UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 10-Q
(Mark One)
ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2012
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from _____________to _____________ |
Commission File Number 0-52567
Lightwave Logic, Inc.
(Exact name of registrant as specified in its charter)
Nevada (State or other jurisdiction of | 82-049-7368 (I.R.S. Employer Identification No.) |
111 Ruthar Drive | __19711____ |
(302) 356-2717 (Registrants telephone number, including area code) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ¨ No x
The number of shares of the registrant’s Common Stock outstanding as of August 10, 2012 was 49,506,837.
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
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Part I | Financial Information | 2 | |
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| Item 1 | Financial Statements | 2 |
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| Item 2 | Managements Discussion and Analysis of Financial | 34 |
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| Item 4 | Controls and Procedures | 50 |
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Part II | Other Information | 52 | |
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| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 52 |
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| Item 6 | Exhibits | 53 |
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| Signatures | 54 |
-1-
PART I FINANCIAL INFORMATION
Item 1
Financial Information
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
JUNE 30, 2012
(UNAUDITED)
-2-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
CONTENTS
| PAGE |
|
|
BALANCE SHEETS | 4 |
|
|
STATEMENTS OF OPERATIONS | 5 |
|
|
STATEMENT OF STOCKHOLDERS EQUITY | 6 10 |
|
|
STATEMENTS OF CASH FLOWS | 11 - 12 |
|
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NOTES TO FINANCIAL STATEMENTS | 13 - 33 |
-3-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
BALANCE SHEETS
|
| June 30, 2012 |
| December 31, 2011 |
|
| (Unaudited) |
| (Audited) |
ASSETS |
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
| $ 3,623,022 |
| $ 359,824 |
Prepaid expenses and other current assets |
| 123,424 |
| 41,756 |
|
| 3,746,446 |
| 401,580 |
|
|
|
|
|
PROPERTY AND EQUIPMENT - NET |
| 200,501 |
| 88,751 |
|
|
|
|
|
OTHER ASSETS |
|
|
|
|
Intangible assets |
| 488,846 |
| 431,104 |
|
|
|
|
|
TOTAL ASSETS |
| $ 4,435,793 |
| $ 921,435 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
| $ 92,118 |
| $ 139,833 |
Accounts payable - related party |
| 29,178 |
| 22,628 |
Accrued expenses |
| 86,608 |
| 75,965 |
|
|
|
|
|
TOTAL LIABILITIES |
| 207,904 |
| 238,426 |
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
Preferred stock, $0.001 par value, 1,000,000 authorized |
|
|
|
|
No shares issued or outstanding |
| - |
| - |
Common stock $0.001 par value, 100,000,000 authorized |
|
|
|
|
49,506,837 and 45,337,092 issued and outstanding at |
|
|
|
|
June 30, 2012 and December 31, 2011 |
| 49,507 |
| 45,337 |
Additional paid-in-capital |
| 29,952,660 |
| 24,513,000 |
Accumulated deficit |
| (15,827) |
| (15,827) |
Deficit accumulated during development stage |
| (25,758,451) |
| (23,859,501) |
|
|
|
|
|
TOTAL STOCKHOLDERS' EQUITY |
| 4,227,889 |
| 683,009 |
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ 4,435,793 |
| $ 921,435 |
See accompanying notes to these financial statements.
-4-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDING JUNE 30, 2012 AND 2011 AND FOR THE PERIOD
JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO JUNE 30, 2012
(UNAUDITED)
|
| Cumulative |
| For the Three |
| For the Three |
| For the Six |
| For the Six |
|
| Since |
| Months Ending |
| Months Ending |
| Months Ending |
| Months Ending |
|
| Inception |
| June 30, 2012 |
| June 30, 2011 |
| June 30, 2012 |
| June 30, 2011 |
|
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|
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|
|
NET SALES |
| $ 3,200 |
| $ - |
| $ - |
| $ - |
| $ - |
|
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|
|
|
COST AND EXPENSE |
|
|
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|
|
Research and development |
| 11,592,103 |
| 455,253 |
| 498,041 |
| 927,662 |
| 964,904 |
General and administrative |
| 13,836,200 |
| 553,860 |
| 389,535 |
| 851,050 |
| 848,780 |
|
| 25,428,303 |
| 1,009,113 |
| 887,576 |
| 1,778,712 |
| 1,813,684 |
|
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|
|
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|
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|
|
LOSS FROM OPERATIONS |
| (25,425,103) |
| (1,009,113) |
| (887,576) |
| (1,778,712) |
| (1,813,684) |
|
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|
|
OTHER INCOME (EXPENSE) |
|
|
|
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|
|
Interest income |
| 30,820 |
| 124 |
| 149 |
| 322 |
| 327 |
Dividend income |
| 1,551 |
| - |
| - |
| - |
| - |
Realized gain on investment |
| 3,911 |
| - |
| - |
| - |
| - |
Realized gain on disposal of assets |
| 637 |
| - |
| - |
| - |
| - |
Litigation settlement |
| (47,500) |
|
|
|
|
|
|
|
|
Interest expense and commitment fee |
| (322,767) |
| (18,615) |
| (166,475) |
| (120,560) |
| (166,540) |
|
|
|
|
|
|
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|
|
|
|
NET LOSS |
| $ (25,758,451) |
| $ (1,027,604) |
| $ (1,053,902) |
| $ (1,898,950) |
| $ (1,979,897) |
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|
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|
Basic and Diluted Loss per Share |
|
|
| $ (0.02) |
| $ (0.02) |
| $ (0.04) |
| $ (0.04) |
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Weighted Average Number of Shares |
| 49,055,806 |
| 44,090,488 |
| 47,893,907 |
| 44,028,664 |
See accompanying notes to these financial statements.
-5-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO JUNE 30, 2012
(UNAUDITED)
|
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| Subscription |
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| Receivable/ |
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|
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| Receivable |
|
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|
| Deficit Accumulated |
|
|
|
| Number of |
| Common |
| Paid-in |
| for Issuance |
| Deferred |
| Unrealized Loss |
| Accumulated |
| During |
|
|
|
| Shares |
| Stock |
| Capital |
| of Common Stock |
| Charges |
| on Securities |
| Deficit |
| Development Stage |
| Total |
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|
ENDING BALANCE AT DECEMBER 31, 2003 |
| 100 | $ | 1 | $ | - | $ | - | $ | - | $ | - | $ | (15,827) | $ | - | $ | (15,826) |
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Retroactive recapitalization upon reverse acquisition |
| 706,973 |
| 706 |
| (706) |
| - |
| - |
| - |
| - |
| - |
| - |
|
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|
BALANCE AT JANUARY 1, 2004 |
| 707,073 |
| 707 |
| (706) |
| - |
| - |
| - |
| (15,827) |
| - |
| (15,826) |
|
|
|
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|
|
|
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|
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|
|
Common stock issued to founders |
| 13,292,927 |
| 13,293 |
| (13,293) |
| - |
| - |
| - |
| - |
| - |
| - |
Common stock issued for future services in July 2004 at $0.16/share |
| 1,600,000 |
| 1,600 |
| 254,400 |
| - |
| - |
| - |
| - |
| - |
| 256,000 |
Common stock issued at merger |
| 2,000,000 |
| 2,000 |
| (2,000) |
| - |
| - |
| - |
| - |
| - |
| - |
Common stock issued for future services in August 2004 at $0.12/share |
| 637,500 |
| 638 |
| 74,362 |
| - |
| - |
| - |
| - |
| - |
| 75,000 |
Conversion of note payable in December 2004 at $0.16/share |
| 187,500 |
| 187 |
| 29,813 |
| - |
| - |
| - |
| - |
| - |
| 30,000 |
Net loss for the year ended December 31, 2004 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (722,146) |
| (722,146) |
|
|
|
|
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|
|
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|
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|
|
BALANCE AT DECEMBER 31, 2004 |
| 18,425,000 |
| 18,425 |
| 342,576 |
| - |
| - |
| - |
| (15,827) |
| (722,146) |
| (376,972) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
Common stock issued in private placement in April 2005 at $0.25/share |
| 4,000,000 |
| 4,000 |
| 996,000 |
| - |
| - |
| - |
| - |
| - |
| 1,000,000 |
Conversion of notes payable in May 2005 at $0.16/share |
| 3,118,750 |
| 3,119 |
| 495,881 |
| - |
| - |
| - |
| - |
| - |
| 499,000 |
Subscription receivable |
| - |
| - |
| - |
| (6,500) |
| - |
| - |
| - |
| - |
| (6,500) |
Common stock issued for future services in August 2005, valued at $2.79/share |
| 210,000 |
| 210 |
| 585,290 |
| - |
| - |
| - |
| - |
| - |
| 585,500 |
Common stock issued for future services in August 2005, valued at $2.92/share |
| 200,000 |
| 200 |
| 583,800 |
| - |
| - |
| - |
| - |
| - |
| 584,000 |
Warrants issued for services in May 2005, vested during 2005, valued at $1.13/share |
| - |
| - |
| 37,000 |
| - |
| - |
| - |
| - |
| - |
| 37,000 |
Warrants issued for services in September 2005, vested during 2005, valued at $1.45/share |
| - |
| - |
| 24,200 |
| - |
| - |
| - |
| - |
| - |
| 24,200 |
Warrants issued for services in October 2005, vested during 2005, valued at $0.53/share |
| - |
| - |
| 15,900 |
| - |
| - |
| - |
| - |
| - |
| 15,900 |
Warrants issued for future services in December 2005, vested during 2005, valued at $1.45/share |
| - |
| - |
| 435,060 |
| - |
| - |
| - |
| - |
| - |
| 435,060 |
Deferred charges for common stock issued for future services in August 2005, valued at $2.92/share |
| - |
| - |
| - |
| - |
| (584,000) |
| - |
| - |
| - |
| (584,000) |
Amortization of deferred charges |
| - |
| - |
| - |
| - |
| 265,455 |
| - |
| - |
| - |
| 265,455 |
Exercise of warrants in December 2005 at $0.25/share |
| 300,000 |
| 300 |
| 74,700 |
| - |
| - |
| - |
| - |
| - |
| 75,000 |
Net loss for the year ended December 31, 2005 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (1,721,765) |
| (1,721,765) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT DECEMBER 31, 2005 |
| 26,253,750 |
| 26,254 |
| 3,590,407 |
| (6,500) |
| (318,545) |
| - |
| (15,827) |
| (2,443,911) |
| 831,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued in private placement during 2006 at $0.50/share |
| 850,000 |
| 850 |
| 424,150 |
| - |
| - |
| - |
| - |
| - |
| 425,000 |
Common stock issued for future services in February 2006, valued at $0.90/share |
| 300,000 |
| 300 |
| 269,700 |
| - |
| - |
| - |
| - |
| - |
| 270,000 |
Common stock issued for future services in May 2006, valued at $1.55/share |
| 400,000 |
| 400 |
| 619,600 |
| - |
| - |
| - |
| - |
| - |
| 620,000 |
Common stock issued for future services in June 2006, valued at $1.45/share |
| 25,000 |
| 25 |
| 36,225 |
| - |
| - |
| - |
| - |
| - |
| 36,250 |
Common stock issued for future services in November 2006, valued at $0.49/share |
| 60,000 |
| 60 |
| 29,340 |
| - |
| - |
| - |
| - |
| - |
| 29,400 |
Warrants issued for services in September 2005, vested during 2006, valued at $1.45/share | - |
| - |
| 66,500 |
| - |
| - |
| - |
| - |
| - |
| 66,500 | |
Warrants issued for future services in June 2006, vested during 2006, valued at $1.55/share | - |
| - |
| 465,996 |
| - |
| - |
| - |
| - |
| - |
| 465,996 | |
Options issued for services in February 2006, vested during 2006, valued at $1.01/share | - |
| - |
| 428,888 |
| - |
| - |
| - |
| - |
| - |
| 428,888 | |
Contributed capital related to accrued interest |
| - |
| - |
| 35,624 |
| - |
| - |
| - |
| - |
| - |
| 35,624 |
Subscription receivable |
| - |
| - |
| - |
| 6,500 |
| - |
| - |
| - |
| - |
| 6,500 |
Amortization of deferred charges |
| - |
| - |
| - |
| - |
| 318,545 |
| - |
| - |
| - |
| 318,545 |
Unrealized gain (loss) on securities |
| - |
| - |
| - |
| - |
| - |
| (26,000) |
| - |
| - |
| (26,000) |
Net loss for the year ending December 31, 2006 |
| - |
| - |
| - |
| - |
| - |
|
|
| - |
| (2,933,809) |
| (2,933,809) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT DECEMBER 31, 2006 |
| 27,888,750 | $ | 27,889 | $ | 5,966,430 | $ | - | $ | - | $ | (26,000) | $ | (15,827) | $ | (5,377,720) | $ | 574,772 |
See accompanying notes to these financial statements.
