What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-18 compared with 2024-02-29 · 255 added, 329 removed, 125 unchanged (82% of the section changed)

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within this Annual Report on Form 10-K and the "Forward-Looking Statements" explanation included elsewhere herein.

is a technology company focused on the development of next generation electro-optic photonic devices made on its P 2 IC™

technology platform which we have detailed as:

1) Polymer Stack™, 2) Polymer Plus™, and 3) Polymer Slot™.

polymer technology platform uses in-house proprietary high-activity and high-stability organic polymers.

Electro-optical devices called

modulators convert data from electric signals into optical signals for multiple applications.

is a technology platform company leveraging its proprietary engineered electro-optic (EO) polymers to transmit data at higher

speeds with less power in a small form factor.

The Company’s high activity and high stability organic polymers allow it to create

next-generation photonic EO devices that convert data from electrical signals into light/optical signals for applications in telecommunications,

and for data transmission potentially used to support generative AI.

Our differentiation

at the modulator device level is in higher speed, lower power consumption, simplicity of manufacturing, small footprint (size), and reliability.

We have demonstrated higher speed and lower power consumption in packaged devices, and during 2022 and 2023, we continued to make advances

in techniques to translate material properties to efficient, reliable modulator devices with commercial foundries.

We are currently focused

on testing and demonstrating the simplicity of manufacturability and reliability of our devices, including in conjunction with the silicon

photonics manufacturing ecosystem.

In 2022 we discussed the addition of several silicon-based foundry partners to help scale in volume

our polymer modulator devices and we started to receive working modulator chips from the foundries.

We have advanced our interactions

with our foundries, and we continue to receive working modulator chips for prototyping.

Silicon-based foundries are large semiconductor

We have demonstrated the electro-optic polymers potential for higher speed and lower power consumption in packaged devices, and during

2024, we continued to make advances in techniques to translate our world class material properties to efficient, reliable modulator devices

with commercial foundries.

We are currently focused on a) working with potential and existing customers to integrate our proprietary materials

into our customers’ specific PIC and device architecture.

b) testing and demonstrating the superior performance, simplicity of manufacturability

and reliability of our devices, including in conjunction with the silicon photonics manufacturing ecosystem c) providing our potential

and existing customers with the proper Process Development Kits (PDKs) to enable the efficient and fast integration of our materials into

their own design and manufacturing plans.

In 2024 we continued to work with silicon-based foundry partners to help scale in volume our

polymer modulator devices and we received working modulator chips from these foundries.

We have advanced and matured our interactions

with our foundry partners and we continue to receive working modulator chips for prototyping.

Silicon-based foundries are semiconductor

fabrication plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput.

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our high-performance polymer optical engines quickly and efficiently.

We have now received silicon wafers that range up to 200mm in diameter,

which aligns well with foundry manufacturing.

Our extremely

strong and broad patent portfolio allows us to optimize our business model in three areas:

1) Traditional focus on product development,

1) Traditional focus on polymer materials development,

2) Patent licensing and 3) Technology transfer to foundries.

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inventions and acquisition of intellectual property.

initially targeting applications in fiber optic data communications and telecommunications markets and are exploring other applications

that include automotive/LIDAR, sensing, displays etc., for our polymer technology platform.

Our goal is to have our unique polymer technology

platform become ubiquitous.

initially targeting applications in fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth

optical connections deployed inside and between datacenters and/or AI clusters.

In addition, we are exploring other applications that

include automotive/LIDAR, sensing, displays, storage, aerospace and defense, etc., for our polymer technology platform.

Our goal is to

have our unique polymer technology platform become ubiquitous across multiple market verticals over and above the optical fiber optic

communications markets.

Intelligence (AI) has been integrating deeper within our daily activities with applications to make us more efficient and possibly smarter.

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or information to and from destinations.

Data centers are being upgraded today in a fashion that the industry has not seen before.

expected demands of increased traffic, information, and data driven by AI is changing the way the internet is being operated.

creating new and interesting market opportunities to upgrade the internet.

Three of these are important today:

density, speed, and low

power and these are very well aligned with our high performance electro-optic polymers.

We are designing high performance polymer modulator

optical engines to support the rise and growth of AI as it generates more information that will travel through the internet and optical

Data centers are being upgraded today in a fashion that the industry has not seen before with

significant investments of capital.

The expected demands of increased traffic, information, and data driven by AI is changing the way

the internet is being operated.

AI is now creating new and interesting market opportunities to upgrade the internet.

Three of these opportunities

are important today:

density, speed, and low power and these are very well aligned with our high performance electro-optic polymers modulator

We are designing high performance polymer modulator optical engines to support the rise and growth of AI as it generates more

information that will travel through the internet and optical network.

While we are not directly an AI company designing electronic processors,

we do see immediate benefits of enabling higher levels of information to cross the internet using our optical polymer modulator platform.

Commencement of Commercial Operations

We commenced commercial operations

Presently, our commercial operations consist of a material supply license agreement

to provide Perkinamine ® chromophore materials for polymer based photonic devices and photonic integrated circuits

The license agreement represents tangible commercial progress for electro-optic polymers as part of our Company's business plan.

