What changed in this filing

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Item 9A. Controls and Procedures

2026-03-20 compared with 2025-03-18 · 1189 added, 1155 removed, 429 unchanged (85% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

As of December 31, 2024, our Company

evaluated the effectiveness and design and operation of its disclosure controls and procedures.

Our Company’s disclosure controls

and procedures are the controls and other procedures that we designed to ensure that our Company records, processes, summarizes, and reports

in a timely manner the information that it must disclose in reports that our Company files with or submits to the Securities and Exchange

As of December 31, 2025,

our Company evaluated the effectiveness and design and operation of its disclosure controls and procedures.

Our Company’s disclosure

controls and procedures are the controls and other procedures that we designed to ensure that our Company records, processes, summarizes,

and reports in a timely manner the information that it must disclose in reports that our Company files with or submits to the Securities

and Exchange Commission.

Our principal executive officer and principal financial officer reviewed and participated in this evaluation.

Based on this

evaluation, our Company made the determination that its disclosure controls and procedures were effective.

Based on this evaluation, our Company made the determination that its disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control Over Financial

6 unchanged sentences

Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31,

The Company’s internal control

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

and fairly reflect transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are

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

receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

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

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

Our management, including our

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

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

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

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

Internal control over financial reporting

is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.

In addition, the design of any system of controls is based in part on certain assumptions about the likelihood of future events, and controls

may become inadequate if conditions change.

There can be no assurance that any design will succeed in achieving its stated goals under

all potential future conditions.

Attestation Report of

the Registered Public Accounting Firm

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

control over financial reporting.

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

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

in this Annual Report.

The Company’s internal

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

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

(2) provide reasonable assurance that transactions

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

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

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

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

Our management, including

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

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

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

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

Internal control over financial

reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from

human failures.

In addition, the design of any system of controls is based in part on certain assumptions about the likelihood of future

events, and controls may become inadequate if conditions change.

There can be no assurance that any design will succeed in achieving

its stated goals under all potential future conditions.

Attestation Report of the Registered Public Accounting Firm

This Annual Report does not

include an attestation report of our Company’s independent registered public accounting firm regarding internal control over financial

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

to rules of the Securities and Exchange Commission that permit our Company to provide only management’s attestation in this Annual

Changes in Internal Control Over Financial Reporting

3 unchanged sentences

Other Information

Park Purchase Agreement

On March 17, 2025,

Lightwave Logic, Inc.

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

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

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

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

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

Concurrently with entering

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

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

Rights Agreement ”).

Beginning one

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

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

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

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

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

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

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

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

Purchase Share Limit.

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

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

The purchase price

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

(i) the lowest sale

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

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

In addition to Regular

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

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

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

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

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

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

The purchase price

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

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

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

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

The Company may also

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

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

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

The Company may direct multiple Additional Accelerated

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

Lincoln Park has purchased.

The purchase price

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

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

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

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

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

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

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

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

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

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

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

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

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

The Purchase Agreement

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

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

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

the outstanding shares of Common Stock.

On March 17, 2025,

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

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

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

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

Commitment Shares, the “ Commitment Shares ”).

The Purchase Agreement

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

indemnification and termination provisions.

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

to Lincoln Park until such Suspension Event is cured.

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

occurrence of a Suspension Event.

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

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

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

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

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

The Purchase Agreement

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

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

Lincoln Park has covenanted not to cause or engage in any

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

The foregoing is a

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

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

The foregoing

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

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

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

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

The provisions of the Purchase Agreement and

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

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

current state of affairs of the parties thereto.

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

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

The information contained in this Item

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

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

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

(b) Trading Arrangements

the three months ended December 31, 2024, none of

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

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

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

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Directors, Executive Officers and Corporate Governance.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2024,

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

Trading Arrangements

the three months ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f)

under the Exchange Act) adopted

or terminated

any contract, instruction or written plan for the purchase or sale of our securities that was intended to

satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 arrangement”

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

Disclosure Regarding Foreign Jurisdictions

that Prevent Inspections.

Not applicable.

Directors, Executive Officers and

Corporate Governance.

Information required under this Item will

be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2025, our most recent fiscal year

end, and is incorporated herein by reference.

Executive Compensation.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2024,

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

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

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2024,

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

Certain Relationships and Related Transactions, and Director Independence.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2024,

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

Information required under this Item will

be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2025, our most recent fiscal year

end, and is incorporated herein by reference.

Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters.

Information required under this Item will

be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2025, our most recent fiscal year

end, and is incorporated herein by reference.

Certain Relationships and Related

Transactions, and Director Independence.

Information required under this Item will

be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2025, our most recent fiscal year

end, and is incorporated herein by reference.

Principal Accountant Fees and Services.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2024,

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

Exhibits and Financial Statement Schedules

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

Report of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Comprehensive Loss

Statement of Stockholders’ Equity

Statements of Cash Flows

Notes to Financial Statements

The following exhibits are filed as part of this report.

Description of Exhibit

Articles of Incorporation

Incorporated by reference to Company’s Form 10-SB as filed with the SEC on April 13, 2007

Certificate of Amendment to Articles of Incorporation

Incorporated by reference to Company’s Definitive Schedule 14C Information Statement as filed with the SEC on February 19, 2008

Certificate of Amendment to Articles of Incorporation

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

Second Amended and Restated Bylaws – June 18, 2024

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

Description of Registrant’s Securities

Filed herewith

Employee Agreement - Yves Lemaitre

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

Employee Agreement - Thomas Zelibor

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

Employee Agreement - James Marcelli

Incorporated by reference to Company’s Form 10-Q as filed with the SEC on August 12, 2015

Employee Agreement Amendment - James Marcelli

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on April 20, 2021

Employee Agreement Amendment - James Marcelli

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

Employee Agreement Amendment – James Marcelli

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

Employee Agreement Amendment – James S.

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

Employee Agreement – Michael Lebby

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

Employee Agreement Amendment - Michael Lebby

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on April 20, 2021

Employee Agreement Amendment - Michael Lebby

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

Employee Agreement Amendment – Michael Lebby

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

Employee Agreement Amendment – Michael Lebby

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

Form of Executive Paid Time Off Waiver Agreement

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

Form of Director Agreement

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

Form of Director and Officer Indemnification Agreement

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

Form of Director’s Non-Disclosure Agreement

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

Description of Exhibit

Operations Committee Charter

Incorporated by reference to the Company’s Form 10-Q as filed with the SEC on August 15, 2016

Statement of Operations Committee Work - Frederick J.

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on April 3, 2017

Statement of Operations Committee Work - Siraj Nour El-Ahmadi

Incorporated by reference to the Company’s Form 10-K as filed with the SEC on March 31, 2021

Information required under this Item will be

contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2025, our most recent fiscal year end,

and is incorporated herein by reference.

Exhibits and Financial Statement

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

of Independent Registered Public Accounting Firm

of Comprehensive Loss

of Stockholders’ Equity Statements of Cash Flows

to Financial Statements

following exhibits are filed as part of this report.

Agreement, dated as of December 9, 2022, by and between the Company and Roth Capital Partners, LLC

Underwriting Agreement,

dated December 15, 2025, by and between Lightwave Logic, Inc.

and Titan Partners Group LLC, as Underwriter

and Restated Articles of Incorporation of Lightwave Logic, Inc.

(conformed copy incorporating all amendments through June 8, 2015)

Amended and Restated Bylaws - June 18, 2024

of Registrant’s Securities

of Underwriter Warrant

Agreement - Yves Lemaitre

of Executive Paid Time Off Waiver Agreement

of Director Agreement

of Director and Officer Indemnification Agreement

of Director’s Non-Disclosure Agreement

Employee Stock Plan

Incorporated by reference to Company’s Definitive Schedule 14C Information Statement as filed with the SEC on February 19, 2008

Employee Stock Plan Amendment

Incorporated by reference to Company’s Definitive Schedule 14A Proxy Statement as filed with the SEC on July 22, 2014

Equity Incentive Plan

Incorporated by reference to Appendix A to the Company’s Definitive Schedule 14A filed with the SEC on April 20, 2016

Equity Incentive Plan Amendment

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

Equity Incentive Plan Amendment No.