-6-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO JUNE 30, 2012 (CONTINUED)
(UNAUDITED)
|
|
|
|
|
|
|
| Subscription |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receivable/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receivable |
|
|
|
|
|
|
| Deficit Accumulated |
|
|
|
| Number of |
| Common |
| Paid-in |
| for Issuance |
| Deferred |
| Unrealized Loss |
| Accumulated |
| During |
|
|
|
| Shares |
| Stock |
| Capital |
| of Common Stock |
| Charges |
| on Securities |
| Deficit |
| Development Stage |
| Total |
BALANCE AT DECEMBER 31, 2006 |
| 27,888,750 | $ | 27,889 | $ | 5,966,430 | $ | - | $ | - | $ | (26,000) | $ | (15,827) | $ | (5,377,720) | $ | 574,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued in private placement during 2007 at $0.50/share |
| 2,482,000 |
| 2,482 |
| 1,238,518 |
| - |
| - |
| - |
| - |
| - |
| 1,241,000 |
Common stock issued in private placement during 2007 at $0.60/share |
| 1,767,540 |
| 1,768 |
| 1,058,756 |
| - |
| - |
| - |
| - |
| - |
| 1,060,524 |
Common stock subscription rescinded during 2007 at $0.50/share |
| (400,000) |
| (400) |
| (199,600) |
| - |
| - |
| - |
| - |
| - |
| (200,000) |
Common stock issued for future services in February 2007, valued at $0.70/share |
| 151,785 |
| 152 |
| 106,098 |
| - |
| - |
| - |
| - |
| - |
| 106,250 |
Common stock issued for future services in March 2007, valued at $0.58/share |
| 1,000,000 |
| 1,000 |
| 579,000 |
| - |
| - |
| - |
| - |
| - |
| 580,000 |
Common stock issued for services and settlement for accounts payable in April 2007, valued at $0.35/share | 100,000 |
| 100 |
| 34,900 |
| - |
| - |
| - |
| - |
| - |
| 35,000 | |
Common stock issued for services in October 2007, valued at $0.68/share |
| 150,000 |
| 150 |
| 101,850 |
| - |
| - |
| - |
| - |
| - |
| 102,000 |
Common stock issued for services in October 2007, valued at $0.90/share |
| 150,000 |
| 150 |
| 134,850 |
| - |
| - |
| - |
| - |
| - |
| 135,000 |
Common stock issued for services in November 2007, valued at $0.72/share |
| 400,000 |
| 400 |
| 287,600 |
| - |
| - |
| - |
| - |
| - |
| 288,000 |
Warrants issued for services in September 2005, vested during 2007, valued at $1.45/share |
| - |
| - |
| 36,370 |
| - |
| - |
| - |
| - |
| - |
| 36,370 |
Warrants issued for services in March 2007, vested during 2007, valued at $0.63/share |
| - |
| - |
| 52,180 |
| - |
| - |
| - |
| - |
| - |
| 52,180 |
Warrants issued for services in April 2007, vested during 2007, valued at $0.69/share |
| - |
| - |
| 293,476 |
| - |
| - |
| - |
| - |
| - |
| 293,476 |
Warrants issued for services in April 2007, vested during 2007, valued at $0.63/share |
| - |
| - |
| 140,490 |
| - |
| - |
| - |
| - |
| - |
| 140,490 |
Warrants issued for services in May 2007, vested during 2007, valued at $0.56/share |
| - |
| - |
| 52,946 |
| - |
| - |
| - |
| - |
| - |
| 52,946 |
Warrants issued for services in October 2007, vested during 2007, valued at $0.61/share |
| - |
| - |
| 61,449 |
| - |
| - |
| - |
| - |
| - |
| 61,449 |
Warrants issued for services in October 2007, vested during 2007, valued at $0.78/share |
| - |
| - |
| 52,292 |
| - |
| - |
| - |
| - |
| - |
| 52,292 |
Warrants issued for services in December 2007, vested during 2007, valued at $0.55/share |
| - |
| - |
| 1,159 |
| - |
| - |
| - |
| - |
| - |
| 1,159 |
Options issued for services in February 2006, vested during 2007, valued at $1.01/share |
| - |
| - |
| 17,589 |
| - |
| - |
| - |
| - |
| - |
| 17,589 |
Options issued for services in February 2006, vested during 2007, valued at $1.09/share |
| - |
| - |
| 43,757 |
| - |
| - |
| - |
| - |
| - |
| 43,757 |
Options issued for services in November 2007, vested during 2007, valued at $0.60/share |
| - |
| - |
| 41,653 |
| - |
| - |
| - |
| - |
| - |
| 41,653 |
Warrants issued for future services in April 2007, vested during 2007, valued at $0.70/share |
| - |
| - |
| 348,000 |
| - |
| - |
| - |
| - |
| - |
| 348,000 |
Deferred charges for common stock issued for future services in March 2007, valued at $0.58/share |
| - |
| - |
| - |
| - |
| (928,000) |
| - |
| - |
| - |
| (928,000) |
Amortization of deferred charges |
| - |
| - |
| - |
| - |
| 773,333 |
| - |
| - |
| - |
| 773,333 |
Unrealized gain (loss) on securities |
| - |
| - |
| - |
| - |
| - |
| (32,610) |
| - |
| - |
| (32,610) |
Net loss for the year ending December 31, 2007 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (4,223,449) |
| (4,223,449) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT DECEMBER 31, 2007 |
| 33,690,075 |
| 33,690 |
| 10,449,763 |
| - |
| (154,667) | $ | (58,610) |
| (15,827) |
| (9,601,169) |
| 653,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued in private placement during 2008 at $0.60/share |
| 690,001 |
| 690 |
| 413,310 |
| - |
| - |
| - |
| - |
| - |
| 414,000 |
Common stock issued for services in March 2008, valued at $0.75/share |
| 100,000 |
| 100 |
| 74,900 |
| - |
| - |
| - |
| - |
| - |
| 75,000 |
Common stock issued for services in August 2008, valued at $1.80/share |
| 200,000 |
| 200 |
| 359,800 |
| - |
| - |
| - |
| - |
| - |
| 360,000 |
Exercise of warrants at $0.25/share |
| 320,000 |
| 320 |
| 79,680 |
| - |
| - |
| - |
| - |
| - |
| 80,000 |
Exercise of warrants at $0.25/share, pursuant to November 2008 adjusted stock offering |
| 641,080 |
| 641 |
| 159,629 |
|
|
|
|
|
|
|
|
|
|
| 160,270 |
Exercise of warrants at $0.50/share |
| 270,000 |
| 270 |
| 134,730 |
| - |
| - |
| - |
| - |
| - |
| 135,000 |
Warrants issued for services in September 2005, vested during 2008, valued at $1.45/share |
| - |
| - |
| 27,014 |
| - |
| - |
| - |
| - |
| - |
| 27,014 |
Warrants issued for services in March 2007, vested during 2008, valued at $0.63/share |
| - |
| - |
| 10,885 |
| - |
| - |
| - |
| - |
| - |
| 10,885 |
Warrants issued for services in April 2007, vested during 2008, valued at $0.69/share |
| - |
| - |
| 121,713 |
| - |
| - |
| - |
| - |
| - |
| 121,713 |
Warrants issued for services in April 2007, vested during 2008, valued at $0.63/share |
| - |
| - |
| 48,738 |
| - |
| - |
| - |
| - |
| - |
| 48,738 |
Warrants issued for services in May 2007, vested during 2008, valued at $0.56/share |
| - |
| - |
| 31,444 |
| - |
| - |
| - |
| - |
| - |
| 31,444 |
Warrants issued for services in December 2007, vested during 2008, valued at $0.55/share |
| - |
| - |
| 12,487 |
| - |
| - |
| - |
| - |
| - |
| 12,487 |
Options issued for services in November 2007, vested during 2008, valued at $0.60/share |
| - |
| - |
| 286,803 |
| - |
| - |
| - |
| - |
| - |
| 286,803 |
Options issued for services in January 2008, vested during 2008, valued at $0.60/share |
| - |
| - |
| 30,750 |
| - |
| - |
| - |
| - |
| - |
| 30,750 |
Options issued for services in July 2008, vested during 2008, valued at $1.48/share |
| - |
| - |
| 114,519 |
| - |
| - |
| - |
| - |
| - |
| 114,519 |
Options issued for services in August 2008, vested during 2008, valued at $1.36/share |
| - |
| - |
| 525,263 |
| - |
| - |
| - |
| - |
| - |
| 525,263 |
Options issued for services in November 2008, vested during 2008, valued at $0.50/share |
| - |
| - |
| 6,439 |
| - |
| - |
| - |
| - |
| - |
| 6,439 |
Warrants issued for future services in March 2008, vested through September 2008, valued at $0.83/share |
| - |
| - |
| 332,000 |
| - |
| (332,000) |
| - |
| - |
| - |
| - |
Warrants issued for services in May 2008, vested through September 2008, valued at $1.63/share |
| - |
| - |
| 976,193 |
| - |
| - |
| - |
| - |
| - |
| 976,193 |
Amortization of deferred charges |
| - |
| - |
| - |
| - |
| 431,337 |
| - |
| - |
| - |
| 431,337 |
Receivable for the issuance of common stock |
| - |
| - |
| - |
| (12,500) |
| - |
| - |
| - |
| - |
| (12,500) |
Realized loss reclassification |
| - |
| - |
| - |
| - |
| - |
| 58,610 |
| - |
| - |
| 58,610 |
Net loss for the year ending December 31, 2008 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (4,340,607) |
| (4,340,607) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT DECEMBER 31, 2008 |
| 35,911,156 | $ | 35,911 | $ | 14,196,060 | $ | (12,500) | $ | (55,330) | $ | - | $ | (15,827) | $ | (13,941,776) | $ | 206,538 |
.
See accompanying notes to these financial statements.
