What changed in this filing

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Item 9A. Controls and Procedures

2025-03-18 compared with 2024-02-29 · 972 added, 612 removed, 612 unchanged (72% of the section changed)

36 unchanged sentences

all potential future conditions.

Audit Report on Internal

Controls Over Financial Reporting of the Registered Public Accounting Firm

Cogen LLP, the Company’s independent registered public accounting firm has audited the financial statements included in this Annual

Report on Form 10-K and, as part of their audit, has issued their report, included herein, on the effectiveness of the Company’s

internal control over financial reporting as of December 31, 2023.

Attestation Report of

the Registered Public Accounting Firm

Annual Report does not include an attestation report of our Company’s independent registered public accounting firm regarding internal

control over financial reporting.

Management’s report was not subject to attestation by our Company’s registered public accounting

firm pursuant to rules of the Securities and Exchange Commission that permit our Company to provide only management’s attestation

in this Annual Report.

Changes in Internal Control Over Financial Reporting

3 unchanged sentences

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.

Park Purchase Agreement

On March 17, 2025,

Lightwave Logic, Inc.

(the “ Company ”), entered into a purchase agreement (the “ Purchase Agreement ”)

with Lincoln Park Capital Fund, LLC (“ Lincoln Park ” or “ Investor ”) (each, a “ Party ”,

and together, the “ Parties ”), which provides that, upon the terms and subject to the conditions and limitations set

forth therein, the Company may sell to Lincoln Park up to $30,000,000 of shares (the “ Purchase Shares ”) of its common

stock, par value $0.001 per share (the “ Common Stock ”).

Concurrently with entering

into the Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park, pursuant to which it agreed

to provide Lincoln Park with certain registration rights related to the shares issued under the Purchase Agreement (the “ Registration

Rights Agreement ”).

Beginning one

business day following the date of satisfaction of certain conditions set forth in the Purchase Agreement (the “ Commencement

Date ”) and over the thirty-six (36) month term following the Commencement Date, the Company has the right, but not the

obligation, on any business day selected by the Company (each, a “ Purchase

Date ”), to require Lincoln Park to purchase up to 250,000 shares of Common Stock (the “ Regular

Purchase Share Limit ”) (each such purchase, a “ Regular

Lincoln Park’s committed obligation under each Regular Purchase shall not exceed $3,000,000 (subject

to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar

transaction as provided in the Purchase Agreement), provided that the Parties may mutually agree at any time to increase the Regular

Purchase Share Limit.

The Company shall have the right to submit multiple Regular Purchase notices to the Investor as often as every

business day, provided that the Company has not failed to deliver shares for the most recent prior Regular Purchase.

The purchase price

per share for each such Regular Purchase (the “ Purchase Price ”) shall be equal to the lesser of:

(i) the lowest sale

price of the Common Stock during the Purchase Date and (ii) the average of the three (3) lowest closing sale prices of the Common Stock

during the ten (10) business days immediately preceding such Purchase Date.

In addition to Regular

Purchases and provided that the Company has directed a Regular Purchase in full, the Company in its sole discretion may require Lincoln

Park on each Purchase Date to purchase on the following business day (each, an “ Accelerated Purchase Date ”) up to the

(i) three (3) times the number of shares purchased pursuant to such Regular Purchase and (ii) 30% of the trading volume on

Nasdaq during all or, if certain trading volume or market price thresholds specified in the Purchase Agreement are crossed on the applicable

Accelerated Purchase Date, the portion of the normal trading hours on the applicable Accelerated Purchase Date prior to such time that

any one of such thresholds is crossed, which period of time on the applicable Accelerated Purchase Date (each such purchase, an “ Accelerated

The purchase price

per share for each such Accelerated Purchase shall be equal to the lesser of:

(i) the closing sale price on the Accelerated Purchase Date

or (ii) 96.5% of the Accelerated Purchase Date’s volume weighted average price (the “ Accelerated Purchase Price ”).

The Parties may mutually agree to increase the number of shares of Common Stock sold to the Investor pursuant to any Accelerated Purchase.

The Company may also

direct Lincoln Park, on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder

have been properly delivered to Lincoln Park in accordance with the Purchase Agreement, to make additional purchases upon the same terms

as an Accelerated Purchase, (an “ Additional Accelerated Purchase ”).

The Company may direct multiple Additional Accelerated

Purchases in a day provided that delivery of shares has been completed with respect to any prior Regular and Accelerated Purchases that

Lincoln Park has purchased.

The purchase price

of Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases and the minimum closing sale price for a Regular Purchase

will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction

occurring during the business days used to compute the purchase price.

The aggregate number of shares that the Company can sell to Lincoln

Park under the Purchase Agreement may in no case exceed 24,910,904 shares (subject to adjustment as described above), which is equal to

approximately 19.99% of the shares of Common Stock outstanding immediately prior to the execution of the Purchase Agreement (the “ Exchange

Cap ”), unless (i) stockholder approval is obtained to issue shares above the Exchange Cap, in which the Exchange Cap will no

longer apply, or (ii) the average price of all applicable sales of Common Stock to Lincoln Park under the Purchase Agreement equals or

exceeds $1.06 per share (subject to adjustment as described above) (which represents the lower of (A) the official closing price

of the Common Stock on Nasdaq immediately preceding the signing of the Purchase Agreement and (B) the average official closing price of

the Common Stock on Nasdaq for the five consecutive trading days ending on the trading day immediately preceding the date of the Purchase

In any event, the Purchase Agreement specifically provides that the Company may not issue or sell any shares of Common Stock

under the Purchase Agreement if such issuance or sale would breach any applicable rules or regulations of Nasdaq.

The Purchase Agreement

also prohibits the Company from directing Lincoln Park to purchase any shares of Common Stock if those shares, when aggregated with all

other shares of Common Stock then beneficially owned by Lincoln Park, would result in Lincoln Park beneficially owning more than 4.99%

of its outstanding shares of Common Stock, or at the option of Lincoln Park following the satisfaction of certain conditions, 9.99% of

the outstanding shares of Common Stock.

On March 17, 2025,

we issued 245,098 shares of Common Stock to Lincoln Park as an initial fee for its commitment to purchase shares of our common stock under

the Purchase Agreement (the “ Initial Commitment Shares ”).

We may issue up to 490,196 additional shares of Common Stock

pro-rata in connection with the sale of Purchase Shares (the “ Additional Commitment Shares ” and together with the Initial

Commitment Shares, the “ Commitment Shares ”).

The Purchase Agreement

contains customary representations, warranties, covenants, Suspension Events (as defined in the Purchase Agreement), closing conditions,

indemnification and termination provisions.

During any Suspension Event specified in the Purchase Agreement, we may not initiate any sales

to Lincoln Park until such Suspension Event is cured.

Lincoln Park does not have the right to terminate the Purchase Agreement upon the

occurrence of a Suspension Event.

There are no restrictions on future financings, rights of first refusal, participation rights, penalties

or liquidated damages in the Purchase Agreement or the Registration Rights Agreement, other than the Company’s agreement not to

enter into any Variable Rate Transactions (as defined in the Purchase Agreement) with any third party, subject to certain exceptions set

forth in the Purchase Agreement, over the thirty-six (36) month term following the date of the Purchase Agreement (irrespective of any

earlier termination of the Purchase Agreement in accordance with the terms therein).

The Purchase Agreement

may be terminated by the Company at any time after the Commencement Date, at its sole discretion, without any cost or penalty, by giving

one business day notice to Lincoln Park to terminate the Purchase Agreement.