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

Form of Non-qualified Stock Option Award Agreement - Employees

Incorporated by reference to the Company’s Annual Report on Form 10-K as filed with the SEC on March 17, 2017

Form of Non-qualified Stock Option Award Agreement - Executive Officers

Incorporated by reference to the Company’s Annual Report on Form 10-K as filed with the SEC on March 17, 2017

Form of Non-qualified Stock Option Award Agreement - Non Employee Directors

Incorporated by reference to the Company’s Annual Report on Form 10-K as filed with the SEC on March 17, 2017

Form of Restricted Stock Award Agreement -Non Employee Directors

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

Lease Agreement dated October 26, 2017

Incorporated by reference to the Company’s Current Report on Form 8-K as filed with the SEC on November 2, 2017

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

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

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

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

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

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

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

Equity Incentive Plan

Agreement dated October 26, 2017

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

Trading Policy

of the Registrant

of Independent Registered Public Accounting Firm - Stephano Slack LLC

Filed herewith

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

Certification

pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Executive Officer of the

Filed herewith

Code of Ethics and Business Conduct

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

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

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

Insider Trading Policy

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

Subsidiaries of the Registrant

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

Description of Exhibit

Consent of Independent Registered Public Accounting Firm - Stephano Slack LLC

Certification

pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Financial Officer of the

Filed herewith

Consent of Independent Registered Public Accounting Firm - Morison Cogen LLP

Certification

pursuant to 18 U.S.C.

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

Executive Officer of the Company.

Furnished herewith

Certification

pursuant to 18 U.S.C.

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

Financial Officer of the Company.

Furnished herewith

Clawback Policy

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

Inline XBRL document)

Filed herewith

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Executive Officer of the Company.

Taxonomy Extension Schema Document

Filed herewith

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Financial Officer of the Company.

Taxonomy Extension Calculation Linkbase Document

Filed herewith

Certification pursuant to 18 U.S.C.

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

Certification pursuant to 18 U.S.C.

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

Compensation Clawback Policy

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

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

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Taxonomy Extension Definition Linkbase Document

Filed herewith

Taxonomy Extension Label Linkbase Document

Filed herewith

Taxonomy Extension Presentation Linkbase Document

Filed herewith

Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed herewith

contract or compensatory plan or arrangement.

Form 10-K Summary

Pursuant to the requirements of

Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the

undersigned, thereunto duly authorized.

LIGHTWAVE LOGIC, INC.

/s/ Yves LeMaitre

Yves LeMaitre,

Chief Executive Officer

(Principal Executive Officer)

March 18, 2025

Pursuant to the requirements of

the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the

capacities and on the dates indicated.

/s/ Yves LeMaitre

Chief Executive Officer, Principal Executive Officer, Director

March 18, 2025

Yves LeMaitre

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

March 18, 2025

/s/ Ronald A.

Director, Chair of the Board of Directors

March 18, 2025

/s/ Siraj Nour El-Ahmadi

March 18, 2025

Siraj Nour El-Ahmadi

/s/ Craig Ciesla

March 18, 2025

/s/ Laila Partridge

March 18, 2025

Laila Partridge

/s/ Thomas M.

Connelly, Jr.

March 18, 2025

Connelly, Jr.

LIGHTWAVE LOGIC, INC.

FINANCIAL STATEMENTS

1 unchanged sentence

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

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

BALANCE SHEETS

STATEMENTS OF COMPREHENSIVE LOSS

STATEMENTS OF STOCKHOLDERS' EQUITY

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

STATEMENTS OF CASH FLOWS

3 unchanged sentences

Stockholders of Lightwave Logic, Inc.

Opinions on the Financial Statements and Internal

Control over Financial Reporting

We have audited the accompanying balance sheet of

Lightwave Logic, Inc.

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

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

In our opinion, the financial statements present fairly,

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

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

Opinions on the Financial Statements and Internal Control over

Financial Reporting

have audited the accompanying balance sheets of Lightwave Logic, Inc.

(the Company) as of December 31, 2025 and 2024, and the related

statements of comprehensive loss, changes in stockholders’ equity, and cash flows for each of the two years in the period

ended December 31, 2025, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the

results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting

principles generally accepted in the United States of America.

Basis for Opinion

2 unchanged sentences

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

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

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

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards

of the PCAOB.

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

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

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

an audit of its internal control over financial reporting.

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

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

control over financial reporting.

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

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

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

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

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

The company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

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

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

the company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to

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

to those risks.

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

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

the overall presentation of the financial statements.

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

To the Board of Directors and

Stockholders of Lightwave Logic, Inc.

Our audits included performing procedures to

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

respond to those risks.

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

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

as evaluating the overall presentation of the financial statements.

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

Critical Audit Matters

4 unchanged sentences

We determined that there are no critical audit matters.

/s/ Stephano Slack LLC

We have served as the Company’s auditor since 2024.

Wayne, Pennsylvania

March 20, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and

Stockholders of Lightwave Logic, Inc.

Opinions on the Financial Statements and Internal

Control over Financial Reporting

We have audited the accompanying balance sheet of

LIGHTWAVE LOGIC, INC.

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

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

We also have audited

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

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

In our opinion, the financial statements referred

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

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

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

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

Basis for Opinions

The Company’s management is responsible for

these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness

of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial

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

internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting

Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

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

We conducted our audit in accordance with the standards

of the PCAOB.

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

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

maintained in all material respects.

Our audit of the financial statements included

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

procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

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

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

Our audit of internal control over financial reporting included

obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing

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

Our audit also included performing

such other procedures as we considered necessary in the circumstances.

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

To the Board of Directors and

Stockholders of Lightwave Logic, Inc.

and Limitations of Internal Control over Financial Reporting

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

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

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

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

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

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

with authorizations of management and directors of the company;

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

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

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

Also, projections of

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

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

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

Morison Cogen LLP

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

Bell, Pennsylvania

LIGHTWAVE LOGIC, INC.

BALANCE SHEETS

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TOTAL CURRENT ASSETS

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

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

PROPERTY AND EQUIPMENT - net of accumulated depreciation of $ 7,802,183

and $ 6,037,723

Intangible assets - net of accumulated amortization of $ 473,771

and $ 771,631

Operating Lease - Right of Use - Building

6 unchanged sentences

Contract liability

Deferred lease liability

Operating lease liability

5 unchanged sentences

STOCKHOLDERS' EQUITY

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

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

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

December 31, 2024 and December 31, 2023

Preferred stock,

$ 0.001 par value,

1,000,000 authorized,

shares issued or outstanding

Common stock $ 0.001

par value, 250,000,000 authorized, 146,050,506

and 123,301,653 issued and outstanding at December

31, 2025 and December 31, 2024

Additional paid-in-capital

5 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

The accompanying notes are an integral part of these

financial statements.

The accompanying notes are an integral part of

these financial statements.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

FOR THE YEARS ENDED DECEMBER 31, 2025

31, 2024 AND 2023

COST AND EXPENSE

9 unchanged sentences

Commitment fee

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

Other (expense)

Loss on disposal of property and equipment and intangible assets

Other income (expense)

$ ( 20,313,797 )

1 unchanged sentence

LOSS PER SHARE

Basic and diluted

WEIGHTED AVERAGE NUMBER OF SHARES

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

Basic and diluted

The accompanying notes are an integral part of

these financial statements.

LIGHTWAVE LOGIC, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

BALANCE AT DECEMBER 31, 2023

STATEMENTS OF CHANGES IN STOCKHOLDERS’

FOR THE YEARS ENDED DECEMBER 31, 2025

Year Ended December 31, 2025

BALANCE AT DECEMBER 31, 2024 (as restated)

$ 180,956,329

4 unchanged sentences

Common stock sales at the market by investment banking company

Common stock issued to investment bank

Exercise of options

Cashless exercise of 1,350,000 options

Exercise of warrants

Options issued for services

Restricted stock awards issued for future services

Options issued to settle accrued bonuses

Performance stock units (PSUs) issued for services, net of share settlement for

Restricted stock units (RSUs) issued for services

Restricted stock awards issued for services, net of forfeitures and share settlement

Deferred compensation

6 unchanged sentences

$ ( 167,312,788 )

BALANCE AT DECEMBER 31, 2022

Year Ended December 31, 2024

BALANCE AT DECEMBER 31, 2023 (as restated) (see Note 2)

$ 161,211,920

7 unchanged sentences

Options issued for services

Restricted stock awards issued for future services

Restricted stock awards issued for services

Deferred compensation

2 unchanged sentences

( 22,535,041 )

BALANCE AT DECEMBER 31, 2023

BALANCE AT DECEMBER 31, 2024 (as restated)

$ 180,956,329

1 unchanged sentence

$ ( 146,998,991 )

The accompanying

notes are an integral part of these financial statements.

The accompanying notes are an integral part of

these financial statements.

LIGHTWAVE LOGIC, INC.

