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What changed 10-K

Item 9A. Controls and Procedures

2024-02-29 compared with 2023-03-01 · 469 added, 315 removed, 755 unchanged (51% of the section changed)

10 unchanged sentences

Management’s Annual Report on Internal Control Over Financial

Our management is responsible for

establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f)

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f)

and 15d-15(f).

11 unchanged sentences

Company’s assets that could have a material effect on the financial statements.

Our management, including our principal

executive officer and principal financial officer, does not expect that our disclosure controls or our internal control over financial

reporting will prevent or detect all errors and all fraud.

A control system, no matter how well designed and operated, can provide only

reasonable, not absolute, assurance that the control system’s objectives will be met.

Our management, including our

principal executive officer and principal financial officer, does not expect that our disclosure controls or our internal control over

financial reporting will prevent or detect all errors and all fraud.

A control system, no matter how well designed and operated, can provide

only reasonable, not absolute, assurance that the control system’s objectives will be met.

Internal control over financial reporting

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Other Information

Trading Arrangements

6, 2023 , Ronald Bucchi , a member of our Company’s Board of Directors , adopted a non-Rule 10b5–1 trading

arrangement as defined in Item 408(c) of Regulation S-K.

The arrangement provided for the sale of 27,000 shares of

the Company’s common stock and it terminated on December 6, 2023, after all of the shares were sold.

arrangement was adopted during an open trading window and satisfied the Company’s policies regarding insider transactions.

13, 2023 , Fred Leonberger , a member of our Company’s Board of Directors , adopted a non-Rule 10b5–1 trading

arrangement as defined in Item 408(c) of Regulation S-K.

The arrangement provided for the sale of 75,000 shares of

the Company’s common stock and it terminated on December 13, 2023, after all of the shares were sold.

arrangement was adopted during an open trading window and satisfied the Company’s policies regarding insider transactions.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Directors, Executive Officers and Corporate Governance.

Information required under this Item

will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2022, our most recent fiscal

year end, and is incorporated herein by reference.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

our most recent fiscal year end, and is incorporated herein by reference.

Executive Compensation.

Information required under this Item

will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2022, our most recent fiscal

year end, and is incorporated herein by reference.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

our most recent fiscal year end, and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information required under this Item

will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2022, our most recent fiscal

year end, and is incorporated herein by reference.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

our most recent fiscal year end, and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

Information required under this Item

will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2022, our most recent fiscal

year end, and is incorporated herein by reference.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

our most recent fiscal year end, and is incorporated herein by reference.

Principal Accountant Fees and Services.

Information required under this Item

will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2022, our most recent fiscal

year end, and is incorporated herein by reference.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

our most recent fiscal year end, and is incorporated herein by reference.

Exhibits, Financial Statement Schedules

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Incorporated by reference to Company’s Form S-1 Registration Statement as filed with the SEC on August 3, 2015

Restated Bylaws

Incorporated by reference to the Company’s Form 10-K as filed with the SEC on March 16, 2018

Amended and Restated Bylaws

Incorporated by reference to the Company’s Form 10-Q as filed with the SEC on November 9, 2023

Description of Registrant’s Securities

6 unchanged sentences

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on January 21, 2022

Employee Agreement Amendment – Michael Lebby

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on March 20, 2023

Employee Agreement Amendment – Michael Lebby

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on April 27, 2023

Employee Agreement - James Marcelli

4 unchanged sentences

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on January 21, 2022

Employee Agreement Amendment – James Marcelli

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on March 20, 2023

Employee Agreement Amendment – James Marcelli

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on April 27, 2023

Form of Executive Paid Time Off Waiver Agreement

20 unchanged sentences

Incorporated by reference to Appendix A to the Company’s Definitive Schedule 14A filed with the SEC on April 12, 2019

Equity Incentive Plan Amendment No.

Incorporated by reference to Appendix A to the Company’s Definitive Schedule 14A filed with the SEC on April 14, 2023

Form of Non-qualified Stock Option Award Agreement - Employees

5 unchanged sentences

Form of Restricted Stock Award Agreement -Non Employee Directors

Incorporated by reference to the Company’s Annual Report on Form

10-K as filed with the SEC on March 1, 2022

Incorporated by reference to the Company’s Annual Report on Form 10-K as filed with the SEC on March 1, 2022

Lease Agreement dated October 26, 2017

1 unchanged sentence

First Amendment to the October 26, 2017 Lease Agreement dated November 22, 2022

Filed herewith

Incorporated by reference to Company’s Form 10-K as filed with the SEC on March 1, 2023

Purchase Agreement, dated October 4, 2021, by and between the Company and Lincoln Park

3 unchanged sentences

Purchase Agreement, dated February 28, 2023, by and between the Company and Lincoln Park

Filed herewith

Incorporated by reference to Company’s Form 10-K as filed with the SEC on March 1, 2023

Registration Rights Agreement, dated February 28, 2023, by and between the Company and Lincoln Park

Filed herewith

Incorporated by reference to Company’s Form 10-K as filed with the SEC on March 1, 2023

Code of Ethics and Business Conduct

Incorporated by reference to the Company’s Form 10-K as filed with the SEC on March 16, 2018

Insider Trading Policy

Filed herewith

Subsidiaries of the Registrant

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Filed herewith

Compensation Clawback Policy

Filed herewith

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

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(Principal Executive Officer)

March 1, 2023

February 29, 2024

Pursuant to the requirements of

3 unchanged sentences

Chief Executive Officer, Principal Executive Officer, Chair of the Board of Directors

March 1, 2023

February 29, 2024

Michael Lebby

President, Chief Operating Officer, Principal Financial Officer, Secretary, Director

March 1, 2023

President, Chief Operating Officer, Principal Financial/Accounting Officer, Secretary, Director

February 29, 2024

/s/ Ronald A.

March 1, 2023

February 29, 2024

/s/ Siraj Nour El-Ahmadi

March 1, 2023

February 29, 2024

Siraj Nour El-Ahmadi

/s/ Frederick J.

March 1, 2023

February 29, 2024

/s/ Craig Ciesla

March 1, 2023

LIGHTWAVE LOGIC, INC.

FINANCIAL STATEMENTS

DECEMBER 31, 2022, 2021 AND 2020

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

February 29, 2024

/s/ Laila Partridge

February 29, 2024

Laila Partridge

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID Number 00 536 )

BALANCE SHEETS

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NOTES TO FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and

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Critical Audit Matters

Critical audit matters are matters arising from the

current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective,

or complex judgments.

