Lightwave Logic, Inc. 10-Q/A

Item 1: Financial Statements LIGHTWAVE LOGIC, INC. FINANCIAL STATEMENTS JUNE 30, 2025 (UNAUDITED) CONTENTS PAGE BALANCE SHEETS 2 STATEMENTS OF COMPREHENSIVE LOSS 3 STATEMENTS OF STOCKHOLDERS’ EQUITY 4-5 STATEMENTS OF CASH FLOWS 6 NOTES TO FINANCIAL STATEMENTS 7- 25 1 LIGHTWAVE LOGIC, INC. BALANCE SHEETS (Restated) June 30, 2025 December 31, 2024 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 22,106,946 $ 27,667,964 Accounts Receivable 10,753 45,565 Prepaid expenses and other current assets 638,856 401,741 TOTAL CURRENT ASSETS 22,756,555 28,115,270 PROPERTY AND EQUIPMENT - net of accumulated depreciation of $ 6,902,263 and $ 6,037,723 5,724,559 5,691,545 OTHER ASSETS Intangible assets - net of accumulated amortization of $ 825,040 and $ 771,631 1,410,368 1,355,445 Operating Lease - Right of Use - Building 2,544,785 2,645,723 TOTAL OTHER ASSETS 3,955,153 4,001,168 TOTAL ASSETS $ 32,436,267 $ 37,807,983 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 320,543 $ 515,955 Accrued bonuses and accrued expenses 434,222 877,165 Accounts payable and accrued expenses - related parties 147,420 200,779 Contract liability 14,875 23,208 Operating lease liability 181,248 168,289 TOTAL CURRENT LIABILITIES 1,098,308 1,785,396 LONG TERM LIABILITIES Operating lease liability 2,503,789 2,598,682 TOTAL LONG TERM LIABILITIES 2,503,789 2,598,682 TOTAL LIABILITIES 3,602,097 4,384,078 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, 126,466,708 and 123,301,653 issued and outstanding at June 30, 2025 and December 31, 2024 126,467 123,302 Additional paid-in-capital 185,723,412 180,956,329 Deferred compensation ( 353,061 ) ( 656,735 ) Accumulated deficit ( 156,662,648 ) ( 146,998,991 ) TOTAL STOCKHOLDERS' EQUITY 28,834,170 33,423,905 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,436,267 $ 37,807,983 See accompanying notes to these financial statements. 2 LIGHTWAVE LOGIC, INC. STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2025 (Restated) June 30, 2024 June 30, 2025 (Restated) June 30, 2024 NET SALES $ 25,605 $ 19,355 $ 48,522 $ 49,772 COST AND EXPENSE Cost of sales 3,463 — 5,491 5,175 Research and development 2,621,441 4,362,258 5,710,659 8,982,920 General and administrative 2,300,884 1,896,672 4,137,936 3,152,122 TOTAL COST AND EXPENSE 4,925,788 6,258,930 9,854,086 12,140,217 LOSS FROM OPERATIONS ( 4,900,183 ) ( 6,239,575 ) ( 9,805,564 ) ( 12,090,445 ) OTHER INCOME (EXPENSE) Interest income 168,253 251,730 356,101 505,066 Commitment fee ( 235,801 ) ( 28,982 ) ( 243,830 ) ( 105,959 ) Gain (loss) on disposal of property and equipment — — 28,800 ( 3,166 ) Other income (expense) 1,098 ( 2,857 ) 836 ( 5,091 ) NET LOSS $ ( 4,966,633 ) $ ( 6,019,684 ) $ ( 9,663,657 ) $ ( 11,699,595 ) LOSS PER SHARE Basic and diluted $ ( 0.04 ) $ ( 0.05 ) $ ( 0.08 ) $ ( 0.10 ) WEIGHTED AVERAGE NUMBER OF SHARES Basic and diluted (1) 125,271,407 120,179,570 124,605,324 119,552,430 (1) For the three and six months ended June 30, 2025, the Company excluded from the calculation of diluted loss per share 668,844 and 1,012,128 , shares, respectively, potentially issuable for exercises of options and warrants under incentive compensation plans, as their effect, if included, would have been anti-dilutive due to the Company's net loss position. For the three and six months ended June 30, 2024, the Company excluded from the calculation of diluted loss per share 4,160,711 and 4,265,583 shares, respectively, potentially issuable for exercises of options and warrants under incentive compensation plans, as their effect, if included, would have been anti-dilutive due to the Company's net loss position. The calculation of diluted loss per common share also excludes non-vested restricted stock units and earned performance stock units that are anti-dilutive based upon the terms of the awards. Such shares were 363,637 and 182,823 for the three and six months ended June 30, 2025, respectively, and zero 0 for the three and six months ended June 30, 2024. See accompanying notes to these financial statements 3 LIGHTWAVE LOGIC, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (Restated) Three Months Ended June 30, 2025 Number of Shares Common Stock Additional Paid-in Capital Deferred Compensation Accumulated Deficit Total BALANCE AT MARCH 31, 2025 (UNAUDITED) 124,654,522 $ 124,655 $ 183,577,533 $ ( 456,585 ) $ ( 151,696,015 ) 31,549,588 Common stock issued to institutional investor 650,000 650 687,350 — — 688,000 Common stock issued for commitment shares 256,340 256 235,545 — — 235,801 Common stock sales at the market by investment banking company 318,411 318 390,495 — — 390,813 Exercise of options 57,500 58 40,442 — — 40,500 Cashless exercise of 1,300,000 options 417,206 417 ( 192,842 ) — — ( 192,425 ) Options issued for services — — 533,650 — — 533,650 Performance stock units (PSUs) issued for services — — 384,925 — — 384,925 Restricted stock units (RSUs) issued for services — — 11,113 — — 11,113 Restricted stock awards issued for services, net of forfeitures and share settlement for taxes 112,729 113 55,201 ( 68,189 ) — ( 12,875 ) Deferred compensation — — — 171,713 — 171,713 Net loss for the three months ended June 30, 2025 — — — — ( 4,966,633 ) ( 4,966,633 ) BALANCE AT JUNE 30, 2025 (UNAUDITED) 126,466,708 $ 126,467 $ 185,723,412 $ ( 353,061 ) $ ( 156,662,648 ) $ 28,834,170 Six Months Ended June 30, 2025 Number of Shares Common Stock Additional Paid-in Capital Deferred Compensation Accumulated Deficit Total BALANCE AT DECEMBER 31, 2024 123,301,653 $ 123,302 $ 180,956,329 $ ( 656,735 ) $ ( 146,998,991 ) $ 33,423,905 Common stock issued to institutional investor 1,685,881 1,686 2,173,297 — — 2,174,983 Common stock issued for commitment shares 261,386 261 243,569 — — 243,830 Common stock sales at the market by investment banking company 368,411 368 506,880 — — 507,248 Exercise of options 282,500 283 203,717 — — 204,000 Cashless exercise of 1,350,000 options 434,148 434 ( 172,359 ) — — ( 171,925 ) Options issued for services — — 1,282,692 — — 1,282,692 Options issued to settle accrued bonuses — — 48,068 — — 48,068 Performance stock units (PSUs) issued for services — — 384,925 — — 384,925 Restricted stock units (RSUs) issued for services — — 11,113 — — 11,113 Restricted stock awards issued for services, net of forfeitures and share settlement for taxes 132,729 133 85,181 ( 98,189 ) — ( 12,875 ) Deferred compensation — — — 401,863 — 401,863 Net loss for the six months ended June 30, 2025 — — — — ( 9,663,657 ) ( 9,663,657 ) BALANCE AT JUNE 30, 2025 (UNAUDITED) 126,466,708 $ 126,467 $ 185,723,412 $ ( 353,061 ) $ ( 156,662,648 ) $ 