7 unchanged sentences

Amortization of deferred compensation

Performance stock units issued for services

Restricted stock units issued for services

Common stock issued for commitment shares

1 unchanged sentence

Amortization of right of use asset

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

Decrease (increase) in assets

Loss on disposal of property and equipment and intangible assets

(Increase) decrease in assets

Accounts receivable

15 unchanged sentences

( 2,267,398 )

Repayment of loan

Sale of property and equipment

Net cash used in investing activities

3 unchanged sentences

Exercise of options and warrants

Cashless option exercise tax payments

Tax payment on net settlement of vested restricted stock awards

Issuance of common stock, institutional investor

Issuance of common stock to investment bank

Common stock sales at the market by investment banking company

Net cash provided by financing activities

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

NET DECREASE IN CASH AND CASH EQUIVALENTS

( 3,764,123 )

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS - END OF YEAR

Supplemental Disclosure of Non-cash investing and financing activities :

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

accompanying notes are an integral part of these financial statements.

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS - END OF PERIOD

Supplemental Disclosure of Non-cash

Options issued to settle accrued bonuses

Trade-in credit for purchase of property and equipment

Restricted stock awards issued for services

The accompanying notes are an integral part of

these financial statements.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING

Nature of Business

Lightwave Logic, Inc is a technology platform

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

less power in a small form factor.

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

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

for data transmission potentially used to support generative AI.

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

electro-optic polymer materials for use in manufacturing photonic devices.

Currently, the Company is in various stages of materials development

and evaluation with potential customers and strategic partners.

The Company expects to continue to obtain a revenue stream from technology

licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of its electro-optic

The Company’s current

development activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize

the Company’s technology now under development.

1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

and Nature of Business

is 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.

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 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.

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.

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.

Lightwave Logic, Inc.

was organized under the laws

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

Basis of Presentation

was organized under the

laws of the State of Nevada in 1997, and it commenced with its current business plan in 2024.

of Presentation

The accompanying financial statements are presented

1 unchanged sentence

The preparation of financial statements in conformity

with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the

amounts reported in the financial statements and accompanying disclosures.

Although these estimates are based on management’s best

knowledge of current events and actions the Company may undertake in the future, actual results could differ from the estimates.

Cash Equivalents

with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect

the amounts reported in the financial statements and accompanying disclosures.

Although these estimates are based on management’s

best knowledge of current events and actions the Company may undertake in the future, actual results could differ from the estimates.

The Company considers all highly liquid investments

3 unchanged sentences

Certain financial instruments potentially subject

the Company to concentrations of credit risk.

These financial instruments consist primarily of cash.

At December 31, 2024, the Company

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

Accounts Receivable

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

allowance for credit losses.

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

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

credit losses.

Management exercises significant judgment in determining expected credit losses.

Key inputs include macroeconomic factors,

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

and age of past due accounts.

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

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

Receivables are considered past due if full payment is

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

Past due accounts are generally written off

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

The allowance for credit losses was zero

0 as of December 31, 2024 and 2023.

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

as of December 31, 2024.

the Company to concentrations of credit risk, primarily cash and accounts receivable.

At December 31, 2025, the Company maintained cash

balances at financial institutions in excess of FDIC-insured limits.

Cash uninsured by FDIC totaled approximately $ 68,767,354

at December 31, 2025 and $ 27,417,964

at December 31, 2024.

The Company monitors the creditworthiness of the financial institutions in which it maintains deposits.

The Company is also exposed to concentrations

of credit risk with respect to its customers.

For the year ended December 31, 2025, the Company had two customers that accounted for

of total revenue.

As of December 31, 2025, two customers accounted for 68 %

of total accounts receivable, respectively.

For the year ended December 31, 2024, the Company had two customers that accounted for 86 %

of total revenue.

As of December 31, 2024, one customer accounted for 100 %

of total accounts receivable.

The Company performs ongoing credit evaluations of its customers and generally does not require collateral.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

Property and Equipment

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

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

Depreciation of property and equipment is computed using

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

3 years for office

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

Leasehold improvements are amortized over the

lesser of remaining life of the lease or.

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

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

NOTE 1 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (CONTINUED)

Accounts receivable are carried at their contractual

amounts, less an estimated allowance for credit losses.

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

based on historical loss information, adjusted for management’s expectations about current and future economic conditions, as the

basis to determine expected credit losses.

Management exercises significant judgment in determining expected credit losses.

include macroeconomic factors, industry trends, the creditworthiness of counterparties, historical experience, the financial conditions

of the customers, and the amount and age of past due accounts.

Management believes that the composition of receivables at year-end is

consistent with historical conditions as credit terms and practices and the client base has not changed significantly.

Receivables are

considered past due if full payment is not received by the contractual due date, which is typically 30 days from the invoice date.

due accounts are generally written off against the allowance for credit losses only after all collection attempts have been exhausted.

The allowance for credit losses was zero 0

as of December 31, 2025 and 2024.

and Equipment

Property and equipment is stated at the Company’s

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

Depreciation of property and equipment

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

years for office equipment, 3

years for lab equipment, 7

years for furniture and 3

years for software.

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

using the straight-line method.

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

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

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

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

Intangible Assets

Definite-lived intangible assets are stated at cost.

Patents are amortized over their estimated useful lives, commencing from the date of grant for the remaining legal lives of the patents.

The patents generally have a term of up to 20 years from the date of filing of the earliest related patent application.

When certain patent

applications are abandoned by the Company for claims that are covered by patents already granted to the Company, the cost of patent applications

are removed from the accounts and the resulting expense is reflected in the statement of comprehensive loss.

Fair Value of Financial Instruments

The carrying value of the Company’s short-term

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

Revenue Recognition and Contract Liability

The Company recognizes revenue in accordance with

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

Contracts with Customers.

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

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

To achieve this, the Company applies the five-step

Material expenditures

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

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

or losses are recognized in income from continued operations.

Definite-lived intangible assets are stated at

Patents are amortized over their estimated useful lives, commencing from the date of grant for the remaining legal lives of the

The patents generally have a term of up to 20

years from the date of filing of the earliest related patent application.

When certain patent applications are abandoned by the Company

for claims that are covered by patents already granted to the Company, the cost of patent applications are removed from the accounts

and the resulting expense is reflected in the statement of comprehensive loss.

Value of Financial Instruments

The carrying value of the Company’s

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

Recognition and Contract Liability

The Company recognizes revenue in accordance

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

from Contracts with Customers.

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

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

To achieve this, the Company applies the five-step model:

Identify the contract with a customer.

1 unchanged sentence

Determine the transaction price for the contract.

Allocate the transaction price to the performance obligations.

Recognize revenue as performance obligations are satisfied.

The Company’s primary revenue stream includes technology license

and material supply agreements.

Allocate the transaction price to the performance

Recognize revenue as performance obligations are

The Company’s primary revenue streams includes

technology license and material supply agreements and non-recurring engineering revenue from joint development agreements.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

Revenue Recognition and Contract Liability (Continued)

Technology License and Material Supply Agreements

The Company enters into technology license and material

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

technology (the “Licensed Product”).

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

of photonic devices.

The Company assesses whether the license and the

supply of proprietary polymers represent distinct performance obligations.

Based on this assessment, the Company has determined that the

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

Accordingly, the

Company accounts for these as a single performance obligation.

NOTE 1 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition and Contract Liability

License and Material Supply Agreements

The Company enters into technology license and

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

polymer technology (the “Licensed Product”).

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

manufacturing of photonic devices.

The Company assesses whether the license and

the supply of proprietary polymers represent distinct performance obligations.

Based on this assessment, the Company has determined that

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

the Company accounts for these as a single performance obligation.

Revenue under these agreements is recognized as follows:

1 unchanged sentence

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

Minimum Annual Royalties – Fixed royalty payments

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

Variable Royalties – Royalties exceeding the

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

Milestone Payments – Recognized only when the

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

Contract Costs

The Company capitalizes incremental costs to obtain

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

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

Contract Liability

Contract liability represents amounts received in

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

The Company recognizes contract liability

revenue as revenue when the related performance obligations are satisfied.

Cost of Sales

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

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

agreement at the Company’s facility.

Minimum Annual Royalties – Fixed royalty

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

Variable Royalties – Royalties exceeding

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

Milestone Payments – Recognized only when

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

Development Agreement

The Company entered into a memorandum of agreement

(“MOA”) with a customer to specify certain binding terms related to the joint development of electro-optical polymer-based

modulators on silicon photonics for use in communication applications.

The MOA was executed in January 2026;

however, the Company commenced

work under the arrangement during 2025.

The development work consists of preparing reference documentation and support of a multi-project

wafer chip produced at a mutually agreed upon foundry, the design and post processing of fabricated chips, and complete product verification

and volume manufacturing preparation, with each party to the agreement having responsibility over various deliverables for each phase.

The Company evaluated the arrangement under ASC

808, Collaborative Arrangements, and concluded the arrangement meets the definition of a collaborative arrangement.

The Company also

concluded that certain promised services within the arrangement represent units of account with a customer and therefore are within the

scope of ASC 606.