Our Company is also in various stages of photonic device and materials development and evaluation with potential customers

and strategic partners.

We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional

revenue streams from technology transfer agreements and direct sale of our electro-optic device components.

commenced commercial operations in May 2023.

Presently, our commercial operations consist of a material

supply license agreement to provide Perkinamine ® chromophore

materials for polymer based photonic devices and photonic integrated circuits (PICs).

The license agreement represents tangible commercial

progress for electro-optic polymers as part of our Company's business plan.

Our Company is also

in various stages of photonic proprietary device designs and materials development and evaluation with potential customers and strategic

We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams

from technology transfer agreements and sale of our electro-optic proprietary device designs.

Business Strategy

Our first revenue stream was obtained

from our entry into a material supply license agreement to provide Perkinamine ® chromophore

first revenue stream was obtained from our entry into a material supply license agreement to

provide Perkinamine ® chromophore

materials for polymer based photonic devices and photonic integrated circuits (PICs).

Our Company is also in various stages

of photonic device and materials development and evaluation with potential customers and strategic partners.

We expect to continue to

obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements

and direct sale of our electro-optic device components.

is also in various stages of photonic device designs and materials development and evaluation with potential customers and strategic partners.

We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology

transfer agreements and sale of our proprietary electro-optic devices.

Specifically,

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(ii) joint venture relationships with significant industry leaders;

and (iii) the production and direct

sale of our own electro-optic device components.

Our objective is to be a leading provider of proprietary technology and know-how in the

electro-optic device market.

and (iii) the sale of our own proprietary

electro-optic device designs.

Our objective is to be a leading provider of proprietary technology and know-how in the electro-optic materials

In order to meet this objective, we intend to continue to:

Further the development of proprietary organic electro-optic polymer material systems

Develop photonic devices based on our P 2 IC TM technology

Develop photonic device designs based on our

P 2 IC™ technology

Develop proprietary intellectual property

Grow our commercial device development capabilities

Grow our device design development

Partner with silicon-based foundries who can scale volume quickly

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Maintain/develop strategic relationships with major telecommunications and data communications companies to further the awareness and commercialization of our technology platform

Add high-level personnel with industrial and manufacturing experience in key areas of our materials and device development programs.

Create Organic Polymer-Enabled Electro-Optic Modulators

Add high-level personnel with industrial and manufacturing experience in key areas of our materials and device development

Create Organic Polymesr-Enabling design and production

of Electro-Optic Modulators

intend to utilize our proprietary optical polymer technology to create an initial portfolio of commercial electro-optic polymer product

devices with applications for various markets, including telecommunications, data communications and data centers.

These product devices

will be part of our proprietary photonics integrated circuit (PIC) technology platform .

our initial modulator products will operate at symbol rates at least 112 Gigabaud which is roughly 200Gbps when utilized with PAM4 encoding

Our devices are highly linear and can also enable the performance required to take advantage of more advance complex encoding

schemes if required.

devices designs with applications for various markets, including telecommunications, data communications and data centers.

These product

devices will be part of our proprietary photonics integrated circuit (PIC) technology platform .

Capital Requirements

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Results of Operations

Comparison of year ended December 31, 2023 to year

ended December 31, 2022 and year ended December 31, 2022 to year ended December 31, 2021

During the year ended

December 31, 2023, we recognized $40,502 of licensing and royalty revenue.

As a development stage company during the years ended

December 31, 2022 and December 31, 2021, we had no revenues.

The Company is in various stages of photonic device and materials

development and evaluation with potential customers and strategic partners, and commercialization.

The Company expects to continue

obtaining a revenue stream from technology licensing agreements, to obtain additional revenue streams from technology transfer

agreements and direct sale of its own electro-optic device components.

Comparison of year ended December

31, 2024 to year ended December 31, 2023

During the year ended December

31, 2024, we recognized $81,855 of licensing and royalty revenue and $13,750 of revenue for the device processing work on the device supplied

by a customer.

During the year ended December 31, 2023, we recognized $40,502 of licensing and royalty revenue.

Cost of sales

During the year ended December 31, 2024,

31, 2023, we recognized $2,513 in Cost of Sales, and $0 in Cost of Sales during the years ended December 31, 2022 and 2021.

we recognized $7,395 in cost of sales.

During the year ended December 31, 2023, we recognized $2,513 in cost of sales.

Operating expenses

December 31, 2024

December 31, 2022

Ended December

Research and development

General and administrative

December 31, 2022

December 31, 2021

Research and development

General and administrative

Research and development expenses

increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to increases in research

and development salary and bonus expenses, research and development non-cash stock option and RSA amortization, recruiting fees, employee

relocation expenses, rent expense, chemistry and wafer fabrication materials and supplies, testing expenses, software expenses, research

and development consulting expenses, and travel expenses, offset by a decrease in prototype expenses.

expenses increased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to increases in

research and development salary and benefits expenses, research and development equipment depreciation expense, prototype device development

and wafer fabrication expenses, research and development travel expenses, rent expenses, property tax expenses, research and development

consulting expenses, software expenses, and laboratory and wafer fabrication materials and supplies expenses, offset by decreases in research

and development non-cash stock option amortization expenses, research and development recruiting fees, and research and development employee

relocation expenses in the year ended December 31, 2024, compared to the same period in 2023.