Critical audit matters are matters arising from

the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

We determined that there are no critical audit matters.

1 unchanged sentence

We have served as the Company’s auditor since

PCAOB ID Number 00 536

Blue Bell, Pennsylvania

March 1, 2023

February 29, 2024

LIGHTWAVE LOGIC, INC.

BALANCE SHEETS

December 31, 2023

December 31, 2022

CURRENT ASSETS

Cash and cash equivalents

Accounts Receivable

Prepaid expenses and other current assets

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Accounts payable and accrued expenses - related parties

Deferred revenue

Deferred lease liability

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Preferred stock, $ 0.001 par value, 1,000,000 authorized, no shares issued or outstanding

Common stock $ 0.001 par value, 250,000,000 authorized, 112,882,793 and 110,555,459 issued and outstanding at December 31, 2022 and December 31, 2021

Common stock $ 0.001 par value, 250,000,000 authorized, 118,137,309 and 112,882,793

issued and outstanding at December 31, 2023 and December 31, 2022

Additional paid-in-capital

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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these

financial statements.

LIGHTWAVE LOGIC, INC.

STATEMENTS OF COMPREHENSIVE LOSS

FOR THE YEARS ENDING DECEMBER 31, 2022, 2021

FOR THE YEARS ENDING DECEMBER 31, 2023, 2022 AND

December 31, 2023

December 31, 2022

December 31, 2021

COST AND EXPENSE

Cost of sales

Research and development

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( 2,059,464 )

Gain on disposal of property and equipment

Other (expense) income

$ ( 21,038,032 )

4 unchanged sentences

The accompanying notes are an integral part of these financial statements

LIGHTWAVE LOGIC, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDING DECEMBER 31, 2022, 2021

OF STOCKHOLDERS’ EQUITY

THE YEARS ENDING DECEMBER 31, 2023, 2022 AND 2021

BALANCE AT DECEMBER 31, 2022

1 unchanged sentence

$ ( 133,324 )

$ ( 106,833,361 )

Common stock issued to institutional investor

Common stock issued for commitment shares

Common stock sales at the market by investment banking company

Exercise of options

Cashless exercise of 4,375 options

Exercise of warrants

1 unchanged sentence

Restricted stock awards issued for future services

Forfeiture restricted stock awards issued for future services

Deferred compensation

8 unchanged sentences

$ 114,696,597

$ ( 89,602,881 )

Common stock issued to institutional investor

4 unchanged sentences

Options issued for services

Warrants issued for services

Restricted stock awards issued for future services

Forfeiture restricted stock awards issued for future services

Deferred compensation

Net loss for the year ending December 31, 2022

4 unchanged sentences

$ ( 133,324 )

$ ( 106,833,361 )

BALANCE AT DECEMBER 31, 2020

2 unchanged sentences

Common stock issued for commitment shares

Exercise of options

Cashless exercise of 445,252 options

Exercise of warrants

6 unchanged sentences

$ 114,696,597

$ ( 89,602,881 )

The accompanying notes are an integral part of these financial statements

9 unchanged sentences

$ ( 18,631,381 )

Adjustments to reconcile net loss to net cash used in operating activities

Adjustments to reconcile net loss to net cash used in

operating activities

Warrants issued for services

4 unchanged sentences

Depreciation and amortization of patents

Amortization of right of use asset

Gain on disposal of property and equipment

Paycheck Protection Program loan forgiveness

Decrease (increase) in assets

Accounts receivable

Prepaid expenses and other current assets

3 unchanged sentences

Accounts payable and accrued expenses-related parties

Deferred revenue

Deferred lease liability

Paycheck Protection Program advance

Operating lease liability

Net cash used in operating activities

7 unchanged sentences

( 1,307,187 )

Issuance of loan

( 1,097,530 )

Repayment (issuance) of loan

Sale of property and equipment

Net cash used in investing activities

1 unchanged sentence

( 2,209,722 )

( 1,116,179 )

CASH FLOWS FROM FINANCING ACTIVITIES

3 unchanged sentences

Issuance of common stock, institutional investor

At the market sale by investment banking company

Repayment of equipment purchase payable

3 unchanged sentences

CASH AND CASH EQUIVALENTS - END OF YEAR

Disclosure of Non-cash investing and financing activities :

Amended Operating Lease - Right of Use -

Building and Operating lease liability

The accompanying notes are an integral part of these financial statements

5 unchanged sentences

Lightwave Logic, Inc.

a technology company focused on the development of next generation photonic devices and non-linear optical polymer materials systems for

applications in high speed fiber-optic data communications and optical computing markets.

Currently the Company is in various stages of

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

The Company expects to obtain

a revenue stream from technology licensing agreements, technology transfer agreements and the production and direct sale of its own electro-optic

device components.

“Company”) is a technology company focused on the development of next generation photonic devices and electro-optic polymer

materials systems for applications in high speed fiber-optic data communications, telecommunications and optical computing markets.

The Company's

first revenue stream is from a technology material supply and licensing agreement that incorporates the Company's patented electro-optic polymer

materials for use in manufacturing photonic devices.

Currently, the Company is in various stages of photonic device and materials

development and evaluation with potential customers and strategic partners.

The Company expects to obtain additional revenue from material

supply and licensing agreements, technology transfer agreements and the production and direct sale of its own photonic devices.

The Company’s current

2 unchanged sentences

Lightwave Logic, Inc.

(the “Company”)

was organized under the laws of the State of Nevada in 1997, and the Company commenced with its current business plan in 2004.

was organized under the laws

of the State of Nevada in 1997, and it commenced with its current business plan in 2004.

Basis of Presentation

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financial instruments such as cash, accounts payable and accrued expenses approximate their fair values because of their short maturities.

Revenue Recognition

In accordance with FASB ASC 606, Revenue from Contracts

with Customers , the Company will recognize revenue upon transfer of promised goods or services in an amount that reflects the consideration

expected to be received in exchange for those goods or services.

To determine revenue recognition for arrangements within the scope of

FASB ASC 606, the Company performs the following five steps:

Identify the contract with the customer.

Identify the performance obligations in the contract.

Determine the transaction price.

Allocate the transaction price to the performance obligations in the contract.