Lincoln Park has covenanted not to cause or engage in any

manner whatsoever, any direct or indirect short selling or hedging of the Common Stock.

The foregoing is a

summary description of certain terms of the Purchase Agreement and the Registration Rights Agreement and, by its nature, is incomplete.

Copies of the Purchase Agreement and the Registration Rights Agreement are filed as Exhibits 10.33 and 10.34 attached hereto.

The foregoing

descriptions of the Purchase Agreement and the Registration Rights Agreement are qualified in their entirety by reference to such exhibits.

The Purchase Agreement and Registration Rights Agreement contain customary representations and warranties, covenants and indemnification

provisions that the parties made to, and solely for the benefit of, each other in the context of all of the terms and conditions of such

agreements and in the context of the specific relationship between the parties thereto.

The provisions of the Purchase Agreement and

the Registration Rights Agreement, including any representations and warranties contained therein, are not for the benefit of any party

other than the parties thereto and are not intended as documents for investors and the public to obtain factual information about the

current state of affairs of the parties thereto.

Rather, investors and the public should look to other disclosures contained in the Company’s

annual, quarterly and current reports it may file with the Securities and Exchange Commission.

The information contained in this Item

9B shall not constitute an offer to sell or the solicitation of an offer to buy the shares of the Company’s Common Shares discussed

herein, nor shall there be any offer, solicitation or sale of the shares in any jurisdiction in which such offer, solicitation or sale

would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

(b) Trading Arrangements

the three months ended December 31, 2024, none of

our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written

plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under

the Exchange Act or any “non-Rule 10b5-1 arrangement” as defined in Item 408(c) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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

Exhibits, Financial Statement Schedules

Exhibits and Financial Statement Schedules

The following Audited Financial Statements are filed as part of this Form 10-K Report:

13 unchanged sentences

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

Amended and Restated Bylaws

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

Second Amended and Restated Bylaws – June 18, 2024

Incorporated by reference to the Company’s Form 10-Q as filed with the SEC on June 25, 2024

Description of Registrant’s Securities

Filed herewith

Employee Agreement – Michael Lebby

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on March 22, 2017

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 20, 2021

Employee Agreement Amendment - Michael Lebby

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 - Yves Lemaitre

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on December 13, 2024.

Employee Agreement - Thomas Zelibor

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on December 13, 2024

Employee Agreement - James Marcelli

5 unchanged sentences

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

Employee Agreement Amendment – James S.

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on June 25, 2024

Employee Agreement – Michael Lebby

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on March 22, 2017

Employee Agreement Amendment – James Marcelli

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 20, 2021

Employee Agreement Amendment - Michael Lebby

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 April 27, 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 June 25, 2024

Form of Executive Paid Time Off Waiver Agreement

6 unchanged sentences

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

Description of Exhibit

Operations Committee Charter

26 unchanged sentences

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

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on October 5, 2021

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

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on October 5, 2021

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

2 unchanged sentences

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

Purchase Agreement, dated March 17, 2025, by and between the Company and Lincoln Park

Filed herewith

Registration Rights Agreement, dated March 17, 2025, by and between the Company and Lincoln Park

Filed herewith

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

Letter from Morison Cogen LLP to the Securities and Exchange Commission dated October 4, 2024

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on October 4, 2024

Insider Trading Policy

Filed herewith

Incorporated by reference to the Company’s Form 10-K as filed with the SEC on February 29, 2024

Subsidiaries of the Registrant

Incorporated by reference to the Company’s Form 10-K as filed with the SEC on February 29, 2024

Description of Exhibit

Consent of Independent Registered Public Accounting Firm - Stephano Slack LLC

Filed herewith

7 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Executive Officer of the Company.

Filed herewith

Certification pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Financial Officer of the Company.

Filed herewith

Compensation Clawback Policy

Filed herewith

Incorporated by reference to the Company’s Form 10-K as filed with the SEC on February 29, 2024

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)

10 unchanged sentences

LIGHTWAVE LOGIC, INC.

/s/ Michael Lebby

Michael Lebby,

/s/ Yves LeMaitre

Yves LeMaitre,

Chief Executive Officer

(Principal Executive Officer)

February 29, 2024

March 18, 2025

Pursuant to the requirements of

1 unchanged sentence

capacities and on the dates indicated.

/s/ Michael Lebby

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

February 29, 2024

Michael Lebby

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

February 29, 2024

/s/ Yves LeMaitre

Chief Executive Officer, Principal Executive Officer, Director

March 18, 2025

Yves LeMaitre

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

March 18, 2025

/s/ Ronald A.

February 29, 2024

Director, Chair of the Board of Directors

March 18, 2025

/s/ Siraj Nour El-Ahmadi

February 29, 2024

March 18, 2025

Siraj Nour El-Ahmadi

/s/ Frederick J.

February 29, 2024

/s/ Craig Ciesla

February 29, 2024

March 18, 2025

/s/ Laila Partridge

February 29, 2024

March 18, 2025

Laila Partridge

/s/ Thomas M.

Connelly, Jr.

March 18, 2025

Connelly, Jr.

LIGHTWAVE LOGIC, INC.

FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID Number 3523 )

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

BALANCE SHEETS

STATEMENTS OF COMPREHENSIVE LOSS

STATEMENT OF STOCKHOLDERS' EQUITY

STATEMENTS OF STOCKHOLDERS' EQUITY

STATEMENTS OF CASH FLOWS

5 unchanged sentences

Control over Financial Reporting

We have audited the accompanying balance sheets of

We have audited the accompanying balance sheet of

Lightwave Logic, Inc.

(the Company) as of December 31, 2023 and 2022, and the related statements of comprehensive loss, stockholders’

equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred

to as the financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31,

2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring

Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred

to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results

of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting

principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects,

effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control –

Integrated Framework (2013) issued by COSO.

(the Company) as of December 31, 2024, and the related statements of comprehensive loss, stockholders’ equity,

and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash

flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required

to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal

control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to

assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

To the Board of Directors and

Stockholders of Lightwave Logic, Inc.

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

(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.

/s/ Stephano Slack LLC

We have served as the Company’s auditor since

Wayne, Pennsylvania

March 18, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and

Stockholders of Lightwave Logic, Inc.

Opinions on the Financial Statements and Internal

Control over Financial Reporting

We have audited the accompanying balance sheet of

Lightwave Logic, Inc.

(the Company) as of December 31, 2023, and the related statements of comprehensive loss, stockholders’ equity,

and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements).

We also have audited

the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control

– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred

to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its

operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting

as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for

6 unchanged sentences

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

We conducted our audit in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was

maintained in all material respects.

Our audits of the financial statements included

Our audit of the financial statements included

performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing

2 unchanged sentences

in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management,

Our audit also included evaluating the accounting principles used and significant estimates made by management,

as well as evaluating the overall presentation of the financial statements.

2 unchanged sentences

and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing

Our audit also included performing

such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

We believe that our audit provides a reasonable basis for our opinions.

To the Board of Directors and

Stockholders of Lightwave Logic, Inc.

Definition and Limitations of Internal Control

over Financial Reporting

A company’s internal control over financial

reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of

financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control

over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,

accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions

are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and

that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition

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

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods

are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the

policies or procedures may deteriorate.

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

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

subjective, or complex judgments.

and Limitations of Internal Control over Financial Reporting

company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance

with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,

or that the degree of compliance with the policies or procedures may deteriorate.

Audit Matters

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.

We determined that there are no critical audit matters.

/s/ Morison Cogen LLP

We have served as the Company’s auditor since

Blue Bell, Pennsylvania

February 29, 2024

Morison Cogen LLP

served as the Company’s auditor from 2005 to 2024.

