages.
Recent Significant Events and Milestones Achieved
During February and
During
During
Also, during
In
In
19
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In
Also, in
During the second quarter of 2019, our Company promoted its polymers at
CoInnovate in May and the
In
In
In
As we move forward to diligently meet our goals, we continue to work closely with our packaging partner for the 50Gbaud and 100 Gbaud prototypes, and we are advancing our reliability and characterization efforts to support our prototyping. We are actively engaged with test equipment manufacturers of the most advanced test equipment to test our state-of-the-art polymer devices. We continue to engage with multiple industry bodies to promote our roadmap. We continue to fine tune our business model with target markets, customers, and technical specifications. Discussions with prospective customers are validating that our modulators are ideally suited for the datacenter and telecommunications markets that are over 10km in length. Details of what these prospective customers are seeking from a prototype are delivered to our technical team.
Capital Requirements
As a development stage company, we do not generate revenues. We have incurred substantial net losses since inception. We have satisfied our capital requirements since inception primarily through the issuance and sale of our common stock.
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Results of Operations
Comparison of three months ended
Comparison of three months ended
Revenues
As a development stage company, we had no revenues during the three months ended
Operating Expenses
Our operating expenses were
Included in our operating expenses for the three months ended
Research and development expenses currently consist primarily of compensation for employees and consultants engaged in internal research, product development activities; laboratory operations, prototypes, electro-optic device designs, development and internal material and device testing; prototype device fabrication; costs; and related operating expenses.
We expect to continue to incur substantial research and development expense to develop and commercialize our photonic devices, PIC development and electro-optic materials platform. 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 in our in-house laboratories; 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.
Depreciation expense increased
Wages and salaries increased
Research and development non-cash stock option amortization increased
Product development consulting expenses decreased
Laboratory and wafer fabrication materials and supplies decreased
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Travel expenses decreased
General and administrative expense consists primarily of compensation and support costs for management staff, and for other general and administrative costs, including executive, sales and marketing, investor relations, accounting and finance, legal, consulting and other operating expenses.
General and administrative expenses increased
Investor relation expenses increased
The primary reason for the increase was the engagement of an investor relations firm.
Other tax expenses increased
Legal fees decreased
General and administrative consulting fees decreased
We expect general and administrative expense to increase in future periods as we increase the level of corporate and administrative activity, including increases associated with our operation as a public company; and significantly increase expenditures related to the future production and sales of our products.
Other Income (Expense)
Other expenses decreased
Net Loss
Net loss was
Significant Accounting Policies
We believe our significant accounting policies affect our more significant
estimates and judgments used in the preparation of our financial statements. Our
Annual Report on Form 10-K for the year ended
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Liquidity and Capital Resources
For the three months ended
During the three months ended
For the three months ended
During the three months ended
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. We expect
that we will incur approximately
Subject to any additional impact of the COVID-19 pandemic, we expect our
On
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There are no trading volume requirements or restrictions under the Purchase
Agreement, and we will control the timing and amount of any sales of our Common
Stock to
On
We expect that our cash used in operations will continue to increase during 2020 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;
· 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.
Analysis of Cash Flows
For the three months ended
Net cash used in operating activities was
Net cash used by investing activities was
Net cash provided by financing activities was
For the three months ended
Net cash used in operating activities was
Net cash used by investing activities was
Net cash provided by financing activities was
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Contractual Obligations
There have been no material changes outside the ordinary course of business in
our contractual commitments during the three months ended
Off-Balance Sheet Arrangements
As of
Item 4 Controls and Procedures
Evaluation of Disclosure Controls and Procedures. The Company's management, with
the participation of the Company's Principal Executive Officer and Principal
Financial Officer, evaluated the effectiveness of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended) as of
Changes in Internal Control Over Financial Reporting. There were no changes in
our internal control over financial reporting during the quarter ended
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