Recognize revenue as (or when) the performance obligations are satisfied.

For product sales, revenue will be recognized at a point in time when the

product is shipped or is delivered to the customer’s location.

For services performed, revenue will be recognized at a point in

time when the service is performed.

However, for certain contracts, revenue will be recognized over time as the customer simultaneously

receives and consumes the benefits of performance as the Company performs the service.

For license agreements, each contract will be reviewed

to determine the portion of the revenue recognition at the point in time that the license is transferred to the customer and the portion

of the revenue recognition to be recognized over time.

Revenue Recognition and Deferred Revenue

The rights and benefits to the Company’s patented electro-optic polymer

materials are conveyed to the customer through technology license and material supply agreements where the Company provides the licensee

a supply of its proprietary polymers for use in the licensee’s manufacturing of photonic devices (the “Licensed Product”)

as well as non-exclusive, royalty-bearing license to intellectual property rights in the Company’s patented polymer technology.

The Company receives license and royalty payments under such commercial agreements, some of which are nonrefundable upfront payments for

license fees.

These advances are initially recorded as deferred revenue on the Company’s balance sheets.

The Company believes that

the licenses provided and materials transferred under such agreements are not distinct from each other for financial reporting purposes

and as such, they are accounted for as a single performance obligation.

Advance payments for license fees and minimum annual royalties

are recognized on a pro-rata basis over the related contract term.

Royalties from licensee’s sale of the Licensed Product that exceed

the minimum annual royalty are recognized when cumulative royalties exceed the minimum royalty.

Milestone license fees are recognized

when the licensee reaches the milestone of selling a contractually specified number of units of the Licensed Product.

Revenue associated with the sale of the Company’s patented electro-optic

polymer materials for incorporation into the customers’ commercial photonic devices or for their device development and evaluation

activities will be recognized at the time title passes, which is typically at the time of shipment or at the time of delivery, depending

upon the contractual agreement between the parties.

Cost of Sales

Cost of sales consists of labor costs, material costs and manufacturing

overhead costs associated with the production of materials transferred to the customer under the technology license and material supply

agreement at the Company’s facility.

The Company follows Financial Accounting Standards

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The amendments in the 2018 Update expand the scope of Topic 718

to include share-based payment transactions for acquiring goods and services from nonemployees.

to include share-based payment transactions for acquiring goods and services from non-employees.

Prior to the 2018 Update, Topic 718 applied

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income (loss).

Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

As of December 31, 2023 and for the period then ended,

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DECEMBER 31, 2023, 2022 AND 2021

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

Reclassifications

Certain reclassifications have been

made to the 2022 financial statement in order to conform to the 2023 financial statement presentation.

NOTE 2 – MANAGEMENT’S PLANS

expenditures and capital requirements will depend on numerous factors, including:

the progress of our research and development

the rate at which we can, directly or through arrangements with original equipment manufacturers, introduce and sell

products incorporating our polymer materials technology;

the costs of filing, prosecuting, defending and enforcing any patent claims

and other intellectual property rights;

market acceptance of our products and competing technological developments;

and our ability

to establish cooperative development, joint venture and licensing arrangements.

We expect that we will incur

approximately $ 1,604,000 of

expenditures per month over the next 12 months.

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

On July 2, 2021, the Company filed a $100,000,000 universal shelf registration statement with the U.S.

Securities and

Exchange Commission which became effective on July 9, 2021.

On October 4, 2021, the Company entered into a purchase agreement with

the institutional investor to sell up to $ 33,000,000

of common stock over a 36-month period (described in Note 10).

Pursuant to the purchase agreement, the Company received $ 1,720,750

in January and February 2023 and a remaining available amount of $ 2,126,557

Our future expenditures and capital requirements

will depend on numerous factors, including:

the progress of our research and development efforts;

the rate at which we can, directly

or through arrangements with original equipment manufacturers, introduce and sell products incorporating our polymer materials technology;

the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

market acceptance

of our products and competing technological developments;

and our ability to establish cooperative development, joint venture and licensing

arrangements.

We expect that we will incur approximately $ 1,830,000 of expenditures per month over the next 12 months.

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

On February 28, 2023, the Company entered

into a purchase agreement with the institutional investor to sell up to $ 30,000,000 of common stock over a 36-month period (described

Pursuant to the purchase agreement, the Company received $ 3,335,300 in January and February 2024 and a remaining available

amount of $ 10,518,648 is available to the Company per the agreement.

On December 9, 2022, the Company entered into a sales agreement

with an investment banking company whereby the Company may offer and sell shares of its common stock having an aggregate offering price

of up to $ 35,000,000 from time to time through or to the investment banking company, as sales agent or principal (described in Note 11).

Pursuant to the sales agreement, the Company received $ 52,669 in January and February 2024 and the remaining available amount of $ 33,382,897

is available to the Company per the agreement.

On December 9, 2022, the Company entered into a sales agreement with an investment

banking company whereby the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 35,000,000

from time to time through or to the investment banking company, as sales agent or principal (described in Note 10).

requirements are expected to increase at a rate consistent with the Company’s path to revenue as we expand our activities and

operations with the objective of commercializing our electro-optic polymer technology.

The Company's first commercial agreement occurred in May 2023 from a material supply and

license agreement that incorporates the Company's patented electro-optic polymer materials for use

in manufacturing photonic devices (described in Note 3 ).

For the year ended December 31,

2023, we recognized $ 40,502 in revenue related to this agreement.

Our cash requirements are expected to increase at a rate consistent

with the Company’s path to revenue as we expand our activities and operations with the objective of commercializing our electro-optic

polymer technology.

We currently have no debt to service.

NOTE 3 – REVENUE

The Company recognizes revenue in accordance with

ASC Topic 606, Revenue from Contracts with Customers (Topic 606).

The standard establishes the principles that an entity shall apply to

report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows

from a contract with a customer.

The Company's first commercial agreement occurred

in May 2023, in the form of a four-year material supply and license agreement (the “License Agreement”) that incorporates

the Company's patented electro-optic polymer materials for use in manufacturing of photonic devices (the “Licensed Product”).

The licensee shall pay the Company a running royalty with a minimum royalty paid on an annual basis over the term of the License Agreement.

Additional future revenue will be generated from royalties from the licensee’s sale of Licensed Product that exceed the minimum

royalty payments and milestone license fees.