Bell, Pennsylvania

LIGHTWAVE LOGIC, INC.

6 unchanged sentences

Prepaid expenses and other current assets

Loan receivable

TOTAL CURRENT ASSETS

PROPERTY AND EQUIPMENT - NET

Intangible assets - net

PROPERTY AND EQUIPMENT - net of accumulated depreciation of $ 6,037,723 and $ 4,674,560

Intangible assets - net of accumulated amortization of $ 771,631 and $ 659,250

Operating Lease - Right of Use - Building

5 unchanged sentences

Accounts payable and accrued expenses - related parties

Deferred revenue

Contract liability

Deferred lease liability

2 unchanged sentences

LONG TERM LIABILITIES

Deferred lease liability

Operating lease liability

2 unchanged sentences

STOCKHOLDERS' EQUITY

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, 118,137,309 and 112,882,793

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

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

Common stock $ 0.001 par value, 250,000,000 authorized,

123,301,653 and 118,137,309 issued and outstanding at

December 31, 2024 and December 31, 2023

Additional paid-in-capital

9 unchanged sentences

STATEMENTS OF COMPREHENSIVE LOSS

FOR THE YEARS ENDING DECEMBER 31, 2023, 2022 AND

December 31, 2023

December 31, 2022

December 31, 2021

FOR THE YEARS ENDED DECEMBER

31, 2024 AND 2023

COST AND EXPENSE

6 unchanged sentences

( 21,225,265 )

( 16,996,443 )

OTHER INCOME (EXPENSE)

Paycheck Protection Program loan forgiveness

Interest income

Commitment fee

( 2,059,464 )

Gain on disposal of property and equipment

Other (expense) income

$ ( 21,038,032 )

(Loss) gain on disposal of property and equipment and intangible assets

Other (expense)

$ ( 22,535,041 )

3 unchanged sentences

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

OF STOCKHOLDERS’ EQUITY

THE YEARS ENDING DECEMBER 31, 2023, 2022 AND 2021

LIGHTWAVE LOGIC, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

BALANCE AT DECEMBER 31, 2023

10 unchanged sentences

Deferred compensation

Net loss for the year ending December 31, 2023

Net loss for the year ended December 31, 2024

( 22,535,041 )

7 unchanged sentences

$ ( 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

Net loss for the year ending December 31, 2022

( 17,230,480 )

BALANCE AT DECEMBER 31, 2022

$ 134,406,825

Net loss for the year ended December 31, 2023

( 21,038,032 )

2 unchanged sentences

$ 164,619,363

Common stock issued to institutional investor

Common stock issued for commitment shares

Exercise of options

Cashless exercise of 445,252 options

Exercise of warrants

Options issued for services

Warrants issued for services

Net loss for the year ending December 31, 2021

$ ( 432,293 )

$ ( 127,871,393 )

BALANCE AT DECEMBER 31, 2021

$ 114,696,597

$ ( 89,602,881 )

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 CASH FLOWS

FOR THE YEARS ENDING DECEMBER 31, 2023, 2022 AND 2021

December 31, 2023

December 31, 2022

December 31, 2021

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

$ ( 21,038,032 )

$ ( 18,631,381 )

Adjustments to reconcile net loss to net cash used in

operating activities

Warrants issued for services

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

Stock options issued for services

Amortization of deferred compensation

Cashless option exercise

Common stock issued for services and fees

Common stock issued for commitment shares

Depreciation and amortization of patents

Amortization of right of use asset

Gain on disposal of property and equipment

Paycheck Protection Program loan forgiveness

Loss (gain) on disposal of property and equipment and intangible assets

Decrease (increase) in assets

1 unchanged sentence

Prepaid expenses and other current assets

Increase (decrease) in liabilities

(Decrease) increase in liabilities

Accounts payable

Accrued bonuses and accrued expenses

Accrued bonuses, accrued expenses and other liabilities

Accounts payable and accrued expenses-related parties

Deferred revenue

Contract liability

Deferred lease liability

3 unchanged sentences

( 12,236,024 )

( 10,304,005 )

CASH FLOWS FROM INVESTING ACTIVITIES

3 unchanged sentences

( 3,292,224 )

( 1,097,530 )

Repayment (issuance) of loan

Repayment of loan

Sale of property and equipment

2 unchanged sentences

( 2,957,201 )

( 1,116,179 )

CASH FLOWS FROM FINANCING ACTIVITIES

Exercise of options and warrants

Cashless option exercise tax payments

( 1,170,586 )

Issuance of common stock, institutional investor

At the market sale by investment banking company

Repayment of equipment purchase payable

Common stock sales at the market by investment banking company

Net cash provided by financing activities

NET INCREASE IN CASH AND CASH EQUIVALENTS

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

( 3,764,123 )

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

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

Supplemental Disclosure of Non-cash investing and financing activities :

Amended Operating Lease - Right of Use - Building and Operating lease liability

accompanying notes are an integral part of these financial statements.

LIGHTWAVE LOGIC, INC.

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Nature of Business

Lightwave Logic, Inc.

“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.

Lightwave Logic, Inc is a technology platform

company leveraging its proprietary engineered electro-optic (EO) polymers, named Perkinamine® to transmit data at higher speeds with

less power in a small form factor.

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.

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 materials development

and evaluation with potential customers and strategic partners.

The Company expects 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 its electro-optic

The Company’s current

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Cash Equivalents

For the purposes of the statement of cash flows, the

Company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents.

The Company considers all highly liquid investments

with an original maturity from the date of purchase of three months or less to be cash equivalents.

Concentration

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did have deposits with a financial institution that exceed the Federal Depository Insurance coverage.

Property and Equipment

Equipment is stated at cost.

Depreciation is principally

provided by use of straight-line methods for financial and tax reporting purposes over the estimated useful lives of the assets, generally

When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any

resulting gain or loss is included in operations.

Accounts Receivable

Accounts receivable are carried at their contractual amounts, less an estimated

allowance for credit losses.

Management estimates the allowance for credit losses using a loss-rate approach based on historical loss

information, adjusted for management’s expectations about current and future economic conditions, as the basis to determine expected

credit losses.

Management exercises significant judgment in determining expected credit losses.

Key inputs include macroeconomic factors,

industry trends, the creditworthiness of counterparties, historical experience, the financial conditions of the customers, and the amount

and age of past due accounts.

Management believes that the composition of receivables at year-end is consistent with historical conditions

as credit terms and practices and the client base has not changed significantly.

Receivables are considered past due if full payment is

not received by the contractual due date, which is typically 30 days from the invoice date.

Past due accounts are generally written off

against the allowance for credit losses only after all collection attempts have been exhausted.

The allowance for credit losses was zero

0 as of December 31, 2024 and 2023.

There was one customer who represented 100 % of total accounts receivable

as of December 31, 2024.

LIGHTWAVE LOGIC, INC.

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POLICIES (CONTINUED)

Property and Equipment

Property and equipment is stated at the Company’s original cost or

fair value for acquired property and equipment net of accumulated depreciation.

Depreciation of property and equipment is computed using

the straight-line method over the estimated useful lives of the respective assets, which are generally as follows:

3 years for office

equipment, 3 to 5 years for lab equipment, 7 years for furniture and 3 years for software.

Leasehold improvements are amortized over the

lesser of remaining life of the lease or.

Leasehold improvements are amortized over the lesser of remaining life of the lease or useful

life of the asset, using the straight-line method.

The cost of normal maintenance and repairs is charged to operating expenses as incurred.