· Research and development salary

and bonus expenses increased by $1,636,577 in the year ended December 31, 2023, compared to the same period in 2022.

Research and development

non-cash stock option and RSA amortization expenses increased by $690,879 in the year ended December 31, 2023, compared to the same period

Recruiting fees increased by $195,697 in the year ended December 31, 2023, compared to the same period in 2022.

Employee relocation

expenses increased by $178,626 in the year ended December 31, 2023, compared to the same period in 2022.

Rent expense increased by $153,949

in the year ended December 31, 2023, compared to the same period in 2022.

Chemistry and wafer fabrication materials and supplies increased

and benefits expenses increased by $1,472,979 in the year ended December 31, 2024, compared to the same period in 2023.

· Depreciation expense increased

by $424,232 in the year ended December 31, 2024, compared to the same period in 2023.

Research and development testing expenses increased

· Prototype device development

and wafer fabrication expenses increased by $341,555 in the year ended December 31, 2024, compared to the same period in 2023.

· Research and development travel

expenses increased by $107,351 in the year ended December 31, 2024, compared to the same period in 2023.

· Research and development rent

expenses increased by $99,898 in the year ended December 31, 2024, compared to the same period in 2023.

· Property tax expenses increased

by $98,181 in the year ended December 31, 2024, compared to the same period in 2023.

Software expenses increased by $126,854 in the year

ended December 31, 2023, compared to the same period in 2022.

Research and development consulting expenses increased by $112,261 in the

year ended December 31, 2023, compared to the same period in 2022.

Research and development travel expenses increased by $96,923 in the

year ended December 31, 2023, compared to the same period in 2022.

These increases were offset by a $483,617 decrease in prototype expenses

in the year ended December 31, 2023, compared to the same period in 2022.

Research and development expenses

increased for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to increases in research

and development non-cash stock option amortization, prototype device development expenses, research and development salary expenses, laboratory

and wafer fabrication materials and supplies, research and development consulting expenses, depreciation and research and development

travel expenses offset by a decrease in expense for cashless option exercises and research and development bonus expenses.

Research and development non-cash

stock option amortization expenses increased by $3,732,646 in the year ended December 31, 2022, compared to the same period in 2021.

device development expenses increased by $1,460,419 in the year ended December 31, 2022, compared to the same period in 2021.

and development salary expenses increased by $617,627 in the year ended December 31, 2022, compared to the same period in 2021.

and wafer fabrication materials and supplies increased by $242,737 in the year ended December 31, 2022, compared to the same period in

Research and development consulting expenses increased by $224,435 in the year ended December 31, 2022, compared to the same period

Depreciation expenses increased by $173,206 in the year ended December 31, 2022, compared to the same period in 2021.

and development travel expenses increased by $147,136 in the year ended December 31, 2022, compared to the same period in 2021.

for research and development cashless option exercises decreased by $3,382,582 in the year ended December 31, 2022, compared to the same

period in 2021.

Research and development bonus expenses decreased by $3,003,169 in the year ended December 31, 2022, compared to the same

period in 2021.

· Research and development consulting

expenses increased by $65,261 in the year ended December 31, 2024, compared to the same period in 2023.

· Research and development software

expenses increased by $64,318 in the year ended December 31, 2024, compared to the same period in 2023.

· Laboratory and wafer fabrication

materials and supplies expenses increased by $59,090 in the year ended December 31, 2024, compared to the same period in 2023.

· These increases were offset

by a $1,571,632 decrease in research and development non-cash stock option amortization expenses, a $216,115 decrease in research and

development recruiting fees, and a $108,305 decrease in research and development employee relocation expenses in the year ended December

31, 2024, compared to the same period in 2023.

We expect to continue to incur

substantial research and development expense developing and commercializing our photonic devices, and electro-optic materials platform.

These expenses will increase as a result of accelerated development effort to support commercialization of our non-linear optical polymer

materials technology;

to build photonic device prototypes;

substantial research and development expenses developing and commercializing our electro-optic materials platform.

These expenses will

increase as a result of accelerated development effort to support commercialization of our non-linear optical polymer materials technology

and create next-generation photonic EO device designs;

working with semiconductor foundries;

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increased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to increases in general

and administrative salary and bonus expenses, accounting fees, general and administrative consulting fees, general and administrative

non-cash stock option and RSA amortization, D&O insurance expenses, investor relations expenses, travel expenses, office expenses,

rent expense, general and administrative recruiting fees, and software expenses, offset by a decrease in legal fees.

and administrative salary and benefits expenses, consulting fees, depreciation expense, investor relations expenses, and sales and marketing

expenses, offset by decreases general and administrative non-cash stock option amortization expenses, and accounting expenses.

· General and administrative salary

and bonus expenses increased by $172,690 in the year ended December 31, 2023, compared to the same period in 2022.

Accounting fees increased

by $191,803 in the year ended December 31, 2023, compared to the same period in 2022.