The License Agreement is a non-exclusive material supply and license agreement.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2023, 2022 AND 2021

NOTE 3 – REVENUE (CONTINUED)

Timing of Revenue Recognition and Contract

related to the initial license fee and a minimum annual royalty are recognized over time commencing with the License Agreement in

An up-front license fee in the amount of $ 50,000 was paid during the period ending December 31, 2023.

$ 39,875 of this

amount is recorded in short term liability deferred revenue in the Company’s balance sheet as of December 31, 2023.

For the year ended

December 31, 2023, the Company recognized $ 40,502 in revenue related to this agreement.

Contract balances

are as follows:

Schedule of contract balances

Accounts receivable, net

Short-term contract assets

Long-term contract assets

Short-term liability deferred revenue

Long-term liability deferred revenue

A roll forward of contract balances is

not disclosed since there were no contracts as of December 31, 2022.

Assets Recognized for the Costs to

Obtain a Contract

There are no assets recognized for the

costs to obtain the License Agreement.

NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT

1 unchanged sentence

Schedule of prepaid expenses and other current assets

Deposit for equipment

December 31, 2023

December 31, 2022

Materials fabrication

Prototype devices

Deposit for equipment

Investor relations

Lease incentive receivable

Loan interest receivable

Prepaid expenses and other current assets

prepaid expenses and other current

NOTE 5 – LOAN RECEIVABLE

On September 7, 2022, the Company entered into a convertible loan agreement

(the “Loan”) with an entity and issued a loan on September 12, 2022 in the amount of EUR 600,000 bearing interest at 7 % per

annum with a maturity date of March 31, 2023 .

The Company recorded $ 13,375 of interest income for the year ended December 31, 2022.

exchange rates used for the conversion of the EUR denominated loan are the December 31, 2022 reporting period end date exchange rate for

the loan principal resulting in a balance of $ 642,120 and interest receivable resulting in a balance of $ 13,669 and

the average exchange rate for the period ending December 31, 2022 for interest income.

On September 7, 2022, the Company entered into a

convertible loan agreement (the “Loan”) with an entity and issued a loan on September 12, 2022 in the amount of EUR 600,000

bearing interest at 7 % per annum with a maturity date of March 31, 2023 .

The Company recorded $ 13,375 of interest income for the

year ended December 31, 2022.

The exchange rates used for the conversion of the EUR denominated loan were the December 31,

2022 reporting period end date exchange rate for the loan principal resulting in a balance of $ 642,120 and interest receivable resulting

in a balance of $ 13,669 and the average exchange rate for the period ending December 31, 2022 for interest income.

interest were repaid in February and March 2023.

The Company recorded $ 11,125 of interest income for the period ended December 31, 2023

and used the average exchange rate for the conversion of the EUR denominated interest income for the period.

LIGHTWAVE LOGIC, INC.

4 unchanged sentences

schedule of property and equipment

December 31, 2023

December 31, 2022

Office equipment

4 unchanged sentences

31, 2023, 2022 and 2021 was $ 1,035,620 , $ 966,995 and $ 792,004 .

During the year ending December 31, 2022, the Company retired $ 70,963 of

leasehold improvements.

During the years ended December 31, 2021 and 2020, the Company did no t sell or retire property and equipment.

During the year ending December 31, 2023, the Company disposed of equipment

for proceeds of $ 590 , trade-in credit of $ 216,090 and a gain of $ 215,509 .

During the year ending December 31, 2022, the Company retired

$ 70,963 of leasehold improvements.

During the year ended December 31, 2021, the Company did no t sell or retire property and equipment.

NOTE 7 – INTANGIBLE ASSETS

1 unchanged sentence

with the prosecution of patent applications.

The Company has recorded amortization expense on patents granted, which are amortized over

the remaining legal life.

The Company has recorded amortization expense on patents granted, which are amortized

over the remaining legal life.

Maintenance patent fees are paid to a government patent authority to maintain a granted patent in

8 unchanged sentences

Schedule of intangible assets

December 31, 2023

December 31, 2022

Accumulated amortization

1 unchanged sentence

Amortization expense for the years ending December

31, 2022, 2021 and 2020 was $ 78,213 , $ 86,516

31, 2023, 2022 and 2021 was $ 83,521 , $ 78,213 and $ 86,516 .

There were no patent costs written off for the years ended December 31, 2023,

2022 and 2021.

no patent costs

written off for the years ended December 31, 2022, 2021 and 2020.

LIGHTWAVE LOGIC, INC.

3 unchanged sentences

On October 30, 2017, the Company entered into a lease

agreement (the “Lease”) to lease approximately 13,420 square feet of office, laboratory and research and development space

located in Colorado for the Company’s principal executive offices and research and development facility.

The term of the lease

is sixty- one ( 61 ) months, beginning

on November 1, 2017 and ending on November

During January 2022, the term was extended for an additional twenty-four ( 24 )

This extension did not require a lease modification as the additional option period was included in the original computation

as of January 1, 2019.

agreement (the “Lease”) to lease approximately 13,420 square feet of office, chemistry, clean room and research and development

space located in Colorado for the Company’s principal executive offices and research and development facility.

the lease is sixty- one ( 61 ) months, beginning on November 1, 2017 and ending on November 30, 2022 .

During January 2022, the term

was extended for an additional twenty-four ( 24 ) months.

This extension did not require a lease modification as the additional option

period was included in the original computation as of January 1, 2019.

Base rent for the first year of the lease term is approximately

with an increase in annual base rent of approximately 3 %

in each subsequent year of the lease term.

As specified in the lease, the Company paid the landlord (i) all base rent for the period

November 1, 2017 and ending on October 31, 2019, in the sum of $ 347,045 ;

$ 168,824 , with an increase in annual base rent of approximately 3 % in each subsequent year of the lease term.

As specified in the

lease, the Company paid the landlord (i) all base rent for the period November 1, 2017 and ending on October 31, 2019, in the sum of

and (ii) the estimated amount of tenant’s proportionate share of operating expenses for the same period in the sum of

Commencing on November 1, 2019, monthly installments of base rent and one-twelfth of landlord’s estimate of tenant’s proportionate

share of annual operating expenses shall be due on the first day of each calendar month.

The lease also provides that (i) on November

1, 2019 landlord shall pay the Company for the cost of the cosmetic improvements in the amount of $3.00 per rentable square foot of the

premises, and (ii) on or prior to November 1, 2019, the Company shall deposit with Landlord the sum of $ 36,524

as a security deposit which shall be held by landlord to secure the Company’s obligations under the lease.