Material expenditures that increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the

The cost of assets sold, or otherwise disposed of, and the related accumulated depreciation is relieved from the property accounts,

and any gains or losses are recognized in income from continued operations.

Intangible Assets

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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 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.

Revenue Recognition and Contract Liability

The Company recognizes revenue in accordance with

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from

Contracts with Customers.

Under ASC 606, revenue is recognized when control of goods or services is transferred to a customer in an amount

that reflects the consideration to which the Company expects to be entitled.

To achieve this, the Company applies the five-step

Identify the contract with a customer.

Identify the performance obligations in the contract.

Determine the transaction price for the contract.

Allocate the transaction price to the performance obligations.

Recognize revenue as performance obligations are satisfied.

The Company’s primary revenue stream includes technology license

and material supply agreements.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

Revenue Recognition and Contract Liability (Continued)

Technology License and Material Supply Agreements

The Company enters into technology license and material

supply agreements, under which it grants customers a non-exclusive, royalty-bearing license to use its patented electro-optic polymer

technology (the “Licensed Product”).

The Company also supplies proprietary polymers to licensees for use in their manufacturing

of photonic devices.

The Company assesses whether the license and the

supply of proprietary polymers represent distinct performance obligations.

Based on this assessment, the Company has determined that the

license and material supply are not distinct for financial reporting purposes because they are highly interdependent.

Accordingly, the

Company accounts for these as a single performance obligation.

Revenue under these agreements is recognized as follows:

Upfront License Fees – Nonrefundable upfront

license fees are recorded as contract liability and recognized on a pro-rata basis over the contract term.

Minimum Annual Royalties – Fixed royalty payments

required under the contract are also recognized on a pro-rata basis over the contract term.

Variable Royalties – Royalties exceeding the

minimum annual amount are recognized when earned, typically when the licensee’s sales exceed the minimum threshold.

Milestone Payments – Recognized only when the

contractual milestone is achieved, such as when the licensee sells a specified number of units of the Licensed Product.

Contract Costs

The Company capitalizes incremental costs to obtain

contracts if they are expected to be recoverable, in accordance with ASC 340-40, Other Assets and Deferred Costs – Contracts with

These capitalized costs are amortized over the expected contract term in a manner consistent with the related revenue recognition.

Contract Liability

Contract liability represents amounts received in

advance for performance obligations not yet satisfied, including nonrefundable upfront license fees.

The Company recognizes contract liability

revenue as revenue when the related performance obligations are satisfied.

Cost of Sales

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agreement at the Company’s facility.

The Company follows Financial Accounting Standards

Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Income Taxes,” which requires an asset

and liability approach to financial accounting and reporting for income taxes.

Deferred income tax assets and liabilities are computed

annually for temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable

or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected

to affect taxable income.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to

Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred

tax assets and liabilities.

LIGHTWAVE LOGIC, INC.

3 unchanged sentences

POLICIES (CONTINUED)

The Company follows FASB ASC 740, “Income Taxes,”

which requires an asset and liability approach to financial accounting and reporting for income taxes.

Deferred income tax assets and

liabilities are computed annually for temporary differences between the financial statement and tax bases of assets and liabilities that

will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the

differences are expected to affect taxable income.

Valuation allowances are established when necessary to reduce deferred tax assets to

the amount expected to be realized.

Income tax expense is the tax payable or refundable for the period plus or minus the change during

the period in deferred tax assets and liabilities.

Stock-based Payments

accounts for stock-based compensation under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards

Codification (ASC) 718, "Compensation - Stock Compensation", which requires the measurement

and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the

The fair value of restricted stock awards is estimated by the market price of the Company’s common stock at the date

Restricted stock awards are being amortized to expense over the vesting period.

The Company estimates the fair value of option

and warrant awards on the date of grant using the Black-Scholes model.

The value of the portion of the award that is ultimately expected

to vest is recognized as expense over the requisite service periods using the straight-line method.

In June 2018, the FASB issued

2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting

(the “2018 Update).

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

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

Prior to the 2018 Update, Topic 718 applied

only to share- based transactions to employees.

Consistent with the accounting requirement for employee share-based payment awards, nonemployee

share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity

is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the

right to benefit from the instruments have been satisfied.

accounts for stock-based compensation under the provisions of FASB ASC 718, "Compensation - Stock Compensation", which

requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated

fair values on the grant date.

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 awards are being amortized to expense over the shorter of the requisite service period or

the actual vesting period.

The Company estimates the fair value of option and warrant awards on the date of grant using the Black-Scholes

The value of the portion of the award that is ultimately expected to vest is recognized as expense over the shorter of the requisite

service period or the actual vesting period, using the straight-line method.

In June 2018, the FASB issued Accounting Standard Update

2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based

Payment Accounting (the “2018 Update).

The amendments in the 2018 Update expand the

scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees.

Prior to the 2018

Update, Topic 718 applied only to share- based transactions to employees.

Consistent with the accounting requirement for employee share-based

payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity

instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions

necessary to earn the right to benefit from the instruments have been satisfied.

The Company has

5 unchanged sentences

reported a net loss in 2024 and 2023, common stock equivalents, including stock options and warrants were anti-dilutive;

the amounts reported for basic and dilutive loss per share were the same.

Recoverability

of Long-Lived Assets

The Company follows FASB ASC 360, “Property,

Plant, and Equipment”.

Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances

indicate that the related carrying amount may not be recoverable.

When required, impairment losses on assets to be held and used are recognized

based on the excess of the asset’s carrying amount.

therefore, the

amounts reported for basic and dilutive loss per share were the same.

The Company is a lessee in operating

leases primarily incurred to facilitate manufacturing, research and development, and selling, general and administrative activities.

contract inception, the Company determines if an arrangement is or contains a lease, and if so, recognizes a right-of-use asset and lease

liability at the lease commencement date.

For operating leases, the lease liability is measured at the present value of the unpaid lease

payments at the lease commencement date, whereas for finance leases, the lease liability is initially measured at the present value of

the unpaid lease payments and subsequently measured at amortized cost using the interest method.

Operating lease right-of-use assets are

included in other assets on the Balance Sheets.

The short-term portion of operating lease liabilities is included in other current liabilities

on the Balance Sheets and the long-term portion is included in long term liabilities on the Balance Sheets.

As of December 31, 2024, the

Company had no leases that qualified as financing arrangements.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

Leases (Continued)

Key estimates and judgments

include how the Company determines the discount rate used to discount the unpaid lease payments to present value and the lease term.

Company monitors for events or changes in circumstances that could potentially require recognizing an impairment loss.

The Company elected a short-term

lease exemption practical expedient under ASU 2026-02, “Leases” (Topic 842), which allows the Company to not recognize leases

with the total lease term of 12 months or less on the balance sheet.

Impairment of Long Lived and Finite-Lived Intangible Assets

Long lived assets, such as property,

equipment, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate

that the carrying amount of an asset group may not be recoverable, such as a significant decrease in market price of an asset group, a

significant adverse change in legal factors or business climate that could affect the value of an asset group, or a continuous deterioration

of the Company’s financial condition.

Recoverability of asset groups to be held and used is measured by comparing the undiscounted

future cash flows expected to be generated by the asset group to the carrying amount of the asset group.

If the carrying amount of the

asset group exceeds its estimated undiscounted future cash flows, impairment is recognized to the extent that the carrying value exceeds

its fair value.

Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values,

and third-party independent appraisals, as considered necessary.

For the years ended December

31, 2024 and 2023, the Company did no t record an impairment of its long-lived and finite-lived intangible assets.