-7-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO JUNE 30, 2012 (CONTINUED)
(UNAUDITED)
|
|
|
|
|
|
|
| Subscription |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receivable/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receivable |
|
|
|
|
|
|
| Deficit Accumulated |
|
|
|
| Number of |
| Common |
| Paid-in |
| for Issuance |
| Deferred |
| Unrealized Loss |
| Accumulated |
| During |
|
|
3 |
| Shares |
| Stock |
| Capital |
| of Common Stock |
| Charges |
| on Securities |
| Deficit |
| Development Stage |
| Total |
BALANCE AT DECEMBER 31, 2008 |
| 35,911,156 |
| $ 35,911 |
| $ 14,196,060 |
| $ (12,500) |
| $ (55,330) |
| $ - |
| $ (15,827) |
| $ (13,941,776) |
| $ 206,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rights to purchase shares issued in January 2009, vested during 2009, valued at $0.33/share |
| - |
| - |
| 132,058 |
| - |
| - |
| - |
| - |
| - |
| 132,058 |
Common stock issued for services in January 2009, valued at $0.58/share |
| 100,000 |
| 100 |
| 57,900 |
| - |
| - |
| - |
| - |
| - |
| 58,000 |
Common stock issued for services & settlement for accounts payable January 2009 valued at $0.25/share |
| 100,000 |
| 100 |
| 24,900 |
| - |
| - |
| - |
| - |
| - |
| 25,000 |
Exercise of purchase right agreement in January 2009 at $0.25/share |
| 180,550 |
| 181 |
| 44,957 |
| - |
| - |
| - |
| - |
| - |
| 45,138 |
Exercise of warrants at $0.25/share, pursuant to November 2008 adjusted stock offering |
| 1,279,336 |
| 1,279 |
| 318,555 |
|
|
|
|
| - |
|
|
|
|
| 319,834 |
Exercise of warrants at $0.001/share |
| 400,000 |
| 400 |
| - |
| - |
| - |
| - |
| - |
| - |
| 400 |
Exercise of warrants at $1.00/share |
| 355,000 |
| 355 |
| 354,645 |
|
|
|
|
| - |
|
|
|
|
| 355,000 |
Options issued for services in November 2007, vested during 2009, valued at $0.60/share |
| - |
| - |
| 199,234 |
| - |
| - |
| - |
| - |
| - |
| 199,234 |
Options issued for services in January 2008, vested during 2009, valued at $0.60/share |
| - |
| - |
| 13,583 |
| - |
| - |
| - |
| - |
| - |
| 13,583 |
Options issued for services in July 2008, vested during 2009, valued at $1.48/share |
| - |
| - |
| 67,838 |
| - |
| - |
| - |
| - |
| - |
| 67,838 |
Options issued for services in August 2008, vested during 2009, valued at $1.36/share |
| - |
| - |
| 623,246 |
| - |
| - |
| - |
| - |
| - |
| 623,246 |
Options issued for services in November 2008, vested during 2009, valued at $0.50/share |
| - |
| - |
| 61,346 |
| - |
| - |
| - |
| - |
| - |
| 61,346 |
Options issued for services in January 2009, vested during 2009, valued at $0.53/share |
| - |
| - |
| 13,136 |
| - |
| - |
| - |
| - |
| - |
| 13,136 |
Options issued for services in February 2009, vested during 2009, valued at $0.38/share |
| - |
| - |
| 9,583 |
| - |
| - |
| - |
| - |
| - |
| 9,583 |
Options issued for services in June 2009, vested during 2009, valued at $0.85/share |
| - |
| - |
| 21,085 |
| - |
| - |
| - |
| - |
| - |
| 21,085 |
Warrants issued for services in June 2009, vested during 2009, valued at $0.85/share |
| - |
| - |
| 177,881 |
| - |
| - |
| - |
| - |
| - |
| 177,881 |
Contribution of accrued payroll in February 2009 |
| - |
| - |
| 52,129 |
| - |
| - |
| - |
| - |
| - |
| 52,129 |
Amortization of deferred charges |
| - |
| - |
| - |
| - |
| 55,330 |
| - |
| - |
| - |
| 55,330 |
Payment for the issuance of common stock |
| - |
| - |
| - |
| 12,500 |
| - |
| - |
| - |
| - |
| 12,500 |
Common stock issued for services in June 2009, valued at $0.34/share |
| 116,000 |
| 116 |
| 39,884 |
| - |
| - |
| - |
| - |
| - |
| 40,000 |
Common stock issued for services & settlement for accounts payable June 2009 valued at $0.34/share |
| 145,000 |
| 145 |
| 49,855 |
| - |
| - |
| - |
| - |
| - |
| 50,000 |
Common stock issued in private placement during June 2009 at $0.34/share |
| 2,479,500 |
| 2,480 |
| 852,520 |
| - |
| - |
| - |
| - |
| - |
| 855,000 |
Common stock issued for services in July 2009, valued at $0.75/share |
| 100,000 |
| 100 |
| 74,900 |
| - |
| - |
| - |
| - |
| - |
| 75,000 |
Net loss for the year ending December 31, 2009 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (2,721,871) |
| (2,721,871) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT December 31, 2009 |
| 41,166,542 |
| 41,167 |
| 17,385,295 |
| - |
| - |
| - |
| (15,827) |
| (16,663,647) |
| 746,988 |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
Options issued for services in November 2007, vested during 2010, valued at $0.60/share |
| - |
| - |
| 174,866 |
| - |
| - |
|
|
| - |
| - |
| 174,866 |
Options issued for services in January 2008, vested during 2010, valued at $0.60/share |
| - |
| - |
| 14,873 |
| - |
| - |
| - |
| - |
| - |
| 14,873 |
Options issued for services in July 2008, vested during 2010, valued at $1.48/share |
| - |
| - |
| 74,061 |
| - |
| - |
| - |
| - |
| - |
| 74,061 |
Options issued for services in August 2008, vested during 2010, valued at $1.36/share |
| - |
| - |
| 643,812 |
| - |
| - |
| - |
| - |
| - |
| 643,812 |
Options issued for services in November 2008, vested during 2010, valued at $0.50/share |
| - |
| - |
| 31,478 |
| - |
| - |
| - |
| - |
| - |
| 31,478 |
Warrants issued for services in June 2009, vested during 2010, valued at $0.85/share |
| - |
| - |
| 213,459 |
| - |
| - |
| - |
| - |
| - |
| 213,459 |
Warrants issued for services in January 2010, vested during 2010, valued at $1.83/share |
|
|
|
|
| 580,167 |
|
|
|
|
| - |
|
|
|
|
| 580,167 |
Warrants issued for services in March 2010, vested during 2010, valued at $1.86/share |
| - |
| - |
| 214,063 |
| - |
| - |
| - |
| - |
| - |
| 214,063 |
Options issued for services in August 2010, vested during 2010, valued at $1.31/share |
| - |
| - |
| 27,434 |
| - |
| - |
| - |
| - |
| - |
| 27,434 |
Options issued for services in December 2010, vested during 2010, valued at $1.14/share |
| - |
| - |
| 286,002 |
| - |
| - |
| - |
| - |
| - |
| 286,002 |
Exercise of warrants at $0.25/share |
| 947,200 |
| 947 |
| 235,853 |
| - |
| - |
| - |
| - |
| - |
| 236,800 |
Exercise of options at $0.25/share |
| 15,000 |
| 15 |
| 3,735 |
| - |
| - |
| - |
| - |
| - |
| 3,750 |
Exercise of warrants at $0.345/share |
| 10,000 |
| 10 |
| 3,440 |
| - |
| - |
| - |
| - |
| - |
| 3,450 |
Exercise of warrants at $0.50/share |
| 25,000 |
| 25 |
| 12,475 |
| - |
| - |
| - |
| - |
| - |
| 12,500 |
Exercise of warrants at $1.00/share |
| 282,500 |
| 283 |
| 282,218 |
| - |
| - |
| - |
| - |
| - |
| 282,500 |
Common stock issued in private placement during 2010 at $1.00/share |
| 1,500,000 |
| 1,500 |
| 1,498,500 |
| - |
| - |
| - |
| - |
| - |
| 1,500,000 |
Common stock issued for services in August 2010, valued at $1.25/share |
| 4,800 |
| 4 |
| 5,996 |
| - |
| - |
| - |
| - |
| - |
| 6,000 |
Common stock issued for services in November 2010, valued at $0.93/share |
| 5,000 |
| 5 |
| 4,645 |
| - |
| - |
| - |
| - |
| - |
| 4,650 |
Common stock issued for services in December 2010, valued at $01.20/share |
| 10,000 |
| 10 |
| 11,990 |
| - |
| - |
| - |
| - |
| - |
| 12,000 |
Net loss for the year ending December 31, 2010 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (3,713,232) |
| (3,713,232) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT DECEMBER 31, 2010 |
| 43,966,042 |
| $ 43,966 |
| $ 21,704,361 |
| $ - |
| $ - |
| $ - |
| $ (15,827) |
| $ (20,376,879) |
| $ 1,355,621 |
See accompanying notes to these financial statements.
-8-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO JUNE 30, 2012 (CONTINUED)
(UNAUDITED)
|
|
|
|
|
|
|
| Subscription |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receivable/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receivable |
|
|
|
|
|
|
| Deficit Accumulated |
|
|
|
| Number of |
| Common |
| Paid-in |
| for Issuance |
| Deferred |
| Unrealized Loss |
| Accumulated |
| During |
|
|
|
| Shares |
| Stock |
| Capital |
| of Common Stock |
| Charges |
| on Securities |
| Deficit |
| Development Stage |
| Total |
BALANCE AT DECEMBER 31, 2010 |
| 43,966,042 |
| $ 43,966 |
| $ 21,704,361 |
| $ - |
| $ - |
| $ - |
| $ (15,827) |
| $ (20,376,879) |
| $ 1,355,621 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for services in March 2011, valued at $1.45/share |
| 10,000 |
| 10 |
| 14,490 |
| - |
| - |
| - |
| - |
| - |
| 14,500 |
Options issued for services in January 2008, vested during 2011, valued at $0.60/share |
| - |
| - |
| 285 |
| - |
| - |
| - |
| - |
| - |
| 285 |
Options issued for services in July 2008, vested during 2011, valued at $1.48/share |
| - |
| - |
| 39,829 |
| - |
| - |
| - |
| - |
| - |
| 39,829 |
Options issued for services in August 2008, vested during 2011, valued at $1.36/share |
| - |
| - |
| 383,881 |
| - |
| - |
| - |
| - |
| - |
| 383,881 |
Options issued for services in November 2008, vested during 2011, valued at $0.50/share |
| - |
| - |
| 26,648 |
| - |
| - |
| - |
| - |
| - |
| 26,648 |
Warrants issued for services in January 2010, vested during 2011, valued at $1.83/share |
| - |
| - |
| 306,765 |
| - |
| - |
| - |
| - |
| - |
| 306,765 |
Warrants issued for services in March 2010, vested during 2011, valued at $1.86/share |
| - |
| - |
| 64,983 |
| - |
| - |
| - |
| - |
| - |
| 64,983 |
Options issued for services in August 2010, vested during 2011, valued at $1.31/share |
| - |
| - |
| 65,447 |
| - |
| - |
| - |
| - |
| - |
| 65,447 |
Options issued for services in December 2010, vested during 2011, valued at $1.14/share |
| - |
| - |
| 212,136 |
| - |
| - |
| - |
| - |
| - |
| 212,136 |
Warrants issued for services in January 2011, vested during 2011, valued at $1.05/share |
| - |
| - |
| 36,585 |
| - |
| - |
| - |
| - |
| - |
| 36,585 |
Warrants issued for services in April 2011, vested during 2011, valued at $0.98/share |
| - |
| - |
| 109,820 |
| - |
| - |
| - |
| - |
| - |
| 109,820 |
Options issued for services in May 2011, vested during 2011, valued at $0.97/share |
| - |
| - |
| 79,702 |
| - |
| - |
| - |
| - |
| - |
| 79,702 |
Options issued for services in August 2011, vested during 2011, valued at $0.82/share |
| - |
| - |
| 17,204 |
| - |
| - |
| - |
| - |
| - |
| 17,204 |
Options issued for services in November 2011, vested during 2011, valued at $0.53/share |
| - |
| - |
| 4,384 |
| - |
| - |
| - |
| - |
| - |
| 4,384 |
Options issued for services in December 2011, vested during 2011, valued at $0.82/share |
| - |
| - |
| 53,124 |
| - |
| - |
| - |
| - |
| - |
| 53,124 |
Warrants issued for services in December 2011, vested during 2011, valued at $1.05/share |
| - |
| - |
| 1,288 |
| - |
| - |
| - |
| - |
| - |
| 1,288 |
Common stock issued for commitment shares, valued at $1.08/share |
| 150,830 |
| 151 |
| 162,746 |
| - |
| - |
| - |
| - |
| - |
| 162,896 |
Common stock issued to institutional investor, valued at $1.08/share |
| 185,185 |
| 185 |
| 199,815 |
| - |
| - |
| - |
| - |
| - |
| 200,000 |
Common stock issued for additional commitment shares, valued at $1.15/share |
| 3,017 |
| 3 |
| 3,467 |
| - |
| - |
| - |
| - |
| - |
| 3,470 |
Common stock issued for services in June 2011, valued at $1.04/share |
| 10,000 |
| 10 |
| 10,390 |
| - |
| - |
| - |
| - |
| - |
| 10,400 |
Common stock issued in private placement during 2011 at $1.00/share |
| 1,000,000 |
| 1,000 |
| 999,000 |
| - |
| - |
| - |
| - |
| - |
| 1,000,000 |
Common stock issued for services in September 2011, valued at $1.45/share |
| 10,000 |
| 10 |
| 14,490 |
| - |
| - |
| - |
| - |
| - |
| 14,500 |
Common stock issued for services in May 2011 through August 2011, valued at $0.90/share to $1.25/share |
| 2,018 |
| 2 |
| 2,161 |
| - |
| - |
| - |
| - |
| - |
| 2,163 |
Net loss for the nine months ending December 31, 2011 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (3,482,622) |
| (3,482,622) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT DECEMBER 31, 2011 |
| 45,337,092 |
| $ 45,337 |
| $ 24,513,000 |
| $ - |
| $ - |
| $ - |
| $ (15,827) |
| $ (23,859,501) |
| $ 683,009 |
See accompanying notes to these financial statements.