General and administrative consulting fees increased

and benefits expenses increased by $866,829 in the year ended December 31, 2024, compared to the same period in 2023.

· General and administrative consulting

fees increased by $215,707 in the year ended December 31, 2024, compared to the same period in 2023.

· Depreciation expense increased

by $103,624 in the year ended December 31, 2024, compared to the same period in 2023.

General and administrative non-cash stock option

and RSA amortization expenses increased by $125,863 in the year ended December 31, 2023, compared to the same period in 2022.

insurance expenses increased by $99,555 in the year ended December 31, 2023, compared to the same period in 2022.

· Investor relations expenses

increased by $54,259 in the year ended December 31, 2024, compared to the same period in 2023.

Travel expenses increased by $58,999 in

the year ended December 31, 2023, compared to the same period in 2022.

Office expenses increased by $53,949 in the year ended December

31, 2023, compared to the same period in 2022.

Rent expense increased by $48,350 in the year ended December 31, 2023, compared to the

same period in 2022.

General and administrative recruiting fees increased by $43,255 in the year ended December 31, 2023, compared to

the same period in 2022.

Software expenses increased by $33,222 in the year ended December 31, 2023, compared to the same period in 2022.

These increases were offset by a $38,374 decrease in legal fees in the year ended December 31, 2023, compared to the same period in 2022.

General and administrative expenses

decreased for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to decreases in general

and administrative bonus and salary expenses and general and administrative expense for cashless option exercises offset by increases

general and administrative non-cash stock option amortization, legal expenses, director fees, insurance and general and administrative

travel expenses.

General and administrative bonus

and salary expenses decreased by $2,054,916 in the year ended December 31, 2022, compared to the same period in 2021 primarily for bonus

expenses in the year ended December 31, 2021.

The expense for general and administrative cashless option exercises decreased by $170,137

in the year ended December 31, 2022, compared to the same period in 2021.

General and administrative non-cash stock option amortization

· Sales and marketing expenses

increased by $52,623 in the year ended December 31, 2024, compared to the same period in 2023.

Legal expenses increased by $417,624

in the year ended December 31, 2022, compared to the same period in 2021.

Director fees increased by $149,750 in the year ended December

31, 2022, compared to the same period in 2021.

Insurance expenses increased by $136,771 in the year ended December 31, 2022, compared

to the same period in 2021.

General and administrative travel expenses increased by $75,652 in the year ended December 31, 2022, compared

to the same period in 2021.

Other Income (Expense)

December 31, 2023

December 31, 2022

Other Income (Expense)

December 31, 2022

December 31, 2021

Other Expense

$ (1,634,938 )

Other income increased for the

year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in interest income earned

on money market account of $568,137 and a gain on disposal of fixed assets of $215,509, offset by an increase in commitment fee associated

with the purchase of shares by an institutional investor for sale under a stock purchase agreement in the amount of $463,869.

Other expenses decreased for the

year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to a decrease in commitment fee associated

with the purchase of shares by an institutional investor for sale under a stock purchase agreement in the amount of $1,849,755 offset

by the forgiveness by the Small Business Administration during 2021 of a loan funding from the Paycheck Protection Program in the amount

· These increases were offset

by a $263,822 decrease in general and administrative non-cash stock option amortization expense and a $183,722 decrease in accounting

fees in the year ended December 31, 2024, compared to the same period in 2023.

December 31, 2024

December 31, 2023

Other income increased

for the year ended December 31, 2024, as compared to year ended December 31, 2023, primarily due to a $519,368 decrease in commitment

fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement, a $280,433 increase

in interest income on money market account, and a recognition of a $210,274 loss on retirement of certain expired patent applications

Other income increased

for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in interest income

earned on money market account of $568,137 and a gain on disposal of fixed assets of $215,509, offset by an increase in commitment fee

associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement in the amount of $463,869.

December 31, 2024

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Net loss was $22,535,041 and $21,038,032

for the year ended December 31, 2023 and 2022, respectively, for an increase of $3,807,552 due primarily to increases in salary and bonus

expense, non-cash stock option and RSA amortization, commitment fee associated with the purchase of shares by an institutional investor

for sale under a stock purchase agreement, consulting fees, recruiting fees, rent expense, accounting fees, research and development employee

relocation costs, software costs, research and development travel expenses, chemistry and wafer fabrication materials and supplies, testing

expenses, D&O insurance, investor relations fees, and office expenses, offset by decrease primarily related to prototype and legal

expenses, a higher interest income earned on money market account, and a gain on property and equipment disposal.