Comprehensive

Income (Loss)

follows FASB ASC 220.10, “Reporting Comprehensive Income (Loss).” Comprehensive income (loss) is a more inclusive financial

reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation

of net income (loss).

Since the Company has no items of other comprehensive income (loss), comprehensive income (loss) is equal to net

income (loss).

follows FASB ASC 220.10, “Reporting Comprehensive Income (Loss).” Comprehensive loss is a more inclusive financial reporting

methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of

Since the Company has no items of other comprehensive loss, comprehensive loss is equal to net loss.

Recently Adopted Accounting Pronouncements

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

there are no recently adopted accounting standards that have a material effect on the Company’s financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting

Improvements to Reportable Segment Disclosures, which requires public entities to disclose significant segment expenses

and other segment items on an interim and annual basis and provide in interim periods all disclosures about a reportable segment's profit

or loss and assets that are currently required annually.

The ASU does not change how a public entity identifies its operating segments,

aggregates them, or applies the quantitative threshold to determine its reportable segments.

The new disclosure requirements are also

applicable to entities that account and report as a single operating segment entity.

ASU 2023-07 is effective for fiscal years beginning

after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

The Company adopted the guidance

for the annual reporting period ended December 31, 2024.

There was no impact on the Company’s reportable segments identified and

additional required disclosures have been included in Note 14 - Segment Reporting.

Recently Issued Accounting Pronouncements Not Yet

As of December 31, 2023, there are no recently issued

accounting standards not yet adopted which would have a material effect on the Company’s financial statements.

ASU 2023-09 – Income Taxes

(Topic 740) requires disclosures related to the rate reconciliation and income taxes paid disclosures improve the transparency of income

tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income

taxes paid disaggregated by jurisdiction.

The other amendments in this Update improve the effectiveness and comparability of disclosures

by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S.

Securities and Exchange

Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements:

Income Tax Expense,

and (2) removing disclosures that no longer are considered cost beneficial or relevant.

For public business entities, the amendments in

this Update are effective for annual periods beginning after December 15, 2024.

The Company does not expect this ASU to have material

impact on its disclosures in the year of adoption.

LIGHTWAVE LOGIC, INC.

3 unchanged sentences

POLICIES (CONTINUED)

Reclassifications

Certain reclassifications have been

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

Recently Issued Accounting Pronouncements Not

Yet Adopted (Continued)

ASU 2024-03 – Income Statement –

Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) requires disclosure, in the notes to

financial statements, of specified information about certain costs and expenses, such as the amounts of purchases of inventory,

employee compensation, depreciation, intangible asset amortization, included in each relevant expense caption;

disclosure of a

qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively;

and disclosure of the total amounts of selling expenses.

For public business entities, the amendments in this Update are effective

for annual periods beginning after December 15, 2026 and interim reporting period within fiscal years beginning after December 15,

Early adoption is permitted.

The Company is evaluating the impact of this ASU on its financial statement disclosures.

NOTE 2 – MANAGEMENT’S PLANS

Our future expenditures and capital requirements

will depend on numerous factors, including:

The Company’s 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 rate at which the

Company can, directly or through arrangements with original equipment manufacturers, introduce and sell its 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

of the Company’s products and competing technological developments;

and the Company’s ability to establish cooperative development,

joint venture and licensing arrangements.

The Company expects that it will incur approximately $ 1,727,000 of

expenditures per month over the next 12 months.

The Company’s current cash position enables it to finance its operations through

On March 17, 2025, 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.

As of the date of this filing, $ 30,000,000

remains available to the Company per the agreement.

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 (described in Note 10).

Pursuant to the purchase agreement, the Company received $ 1,486,983

during the period from January 1 through March 18, 2025 and the remaining available amount of $ 0

is available to the Company per the agreement.

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.

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).

the sales agreement, the Company received $ 116,435

during the period from January 1 through March 18, 2025 and the remaining available amount of $ 31,482,032

is available to the Company per the agreement.

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, 2024, the Company recognized $ 81,855

in revenue related to this agreement.

The Company’s cash requirements are expected to increase at a rate consistent with

the Company’s path to revenue as it expands its activities and operations with the objective of increasing its revenue stream from

commercialization of its electro-optic polymer technology.

The Company currently has 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 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 the minimum royalty

payments and milestone license fees.

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

3 unchanged sentences

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.

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.

During 2024, the Company also performed device processing

work for a customer.

Timing of Revenue Recognition and Contract Balances

Revenues related

to the initial license fee and a minimum annual royalty are recognized over time commencing with the License Agreement in May 2023.

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

$ 23,208 and $ 39,875 of this amount is

recorded as a contract liability in current liabilities on the Company’s balance sheets as of December 31, 2024 and December 31,

2023, respectively.

For the years ended December 31, 2024 and December 31, 2023, the Company recognized

$ 81,855 and $ 40,502 in revenue related to this agreement.

In March 2024, the Company completed device processing

work on the devices supplied by a customer.

Revenue for this contract was recognized at the time of shipment of the devices back to the

customer and amounted to $ 13,750 for the year ended December 31, 2024.

Contract balances

4 unchanged sentences

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.

Short-term contract liability

Significant changes in the contract balances

for the years ended December 31, 2024 are as follows:

Schedule of significant changes in the contract balances

Year Ended December 31, 2024

Balance at December 31, 2023

Revenue recognized that was previously included in contract liability

Decreases/increases due to cash received

Billed receivables recorded

Transferred to receivables from unbilled receivables

Unbilled receivables recorded

Balance at December 31, 2024

A rollforward of contract balances is

not disclosed for the year ended December 31, 2023 since there were no contracts as of December 31, 2022.

Assets Recognized for the Costs to

2 unchanged sentences

costs to obtain the License Agreement.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT

3 unchanged sentences

December 31, 2023

Materials fabrication

Prototype devices

Deposit for equipment

Investor relations

Materials fabrication

Deposit for equipment

Lease incentive receivable

Loan interest receivable

prepaid expenses and other current

NOTE 5 – LOAN RECEIVABLE

Prepaid expenses and other current assets

LOAN RECEIVABLE

On September 7, 2022, the Company entered into a

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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.

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 ended December 31, 2022 for interest income.

The loan and 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.

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Accumulated depreciation

Depreciation expense for the years ending December

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

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.

Depreciation expense for the years ended December

31, 2024 and 2023 was $ 1,563,477 and $ 1,035,620 , respectively.

During the year ended December 31, 2024, the Company retired property and

equipment with a cost of $ 203,480 and accumulated depreciation of $ 200,314 for a loss of $ 3,166 .

During the year ended December 31, 2023,

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

NOTE 7 – INTANGIBLE ASSETS

This represents legal fees and patent fees associated

with the prosecution of patent applications.

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

over the remaining legal life.

Intangible assets represent legal fees and patent

fees associated with the prosecution of patent applications.

The Company has recorded amortization expense on patents granted, which

are amortized over the remaining legal life.

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

Some countries require the payment of maintenance fees for pending patent

applications.

Maintenance fees paid after a patent is granted are expensed, as these are considered ongoing costs to “maintain

Maintenance fees paid prior to a patent grant date are capitalized to patent costs, as these are considered “patent

application costs”.

No amortization expense has been recorded on the remaining patent applications since patents on these applications

have yet to be granted.

Some countries require the payment of maintenance fees for pending patent applications.

Maintenance fees paid after a patent

is granted are expensed, as these are considered ongoing costs to “maintain a patent”.

Maintenance fees paid prior to

a patent grant date are capitalized to patent costs, as these are considered “patent application costs”.