-9-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO JUNE 30, 2012 (CONTINUED)
(UNAUDITED)
|
|
|
|
|
|
|
| Subscription |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receivable/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receivable |
|
|
|
|
|
|
| Deficit Accumulated |
|
|
|
| Number of |
| Common |
| Paid-in |
| for Issuance |
| Deferred |
| Unrealized Loss |
| Accumulated |
| During |
|
|
|
| Shares |
| Stock |
| Capital |
| of Common Stock |
| Charges |
| on Securities |
| Deficit |
| Development Stage |
| Total |
BALANCE AT DECEMBER 31, 2011 |
| 45,337,092 |
| $ 45,337 |
| $ 24,513,000 |
| $ - |
| $ - |
| $ - |
| $ (15,827) |
| $ (23,859,501) |
| $ 683,009 |
Common stock issued to institutional investor, valued at $1.013/share |
| 197,433 |
| 198 |
| 199,802 |
| - |
| - |
| - |
| - |
| - |
| 200,000 |
Common stock issued for additional commitment shares, valued at $1.64/share |
| 3,017 |
| 3 |
| 4,945 |
| - |
| - |
| - |
| - |
| - |
| 4,948 |
Common stock issued to institutional investor, valued at $1.197/share |
| 167,084 |
| 167 |
| 199,832 |
| - |
| - |
| - |
| - |
| - |
| 199,999 |
Common stock issued for additional commitment shares, valued at $1.67/share |
| 3,017 |
| 3 |
| 5,035 |
| - |
| - |
| - |
| - |
| - |
| 5,038 |
Common stock issued to institutional investor, valued at $1.58/share |
| 316,455 |
| 317 |
| 499,682 |
| - |
| - |
| - |
| - |
| - |
| 499,999 |
Common stock issued for additional commitment shares, valued at $2.87/share |
| 7,542 |
| 7 |
| 21,638 |
| - |
| - |
| - |
| - |
| - |
| 21,645 |
Common stock issued to institutional investor, valued at $1.66/share |
| 120,482 |
| 120 |
| 199,880 |
| - |
| - |
| - |
| - |
| - |
| 200,000 |
Common stock issued for additional commitment shares, valued at $1.97/share |
| 3,017 |
| 3 |
| 5,940 |
| - |
| - |
| - |
| - |
| - |
| 5,943 |
Common stock issued to institutional investor, valued at $1.897/share |
| 158,144 |
| 158 |
| 299,841 |
| - |
| - |
| - |
| - |
| - |
| 299,999 |
Common stock issued for additional commitment shares, valued at $2.60/share |
| 4,525 |
| 5 |
| 11,760 |
| - |
| - |
| - |
| - |
| - |
| 11,765 |
Common stock issued to institutional investor, valued at $2.073/share |
| 96,479 |
| 97 |
| 199,904 |
| - |
| - |
| - |
| - |
| - |
| 200,001 |
Common stock issued for additional commitment shares, valued at $2.64/share |
| 3,017 |
| 3 |
| 7,962 |
| - |
| - |
| - |
| - |
| - |
| 7,965 |
Common stock issued to institutional investor, valued at $2.19/share |
| 91,324 |
| 92 |
| 199,908 |
| - |
| - |
| - |
| - |
| - |
| 200,000 |
Common stock issued for additional commitment shares, valued at $2.23/share |
| 3,017 |
| 3 |
| 6,725 |
| - |
| - |
| - |
| - |
| - |
| 6,728 |
Common stock issued to institutional investor, valued at $1.68/share |
| 119,048 |
| 119 |
| 199,882 |
| - |
| - |
| - |
| - |
| - |
| 200,001 |
Common stock issued for additional commitment shares, valued at $1.80/share |
| 3,017 |
| 3 |
| 5,428 |
| - |
| - |
| - |
| - |
| - |
| 5,431 |
Common stock issued to institutional investor, valued at $1.81/share |
| 220,994 |
| 221 |
| 399,778 |
| - |
| - |
| - |
| - |
| - |
| 399,999 |
Common stock issued for additional commitment shares, valued at $1.88/share |
| 3,017 |
| 3 |
| 5,669 |
| - |
| - |
| - |
| - |
| - |
| 5,672 |
Common stock issued for additional commitment shares, valued at $1.92/share |
| 3,017 |
| 3 |
| 5,790 |
| - |
| - |
| - |
| - |
| - |
| 5,793 |
Common stock issued to institutional investor, valued at $1.53/share |
| 130,719 |
| 131 |
| 199,870 |
| - |
| - |
| - |
| - |
| - |
| 200,001 |
Common stock issued for additional commitment shares, valued at $1.60/share |
| 3,017 |
| 3 |
| 4,824 |
| - |
| - |
| - |
| - |
| - |
| 4,827 |
Common stock issued to institutional investor, valued at $1.667/share |
| 119,976 |
| 120 |
| 199,880 |
| - |
| - |
| - |
| - |
| - |
| 200,000 |
Common stock issued for additional commitment shares, valued at $1.93/share |
| 3,017 |
| 3 |
| 5,820 |
| - |
| - |
| - |
| - |
| - |
| 5,823 |
Common stock issued to institutional investor, valued at $1.51/share |
| 132,450 |
| 132 |
| 199,867 |
| - |
| - |
| - |
| - |
| - |
| 199,999 |
Common stock issued for additional commitment shares, valued at $1.70/share |
| 6,034 |
| 6 |
| 10,252 |
| - |
| - |
| - |
| - |
| - |
| 10,258 |
Common stock issued to institutional investor, valued at $1.677/share |
| 119,261 |
| 119 |
| 199,882 |
| - |
| - |
| - |
| - |
| - |
| 200,001 |
Common stock issued for additional commitment shares, valued at $1.35/share |
| 3,017 |
| 3 |
| 4,070 |
| - |
| - |
| - |
| - |
| - |
| 4,073 |
Common stock issued to institutional investor, valued at $1.13/share |
| 176,991 |
| 177 |
| 199,823 |
| - |
| - |
| - |
| - |
| - |
| 200,000 |
Common stock issued for additional commitment shares, valued at $1.28/share |
| 3,017 |
| 3 |
| 3,859 |
| - |
| - |
| - |
| - |
| - |
| 3,862 |
Common stock issued to institutional investor, valued at $1.1267/share |
| 177,510 |
| 178 |
| 199,823 |
| - |
| - |
| - |
| - |
| - |
| 200,001 |
Common stock issued for additional commitment shares, valued at $1.28/share |
| 3,017 |
| 3 |
| 3,859 |
| - |
| - |
| - |
| - |
| - |
| 3,862 |
Common stock issued to institutional investor, valued at $1.107/share |
| 180,668 |
| 180 |
| 199,820 |
| - |
| - |
| - |
| - |
| - |
| 200,000 |
Common stock issued for additional commitment shares, valued at $1.18/share |
| 3,017 |
| 3 |
| 3,557 |
| - |
| - |
| - |
| - |
| - |
| 3,560 |
Common stock issued to institutional investor, valued at $1.10/share |
| 181,818 |
| 182 |
| 199,818 |
| - |
| - |
| - |
| - |
| - |
| 200,000 |
Common stock issued for additional commitment shares, valued at $1.08/share |
| 3,017 |
| 3 |
| 3,255 |
| - |
| - |
| - |
| - |
| - |
| 3,258 |
Common stock issued to institutional investor, valued at $1.063/share |
| 188,147 |
| 188 |
| 199,812 |
| - |
| - |
| - |
| - |
| - |
| 200,000 |
Exercise of options at $0.65/share |
| 250,000 |
| 250 |
| 162,250 |
| - |
| - |
| - |
| - |
| - |
| 162,500 |
Exercise of warrants at $1.25/share |
| 40,000 |
| 40 |
| 49,960 |
| - |
| - |
| - |
| - |
| - |
| 50,000 |
Exercise of warrants at $0.34/share |
| 20,000 |
| 20 |
| 6,880 |
| - |
| - |
| - |
| - |
| - |
| 6,900 |
Exercise of warrants at $0.25/share |
| 900,000 |
| 900 |
| 224,100 |
| - |
| - |
| - |
| - |
| - |
| 225,000 |
Common stock issued for services in October 2011 through January 2012, valued at $0.65/share to $2.70/share | 1,406 |
| 1 |
| 1,606 |
| - |
| - |
| - |
| - |
| - |
| 1,607 | |
Options issued for services in August 2010, vested during 2012, valued at $1.31/share |
| - |
| - |
| 32,634 |
| - |
| - |
| - |
| - |
| - |
| 32,634 |
Options issued for services in December 2010, vested during 2012, valued at $1.14/share |
| - |
| - |
| 42,414 |
| - |
| - |
| - |
| - |
| - |
| 42,414 |
Warrants issued for services in April 2011, vested during 2012, valued at $0.98/share |
| - |
| - |
| 36,605 |
| - |
| - |
| - |
| - |
| - |
| 36,605 |
Options issued for services in May 2011, vested during 2012, valued at $0.97/share |
| - |
| - |
| 24,122 |
| - |
| - |
| - |
| - |
| - |
| 24,122 |
Options issued for services in August 2011, vested during 2012, valued at $0.82/share |
| - |
| - |
| 20,466 |
| - |
| - |
| - |
| - |
| - |
| 20,466 |
Options issued for services in November 2011, vested during 2012, valued at $0.53/share |
| - |
| - |
| 13,080 |
| - |
| - |
| - |
| - |
| - |
| 13,080 |
Options issued for services in December 2011, vested during 2012, valued at $0.82/share |
| - |
| - |
| 25,556 |
| - |
| - |
| - |
| - |
| - |
| 25,556 |
Warrants issued for services in December 2011, vested during 2012, valued at $1.05/share |
| - |
| - |
| 78,134 |
| - |
| - |
| - |
| - |
| - |
| 78,134 |
Options issued for services in March 2012, vested during 2012, valued at $1.37/share |
| - |
| - |
| 75,893 |
| - |
| - |
| - |
| - |
| - |
| 75,893 |
Options issued for services in March 2012, vested during 2012, valued at $1.37/share |
| - |
| - |
| 32,184 |
| - |
| - |
| - |
| - |
| - |
| 32,184 |
Warrants issued for services in March 2012, vested during 2012, valued at $1.37/share |
| - |
| - |
| 13,709 |
| - |
| - |
| - |
| - |
| - |
| 13,709 |
Options issued for services in May 2012, vested during 2012, valued at $1.23/share |
| - |
| - |
| 230,387 |
| - |
| - |
| - |
| - |
| - |
| 230,387 |
Warrants issued for services in May 2012, vested during 2012, valued at $0.97/share |
| - |
| - |
| 13,912 |
| - |
| - |
| - |
| - |
| - |
| 13,912 |
Options issued for services in June 2012, vested during 2012, valued at $0.73/share |
| - |
| - |
| 38,276 |
| - |
| - |
| - |
| - |
| - |
| 38,276 |
Net loss for the six months ending June 30, 2012 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| (1,898,950) |
| (1,898,950) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT JUNE 30, 2012 (UNAUDITED) |
| 49,506,837 |
| $ 49,507 |
| $ 29,952,660 |
| $ - |
| $ - |
| $ - |
| $ (15,827) |
| $ (25,758,451) |
| $ 4,227,889 |
See accompanying notes to these financial statements.
-10-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDING JUNE 30, 2012 AND 2011 AND
FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO JUNE 30, 2012
(UNAUDITED)
| Cumulative |
| For the Six |
| For the Six |
| Since |
| Months Ending |
| Months Ending |
| Inception |
| June 30, 2012 |
| June 30, 2011 |
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
Net loss | $ (25,758,451) |
| $ (1,898,950) |
| $ (1,979,897) |
Adjustment to reconcile net loss to net cash used |
|
|
|
|
|
Amortization of deferred charges | 4,392,456 |
| - |
| - |
Amortization of prepaid expenses | 75,000 |
| - |
| - |
Warrants issued for services | 3,909,807 |
| 142,360 |
| 303,758 |
Stock options issued for services | 5,508,390 |
| 535,012 |
| 628,911 |
Common stock issued for services and fees | 1,445,929 |
| 122,058 |
| 191,266 |
Purchase right agreement amortization | 132,058 |
| - |
| - |
Depreciation and amortization of patents | 165,537 |
| 22,110 |
| 16,576 |
Realized gain on investments | (3,911) |
| - |
| - |
Realized gain on disposal of assets | (637) |
| - |
| - |
(Increase) decrease in assets |
|
|
|
|
|
Receivables | (30,461) |
| - |
| - |
Prepaid expenses and other current assets | (123,424) |
| (81,668) |
| 15,637 |
Increase (decrease) in liabilities |
|
|
|
|
|
Accounts payable | 225,033 |
| (47,715) |
| 40,829 |
Accounts payable - related party | 29,178 |
| 6,550 |
| 11,951 |
Accrued expenses | 73,222 |
| 10,643 |
| 44,108 |
Net cash used in operating activities | (9,960,274) |
| (1,189,600) |
| (726,861) |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
Cost of intangibles | (503,153) |
| (63,366) |
| (45,230) |
Proceeds from sale of available for sale securities | 203,911 |
| - |
| - |
Proceeds from receipt of note receivable | 100,000 |
|
|
| - |
Purchase of available for sale securities | (200,000) |
| - |
| - |
Purchase of equipment, furniture and leasehold improvements | (314,481) |
| (128,236) |
| (7,281) |
Net cash used in investing activities | (713,723) |
| (191,602) |
| (52,511) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
Issuance of common stock, private placement | 7,495,524 |
| - |
| - |
Common stock rescinded, private placement | (200,000) |
| - |
| - |
Issuance of common stock, exercise of options and warrants | 2,021,404 |
| 444,400 |
| - |
Issuance of common stock, exercise of purchase right agreement | 45,138 |
| - |
| - |
Issuance of common stock, institutional investor | 4,400,000 |
| 4,200,000 |
| 200,000 |
Repayment of notes payable | (14,970) |
| - |
| - |
Proceeds from subscription receivable | 19,000 |
| - |
| - |
Advances to stockholders | (4,933) |
| - |
| - |
Proceeds from convertible notes | 529,000 |
| - |
| - |
Advances from officers | 1,498 |
| - |
| - |
Net cash provided by financing activities | 14,291,661 |
| 4,644,400 |
| 200,000 |
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 3,617,664 |
| 3,263,198 |
| (579,372) |
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 5,358 |
| 359,824 |
| 953,867 |
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 3,623,022 |
| $ 3,623,022 |
| $ 374,495 |
See accompanying notes to these financial statements.