Net loss was $17,230,480 and $18,631,381

for the year ended December 31, 2022 and 2021, respectively, for a decrease of $1,400,901 due primarily to decreases in expense for cashless

option exercises, bonus expenses and commitment fee associated with the purchase of shares by an institutional investor for sale under

a stock purchase agreement offset by increases in non-cash stock option amortization, prototype device development expenses, research

and development salary expenses, legal expenses, the forgiveness by the Small Business Administration during 2021 of a loan funding from

the Paycheck Protection Program, laboratory and wafer fabrication materials and supplies, research and development consulting fees, travel

expenses, depreciation, director fees and insurance expenses.

for the year ended December 31, 2024 and 2023, respectively, for an increase of $1,497,009 due primarily to increases in salary and benefits

expenses, depreciation expense, prototype device development and wafer fabrication expenses, and consulting fees, recognition of loss

on retirement of certain expired patent applications and patents, travel expenses, rent expense, property tax expenses, software expenses,

laboratory and wafer fabrication materials and supplies expenses, investor relations expenses, and sales and marketing expenses.

increases were offset by decreases in non-cash stock option amortization expense, commitment fee associated with the purchase of shares

by an institutional investor for sale under a stock purchase agreement, recruiting fees, accounting fees, and employee relocation expenses,

and an increase in interest income on money market account.

Significant Accounting Policies

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Liquidity and Capital Resources

source of operating cash inflows was proceeds from the sale of common stock to Lincoln Park (institutional investor) pursuant to purchase

agreements with Lincoln Park and proceeds from sale of common stock by Roth Capital (investment banking company) pursuant to the at the

market sale agreement with Roth Capital as described in Note 11 to the Financial Statements and below, proceeds received pursuant to the

exercise of options and warrants and a proceed received under a material supply and license agreement of which $39,875 is recorded as

deferred revenue as of December 31, 2023.

All of the registered shares under

the January 21, 2019 purchase agreement with Lincoln Park have been issued as of June 30, 2021.

On July 2, 2021, the Company filed

a $100 million universal shelf registration statement which became effective on July 9, 2021.

On October 4, 2021, our Company entered

into the 2021 purchase agreement with Lincoln Park to sell up to $33 million of common stock over a 36-month period.

All of the registered

shares under the October 4, 2021 purchase agreement with Lincoln Park have been issued as of June 30, 2023.

On February 28, 2023, our

Company entered into the 2023 purchase agreement with Lincoln Park to sell up to $30 million of common stock over a 36-month period, with

$10.5 million remaining on the 2023 purchase agreement as of the date of this filing.

On December 9, 2022, our Company entered into the

at the market sale agreement with Roth Capital, as sales agent, whereby pursuant to the at the market sale agreement, our Company may

offer and sell up to $35,000,000 in shares of our common stock, from time to time through Roth Capital.

As of the date of this filing

$33.4 million remains available to our Company pursuant to the at the market sale agreement.

the year ended December 31, 2023, the Company received $19,993,359 in proceeds pursuant to the 2021 purchase agreement and 2023 purchase

agreement with Lincoln Park, $1,515,878 in proceeds pursuant to the at the market sale agreement with Roth Capital, $1,013,924 in proceeds

pursuant to the exercise of options and warrants and $50,000 in a proceed received under a material supply and license agreement of which

$39,875 is recorded as deferred revenue as of December 31, 2023.

During the year ended December 31, 2022, the Company received $12,775,268

in proceeds pursuant to the 2021 purchase agreement with Lincoln Park and $653,895 in proceeds pursuant to the exercise of options and

During the year ended December 31, 2021, the Company received $30,350,674 in proceeds pursuant to purchase agreements with Lincoln

Park and $2,379,225 in proceeds pursuant to the exercise of options and warrants.

the year ended December 31, 2023, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to

vendors including prototypes development and foundries expenses and third-party service providers.

Our primary source of operating cash

inflows was (i) proceeds from the sale of common stock to Lincoln Park (institutional investor) pursuant to purchase agreements with Lincoln

Park and proceeds from sale of common stock by Roth Capital (investment banking company) pursuant to the at the market sale agreement

with Roth Capital as described in Note 10 to the Financial Statements and (ii) proceeds received pursuant to the exercise of options and

On July 2, 2021, our Company

filed a $100 million universal shelf registration statement which became effective on July 9, 2021, and expired on July 8, 2024.

26, 2024, the Company filed a new $100 million universal shelf registration statement which became effective on August 5, 2024.

4, 2021, our Company entered into the 2021 purchase agreement with Lincoln Park to sell up to $33 million of registered common stock over

a 36-month period.

All of the registered shares under the October 4, 2021 purchase agreement with Lincoln Park have been issued as of

December 31, 2023.

On February 28, 2023, our Company entered into the 2023 Purchase Agreement with Lincoln Park to sell up to $30 million

of registered common stock over a 36-month period.

As of the date of this filing, $0 remains on the 2023 Purchase Agreement.

17, 2025, our Company entered into the 2025 Purchase Agreement with Lincoln Park to sell up to $30 million of registered common stock

over a 36-month period, subject to the conditions set forth therein.

As of the date of this filing, $30 million remains on the 2025 Purchase

On December 9, 2022, our Company entered into the at the market sale agreement with Roth Capital, as sales agent, whereby pursuant

to the at the market sale agreement, our Company may offer and sell up to $35 million in shares of our registered common stock, from time

to time through Roth Capital.

As of the date of this filing, $31.5 million remains available to our Company pursuant to the at the market

sale agreement.

During the year ended December

2022, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including prototypes

development and foundries expenses, third-party service providers and payroll taxes related to cashless option exercise.