On October 30,

2017, the Company entered into an agreement with the tenant leasing the premise from the landlord (“Original Lessee”) whereby

the Original Lessee agreed to pay the Company the sum of $260,000 in consideration of the Company entering into the lease and landlord

agreeing to the early termination of the Original Lessee’s lease agreement with landlord.

The consideration of $ 260,000

was received on November 1, 2017.

to the adoption of the new lease standard, the Company has capitalized the present value of the minimum lease payments commencing November

1, 2019, including the additional option period using an estimated incremental borrowing rate of 6.5 %.

The minimum lease payments do not

include common area annual expenses which are considered to be nonlease components.

Commencing on November 1, 2019, monthly installments of base rent and one-twelfth of landlord’s estimate of tenant’s

proportionate share of annual operating expenses shall be due on the first day of each calendar month.

The lease also provides that (i)

on November 1, 2019 landlord shall pay the Company for the cost of the cosmetic improvements in the amount of $3.00 per rentable square

foot of the premises, and (ii) on or prior to November 1, 2019, the Company shall deposit with Landlord the sum of $ 36,525 as a security

deposit which shall be held by landlord to secure the Company’s obligations under the lease.

On October 30, 2017, the Company

entered into an agreement with the tenant leasing the premise from the landlord (“Original Lessee”) whereby the Original

Lessee agreed to pay the Company the sum of $260,000 in consideration of the Company entering into the lease and landlord agreeing to

the early termination of the Original Lessee’s lease agreement with landlord.

The consideration of $ 260,000 was received

on November 1, 2017.

Due to the adoption of the new lease standard, the

Company has capitalized the present value of the minimum lease payments commencing November 1, 2019, including the additional option period

using an estimated incremental borrowing rate of 6.5 %.

The minimum lease payments do not include common area annual expenses which are

considered to be non-lease components.

As of January 1, 2019 the operating lease right-of-use

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warehouse space.

The Amended Lease is contingent upon the landlord entering into a written agreement with the existing tenant occupying

the expanded premise (“the Existing Tenant Lease Termination”) to terminate its lease prior to the expiration date thereof,

and to surrender the expansion premises to the landlord.

The term of the Amended Lease is one hundred twenty ( 120 ) months, with an effective

date estimated to be August 1, 2023 or earlier if the existing tenant terminates its lease prior to that date.

Base rent through October

31, 2023 of the Amended Lease term is approximately $ 30,517 per month.

The base rent for the next full year of the Amended Lease term

is approximately $ 377,288 , with an increase in annual base rent of approximately 3 % in each subsequent year of the lease term.

on the effective date, monthly installments of base rent and one-twelfth of landlord’s estimate of tenant’s proportionate

share of annual operating expenses shall be due on the first day of each calendar month.

The Amended Lease also provides an allowance

of up to $ 38,736 to be used solely for the cost of renovations to the additional lease premises.

As of December, 31, 2022, the landlord

did not enter into the Existing Tenant Lease Termination.

As a result, the Company did not capitalize the present value of the minimum

lease payments under the Amended Lease.

The term of the Amended Lease is one hundred twenty ( 128 ) months, with an effective date of June 1, 2023 .

rent through January 31, 2024 of the Amended Lease term is approximately $ 30,517 per month.

The base rent for the next full year of the

Amended Lease term is approximately $ 377,288 , with an increase in annual base rent of approximately 3 % in each subsequent year of the

Commencing on June 1, 2023, monthly installments of base rent and one-twelfth of landlord’s estimate of tenant’s

proportionate share of annual operating expenses shall be due on the first day of each calendar month.

The Amended Lease also provides

an allowance of up to $ 43,216 to be used solely for the cost of renovations to the additional lease premises.

As of June 1, 2023, the

operating lease right-of-use asset and operating lease liability amounted to $ 2,945,322 .

The Company has elected not to recognize right-of-use

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NOTE 8 – COMMITMENTS (CONTINUED)

The Company is obligated under an operating lease

for office and laboratory space.

The aggregate minimum future lease payments under the operating lease, including the extended term are

The Company is obligated under the Amended Lease for

office, chemistry, clean room and research and development space.

The aggregate minimum future lease payments under the Amended Lease,

including the extended term are as follows:

Schedule of future lease payments of operating leases

Total operating lease obligation

Less discounted interest

( 1,444,495 )

Rent expense totaling $ 236,170 and $ 78,724 is included

4 unchanged sentences

December 31, 2021.

PAYCHECK PROTECTION PROGRAM ADVANCE

NOTE 9 – PAYCHECK PROTECTION PROGRAM

On April 24, 2020, the Company received $ 410,700 in

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effective income tax rate is as follows:

Schedule of Reconciliation of Statutory Federal Rate to Effective Income Tax Rate

Schedule of reconciliation of statutory federal rate to effective income tax ate

Income tax benefit at U.S.

9 unchanged sentences

( 2,850,000 )

( 2,981,000 )

Change in valuation allowance

23 unchanged sentences

As of December 31, 2023, the Company had net operating

loss carry forwards of approximately $ 97,297,000

and is comprised of net operating losses in the amount of approximately $ 38,275,000

recorded in tax years beginning prior to Janua ry 1, 2018 expiring through

the year ending December 31,

2038 and net operating losses recorded in tax years beginning January 1, 2018 and after in the amount of approximately $ 59,022,000

which are allowed for an indefinite carryforward period but may be subject to limitations.

This amount can be used to offset future

taxable income of the Company.

The timing and manner in which the Company can utilize

operating loss carryforwards in any year may be limited by provisions of the Internal Revenue Code regarding changes in ownership of corporations.

Such limitation may have an impact on the ultimate realization of its carryforwards and future tax deductions.

loss carry forwards of approximately $ 117,985,000 and is comprised of net operating losses in the amount of approximately $ 38,275,000

recorded in tax years beginning prior to January 1, 2018 expiring through the year ending December 31, 2038 and net operating losses recorded

in tax years beginning January 1, 2018 and after in the amount of approximately $ 79,710,000 which are allowed for an indefinite carryforward

period but may be subject to limitations.

This amount can be used to offset future taxable income of the Company.

LIGHTWAVE LOGIC, INC.