-11-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDING JUNE 30, 2012 AND 2011 AND
FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO JUNE 30, 2012
(UNAUDITED)
|
| Cumulative |
| For the Six |
| For the Six |
|
| Since |
| Months Ending |
| Months Ending |
|
| Inception |
| June 30, 2012 |
| June 30, 2011 |
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
| ||
|
|
|
|
|
|
|
CASH PAID DURING THE PERIOD FOR: |
|
|
|
|
|
|
Interest |
| $ 23,341 |
| $ 109 |
| $ 174 |
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING |
|
|
|
|
|
|
AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued in exchange for deferred charges |
| $ 3,142,400 |
| $ - |
| $ - |
|
| ` |
|
|
|
|
Warrants issued in exchange for deferred charges |
| $ 1,581,056 |
| $ - |
| $ - |
|
|
|
|
|
|
|
Common stock issued as settlement for accounts payable |
| $ 74,708 |
| $ - |
| $ - |
|
|
|
|
|
|
|
Increase/(Decrease) in fair value of investment securities |
| $ - |
| $ - |
| $ - |
|
|
|
|
|
|
|
Accrued interest contributed as capital |
| $ 35,624 |
| $ - |
| $ - |
|
|
|
|
|
|
|
Common stock issued in the conversion of notes payable |
| $ 529,000 |
| $ - |
| $ - |
|
|
|
|
|
|
|
Acquisition of automobile through loan payable |
| $ 24,643 |
| $ - |
| $ - |
|
|
|
|
|
|
|
Common stock issued upon exercise of a warrant |
| $ 75,000 |
| $ - |
| $ - |
|
|
|
|
|
|
|
Insurance company pay off of note payable |
| $ 9,673 |
| $ - |
| $ - |
|
|
|
|
|
|
|
Receivable for issuance of common stock |
| $ 210,001 |
| $ - |
| $ - |
|
|
|
|
|
|
|
Contribution of officer accrued payroll |
| $ 52,129 |
| $ - |
| $ - |
|
|
|
|
|
|
|
Common stock issued for prepaid expense |
| $ 75,000 |
| $ - |
| $ - |
See accompanying notes to these financial statements.
-12-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 1- FINANCIAL STATEMENTS
The accompanying unaudited financials statements have been prepared by Lightwave Logic, Inc. (the Company). These statements include all adjustments (consisting only of its normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting polices described in the Summary of Accounting Policies included in the 2011 Annual Report. Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with accounting principals generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company firmly believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission. The interim operating results for the three and six months ending June 30, 2012 may not be indicative of operating results expected for the full year.
Loss per Share
The Company follows Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) 260, Earnings per Share, resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss in 2012 and 2011, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same.
Comprehensive Income
The Company follows FASB ASC 220.10, Reporting Comprehensive Income. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Since the Company has no items of other comprehensive income, comprehensive income (loss) is equal to net income (loss).
Recently Issued Accounting Pronouncements Not Yet Adopted
As of June 30, 2012, there are no recently issued accounting standards not yet adopted which would have a material effect on the Companys financial statements.
Recently Adopted Accounting Pronouncements
As of June 30, 2012 and for the period then ended, there were no recently adopted accounting pronouncements that had a material effect on the Companys financial statements.
NOTE 2 GOING CONCERN
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As a development stage company, substantial net losses have been incurred since inception. The Company has satisfied capital requirements since inception primarily through the issuance and sale of its common stock. In May 2011, the Company signed an agreement with an institutional investor to sell up to $20 million of common stock. Under
-13-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 2 GOING CONCERN (CONTINUED)
the agreement subject to certain conditions and at the Company's sole discretion, the institutional investor has committed to invest up to $20 million in the Company's common stock over a 30-month period with the remaining available amount of $15,600,002. The Company filed a registration statement with the U.S. Securities and Exchange Commission covering the resale of the shares that may be issued to the institutional investor. The institutional investor is obligated to make purchases as the Company directs in accordance with the agreement, which may be terminated by the Company at any time, without cost or penalty. Sales of shares will be made in specified amounts and at prices that are based upon the market prices of the Company's common stock. Management believes the Company has raised sufficient capital to finance its operations through August 2013. With the additional capital raised, the Company expects to achieve a level of revenues attractive enough to fulfill its development activities and achieve a level of revenue adequate to support the Companys business model. However, there can be no assurances that the Company will achieve an adequate sales level or meet all the conditions to obligate the institutional investor to make purchases. The Company continues to develop and test its next generation Electro-Optic and third-order material platform to support and cultivate potential customers, strategic partners and develop photonic devices. Currently, the Companys Electro-Optic materials are in evaluation with potential customers. The Companys first revenue stream has been in engineering revenues. Management believes the Companys next revenue stream will be in prototype devices, application and non-recurring engineering charges, and material charges for specialty non-linear application prior to moving into full production. However, the Company has incurred significant losses and experienced negative cash flow during the development stage. If these conditions continue beyond the next fourteen months and if the Company is unable to raise capital, it will raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 3 EQUIPMENT
Equipment consists of the following:
|
|
| June 30, 2012 |
| December 31, 2011 |
|
|
|
|
|
|
Office equipment |
| $ 15,980 |
| $ 12,816 | |
Lab equipment |
| 279,941 |
| 169,028 | |
Furniture |
|
| 4,061 |
| 3,494 |
Leasehold Improvements | 18,960 |
| 5,368 | ||
|
|
| 318,942 |
| 190,706 |
Less: Accumulated depreciation | 118,441 |
| 101,955 | ||
|
|
|
|
|
|
|
|
| $ 200,501 |
| $ 88,751 |
Depreciation expense for the six months ending June 30, 2012 and 2011 was $16,486 and $14,107. Depreciation expense for the three months ending June 30, 2012 and 2011 was $9,750 and $6,638.
-14-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 4 INTANGIBLE ASSETS
This represents legal fees and patent fees associated with the registration of patents. The Company has recorded amortization expenses on the Spacer and Chromophore patent applications accepted by the United States Patent and Trademark Office in February 2011 and April 2011, which are amortized over its legal life of 20 years. No amortization expense has been recorded on the remaining patents since the patents have yet to be declared effective. Once issued, the cost of the patents will be amortized over their legal lives, which is generally 20 years.
Patents consists of the following:
|
|
| June 30, 2012 |
| December 31, 2011 |
|
|
|
|
|
|
Patents |
|
| $ 503,153 |
| $ 439,787 |
Less: Accumulated amortization | 14,307 |
| 8,683 | ||
|
|
|
|
|
|
|
|
| $ 488,846 |
| $ 431,104 |
Amortization expense for the six months ending June 30, 2012 and 2011 was $5,624 and $2,469. Amortization expense for the three months ending June 30, 2012 and 2011 was $2,812 and $2,224.
NOTE 5 INCOME TAXES
There is no income tax benefit for the losses for the three and six months ended June 30, 2012 and 2011 since management has determined that the realization of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of such benefits.
The Companys policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2012, the Company had no unrecognized tax benefits, or any tax related interest of penalties. There were no changes in the Companys unrecognized tax benefits during the period ended June 30, 2012. The Company did not recognize any interest or penalties during 2012 related to unrecognized tax benefits. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2008 and thereafter are subject to examination by the relevant taxing authorities.
NOTE 6 STOCKHOLDERS EQUITY
Preferred Stock
Pursuant to our Companys Articles of Incorporation, our 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 our 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 our business or a takeover from a third party.
-15-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants
The stockholders deficit at January 1, 2004 has been retroactively restated for the equivalent number of shares received in the reverse acquisition at July 14, 2004 after giving effect to the difference in par value with the offset to additional paid-in-capital.
In July 2004, the Company issued to related parties 1,600,000 shares of its common stock for professional services valued at $256,000, fair value.
In August 2004, the Company issued 637,500 shares of its common stock for professional services to related parties valued at $75,000, fair value.
In December 2004, the Company converted a note payable of $30,000 into 187,500 shares of common stock at a conversion price of $0.16 per share.
In April 2005, the Company issued 4,000,000 shares of its common stock in a private placement for proceeds of $1,000,000.
On May 4, 2005, the Company converted the notes payable of $499,000 into 3,118,750 shares of common stock at a conversion price of $0.16 per share. An unpaid note payable in the amount of $6,500 has been reflected as a subscription receivable. During 2006, the Company deemed this $6,500 outstanding subscription receivable to be uncollectible.
During August 2005, the Company issued 210,000 shares of common stock for professional services rendered valued at $585,500, fair value. Consulting expense of $375,500 was recognized during 2005, and at December 31, 2005, the remaining balance of $210,000 is reflected as a deferred charge on the balance sheet. During 2006, consulting expense of $210,000 was recognized. This agreement ended in May 2006.
In August 2005, in conjunction with a management services contract with a related party, the Company issued 200,000 shares of common stock valued at $584,000. Management expense of $265,455 was recognized during 2005, and at December 31, 2005, the remaining balance of $318,545 is reflected as a deferred charge in a contra-equity account. During 2006, management expense of $318,545 was recognized. This agreement ended in June 2006.
During May 2005, the Company issued Stock Purchase Warrants to purchase 100,000 shares of common stock at an exercise price of $2.10 in exchange for consulting services. The warrants are exercisable until May 2008 and vest as follows: 50,000 shares during the first year of the agreement, 25,000 shares during the second year of the agreement, and 25,000 shares during the third year. In accordance with the fair value method, the Company used the Black-Scholes model to calculate the grant-date fair value, with the following assumptions: no dividend yield, expected volatility of 60%, risk-free interest rate of 3.8% and expected life of option of three years. The fair market value of the warrants was $113,250. In accordance with the fair value method as described in accounting requirements of FASB ASC 718 Stock Compensation, the Company recognized consulting expense of $37,000 in 2005. This warrant was cancelled during 2006.
-16-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
During September 2005, the Company issued Stock Purchase Warrants to purchase 100,000 shares of common stock at an exercise price of $2.00 in exchange for consulting services. The warrants expire in September 2008 and vest as follows: 50,000 shares during the first year of the agreement, 25,000 shares during the second year of the agreement, and 25,000 shares during the third year of the agreement. In accordance with the fair value method, the Company used the Black-Scholes model to calculate the grant-date fair value, with the following assumptions: no dividend yield, expected volatility of 60%, risk-free interest rate of 3.8% and expected life of option of three years. The fair market value of the warrants was $145,100. The Company recognized consulting expense of $27,014, $36,370, $66,500 and $24,200 for the years ended December 31, 2008, 2007, 2006 and 2005 in conjunction with this agreement. These warrants expired in September 2008.
On October 15, 2005, the Company issued Stock Purchase Warrants to purchase 30,000 shares of common stock at an exercise price of $1.40 in exchange for consulting services. The warrants expire in October 2006 and are exercisable immediately. In accordance with the fair value method, the Company used the Black-Scholes model to calculate the grant-date fair value, with the following assumptions: no dividend yield, expected volatility of 60%, risk-free interest rate of 4.15% and expected life of option of one year. The fair market value of the warrants was $15,900. In accordance with the fair value method as described in accounting requirements of FASB ASC 718 Stock Compensation, the Company recognized consulting expense of $15,900 during 2005. These warrants expired in October 2006.