During the year

ended December 31, 2021, our primary sources of cash outflows from operations included payroll and bonus, payroll taxes related to cashless

option exercise, rent, utilities, payments to vendors including prototypes development and foundries expenses and third-party service

31, 2024, the Company received $12,366,965 in proceeds pursuant to the 2023 Purchase Agreement with Lincoln Park, $1,779,976 in proceeds

pursuant to the at the market sale agreement with Roth Capital, $337,350 in proceeds pursuant to the exercise of options and warrants

and $63,884 in cash collections from customer contracts, of which $50,000 related to the proceeds received under a material supply and

license agreement and $13,884 – to the proceeds received for a contact for processing work on the devices supplied by a customer.

During the year ended December 31, 2023, the Company received $19,993,359 in proceeds pursuant to the 2021 purchase agreement and 2023

Purchase Agreement with Lincoln Park, $1,515,878 in proceeds pursuant to the at the market sale agreement with Roth Capital, $1,013,924

in proceeds pursuant to the exercise of options and warrants and $50,000 in a proceed received under a material supply and license agreement

of which $39,875 is recorded as a contract liability as of December 31, 2023.

the year ended December 31, 2024, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to

vendors including prototypes development and foundries expenses, laboratory and wafer fabrication materials and supplies expenses, and

third-party service providers.

During the year ended December 31, 2023, our primary sources of cash outflows from operations included

payroll, rent, utilities, payments to vendors including prototypes development and foundries expenses and third-party service providers.

Sources and Uses of Cash

Our future expenditures and capital

requirements will depend on numerous factors, including:

Our future expenditures

and capital requirements will depend on numerous factors, including:

the progress of our research and development efforts;

the rate at which we can,

directly or through arrangements with original equipment manufacturers, continue to introduce and sell products incorporating our polymer

which we can, directly or through arrangements with original equipment manufacturers, introduce and sell products incorporating our polymer

materials technology;

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market acceptance of our products and competing technological developments;

and our ability to establish or continue to establish cooperative

development, joint venture and licensing arrangements.

We expect that we will incur approximately $1,830,000 of expenditures per month

over the next 12 months.

We expect the proceeds

received pursuant to the 2023 purchase agreement and future purchase agreements with Lincoln Park, the at the market sale agreement

with Roth Capital, the exercise of options and warrants and commercial operations to provide us with sufficient funds to maintain

our operations over the next 12 months.

Our current cash position enables us to finance our operations through July 2025

before we will be required to replenish our cash reserves pursuant to the 2023 Purchase Agreement or the Roth Sales Agreement.

Our cash requirements are expected to increase at a rate consistent with our Company’s revenue growth as we expand our

activities and operations with the objective of increasing our revenue stream from the commercialization of our electro-optic

polymer technology.

and our ability to establish cooperative development, joint

venture and licensing arrangements.

We expect that we will incur approximately $1,727,000 of expenditures per month over the next 12

expect the proceeds received pursuant to the 2023 and the 2025 Lincoln Park purchase agreements and, the at the market sale agreement

with Roth Capital, the exercise of options and warrants, and commercial operations to provide us with sufficient funds to maintain our

operations over the next 12 months.

Our current cash position enables us to finance our operations through April 2026

before we will be required to replenish our cash reserves.

Our cash requirements are expected to increase at a rate consistent with our

Company’s revenue growth as we expand our activities and operations with the objective of increasing our revenue stream from the

commercialization of our electro-optic polymer technology.

We currently have no debt to service.

We expect that our cash used in

operations will continue to increase during 2024 and beyond as a result of the following planned activities:

The addition of management, sales, marketing, technical and other staff to our workforce;

Increased spending for the expansion of our research and development efforts, including purchases of additional laboratory and production equipment;

Increased spending in marketing as our products are introduced into the marketplace;

Partnering with commercial foundries to implement our electro-optic polymers into accepted PDKs by the foundries;

We expect that our cash used in operations

will continue to increase during 2025 and beyond because of the following planned activities:

· The addition of management, sales, marketing, technical and other staff

to our workforce;

· Increased spending for the expansion of our research and development efforts,

including purchases of additional laboratory and production equipment;

· Increased spending in marketing as our products are introduced into the

· Partnering with commercial foundries to implement our electro-optic polymers

into accepted PDKs by the foundries;

· Developing and maintaining collaborative relationships with strategic partners;

· Developing and improving our manufacturing processes and quality controls;

Increases in our general and administrative activities related to our operations as a reporting public company and related corporate compliance requirements.

2023 Purchase Agreement with Lincoln Park

On February 28, 2023, our Company

entered into the 2023 purchase agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $30 million

of our common stock (subject to certain limitations) from time to time over a 36-month period.

Pursuant to the 2023 purchase agreement,

Lincoln Park is obligated to make purchases as the Company directs in accordance with the purchase agreement, which may be terminated

by the Company at any time, without cost or penalty.

Sales of shares will be made in specified amounts and at prices that are based upon

the market prices of our common stock immediately preceding the sales to Lincoln Park.

We expect this and any future purchase agreements

with Lincoln Park to provide us with sufficient funds to maintain our operations for the foreseeable future.