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NOTE 10 – INCOME TAXES (CONTINUED)

The timing and manner in which the Company can utilize

operating loss carryforwards in any year may be limited by provisions of the Internal Revenue Code regarding changes in ownership of corporations.

Such limitation may have an impact on the ultimate realization of its carryforwards and future tax deductions.

The Company follows FASB ASC 740-10, which provides

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In January 2019, the Company signed a purchase agreement

with the institutional investor to sell up to $ 25,000,000

of common stock.

The Company registered 9,500,000

shares pursuant to a registration statement filed on January 30, 2019 which became effective February 13, 2019.

The Company issued

shares of common stock to the institutional investor as an initial commitment fee valued at $ 258,125 ,

fair value, and 812,500

shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms

of the purchase agreement.

The Company registered an additional 6,000,000

shares pursuant to a registration statement filed on January 24, 2020 which became effective February 4, 2020.

with the institutional investor to sell up to $ 25,000,000 of common stock.

The Company registered 9,500,000 shares pursuant to a registration

statement filed on January 30, 2019 which became effective February 13, 2019.

The Company issued 350,000 shares of common stock to the

institutional investor as an initial commitment fee valued at $ 258,125 , fair value, and 812,500 shares of common stock are reserved for

additional commitment fees to the institutional investor in accordance with the terms of the purchase agreement.

The Company registered

an additional 8,000,000

shares pursuant to a registration statement filed on November 20, 2020 which became effective November 20, 2020.

the period January 2019 through December 30, 2022, the institutional investor purchased 22,337,500

shares of common stock for proceeds of $ 23,773,924

and the Company issued 772,666

shares of common stock as additional commitment fee, valued at $ 1,575,509 ,

fair value, leaving 39,834

in reserve for additional commitment fees.

During the year ending December 30, 2022, the institutional investor did no t

purchase any shares of common stock.

an additional 6,000,000 shares pursuant to a registration statement filed on January 24, 2020 which became effective February 4, 2020.

The Company registered an additional 8,000,000 shares pursuant to a registration statement filed on November 20, 2020 which became effective

November 20, 2020.

During the period January 2019 through December 31, 2023, the institutional investor purchased 22,337,500 shares of

common stock for proceeds of $ 23,773,924 and the Company issued 772,666 shares of common stock as additional commitment fee, valued at

$ 1,575,509 , fair value, leaving 39,834 in reserve for additional commitment fees.

During the year ending December 31, 2023, the institutional

investor did not purchase any shares of common stock.

All the registered shares under the purchase agreement have been issued as of December

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Securities and Exchange Commission which became effective on July 9, 2021.

4, 2021, the Company entered into a purchase agreement with the institutional investor to sell up to $ 33,000,000

of common stock over a 36-month period.

Concurrently with entering into the purchase agreement, the Company also entered into

a registration rights agreement which provides the institutional investor with certain registration rights related to the shares issued

under the purchase agreement.

Pursuant to the purchase agreement, the Company issued 30,312

shares of common stock to the institutional investor as an initial commitment fee valued at $ 279,174 ,

fair value, and 60,623

shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms

of the purchase agreement.

During the period October 4, 2021 through December 31, 2022, the institutional investor purchased 2,852,511

shares of common stock for proceeds of $ 29,152,692

and the Company issued 53,554

shares of common stock as additional commitment fee, valued at $ 656,372 ,

fair value, leaving 7,069

in reserve for additional commitment fees.

During the year ending December 31, 2022, pursuant to the purchase agreement, the institutional

investor purchased 1,625,000

shares of common stock for proceeds of $ 12,775,268

and the Company issued 23,468

shares of common stock as additional commitment fee, valued at $ 209,709 ,

During January and February 2023, pursuant to the purchase agreement, the institutional

investor purchased 300,000 shares of common stock for proceeds of $ 1,720,750 and the Company issued 3,161 shares of common stock

as additional commitment fee, valued at $ 19,377 , fair value, leaving 3,908

in reserve for additional commitment fees.

On December 9, 2022, the Company entered into a

sales agreement with an investment banking company.

In accordance with the terms of this sales agreement, the Company may offer and

sell shares of its common stock having an aggregate offering price of up to $ 35,000,000

from time to time through or to the investment banking company, as sales agent or principal.

Sales of shares of the Company’s common

stock, if any, may be made by any method deemed to be an “at the market offering”.

The sales agent will be entitled to

compensation under the terms of the sales agreement at a commission rate equal to 3 %

of the gross proceeds of the sales price of common stock that they sell.

On October 4, 2021, the Company entered into a purchase

agreement with the institutional investor to sell up to $ 33,000,000 of common stock over a 36-month period.

Concurrently with entering

into the purchase agreement, the Company also entered into a registration rights agreement which provides the institutional investor with

certain registration rights related to the shares issued under the purchase agreement.

Pursuant to the purchase agreement, the Company

issued 30,312 shares of common stock to the institutional investor as an initial commitment fee valued at $ 279,174 , fair value, and 60,623

shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the purchase

During the period October 4, 2021 through December 31, 2023, the institutional investor purchased 3,632,456 shares of common

stock for proceeds of $ 33,000,000 and the Company issued 60,623 shares of common stock as additional commitment fee, valued at $ 694,531

During the year ending December 31, 2023, pursuant to the purchase agreement, the institutional investor purchased 779,945

shares of common stock for proceeds of $ 3,847,307 and the Company issued 7,069 shares of common stock as additional commitment fee, valued

at $ 38,161 fair value.

All of the registered shares under the purchase agreement have been issued as of December 31, 2023.

On February 28, 2023, the Company entered

into a purchase agreement with an institutional investor to sell up to $ 30,000,000 of common stock over a 36-month period.

with entering into the purchase agreement, the Company also entered into a registration rights agreement which provides the institutional

investor with certain registration rights related to the shares issued under the purchase agreement.

Pursuant to the purchase agreement,

the Company issued 50,891 shares of common stock to the institutional investor as an initial commitment fee valued at $ 279,391 , fair

value, and 101,781 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with

the terms of the purchase agreement.

During the period February 28, 2023 through December 31, 2023, the institutional investor purchased

2,870,455 shares of common stock for proceeds of $ 16,146,052 and the Company issued 54,779 shares of common stock as additional commitment

fee, valued at $ 356,026 fair value.