In December 2005, in conjunction with a consulting contract, the Company issued Stock Purchase Warrants to purchase 300,000 shares of common stock at an exercise price of $0.25 per share valued at $435,060, fair value. The warrants expire in December 2007 and were exercisable immediately. In accordance with the fair value method, the Company used the Black-Scholes model to calculate the grant-date fair value, with the following assumptions: no dividend yield, expected volatility of 60%, risk-free interest rate of 4.41% and expected life of option of two years. In accordance with the fair value method as described in accounting requirements of FASB ASC 718 Stock Compensation, the Company recognized consulting expense of $199,435, and at December 31, 2005, the remaining balance in deferred charges amounted to $235,625. The 300,000 warrants were fully exercised on December 31, 2005 for $75,000. The Company recognized $18,128 and $217,497 in consulting expense in conjunction with this agreement for the years ended December 31, 2007 and 2006, which was cancelled during 2007.
During 2006, the Company issued 850,000 shares of common stock and warrants to purchase 425,000 shares of common stock for proceeds of $425,000 in accordance to a private placement memorandum amended December 18, 2006. Pursuant to the terms of the amended offering, up to 20 units were offered at the offering price of $50,000 per unit, with each unit comprise of 100,000 shares and a warrant to purchase 50,000 shares of common stock at $0.50 per share. In November 2007, 400,000 shares of common stock and warrants to purchase 200,000 shares of common stock were rescinded. As of December 31, 2008, warrants to purchase 210,000 shares of common stock were fully exercised for proceeds of $105,000, and warrants to purchase 15,000 shares expired.
During February 2006, the Company issued 300,000 shares of common stock for professional services rendered valued at $270,000, fair value. The Company recognized consulting expense of $16,875 and $118,125 and legal expense of $16,875 and $118,125 during 2007 and 2006. The contracts expired during 2007. The legal services were provided by a related party.
-17-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
During May 2006, the Company issued 400,000 shares of common stock for professional services rendered valued at $620,000, fair value. The Company recognized consulting expense of $258,333 and $361,667 during 2007 and 2006, and at December 31, 2006. The contracts expired during 2007.
During June 2006, the Company issued 25,000 shares of common stock to a related party for professional services rendered valued at $36,250, fair value. The Company recognized legal expense of $16,615 and $19,635 during 2007 and 2006, and at December 31, 2006. The contracts expired during 2007.
During November 2006, the Company issued 60,000 shares of common stock for professional services valued at $29,400, fair value. The Company recognized investor relations expense of $25,480 and $3,920 during 2007 and 2006. The contract expired during 2007.
In June 2006, in conjunction with an addendum to an existing consulting contract effective December 2005, the Company issued Stock Purchase Warrants to purchase 300,000 shares of common stock at an exercise price of $0.25 per share. The warrants expired in June 2008 and were exercisable immediately. In accordance with the fair value method, the Company used the Black-Scholes model to calculate the grant-date fair value, with the following assumptions: no dividend yield, expected volatility of 186%, risk-free interest rate of 4.41% and expected life of option of two years. The fair market value of the warrants was $465,996. During 2007 and 2006, the Company recognized consulting expense of $330,948 and $135,048 in conjunction with this agreement. The contract was cancelled during 2007. The 300,000 warrants were fully exercised on March 12, 2008 for proceeds of $75,000.
During 2006, the Company cancelled a warrant issued during May 2005 to purchase 100,000 shares of the Companys common stock at an exercise price of $2.10, and issued an option to purchase 500,000 shares of the Companys common stock at an exercise price of $1 per share and the same options expiration and vesting terms were modified during November 2006. This option expired in June 2007. The incremental cost of the modified option was $394,030 and will be expensed over the vesting terms. The Company recognized $17,589 and $406,215 as a consulting expense in 2007 and 2006, which includes $337,290 of the incremental cost of the modified option.
During February 2006, the Company awarded an employee with an option to purchase 200,000 shares of common stock at an exercise price of $1.00 per share under the 2005 Employee Stock Option Plan. These options were valued at $217,628 using the Black-Scholes Option Pricing Formula. The employee compensation expense recognized during 2007 and 2006 is $43,757 and $22,673. In June 2007, the employee was terminated and the vesting ceased. After September 2007, the vested options expired.
During 2006, the Company recognized contributed capital of $35,624 related to the conversion of accrued interest payable.
During 2006, the Company deemed a May 2005 outstanding subscription receivable of $6,500 to be uncollectible.
-18-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
During 2007, the Company issued 2,482,000 shares of common stock and warrants to purchase 1,241,000 shares of common stock for proceeds of $1,241,000 in accordance to a private placement memorandum amended December 18, 2006. Pursuant to the terms of the amended offering, up to 20 units were offered at the offering price of $50,000 per unit, with each unit comprised of 100,000 shares and a warrant to purchase 50,000 shares of common stock at $0.50 per share. For the six month ending June 30, 2009, the remaining 600,000 outstanding warrants expired.
During 2007, the Company issued 1,767,540 shares of common stock and warrants to purchase 883,770 shares of common stock for proceeds of $1,060,524 in accordance to a private placement memorandum issued on October 3, 2007. Pursuant to the terms of the offering, up to 20 units were offered at the purchase price of $60,000 per unit, with each unit comprised of 100,000 shares and a warrant to purchase 50,000 shares of common stock at $1.00 per share. During 2009 and 2008, 416,000 and 82,770 warrants were exercised, respectively. For the year ending December 31, 2009, the remaining 385,000 outstanding warrants expired.
During 2007, as previously described, a shareholder that was issued 400,000 shares of the Companys common stock and a warrant to purchase 200,000 shares of common stock at $0.50 per share rescinded his shares and warrant.
During February 2007, the Company issued 151,785 shares of common stock for investor relations services valued at $106,250, fair value, which was recorded as a deferred charge and amortized over one year, the term of the services contract. During 2007, the Company recognized $97,396 in investor relations expense. During 2008, the Company recognized $8,854 in investor relations expense. This contract expired in February 2008.
During February 2007, the Company terminated its then CEO. The option to purchase 56,000 shares of common stock that was recorded as deferred charges of $42,730 were not vested and were forfeited. The option to purchase 444,000 shares of common stock that were vested expired during 2007.
During March 2007, the Company issued 1,000,000 shares of common stock to a related party for management consulting services valued at $580,000, fair value. During April 2007, the Company issued 500,000 warrants as an addendum to the original contract for management consulting services valued at $348,000, fair value. This contract was recorded as a contra-equity deferred charges account and is amortized over one year, the term of the contract. Management consulting expense recognized during 2008 and 2007 is $154,667 and $773,333. This contract was renewed in March, 2008. In December 2010, the warrant was partially exercised to purchase 100,000 shares of common stock for proceeds of $25,000. In April 2012, the warrant was exercised to purchase the remaining 400,000 shares of common stock for proceeds of $100,000.
During April 2007, the Company issued 100,000 shares of common stock for legal services to a related party valued at $35,000, fair value, to settle $29,708 of accounts payable and as payment for $5,292 of legal services incurred in April 2007.
During October 2007, the Company issued 150,000 shares of common stock for investor relations services valued at $102,000, fair value to a related party. During 2007 the Company recognized $102,000 in investor relation expense.
During October 2007, the Company issued 150,000 shares of common stock for investor relations services valued at $135,000, fair value. During 2007, the Company recognized $135,000 in investor relations expense.
-19-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
During November 2007, the Company issued 400,000 shares of common stock under the 2007 Stock Option Plan to the acting Chief Executive Officer for services rendered valued at $288,000, fair value. The Company recognized $288,000 in consulting expense during 2007.
During March 2007, the Company issued a warrant to purchase 100,000 shares of common stock for consulting services at an exercise price of $0.25 per share. The warrant was valued at $63,065 using the Black-Scholes Option Pricing Formula and expensed over the life of the contract associated with the consulting services, which is one year. The consulting expense recognized during 2008 and 2007 is $10,885 and $52,180. In April 2010, the warrant was exercised to purchase 100,000 shares of common stock for proceeds of $25,000.
During April 2007, the Company issued warrants to purchase 900,000 shares of common stock for consulting services at an exercise price of $0.25 per share. The warrants were valued at $604,416 using the Black-Scholes Option Pricing Formula and expensed over the life of the contracts associated with the consulting services, which is one year. The consulting expense recognized during 2008 and 2007 is $170,451 and $433,966. In July 2008, the warrant was partially exercised to purchase 20,000 shares of common stock for proceeds of $5,000. In April 2010, the warrant was partially exercised to purchase 380,000 shares of common stock for proceeds of $95,000. In April 2012, the warrant was exercised to purchase the remaining 500,000 shares of common stock for proceeds of $125,000.
During May 2007, the Company issued a warrant to purchase 150,000 shares of common stock for consulting services at an exercise price of $0.25 per share. The warrant was valued at $84,390 using the Black-Scholes Option Pricing Formula and expensed over the life of the contract associated with the consulting services, which is one year. The consulting expense recognized during 2008 and 2007 is $31,444 and $52,946. In April 2010, the warrant was exercised to purchase 150,000 shares of common stock for proceeds of $37,500.
During October 2007, the Company issued a warrant to purchase 100,000 shares of common stock at a purchase price of $0.25 per share for accounting services rendered. The warrant was valued at $61,449 using the Black-Scholes Option Pricing Formula. The Company recognized $61,449 in accounting expense during 2007. The warrant is still outstanding as of June 30, 2012.
During October 2007, the Company issued a warrant to purchase 67,200 shares of common stock at a purchase price of $0.25 per share for consulting services rendered. The warrant was valued at $52,292 using the Black-Scholes Option Pricing Formula. During 2007, the Company recognized $52,292 in consulting expense. In October 2010, the warrant was exercised to purchase 67,200 shares of common stock for proceeds of $16,800.
During December 2007, the Company issued a warrant to purchase 25,000 shares of common stock at a purchase price of $0.50 per share for accounting services rendered. The warrant was valued at $13,646 using the Black-Scholes Option Pricing Formula and expensed over the life of the contract, which is one year. The Company recognized $12,487 and $1,159 in consulting expense during 2008 and 2007. In June 2010, the warrant was exercised to purchase 25,000 shares of common stock for proceeds of $12,500.
-20-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
During November 2007, under the 2007 Employee Stock Option Plan, the Company issued options to purchase 1,752,000 shares of common stock at a purchase price of $0.72 per share. The options were valued at $1,045,077 using the Black-Scholes Option Pricing Formula. During 2008, an option to purchase 750,000 shares of common stock, of which 125,000 shares were vested, forfeited. The expense recognized during 2010, 2009, 2008 and 2007 is $174,866, $199,233, $286,803 and $41,653. The options are still outstanding as of June 30, 2012.
In January 2008, under the 2007 Employee Stock Option Plan, the Company issued an option to purchase 100,000 shares of common stock at a purchase price of $0.72 per share. The option was valued at $59,490, fair value, using the Black-Scholes Option Pricing Formula and is being recognized based on vesting terms over a three year period. The expense recognized during 2011, 2010, 2009 and 2008 is $285, $14,873, $13,582, and $30,750. The options are still outstanding as of June 30, 2012.
During 2008, the Company issued 690,001 shares of common stock and warrants to purchase 345,001 shares of common stock for proceeds of $414,000 in accordance to a private placement memorandum issued on October 3, 2007. Pursuant to the terms of the offerings, up to 25 units were offered at the purchase price of $60,000 per unit, with each unit comprised of 100,000 shares and a warrant to purchase 50,000 shares of common stock at $1.00 per share. During 2009 and 2008, the warrant was partially exercised to purchase 25,834 and 20,000 shares of common stock for proceeds of $25,834 and $20,000. In April 2010, the warrant was partially exercised to purchase 282,500 shares of common stock for proceeds of $282,500. During the six month ending June 30, 2010, the remaining warrants to purchase 16,667 shares of common stock expired.
During March 2008, the Company issued a warrant to purchase 400,000 shares of common stock as an addendum to the original contract for management consulting services provided by a related party, valued at $332,000, fair value using Black-Scholes Option Pricing Formula, vesting immediately. This contract was recorded as a contra-equity deferred charges account and is amortized over one year beginning February 28, 2008, the term of the contract. For the year ending December 31, 2009 and 2008, the Company recognized $55,330 and $276,670 of management consulting expense. In January 2009, the warrant was fully exercised to purchase 400,000 shares of common stock for proceeds of $400.
During March 2008, the Company issued 100,000 shares of common stock for legal services to a related party valued at $75,000, fair value. The Company recognized $75,000 of legal expense for the year ending December 31, 2008.