With the additional capital,

we expect to achieve a level of revenues attractive enough to fulfill our development activities and adequate enough to support our business

model for the foreseeable future.

are no trading volume requirements or restrictions under the 2023 purchase agreement, and we will control the timing and amount of any

sales of our common stock to Lincoln Park.

Lincoln Park has no right to require any sales by us, but is obligated to make purchases from

us as we direct in accordance with each of the 2023 purchase agreement.

We can also accelerate the amount of common stock to be purchased

under certain circumstances.

There are no limitations on the use of proceeds, financial or business

covenants, restrictions on future financings (other than restrictions on the Company’s ability to enter into a similar type of agreement

or equity line of credit during the term, excluding an at-the-market transaction with a registered broker-dealer), rights of first refusal,

participation rights, penalties or liquidated damages under the 2023 purchase agreement .

· Increases in our general and administrative activities related to our operations

as a reporting public company and related corporate compliance requirements.

and 2025 Purchase Agreements with Lincoln Park

On February 28, 2023, our

Company entered into the 2023 Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $30

million of our common stock (subject to certain conditions) from time to time over a 36-month period.

On March 17, 2025, our Company entered

into the 2025 Purchase Agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $30 million of our

common stock (subject to certain conditions) from time to time over a 36-month period.

Pursuant to the 2025 Purchase Agreement, subject

to the conditions set forth therein, Lincoln Park is obligated to make purchases as the Company directs in accordance with the 2025 Purchase

Agreement, which may be terminated by the Company at any time, without cost or penalty.

Sales of shares will be made in specified amounts

and at prices that are based upon a look back formula for market prices of our common stock immediately preceding the sales to Lincoln

are no trading volume requirements or restrictions on the 2025 Purchase Agreement, and we will control the timing and amount of any sales

of our common stock to Lincoln Park.

Lincoln Park has no right to require any sales by us, but is obligated to make purchases from us

as we direct in accordance with the 2025 Purchase Agreement.

We can also accelerate the amount of common stock to be purchased under

certain circumstances.

There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings

(other than restrictions on the Company’s ability to enter into a similar type of agreement or equity line of credit during the

term, excluding an at-the-market transaction with a registered broker-dealer), rights of first refusal, participation rights, penalties

or liquidated damages in the 2025 Purchase Agreement.

the Market Sale Agreement – Roth Capital

December 9, 2022, we entered into the at the market sale agreement with Roth Capital, as sales agent.

Pursuant to the at the market sale

agreement, our Company may offer and sell up to $35,000,000 in shares of our common stock, from time to time through Roth Capital.

delivery of a placement notice based on our Company’s instructions and subject to the terms and conditions of the at the market

sale agreement, Roth Capital may sell the shares by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated

9, 2022, we entered into the at the market sale agreement with Roth Capital, as sales agent.

Pursuant to the at the market sale agreement,

our Company may offer and sell up to $35 million in shares of our common stock, from time to time through Roth Capital.

Upon delivery

of a placement notice based on our Company’s instructions and subject to the terms and conditions of the at the market sale agreement,

Roth Capital may sell the shares by methods deemed to be an "at the market offering” as defined in Rule 415(a)(4) promulgated

under the Securities Act, including sales made directly on or through The Nasdaq Capital Market, on any other existing trading market

8 unchanged sentences

rules and regulations and the rules of Nasdaq.

We have agreed to pay Roth Capital commissions for its services of acting as

agent of 3.0% of the gross proceeds from the sale of the shares pursuant to the at the market sale agreement.

The amount of proceeds we receive

from the at the market sale agreement, if any, will depend upon the number of shares of our common stock sold and the market price at

which they are sold.

There can be no assurance that we will be able to sell any shares under or fully utilize this agreement.

is not required to sell any specific number of shares of our common stock under the agreement.

We intend to use net proceeds from the

at the market sale agreement for general corporate purposes, including, without limitation, sales and marketing activities, product development,

making acquisitions of assets, businesses, companies or securities, capital expenditures, and for working capital needs.

We cannot assure you that we will

meet the conditions of the 2023 purchase agreements with Lincoln Park in order to obligate Lincoln Park to purchase our shares of common

stock, and we cannot assure you that we will be able to sell any shares under or fully utilize the at the market sale agreement with Roth

In the event we fail to do so, and other adequate funds are not available to satisfy long-term capital requirements, or if planned

revenues are not generated, we may be required to substantially limit our operations.

This limitation of operations may include reductions

in capital expenditures and reductions in staff and discretionary costs.

We have agreed to pay Roth Capital commissions for its services of acting as agent of 3.0%

of the gross proceeds from the sale of the shares pursuant to the at the market sale agreement.

of proceeds we receive from the at the market sale agreement, if any, will depend upon the number of shares of our common stock sold and

the market price at which they are sold.

There can be no assurance that we will be able to sell any shares under or fully utilize this

Roth Capital is not required to sell any specific number of shares of our common stock under the agreement.