No amortization expense

has been recorded on the remaining patent applications since patents on these applications have yet to be granted.

Intangible assets consist of the following:

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Intangible assets - net

Amortization expense for the years ending December

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,

Amortization expense for the years ended

December 31, 2024 and 2023 was $ 119,283

and $ 83,521 ,

respectively.

During the year ended December 31, 2024, the Company retired certain expired patent applications and patents with a

cost of $ 217,176 and

accumulated amortization of $ 6,902

for a loss of $ 210,274

included in the statements of comprehensive loss in the (Loss) gain on disposal of property and equipment and intangible assets.

There were no

patent costs written off for the year ended December 31, 2023.

LIGHTWAVE LOGIC, INC.

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DECEMBER 31, 2024 AND 2023

NOTE 8 – COMMITMENTS

NOTE 8 – LEASES

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

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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

$ 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 $ 36,525 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

asset and operating lease liability amounted to $ 885,094 with no cumulative-effect adjustment to the opening balance of retained earnings/accumulated

In January 2022, the term was

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

On November 22, 2022, the Company entered into an

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As of June 1, 2023, the

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

operating lease right-of-use asset and operating lease liability amounted to $ 2,945,322 and $ 2,984,058 , respectively.

As of December 30,

2024, the operating lease right-of-use asset and operating lease liability amounted to $ 2,645,723 and $ 2,766,971 , respectively.

For purposes of calculating operating lease liability,

lease term includes the initial non-cancelable term plus any term under renewal options that are reasonably assured.

Any rent escalations,

along with rent abatements, are included in the computation of rent expense calculated on a straight-line basis over the lease term.

interest rate implicit in lease contracts is typically not readily determinable and as such the Company uses the appropriate incremental

borrowing rate based on information available at the lease commencement date in determining the present value of the lease payments.

Undiscounted future minimum lease payments under

the Amended Lease as of December 31, 2024, by year and in aggregate, including the extended term, are as follows:

Schedule of future lease payments of operating leases

Less discounted interest

( 1,212,251 )

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

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There are no other material operating leases.

The following table presents weighted average assumptions

used to compute the Company’s right-of-use assets and lease liabilities:

Schedule of operating lease right-of-use assets

December 31, 2024

Weighted average remaining lease term (in years)

Weighted average discount rate

As of December 31, 2024, current operating leases

had remaining terms between 13 months and 9 years, with some leases having options to extend the lease terms.

Current lease agreements do not contain any residual

value guarantees or material restrictive covenants.

As of December 31, 2024, the Company did not have any finance leases.

Operating and short-term lease costs totaling $ 513,428

and $ 102,077 are included in research and development and general and administrative expenses for the year ended December 31, 2024.

and short-term lease costs totaling $ 334,051 and $ 79,083 are included in research and development and general and administrative expenses

for the year ended December 31, 2023.

LIGHTWAVE LOGIC, INC.

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DECEMBER 31, 2024 AND 2023

NOTE 8 – COMMITMENTS (CONTINUED)

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

Less discounted interest

( 1,444,495 )

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

in research and development and general and administrative expenses for the year ended December 31, 2023.

Rent expense totaling $ 138,394

and $ 46,132 is included in research and development and general and administrative expenses for the year ended December 31, 2022.

expense totaling $ 134,243 and $ 44,747 is included in research and development and general and administrative expenses for the year ended

December 31, 2021.

NOTE 9 – PAYCHECK PROTECTION PROGRAM

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

loan funding from the Paycheck Protection Program, established pursuant to the Coronavirus Aid, Relief, and Economic Security Act enacted

on March 27, 2020 and administered by the U.S.

Small Business Administration.

The unsecured loan is evidenced by a promissory note of

the Company dated April 23, 2020 in the principal amount of $ 410,700 , to Community Banks of Colorado, a division of NBH Bank, the lender.

The loan proceeds have been used to cover payroll costs, rent and utility costs.

The loan was eligible for forgiveness as part of the

CARES Act if certain requirements were met.

The loan was forgiven by the Small Business Administration in its entirety on January 22,

NOTE 9 – INCOME TAXES

As discussed in Note 1, the Company utilizes the asset

and liability method of accounting for income taxes in accordance with FASB ASC 740.

The income tax (benefit) provision consists of the

discussed in Note 1, the Company utilizes the asset and liability method of accounting for income taxes in accordance with FASB ASC 740.

income tax (benefit) provision consists of the following:

Schedule of income tax benefit provision

1 unchanged sentence

( 6,526,000 )

( 3,692,000 )

Change in valuation allowance

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2023, 2022 AND 2021

NOTE 10 – INCOME TAXES (CONTINUED)

The reconciliation of the statutory federal rate to the Company’s

effective income tax rate is as follows:

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

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

Income tax benefit at U.S.

2 unchanged sentences

$ ( 4,418,000 )

$ ( 3,913,000 )

State tax benefit, net of federal tax effect

Federal deduction net of tax

Tax exempt income

Non-deductible share-based compensation

1 unchanged sentence

( 2,850,000 )

( 2,981,000 )

Change in valuation allowance

4 unchanged sentences

Share-based compensation

Valuation allowance

Section 174 research and development expenses

Section 481(a) adjustment

( 2,264,000 )

Valuation allowance

( 37,025,000 )

2 unchanged sentences

of December 31, 2024 and 2023 was $ 37,025,000 and $ 32,805,000 , respectively.

The change in the total valuation for

the year ended December 31, 2023 was an increase of $ 6,526,000 , for the year ended December 31, 2022 was an increase of $ 5,071,000 and

for the year ended December 31, 2021 was an increase of $ 3,692,000 .

In assessing the realization of deferred tax assets, management considers

whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization

of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the net operating losses

and temporary differences become deductible.

Management considered projected future taxable income and tax planning strategies in making

this assessment.

The value of the deferred tax assets was offset by a valuation allowance, due to the current uncertainty of the future

realization of the deferred tax assets.

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

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.

The change in the total valuation for the year ended December

31, 2024 was an increase of $ 4,220,000 , and for the year ended December 31, 2023 was an increase of $ 6,526,000 .

In assessing the realization

of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will

not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the

periods in which the net operating losses and temporary differences become deductible.

Management considered projected future taxable

income and tax planning strategies in making this assessment.

The value of the deferred tax assets was offset by a valuation allowance,

due to the current uncertainty of the future realization of the deferred tax assets.

LIGHTWAVE LOGIC, INC.

2 unchanged sentences

NOTE 9 – INCOME TAXES (CONTINUED)

As of December 31, 2024, the Company had net operating

loss carry forwards of approximately $ 121,349,000 , comprised of net operating losses in the amount of approximately $ 36,485,000 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 $ 84,864,000 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

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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

guidance for the recognition and measurement of certain tax positions in an enterprise’s financial statements.

Recognition involves

a determination of whether it is more likely than not that a tax position will be sustained upon examination with the presumption that

the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information.

of FASB ASC 740-10 did not require an adjustment to the Company’s financial statements.

The Company follows ASC 740-10, which provides guidance

for the recognition and measurement of certain tax positions in an enterprise’s financial statements.

Recognition involves a determination

of whether it is more likely than not that a tax position will be sustained upon examination with the presumption that the tax position

will be examined by the appropriate taxing authority having full knowledge of all relevant information.

The adoption of ASC 740-10 did

not require an adjustment to the Company’s financial statements.

The Company’s policy is to record interest and

1 unchanged sentence

As of January 1, 2024,

the Company had no unrecognized tax benefits and no charge during 2023, and accordingly, the Company did not recognize any interest or

the Company had no unrecognized tax benefits and no charge during 2024, and accordingly, the Company did no t recognize any interest or

penalties during 2024 related to unrecognized tax benefits.