During April 2008, the Company issued a warrant to purchase 600,000 shares of common stock at a purchase price of $0.73 per share for consulting services rendered. The warrant was valued at $976,193, fair value, using the Black-Scholes Option Pricing Formula, vesting immediately. For the year ended December 31, 2008, the Company recognized $976,193 in consulting expense. The warrant is still outstanding as of June 30, 2012.
-21-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
In July 2008, the Company issued options to purchase 200,000 shares of common stock at a purchase price of $1.75 per share to members of the board of directors, under the 2007 Employee Stock Option Plan. Using the Black-Scholes Option Pricing Formula, the options were valued at $296,247, fair value, vesting 50,000 immediately and the remaining in annual equal installments of 50,000 over the next three years. The expense is being recognized based on vesting terms over a three year period. The expense recognized during 2011, 2010, 2009 and 2008 is $39,829, $74,061, $67,840 and $114,519. The options are still outstanding as of June 30, 2012.
In August 2008, under the 2007 Employee Stock Option Plan, the Company issued options to purchase 550,000 and 1,050,000 shares of common stock at a purchase price of $1.42 and $1.75 per share to members of the board of directors and the Chief Executive Officer, vesting 212,500 immediately and the remaining in annual equal installments of 112,500 over the next three years and vesting in quarterly equal installments of 87,500 commencing November 1, 2008, respectively. The options were valued at $2,176,201, fair value, using the Black-Scholes Option Pricing Formula and are being recognized based on vesting terms over a three year period. The expense recognized during 2011, 2010, 2009 and 2008 is $383,881, $643,812, $623,246 and $525,263. The options are still outstanding as of June 30, 2012.
In August 2008, the Company issued 200,000 shares of common stock under the 2007 Stock Option Plan to its new Chief Executive Officer as part of the employment agreement valued at $360,000, fair value. The Company recognized $360,000 in consulting expense for the year ending December 31, 2008.
In 2008, January through August warrant holders exercised warrants to purchase 270,000 shares at $0.50 per share for proceeds of $135,000.
On October 28, 2008, the Companys board of directors authorized the Company to raise up to $600,000 of capital through an Adjusted Common Stock Offering to certain warrant holders. This offering provided eligible warrant holders with the opportunity to purchase four (4) shares of common stock for each dollar invested pursuant to their existing warrant agreement. As of December 31, 2008, warrants to purchase 641,080 shares of common stock were exercised with proceeds of $160,270. For the three month period ending March 31, 2009, warrants to purchase 1,279,336 shares of common stock were exercised with proceeds of $319,834. In January 2009, the term of the 2008 Adjusted Common Stock offering was extended until January 31, 2009.
In November 2008, the Company issued an option to purchase 250,000 shares of common stock under the 2007 Stock Option Plan at a purchase price of $.65 per share to a new member of its board of directors. Using the Black-Scholes Option Pricing Formula, the options were valued at $125,911, fair value, vesting 62,500 immediately and the remaining in annual equal installments of 62,500 over the next three years. The expense is being recognized based on vesting terms over a three year period. The expense recognized during 2011, 2010, 2009 and 2008 is $26,648, $31,478, $61,346 and $6,439. In January 2012, the option was exercised to purchase 250,000 shares of common stock for proceeds of $162,500.
-22-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
In January 2009, an employee was granted with an option to purchase up to 25,000 shares of common stock at a purchase price of $.25 per share. Using the Black-Scholes Option Pricing Formula, the options were valued at valued at $13,136, fair value. These options expire in 5 years and vest immediately. The expense recognized during 2009 is $13,136. In May 2010, the option was partially exercised to purchase 15,000 shares of common stock for proceeds of $3,750. As of June 30, 2012, options to purchase 10,000 shares of common stock are still outstanding.
During January 2009, the Company issued 100,000 shares of common stock to an officer, under the 2007 Stock Option Plan, for services rendered valued at $58,000, fair value.
During January 2009, the Company issued 100,000 shares of common stock for legal services to a related party valued at $25,000, to settle accounts payable for $10,000 and $15,000 for legal services.
During January 2009, the officers, directors, and employees of the Company were each given the right to purchase from the Companys 2007 Employee Stock Plan up to 40,000 shares of common stock at a purchase price of $.25 per share, 400,000 shares in the aggregate, all of which were valued at $132,058, fair value using the Black-Scholes Option Pricing Formula. The rights to purchase vested immediately. A total of 180,550 shares were purchased pursuant to the rights to purchase with total proceeds of $35,138 and a common stock receivable of $10,000 which was paid in May, 2009. The rights to purchase the remaining 219,450 shares expired on January 31, 2009.
At December 31, 2008 the Company had accrued officer salaries and payroll taxes of $98,205. On February 19, 2009, two officers, who are also shareholders, agreed to waive their rights to unpaid wages and salary amounting to $52,129. Accordingly in the first quarter 2009, the accrued expense was adjusted from $98,205 to $42,088 with the $52,129 treated as contributed capital and $3,988 reversed from payroll taxes.
In February 2009, an employee was granted with an option to purchase up to 25,000 shares of common stock at a purchase price of $.45 per share. Using the Black-Scholes Option Pricing Formula, the options were valued at valued at $9,583, fair value. These options expire in 5 years and vest immediately. The expense recognized during 2009 is $9,583. The options are still outstanding as of June 30, 2012.
During June 2009, in accordance to private placement memorandum, the Company issued 2,479,500 shares of common stock for proceeds of $855,000 dated June 10, 2009. Pursuant to the terms of the offering, up to 18 units were offered at the offering price of $50,000 per unit, with each unit comprised of 145,000 shares to purchase at $0.34 per share.
-23-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
During June 2009, the Company issued a warrant to purchase 464,000 shares of common stock at a purchase price of $0.34 per share for accounting services rendered. The warrant was valued at $391,342 using the Black-Scholes Option Pricing Formula, vesting 46,400 immediately and the remaining on equal monthly installments of 23,200 over the next eighteen months. The warrant expires in 5 years. The expense is being recognized based on service terms of the agreement over a twenty two month period. The expense recognized during 2010 and 2009 is $213,459 and $177,883. In April 2010, the warrant was partially exercised to purchase 10,000 shares of common stock for proceeds of $3,450. In February 2012, the warrant was partially exercised to purchase 20,000 shares of common stock for proceeds of $6,900. As of June 30, 2012, warrants to purchase 434,000 shares of common stock are still outstanding.
In June 2009, an employee was granted with an option to purchase up to 25,000 shares of common stock at a purchase price of $.34 per share. Using the Black-Scholes Option Pricing Formula, the options were valued at valued at $21,085, fair value. These options expire in 5 years and vest immediately. The expense recognized during 2009 is $21,085. The option is still outstanding as of June 30, 2012.
During June 2009, the Company issued 145,000 shares of common stock for legal services to a related party valued at $50,000, to settle accounts payable for $35,000 and $15,000 for legal services.
During June 2009, the Company issued 116,000 shares of common stock for accounting services valued at $40,000, fair value. The Company recognized $40,000 of accounting expense for the year ending December 31, 2009.
During July 2009, the Company issued 100,000 shares of common stock for investor relation services valued at $75,000, fair value vesting 25,000 shares each quarter commencing July 1, 2009. The investor relation expense recognized during 2010 and 2009 is $37,500 and $37,500.
In January 2010, the Company issued a warrant to purchase 650,000 shares of common stock at a purchase price of $1.51 per share to a new member of its board of directors serving as the Companys full-time non-executive chair of the board of directors. Using the Black-Scholes Option Pricing Formula, the warrants were valued at $1,188,000, fair value, vesting 162,500 immediately and the remaining in annual equal installments of 162,500 over the next three years. The warrant expires in 5 years. During 2011, the warrant to purchase 650,000 shares of common stock, of which 487,500 shares were vested, forfeited. The expense recognized during 2011 and 2010 is $306,765 and $580,167. The warrant to purchase 487,500 shares of common stock is still outstanding as of June 30, 2012.
-24-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
In March 2010, the Company issued a warrant to purchase 150,000 shares of common stock for consulting services at an exercise price of $0.25 per share. Using the Black-Scholes Option Pricing Formula, the warrants were valued at $279,045, fair value, vesting immediately. The warrant expires in 3 years. The consulting expense recognized during 2011 and 2010 is $64,983 and $214,063. In June and July 2010, the warrant was fully exercised to purchase 150,000 shares of common stock for proceeds of $37,500.
In June 2010, an employee was granted with an option to purchase up to 100,000 shares of common stock at a purchase price of $1.50 per share. Using the Black-Scholes Option Pricing Formula, the options were valued at valued at $131,075, fair value. These options expire in 5 years and vest in equal installments of 12,500 over the next two years commencing August 1, 2010. The expense recognized during 2011 and 2010 is $65,447 and $27,434. For the three month ending June 30, 2012 and 2011 the Company recognized $16,317 and $16,317 of expense. For the six month ending June 30, 2012 and 2011, the Company recognized $32,634 and $32,455 of expense. The options are still outstanding as of June 30, 2012.
During 2010, the Company issued 1,500,000 shares of common stock and warrants to purchase 375,000 shares of common stock with 156,250 warrants expiring September 2011 and 218,750 warrants expiring December 2011 for proceeds of $1,500,000 in accordance to a private placement memorandum as amended on September 14, 2010. Pursuant to the terms of the offerings, up to 30 units were offered at the purchase price of $50,000 per unit, with each unit comprised of 50,000 shares and a warrant to purchase 12,500 shares of common stock at $1.25 per share. During September 2011, all warrants were extended one year expiring September 2012 and December 2012. In January 2012, the warrant was partially exercised to purchase 40,000 shares of common stock for proceeds of $50,000. The remaining warrants to purchase 335,000 shares of common stock at $1.25 per share are still outstanding as of June 30, 2012.
Effective July 8, 2010, the number of shares of the Companys common stock available for issuance under the 2007 Employee Stock plan was increased from 3,500,000 to 6,500,000 shares.
During August 2010, the Company issued 4,800 shares of common stock for investor relations services valued at $6,000, fair value. The Company recognized $6,000 of investor relations expense for the year ending December 31, 2010.
In November 2010, the board of directors approved a grant to employees of options to purchase up to 250,000 shares of common stock at a purchase price of $1.00 per share. These options were granted on December 13, 2010. Using the Black-Scholes Option Pricing Formula, the options were valued at $283,787, fair value. These options expire in 5 years with 125,000 vesting on December 13, 2010 and 125,000 vesting on June 13, 2011. The expense recognized during 2011 and 2010 is $127,080 and $156,707. The options are still outstanding as of June 30, 2012.
-25-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
In November 2010, the board of directors approved a grant to employees of options to purchase up to 35,000 shares of common stock at a purchase price of $1.00 per share. These options were granted on December 13, 2010. Using the Black-Scholes Option Pricing Formula, the options were valued at $39,730, fair value. These options expire in 5 years and vest on December 13, 2010. The expense recognized during 2010 is $39,730. The options are still outstanding as of June 30, 2012.
In November 2010, the board of directors approved a grant to three outside directors of options to purchase up to 300,000 shares of common stock at a purchase price of $1.00 per share. These options were granted on December 13, 2010. Using the Black-Scholes Option Pricing Formula, the options were valued at valued at $340,545, fair value. These options expire in 5 years and vest 75,000 on December 13, 2010 and the remaining in equal annual installments of 75,000 over the next three years commencing November 4, 2011. The expense recognized during 2011 and 2010 is $85,056 and $89,565. For the three month ending June 30, 2012 and 2011 the Company recognized $21,207 and $21,207 of expense. For the six month ending June 30, 2012 and 2011, the Company recognized $42,414 and $42,180 of expense. The options are still outstanding as of June 30, 2012.
In November 2010, 5,000 shares of common stock were issued for investor relation services valued at $4,650, fair value. The Company recognized $4,650 of investor relations expense for the year ending December 31, 2010.
During December 2010, the Company issued 10,000 shares of common stock for investor relations services valued at $12,000, fair value. The Company recognized $12,000 of investor relations expense for the year ending December 31, 2010.
In January 2011, the Company issued a warrant to a related party to purchase 10,000 shares of common stock for legal services at an exercise price of $1.25 per share. Using the Black-Scholes Option Pricing Formula, the warrants were valued at $10,453, fair value. These warrants expire in 3 years and vest immediately. The expense recognized during 2011 is $10,453. The warrants are still outstanding as of June 30, 2012.