Consideration received from the customer for such services is presented as net sales in the accompanying financial

The arrangement includes development services

to be performed in phases.

The Company evaluated the promised goods and services within each phase and concluded they are not separately

identifiable because they are highly interdependent and represent inputs to a combined output that is delivered and accepted at the phase

Accordingly, each phase is accounted for as a single combined performance obligation.

Phases 1 and 2 are within the scope of ASC

Phase 1 consideration was $130,000, which the Company recognized in net sales upon completion and delivery to the customer of the Phase

1 products and services.

Phase 2 consideration was $200,000, payable in installments subject to customer’s confirmation of completion

and acceptance of the related deliverables.

Deliverables and consideration for Phase 3 have not been determined.

The Company recognizes revenue at a point in time upon completion

and customer acceptance of the phase deliverables, as applicable.

Customer acceptance is considered the substantive indicator that control

of the completed phase deliverables has transferred.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

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

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

Deferred income tax assets and

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

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

differences are expected to affect taxable income.

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

the amount expected to be realized.

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

the period in deferred tax assets and liabilities.

Stock-based Payments

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

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

fair values on the grant date.

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

stock at the date of grant.

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

the actual vesting period.

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

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

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

In June 2018, the FASB issued Accounting Standard Update

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

Payment Accounting (the “2018 Update).

The amendments in the 2018 Update expand the

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

Prior to the 2018

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

Consistent with the accounting requirement for employee share-based

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

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

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

The Company has

elected to account for forfeiture of stock-based awards as they occur.

Loss Per Share

The Company follows

FASB ASC 260, “Earnings per Share”, resulting in the presentation of basic and diluted earnings per share.

Because the Company

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

therefore, the

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

The Company is a lessee in operating

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

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

liability at the lease commencement date.

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

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

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

Operating lease right-of-use assets are

included in other assets on the Balance Sheets.

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

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

As of December 31, 2024, the

Company had no leases that qualified as financing arrangements.

NOTE 1 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (CONTINUED)

The Company capitalizes incremental costs to

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

with Customers.

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

The Company evaluated costs to fulfill the joint development arrangement under ASC 340-40 and concluded such costs do not

meet the capitalization criteria because the costs are not expected to be recovered through the consideration payable under the arrangement.

The Company expenses costs to fulfill the development

arrangement as incurred, as the activities are not reimbursable and meet the definition of research and development under ASC 730.

Contract liability represents amounts received

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

The Company recognizes contract

liability revenue as revenue when the related performance obligations are satisfied.

Cost of sales consists of labor costs, material

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

and material supply agreement at the Company’s facility.

The Company follows FASB ASC 740, “Income

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

Deferred income

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

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

in which the differences are expected to affect taxable income.

Valuation allowances are established when necessary to reduce deferred

tax assets to the amount expected to be realized.

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

change during the period in deferred tax assets and liabilities.

The Company accounts for stock-based compensation

under the provisions of FASB ASC 718, "Compensation - Stock Compensation," which requires the measurement and recognition

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

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

Restricted stock awards and units are being amortized to expense over the shorter of the requisite service period or the actual

vesting period.

Performance stock units are subject to both performance-based and service vesting requirements.

The grant-date fair value

of performance stock units is based on the fair value of the Company’s stock on a grant date and is recognized over the service

period based on an assessment of the likelihood that the applicable performance goals will be achieved, and compensation expense is periodically

adjusted based on actual and expected performance.

The Company estimates the fair value of option and warrant awards on the date of grant

using the Black-Scholes model.

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

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

Consistent with the accounting

requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured

at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service

has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.

The Company has elected to account for forfeiture of stock-based awards

as they occur.

The Company follows FASB ASC 260, “Earnings

per Share”, resulting in the presentation of basic and diluted earnings per share.

Because the Company reported a net loss in 2025

and 2024, common stock equivalents, including stock options and warrants were anti-dilutive;

therefore, the amounts reported for basic

and dilutive loss per share were the same.

The Company is a lessee in operating leases primarily

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

At contract inception,

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

lease commencement date.

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

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

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

Operating lease right-of-use assets are included in other

assets on the Balance Sheets.

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

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

As of December 31, 2025, the Company had

no leases that qualified as financing arrangements.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

NOTE 1 – SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (CONTINUED)

Leases (Continued)

Key estimates and judgments

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

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

The Company elected a short-term

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

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

Impairment of Long Lived and Finite-Lived Intangible Assets

Long lived assets, such as property,

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

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

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

of the Company’s financial condition.

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

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

If the carrying amount of the

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

its fair value.

Key estimates and judgments include how the Company

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

The Company monitors for

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

The Company elected a short-term lease

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

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

of Long Lived and Finite-Lived Intangible Assets

Long lived assets, such as property, equipment,

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

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

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

Company’s financial condition.

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

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

If the carrying amount of the asset

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

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

and third-party independent appraisals, as considered necessary.

For the years ended December

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

For the years ended December 31, 2025 and 2024, the Company did no t

record an impairment of its long-lived and finite-lived intangible assets.

Comprehensive

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

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

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

Recently Adopted Accounting Pronouncements

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

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

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

or loss and assets that are currently required annually.

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

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

The new disclosure requirements are also

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

ASU 2023-07 is effective for fiscal years beginning

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

The Company follows FASB ASC 220.10, “Reporting

Comprehensive Income (Loss).” Comprehensive loss is a more inclusive financial reporting methodology that includes disclosure of

certain financial information that historically has not been recognized in the calculation of net loss.

Since the Company has no items

of other comprehensive loss, comprehensive loss is equal to net loss.

Adopted Accounting Pronouncements

In December 2023, the FASB issued Accounting

Standards Update (ASU) 2023-09 – Income Taxes (Topic 740), which requires disclosures related to the rate reconciliation and income

taxes paid improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information

in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

The other amendments in this update improve the effectiveness

and comparability of disclosures by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent

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

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

For public business

entities, the amendments in this update are effective for annual periods beginning after December 15, 2024.

The Company adopted the guidance

for the annual reporting period ended December 31, 2025.

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

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

Recently Issued Accounting Pronouncements Not Yet

ASU 2023-09 – Income Taxes

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

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

taxes paid disaggregated by jurisdiction.

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

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

Securities and Exchange

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

Income Tax Expense,

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

For public business entities, the amendments in

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

The Company does not expect this ASU to have material

impact on its disclosures in the year of adoption.

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

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires incremental disclosures about reportable segments

but does not change the definition of a segment or the guidance for determining reportable segments.

The new guidance requires disclosure

of significant segment expenses that are (1) regularly provided to (or easily computed from information regularly provided to) the chief

operating decision maker (“CODM”) and (2) included in the reported measure of segment profit or loss.

The new standard also

requires companies to disclose the title and position of the individual (or the name of the committee) identified as the CODM, allows

companies to disclose multiple measures of segment profit or loss if those measures are used to assess performance and allocate resources,

and is applicable to companies with a single reportable segment.

The requirements are effective for annual reporting periods beginning

on January 1, 2024, and are required to be applied retrospectively.

The Company has adopted the additional disclosure requirements under

The additional requirements did not have a material impact on the financial statements.

Issued Accounting Pronouncements Not Yet Adopted

ASU 2024-03 – Income Statement –

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

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

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

disclosure of a qualitative description of the

amounts remaining in relevant expense captions that are not separately disaggregated quantitatively;

and disclosure of the total amounts

of selling expenses.

For public business entities, the amendments in this update are effective for annual periods beginning after December

15, 2026 and interim reporting periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

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

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

Recently Issued Accounting Pronouncements Not

Yet Adopted (Continued)

ASU 2024-03 – Income Statement –

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

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

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

disclosure of a

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

and disclosure of the total amounts of selling expenses.

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

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

Early adoption is permitted.

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

NOTE 2 – MANAGEMENT’S PLANS

2 - RESTATEMENT OF FINANCIAL STATEMENTS AND CORRECTION OF PRIOR-PERIOD ERRORS

The Company identified an error related to the

accounting for non-cash stock option exercises in previously issued financial statements.

As a result, the Company corrected the error

by recording the cumulative impact as an adjustment to opening stockholders’ equity.

Error Identified in the Year Ended December 31, 2021

During the year ended December 31, 2021, the

Company incorrectly expensed a portion of the value of the net shares issued in connection with non-cash stock option exercises as compensation

The Company determined that the value of the net shares issued in non-cash stock option exercises should not have been recognized

as compensation expense, resulting in an overstatement of compensation expense in the Company’s previously issued financial statements.

The correction of this error resulted in a decrease

to accumulated deficit by $ 3,407,443

and a corresponding decrease to additional paid-in capital as of December 31, 2021.