4 unchanged sentences

With few exceptions, the U.S.

and state income tax returns filed for the tax years ending on December 31, 2020 and

and state income tax returns filed for the tax years ended on December 31, 2021 and

thereafter are subject to examination by the relevant taxing authorities.

NOTE 10 – STOCKHOLDERS’ EQUITY

Preferred Stock

Pursuant to the Company’s Articles of Incorporation,

the Company’s board of directors is empowered, without stockholder approval, to issue series of preferred stock with any designations,

rights and preferences as they may from time to time determine.

The rights and preferences of this preferred stock may be superior to

the rights and preferences of the Company’s common stock;

consequently, preferred stock, if issued could have dividend, liquidation,

conversion, voting or other rights that could adversely affect the voting power or other rights of the common stock.

Additionally, preferred

stock, if issued, could be utilized, under special circumstances, as a method of discouraging, delaying or preventing a change in control

of the Company’s business or a takeover from a third party.

Common Stock Options and Warrants

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 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 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

Pursuant to the Company’s Articles of

Incorporation, the Company’s board of directors is empowered, without stockholder approval, to issue series of preferred stock

with any designations, rights and preferences as they may from time to time determine.

The rights and preferences of this preferred stock

may be superior to the rights and preferences of the Company’s common stock;

consequently, preferred stock, if issued could have

dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the common

Additionally, preferred stock, if issued, could be utilized, under special circumstances, as a method of discouraging, delaying

or preventing a change in control of the Company’s business or a takeover from a third party.

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 and expired on July 8, 2024.

On July 26, 2024, the Company filed a new $100,000,000

universal shelf registration statement with the U.S.

Securities and Exchange Commission which became effective on August 5, 2024.

LIGHTWAVE LOGIC, INC.

2 unchanged sentences

NOTE 10 – STOCKHOLDERS’ EQUITY (CONTINUED)

Common Stock Options and Warrants (Continued)

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.

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

Common Stock (Continued)

On October 4, 2021, the Company entered

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

5 unchanged sentences

the terms of the purchase agreement.

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

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 fair value.

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

During the year ended 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 $ 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”.

commitment fee, valued at $ 38,161 fair value.

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

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 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, 2024, the institutional investor purchased 6,720,455

shares of common stock for proceeds of $ 28,513,017

and the Company issued 96,735

shares of common stock as additional commitment fee, valued at $ 510,236

fair value, leaving 5,046

in reserve for additional commitment fees.

During the year ended December 31, 2024, pursuant to the purchase agreement, the institutional

investor purchased 3,850,000

shares of common stock for proceeds of $ 12,366,965 ,

and the Company issued 41,956

shares of common stock as additional commitment fee, valued $ 154,210

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

During the period from January 1, 2025 through March 18, 2025, pursuant to the purchase agreement, the institutional

investor purchased 1,035,881

shares of common stock for proceeds of $ 1,486,983

and the Company issued 5,046

shares of common stock as additional commitment fee, valued at $ 8,029

fair value, leaving zero 0

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.

1 unchanged sentence

DECEMBER 31, 2024 AND 2023

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 11 – STOCK BASED COMPENSATION

During 2007, the Board of Directors of the Company

adopted the 2007 Employee Stock Plan (“2007 Plan”) that was approved by the shareholders.

Under the 2007 Plan, the Company

is authorized to grant options to purchase up to 10,000,000 shares of common stock to directors, officers, employees and consultants who

provide services to the Company.

The 2007 Plan is intended to permit stock options granted to employees under the 2007 Plan to qualify

as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”).

All options granted under the 2007 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options

(“Non-Statutory Stock Options”).

Common Stock (Continued)

During the year ended December 31, 2024, pursuant

to the sales agreement, the investment banking company sold 551,501

shares of the Company’s common stock for proceeds of $ 1,779,976

after a payment of the commission in the amount of $ 55,054

to the investment banking company.

During the year ended 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 the period from January 1, 2025 through March 18, 2025, pursuant to the sales agreement,

the investment banking company sold 50,000

shares of the Company’s common stock for proceeds of $ 116,435

after a payment of the commission in the amount of $ 3,601

to the investment banking company.

Common Stock Options and Warrants

During 2007, the Board of Directors

of the Company adopted the 2007 Employee Stock Plan (“2007 Plan”) that was approved by the shareholders.

Under the 2007 Plan,

the Company is authorized to grant options to purchase up to 10,000,000 shares of common stock to directors, officers, employees and

consultants who provide services to the Company.

The 2007 Plan is intended to permit stock options granted to employees under the 2007

Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock

All options granted under the 2007 Plan, which are not intended to qualify as Incentive Stock Options are deemed to

be non-qualified options (“Non-Statutory Stock Options”).

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

14 unchanged sentences

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

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

Common Stock Options and Warrants (Continued)

Both plans are administered by the Company’s

5 unchanged sentences

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

model to calculate the grant-date fair value of an award, with the following assumptions for 2024:

no dividend yield in all years, expected

volatility, based on the Company’s historical volatility, 73.7 % to 77.2 %, risk-free interest rate between 3.37 % to 4.82 % and expected

option life of 10 years.

Prior to May 2018, the expected life is based on the estimated average of the life of options using the “simplified”

method, as prescribed in FASB ASC 718, due to insufficient historical exercise activity during recent years.

Starting in May 2018, the

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

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.

no dividend yield, expected volatility,

based on the Company’s historical volatility, 76.3 % to 78.5 % , risk-free interest rate between 3.73 % to 4.47 % and expected option

life of 10 years, which is based on the legal contractual life of the options.

The Black-Scholes option pricing model assumptions

for 2023 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.

no dividend yield, expected volatility, based on the Company’s historical volatility, 73.7 % to 77.2 % , risk-free

interest rate between 3.37 % to 4.82 % and expected option life of 10 years.

As of December 31, 2024, there was $ 2,755,783 of unrecognized

compensation expense related to non-vested market-based share awards that is expected to be recognized through December 2027.

As of December

31, 2023, there was $ 3,295,335 of unrecognized compensation expense related to non-vested market-based share awards.

Share-based compensation was recognized as follows:

8 unchanged sentences

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

The following tables summarize all stock option and

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

Schedule of stock option and

warrant activity

Common Stock Options and Warrants (Continued)

The following tables summarize all stock option

and warrant activity of the Company during the years ended December 31, 2024 and 2023:

Schedule of stock option and warrant activity

Non-Qualified

Stock Options and Warrants Outstanding and Exercisable

Weighted Average Exercise

Outstanding, December 31, 2022

11 unchanged sentences

$ 0.51 - $ 16.81

$ 4.28 - $ 7.67

$ 6.25 - $ 8.93

( 1,183,408 )

$ 0.67 - $ 5.22

Outstanding, December 31, 2023

$ 0.51 - $ 16.81

Exercisable, December 31, 2024

$ 0.51 - $ 16.81

The aggregate intrinsic value of options and warrants

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

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

The aggregate intrinsic value of options and warrants outstanding and exercisable

as of December 31, 2024 was $ 6,418,443 and $ 6,400,033 , 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 $ 2.10 for the Company’s common stock on

December 31, 2024.

During the year ending December 31, 2024, 375,000 options with the aggregate intrinsic value of $ 1,399,958 were exercised

for proceeds of $ 246,100 .

During the year ending December 31, 2024, 119,000 warrants with the aggregate intrinsic value of $ 171,550 were

exercised for proceeds of $ 91,250 .