In January 2011, the Company issued a warrant to purchase 25,000 shares of common stock for research and development at an exercise price of $1.25 per share. Using the Black-Scholes Option Pricing Formula, the warrants were valued at $26,132, fair value. These warrants expire in 3 years and vest immediately. The expense recognized during 2011 is $26,132. During April 2012 the warrant was voided.
During March 2011, the Company issued 10,000 shares of common stock for investor relations expense valued at $14,500, fair value. The Company recognized $14,500 of investor relations expense for the year ending December 31, 2011.
-26-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
During April 2011, the Company issued warrants to purchase 150,000 shares of common stock at a purchase price of $1.18 per share for accounting services rendered commencing January 1, 2011. The warrant was valued at $146,425 using the Black-Scholes Option Pricing Formula, vesting 37,500 immediately and the remaining on equal monthly installments of 9,375 over the next twelve months expiring in 5 years. The expense is being recognized based on service terms of the agreement over a sixteen month period. The accounting expense recognized during 2011 is $109,820. For the three month ending June 30, 2012 and 2011 the Company recognized $9,150 and $27,455 of expense. For the six month ending June 30, 2012 and 2011, the Company recognized $36,605 and $54,910 of expense. The warrants are still outstanding as of June 30, 2012.
In May 2011, the board of directors approved a grant to a new outside director of an option to purchase up to 200,000 shares of common stock at a purchase price of $1.12 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $193,686, fair value. The option expires in 5 years and vests 50,000 immediately and the remaining in annual equal installments of 50,000 over the next three years. The option is expensed over the vesting terms. The expense recognized during 2011 is $79,702. For the three month ending June 30, 2012 and 2011 the Company recognized $12,061 and $55,314 of expense. For the six month ending June 30, 2012 and 2011, the Company recognized $24,122 and $55,314 of expense. As of June 30, 2012, options to purchase 200,000 shares of common stock are still outstanding.
In May 2011, the Company has signed an agreement with an institutional investor to sell up to $20 million of common stock. Under the agreement subject to certain conditions and at the Company's sole discretion, the institutional investor has committed to invest up to $20 million in the Company's common stock over a 30-month period. The Company filed a registration statement with the U.S. Securities and Exchange Commission covering the resale of the shares that may be issued to the institutional investor. The institutional investor is obligated to make purchases as the Company directs in accordance with the agreement, which may be terminated by the Company at any time, without cost or penalty. Sales of shares will be made in specified amounts and at prices that are based upon the market prices of the Company's common stock immediately preceding the sales to the institutional investor. The Company has issued 150,830 shares of common stock to the institutional investor as an initial commitment fee valued at $162,896, fair value and 301,659 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the agreement. During June, 2011 through June, 2012, the institutional investor purchased 3,080,168 shares of common stock for proceeds of $4,400,000. The Company issued 66,373 shares of common stock as additional commitment fee, valued at $123,921, fair value, leaving 235,286 in reserve for additional commitment fees. For the three month ending June 30, 2012, the institutional investor purchased 905,134 shares of common stock for proceeds of $1,000,001 and the Company issued 15,085 shares of common stock as additional commitment fee, valued at $18,615, fair value. For the six month ending June 30, 2012, the institutional investor purchased 2,894,983 shares of common stock for proceeds of $4,200,000 and the Company issued 63,356 shares of common stock as additional commitment fee, valued at $120,451, fair value.
During June 2011, the Company issued 10,000 shares of common stock for investor relations expense valued at $10,400, fair value. The Company recognized $10,400 of investor relations expense for the year ending December 31, 2011.
-27-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
In August 2011, the board of directors approved a grant to a new employee of an option to purchase up to 150,000 shares of common stock at a purchase price of $1.01 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $123,241, fair value. The option expires in 5 years and vests in equal quarterly installments of 12,500 over the next three years beginning November 1, 2011. The expense recognized during 2011 is $17,204. For the three month ending June 30, 2012 the Company recognized $10,233 of expense. For the six month ending June 30, 2012, the Company recognized $20,466 of expense. As of June 30, 2012, options to purchase 150,000 shares of common stock are still outstanding.
During September 2011, the Company issued 10,000 shares of common stock for investor relations expense valued at $14,500, fair value. The Company recognized $14,500 of investor relations expense for the year ending December 31, 2011.
During 2011, the Company issued 2,018 shares of common stock to a director serving as a member of the Companys Operations Committee valued at $2,163, fair value. The Company recognized $2,163 of expense for the year ending December 31, 2011.
During 2011, the Company issued 1,000,000 shares of common stock and warrants to purchase 1,000,000 shares of common stock expiring September 2013 for proceeds of $1,000,000 in accordance to a private placement memorandum dated August 26, 2011. Pursuant to the terms of the offerings, up to 4 units were offered at the purchase price of $250,000 per unit, with each unit comprised of 250,000 shares and a warrant to purchase 125,000 shares of common stock at $1.00 per share and a warrant to purchase 125,000 shares of common stock at $1.25 per share. The warrants to purchase 500,000 shares of common stock at $1.00 and the warrants to purchase 500,000 shares of common stock at $1.25 per share are still outstanding as of June 30, 2012.
In November 2011, the board of directors approved a grant to a new employee of an option to purchase up to 150,000 shares of common stock at a purchase price of $0.63 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $78,764, fair value. The option expires in 5 years and vests in equal quarterly installments of 12,500 over the next three years beginning February 1, 2012. The expense recognized during 2011 is $4,384. For the three month ending June 30, 2012, the Company recognized $6,540 of expense. For the six month ending June 30, 2012, the Company recognized $13,080 of expense. As of June 30, 2012, options to purchase 150,000 shares of common stock are still outstanding.
In December 2011, the board of directors approved a grant to the member of its board of directors serving as the Companys non-executive chair of the board of directors of an option to purchase up to 250,000 shares of common stock at a purchase price of $1.01 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $205,197, fair value. The option expires in 5 years and vests 62,500 immediately and the remaining in annual equal installments of 62,500 over the next three years. The expense recognized during 2011 is $53,124. For the three month ending June 30, 2012, the Company recognized $12,778 of expense. For the six month ending June 30, 2012, the Company recognized $25,556 of expense. As of June 30, 2012, options to purchase 250,000 shares of common stock are still outstanding.
-28-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
In December 2011, the board of directors approved a grant to a senior advisor of a warrant to purchase up to 150,000 shares of common stock at a purchase price of $1.30 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $158,415, fair value. The warrant expires in 5 years and vests 37,500 immediately and the remaining in annual equal monthly installments of 9,375 over the next year. The expense recognized during 2011 is $1,288. For the three month ending June 30, 2012, the Company recognized $39,067 of expense. For the six month ending June 30, 2012, the Company recognized $78,134 of expense. As of June 30, 2012, warrants to purchase 150,000 shares of common stock are still outstanding.
During February 2012, the Company issued 1,406 shares of common stock to a director serving as a member of the Companys Operations Committee valued at $1,607, fair value. For the three month and six month ending June 30, 2012, the Company recognized $0 and $1,607 of expense.
In March 2012, the board of directors approved a grant to an employee of an option to purchase up to 100,000 shares of common stock at a purchase price of $1.69 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $168,909, fair value. The option expires in 10 years and vests 25,000 immediately and the remaining vest 25,000 in six months, nine months and twelve months from date of grant. The option is expensed over the vesting terms. For the three month ending June 30, 2012, the Company recognized $31,584 of expense. For the six month ending June 30, 2012, the Company recognized $75,893 of expense. As of June 30, 2012, options to purchase 100,000 shares of common stock are still outstanding.
In March 2012, the board of directors approved a grant to an employee of an option to purchase up to 25,000 shares of common stock at a purchase price of $1.69 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $42,227, fair value. The option expires in 10 years with 12,500 vesting immediately and 12,500 vesting in six months from date of grant. The option is expensed over the vesting terms. For the three month ending June 30, 2012, the Company recognized $10,386 of expense. For the six month ending June 30, 2012, the Company recognized $32,184 of expense. As of June 30, 2012, options to purchase 25,000 shares of common stock are still outstanding.
In March 2012, the Company issued a warrant to purchase up to 10,000 shares of common stock for legal services at an exercise price of $1.69 per share. Using the Black-Scholes Option Pricing Formula, the warrants were valued at $13,709, fair value. These warrants expire in 5 years and vest immediately and are being expensed over the service period. For the three month ending June 30, 2012, the Company recognized $6,854 of expense. For the six month ending June 30, 2012, the Company recognized $13,709. As of June 30, 2012, warrants to purchase 10,000 shares of common stock are still outstanding.
-29-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 6 STOCKHOLDERS EQUITY (CONTINUED)
Common Stock and Warrants (Continued)
In May 2012, the board of directors appointed its current Non-Executive Chairman of the board of directors as its new Chief Executive Officer and Executive Chairman of the board of directors and approved a grant of an option to purchase up to 500,000 shares of common stock at a purchase price of $1.30 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $613,805, fair value. The option expires in 10 years and vests quarterly over one year in equal installments of 125,000 shares per quarter commencing on date of grant. The option is expensed over the vesting terms. For the three and six month ending June 30, 2012, the Company recognized $230,387 of expense. As of June 30, 2012, options to purchase 500,000 shares of common stock are still outstanding.
During May 2012, the Company issued warrants to purchase 100,000 shares of common stock at a purchase price of $1.20 per share for accounting services rendered commencing May 7, 2012. The warrant was valued at $97,386 using the Black-Scholes Option Pricing Formula, vesting in thirteen monthly installments with 3,846 vesting at the beginning of each of the succeeding twelve months commencing June 1, 2012 and 3,848 the thirteenth month expiring in 5 years. The expense is being recognized based on service terms of the agreement over a fourteen month period. For the three month and six month ending June 30, 2012, the Company recognized $13,912 of expense. The warrants are still outstanding as of June 30, 2012.
In June 2012, the board of directors appointed a new member of the board of directors and approved a grant of an option to purchase up to 200,000 shares of common stock at a purchase price of $0.90 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $145,150, fair value. The option expires in 5 years and vests 50,000 immediately and the remaining in annual equal installments of 50,000 over the next three years. The option is expensed over the vesting terms. For the three and six month ending June 30, 2012, the Company recognized $38,276 of expense. As of June 30, 2012, options to purchase 200,000 shares of common stock are still outstanding.
-30-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 7 STOCK BASED COMPENSATION
The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award, with the following assumptions for 2012 and 2011: no dividend yield in both years, expected volatility, based on the Companys historical volatility, between 115% and 118% in 2012 and between 119% and 125% in 2011, risk-free interest rate between 0.69% and 2.26% in 2012 and between 0.96% and 2.15% in 2011 and expected option life of five to ten years in 2012 and three to five years in 2011.
As of June 30, 2012, there was $1,248,136 of unrecognized compensation expense related to non-vested market-based share awards that is expected to be recognized through June 2015.
The following tables summarize all stock option and warrant activity of the Company since December 31, 2004:
-31-
LIGHTWAVE LOGIC, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2012 AND 2011
(UNAUDITED)
NOTE 7 STOCK BASED COMPENSATION (CONTINUED)
|
| Non-Qualified Stock Options and Warrants Outstanding and Exercisable | ||||
|
| Number of |
| Exercise |
| Weighted Average |
|
| Shares |
| Price |
| Exercise Price |
Outstanding, December 31, 2004 |
| - |
| $ - |
| $ - |
|
|
|
|
|
|
|
Granted |
| 680,000 |
| $ 0.25-$2.10 |
| $ 0.99 |
Exercised |
| (300,000) |
| $ 0.25 |
| $ 0.25 |
|
|
|
|
|
|
|
Outstanding, December 31, 2005 |
| 380,000 |
| $ 1.40-$2.10 |
| $ 0.68 |
|
|
|
|
|
|
|
Granted |
| 1,425,000 |
| $ 0.25-$1.00 |
| $ 0.70 |
Cancelled |
| (260,000) |
| $ 1.40-$2.10 |
| $ (0.48) |
Expired |
| (70,000) |
| $ 1.40-$2.00 |
| $ (0.12) |
|
|
|
|
|
|
|
Outstanding, December 31, 2006 |
| 1,475,000 |
| $ 0.25-$2.00 |
| $ 0.83 |
|
|
|
|
|
|
|
Granted |
| 5,768,971 |
| $ 0.25-$0.72 |
| $ 0.48 |
Rescinded |
| (200,000) |
| $ 0.50 |
| $ 0.50 |
Forfeited |
| (125,019) |
| $ 1.00 |
| $ 1.00 |
Expired |
| (574,981) |
| $ 1.00 |
| $ 1.00 |
|
|
|
|
|
|
|
Outstanding, December 31, 2007 |
| 6,343,971 |
|