28,834,170 See accompanying notes to these financial statements 4 LIGHTWAVE LOGIC, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (Restated) Three Months Ended June 30, 2024 Number of Shares Common Stock Additional Paid-in Capital Deferred Compensation Accumulated Deficit Total BALANCE AT MARCH 31, 2024 (UNAUDITED) 119,795,941 119,796 167,591,403 ( 368,094 ) ( 130,143,861 ) 37,199,244 Common stock issued to institutional investor 700,000 700 2,342,550 — — 2,343,250 Common stock issued for commitment shares 7,949 8 28,975 — — 28,983 Common stock sales at the market by investment banking company 50,000 50 169,380 — — 169,430 Exercise of options 60,000 60 50,340 — — 50,400 Options issued for services — — 1,710,948 — — 1,710,948 Restricted stock awards issued for services 92,475 93 307,849 ( 307,942 ) — — Deferred compensation — — — 139,322 — 139,322 Net loss for the three months ended June 30, 2024 — — — — ( 6,019,684 ) ( 6,019,684 ) BALANCE AT JUNE 30, 2024 (UNAUDITED) 120,706,365 $ 120,707 $ 172,201,445 $ ( 536,714 ) $ ( 136,163,545 ) $ 35,621,893 Six Months Ended June 30, 2024 Number of Shares Common Stock Additional Paid-in Capital Deferred Compensation Accumulated Deficit Total BALANCE AT DECEMBER 31, 2023 118,137,309 $ 118,137 $ 161,211,920 $ ( 432,293 ) $ ( 124,463,950 ) $ 36,433,814 Common stock issued to institutional investor 1,950,000 1,950 7,493,650 — — 7,495,600 Common stock issued for commitment shares 25,431 26 105,934 — — 105,960 Common stock sales at the market by investment banking company 127,150 127 499,756 — — 499,883 Exercise of options 355,000 355 230,645 — — 231,000 Exercise of warrants 19,000 19 14,231 — — 14,250 Options issued for services — — 2,337,460 — — 2,337,460 Restricted stock awards issued for services 92,475 93 307,849 ( 307,942 ) — — Deferred compensation — — — 203,521 — 203,521 Net loss for the six months ended June 30, 2024 — — — — ( 11,699,595 ) ( 11,699,595 ) BALANCE AT JUNE 30, 2024 (UNAUDITED) 120,706,365 $ 120,707 $ 172,201,445 $ ( 536,714 ) $ ( 136,163,545 ) $ 35,621,893 See accompanying notes to these financial statements 5 LIGHTWAVE LOGIC, INC. STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, 2025 (Restated) Six Months Ended June 30, 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 9,663,657 ) $ ( 11,699,595 ) Adjustments to reconcile net loss to net cash used in operating activities Stock options issued for services 1,282,692 2,337,460 Amortization of deferred compensation 401,863 203,521 Performance stock units issued for services 384,925 — Restricted stock units issued for services 11,113 — Common stock issued for commitment shares 243,830 105,960 Depreciation and amortization of patents 943,089 804,737 Amortization of right of use asset 100,938 94,753 (Gain) loss on disposal of property and equipment ( 28,800 ) 3,166 (Increase) decrease in assets Accounts receivable 34,812 22,311 Prepaid expenses and other current assets ( 237,115 ) 476,730 (Decrease) increase in liabilities Accounts payable ( 195,412 ) ( 529,626 ) Accrued bonuses, accrued expenses and other liabilities ( 394,875 ) ( 382,652 ) Accounts payable and accrued expenses-related parties ( 53,359 ) ( 161,223 ) Contract liability ( 8,333 ) ( 8,334 ) Deferred lease liability — ( 20,889 ) Operating lease liability ( 81,934 ) ( 70,107 ) Net cash used in operating activities ( 7,260,222 ) ( 8,823,788 ) CASH FLOWS FROM INVESTING ACTIVITIES Cost of intangibles ( 108,332 ) ( 67,445 ) Purchase of property and equipment ( 893,894 ) ( 1,585,772 ) Net cash used in investing activities ( 1,002,226 ) ( 1,653,217 ) CASH FLOWS FROM FINANCING ACTIVITIES Exercise of options and warrants 204,000 245,250 Cashless option exercise tax payments ( 171,926 ) — Cashless tax payment on vested restricted stock awards ( 12,875 ) — Issuance of common stock, institutional investor 2,174,983 7,495,600 Common stock sales at the market by investment banking company 507,248 499,883 Net cash provided by financing activities 2,701,430 8,240,733 NET DECREASE IN CASH AND CASH EQUIVALENTS ( 5,561,018 ) ( 2,236,272 ) CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 27,667,964 31,432,087 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 22,106,946 $ 29,195,815 Supplemental Disclosure of Non-cash activities : Options issued to settle accrued bonuses $ 48,068 $ — Trade-in credit for purchase of property and equipment $ 28,800 $ — Non-cash repurchases of shares issued for net option exercises $ 172,359 $ — Restricted stock awards issued for services $ 169,846 $ 307,942 See accompanying notes to these financial statements 6 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Statements The accompanying unaudited financial statements have been prepared by Lightwave Logic, Inc. (the “Company”). These statements include all adjustments (consisting only of its normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting polices described in the Summary of Significant Accounting Policies included in the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as amended, as originally filed with the Securities and Exchange Commission on March 18, 2025 and Amendment No. 1 to the Form 10-K filed on March 28, 2025 (the “2024 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company firmly believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the 2024 Annual Report. The interim operating results for the three and six months ending June 30, 2025 may not be indicative of operating results expected for the full year. History and Nature of Business 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. 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 materials development and evaluation with potential customers and strategic partners. The Company expects to continue to obtain revenue from technology licensing agreements, and to obtain additional revenue from technology transfer agreements and direct sale of its electro-optic materials. The Company’s current development activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s technology now under development. Lightwave Logic, Inc. was organized under the laws of the State of Nevada in 1997, and it commenced with its current business plan in 2024. Fair Value of Financial Instruments The carrying value of the Company’s short-term financial instruments such as cash, accounts receivable, prepaid expenses and other assets, accounts payable and accrued expenses approximate their fair values because of their short maturities. 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. 7 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenue Recognition and Contract Liability (Continued) To achieve this, the Company applies the five-step model: 1. Identify the contract with a customer. 2. Identify the performance obligations in the contract. 3. Determine the transaction price for the contract. 4. Allocate the transaction price to the performance obligations. 5. Recognize revenue as performance obligations are satisfied. The Company’s primary revenue stream includes technology license and material supply agreements. 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 Customers. 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 Cost of sales consists of labor costs, material costs and manufacturing overhead costs associated with the production of materials transferred to the customer under the technology license and material supply agreement at the Company’s facility. 8 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Stock-based Payments The Company 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 and units is estimated by the market price of the Company’s common stock at the date of grant. Restricted stock awards and units are being amortized to expense over the shorter of the requisite service period or the actual vesting period. Performance stock units are subject to both performance-based and service vesting requirements. The grant-date fair value of performance stock units is based on the fair value of the Company’s stock on a grant date and is recognized over the service period based on an assessment of the likelihood that the applicable performance goals will be achieved, and compensation expense is periodically adjusted based on actual and expected performance. 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 shorter of the requisite service period or the actual vesting period, using the straight-line method. 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 elected to account for forfeiture of stock-based awards as they occur. Loss Per Share The Company follows FASB ASC 260, “Earnings per Share,” resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss in 2025 and 2024, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same. Comprehensive Loss The Company 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 net loss. Since the Company has no items of other comprehensive loss, comprehensive loss is equal to net loss. Recently Issued Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09 – Income Taxes (Topic 740), which 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 is adopting the guidance for the annual reporting period ended December 31, 2025 and does not expect this ASU to have a material impact on its year-end disclosures. 9 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of this ASU on its financial statement disclosures. NOTE 2: RESTATEMENT OF FINANCIAL STATEMENTS AND CORRECTION OF PRIOR-PERIOD ERRORS The Company identified errors related to the accounting for non-cash stock option exercises in previously issued financial statements. As a result, the Company has (i) restated its previously issued financial statements for the three and six months ended June 30, 2025 and (ii) recorded the cumulative impact of a prior-period error identified in the year ended December 31, 2021 through opening equity. Error Identified in the Quarter Ended June 30, 2025 During the quarter ended June 30, 2025, the Company incorrectly expensed a portion of the value of the net shares issued in connection with non-cash stock option exercises as compensation expense. The Company determined that the value of the net shares issued in these non-cash option exercises was incorrectly expensed in the originally issued interim financial statements, resulting in an overstatement of non-cash compensation expense. The correction of this error decreased non-cash compensation expense by $ 705,499 , with a corresponding decrease to additional paid-in capital for the three and six months ended June 30, 2025. This non-cash adjustment also resulted in a corresponding decrease to net loss for the three and six months ended June 30, 2025. Because the error related solely to non-cash stock-based compensation arising from non-cash option exercises, the decrease in net loss was fully offset by a corresponding decrease in non-cash stock-based compensation adjustments within operating activities. As a result, there was no impact on net cash used in operating activities or on the Company’s statements of cash flows. Error Identified in the Year Ended December 31, 2021 During the year ended December 31, 2021, the Company incorrectly expensed a portion of the value of the net shares issued by the Company in non-cash stock option exercises as compensation expense. The Company determined that the value of the net shares issued in non-cash option exercises was incorrectly expensed in the original filing, resulting in an overstatement of compensation expense. The correction of this error resulted in a decrease to accumulated deficit by $ 3,407,443 and a corresponding decrease to additional paid-in capital as of December 31, 2021. The cumulative impact of this correction has been reflected as an adjustment to opening accumulated deficit and additional paid-in capital in the Statements of Stockholders’ Equity for March 31, 2025, December 31, 2024, March 31, 2024, and December 31, 2023 presented in this filing, and all other period-ends subsequent to December 31, 2021. The correction of the 2021 error was recorded through opening equity and did not require the amendment or restatement of the Company’s previously issued annual financial statements. Restated Financial Information The following tables present the effects of the restatement on the Company’s previously reported statements of comprehensive loss and stockholders’ equity for the three and six months ended June 30, 2025. Statements of Comprehensive Loss (Unaudited) ( Three Months Ended June 30, 2025) (in dollars, except per-share data) Schedule of statements of comprehensive loss As Previously Reported Adjustment As Restated Research and development expenses $ 2,641,941 $ ( 20,500 ) $ 2,621,441 General and administrative expenses $ 2,985,883 $ ( 684,999 ) $ 2,300,884 Total Operating Expenses $ 5,631,287 $ ( 705,499 ) $ 4,925,788 Net Loss $ ( 5,672,132 ) $ 705,499 $ ( 4,966,633 ) Basic and Diluted Loss per Share $ ( 0.05 ) $ 0.01 $ ( 0.04 ) Statements of Comprehensive Loss (Unaudited) ( Six Months Ended June 30, 2025) (in dollars, except per-share data) As Previously Reported Adjustment As Restated Research and development expenses $ 5,731,159 $ ( 20,500 ) $ 5,710,659 General and administrative expenses $ 4,822,935 $ ( 684,999 ) $ 4,137,936 Total Operating Expenses $ 10,559,585 $ ( 705,499 ) $ 9,854,086 Net Loss $ ( 10,369,156 ) $ 705,499 $ ( 9,663,657 ) Basic and Diluted Loss per Share $ ( 0.08 ) $ — $ ( 0.08 ) 10 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 Statements of Stockholders’ Equity (Unaudited) (As of June 30, 2025) (in dollars) Schedule of statements of stockholders’ equity As Previously Reported Adjustment As Restated Additional paid-in-capital $ 189,836,354 $ ( 4,112,942 ) $ 185,723,412 Accumulated deficit $ ( 160,775,590 ) $ 4,112,942 $ ( 156,662,648 ) NOTE 3 – MANAGEMENT’S PLANS 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 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 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 $ 1,786,000 of expenditures per month over the next 12 months. The Company’s current cash position enables it to finance its operations through October 2026. 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 (described in Note 10). As of the date of this filing, pursuant to the purchase agreement, the Company has received $ 2,153,850 , and the remaining available amount of $ 27,846,150 is available to the Company per the agreement. On December 9, 2022, the Company entered into a sales agreement with an investment banking company whereby the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 35,000,000 from time to time through or to the investment banking company, as sales agent or principal (described in Note 10). As of the date of this filing, pursuant to the sales agreement, the Company has received $ 7,808,419 , and the remaining available amount of $ 26,949,862 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 4). For the three and six months ended June 30, 2025, the Company recognized $ 25,605 and $ 48,522 in revenue related to this agreement, respectively. 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 4 – REVENUE 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 and milestone license fees. The License Agreement is a non-exclusive material supply and license agreement. 11 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 4 – REVENUE (CONTINUED) 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 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. An up-front license fee in the amount of $ 50,000 was paid during the period ended December 31, 2023. $ 14,875 and $ 23,208 of this amount is recorded as a contract liability in current liabilities on the Company’s balance sheets as of June 30, 2025 and December 31, 2024, respectively. For the three months ended June 30, 2025 and 2024, the Company recognized $ 25,605 and $ 19,355 in revenue related to this agreement, respectively. For the six months ended June 30, 2025 and 2024, the Company recognized $ 48,522 and $ 36,022 , in revenue related to this agreement, respectively. 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 $ 0 and $ 13,750 for the three and six months ended June 30, 2024, respectively. Contract balances are as follows: Schedule of contract balances June 30, 2025 December 31, 2024 Accounts receivable, net $ 10,753 $ 45,565 Short-term contract assets $ — $ — Long-term contract assets $ — $ — Short-term contract liability $ 14,875 $ 23,208 Significant changes in the contract balances for the six months ended June 30, 2025 are as follows: Schedule of significant changes in the contract balances Six Months Ended June 30, 2025 Assets Liabilities Balance at December 31, 2024 $ 45,565 $ ( 23,208 ) Revenue recognized that was previously included in contract liability — 8,333 Decreases/increases due to cash received ( 75,000 ) — Billed receivables recorded 29,435 — Transferred to receivables from unbilled receivables ( 29,435 ) — Unbilled receivables recorded 40,188 — Balance at June 30, 2025 $ 10,753 $ ( 14,875 ) 12 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 4 – REVENUE (CONTINUED) Assets Recognized for the Costs to Obtain a Contract There are no assets recognized for the costs to obtain the License Agreement. NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: Schedule of prepaid expenses and other current assets June 30, 2025 December 31, 2024 Insurance $ 357,254 $ 154,945 Software licenses 182,533 151,451 Investor relations 49,053 5,271 Rent 36,525 36,525 Other 13,491 9,415 Prototype devices — 44,134 $ 638,856 $ 401,741 NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment consist of the following: Schedule of property and equipment June 30, 2025 December 31, 2024 Office equipment $ 166,351 $ 155,511 Lab equipment 11,819,801 10,953,487 Furniture 66,438 54,493 Leasehold improvements 440,855 432,400 Software 133,377 133,377 12,626,822 11,729,268 Less: Accumulated depreciation 6,902,263 6,037,723 Property and equipment, net $ 5,724,559 $ 5,691,545 13 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 6 – PROPERTY AND EQUIPMENT (CONTINUED) Depreciation expense for the three months ended June 30, 2025 and 2024 was $ 461,228 and $ 395,928 , respectively. Depreciation expense for the six months ended June 30, 2025 and 2024 was $ 889,680 and $ 761,491 , respectively. During the three months ended June 30, 2025, the Company did not dispose of or retire property and equipment. During the six months ended June 30, 2025, the Company traded in property and equipment with a cost and accumulated depreciation of $ 25,140 for a gain of $ 28,800 . During the three months ended June 30, 2024, the Company retired fully depreciated property and equipment with the cost of $ 5,869 . During the six months ended June 30, 2024, the Company retired property and equipment with a cost of $ 169,010 and accumulated depreciation of $ 165,844 for a loss of $ 3,166 . NOTE 7 – INTANGIBLE ASSETS 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 force. Some countries require the payment of maintenance fees for pending patent applications. Maintenance fees paid after a patent is granted are expensed, as these are considered ongoing costs to “maintain a patent”. Maintenance fees paid prior to a patent grant date are capitalized to patent costs, as these are considered “patent application costs”. No amortization expense has been recorded on the remaining patent applications since patents on these applications have yet to be granted. Intangible assets consist of the following: Schedule of intangible assets June 30, 2025 December 31, 2024 Patents $ 2,235,408 $ 2,127,076 Less: Accumulated amortization 825,040 771,631 Intangible assets, net $ 1,410,368 $ 1,355,445 Amortization expense for the three months ended June 30, 2025 and 2024 was $ 26,901 and $ 22,311 , respectively. Amortization expense for the six months ended June 30, 2025 and 2024 was $ 53,409 and $ 43,246 , respectively. There were no patent costs written off for the three and six months ended June 30, 2025 and 2024. 14 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 8 – LEASES On October 30, 2017, the Company entered into a lease agreement (the “Lease”) to lease approximately 13,420 square feet of office, chemistry, clean room and research and development space located in Colorado for the Company’s principal executive offices and research and development facility. The term of the lease was sixty-one ( 61 ) months, beginning on November 1, 2017 and ending on November 30, 2022 . In January 2022, the term was extended for an additional twenty-four ( 24 ) months. On November 22, 2022, the Company entered into an amendment to the Lease (“the Amended Lease”) to lease an additional approximately 9,684 square feet of adjacent office and warehouse space. The term of the Amended Lease is one hundred twenty ( 128 ) months, with an effective date of June 1, 2023 . Base rent through January 31, 2024 of the Amended Lease term was approximately $ 30,517 per month. The base rent for the next full year of the Amended Lease term is approximately $ 377,288 , with an increase in annual base rent of approximately 3 % in each subsequent year of the lease term. Commencing on June 1, 2023, monthly installments of base rent and one-twelfth of landlord’s estimate of tenant’s proportionate share of annual operating expenses shall be due on the first day of each calendar month. The Amended Lease also provides an allowance of up to $ 43,216 to be used solely for the cost of renovations to the additional lease premises. 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. The 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 June 30, 2025, by year and in aggregate, including the extended term, are as follows: Schedule of future lease payments of operating leases YEARS ENDING DECEMBER 31, AMOUNT 2025 $ 194,305 2026 399,199 2027 411,174 2028 423,612 2029 436,300 Thereafter 1,921,271 3,785,861 Less discounted interest ( 1,100,824 ) TOTAL $ 2,685,037 The Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases. There are no other material operating leases. 15 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 8 – LEASES (CONTINUED) 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 June 30, 2025 Weighted average remaining lease term (in years) 8.58 Weighted average discount rate 8.25 % As of June 30, 2025, current operating leases had remaining terms between 6 months and 8.6 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 June 30, 2025, the Company did not have any finance leases. Operating and short-term lease costs totaling $ 110,713 and $ 32,612 are included in research and development and general and administrative expense, respectively, for the three months ended June 30, 2025. Operating and short-term lease costs totaling $ 171,552 and $ 25,403 are included in research and development and general and administrative expenses, respectively, for the three months ended June 30, 2024. Operating and short-term lease costs totaling $ 197,121 and $ 53,568 are included in research and development and general and administrative expense, respectively, for the six months ended June 30, 2025. Operating and short-term lease costs totaling $ 293,679 and $ 50,806 are included in research and development and general and administrative expenses, respectively, for the six months ended June 30, 2024. NOTE 9 – INCOME TAXES There is no income tax benefit for the losses for the three and six months ended June 30, 2025 and 2024 since management has determined that the realization of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of such benefits. The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2025, the Company had no unrecognized tax benefits, or any tax related interest or penalties, and it does not expect significant changes in the amount of unrecognized tax benefits to occur within the next twelve months. There were no changes in the Company’s unrecognized tax benefits during the three- and six-month period ended June 30, 2025. The Company did no t recognize any interest or penalties during 2025 related to unrecognized tax benefits. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2021 and thereafter are subject to examination by the relevant taxing authorities. Net operating loss (NOL) carryforwards are subject to examination in the year they are utilized regardless of whether the tax year in which they are generated has been closed by the statute. The amount subject to disallowance is limited to the NOL utilized. Accordingly, the company may be subject to examination for prior NOLs generated as such NOLs are utilized. 16 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 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 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. 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 were 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 June 30, 2025, the institutional investor purchased 7,756,336 shares of common stock for proceeds of $ 30,000,000 and the Company issued 101,781 shares of common stock as additional commitment fee, valued at $ 518,265 fair value, leaving zero in reserve for additional commitment fees. During the three-month period ended June 30, 2025, pursuant to the purchase agreement, the institutional investor purchased 0 shares of common stock. During the three-month period ended June 30, 2024, pursuant to the purchase agreement, the institutional investor purchased 700,000 shares of common stock for proceeds of $ 2,343,250 and the Company issued 7,949 shares of common stock as additional commitment fee, valued at $ 28,983 fair value. During the six-month period ended June 30, 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. During the six-month period ended June 30, 2024, pursuant to the purchase agreement, the institutional investor purchased 1,950,000 shares of common stock for proceeds of $ 7,495,600 and the Company issued 25,431 shares of common stock as additional commitment fee, valued at $ 105,960 fair value. As of June 30, 2025, no amounts remain available under this purchase agreement. 17 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 10 – STOCKHOLDERS’ EQUITY (CONTINUED) Common Stock (Continued) On March 17, 2025, the Company entered into a new purchase agreement with the same 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 245,098 shares of common stock to the institutional investor as an initial commitment fee valued at $ 222,990 fair value, and 490,196 shares of common stock were reserved for additional commitment fees to the institutional investor in accordance with the terms of the purchase agreement. During the three- and six-month period ended June 30, 2025, pursuant to the purchase agreement, the institutional investor purchased 650,000 shares of common stock for proceeds of $ 688,000 and the Company issued 11,242 shares of common stock as additional commitment fee, valued at $ 12,811 fair value. During July and August 2025, pursuant to the purchase agreement, the institutional investor purchased 900,000 shares of common stock for proceeds of $ 1,465,850 and the Company issued 23,953 shares of common stock as additional commitment fee, valued at $ 43,338 fair value, leaving 455,001 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 three-month period ended June 30, 2025, pursuant to the sales agreement, the investment banking company sold 318,411 shares of the Company’s common stock for proceeds of $ 390,813 after a payment of the commission in the amount of $ 12,088 to the investment banking company. During the three-month period ended June 30, 2024, pursuant to the sales agreement, the investment banking company sold 50,000 shares of the Company’s common stock for proceeds of $ 169,430 after a payment of the commission in the amount of $ 5,240 to the investment banking company. During the six-month period ended June 30, 2025, pursuant to the sales agreement, the investment banking company sold 368,411 shares of the Company’s common stock for proceeds of $ 507,248 after a payment of the commission in the amount of $ 15,689 to the investment banking company. During the six-month period ended June 30, 2024, pursuant to the sales agreement, the investment banking company sold 127,150 shares of the Company’s common stock for proceeds of $ 499,883 after a payment of the commission in the amount of $ 15,461 to the investment banking company. During July and August 2025, pursuant to the sales agreement, the investment banking company sold 1,923,515 shares of the Company’s common stock for proceeds of $ 4,005,317 after a payment of the commission in the amount of $ 123,877 to the investment banking company. 18 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 11 – STOCK BASED COMPENSATION 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 Options”). All options granted under the 2007 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options (“Non-Statutory Stock Options”). Effective June 24, 2016, the 2007 Plan was terminated. As of June 30, 2025, options to purchase 453,000 shares of common stock have been issued and are outstanding under the 2007 Plan. During 2016, the Board of Directors of the Company adopted the 2016 Equity Incentive Plan (“2016 Plan”) that was approved by the shareholders at the 2016 annual meeting of shareholders on May 20, 2016. Under the 2016 Plan, the Company is authorized to grant awards of incentive and non-qualified stock options and restricted stock to purchase up to 3,000,000 shares of common stock to employees, directors and consultants. Effective May 16, 2019, the number of shares of the Company’s common stock available for issuance under the 2016 Plan was increased from 3,000,000 to 8,000,000 shares. Effective May 25, 2023, the number of shares of the Company’s common stock available for issuance under the 2016 Plan was increased from 8,000,000 to 13,000,000 shares and awards of restricted stock units are authorized for issuance. Effective May 15, 2025, the 2016 Plan was terminated. As of June 30, 2025, options to purchase 7,647,340 shares of common stock have been issued and are outstanding, 498,694 restricted shares of common stock have been granted, net of forfeitures, and 2,187,501 performance stock units have been granted under the 2016 Plan. During 2025, the Board of Directors of the Company adopted the 2025 Equity Incentive Plan (“2025 Plan”) that was approved by the shareholders at the 2025 annual meeting of shareholders on May 15, 2025. Under the 2025 Plan, the Company is authorized to grant awards of incentive and non-qualified stock options and restricted stock to purchase up to 6,000,000 shares of common stock to employees, directors and consultants. As of June 30, 2025, options to purchase 210,000 shares of common stock have been issued and are outstanding and 583,225 restricted stock units have been granted under the 2025 Plan. As of June 30, 2025, 5,206,775 shares of common stock remain available for grants under the 2025 Plan. These plans are administered by the Company’s Board of Directors or its compensation committee which determines the persons to whom awards will be granted, the number of awards to be granted, and the specific terms of each grant. Subject to the provisions regarding Ten Percent Shareholders, (as defined in the 2025 Plan), the exercise price per share of each option cannot be less than 110% of the fair market value of a share of common stock on the date of grant. Options granted under the 2025 Plan are generally exercisable for a period of 10 years from the date of grant and may vest on the grant date, another specified date or over a period of time. The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award, with the following assumptions for the six-month period ended June 30, 2025: no dividend yield, expected volatility, based on the Company’s historical volatility, 78.7 % to 80.8 % , risk-free interest rate between 4.18 % to 4.48 % and expected option life of 10 years, which is based on the legal contractual life of the options. 19 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 11 – STOCK BASED COMPENSATION (CONTINUED) Common Stock Options and Warrants (Continued) The Black-Scholes option pricing model assumptions for six-month period ended June 30, 2024 are as follows: no dividend yield, expected volatility, based on the Company’s historical volatility, 76.3 % to 77.1 % , risk-free interest rate between 3.91 % to 4.28 % and expected option life of 10 years. As of June 30, 2025, there was $ 1,709,499 of unrecognized compensation expense related to non-vested market-based share awards that is expected to be recognized through June 2028. As of June 30, 2024, there was $ 3,777,227 of unrecognized compensation expense related to non-vested market-based share awards that is expected to be recognized through June 2027. Share-based compensation was recognized as follows: Schedule of share-based compensation Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Stock options $ 533,650 $ 1,710,948 $ 1,282,692 $ 2,337,460 Restricted stock awards 171,713 139,322 401,863 203,521 Restricted stock units 11,113 — 11,113 — Performance stock units 384,925 — 384,925 — Total share-based compensation $ 1,101,401 $ 1,850,270 $ 2,080,593 $ 2,540,981 The following tables summarize all stock option and warrant activity of the Company during the six months ended June 30, 2025: Schedule of stock option and warrant activity Non-Qualified Stock Options and Warrants Outstanding and Exercisable Number of Shares Exercise Price Weighted Average Exercise Price Outstanding, December 31, 2024 9,899,859 $ 0.51 - $ 16.81 $ 3.07 Granted 522,336 $ 0.99 - $ 1.79 $ 1.20 Forfeited ( 79,355 ) $ 0.99 - $ 5.58 $ 3.64 Exercised ( 1,632,500 ) $ 0.69 - $ 0.80 $ 0.71 Outstanding, June 30, 2025 8,710,340 $ 0.51 - $ 16.81 $ 3.39 Exercisable, June 30, 2025 7,812,281 $ 0.51 - $ 16.81 $ 3.49 The aggregate intrinsic value of options and warrants outstanding and exercisable as of June 30, 2025 was $ 1,194,861 and $ 1,143,837 , 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 $ 1.24 for the Company’s common stock on June 30, 2025. During the six-month period ended June 30, 2025, 1,632,500 options were exercised for proceeds of $ 204,000 and no warrants were exercised. 20 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 11 – STOCK BASED COMPENSATION (CONTINUED) Common Stock Options and Warrants (Continued) Schedule of non-qualified stock options and warrants outstanding Non-Qualified Stock Options and Warrants Outstanding Range of Exercise Prices Number Outstanding Currently Exercisable at June 30, 2025 Weighted Average Remaining Contractual Life Weighted Average Exercise Price of Options and Warrants Currently Exercisable $ 0.51 - $ 16.81 7,812,281 5.98 Years $ 3.49 Restricted Stock Awards and Units 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. Each RSA had a grant date fair value of $ 3.33 which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss. Such RSAs were granted under the 2016 Plan and vested in total 15,455 shares on June 18, 2024, with the remaining vesting in 10 equal quarterly installments of 7,702 shares each 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 one of the Company’s outside directors. 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 stock-based compensation expenses within the Statement of Comprehensive Loss. Such RSA was granted under the 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 one of the Company’s outside directors. Each RSA had a grant date fair value of $ 2.68 which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss. Such RSA was granted under the 2016 Plan and vests in 8 equal quarterly installments of 1,436 shares beginning October 1, 2024. On December 10, 2024, the Compensation Committee of the Board of Directors approved a grant totaling 85,000 Restricted Stock Awards to two of the Company’s executives and 25,000 Restricted Stock Awards to 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 Plan and cliff vest on March 10, 2025 for the outside director and on June 10, 2025 for the executives. On February 17, 2025, executive leadership team approved a grant totaling 20,000 Restricted Stock Awards to a Company’s employee. Each RSA had a grant date fair value of $ 1.50 which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss. Such RSAs were granted under the 2016 Plan and vest in 12 quarterly installments beginning April 1, 2025. On May 14, 2025, executive leadership team approved a grant totaling 140,000 Restricted Stock Awards to certain Company employees. Each RSA had a grant date fair value of $ 0.99 which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss. Such RSAs were granted under the 2016 Plan and vest in 12 quarterly installments beginning June 1, 2025. 21 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 11 – STOCK BASED COMPENSATION (CONTINUED) Restricted Stock Awards and Units (Continued) On June 20, 2025, executive leadership team approved a grant totaling 180,000 Restricted Stock Units to a Company’s employee. Each RSU had a grant date fair value of $ 1.22 which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss. Such RSUs were granted under the 2025 Plan and vest in 12 quarterly installments beginning August 19, 2025. On June 30, 2025, the Compensation Committee of the Board of Directors approved grants of 80,645 Restricted Stock Units to each of the Company’s five outside directors. Each RSU had a grant date fair value of $ 1.24 which shall be amortized on a straight-line basis over the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss. Such RSUs were granted under the 2025 Plan and vest in 4 quarterly installments beginning July 15, 2025. Upon the occurrence of a Change in Control, 100% of the unvested RSAs and RSUs 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 and units is estimated by the market price of the Company’s common stock at the date of grant. Restricted stock activity during the six-month period ended June 30, 2025 is as follows: Schedule of fair value of restricted stock awards Restricted Stock Awards Six Month Period Ended June 30, 2025 Restricted Stock Units Six Month Period Ended June 30, 2025 Number of Shares Weighted Average Grant Date Fair Value per Share Number of Shares Weighted Average Grant Date Fair Value per Share Non-vested, beginning of period 227,492 $ 3.28 — $ — Granted 160,000 1.06 583,225 1.23 Vested ( 157,709 ) 2.83 — — Cancelled and forfeited ( 17,367 ) 4.13 — — Non-vested, end of period 212,416 $ 1.87 583,225 $ 1.23 Restricted stock awards and units are being amortized to expense over the shorter of the requisite service period or the vesting period. As of June 30, 2025 and 2024, the unamortized value of the restricted stock awards was $ 353,061 and $ 536,714 , respectively. As of June 30, 2025 and 2024, the unamortized value of the restricted stock units was $ 708,487 and $ 0 , respectively. Performance Stock Units During the six months ended June 30, 2025, the Company granted 2,187,501 performance stock units (PSUs) subject to both performance-based and service vesting requirements to the Company’s executives. Performance vesting requirements are tied to various individual and corporate goals related to the Company’s commercialization, as measured over a one-year performance period. Some PSUs vest annually, while others vest 1/3 rd annually over a three-year period. The grant date fair value of the PSUs granted was $ 2,029,126 , as determined by the Company’s closing common stock price on the date of the grant. The grant date fair value per share was $ 0.93 . The Company determined that achievement of some performance conditions is probable as of June 30, 2025, and accordingly has recognized expense for the portion of the awards expected to vest, on a straight-line basis over the requisite service period for each tranche. For the three and six months ended June 30, 2025, the Company recorded $ 384,925 stock-based compensation expense related to the PSU vesting. As of June 30, 2025, a total of 2,187,501 PSUs remain outstanding. No PSUs were outstanding or expensed in the comparable periods of 2024. 