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 .

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

were exercised via cashless method.

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 .

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

Common Stock Options and Warrants (Continued)

Schedule of non-qualified stock options and warrants outstanding

1 unchanged sentence

Stock Options and Warrants Outstanding

Range of Exercise Prices

Number Outstanding Currently Exercisable

Exercise Prices

Number Outstanding

Currently Exercisable

at December 31, 2024

Weighted Average Remaining Contractual

Average Exercise Price of Options and Warrants Currently Exercisable

Weighted Average

Contractual Life

Weighted Average

Exercise Price of Options and

Warrants Currently Exercisable

$ 0.51 - $ 16.81

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 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.

Each 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 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.

On June 18, 2024, the Compensation Committee of the

Board of Directors approved grants totaling 92,475 Restricted Stock Awards to the Company’s five outside directors.

a grant date fair value of $ 3.33 which shall be amortized on a straight-line basis over the vesting period into director’s compensation

expenses within the Statement of Comprehensive Loss.

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

and vested in total 15,455 shares on June 18, 2024, with the remaining vesting in 10 equal quarterly installments in total of 7,702 shares

beginning July 1, 2024.

On August 1, 2024, the Compensation Committee of the

Board of Directors approved a grant totaling 12,924 Restricted Stock Awards to the Company’s outside director.

Each RSA had a grant

date fair value of $ 3.16 which shall be amortized on a straight-line basis over the vesting period into director’s compensation

expenses within the Statement of Comprehensive Loss.

Such RSA was granted under the 2016 Equity Incentive Plan (“2016 Plan”)

and vests in 9 equal quarterly installments of 1,436 shares beginning September 1, 2024.

On September 4, 2024, the Compensation Committee of

the Board of Directors approved a grant totaling 11,488 Restricted Stock Awards to the Company’s outside director.

a grant date fair value of $ 2.68 which shall be amortized on a straight-line basis over the vesting period into director’s compensation

expenses within the Statement of Comprehensive Loss.

Such RSA was granted under the 2016 Equity Incentive Plan

(“2016 Plan”) and vests in 8 equal quarterly installments of 1,436 shares beginning October 1, 2024.

LIGHTWAVE LOGIC, INC.

2 unchanged sentences

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

Stock Awards (Continued)

On December 10, 2024, the Compensation Committee of

the Board of Directors approved a grant totaling 110,000 Restricted Stock Awards to the two Company’s executives and an outside

director for consulting services.

Each RSA had a grant date fair value of $ 2.65 which shall be amortized on a straight-line basis over

the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss.

The RSAs were granted under the

2016 Equity Incentive Plan (“2016 Plan”) and cliff vest on March 10, 2025 for an outside director and on June 10, 2025 for

the executives.

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.

The fair value of restricted stock awards is estimated

6 unchanged sentences

December 31, 2023

December 31, 2021

Weighted Average

Grant Date Fair

Value per Share

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

Grant Date Fair

Value per Share

Non-vested, beginning of period

6 unchanged sentences

NOTE 12 – RELATED PARTY

At December 31, 2023 the Company had a legal accrual

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 .

During the years ended December 31, 2024, and 2023,

the Company engaged in transactions with related parties, including consultants, directors, and entities affiliated with members of the

Board of Directors.

These transactions primarily relate to legal services, consulting fees, director compensation, accounting services,

and expense reimbursements.

Party Transactions for the Year Ended December 31, 2024

• The Company incurred $ 90,360

in legal fees with a related party law firm, of which $ 90,360

remained accrued as of December 31, 2024.

• The Company incurred $ 207,269 in accounting and

IT service fees and expense reimbursements to related parties, with $ 8,326 accrued as of December

• The Company incurred $ 251,194 in fees and travel

expenses to directors, with $ 72,748 accrued as of December 31, 2024.

• The Company incurred $ 438,716 in consulting fees

and travel reimbursements to advisory board members, with $ 29,345 accrued as of December 31,

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 12 – RELATED PARTY (CONTINUED)

Party Transactions for the Year Ended December 31, 2023:

Company incurred $ 175,737 in legal fees with a related party law firm, of which $ 115,160 remained accrued as of December 31, 2023.

• The Company incurred

$ 382,910 in accounting and IT service fees and expense reimbursements to related parties, with $ 102,351 accrued as of December 31, 2023.

• The Company incurred $ 207,563 in fees and travel expenses to directors, with $ 62,226 accrued

as of December 31, 2023.

• The Company incurred $ 390,483 in consulting fees and travel reimbursements to advisory board

members, with $ 33,746 accrued as of December 31, 2023.

NOTE 13 – RETIREMENT PLAN

The Company established a 401(k) retirement plan covering

all eligible employees beginning November 15, 2013.

A contribution of $ 72,570 was charged to expense and accrued for the year ending December

31, 2023 to all eligible non-executive participants.

A contribution of $ 57,126 was charged to expense and accrued for the year ending

December 31, 2022 to all eligible non-executive participants.

A contribution of $ 53,035 was charged to expense and accrued for the year

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

The Company established a 401(k)

retirement plan covering all eligible employees beginning November 15, 2013.

The plan offers two types of elected deferrals:

deferrals and Roth deferrals.

The Company matches 100% of each participant contribution, up to 4% for all eligible employees.

contributions vest immediately.

Participants are entitled to receive distributions of all vested amounts beginning at age 59 1/2.

Matching contributions to all eligible non-executive participants charged to expense were $ 134,766

and $ 72,520 for the years

ending December 31, 2024 and 2023, respectively.

The plan is subject to the annual IRS elective deferral limit of $ 23,000

per employee for 2024 and $7,500

catch-up for 50 and over .

NOTE 14 – SEGMENT REPORTING

The Company operates as a single reportable segment, as

the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer (“CEO”), evaluates the business on a consolidated

basis and does not receive discrete financial information for multiple business units.

Measure of Segment Profit or Loss

The CODM assesses the Company's financial performance based

on operating loss, which aligns with the amount reported in the statements of comprehensive loss.

The following table presents a

reconciliation of segment operating loss to net loss:

Schedule of reconciliation of segment

operating loss

COST OF SALES

OPERATING EXPENSES

Research and development

General and administrative

SEGMENT OPERATING LOSS

( 23,089,143 )

( 21,225,265 )

OTHER INCOME (EXPENSE)

Interest income

Commitment fee

(Loss) gain on disposal of property and equipment and intangible assets

Other (expense)

$ ( 22,535,041 )

$ ( 21,038,032 )

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

Significant Segment Expenses

The Company considers the following as significant expenses

in evaluating its segment performance:

• Research and Development:

includes costs related to personnel, laboratory and wafer

fabrication materials and supplies, prototype device development and wafer fabrication expenses, and third-party consulting costs aimed

at developing high-performance electro-optic polymer materials.

• General and Administrative:

includes personnel costs, professional fees, and other overhead

• Cost of Sales:

represents 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.

Since the Company has only one reportable segment, no additional

segment disclosures are required beyond entity-wide disclosures presented below.

Entity-Wide Disclosures

• Geographic Revenue Information:

For the year ended December 31,

of the Company's net sales were generated in the United States and 86 %

internationally.

For the year ended December 31, 2023, 100 % of the Company’s

net sales were generated internationally.

• Major Customers:

The Company has one customer that accounted for 10 % or more of total

Chief Operating Decision Maker (CODM)

The CODM of the Company is the Chief Executive Officer (CEO),

who is responsible for evaluating financial results and making resource allocation decisions.

15 – SUBSEQUENT EVENTS

On March 17, 2025, 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.

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 9A. Controls and Procedures