The cumulative impact of this correction has been

reflected as an adjustment to opening accumulated deficit and additional paid-in capital as of December 31, 2023 (the beginning of the

earliest period presented), and the comparative stockholders’ equity balances as of December 31, 2024 have been restated to reflect

the correction.

Restated Financial Information

The following table presents the effects of the

restatement on the Company’s previously reported balance sheet and statement of changes in stockholders’ equity as of December

31, 2023 and 2024.

Schedule of restated financial information

Previously Reported

As of December 31, 2023

Additional paid-in-capital

$ 164,619,363

$ ( 3,407,443 )

$ 161,211,920

Accumulated deficit

$ ( 127,871,393 )

$ ( 124,463,950 )

As of December 31, 2024

Additional paid-in-capital

$ 184,363,772

$ ( 3,407,443 )

$ 180,956,329

Accumulated deficit

$ ( 150,406,434 )

$ ( 146,998,991 )

3 – MANAGEMENT’S PLANS

The Company’s future expenditures and capital

6 unchanged sentences

of the Company’s products and competing technological developments;

and the Company’s ability to establish cooperative development,

and the Company’s ability to establish joint development,

joint venture and licensing arrangements.

2 unchanged sentences

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

On March 17, 2025, the Company entered into a purchase agreement with an institutional investor to sell up to $ 30,000,000

of common stock over a 36-month period.

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

remains available to the Company per the agreement.

On February 28, 2023, the Company entered into a purchase agreement

with an institutional investor to sell up to $ 30,000,000

at least December 2027.

On December 15, 2025, the Company entered into an underwriting agreement with an investment bank to sell

shares of its Common Stock.

The net proceeds to the Company from this offering were $ 37,756,627 ,

after deducting underwriting discounts and commissions and other offering expenses payable by the Company.

On March 17, 2025, the Company

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

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

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

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

is available to the Company per the agreement.

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

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

This purchase agreement was terminated on December

As of the termination date, pursuant to the purchase agreement, the Company had received $ 3,646,655

under this agreement.

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

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

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

the sales agreement, the Company received $ 116,435

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

is available to the Company per the agreement.

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

and license agreement that incorporates the Company's patented electro-optic polymer materials for use in manufacturing photonic devices

(described in Note 3).

As of the date of

this filing, pursuant to the sales agreement, the Company has $ 22,081,511

in shares of common stock, and has $ 12,235,261

in shares remaining available to the Company per the agreement.

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

material supply and license agreement that incorporates the Company's patented electro-optic polymer materials for use in manufacturing

photonic devices (described in Note 4).

For the year ended December 31, 2025, the Company recognized $ 106,855

in revenue related to this agreement.

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

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

commercialization of its electro-optic polymer technology.

The Joint Development Agreement also described in Note 4 resulted in the Company recognizing $ 130,000

in non-recurring engineering revenue for the year ended December 31, 2025.

The Company’s cash requirements are expected to increase

at a rate consistent with the Company’s path to revenue as it expands its activities and operations with the objective of increasing

its revenue stream from commercialization of its electro-optic polymer technology.

The Company currently has no debt to service.

NOTE 3 – REVENUE

The Company's first commercial agreement occurred in May 2023, in the form

of a four-year material supply and license agreement (the “License Agreement”) that incorporates the Company's patented

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

The licensee shall

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

payments and milestone license fees.

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

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 3 – REVENUE (CONTINUED)

Additional future revenue will be

generated from royalties from the licensee’s sale of Licensed Product that exceed the minimum royalty payments and milestone

license fees.

During 2024, the Company also performed device processing

work for a customer.

The Company's first commercial agreement occurred

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

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

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

the minimum royalty payments and milestone license fees.

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

Additional future revenue will be generated from royalties from

the licensee’s sale of Licensed Product that exceed the minimum royalty payments and milestone license fees.

In December 2025, Company entered into a memorandum

of agreement (also referred to as “joint development agreement”) under which it, along with other parties, performs its respective

part of the development work to develop an electro-optical polymer-based modulator chip for use in communication applications.

The development

work consists of preparing reference documentation and support of a multi-project wafer chip produced at a mutually agreed upon foundry,

the design and post processing of fabricated chips, and complete product verification and volume manufacturing preparation, with each

party to the agreement having responsibility over various deliverables for each phase.

During 2024, the Company also performed device processing work for

Timing of Revenue Recognition and Contract Balances

Revenues related

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

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

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

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

2023, respectively.

Revenues related to the initial license fee and

a minimum annual royalty are recognized over time commencing with the License Agreement in May 2023.

An up-front license fee in the amount

of $ 50,000 was paid during the period ended December

$ 6,541 and $ 23,208

of this amount is recorded as a contract liability in current liabilities on the Company’s balance sheets as of December 31, 2025

and December 31, 2024, respectively.

For the years ended December 31, 2025 and December 31, 2024, the Company recognized $ 106,855

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

In March 2024, the Company completed device processing

work on the devices supplied by a customer.

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

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

Contract balances

are as follows:

in revenue related to this agreement.

Revenues related to the joint development agreement

are recognized at a point of time, when control over the performance obligations is transferred to a customer.

For the year ended December

31, 2025, the Company recognized $ 130,000

in non-recurring engineering revenue related to this agreement.

In March 2024, the Company completed

device processing work on the devices supplied by a customer.

Revenue for this contract was recognized at the time of shipment of the

devices back to the customer and amounted to $ 13,750

for the year ended December 31, 2024.

Contract balances are as follows:

Schedule of contract balances

3 unchanged sentences

Short-term contract liability

Significant changes in the contract balances

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

Significant changes in the contract balances for the years ended December

31, 2025 and December 31, 2024 are as follows:

Schedule of significant changes in the contract balances

Year Ended December 31, 2024

December 31, 2025

Balance at December 31, 2024

5 unchanged sentences

Balance at December 31, 2025

A rollforward of contract balances is

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

Assets Recognized for the Costs to

Obtain a Contract

There are no assets recognized for the

costs to obtain the License Agreement.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT

NOTE 4 – REVENUE (CONTINUED)

December 31, 2024

Balance at December 31, 2023

Revenue recognized that was previously included in contract liability

Decreases/increases due to cash received

Billed receivables recorded

Transferred to receivables from unbilled receivables

Unbilled receivables recorded

Balance at December 31, 2024

Assets Recognized for the Costs to Obtain a Contract

There are no assets recognized for the costs to obtain the License

5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

2 unchanged sentences

December 31, 2024

Prototype devices

Deposits for equipment purchases

Software licenses

Subscriptions

Investor relations

Materials fabrication

Deposit for equipment

Lease incentive receivable

Prototype devices

Prepaid expenses and other current assets

LOAN RECEIVABLE

On September 7, 2022, the Company entered into a

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

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

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

ended December 31, 2022.

The exchange rates used for the conversion of the EUR denominated loan were the December 31, 2022 reporting

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

of $ 13,669 and the average exchange rate for the period ended December 31, 2022 for interest income.

The loan and interest were repaid

in February and March 2023.

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

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

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 6 – PROPERTY AND EQUIPMENT

6 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

6 unchanged sentences

Accumulated depreciation

Property and equipment, net

Depreciation expense for the years ended December

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

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

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

During the year ended December 31, 2023,

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

NOTE 7 – INTANGIBLE ASSETS

31, 2025 and 2024 was $ 1,821,084 and $ 1,563,477 ,

respectively.

During the year ended December 31, 2025, the Company traded in property and equipment with a cost and accumulated depreciation

of $ 25,140 for a gain of $ 28,800 .

During the year ended December 31, 2025, the Company retired property and equipment with a cost of $ 40,266

and accumulated depreciation of $ 31,484

for a loss of $ 8,782 .

year ended December 31, 2024, the Company retired property and equipment with a cost of $ 203,480

and accumulated depreciation of $ 200,314

for a loss of $ 3,166 .

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2025 AND 2024

7 – INTANGIBLE ASSETS

Intangible assets represent legal fees and patent

2 unchanged sentences

are amortized over the remaining legal life.

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

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

patent in force.

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

Maintenance fees paid after a patent

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

Maintenance fees paid prior to

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

No amortization expense

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

Maintenance fees paid after

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

Maintenance fees paid prior

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

No amortization

expense is recorded for remaining patent applications since patents on these applications have yet to be granted

Intangible assets consist of the following:

Schedule of intangible assets

December 31, 2024

December 31, 2023

intangible assets

Accumulated amortization

Intangible assets, net

Amortization expense for the years ended

December 31, 2024 and 2023 was $ 119,283

and $ 83,521 ,

Amortization expense for the years ended December

31, 2025 and 2024 was $ 82,284 and $ 119,283 ,

respectively.

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

cost of $ 217,176 and

accumulated amortization of $ 6,902

During the year ended December 31, 2025, the Company retired certain expired patents and patent applications with a cost

of $ 425,314 and accumulated amortization

of $ 380,144 for a loss of

year ended December 31, 2024, the Company retired certain expired patent applications and patents with a cost of $ 217,176

and accumulated amortization of $ 6,902

for a loss of $ 210,274 .

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

There were no

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

On October 30, 2017, the Company entered into

a lease agreement (the “Lease”) to lease approximately 13,420

square feet of office, chemistry, clean room and research and development space located in Colorado for the Company’s principal

executive offices and research and development facility.

The term of the lease was sixty-one ( 61 )

months, beginning on November 1, 2017 and ending

on November 30, 2022 .

In January 2022,

the term was extended for an additional twenty-four ( 24 )

On November 22, 2022, the Company entered into

an amendment to the Lease (“the Amended Lease”) to lease an additional approximately 9,684 square feet of adjacent office

and warehouse space.

The term of the Amended Lease is one hundred twenty-eight ( 128 )

months, with an effective date of June 1, 2023 .

Base rent through January 31, 2024 of the Amended Lease term was approximately $ 30,517

The base rent for the next full year of the Amended Lease term is approximately $ 377,288 ,

with an increase in annual base rent of approximately 3 %

in each subsequent year of the lease term.

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

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

Amended Lease also provides an allowance of up to $ 43,216

to be used solely for the cost of renovations to the additional lease premises.

As of December 31, 2025, the operating lease right-of-use

asset and operating lease liability amounted to $ 2,440,369

and $ 2,598,681 , respectively.

As of December 31,

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

and $ 2,766,971 , respectively.

LIGHTWAVE LOGIC, INC.

2 unchanged sentences

NOTE 8 – LEASES

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

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

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

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

In January 2022, the term was

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

On November 22, 2022, the Company entered into an

amendment to the Lease (“the Amended Lease”) to lease an additional approximately 9,684 square feet of adjacent office and

warehouse space.

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

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

The base rent for the next full year of the

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

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

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

The Amended Lease also provides

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

As of June 1, 2023, the

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

As of December 30,

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

For purposes of calculating operating lease liability,

2 unchanged sentences

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

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

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

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

1 unchanged sentence

the Amended Lease as of December 31, 2025, by year and in aggregate, including the extended term, are as follows:

Schedule of future lease payments of operating leases

Less discounted interest

( 1,212,251 )

of future lease payments of operating leases

discounted interest

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

1 unchanged sentence

There are no other material operating leases.

The following table presents weighted average assumptions

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

Schedule of operating lease right-of-use assets

December 31, 2024

The following table presents weighted average

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

of operating lease right-of-use assets

Weighted average remaining lease term (in years)

1 unchanged sentence

As of December 31, 2025, current operating leases

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

had remaining terms between 12

months and 8.08

years, with some leases having options to extend the lease terms.

Current lease agreements do not contain any residual

2 unchanged sentences

Operating and short-term lease costs totaling

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

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

for the year ended December 31, 2023.

and $ 107,140

are included in research and development and general and administrative expenses for the year ended December 31, 2025.

Operating and

short-term lease costs totaling $ 513,428

and $ 102,077

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

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 9 – INCOME TAXES

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

income tax (benefit) provision consists of the following:

9 – INCOME TAXES

As discussed in Note 1, the Company utilizes the asset and liability

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

Loss before provision for income taxes for the years ended December

31, 2025 and 2024 was as follows:

Schedule of loss before provision for

$ ( 20,313,797 )

$ ( 22,535,041 )

Loss before income taxes

$ ( 20,313,797 )

$ ( 22,535,041 )

The income tax (benefit) provision consists of the following:

Schedule of income tax benefit provision

2 unchanged sentences

Change in valuation allowance

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

effective income tax rate is as follows:

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

Upon adoption of ASU 2023-09, Improvements to

Income Tax Disclosures, the reconciliation of the statutory federal rate to the Company’s effective income tax rate for the year

ended December 31, 2025 was as follows:

Schedule of reconciliation of statutory federal rate to effective income tax

federal statutory tax rate

$ ( 4,265,897 )

State taxes, net of federal benefits

Change in valuation allowance

Nontaxable or nondeductible items

Other adjustments

Expirations of net operating losses

Effective tax rate

The reconciliation of the statutory federal rate

to the Company’s effective income tax rate for the year ended December 31, 2024 in accordance with the guidance prior to the adoption

of ASU 2023-09 was as follows:

Income tax benefit at U.S.

1 unchanged sentence

$ ( 4,732,359 )

$ ( 4,418,000 )

State tax benefit, net of federal tax effect

Federal deduction net of tax

Non-deductible share-based compensation

Exercised share-based compensation

( 2,850,000 )

Change in valuation allowance

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2025 AND 2024

NOTE 9 – INCOME TAXES (CONTINUED)

The components of deferred tax assets as of December 31, 2025 and

1 unchanged sentence

Schedule of components of deferred tax assets

Deferred tax asset for NOL carryforwards

Net operating loss carryforwards

Share-based compensation

Section 174 research and development expenses

Lease liability

Total deferred tax assets

Valuation allowance

( 41,389,874 )

( 37,024,998 )

Deferred tax assets net of valuation allowance

Section 481(a) adjustment

( 1,490,581 )

Valuation allowance

( 2,264,040 )

Right of use asset

and Equipment

Total deferred tax liabilities

( 2,484,657 )

The valuation allowance for deferred tax assets as

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

The change in the total valuation for the year ended December

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

In assessing the realization

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

not be realized.

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

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

Management considered projected future taxable

income and tax planning strategies in making this assessment.

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

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

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 9 – INCOME TAXES (CONTINUED)

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

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

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

tax years beginning January 1, 2018 and after in the amount of approximately $ 84,864,000 which are allowed for an indefinite carryforward

period but may be subject to limitations.

( 3,335,796 )

Net deferred tax assets (liabilities)

The valuation allowance for deferred tax assets

as of December 31, 2025 and 2024 was $ 41,389,874

and $ 37,024,998 .

The change in the total valuation

for the year ended December 31, 2025 was an increase of $ 4,364,876 ,

and for the year ended December 31, 2024 was an increase of $ 4,219,770 .

In assessing the realization of deferred tax

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

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

the net operating losses and temporary differences become deductible.

Management considered projected future taxable income and tax planning

strategies in making this assessment.

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

of the future realization of the deferred tax assets.

As of December 31, 2025, the Company had federal

net operating loss carry forwards of approximately $ 140,064,567 ,

comprised of federal net operating losses in the amount of approximately $ 34,755,366

recorded in tax years beginning prior to January 1, 2018 expiring through the year ending December

31, 2037 and federal net operating losses recorded in tax years beginning January 1, 2018 and after in the amount of approximately

$ 105,309,201 which are allowed for an indefinite

carryforward period but may be subject to limitations.

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

The timing and manner in which the Company can utilize

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

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

The Company follows ASC 740-10, which provides guidance

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

Recognition involves a determination

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

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

The adoption of ASC 740-10 did

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

The Company’s policy is to record interest and

penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations.

The timing and manner in which the Company can

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

of corporations.

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

The Company follows ASC 740-10, which provides

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

Recognition involves

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

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

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

The Company’s policy is to record interest

and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations.

As of January 1, 2025,

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

penalties during 2024 related to unrecognized tax benefits.

There is no accrual for uncertain tax positions as of December 31, 2024.

the Company had no unrecognized tax benefits

and no charge during 2025, and accordingly, the Company did no t

recognize any interest or penalties during 2025 related to unrecognized tax benefits.

accrual for uncertain tax positions as of December 31, 2025.

The Company files U.S.

income tax returns and a state

income tax return.

income tax returns and

state income tax returns.

With few exceptions, the U.S.

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

thereafter are subject to examination by the relevant taxing authorities.

NOTE 10 – STOCKHOLDERS’ EQUITY

Pursuant to the Company’s Articles of

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

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

The rights and preferences of this preferred stock

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

consequently, preferred stock, if issued could have

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

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

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

On July 2, 2021, the Company filed a

$100,000,000 universal shelf registration statement with the U.S.

Securities and Exchange Commission which became effective on July 9,

2021 and expired on July 8, 2024.

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

universal shelf registration statement with the U.S.

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

and state income tax returns filed for the tax years ended on December 31, 2022

and thereafter are subject to examination by the relevant taxing authorities.

On July 4, 2025, the U.S.

H.R.1, an act to provide

for reconciliation pursuant to title II of H.

(the “OBBBA”) was enacted.

The OBBBA introduces multiple tax

law and other legislative changes, including modifications to income tax provisions such as existing 21 %

corporate income tax rate made permanent, domestic research and development expenses, the restoration of 100% bonus depreciation, changes

to Section 163(j) interest limitations, and U.S.

taxation of international earnings;

the repeal or acceleration of the sunset of certain

tax credits under the 2022 Inflation Reduction Act and elimination of certain penalties for violations of certain regulatory credit programs.

The Company recognized the effects of the OBBBA provisions in its financial results to the extent they are applicable to the year ended

December 31, 2025 and will continue to evaluate the impact of these provisions on its 2026 and subsequent consolidated financial statements.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 10 – STOCKHOLDERS’ EQUITY (CONTINUED)

Common Stock (Continued)

On October 4, 2021, the Company entered

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

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

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

Pursuant to the purchase agreement,

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

value, and 60,623 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with

the terms of the purchase agreement.

During the period October 4, 2021 through December 31, 2023, the institutional investor purchased

3,632,456 shares of common stock for proceeds of $ 33,000,000 and the Company issued 60,623 shares of common stock as additional commitment

fee, valued at $ 694,531 fair value.

During the year ended December 31, 2023, pursuant to the purchase agreement, the institutional investor

purchased 779,945 shares of common stock for proceeds of $ 3,847,307 and the Company issued 7,069 shares of common stock as additional

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

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

On February 28, 2023, the Company entered into a

purchase agreement with an institutional investor to sell up to $ 30,000,000

10 – STOCKHOLDERS’ EQUITY

Preferred Stock

Pursuant to the Company’s Articles of Incorporation,

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

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

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

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

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

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

Additionally, preferred

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

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

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

universal shelf registration statement with the U.S.

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

On February 28, 2023, the Company entered

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

of common stock over a 36-month period.

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

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

under the purchase agreement.

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

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

Pursuant to the purchase agreement, the Company issued 50,891

1 unchanged sentence

fair value, and 101,781

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

of the purchase agreement.

During the period February 28, 2023 through December 31, 2024, the institutional investor purchased 6,720,455

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

purchase agreement.

During the period February 28, 2023 through December

31, 2025, the institutional investor purchased 7,756,336

shares of common stock for proceeds of $ 30,000,000

1 unchanged sentence

shares of common stock as additional commitment fee, valued at $ 518,265

fair value, leaving 5,046

in reserve for additional commitment fees.

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

investor purchased 3,850,000

fair value, leaving zero in reserve for additional commitment fees.

During the year ended December 31, 2025, pursuant to the purchase

agreement, the institutional investor purchased 1,035,881

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

and the Company issued 5,046

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

During the period February 28, 2023 through December 31, 2023, the institutional investor purchased 2,870,455

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

During the year ended December 31, 2024, pursuant to the purchase agreement, the institutional investor purchased 3,850,000

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

and the Company issued 41,956

shares of common stock as additional commitment fee, valued at $ 356,026

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

investor purchased 1,035,881

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

As of December 31, 2025, no amounts remain available under this purchase agreement.

On March 17, 2025, the Company entered into

a new purchase agreement with the same institutional investor to sell up to $ 30,000,000

of common stock over a 36-month period.

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

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

Pursuant to the purchase agreement, the Company issued 245,098

shares of common stock to the institutional investor as an initial commitment fee valued at $ 222,990

fair value, and 490,196

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

purchase agreement.

During the year ended December 31, 2025, pursuant

to the purchase agreement, the institutional investor purchased 2,050,000

shares of common stock for proceeds of $ 3,646,655

1 unchanged sentence

shares of common stock as additional commitment fee, valued at $ 139,292

fair value, leaving zero 0

in reserve for additional commitment fees.

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

investment banking company.

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

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

agent or principal.

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

market offering”.

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

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

This purchase agreement was terminated on December 15, 2025 in conjunction with an offering to sell shares of the Company’s

common stock to an investment bank.

On December 17, 2025, the Company closed the

offering with an investment bank to sell up to 13,416,667

shares of its common stock, including up to 1,750,000

shares to cover over-allotments.

Pursuant to the underwriting agreement for the offering, the Company agreed to issue to the underwriter

warrants to purchase up to 350,000

shares of common stock, or three percent ( 3 % )

of the total number of shares of common stock sold in the offering, as well as additional underwriter warrants to purchase up to an aggregate

shares of common stock in connection with the exercise of the option by the underwriter.

During the year ended December 31, 2025, the

Company sold 11,666,667

shares under this agreement for the net proceeds of $ 32,825,700 ,

after deducting underwriting discounts and commissions and other offering expenses payable by the Company.

The underwriter warrants will

be immediately exercisable at an exercise price of $ 3.45

per share during the five-year 5

period following the date of the underwriting agreement.

As of the year ended December 31, 2025, 350,000

underwriter warrants were outstanding.

underwriting warrants were exercised during the year ended December 31, 2025.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 11 – STOCK BASED COMPENSATION

STOCKHOLDERS’ EQUITY (CONTINUED)

Common Stock (Continued)

On December 9, 2022, the Company entered into

a sales agreement with an investment banking company.

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

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

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

Sales of shares of the Company’s common

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

The sales agent is entitled to compensation

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

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

During the year ended December 31, 2025, pursuant

3 unchanged sentences

to the investment banking company.

During the year ended December 31, 2023, pursuant to the sales agreement, the investment banking

company sold 202,115

shares of the Company’s common stock for proceeds of $ 1,515,878

after a payment of the commission in the amount of $ 46,884

to the investment banking company.

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

the investment banking company sold 50,000

During the year ended December 31, 2024, pursuant to the sales agreement, the investment banking company

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

1 unchanged sentence

to the investment banking company.

During the period from January 1, 2026 through March 20, 2026, pursuant to the sales agreement, the

investment banking company sold 0

shares of the Company’s common stock.

11 – STOCK BASED COMPENSATION

Common Stock Options and Warrants

During 2007, the Board of Directors

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

Under the 2007 Plan,

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

consultants who provide services to the Company.

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

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

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

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

During 2007, the Board of Directors of the Company

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

Under the 2007 Plan, the Company

is authorized to grant options to purchase up to 10,000,000

shares of common stock to directors, officers, employees and consultants who provide services to the Company.

The 2007 Plan is

intended to permit stock options granted to employees under the 2007 Plan to qualify as incentive stock options under Section 422 of

the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”).

All options granted under the 2007 Plan, which

are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options (“Non-Statutory Stock Options”).

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

As of December 31, 2024, options to purchase 2,053,000 shares of common stock have been issued and are outstanding.

As of December 31, 2025, options to purchase 350,000

shares of common stock are outstanding under the 2007 Plan.

During 2016, the Board of Directors of the Company

adopted the 2016 Plan that was approved by the shareholders at the 2016 annual meeting of shareholders on May 20, 2016.

Under the 2016

Plan, the Company is authorized to grant awards of incentive and non-qualified stock options and restricted stock to purchase up to 3,000,000

adopted the 2016 Equity Incentive Plan (“2016 Plan”) that was approved by the shareholders at the 2016 annual meeting of

shareholders on May 20, 2016.

Under the 2016 Plan, the Company is authorized to grant awards of incentive and non-qualified stock options

and restricted stock to purchase up to 3,000,000

shares of common stock to employees, directors and consultants.

Effective May 16, 2019, the number of shares of the Company’s common

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

Effective May 25, 2023, the number

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

and awards of restricted stock units are authorized for issuance.

As of December 31, 2024, options to purchase 7,446,859 shares of common

stock have been issued and are outstanding and 356,061 restricted shares of common stock have been granted.

stock available for issuance under the 2016 Plan was increased from 3,000,000

Effective May 25, 2023, the number of shares of the Company’s common stock available for issuance under the 2016 Plan was

increased from 8,000,000

to 13,000,000

shares and awards of restricted stock units were authorized for issuance.

Effective May 15, 2025, the 2016 Plan was terminated.

December 31, 2025, options to purchase 7,569,828

shares of common stock have been issued and are outstanding, 498,694

restricted shares of common stock have been granted, net of forfeitures, 1,616,380

restricted stock units have been granted, and 542,566

performance stock units have been issued under the 2016 Plan.

During 2025, the Board of Directors of the Company

adopted the 2025 Equity Incentive Plan (“2025 Plan”) that was approved by the shareholders at the 2025 annual meeting of

shareholders on May 15, 2025.

Under the 2025 Plan, the Company is authorized to grant awards of incentive and non-qualified stock options

and restricted stock to purchase up to 6,000,000

shares of common stock to employees, directors and consultants.

As of December 31, 2025, options to purchase 451,250

shares of common stock have been issued and are outstanding and 1,561,119

restricted stock units have been granted under the 2025 Plan.