During January and February 2024, pursuant to the purchase agreement, the institutional investor

purchased 800,000 shares of common stock for proceeds of $ 3,335,300 and the Company issued 11,319 shares of common stock as additional

commitment fee, valued at $ 50,841 fair value, leaving 35,683 in reserve for additional commitment fees.

On December 9, 2022, the Company entered into a sales

agreement with an investment banking company.

In accordance with the terms of this sales agreement, the Company may offer and sell shares

of its common stock having an aggregate offering price of up to $ 35,000,000 from time to time through or to the investment banking company,

as sales agent or principal.

Sales of shares of the Company’s common stock, if any, may be made by any method deemed to be an “at

the market offering”.

The sales agent is entitled to compensation under the terms of the sales agreement at a commission rate equal

to 3 % of the gross proceeds of the sales price of common stock that they sell.

During the twelve months period ending December 31, 2023,

pursuant to the sales agreement, the investment banking company sold 202,115 shares of the Company’s common stock for proceeds

of $ 1,515,878 after a payment of the commission in the amount of $ 46,884 to the investment banking company.

During January and February

2024, pursuant to the sales agreement, the investment banking company sold 12,150 shares of the Company’s common stock for proceeds

of $ 52,669 after a payment of the commission in the amount of $ 1,629 to the investment banking company.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2023, 2022 AND 2021

NOTE 11 – STOCKHOLDERS’ EQUITY (CONTINUED)

Restricted Stock Awards

On March 16, 2023, the Compensation Committee of the

Board of Directors approved grants totaling 99,616 Restricted Stock Awards to the Company’s four outside directors.

a grant date fair value of $ 5.22 which shall be amortized on a straight-line basis over the vesting period into director’s compensation

expenses within the Consolidated Statement of Comprehensive Loss.

Such RSAs were granted under the 2016 Equity Incentive Plan (“2016

Plan”) and vest in total 8,338 shares on March 16, 2023, with the remaining vesting in 33 equal monthly installments in total of

2,766 shares beginning April 1, 2023.

On August 1, 2023, the Compensation Committee of the

Board of Directors approved a grant totaling 6,238 Restricted Stock Awards to the Company’s outside director.

The new RSA had a

grant date fair value of $ 6.68 which shall be amortized on a straight-line basis over the vesting period into director’s compensation

expenses within the Consolidated Statement of Comprehensive Loss.

Such RSA was granted under the 2016 Plan.

218 shares from this grant

vested on August 1, with the remaining vesting in 28 equal monthly installments in total of 215 shares beginning September 1, 2023.

Upon the occurrence of a Change in Control, 100% of

the unvested Restricted Stock shall vest as of the date of the Change in Control.

Upon vesting, the restrictions on the shares lapse.

NOTE 12 – STOCK BASED COMPENSATION

9 unchanged sentences

Effective June 24, 2016, the 2007 Plan was terminated.

As of December 31, 2022, options to

purchase 2,895,000 shares of common stock have been issued and are outstanding.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2022, 2021 AND 2020

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

As of December 31, 2023, options to purchase 2,063,000 shares of common stock have been issued and are outstanding.

During 2016, the Board of Directors of the Company

5 unchanged sentences

stock available for issuance under the 2016 Plan was increased from 3,000,000 to 8,000,000 shares.

As of December 31, 2022, options to

purchase 4,390,173 shares of common stock have been issued and are outstanding and 28,500 restricted shares of common stock have been

granted, 5,180 have been forfeited and 13,816 are non-vested.

As of December 31, 2022, 2,317,680 shares of common stock remain available

for grants under the 2016 Plan.

Effective May 25, 2023, the number

of shares of the Company’s common stock available for issuance under the 2016 Plan was increased from 8,000,000 to 13,000,000 shares

and awards of restricted stock units are authorized for issuance.

As of December 31, 2023, options to purchase 6,227,807 shares of common

stock have been issued and are outstanding and 129,174 restricted shares of common stock have been granted.

As of December 31, 2023, 5,291,784

shares of common stock remain available for grants under the 2016 Plan.

Both plans are administered by the Company’s

1 unchanged sentence

be granted, and the specific terms of each grant.

Subject to the provisions regarding Ten Percent Shareholders, (as defined in the 2016

Plan), the exercise price per share of each option cannot be less than 100% of the fair market value of a share of common stock

on the date of grant.

Options granted under the 2016 Plan are generally exercisable for a period of 10 years from the date of grant

and may vest on the grant date, another specified date or over a period of time.

Subject to the provisions regarding Ten Percent Shareholders, (as defined in the 2016 Plan), the exercise

price per share of each option cannot be less than 100% of the fair market value of a share of common stock on the date of grant.

Options granted under the 2016 Plan are generally exercisable for a period of 10 years from the date of grant and may vest on the

grant date, another specified date or over a period of time.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2023, 2022 AND 2021

NOTE 12 – STOCK BASED COMPENSATION (CONTINUED)

The Company uses the Black-Scholes option pricing

7 unchanged sentences

expected life is based on the legal contractual life of options.

The Black-Scholes option pricing model assumptions for 2021 are as follows:

no dividend yield in all years, expected volatility, based on the Company’s historical volatility, 70.4 % to 77.1 %, risk-free interest

rate between 1.15 % to 1.73 % and expected option life of 10 years.

The Black-Scholes option pricing model assumptions for 2020 are as follows:

no dividend yield in all years, expected volatility, based on the Company’s historical volatility, 64 % to 78 %, risk-free interest

rate between 0.30 % to 1.82 % and expected option life of 4.6 to 10 years.

The Black-Scholes option pricing model assumptions

for 2022 are as follows:

no dividend yield in all years, expected volatility, based on the Company’s historical volatility, 74.7 %

to 76.4 %, risk-free interest rate between 1.87 % to 3.84 % and expected option life of 10 years.

The Black-Scholes option pricing model assumptions

for 2021 are as follows:

no dividend yield in all years, expected volatility, based on the Company’s historical volatility, 70.4 %

to 77.1 %, risk-free interest rate between 1.15 % to 1.73 % and expected option life of 10 years.