We intend to use

net proceeds from the at the market sale agreement for general corporate purposes, including, without limitation, sales and marketing

activities, product development, making acquisitions of assets, businesses, companies or securities, capital expenditures, and for working

capital needs.

assure you that we will meet the conditions of the 2025 Purchase Agreement with Lincoln Park in order to obligate Lincoln Park to purchase

our shares of common stock, and we cannot assure you that we will be able to sell any shares under or fully utilize the at the market

sale agreement with Roth Capital.

In the event we fail to do so, and other adequate funds are not available to satisfy long-term capital

requirements, or if planned revenues are not generated, we may be required to substantially limit our operations, which could result

in our Company reducing some capital expenditures or reducing staff and discretionary costs.

Analysis of Cash Flows

For the year ended December 31, 2024

Net cash used in operating

activities was $15,550,515 for the year ended December 31, 2024, primarily attributable to the net loss of $22,535,041 adjusted by $4,440,003

in options issued for services, $446,628 amortization of deferred compensation, $154,210 in common stock issued for services, $1,682,760

in depreciation expenses and patent amortization expenses, $192,487 amortization of right of use asset, $213,440 loss on disposal of property

and equipment and retirement of certain expired patent applications and patents, $(15,189) in accounts receivable, $835,880 in prepaid

expenses and other current assets, and ($965,693) in accounts payable, accrued bonuses, accrued expenses, contract liability and other

Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting

expenses, rent and other expenditures necessary to develop our business infrastructure.

Net cash used by investing

activities was $2,697,899 for the year ended December 31, 2024, consisting of $430,501 in cost for intangibles and $2,267,398 in asset

additions for the Colorado headquarter facility and labs.

Net cash provided by

financing activities was $14,484,291 for the year ended December 31, 2024, and consisted of $337,350 in proceeds from exercise of options

and warrants, $12,366,965 in proceeds from resale of common stock to an institutional investor and $1,779,976 in proceeds from at the

market sale of common stock by an investment banking company.

31, 2024, our cash and cash equivalents totaled $27,667,964, our assets totaled $37,807,983, our liabilities totaled $4,384,078 and we

had stockholders’ equity of $33,423,905.

For the year ended December 31, 2023

Net cash used in operating activities

15 unchanged sentences

had stockholders’ equity of $36,433,814.

For the year ended December 31, 2022

Net cash used in operating activities

was $10,465,880 for the year ended December 31, 2022, primarily attributable to the net loss of $17,230,480 adjusted by $5,813,628 in

options issued for services, $91,713 amortization of deferred compensation, $209,709 in common stock issued for services, $1,045,208 in

depreciation expenses and patent amortization expenses, ($379,037) in prepaid expenses, ($135,661) in accounts payable, accrued bonuses

and accrued expenses and $119,040 in cashless option exercise expense.

Net cash used in operating activities consisted of payments for

research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.

Net cash used by investing activities

was $2,209,722 for the year ended December 31, 2022, consisting of $260,415 in cost for intangibles, $1,307,187 in asset additions for

the Colorado headquarter facility and labs and $642,120 in a loan issuance.

Net cash provided by financing

activities was $13,345,141 for the year ended December 31, 2022 and consisted of $653,895 in proceeds from exercise of options and warrants,

$12,775,268 in proceeds from resale of common stock to an institutional investor offset by $84,022 in cashless option exercise tax payments.

31, 2022, our cash and cash equivalents totaled $24,102,151, our assets totaled $29,263,472, our liabilities totaled $1,710,449 and we

had stockholders’ equity of $27,553,023.

For the year ended December 31, 2021

Net cash used in operating activities

was $10,038,626 for the year ended December 31, 2021, primarily attributable to the net loss of $18,631,381 adjusted by $11,001 in warrants

issued for services, $1,022,985 in options issued for services, $2,059,464 in common stock issued for services, $878,520 in depreciation

expenses and patent amortization expenses, ($410,700) in Paycheck Protection Program loan forgiveness, $334,877 in prepaid expenses, $1,023,785

in accounts payable, accrued bonuses and accrued expenses and $3,672,823 in cashless option exercise expense.

Net cash used in operating

activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures

necessary to develop our business infrastructure.

Net cash used by investing activities

was $1,116,179 for the year ended December 31, 2021, consisting of $18,649 in cost for intangibles and $1,097,530 in asset additions primarily

for the Colorado headquarter facility and labs.

Net cash provided by financing

activities was $31,280,827 for the year ended December 31, 2021 and consisted of $2,379,225 in proceeds from exercise of options and warrants,

$30,350,674 in proceeds from resale of common stock to an institutional investor offset by $1,435,965 in cashless option exercise tax

payments and $13,107 repayment of equipment purchased.

31, 2021, our cash and cash equivalents totaled $23,432,612, our assets totaled $27,228,575, our liabilities totaled $2,024,303 and we

had stockholders’ equity of $25,204,272.

Contractual Obligations

See “Note 8–Commitments”

of the notes to the financial statements contained elsewhere within this Annual Report on Form 10-K for a discussion of our operating

lease for office and laboratory space.

8–Leases” of the notes to the financial statements contained elsewhere within this Annual Report on Form 10-K for a discussion

of our operating lease for office and laboratory space.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis