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Item 1. Business

2026-03-20 compared with 2025-03-18 · 754 added, 730 removed, 12 unchanged (99% of the section changed)

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.

differentiation at the modulator device level is in higher speed, lower power consumption, simplicity of manufacturing, small

footprint (size), and reliability.

We have demonstrated the electro-optic polymers potential for higher speed and lower power

consumption in packaged devices, and during 2024, we continued to make advances in techniques to translate our world class material

properties to efficient, reliable modulator devices with commercial foundries.

We are currently focused on:

a) working with potential

and existing customers to integrate our proprietary materials into our customers’ specific PIC and device architecture;

testing and demonstrating the superior performance, simplicity of manufacturability and reliability of our devices, including in

conjunction with the silicon photonics manufacturing ecosystem;

and c) providing our potential and existing customers with the

proper Process Development Kits (PDKs) to enable the efficient and fast integration of our materials into their own design and

manufacturing plans.

Silicon-based foundries are semiconductor fabrication

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

Partnering with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard

production lines using standard equipment, it also allows us to efficiently utilize our capital.

The foundry partnerships will allow

us to scale our high-performance polymer optical engines quickly and efficiently.

We have now received silicon wafers that range up

to 200mm in diameter, which aligns well with foundry manufacturing.

Our extremely

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

1) Traditional focus on polymer materials development,

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

We are continually looking to strengthen our patent portfolio both by internal

inventions and acquisition of intellectual property.

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

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

In addition, we are exploring other applications that

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

Our goal is to have our unique polymer technology platform become ubiquitous across multiple market verticals over and above

the optical fiber optic communications markets.

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

The impact on the internet is huge, and the internet is based on an optical network that utilizes data centers to route and switch traffic

or information to and from destinations.

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

significant investments of capital.

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

the internet is being operated.

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

Three of these opportunities

are important today:

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

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

information that will travel through the internet and optical network.

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

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

Unless the context otherwise requires,

all references to the “Company,” “we,” “our” or “us” and other similar terms means Lightwave

Also, this Form 10-K Annual Report includes the names of various government agencies and the trade names of other companies.

Unless specifically stated otherwise, the use or display by us of such other parties’ names and trade names in this report is not

intended to and does not imply a relationship with, or endorsement or sponsorship of us by, any of these other parties.

Commencement of Commercial Operations

We commenced commercial operations

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

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

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

Our Company is also in various stages of new materials development and evaluation with potential customers and strategic partners.

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

transfer agreements and direct sale of our electro-optic materials.

We have seen increased interest in our materials during 2024, driven

by the need for higher speed connections to scale the AI-enabled network infrastructure and we are in discussions on future license agreements.

In December 2024, we made the decision to focus our commercial and R&D efforts on the EO Polymer materials development and manufacturing.

Although we continue to develop full Photonic Integrated Circuits and packaged device designs as part of our internal technology and process

development roadmap, we are not actively promoting the sale of such PICs and/or packaged devices to external customers, but rather EO

Polymer materials supply and license agreements.

Materials Development

designs and synthesizes organic chromophores for use in its own proprietary electro-optic polymer systems and photonic

device designs.

A polymer system is not solely a material but also encompasses various technical enhancements necessary for its implementation.

These include host polymers, poling methodologies, and molecular spacer systems that are customized to achieve specific optical properties.

Our organic electro-optic polymer systems compounds are mixed into solution form that allows for thin film application.

Our proprietary

electro-optic polymers are designed at the molecular level for potentially superior performance, stability, and cost-efficiency.

our proprietary and unique polymers have the potential to replace more expensive, higher power consuming, slower-performance materials

such as semiconductor-based modulator devices that are used in fiber-optic communication networks today.

and patent pending molecular architectures are based on a well-understood chemical and quantum mechanical occurrence known as aromaticity .

Aromaticity provides a high degree of molecular stability that enables our core molecular structures to maintain stability under a broad

range of operating conditions.

our patented and patent-pending optical materials along with trade secrets and licensed materials, to be the core of and the enabling

technology for future generations of optical devices, modules, sub-systems, and systems that we will develop or enable our partners to

fully commercialize.

Examples of our partners include:

electro-optic PIC and device design and manufacturing companies, contract manufacturers,

original equipment manufacturers, foundries, packaging and assembly manufacturers etc.

Our Company contemplates future applications in

market verticals that may address the needs of semiconductor companies, optical network companies, Web 2.0/3.0 media companies, high performance

computing companies, telecommunications companies, aerospace companies, automotive companies, as well as for example, government agencies

and defense entities.

Device Design and Development

Electro-optic Modulators

designs its own proprietary materials for electro-optical modulation devices.

Electro-optical modulators convert data from electric signals

into optical signals that can then be transmitted over high-speed fiber-optic cables.

Our modulators are electro-optic, meaning they work

because the optical properties of the polymers are affected by electric fields applied by means of electrodes.

Modulators are key components

that are used in fiber optic telecommunications, data communications, and data centers networks etc., to convey the high data flows that

have been driven by applications such as pictures, video streaming, movies etc., that are being transmitted through the Internet.

Electro-optical

modulators are expected to continue to be an essential element as the appetite and hunger for data increases every year as well as the

drive towards lower power consumption, and smaller footprint (size).

semiconductor photonic technology today is struggling to reach faster device speeds.

Our modulator devices, enabled by our electro-optic

polymer material systems, work at extremely high frequencies (wide bandwidths) and possess inherent advantages over current crystalline

electro-optic material contained in most modulator devices such as bulk lithium niobate (LiNbO3), indium phosphide (InP), silicon (Si),

and gallium arsenide (GaAs).

Our advanced electro-optic polymer platform is creating a new class of modulators that can be easily integrated

into various PIC platforms and can address higher data rates in a lower cost, lower power consuming manner, smaller footprint (size) with

much simpler data encoding techniques.

Our electro-optic polymer material will boost the performance of standard PIC platforms such as

silicon photonics and indium phosphide.

Our electro-optic

polymers can be integrated with other materials platforms because they can be applied as a thin film coating in a fabrication clean room

such as may be found in semiconductor foundries using standard clean room tooling.

These approaches enable our device platforms to not

only be competitive but fully integrated with foundries.

Our polymers are unique in that they are stable enough to seamlessly integrate

into existing CMOS, Indium Phosphide (InP), Gallium Arsenide (GaAs), and other semiconductor manufacturing lines.

Of relevance are the

integrated silicon photonics platforms that combine optical and electronic functions.

These include a miniaturized modulator for ultra-small

footprint applications in which we term the Polymer Slot™.

This design is based on a slot modulator fabricated into semiconductor

wafers that can include either silicon or indium phosphide.

has a fabrication facility in Colorado to apply standard fabrication processes to our electro-optic polymers which create modulator devices.

While our internal fabrication facility is capable of manufacturing modulator devices, we have partnered with commercial silicon-based

fabrication companies that are called foundries who can scale our technology with volume quickly and efficiently.

The process recipe for

fabrication plants or foundries is called a ‘process development kit’ or PDK.

We are currently working with commercial foundries

to implement our electro-optic polymers into accepted PDKs by the foundries.

One of the metrics for successful implementation of PDK is

to receive working modulator chips.

Glossary of select technology

terms to provide you with a better understanding our Company’s technology and devices:

Electro-optic devices -

Electro-optic devices convert data from electric signals into optical signals for use in communications systems and in optical interconnects

for high-speed data transfer.

Electro-optic material - Electro-optic

material is the core active ingredient in high-speed fiber-optic telecommunication systems.

Electro-optic materials are materials

that are engineered at the molecular level.

Molecular level engineering is commonly referred to as “nanotechnology.”

Electro-optic modulators

- Electro-optic (E/O) modulators are electro-optic devices that perform electric-to-optic conversions within the infrastructure

of the internet.

Data centers may also benefit from this technology through devices that could significantly increase bandwidth and speed

while decreasing costs.

Polymer E/O modulators can be designed and fabricated with multiple structures.

The waveguides allow the light

to be efficiently coupled into and out of the modulators, and provide a basis for integrating modulators together.

Gbaud - The rate of symbol

changes in data transmission in billions of symbol changes per second.

Each symbol can support one or more bits, the number of bits depending

on the modulation format.

NRZ – See PAM2.

PAM2 – 2 level Pulse

Amplitude Modulation, a modulation format in which the optical power in each symbol can assume either of two different levels, low or

high, representing, respectively, a 0 or a 1.

PAM2 supports 1 bit per symbol so the bit rate is equal to the baud rate or symbol rate.

For example, a modulator capable of supporting 100 Gbaud can transmit 100 Gbps with PAM2 modulation.

This modulation format is often called

NRZ (Non Return to Zero).

PAM4 - 4 level Pulse Amplitude

Modulation, a modulation format in which the optical power in each symbol can assume any one of 4 different levels.

PAM4 supports 2 bits

per symbol so the bit rate is equal to two times the baud rate or symbol rate.

For example, a modulator capable of supporting 100 Gbaud

can transmit 200 Gbps with PAM4 modulation.

PAM8 - 8 level Pulse Amplitude

Modulation, a modulation format in which the optical power in each symbol can assume any one of 8 different levels.

PAM4 supports 3 bits

per symbol so the bit rate is equal to three times the baud rate or symbol rate.

For example, a modulator capable of supporting 100 Gbaud

can transmit 300 Gbps with PAM8 modulation.

Photonic Devices - Photonic

devices are components for creating, manipulating, or detecting light.

This can include modulators, laser diodes, light-emitting diodes,

solar and photovoltaic cells, displays and optical amplifiers.

Other examples are devices for modulating a beam of light and for combining

and separating beams of light of different wavelength.

Polymers - Polymers, also

known as plastics, are large carbon-based molecules that bond many small molecules together to form a long chain.

Polymer materials can

be engineered and optimized using nanotechnology to create a system in which unique surface, electrical, chemical, and electro-optic characteristics

can be controlled.

Materials based on polymers are used in a multitude of industrial and consumer products, from automotive parts to home

appliances and furniture, as well as scientific and medical equipment.

Our Business Opportunity

Lightwave Logic, Inc.

is developing

our advanced electro-optical polymer material systems.

Current legacy technology is based on inorganic crystalline materials, which has

allowed for the proliferation of data over fiber optic cables.

However, there are inherent molecular deficiencies that have prevented

this technology from scaling down in price and up in functionality, especially in terms of $/Gbps.

This is primarily due to a closed valence

structure that does not allow for the molecular improvements.

The valence or valency of an element is a measure of its combining power

with other atoms when it forms chemical compounds or molecules.

Also, the physical properties of a crystal do not allow for its implementation

into highly miniaturize slot structures that are in simple terms the pathways that light travels through in the device.

Organic polymer materials have

free electrons that allow for limitless potential to combine with other molecular structures, which allows for multiple options and combinations

to improving performance characteristics.

Importantly, because they can be applied to optical structures in thin-film liquid form, it

is possible to imbue electro-optic ability to highly miniaturized slot structures.

Organic polymer materials are also more economic to

manufacture in comparison to growing exotic crystals that are prone to contamination and further must be sliced into thin wafers.

Company believes that the combination of less expensive manufacturing cost, ease of application, and better scalability, together with

a lower cost of ownership due to lower heat dissipation (requiring less cooling), will create enormous demand for our polymer material

through supply agreements as well as polymer-based products.

Many companies’ early attempts

at developing commercially reliable organic polymers were stymied due to the difficulty of creating organic molecules that could remain

electro-optically active after being subjected to the high heat of semiconductor manufacturing temperatures (such as silicon CMOS, InP,

These early attempts also encountered difficulty synthesizing materials that could withstand photochemical bleaching (loss

of sensitivity to specific frequencies) and material degradation due to high operating temperatures.

Over the last several years,

our Company has made various scientific breakthroughs that have allowed for the synthesis of proprietary organic polymer materials that

can withstand extremely high process temperatures that exceed 175°C.

Additionally, these materials have demonstrated photochemical stability

in devices, even after being subjected to high intensity light for over 5,000 hours.

These materials also exhibited stable electro-optic

performance after being continuously aged at 85°C for over 12,000 hours.

This exposure duration far exceeds industry standard stress

These devices have performed with 3dB bandwidths that exceed 70GHz.

We are now further optimizing

our electro-optic (EO) polymer materials platform to meet additional specifications that are beginning to be required by the fiber communications

industry for applications such as networks running at data rates of 800Gbps and 1600Gbps and 3200Gbps in the future.

a specialty materials and intellectual property company focused on the development and commercialization of proprietary electro-optic

(“EO”) polymer materials designed to enable high-speed optical modulators for data communications and other photonic applications.

Our Perkinamine® family

of EO polymer materials is engineered for integration into silicon photonics (“SiPh”) and other photonic integrated circuit

(“PIC”) platforms.

When incorporated into device architectures, these materials are designed to support high-speed, high-bandwidth

optical modulation with lower drive voltage requirements relative to certain conventional silicon-based approaches and certain other

traditional photonic material systems, including III-V–based compound semiconductor technologies.

The electro-optic properties

of these materials can allow shorter interaction lengths in modulator designs, which can contribute to more compact device footprints

and increased integration density.

In addition, our materials are intended to be compatible with complementary metal-oxide-semiconductor

(“CMOS”) fabrication processes, which may facilitate integration into established semiconductor foundry workflows.

drive voltage operation may enable lower system-level power consumption and simplified driver electronics in specific implementations.

We do not manufacture optical

transceivers, photonic devices, or complete optical modules.

Instead, our strategy is to commercialize our technology through a combination

of material sales, intellectual property licensing, process design kit (“PDK”) enablement, and royalty or other fee-based

arrangements tied to customer production.

Our customers and prospective

customers include semiconductor foundries, silicon photonics device designers, optical module manufacturers, and system integrators serving

artificial intelligence (“AI”), cloud computing, data center, and telecommunications markets.

We pursue customer adoption

through a structured commercialization process designed to support evaluation, integration, qualification, and production readiness within

established semiconductor manufacturing ecosystems.

As of January 2026, multiple

customer programs are progressing through defined development stages under our commercialization framework.

The timing and scale of potential

production revenue depend on customer product qualification and adoption cycles, technical validation, manufacturing readiness, end-market

demand, and broader industry conditions.

Our Electro-Optic Polymer Technology

Our technology platform

has the capability and potential to address 4 or more channels of 400Gbps utilizing PAM4 encoding schemes, thus creating a roadmap of

increased performance for the industry.

Furthermore, we are collaborating with industry partners to optimize device designs and packaging.

We have already made extensive progress with our polymer materials on this front, and now we are integrating our robust polymer materials

onto an integrated photonics platform.

While our initial focus is to

address data communications and telecommunications network applications along with cloud computing/data center needs, we believe that

in the future we will have additional opportunities over and above AI to address other applications such as:

chip-to-chip and backplane

optical interconnects, photovoltaic cells, medical applications, satellite reconnaissance, navigation systems, radar applications, optical

filters, spatial light modulators;

and all-optical switches.

Electro-Optic Polymer Production – Our Approach vs.

the BLA Approach

Our Electro-Optic Material Approach

Our core material expertise relates

to the production of high-performance, high-stability electro-optic polymers for high-speed (wide bandwidth) telecommunication and data

communications applications.

More specifically, it lies in a less mainstream, yet firmly established, scientific phenomenon called aromaticity.

Aromaticity causes a high degree of molecular stability.

It is a molecular arrangement wherein atoms combine into multi-membered rings

and share their electrons among each other.

Aromatic compounds are stable because the electronic charge distributes evenly over a great

area preventing hostile moieties, such as oxygen and free radicals, from finding an opening to attack.

Previous and Current Competitive Organic Electro-Optic

Polymer Efforts

For the past several decades,

diverse corporate interests, including, to our knowledge, IBM, Lockheed Martin, DuPont, AT&T Bell Labs, Honeywell, Motorola, HP, 3M,

and others in addition to numerous universities and U.S.

Government Agencies, have attempted to produce high-performance, high-stability

electro-optic polymers for high-speed (wide bandwidth) telecommunication applications.

These efforts were largely unsuccessful due, in

our opinion, to the industry’s singular adherence to an industry pervasive engineering model known as the Bond Length Alternation

("BLA") theory model, which none of our patented molecular designs rely upon.

The BLA model, like all other current industry-standard

molecular designs, consists of molecular designs containing long strings of atoms called polyene chains.

Longer polyene chains provide

higher electro-optic performance, but are also more susceptible to environmental threats, which result in unacceptably low-performing,

thermally unstable electro-optic polymers.

As a result, high frequency modulators

engineered with electro-optic polymers designed on the BLA model or any other polyene chain design models are unstable over typical operating

temperature ranges, and often exhibit performance degradation within days, hours or even minutes.

Similarly, lower frequency modulators

exhibit comparable failings, but to a lesser extent.

These flaws, in most cases, have prevented commercial quality polymer-based modulators

from entering the commercial marketplace.

The thermal stability of these devices does not generally meet the minimum Telcordia GR-468

operating temperature range (-40 degrees Celsius to +85 degrees Celsius) much less the harsher MILSPEC 883D (military specification) range

of -55 degrees Celsius to 150 degrees Celsius.

While many new applications do not require meeting full military or Telcordia GR-468 specifications

for polymers, many potential customers prefer to see polymer operate at or near these conditions to convey confidence in the material

We understand from initial conversations with data center architects and designers that the temperature specifications that our

materials achieve are compliant with their equipment design needs.

We are aware of other academic

and commercial development efforts—some by larger companies with vastly more financial resources than we possess.

However, we believe

that no one yet has developed organic polymer materials that have demonstrated the combination of thermal stability, photochemical stability

and reliability that can meet or exceed commercial specifications.

Our Electro-Optic Photonic P 2 IC™ Device Approach

Our electro-optic device designs

are built around our proprietary organic polymer material systems that we believe will enable better performance than the current embedded

legacy technology built around inorganic materials.

We also believe that the inherent flexibility of being able to apply our organic polymer

materials in liquid thin-film form will accelerate the move toward ultra-miniaturization of Polymer Photonic Integrated Circuits (P 2 IC™)

by increasing the number of photonic circuits on a single chip.

Polymer photonics is the application of polymers on to a platform such

as silicon where there are both active and passive photonic component designs.

In polymer photonics, polymer devices such as modulators,

waveguides, and multiplexers can be fabricated on to a silicon platform that acts as a package as well as a base for mounting lasers (which

are needed to source the light).

We continue to invest in R&D and process development to help accelerate the adoption of our polymer

materials by potential customers into their own PIC platforms, typically based on silicon photonics.

Our initial device, though highly miniaturized, utilizes conventional

design and fabrication techniques in the industry.

Our future device designs will utilize silicon photonics (SiPh) technology, which can

support highly miniaturized slot waveguides structures etched in large format (200mm), low cost, and less expensive silicon wafers coated

with our organic electro-optic polymers.

The low-cost structure compares well to compound semiconductor technologies such as GaAs (Gallium

arsenide) and InP (Indium Phosphide), which suffer from small format wafers that do not allow the economies of scale in high volume fabrication

The degree of miniaturization possible of the slot modulator using SiPh is not technically feasible to accomplish with inorganic

crystalline materials.

Although this may not always remain the case, presently there are nearly insurmountable technical difficulties

that are inherent to a crystalline molecule.

We now have the capability to model, simulate and design photonic integrated circuits (PICs)

is based on the design, synthesis, and integration of proprietary electro-optic polymer materials engineered to exhibit strong electro-optic

(“EO”) activity, optical transparency in relevant wavelength bands, and compatibility with semiconductor fabrication processes.

Electro-optic polymers utilize

engineered chromophore molecules embedded within a polymer matrix.

When an electric field is applied, the optical properties of the material

change in a manner that can be used to modulate light propagating through a waveguide structure.

The strength of this electro-optic response,

combined with the material’s processability, is central to device performance and manufacturability.

Our Perkinamine® materials

are designed to:

high-speed optical modulation suitable for advanced data rate standards,

high-bandwidth performance through strong electro-optic coefficients,

at relatively low drive voltages,

deposited and patterned using processes compatible with semiconductor manufacturing environments,

stability under operational and environmental stress conditions required by customer applications.

Because electro-optic polymers

can be applied directly within waveguide structures, they may allow modulator architectures with shorter interaction lengths compared

to certain alternative material systems.

Shorter interaction lengths can contribute to more compact device geometries and increased integration

density within photonic integrated circuits.

The compatibility of our

materials with complementary metal oxide semiconductor (“CMOS”) fabrication processes, including back-end-of-line integration

flows, is designed to facilitate incorporation into silicon photonics platforms using established foundry infrastructure rather than

requiring dedicated fabrication facilities.

We continue to invest in

material optimization, including improvements in electro-optic efficiency, thermal stability, wavelengths expansion, environmental robustness,

and process integration parameters.

Material formulation, device architecture, and integration techniques are developed in parallel to

support customer-specific performance and reliability requirements.

Commercial deployment of

devices incorporating our materials depends on successful integration within customer and foundry process flows, achievement of reliability

standards, and attainment of yield and cost targets.

Unless the context otherwise

requires, all references to the “Company,” “we,” “our” or “us” and other similar terms

means Lightwave Logic, Inc.

Also, this Form 10-K Annual Report may include the names of various government agencies and the trade names

of other companies.

Unless specifically stated otherwise, the use or display by us of such other parties’ names and trade names

in this report is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, any of these other

Business Model - Material + IP Licensing

Our business model is centered

on the commercialization of proprietary electro-optic polymer materials and related intellectual property through material supply and

licensing arrangements.

We do not currently intend

to manufacture finished optical transceivers, discrete photonic devices, or complete optical modules.

Our strategy is to enable customers

to incorporate our materials into their own device platforms and manufacturing ecosystems, leveraging established semiconductor foundry

infrastructure.

Our revenue model may include

one or more of the following components:

Material Sales

We supply EO polymer materials

to customers for evaluation, prototyping, and potential commercial production.

Material sales may occur during development phases as

well as during volume manufacturing, subject to customer qualification and demand.

If customer programs transition

to commercial production incorporating our materials, material revenue would be expected to scale with device volumes.

Intellectual Property

We may enter into licensing

agreements covering aspects of our polymer compositions, device designs, integration processes, and related intellectual property.

arrangements may include:

upfront license fees, development or milestone-based payments, and field-of-use or application-specific licenses.

The structure and economics

of such agreements vary depending on customer requirements and the scope of intellectual property granted.

Royalty or Production-Based

In certain arrangements,

we may receive royalties or other production-based payments tied to the manufacture or sale of devices incorporating our materials or

licensed technology.

The structure, rate, and duration of such payments depend on negotiated terms and customer product lifecycles.

There can be no assurance

that any given customer program will result in royalty-bearing production.

Revenue Timing Considerations

Customer engagements typically

progress through multi-stage development cycles.

During early stages, revenue may consist primarily of material sales, non-recurring

engineering (“NRE”) fees, prototype-related activities, or development support.

Based on the current status

of customer programs, we anticipate that revenues, if any, recognized during 2026 would primarily relate to material supply, NRE arrangements,

or prototype and development activities.

We do not currently expect significant revenue from volume commercial production of customer

products until 2027 at the earliest.

The timing and magnitude of any production-related revenue depend on successful product qualification,

yield validation, customer adoption decisions, end-market demand, and broader industry conditions.

There can be no assurance

that development-stage programs will transition to volume production, that anticipated timelines will be achieved, or that commercial

revenues will occur as expected.

Strategic Flexibility

While our current strategy

is focused on materials supply and intellectual property licensing, we may evaluate selective opportunities to participate more directly

in device-level development in limited circumstances.

Such participation, if pursued, would likely be application-specific and would

depend on market conditions, partnership opportunities, capital requirements, and strategic considerations.

We have not committed to

entering device manufacturing as a core component of our business model, and any such activity would be evaluated in the context of our

overall capital allocation priorities and commercialization strategy.

Operating Leverage

Our model is designed to

leverage existing semiconductor fabrication infrastructure rather than require capital-intensive wafer fabrication facilities.

By integrating

into established foundry process flows, we seek to enable scalable production through customer and foundry manufacturing capacity.

If customer programs advance

to high-volume production, incremental material demand and royalty streams may provide operating leverage due to the intellectual property-driven

nature of our model.

However, realization of such leverage depends on successful qualification, customer adoption, competitive dynamics,

and end-market demand.

Commercialization Process (Design Win Cycle)

We pursue customer adoption

through a structured, multi-stage engagement framework that we refer to as our Design Win Cycle.

This process is designed to guide customer

programs from initial technology evaluation through potential production ramp within established semiconductor manufacturing ecosystems.

While program timelines vary

based on customer requirements, foundry schedules, application complexity, and market conditions, the Design Win Cycle typically spans

approximately 18 to 24 months.

Progression between stages

depends on the achievement of defined technical and commercial milestones.

Advancement to later stages does not assure commercial production.

Stage 1 – Technology

(Typically 3–6 Months)

During the Technology Selection

stage, customers evaluate the suitability of our electro-optic polymer materials for their intended applications.

Activities may include:

• Demonstration

of modulator performance characteristics,

of material reliability and environmental stability, or

• Comparative

evaluation against alternative technologies, including performance, power consumption, footprint,

and cost considerations.

This stage is focused on

determining whether our materials are appropriate for incorporation into the customer’s development roadmap.

Revenue during this stage,

if any, may consist of material samples, evaluation kits, or limited technical support.

Stage 2 – Product

(Typically 3–6 Months)

If a customer elects to proceed,

engagement advances to Product Design.

During this stage, we support integration of our materials into the customer’s device architecture

and semiconductor foundry process flow.

Activities may include:

of process design kit (“PDK”) elements,

for modulator design and simulation activities,

• Coordination

with semiconductor foundries to enable material integration, or

• Participation

in product reliability planning and test definition.

Progression from Stage 2

to Stage 3 typically requires successful completion of prototype design objectives and confirmation that fabrication resources are available.

In certain cases, advancement may be gated by the availability of, and access to, a customer’s preferred semiconductor foundry,

including allocation of wafer runs, process integration readiness, and foundry scheduling considerations.

Revenue during this stage

may include material sales or non-recurring engineering (“NRE”) fees associated with development activities.

Stage 3 – Prototype

to Final Product

(Typically 12–18

In this stage, customers

fabricate and refine prototype devices incorporating our materials.

Activities may include:

for product design iterations (alpha, beta, and final versions),

• Participation

in end-user qualification activities, including performance and reliability validation,

refinement efforts intended to improve manufacturing yield and cost metrics.

As of January 2026, three

customer programs were engaged in this stage, with one customer requiring customization of our material platform to meet their specific

application needs.

Approximately fifteen additional customer engagements were in Stages 1 and 2.

Revenue during Stage 3, if

any, may consist of material supply, NRE arrangements, or development-related activities.

Entry into this stage does not guarantee transition

to commercial production.

Stage 4 – Production

Ramp to High Volume

If technical qualification,

yield targets, and cost alignment objectives are achieved, programs may advance to production ramp.

Activities during this phase

support for process control and yield improvement,

• Participation

in cost reduction and manufacturing efficiency initiatives,

for design of product variants, or

• Preparation

for next-generation product platforms.

Commercial production typically

requires achievement of customer-defined qualification milestones, acceptable manufacturing yields, cost targets, and confirmed end-market

Based on the current status

of customer programs, we anticipate that revenues, if any, recognized during 2026 would primarily relate to material supply, NRE arrangements,

or prototype and development activities.

We do not currently expect significant revenue from high-volume commercial production of customer

products until 2027 at the earliest.

There can be no assurance

that programs currently in development will successfully transition to commercial production, that foundry capacity will be available

as anticipated, or that projected timelines will be achieved.

Market Opportunity (AI Networking, Hyperscale

Data Centers and Telecommunications)

AI Networking and Hyperscale

The rapid expansion of artificial

intelligence (“AI”), machine learning workloads, and cloud computing applications is driving structural changes in data center

architecture and networking design.

AI training and inference systems require increasingly higher bandwidth, lower latency, and improved

energy efficiency across dense computing environments.

As AI clusters scale, networking performance has become a critical factor influencing

system throughput, power consumption, and total cost of ownership.

Industry analysts project

continued growth in the optical interconnect market serving hyperscale data centers.

According to LightCounting and other industry research

sources, the total addressable market (“TAM”) for optical transceivers supporting AI networking, data center, and related

applications could reach approximately $24 billion annually by 2028, driven by transitions to 800G, 1.6T, and higher-speed architectures.

Within this broader market,

the serviceable addressable market (“SAM”) for high-speed optical modulators represents a subset of overall optical engine

and transceiver content.

Based on internal company estimates informed by LightCounting research, we believe the SAM associated with high-speed

modulators used in advanced data center interconnects could range from approximately $1 billion to $2.5 billion annually by 2028, depending

on architecture mix, lane speeds, and adoption rates.

These estimates are based

on published industry data and internal modeling assumptions.

Actual market size, growth rates, and our potential participation in these

markets depend on technology adoption, competitive dynamics, customer qualification cycles, and broader industry conditions.

Scale-Up, Scale-Out

and Scale-Across Architectures

AI networking expansion occurs

across three primary dimensions:

Scale-Up (Within the Rack)

Scale-up refers to high-bandwidth

connectivity among processors, accelerators, and memory within a single server or rack.

These connections require short-reach, ultra-high-speed

interconnects operating within strict power and thermal envelopes.

In scale-up environments,

electrical interconnect limitations are increasingly addressed through optical solutions.

Modulators capable of high bandwidth, low drive

voltage, and compact footprints may enable greater port density and reduced power consumption within rack-level architectures.

Scale-Out (Across Racks

Within a Data Center)

Scale-out refers to connectivity

between racks within a hyperscale data center.

These links require higher aggregate bandwidth and reliable performance over longer distances

relative to intra-rack connections.

As AI clusters expand, the

number of deployed optical transceivers and modulator lanes increases significantly.

Technologies that support higher per-lane data rates

while managing power consumption and integration complexity are central to enabling scalable cluster growth.

Scale-Across (Between

Data Centers)

Scale-across connectivity

supports communication between geographically distributed data centers.

These links typically rely on coherent optical systems and must

support high aggregate throughput across longer distances.

Electro-optic polymer-based

modulators may be relevant across all three scaling dimensions, subject to application-specific performance requirements and qualification

Optical Transceivers

and Co-Packaged Optics Architectures

Most data center optical

interconnects today are implemented using pluggable optical transceivers.

In this architecture, optical modules are inserted into network

switches or servers through standardized electrical interfaces.

The optical engine, including modulators, lasers, drivers, and receivers,

is contained within a discrete pluggable module.

Pluggable transceivers offer

flexibility and interoperability.

However, as data rates increase, electrical trace lengths between the switch silicon and the pluggable

module can introduce signal integrity challenges, increased power consumption, and thermal constraints.

Co-packaged optics (“CPO”)

represents an alternative architectural approach in which optical engines are integrated more closely with switching silicon within the

same package or substrate.

By reducing electrical trace lengths, CPO architectures seek to improve signal integrity and power efficiency

at higher data rates.

Both pluggable transceiver

and CPO architectures rely on high-performance optical modulators as core functional components.

Our electro-optic polymer materials

are designed to support high-speed, high-bandwidth modulation with compact device geometries and CMOS-compatible integration, characteristics

that may be relevant to both architectures, subject to customer qualification and system-level requirements.

The pace and extent of adoption

of CPO relative to pluggable architectures remain dependent on ecosystem coordination, packaging technology readiness, cost considerations,

and deployment strategies.

Transceiver Data Rates

and Per-Lane Bandwidth

Optical transceiver performance

is typically described using aggregate data rate designations, such as 400G, 800G, or 1.6T.

These figures represent the total data throughput

of the module.

In practice, transceivers achieve these aggregate speeds by combining multiple parallel optical lanes, each operating

at a defined per-lane data rate.

For example, a 1.6 terabit

(“1.6T”) optical transceiver may be implemented using eight optical lanes operating at 200 gigabits per second (“200G”)

Increasing per-lane bandwidth reduces the need to proportionally increase lane count, which can otherwise add complexity, footprint,

power consumption, and packaging challenges.

Higher per-lane data rates

require modulators capable of operating at increased bandwidth while maintaining signal integrity and acceptable power consumption.

electro-optic polymer materials are designed to support high-speed, high-bandwidth optical modulation, which may be relevant as customers

transition to higher per-lane data rates in next-generation transceiver and co-packaged optical architectures, subject to qualification

and system-level integration requirements.

Telecommunications

and Coherent Optical Systems

In addition to hyperscale

AI data centers, optical modulators are used in coherent dense wavelength division multiplexing (“DWDM”) systems for long-haul,

metro, and access networks.

LightCounting has estimated that the market for coherent optical transceivers represents several billion

dollars annually, including an estimated approximately $7 billion TAM for coherent DWDM applications referenced in our investor materials.

Electro-optic polymer materials

may be applicable in certain coherent optical architectures, subject to performance validation and qualification requirements.

Emerging and Specialty

Beyond data center and telecommunications

markets, electro-optic materials may have potential applications in additional photonic domains, including quantum technologies, sensing,

defense systems, and space communications.

Published industry research has projected long-term growth in certain quantum computing, quantum

communications, and quantum sensing markets, although adoption timelines and commercial maturity remain uncertain.

While our current commercialization

efforts are primarily concentrated on AI-driven data center and telecommunications applications, we are also evaluating opportunities

to participate selectively in emerging vertical markets.

For example, we have publicly announced collaborative activities related to

quantum photonic applications, including recent engagement with QPICs.

These efforts are intended to explore the applicability of our

materials in specialized photonic platforms and to position the Company for potential participation in evolving quantum ecosystems.

We expect that any participation

in emerging or specialty applications would develop gradually and remain subject to technical validation, partnership development, capital

allocation priorities, and overall strategic considerations.

Manufacturing

and Foundry Integration Strategy

Our commercialization approach

is designed to leverage established semiconductor fabrication infrastructure rather than require construction of proprietary wafer fabrication

We do not operate semiconductor wafer fabrication plants.

Instead, our electro-optic polymer materials are intended to be

integrated into silicon photonics (“SiPh”) and related photonic integrated circuit (“PIC”) platforms at third-party

semiconductor foundries.

This fabless materials model

allows us to focus on material innovation, integration support, and intellectual property development while utilizing the manufacturing

scale, process controls, and capacity of established semiconductor ecosystems.

Foundry Integration

Successful commercialization

of devices incorporating our materials requires compatibility with customer-selected semiconductor foundries.

Integration typically involves:

with foundry thermal budgets and process flows,

• Back-end-of-line

(“BEOL”) material deposition compatibility,

design kit (“PDK”) enablement and validation,

layout and waveguide integration support, and

• Reliability

and environmental qualification testing.

At present, certain BEOL

polymer deposition and integration processes are performed at our facility in Englewood, Colorado to support development programs, prototyping

activities, and early-stage customer engagements.

As customer programs advance toward volume production, we expect to work with foundry

partners to progressively transfer and qualify these BEOL integration steps within customer-preferred semiconductor fabrication environments,

subject to technical validation and foundry readiness.

In certain cases, progression

of customer programs may depend on availability of fabrication slots at customer-preferred foundries, allocation of wafer runs, process

integration readiness, and foundry scheduling considerations.

Because we do not control third-party foundry capacity or scheduling priorities,

program timelines may be affected by semiconductor capacity constraints, customer allocation decisions, or shifts in foundry resource

Perkinamine Manufacturing

Our electro-optic polymer

materials are synthesized and processed at our facility in Englewood, Colorado.

Current operations support research, development, customer

sampling, BEOL integration activities, and early-stage commercial supply.

As customer programs advance

toward production ramp, material volume requirements may increase.

Scaling production beyond current capacity could require additional

capital investment, equipment procurement, workforce expansion, process automation, supplemental third-party manufacturing arrangements,

and expanded foundry-based BEOL integration.

We maintain procurement relationships

with suppliers of specialty chemical precursors and seek to manage supply chain risk through inventory planning and supplier diversification

where feasible.

While our materials are not dependent on rare-earth elements, our supply chain remains subject to general risks affecting

specialty chemical sourcing, including geopolitical developments, transportation disruptions, regulatory changes, and supplier concentration.

Yield, Reliability,

and Production Ramp

Transition to high-volume

production requires achievement of customer-defined qualification milestones, acceptable manufacturing yields, and cost targets.

stages of the Design Win Cycle, we support:

window characterization,

improvement initiatives,

• Statistical

process control refinement,

modeling and reduction efforts, and

of repeatability at scale.

Production ramp may occur

gradually as customers validate reliability under environmental and operational stress conditions and confirm end-market demand.

Based on the current status

of customer programs, we anticipate that revenues, if any, recognized during 2026 would primarily relate to material supply, non-recurring

engineering (“NRE”) arrangements, or prototype and development activities.

We do not currently expect significant revenue

from high-volume commercial production of customer products until 2027 at the earliest.

There can be no assurance

that production ramp will occur on anticipated timelines, that foundry capacity will be available as required, or that customer qualification

and yield targets will be achieved.

Scalability Across

Deployment Architectures

As AI networking architectures

expand across scale-up, scale-out, and scale-across applications, the number of deployed optical transceivers and modulator lanes may

increase significantly.

Our manufacturing model is intended to support scalability across these deployment dimensions by enabling customers

to utilize established semiconductor fabrication capacity rather than relying on vertically integrated or specialized production facilities.

If customers transition to

volume production incorporating our materials, incremental material demand may scale with transceiver volumes and per-lane deployment

density, subject to architecture selection, foundry integration success, and customer design decisions.

Our Intellectual Property

Our research and development efforts

over the last 10+ years have yielded our Company an extensive patent portfolio as well as critical trade secrets, unpatented technology

and proprietary knowledge related to our optical polymer materials.

Our intellectual property portfolio has expanded significantly over

the few years.

We have actively filed technical utility patents and are currently in the process of readying a number of other inventions

for formal filings in 2025 and 2026.

Our research and development

efforts over the past 10+ years have yielded our Company an extensive patent portfolio drawn to organic electro-optic (OEO) polymer materials,

silicon photonics, and silicon-organic hybrid (SOH) slot modulator platforms (e.g., photonic integrated circuits (PICs), as well as critical,

related trade secrets and proprietary knowledge.

Our intellectual property portfolio has expanded significantly over the few years.

have actively filed technical utility patents and are currently in the process of readying a number of other inventions for formal filings

in 2026 and 2027.

We expect to continue innovating our technology platform over the next decade.

We had additional

patents issued or published over the past year indicating that our technology is being recognized as being unique.

In 2018, we acquired the polymer

technology intellectual property assets of BrPhotonics Productos Optoelectrónicos S.A., a Brazilian corporation, which significantly

advanced our patent portfolio of electro-optic polymer technology with 15 polymer chemistry materials, devices, packaging and subsystems

patents and further strengthened our design capabilities to solidify our market position as we prepare to enter the 400Gbps integrated

photonics marketplace with a highly competitive, scalable alternative to installed legacy systems.

2022, we acquired the polymer technology and intellectual property assets of Chromosol Ltd (UK), which significantly

strengthened our Company's design capabilities with foundry PDKs with extremely low temperature atomic layer deposition (ALD) processes

that effectively hermetically seal polymer devices that have been prepared for high volume manufacturing.

The advanced fabrication processes

of ALD with temperatures below 100C will solidify our market position with both the Company's manufacturing foundry partners as well as

end-users as we prepare to enter the 800Gbps integrated photonics marketplace.

The acquisition also advanced our Company’s patent

portfolio of electro-optic polymer technology with an innovative polymer chemistry device patent that has potential to increase the performance

of integrated modulators through optical amplification in a photonic integrated circuit (PIC) and enhance the functionality of the PIC

by integrating laser light sources made using the polymer-based gain and a laser optical cavity defined on the Silicon photonic platform,

with our Company’s high speed, high efficiency modulators.

We had additional patents issued or

published over the past year indicating that our technology is being recognized as being unique.

In 2018, we acquired the

polymer technology intellectual property assets of BrPhotonics Productos Optoelectrónicos S.A., a Brazilian corporation, which significantly

advanced our patent portfolio of OEO polymer technology with fifteen polymer chemistry materials, devices, packaging and subsystems patents

and further strengthened our design capabilities to solidify our market position as we prepare to enter the 400Gbps integrated photonics

marketplace with a highly competitive, scalable alternative to installed legacy systems.

In 2022, we acquired the

polymer technology and intellectual property assets of Chromosol Ltd (UK), which significantly strengthened our Company's design capabilities

with foundry PDKs with extremely low temperature atomic layer deposition (ALD) processes that effectively hermetically seal SOH and other

OEO polymer devices that have been prepared for high volume manufacturing.

The advanced fabrication processes of ALD with temperatures

below 100C° will solidify our market position with both the Company's manufacturing foundry partners as well as end-users as we

prepare to enter the 800Gbps integrated photonics marketplace.

The acquisition also advanced our Company’s patent portfolio of

OEO polymer technology with an innovative polymer chemistry device patent that has potential to increase the performance of integrated

modulators through optical amplification in a PIC format and enhance the functionality of the PIC by integrating laser light sources

made using the polymer-based gain and a laser optical cavity defined on the Silicon photonic platform, with our Company’s high

speed, high efficiency modulators.

In total, our patent portfolio

currently consists of 77 granted patents that include 46 from the US, 2 from Canada, 3 from the United Kingdom, 18 from the EU, 1 from

Japan, 6 from China (including Hong Kong), and 1 from Australia.

as of December 31, 2025, consists of 67 granted patents that include 45 from the US, 1 from Canada, 2 from the United Kingdom, 12 from

the EU, 1 from Japan, 5 from China (including Hong Kong), and 1 from Korea.

Our materials patent portfolio

1 unchanged sentence

as well as recent, innovative inventions that are expected to protect our P2IC polymer PIC platform from potential competition.

Included in our patent portfolio are the following

nonlinear optic chromophore designs:

Stable Free Radical Chromophores, processes for preparing the same

Tricyclic Spacer Systems for Nonlinear Optical Devices

Included in our patent portfolio

are the following nonlinear optic chromophore designs:

Free Radical Chromophores, processes for preparing the same

Spacer Systems for Nonlinear Optical Devices

• Anti-Aromatic

Chromophore Architectures

• Heterocyclical

Anti-Aromatic Chromophore Architectures

Heterocyclical Anti-Aromatic Chromophore Architectures

Heterocyclical Chromophore Architectures

Heterocyclical Chromophore Architectures with Novel Electronic Acceptor Systems

Multi-fiber/port hermetic capsule sealed by metallization and method

• Device Design Fabrication

• Modulators and

• Hermetic Capsulation

• Heterocyclical

Chromophore Architectures

• Heterocyclical

Chromophore Architectures with Novel Electronic Acceptor Systems

Optical Chromophores Containing Spirofluorene-Isophorone Bridging Groups

Optical Chromophores Containing Furanyl Accepting Groups

Optical Chromophores Containing 3-Aminocyclohex-2-en-1-one Based Donor Groups

Optical Chromophores Containing 3-Methyl-2-cyclopenten-1-one Based Bridge Structures

Optical Chromophores with Ring-locked Donors that Increase r33 and Stability

Optical Chromophores with Bridges that Increase Refractive Index

Optical Chromophores with Acceptors that Increase Refractive Index

Optical Chromophores with Donors that Increase Refractive Index

Optical Chromophores with Increased Visible Light Transparency

Optical Chromophores Containing Donors with Substituents Giving High Steric Hinderance

• Electro-optic

Polymers Devices Having High Performance Claddings

Optical Chromophores Comprising a Diamondoid Group

Optical Chromophores Containing High Boiling Point Solvents

Optical Chromophores Having Tetrahydrocarbazole Donor Groups, Lyotropic Compositions Containing

the Same, and Methods of Poling Such Compositions

Optical Chromophores Having Short-chain Bridge Structures, Low Optical Loss Materials Containing

the Same, and Methods for Preparing the Same

Optical Chromophores with Indolizine Donor Groups

Optical Chromophores with Michler's Base-Type Donors

of Synthesizing Chromophore Acceptors

Photodegradation of Organic Electra-Optic Materials

Our patent portfolio includes

patents not only on nonlinear optic chromophore designs, but also device designs and inventions, fabrication process inventions, packaging

patents not only to nonlinear optic chromophore designs, but also device designs and inventions, fabrication process inventions, packaging

design inventions, as well as novel chemistry to enable high performance, low power, small footprint polymer PIC technology.

Our strategic plan is to utilize

our core proprietary technology and leverage our proprietary optical materials to be the core of and the enabling technology for future

generations of optical devices, modules, sub-systems and systems that we will develop or potentially out-license to electro-optic device

manufacturers.

Our Company contemplates future applications that may address the needs of semiconductor companies, automotive/LiDAR companies,

sensing companies, aerospace companies and government agencies.

We rely on a combination of patents,

patent applications, trademarks, trade secrets and contractual provisions to protect our technologies.

Further, employees are required

to surrender any inventions or intellectual property developed as part of their employment agreements.

We also have a policy of requiring

prospective business partners to enter into non-disclosure agreements (NDAs) before disclosure of any of our confidential or proprietary

Our Company can make no assurances that we will be able to effectively protect our technologies and know-how or that third

parties will not be able to develop similar technologies and know-how independently.

Recent Significant Events and Milestones Achieved

February and March 2018, we moved our Newark, Delaware synthetic laboratory and our Longmont, Colorado optical testing laboratory and

corporate headquarters to office, laboratory and research and development space located at 369 Inverness Parkway, Suite 350, Englewood,

The 13,420 square feet Englewood facility includes fully functional 1,000 square feet of class 1,000 cleanroom, 500 square feet

of class 10,000 cleanroom, chemistry laboratories, and analytic laboratories.

The Englewood facility streamlines all of our Company’s

research and development workflow for greater operational efficiencies.

June 2018, our Company Acquired the Polymer Technology Intellectual Property Assets of BrPhotonics Productos Optoelectrónicos S.A.,

a Brazilian corporation, which significantly advanced our patent portfolio of electro-optic polymer technology with 15 polymer chemistry

materials, devices, packaging and subsystems patent and further strengthened our design capabilities to solidify our market position as

we prepare to enter the 400Gbps integrated photonics marketplace with a highly competitive, scalable alternative to installed legacy systems.

1, 2021, our Company's common shares began trading on the Nasdaq Capital Market (“Nasdaq”).

The Company’s Nasdaq listing

will help to expand our potential shareholder base, improve liquidity, elevate our public profile within the industry and should ultimately

enhance shareholder value.

November 29 , 2022, we announced our acquisition of the polymer technology and intellectual property assets

of Chromosol Ltd (UK).

The acquisition significantly strengthened our Company's design capabilities with foundry PDKs with extremely

low temperature atomic layer deposition (ALD) processes that effectively hermetically seal polymer devices that have been prepared for

high volume manufacturing.

Having access to extremely low temperature ALD allows our Company's polymer modulators to be protected from

the environment without the need for expensive and large footprint gold box packaging, propelling our Company forward with chip-scale

packaging as required by major hyper-scaler end-users.

the acquisition, our Company has made substantially progress in the utilization of ALD to hermetically seal polymers for modulator applications.

On December 12, 2022, we announced the receipt of U.S.

patent number 11,506,918

B2 entitled “Hybrid electro-optic polymer modulator with atomic layer deposition (ALD) sealant layer,” which allows our proprietary

polymers to be sealed to moisture and atmospheric gases in a very low temperature and quasi-hermetic environment through the use of a

chip-scale packaging approach that can be applied in parallel at wafer level (i.e.

in volume) and that eliminates the need for a separate

hermetic enclosure or "gold box." Specifically, our electro-optic polymer modulators will be sealed with low-temperature conformal

atomic layer deposition dielectric layers that are supported on a silicon substrate with passive silicon photonics waveguides.

process will enable lower cost system implementation in a high-volume foundry environment.

22, 2023, we announced that our latest commercial-class electro-optic polymer material achieved

breakthrough performance metrics at 1310 nanometers (nm), a wavelength popular in hyperscale datacenter applications.

commercial-class improvements include a significantly higher electro-optic coefficient exceeding 200 pm/V, which allows for very

low drive power of 1 volt or less.

Other characteristics include optimized chromophore loading, superior low optical loss, excellent temporal

stability at 85 0 Celsius, and extremely high thermal and photo stability.

The breakthrough commercial-class electro-optic material is

expected to enable ultra-small footprint modulators with at least 100 GHz bandwidth as well as meeting all critical requirements for pluggable

transceivers, on-board optics and co-packaging solutions.

Additionally, the achievement of these results at the 1310nm bandwidth positions

us for potential near-term licensing opportunities in datacenter applications.

May 25, 2023, we announced our Company's first commercial material supply license agreement for our Perkinamine® chromophore

This agreement is to provide Perkinamine® chromophore materials for polymer based photonic devices and

photonic integrated circuits (PICs).

Supplying licensed materials is one prong of our Company's three-prong revenue model and business

strategy that includes polymer modulator products as well as technology transfer.

This agreement recognizes market acceptance and competitive

advantage of our technology and validates the first prong of our business model.

Further, it represents tangible commercial progress for

electro-optic polymers as part of our business plan.

May 31, 2023, we announced the receipt of U.S.

patent number 11,661,428 entitled "Nonlinear Optical Chromophores, Nonlinear Optical

Materials Containing the Same, and Uses Thereof in Optical Devices," which details an innovative organic chromophore design using

a novel 'thiophene bridge' to significantly improve material performance in a production environment.

This is accomplished by designing

thiophene-containing bridging groups that are positioned between the electron-donating and electron-accepting ends of the chromophore.

These designs provide nonlinear optical chromophores with significantly improved optical properties and improved stability.

this patent will help us progress our commercial discussions with potential customers.

August 21, 2023, we announced the completion of new laboratory production facilities, expanding our corporate headquarters by over 65%,

nearly 10,000 square feet, for a total of approximately 23,500 square feet to support new commercial activity, including enabling commercial

device testing and evaluation, production reliability testing, laser characterization, SEM analysis and the expansion of our Company's

chemical synthesis production line.

March 24, 2024, at the 2024 Optical Fiber Conference in San Diego, California (OFC 2024), we presented world-class results for our Company’s

200Gbps heterogeneous polymer/silicon photonic modulator at a record low drive voltage, which are based on a novel packaged heterogeneous

polymer EO modulator design leveraging silicon photonics devices from a 200mm production foundry process and Lightwave Logic’s proprietary

high temperature, high performance EO Polymer material.

Each modulator was operated at 100GBaud PAM4 and achieved all drive voltages below

2V, and as low as 1V which is excellent for low power operation.

We discussed the test set-up for the high-speed results, and how electro-optic

polymer-based modulators based on 200mm silicon foundry wafers are ideal for 4 lane 200Gbps per lane 800Gbps pluggable optical transceivers

for datacenter applications.

We also shared updated lifetime and reliability data for both the electro-optic polymer materials and electro-optic

polymer devices.

Our results demonstrate that a hybrid approach, leveraging the cost and integration benefits of silicon photonics along

with the unparalleled bandwidth and low power advantages of Lightwave Logic’s proprietary EO polymers, lays a clear path for competitive

performance and integration for today’s and future optical pluggable transceivers, and we expect these results will position our

Company to support the burgeoning demand of generative AI as datacenters around the world begin to upgrade their hardware faster than

expected to meet the demands of the future.

March 28, 2024, we announced world-class performance of the Company’s Perkinamine® EO polymer material operating in an optical

interconnect link, at 437.1Gbps employing a PAM8 178GBaud signal encoded by a plasmonic Mach Zehnder modulator (MZM).

In this work, intensity

modulated, direct detection (IM/DD) techniques were utilized to drive higher performance.

The paper, authored by our teammates ETH Zurich

and Polariton Technologies, demonstrated data rates beyond 400Gbps for a IM/Dd optical interconnect link for the first time.

This world-class

result, achieving data rates of 400Gbps per lane, demonstrates that our Company’s EO polymers are capable of exceeding double the

current industry expectation.

This has the potential to enable 4 lane 1.6Tbps (1600Gbps) pluggable transceiver modules, which is on the

roadmap of datacenter operators today.

May 21, 2024, we announced our collaboration with Advanced Micro Foundry (AMF), a leading Silicon Photonics volume foundry, to develop

state-of art polymer slot modulators utilizing AMF's silicon photonics platform.

These modulators have been shown to achieve a record

low drive voltage below 1V and data rates of 200Gbps PAM4.

This performance will enable a new generation of 800 Gb/s and 1.6T Gb/s pluggable

transceivers to address fast growing requirements for optical connectivity for large generative AI computing clusters.

Lightwave Logic

and AMF have collaborated over the past year to develop the electro optic polymer slot modulators utilizing AMF's standard manufacturing

process flow on 200-mm wafers.

This successful demonstration marked a significant milestone in integrated photonics, blending Silicon

photonics with polymer materials.

Building on this demonstration, both parties are aiming to enhance the modulators to ensure these advanced

components are readily accessible to product companies on a manufacturing scale.

This accomplishment puts our Company in a very strong

position to ramp volume both for our polymers as well as 200-mm silicon wafer volume with AMF.

It also opens exciting opportunities to

develop novel solutions for commercial-grade-compatible EO polymer modulators seamlessly integrated with AMF's standard processes.

September 24, 2024, we announced a collaboration with Polariton Technologies to demonstrate a packaged device with over

110 GHz super high bandwidth packaged electro-optic polymer modulators using Polariton's plasmonic modulator device design that

contains Lightwave's proprietary Perkinamine® chromophores at the European Conference on Optical Communications (ECOC) held

in Frankfurt, Germany from September 22-26, 2024.

The packaged device contains a plasmonic modulator using

electro-optic polymer material and platform chips have demonstrated 400 Gbps, which is the current specification that datacenters

are looking for in optical transceiver modules.

This collaboration forms an important technology platform for scalability using

large silicon foundries for mass commercialization with 200mm silicon wafers.

The combination of electro-optic polymers and

plasmonics can support datacenters around the world which are responding to high power consumption and the burgeoning demand for

higher speed data transmission from artificial intelligence, machine learning, and other cloud-based services.

This device enables

ultra-high bandwidths, which are extremely well suited for next generation internet and optical networking transceivers that require

200Gbps per lane today, and 400Gbps per lane soon.

December 11, 2024, we strengthened our Company's management team to reinforce our competitive position and accelerate product and commercial

strategic initiatives, including capitalizing on high-growth opportunities across the AI and datacenter networking sector, expediting

commercialization for our proprietary electro-optic materials, and opening new markets and applications for our advanced polymer-based

We named optical communications industry veteran Yves LeMaitre as our Chief Executive Officer and former CEO and

Chairman Thomas E.

Zelibor as our President.

Ronald Bucchi, lead independent director, was appointed as our new non-executive

independent Chairman, and James S.

Marcelli, principal financial officer, was named as our Chief Financial Officer and continues to serve

as Chief Operating Officer.

Michael Lebby retired as Chairman and Chief Executive Officer of Lightwave Logic, effective December

On March 10, 2025, we announced the advancement of our technical collaboration

with Polariton Technologies, a technology leader of high-speed EO components for the communication market, and our transition from being

a material supplier to collaborating on market development through end-user engagement and technical cooperation.

Lightwave Logic and

Polariton will work together to jointly develop technical solutions to enable the faster adoption and integration of combined plasmonics

and polymer-based products, with semiconductor fabrication plants, outsourced assembly, and test operations.

In addition to manufacturing

transmitter PICs with inherent superior electro-optic performance, both teams will be working together on an extensive qualification and

reliability program, high-speed RF and optical testing and back-end manufacturing process integration.

move forward to diligently meet our goals, we continue to work closely with our packaging and foundry partners for 200Gbps and 400Gbps/lane

device designs and prototypes, and we are advancing our reliability and characterization efforts to support our prototyping.

Our partnership

with silicon-based foundries will allow us to scale commercial volumes of electro-optic polymer modulator devices using large silicon

wafers, and we are currently working to have our fabrication processes accepted into foundry PDKs (process development kits).

the recipes that foundries use to manufacture devices in their fabrication plants.

actively engaged with test equipment manufacturers of the most advanced test equipment to test our state-of-the-art polymer devices.

continue to engage with multiple industry bodies to promote our roadmap.

We continue to fine tune our business model with target markets,

customers, and technical specifications.

Our business model includes the licensing of our strong IP and Patent portfolio, as well as technology

transfer to entities such as foundries.

Discussions with prospective customers are validating that our materials are ideally suited for

the datacenter, AI connectivity and telecommunications markets.

Details and feedback of what these prospective customers are seeking from

a prototype are delivered to our technical team.

The Global Photonic Device Market and Our Target Markets

target market is the AI focused datacenter eco-system that is exponentially expanding to address the need for accurate Large Language

Models – LLMs - for a variety of applications.

To address these requirements, datacenters have grown in number and scope to include

hundreds of thousands of servers, switches and associated equipment per datacenter to address the computing needs required for LLMs –

a process often known as “scaling up and scaling out”.

The number of “hyperscale” datacenters are expected to

continue to increase in number both in the US, but also in the rest of the world.

Number of Data

Center Sites (by Size)

Data Centers Are There and Where Are They being Built”, Yih-Khai Wong, ABI Research, July 16, 2024

hyperscale datacenter may consist of multiple large warehouse-size buildings on a campus or even several locations distributed around

a metropolitan area.

Regardless of the design, these datacenters will require transmitting and receiving vast amounts of data - not only

around a single data center building – but often also between buildings in distributed data center architecture.

The connectivity

required between servers, switches and related electronics within a single datacenter building is often shorter than 500 meters, with

a growing requirement for opto-electronics for connecting equipment that may be in facilities that are up to 10km apart.

The ideal method

for addressing these links has been – and will continue to be - single mode fiber cabling.

Correspondingly, the minimum “speeds”

or bandwidth required for transmitting data on these connections is expected to be 800Gigabits/second – a speed that eventually

be supplanted with 1.6Terabit/second and 3.2 Terabit/second connections, (2 times and 4 times faster than 800Gibaits/second), as shown

Each connection speed will require either 4 or 8 modulators which results in a multimillion unit opportunity on a yearly

Number of Opto-Electronic

Connectivity Requirements (by “speed”)

Communications market Forecast”, Lightcounting, October, 2024

growth in number of datacenters and speed requirements has generated considerable discussion of the need for reduction in the growth of

energy demands needed for operations.

Our polymers will enable low power modulators that will be required for the opto-electronics utilized

for interconnecting the switches and servers deployed at these required speeds on this cabling infrastructure.

Power Consumption Forecast

in the Rising Data Center Economy”, McKinsey, January 17, 2023

Business Strategy

Our first revenue stream was obtained

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

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

Our Company is also in various stages

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

We expect to continue to obtain a revenue stream

from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of

our electro-optic Perkinamine® chromophore material.

Specifically,

our business strategy provides that our revenue stream will be derived from one or some combination of the following:

(i) technology licensing

for specific product application;

(ii) joint venture relationships with significant industry leaders;

and (iii) the production and direct

sale of our own electro-optic materials.

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

device market.

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

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

Partner with PIC or packaged device design and manufacturing companies to further the development of PDKs for our polymer material.

Develop proprietary intellectual property.

our commercial device design and development capabilities.

Partner with silicon-based foundries who can scale volume quickly and integrate our materials into their infrastructure.

Grow our product reliability and quality assurance capabilities.

Grow our optoelectronic and RF testing capabilities.

our commercial material manufacturing capabilities.

Maintain/develop

strategic relationships with major telecommunications and data communications companies to further the awareness and commercialization

of our technology platform.

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

Create Organic Polymer-Enabled Electro-Optic Modulators

intend to utilize our proprietary optical polymer technology to enable the creation by our customers of a portfolio of commercial electro-optic

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

We expect our -polymer material

to be used initially in modulator products that will operate at symbol rates at least 112 Gigabaud which is roughly 200Gbps when utilized

with PAM4 encoding schemes.

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

complex encoding schemes if required.

Our Research and Development Process

Our research and development process consists of the

following steps:

We develop novel polymer materials utilizing our patented and patent pending technology to meet certain performance specifications.

We then develop methods to synthesize larger quantities of such material.

We conduct a full battery of tests at the completion of the synthesis of each new polymer material to evaluate its characteristics.

We also create development strategies to optimize materials to meet specifications for specific applications.

We model and simulate each new polymer material so that we can further understand how to optimize the material for device operation.

We integrate data from the material characterization and test results to fabricate sample devices for internal use.

We analyze device-testing results to refine and improve fabrication processes and methods.

In addition, we investigate alternative material and design variations to possibly create more efficient fabrication processes.

We create an initial device design using simulation software.

Following device fabrication, we run a series of optical and electronic tests on the device.

We are developing PDKs with commercial silicon-based foundries so that our technology can transfer seamlessly to larger silicon wafer fabrication plants, and scale in volume quickly.

We have and expect to continue to make significant operating and capital

expenditures for research and development.

Our research and development expenses were $16,806,548 and $15,903,689, for the years ended

December 31, 2024, and 2023, respectively.

Our Past Government Program Participation

Our Company has been a participant

in several vital government sponsored research and development programs with various government agencies that protect the interests of

The following is a list of some of the various divisions of government agencies that have provided us with advisory, financial

and/or materials support in the pursuit of high-speed electro-optic materials.

Our previous relationships included:

National Reconnaissance Office (NRO)

Properties Branch of the Army Research Laboratory on the Aberdeen Proving Grounds in Aberdeen, Maryland

Defense Advance Research Project Agency (DARPA)

Naval Air Warfare Center Weapons Division in China Lake, California

Air Force Research Laboratory at Wright-Patterson Air Force Base in Dayton, Ohio

We are aware of a multitude of

government programs that include for example the Chips and Science Act amongst others.

As noted above, we are not currently partnered

with or financially supported by any governmental agency at this time, however, we are exploring future opportunities as our Company grows

and gains the additional resources and personnel necessary to support these efforts.

Our Competition

The markets we are targeting for

our electro-optic polymer technology are intensely competitive.

While there are no major multi-national companies that compete directly

with us on electro-polymers, there are other companies that do manufacture optical modulators based on alternative material platforms

such as Indium Phosphide, Silicon or Silicon Nitride and Lithium Niobate.

These companies that have incumbent optical modulators using

semiconductors include:

Lumentum, Broadcom, Marvell, Cisco, Intel, Ciena, Fujitsu, and Coherent.

These companies are heavily invested

in the production of crystalline-based semiconductor electro-optic modulator technologies, as well as the development of novel manufacturing

techniques and modulator designs.

Smaller companies that compete

with us on optical modulators using new and novel technologies include:

Hyperlite (who are developing thin film lithium niobate (TFLN),

NLM Photonics (organic hybrid polymer) and Lumiphase (who are developing Barium Titanate or BTO).

Our Plan to Compete

We believe that as our organic

polymer technology gains industry acceptance, we will be poised to obtain a significant portion of the component manufacturing market

and have our technology become ubiquitous.

Electro-optic polymers demonstrate several advantages over other technologies, such as inorganic-based

technologies, due to their reduced manufacturing and processing costs, higher performance, and lower power requirements.

organic polymers and future electro-optic photonic devices have demonstrated significant stability advantages over our known competitor’s

We believe the principal competitive factors in our

target markets are:

The ability to develop and commercialize highly stable optical polymer-based materials and optical devices in commercial quantities.

The ability to obtain appropriate patent and proprietary rights protection.

The ability to create commercial silicon-based PDKs for our electro-optic polymers.

Lower cost, high production yield for these products.

The ability to enable integration and implement advanced technologies.

Strong sales and marketing, and distribution channels for access to products.

We believe that our current business

planning will position our Company to compete adequately with respect to these factors.

Our future success is difficult to predict because

we are an early-stage company with most of products still in development.

Many of our existing and potential

competitors have substantially greater research and product development capabilities and financial, scientific, marketing and human resources

As a result, these competitors may:

Succeed in developing products that are equal to or superior to our products and future products or that achieve greater market acceptance than our products and future products.

Devote greater resources to developing, marketing or selling their products.

Respond quickly to new or emerging technologies or scientific advances and changes in customer requirements, which could render our technologies or products obsolete.

Introduce products that make the continued development of our products and/or future products uneconomical.

Obtain patents that block or otherwise inhibit our ability to develop and commercialize our future products.

Withstand price competition more successfully than we can.

Establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our prospective customers.

Take advantage of acquisition or other opportunities more readily than we can.

Employees and Human Capital

We currently have 31 full-time

employees, and we retain several independent contractors on an as-needed basis.

Based on our current development plan we expect to add

4 additional full-time employees in 2025.

As a technology and innovation-driven

company, we depend on a highly skilled workforce.

Attracting, developing, advancing and retaining the best talent is critical for us to

execute our strategy and grow our business.

Individuals with technical, engineering, chemistry and other science backgrounds, experience,

or interests are particularly important for us to succeed.

We strive to advance a diverse, equitable and inclusive work environment.

Technical Team

Our team is composed of world-class

technologists, including materials scientists, design engineers, device engineers, synthetic organic chemists, test and material engineers

and technicians.

Diversity and Inclusion

We work to create a culture of diversity and inclusion so that all of our employees feel they are respected and treated

equally, regardless of gender, race, ethnicity, age, disability, sexual orientation, gender identity, cultural background or religious

Compensation and benefits

rewards package includes market-competitive pay, stock option grants and bonuses, healthcare benefits, retirement savings plans, life

insurance, disability insurance, paid time off and family leave, and flexible work schedules.

The principal

purposes of our equity incentive plan is to attract and retain employees who will contribute to our Company’s long range success,

to provide incentives that align the interests of our employees with those of our shareholders, and to promote the success of our Company’s

committed to providing a healthy environment and safe workplace by operating in accordance with established health and safety protocols

within our facility and maintaining a strong health and safety compliance program.

We prioritize, manage, and carefully track safety performance

at our facility and integrate sound safety practices in every aspect of our operations.

We regularly conduct self-assessments to examine

our safety culture and processes.

in our patent portfolio are the following device designs and fabrication methods:

• Electro-Optic

Polymer Devices Having High Performance Claddings, and Methods of Preparing The Same

And Methods For Electro-Optic Polymer Optic Pathways for Poling and Operation

for Optoelectronic Devices, Methods of Fabrication Thereof and Materials Therefor

• Wafer-Level

Poling of Electro-Optic Phase Modulators

Techniques for EO Polymer Films for Use in Slot Modulators and Other Applications

• Encapsulation

Material and Processes for Thin Film Devices

Techniques for EO Polymer Films for Use in Slot Modulators and Other Applications

• Intrinsically

Low Resistivity Hybrid Sol-Gel Polymer Clads and Electro-Optic Devices Made Therefrom

Our strategic plan is to

utilize our core proprietary technology and leverage our proprietary optical materials to be the core of and the enabling technology

for future generations of optical devices, modules, sub-systems and systems that we will develop or potentially out-license to electro-optic

device manufacturers.

Our Company contemplates future applications that may address the needs of semiconductor companies, automotive/LiDAR

companies, sensing companies, aerospace companies and government agencies.

We rely on a combination

of patents, patent applications, trademarks, trade secrets and contractual provisions to protect our technologies.

Further, employees

are required to surrender any inventions or intellectual property developed as part of their employment agreements.

We also have a policy

of requiring prospective business partners to enter into non-disclosure agreements (NDAs) before disclosure of any of our confidential

or proprietary information.

Our Company can make no assurances that we will be able to effectively protect our technologies and know-how

or that third parties will not be able to develop similar technologies and know-how independently.

Layered Protection

Our intellectual property

strategy is designed to provide multiple layers of protection:

Composition-of-Matter

These patents cover proprietary electro-optic polymer formulations and molecular structures.

Composition-of-matter protection may provide broader protection than process-only claims,

subject to enforceability and jurisdictional scope.

and Integration Patents

These patents cover fabrication techniques, BEOL integration methods, deposition approaches,

and process compatibility with semiconductor manufacturing environments.

Architecture Patents

These patents relate to modulator designs, waveguide geometries, and integration structures

incorporating our materials.

By combining composition,

process, and device-level protection, we seek to support commercialization through material supply, licensing arrangements, and potential

royalty-bearing agreements.

Trade Secrets and Know-How

In addition to patent protection,

we rely on trade secrets, proprietary know-how, and confidentiality agreements to protect aspects of our technology that may not be publicly

These include:

formulation techniques,

parameters and yield optimization methods,

• Reliability

enhancement techniques, and

• Customer-specific

integration data.

Employees, contractors, and

collaborators are typically subject to confidentiality and intellectual property assignment agreements.

Patent Term and Limitations

Issued patents have limited

terms and are subject to expiration, challenge, invalidation, or circumvention.

Issued patents expire on various dates from 2027 through

The scope, enforceability, and commercial value of individual patents may vary by jurisdiction.

We cannot assure that our

patent portfolio will prevent competitors from developing alternative technologies, that pending applications will mature into issued

patents, or that issued patents will provide a sustained competitive advantage.

IP and Licensing Model

Our intellectual property

portfolio supports our business model by enabling:

• Field-of-use

licensing structures,

transfer arrangements,

supply agreements tied to patented integration methods, and

royalty-bearing production agreements.

The structure and economics

of such arrangements vary depending on negotiated terms and customer requirements.

The markets for optical modulators

and silicon photonics technologies are highly competitive and characterized by rapid technological change, evolving industry standards,

and significant capital investment.

We compete with a range of companies developing alternative materials systems, device architectures,

and integration approaches.

Many of our current and potential

competitors are larger, more established companies with substantially greater financial, technical, manufacturing, and marketing resources.

Some competitors operate their own wafer fabrication facilities or are vertically integrated across multiple layers of the photonics

Competing Technologies

Optical modulators may be

implemented using several different material platforms and device structures, including:

Silicon-Based Modulators

Conventional silicon photonics

modulators typically rely on carrier depletion or carrier injection effects within silicon waveguides.

These approaches benefit from

compatibility with established CMOS fabrication processes and large-scale foundry ecosystems.

Ongoing development efforts seek to improve

bandwidth, reduce power consumption, and enhance integration density.

Thin-Film Lithium Niobate

Thin-film lithium niobate

technologies leverage the electro-optic properties of crystalline materials to achieve high-speed modulation.

TFLN solutions have gained

attention for bandwidth performance and may be deployed in both pluggable transceiver and advanced packaging architectures.

III-V Compound Semiconductor

Indium phosphide and other

III-V material systems are used in certain modulated laser and photonic device architectures.

These technologies are widely deployed

in telecommunications and coherent optical systems and benefit from long operational track records.

Other Emerging Materials

and Architectures

Additional material platforms

and hybrid integration approaches continue to be explored within the industry, including heterogeneous integration and novel electro-optic

Architectural Tradeoffs

and Industry Dynamics

The rapid growth of AI networking

has placed significant performance and power-efficiency pressure on optical interconnect technologies.

As aggregate data rates move toward

1.6T and beyond, industry participants are evaluating multiple architectural pathways to achieve required throughput.

Many development efforts

are focused on increasing per-lane data rates through ultra-high-speed modulators capable of operating at 200G per lane and beyond.

per-lane bandwidth can reduce the number of required lanes, potentially lowering packaging complexity, footprint, and power consumption.

However, if ultra-high-speed

modulation targets prove difficult to achieve reliably, economically, or at acceptable yields, system designers may adopt alternative

scaling strategies.

These may include increasing the number of parallel optical lanes while operating at lower per-lane speeds, sometimes

referred to as “wide and slow” architectures.

Such approaches can increase aggregate throughput by expanding lane count rather

than pushing the performance limits of individual modulators.

The relative adoption of

high-speed per-lane scaling versus wider parallel implementations will depend on technical feasibility, power budgets, packaging constraints,

yield performance, and overall system economics.

Our electro-optic polymer

materials are designed to support high-speed, high-bandwidth optical modulation and compact device geometries, which may be relevant

in architectures prioritizing higher per-lane bandwidth.

At the same time, broader architectural shifts toward increased parallelism

could alter modulator content requirements, integration approaches, and competitive dynamics.

Competitive Factors

Adoption of optical modulation

technologies depends on a range of technical and commercial factors, including:

modulation bandwidth and signal integrity,

voltage requirements and associated power consumption,

• Compatibility

with established semiconductor fabrication processes,

• Reliability

and environmental stability,

performance and cost at scale,

support and foundry availability, and

• Qualification

history and customer risk tolerance.

While our materials are engineered

to address several of these factors, competing technologies may improve over time, may offer advantages in certain applications, or may

benefit from earlier market adoption and established customer relationships.

Market Adoption Considerations

Customers in the data center

and telecommunications markets typically require extensive qualification cycles and long-term reliability validation before deploying

new technologies.

Switching costs, ecosystem inertia, and supplier relationships may influence technology selection decisions.

Even where performance advantages

are demonstrated, adoption may depend on:

• Availability

of foundry capacity,

with customer product roadmaps,

competitiveness at target volumes,

industry standardization trends, and

• Architectural

decisions regarding per-lane scaling versus parallel expansion.

There can be no assurance

that our technology will achieve widespread market adoption or that it will displace incumbent solutions in any given application.

As of December 31, 2025,

we employed 34 full-time employees (FTEs), excluding two employees that retired on December 31, 2025.

Our workforce includes personnel

engaged in research and development, materials synthesis, device integration, process engineering, quality control, business development,

and general and administrative functions.

Approximately 23 FTEs were engaged in research and development activities and 11 FTEs were

engaged in selling, general and administrative functions.

Our technical team includes

scientists and engineers with backgrounds in organic chemistry, polymer science, photonics, semiconductor process integration, materials

engineering, and device design.

Many members of our technical staff have prior experience in semiconductor manufacturing environments,

silicon photonics development, or specialty materials commercialization.

Technical Expertise

and Commercialization Focus

Our commercialization strategy

requires cross-disciplinary expertise spanning materials chemistry, device physics, semiconductor process integration, reliability engineering,

and customer support.

As customer programs progress through the Design Win Cycle, our technical personnel support:

formulation optimization,

• Back-end-of-line

(“BEOL”) integration process development,

design kit (“PDK”) enablement,

improvement and reliability validation,

with customer product roadmaps, and

coordination and technology transfer activities.

We continue to evaluate hiring

needs based on program progression, manufacturing scale requirements, and strategic priorities.

Talent Retention and

The markets in which we operate

are characterized by competition for highly skilled technical personnel, particularly in semiconductor process engineering, photonics

design, and advanced materials development.

Our ability to attract, develop, and retain qualified employees is important to our long-term

We seek to foster a collaborative

environment focused on innovation, technical rigor, and disciplined commercialization.

Our compensation programs are designed to align

employee interests with long-term stockholder value and may include equity-based incentives.

Workforce Development

We emphasize cross-functional

collaboration among materials scientists, engineers, and commercial personnel to support integration within semiconductor manufacturing

As we transition from research-focused activities toward commercialization and production ramp, we continue to evolve internal

processes, documentation standards, and quality systems to support scalable operations.

We are committed to maintaining

a safe working environment and complying with applicable labor, environmental, and safety regulations.

Our principal executive offices

and laboratory facilities are located in Englewood, Colorado.

This facility supports research and development activities, electro-optic

polymer synthesis, materials characterization, device integration, back-end-of-line (“BEOL”) process development, and early-stage

commercial material supply.

The Englewood facility houses

laboratory space, materials processing equipment, analytical instrumentation, and office space supporting scientific, engineering, and

administrative functions.

Current operations are designed to support customer evaluation programs, prototype support, BEOL integration

activities, and limited commercial material production.

As customer programs advance

toward potential high-volume production, additional capital investment, equipment procurement, facility expansion, or supplemental third-party

manufacturing arrangements may be required to support increased material output and process scale.

We believe our existing facilities

are adequate to support current operations.

Future facility requirements will depend on commercialization progress, production ramp timelines,

and strategic capital allocation decisions.

Glossary of select technology terms

to provide you with a better understanding our Company’s technology and devices:

Electro-optic

devices - Electro-optic devices convert data from electric signals into optical signals for use in communications systems

and in optical interconnects for high-speed data transfer.

Electro-optic material

- Electro-optic material is the core active ingredient in high-speed fiber-optic telecommunication systems.

Electro-optic

materials are materials that are engineered at the molecular level.

Molecular level engineering is commonly referred to as “nanotechnology.”

Electro-optic modulators

- Electro-optic (E/O) modulators are electro-optic devices that perform electric-to-optic conversions within the infrastructure

of the internet.

Data centers may also benefit from this technology through devices that could significantly increase bandwidth and speed

while decreasing costs.

Polymer E/O modulators can be designed and fabricated with multiple structures.

The waveguides allow the light

to be efficiently coupled into and out of the modulators, and provide a basis for integrating modulators together.

Photonic Devices

- Photonic devices are components for creating, manipulating, or detecting light.

This can include modulators, laser diodes,

light-emitting diodes, solar and photovoltaic cells, displays and optical amplifiers.

Other examples are devices for modulating a beam

of light and for combining and separating beams of light of different wavelength.

Polymers - Polymers,

also known as plastics, are large carbon-based molecules that bond many small molecules together to form a long chain.

Polymer materials

can be engineered and optimized using nanotechnology to create a system in which unique surface, electrical, chemical, and electro-optic

characteristics can be controlled.

Materials based on polymers are used in a multitude of industrial and consumer products, from automotive

parts to home appliances and furniture, as well as scientific and medical equipment.

Available Information

a website at www.lightwavelogic.com.

We make available on our website under “Investors” – “SEC Filings,”

free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those

reports as soon as reasonably practicable after we electronically file or furnish such material with the SEC.

References to our website

in this report are provided as a convenience, and the information on our website is not, and shall not be deemed to be a part of this

Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.

The SEC maintains an Internet site (www.sec.gov)

that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

In addition, we make available on our website under “Leadership” – “Governance Documents”, free of charge,

our Audit Committee Charter, Compensation Committee Charter, Nominating And Corporate Governance Committee Charter, Operations Committee

Charter and Code of Ethics and Business Conduct.

In addition, the foregoing information is available in print, without charge, to any

stockholder who requests these materials from us.

We maintain a website

at www.lightwavelogic.com.

We make available on our website under “Investors” – “SEC Filings,” free of

charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports

as soon as reasonably practicable after we electronically file or furnish such material with the SEC.

References to our website in this

report are provided as a convenience, and the information on our website is not, and shall not be deemed to be a part of this Annual

Report on Form 10-K or incorporated into any other filings we make with the SEC.

The SEC maintains an Internet site (www.sec.gov) that

contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

addition, we make available on our website under “Investors – Corporate Governance – Governance Documents”, free

of charge, our Audit Committee Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee Charter and Code

of Ethics and Business Conduct.

We were incorporated under

the laws of the State of Nevada on June 24, 1997.

In 2004, we acquired PSI-TEC Corp., and in 2006 we merged with PSI-TEC Corp.

we changed our name to Lightwave Logic, Inc.

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 1. Business