As of December 31, 2023, there was $ 3,295,335 of unrecognized

1 unchanged sentence

Share-based compensation was recognized as follows:

Schedule of Stock-based Compensation Plans

Schedule of share-based compensation

2007 Employee Stock Option Plan

8 unchanged sentences

warrant activity of the Company during the years ended December 31, 2023, 2022 and 2021:

Schedule of Non-Qualified Stock Options and Warrants Outstanding and Exercisable

Non-Qualified Stock Options and Warrants Outstanding and Exercisable

Weighted Average

Schedule of stock option and

warrant activity

Non-Qualified

Stock Options and Warrants Outstanding and Exercisable

Weighted Average Exercise

Outstanding, December 31, 2020

9 unchanged sentences

$ 0.64 - $ 5.81

$ 0.60 - $ 1.50

Outstanding, December 31, 2022

3 unchanged sentences

( 1,183,408 )

$ 0.67 - $ 5.22

Outstanding, December 31, 2023

4 unchanged sentences

outstanding and exercisable as of December 31, 2023 was $ 24,308,723

The aggregate intrinsic value is calculated as the difference between

the exercise price of the underlying options and warrants and the closing stock price of $ 4.31 for the Company’s common stock on

December 31, 2022.

During the year ending December 31, 2022, 302,950 options were exercised for proceeds of

$ 257,895 and 4,375 options were exercised via cashless method.

During the year ending December 31, 2022, 350,000 warrants were exercised

for proceeds of $ 396,000 .

During the year ending December 31, 2021, 2,046,250 options were exercised for proceeds of $ 1,950,875 .

the year ending December 31, 2021, 677,000 warrants were exercised for proceeds of $ 428,350 and 445,252 options were exercised via cashless

No options were exercised during 2020.

During the year ending December 31, 2020, 2,073,052 warrants were exercised for proceeds

of $ 1,658,442 .

Schedule of Non-Qualified Stock Options and Warrants Outstanding, by Exercise Price Range

and $ 24,214,724 ,

respectively.

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and

warrants and the closing stock price of $ 4.98 for the Company’s

common stock on December 31, 2023.

During the year ending December 31, 2023, 914,408

options with the aggregate intrinsic value of $ 4,698,996

were exercised for proceeds of $ 777,674 .

During the year ending December 31, 2023, 269,000

warrants with the aggregate intrinsic value of $ 1,162,230

were exercised for proceeds of $ 236,250 .

During the year ending December 31, 2022, 302,950

options with the aggregate intrinsic value of $ 2,920,861 were exercised for proceeds of $ 257,895

options with the aggregate intrinsic value of $ 53,219

were exercised via cashless method.

During the year ending December 31, 2022, 350,000

warrants with the aggregate intrinsic value of $ 2,555,750

were exercised for proceeds of $ 396,000 .

During the year ending December 31, 2021, 2,046,250

options with the aggregate intrinsic value of $ 22,351,788

were exercised for proceeds of $ 1,950,875 .

During the year ending December 31, 2021, 677,000

warrants with the aggregate intrinsic value of $ 6,796,400

were exercised for proceeds of $ 428,350

options with the aggregate intrinsic value of $ 3,406,530

were exercised via cashless method.

Schedule of non-qualified stock options and warrants outstanding

Non-Qualified

Stock Options and Warrants Outstanding

Price of Options and

December 31, 2022

Currently Exercisable

Range of Exercise Prices

Number Outstanding Currently Exercisable

at December 31, 2023

Weighted Average Remaining Contractual

Average Exercise Price of Options and Warrants Currently Exercisable

$ 0.51 - $ 16.81

The fair value of restricted stock awards is estimated

by the market price of the Company’s common stock at the date of grant.

Restricted stock activity during the year ending December

31, 2022, 2021 and 2020 are as follows:

LIGHTWAVE LOGIC, INC.

2 unchanged sentences

NOTE 12 – STOCK BASED COMPENSATION (CONTINUED)

Schedule of Nonvested Restricted Stock Units Activity

The fair value of restricted stock awards is estimated

by the market price of the Company’s common stock at the date of grant.

Restricted stock activity during the year ending December

31, 2023, 2022 and 2021 are as follows:

Schedule of fair value of restricted stock awards

Restricted Stock Awards

December 31, 2023

December 31, 2022

December 31, 2021

Weighted Average

1 unchanged sentence

Weighted Average

Number of Shares

Grant Date Fair Value per Share

Number of Shares

Grant Date Fair Value per Share

Number of Shares

Grant Date Fair Value per Share

Non-vested, beginning of period

1 unchanged sentence

Non-vested, end of period

Restricted stock awards are being amortized to expense

over the vesting period.

As of December 31, 2023 and 2022, the unamortized value of the restricted stock awards was $ 432,292 and $ 133,324 ,

respectively.

NOTE 13 – RELATED PARTY

At December 31, 2023 the Company had a legal accrual

to a related party of $ 60,577 , fees and consulting expense accruals of advisory board members in the amount of $ 18,000 , fees to directors

in the amount of $ 13,500 , travel and office expense accruals of officers in the amount of $ 4,859 and accounting service fee accrual and

expense reimbursement to related parties of $ 3,233 .

At December 31, 2021 the Company had office expense accruals of officers in the amount

of $ 24,000 , a legal accrual to related party of $ 6,130 and accounting service fee accrual and expense reimbursements to related parties

to a related party of $ 115,160 , accounting service fee accrual and expense reimbursement to related parties of $ 102,351 , fees and travel

expense accruals to directors in the amount of $ 53,776 , fees, consulting expense and travel expense accruals of advisory board members

in the amount of $ 33,746 , and travel and office expense accruals of officers in the amount of $ 8,450 .

At December 31, 2022 the Company

had a legal accrual to a related party of $ 60,577 , fees and consulting expense accruals of advisory board members in the amount of $ 18,000 ,

fees to directors in the amount of $ 13,500 , travel and office expense accruals of officers in the amount of $ 4,859 and accounting service

fee accrual and expense reimbursement to related parties of $ 3,233 .

NOTE 14 – RETIREMENT PLAN

7 unchanged sentences

ending December 31, 2021 to all eligible non-executive participants.

NOTE 14 – SUBSEQUENT EVENTS

On February 28, 2023,

the Company entered into a purchase agreement with an institutional investor to sell up to $ 30,000,000

of common stock over a 36-month period.

Concurrently with entering into the purchase agreement, the Company also entered into

a registration rights agreement which provides the institutional investor with certain registration rights related to the shares issued

under the purchase agreement.

Pursuant to the purchase agreement, the institutional investor has agreed to purchase $ 3,000,000

of shares upon commencement.

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.