22 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 12 – RELATED PARTY During the three and six months period ended June 30, 2025, and 2024, 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. Related Party Transactions for the Three and Six Months Ended June 30, 2025 • The Company incurred $ 2,100 and $ 69,643 in legal fees and expense reimbursements with a related party law firm for the three and six months ended June 30, 2025, respectively. Related accrual was $ 68,750 as of June 30, 2025. • The Company incurred $ 16,980 and $ 39,740 in accounting and IT service fees and expense reimbursements to related parties for the three and six months ended June 30, 2025, respectively. Related accrual was $ 4,920 as of June 30, 2025. • The Company incurred $ 53,841 and $ 108,636 in fees and travel expenses to directors for the three and six months ended June 30, 2025, respectively. Related accrual was $ 51,250 as of June 30, 2025. • The Company incurred $ 82,500 and $ 165,000 in consulting fees to advisory board member for the three and six months ended June 30, 2025, respectively. Related accrual was $ 22,500 as of June 30, 2025. Related Party Transactions for the Three and Six Months Ended June 30, 2024 • The Company incurred $ 38,759 and $ 62,759 in legal fees with a related party law firm for the three and six months ended June 30, 2024, respectively. Related accrual was $ 90,360 as of December 31, 2024. • The Company incurred $ 67,900 and $ 162,121 in accounting and IT service fees and expense reimbursements to related parties for the three and six months ended June 30, 2024, respectively. Related accrual was $ 8,326 as of December 31, 2024. • The Company incurred $ 57,555 and $ 111,339 in fees and travel expenses to directors for the three and six months ended June 30, 2024, respectively. Related accrual was $ 72,748 as of December 31, 2024. • The Company incurred $ 120,673 and $ 222,373 in consulting fees and travel reimbursements to advisory board members for the three and six months ended June 30, 2024, respectively. Related accrual was $ 29,345 as of December 31, 2024. NOTE 13 – RETIREMENT PLAN The Company established a 401(k) retirement plan covering all eligible employees beginning November 15, 2013, which was amended effective February 15, 2025. The plan offers two types of elected deferrals: pre-tax deferrals and Roth deferrals. The Company matches 100% of each participant contribution, up to 4% for all eligible employees. Matching contributions vest immediately. Participants are entitled to receive distributions of all vested amounts beginning at age 59 1/2. Matching contributions to all eligible participants charged to expense were $ 45,890 and $ 34,324 for the three months ended June 30, 2025 and 2024, respectively. Matching contributions to all eligible participants charged to expense were $ 85,477 and $ 59,092 for the six months ended June 30, 2025 and 2024, respectively. The plan is subject to the annual IRS elective deferral limit of $ 23,500 per employee for 2025, $ 7,500 catch-up for those aged 50 and over, and $11,250 or 150% of the regular catch-up limit for those aged 60-63. 23 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 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 as a whole and does not receive discrete financial information for separate business units. The CODM is responsible for evaluating financial results and making resource allocation decisions. 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 for the three- and six-months period ended June 30, 2025 and 2024: Schedule of reconciliation of segment operating loss Three Months Ended June 30, 2025 (Restated) Three Months Ended June 30, 2024 Six Months Ended June 30, 2025 ( Restated) Six Months Ended June 30, 2024 NET SALES $ 25,605 $ 19,355 $ 48,522 $ 49,772 COST OF SALES 3,463 — 5,491 5,175 OPERATING EXPENSES Research and development 2,621,441 4,362,258 5,710,659 8,982,920 General and administrative 2,300,884 1,896,672 4,137,936 3,152,122 4,925,788 6,258,930 9,854,086 12,135,042 SEGMENT OPERATING LOSS ( 4,900,183 ) ( 6,239,575 ) ( 9,805,564 ) ( 12,090,445 ) OTHER INCOME (EXPENSE) Interest income 168,253 251,730 356,101 505,066 Commitment fee ( 235,801 ) ( 28,982 ) ( 243,830 ) ( 105,959 ) Gain (loss) on disposal of property and equipment — — 28,800 ( 3,166 ) Other income (expense) 1,098 ( 2,857 ) 836 ( 5,091 ) NET LOSS $ ( 4,966,633 ) $ ( 6,019,684 ) $ ( 9,663,657 ) $ ( 11,699,595 ) 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 expenses. • 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. 24 LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024 NOTE 14 – SEGMENT REPORTING (CONTINUED) Entity-Wide Disclosures • Geographic Revenue Information: For the three and six months ended June 30, 2025, 100 % of the Company’s net sales were generated internationally. For the three months ended June 30, 2024, 100 % of the Company's net sales were generated internationally. For the six months ended June 30, 2024, 28 % of the Company's net sales were generated in the United States and 72 % internationally. • Major Customers: The Company has one customer that accounted for 10 % or more of total revenue. NOTE 15 – SUBSEQUENT EVENTS On July 4, 2025, the U.S. enacted H.R. 1 “A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14.” The bill contains a broad range of tax reform provisions affecting businesses. The Company is currently evaluating the full effects of the legislation on the Company's estimated annual effective tax rate and deductibility of certain R&D expenses. As the legislation was signed into law after June 30, 2025, the impacts are not reflected in the Company's operating results for the three and six months ended June 30, 2025. On August 6, 2025, the Compensation Committee of the Board of Directors approved a grant of 51,250 options with the total value of $ 87,907 to the members of the Technical Advisory Board. The options had an exercise price of $ 2.04 per share, 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 options were granted under the 2025 Plan and vest in five monthly installments starting on August 6, 2025, with some options having a cliff vesting provision. 25