As of December 31, 2025, 3,987,631

3 unchanged sentences

DECEMBER 31, 2025 AND 2024

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

Common Stock Options and Warrants (Continued)

Both plans are administered by the Company’s

STOCK BASED COMPENSATION (CONTINUED)

Common Stock Options

and Warrants (Continued)

These plans are administered by the Company’s

Board of Directors or its compensation committee which determines the persons to whom awards will be granted, the number of awards to

be granted, and the specific terms of each grant.

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

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

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

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

The Company uses the Black-Scholes option pricing

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

no dividend yield, expected volatility,

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

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

The Black-Scholes option pricing model assumptions

for 2023 are as follows:

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

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

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

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

As of December

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

Options granted under the 2025 Plan are generally exercisable for a period of 10 years

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

The Company uses the Black-Scholes

option pricing model to calculate the grant-date fair value of an award, with the following assumptions for the year ended December 31,

dividend yield, expected volatility, based on the Company’s historical volatility, 78.7 %

risk-free interest rate between 4.18 %

and expected option life of 10

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

The Black-Scholes

option pricing model assumptions for 2024 are as follows:

dividend yield, expected volatility, based on the Company’s historical volatility, 76.3 %

risk-free interest rate between 3.73 %

and expected option life of 10

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

As of December 31, 2025, there was $ 1,524,567

of unrecognized compensation expense related to non-vested option awards that is expected to be recognized through September 2028.

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

of unrecognized compensation expense related to non-vested option awards.

Share-based compensation was recognized as follows:

Schedule of share-based compensation

2007 Employee Stock Option Plan

2016 Equity Incentive Plan

2016 Equity Incentive Plan restricted stock awards

Stock options

Restricted stock awards

Restricted stock units

Performance stock units

Total share-based compensation

2 unchanged sentences

DECEMBER 31, 2025 AND 2024

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

Common Stock Options and Warrants (Continued)

STOCK BASED COMPENSATION (CONTINUED)

Common Stock Options

and Warrants (Continued)

The following tables summarize all stock option

and warrant activity of the Company during the years ended December 31, 2025 and 2024:

Schedule of stock option and warrant activity

Schedule of stock option and

warrant activity

Non-Qualified

Stock Options and Warrants Outstanding and Exercisable

Outstanding, December 31, 2022

$ 0.51 - $ 16.81

$ 4.28 - $ 7.67

$ 6.25 - $ 8.93

( 1,183,408 )

$ 0.67 - $ 5.22

Outstanding, December 31, 2023

$ 0.51 - $ 16.81

$ 1.96 - $ 5.00

$ 4.28 - $ 7.67

$ 0.57 - $ 1.15

Outstanding, December 31, 2024

$ 0.51 - $ 16.81

Exercisable, December 31, 2024

Exercise Price

December 31, 2023

December 31, 2024

( 1,849,012 )

The aggregate intrinsic value of options and warrants outstanding and exercisable

as of December 31, 2024 was $ 6,418,443 and $ 6,400,033 , respectively.

The aggregate intrinsic value is calculated as the difference between

the exercise price of the underlying options and warrants and the closing stock price of $ 2.10 for the Company’s common stock on

December 31, 2025

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

for proceeds of $ 246,100 .

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

exercised for proceeds of $ 91,250 .

During the year ending December 31, 2023, 914,408 options with the aggregate intrinsic value of $ 4,698,996

December 31, 2025

The aggregate intrinsic value of options and

warrants outstanding and exercisable as of December 31, 2025 was $ 9,210,466

and $ 8,336,267 ,

respectively.

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

warrants and the closing stock price of $ 3.24 for the Company’s common

stock on December 31, 2025.

During the year ending December 31, 2025, 1,724,012

options with the aggregate intrinsic value of $ 1,129,713

were exercised for proceeds of $ 280,583 .

During the year ending December 31, 2023, 269,000 warrants with the aggregate intrinsic value

of $ 1,162,230 were exercised for proceeds of $ 236,250 .

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

Common Stock Options and Warrants (Continued)

Schedule of non-qualified stock options and warrants outstanding

Non-Qualified

Stock Options and Warrants Outstanding

Of this amount, 1,350,000 options

were exercised via cashless settlement.

During the year ending December 31, 2025, 125,000

warrants with the aggregate intrinsic value of $ 468,750

were exercised for proceeds of $ 75,000 .

the year ending December 31, 2024, 375,000

options with the aggregate intrinsic value of $ 1,399,958

were exercised for proceeds of $ 246,100 .

During the year ending December 31, 2024, 119,000

warrants with the aggregate intrinsic value of $ 171,550

were exercised for proceeds of $ 91,250 .

Schedule of non-qualified stock

options and warrants outstanding

Non-Qualified Stock Options

and Warrants Outstanding

Exercise Prices

Number Outstanding

Currently Exercisable

at December 31, 2025

2 unchanged sentences

Weighted Average

Exercise Price of Options and

Price of Options and

Warrants Currently Exercisable

$ 0.51 - $ 16.81

On March 16, 2023, the Compensation Committee of the

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

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

expenses within the Statement of Comprehensive Loss.

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

and vest in total 8,338 shares on March 16, 2023, with the remaining vesting in 33 equal monthly installments in total of 2,766 shares

beginning April 1, 2023.

On August 1, 2023, the Compensation Committee of the

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

Each RSA had a grant

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

expenses within the Statement of Comprehensive Loss.

Such RSA was granted under the 2016 Plan.

218 shares from this grant vested on August

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

On June 18, 2024, the Compensation Committee of the

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

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

expenses within the Statement of Comprehensive Loss.

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

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

beginning July 1, 2024.

On August 1, 2024, the Compensation Committee of the

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

Each RSA had a grant

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

expenses within the Statement of Comprehensive Loss.

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

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

On September 4, 2024, the Compensation Committee of

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

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

expenses within the Statement of Comprehensive Loss.

Such RSA was granted under the 2016 Equity Incentive Plan

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

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

Stock Awards (Continued)

On December 10, 2024, the Compensation Committee of

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

director for consulting services.

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

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

The RSAs were granted under the

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

the executives.

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

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

STOCK BASED COMPENSATION (CONTINUED)

Restricted Stock Awards and Units

The Company grants restricted stock units (“RSUs”)

and restricted stock awards (“RSAs”) to employees and directors.

RSUs represent the right to receive shares of common stock

upon vesting, while RSAs are shares issued at the grant date that remain subject to forfeiture until vesting conditions are met.

awards are amortized on a straight-line basis over the vesting period into stock-based compensation expense.

The vesting period ranges

from immediate vesting to monthly or quarterly vesting.

Upon the occurrence of a Change in Control, 100%

of the unvested RSAs and RSUs shall vest as of the date of the Change in Control.

Upon vesting, the restrictions on the shares lapse.

The fair value of restricted stock awards is estimated

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

Restricted stock activity during the year ending December

31, 2024 and 2023 are as follows:

Schedule of fair value of restricted stock awards

The fair value of restricted stock awards and

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

Restricted stock activity during the

years ended December 31, 2025 and December 31, 2024 is as follows:

Schedule of fair value of restricted

Restricted Stock Awards

Restricted Stock Units

December 31, 2025

December 31, 2024

December 31, 2025

December 31, 2024

Weighted Average

4 unchanged sentences

Value per Share

Weighted Average

Grant Date Fair

Value per Share

Weighted Average

Grant Date Fair

Value per Share

Non-vested, beginning of period

1 unchanged sentence

Non-vested, end of period

Restricted stock awards are being amortized to expense

over the vesting period.

As of December 31, 2024 and 2023, the unamortized value of the restricted stock awards was $ 656,735 and $ 432,292 ,

Restricted stock awards and units are being amortized

to expense over the shorter of the requisite service period or the vesting period.

As of December 31, 2025 and 2024, the unamortized

value of the restricted stock awards was $ 203,458

and $ 656,735 ,

respectively.

NOTE 12 – RELATED PARTY

As of December 31, 2025 and 2024, the unamortized value of the restricted stock units was $ 5,836,770

respectively.

During the years ended December 31, 2025

and 2024, the Company recognized $ 98,189

and $ 671,070 ,

respectively, for restricted stock awards issuances, net of forfeitures and share settlement for taxes as deferred compensation.

Performance Stock Units

On April 18, 2025, the Company granted 2,187,501

performance stock units (PSUs) subject to both performance-based and service vesting requirements to the Company’s executives.

Performance vesting requirements are tied to various individual and corporate goals related to the Company’s commercialization,

as measured over a one-year performance period.

The grant date fair value of the PSUs granted was $ 2,029,126 ,

as determined by the Company’s closing common stock price on the date of the grant.

The grant date fair value per share was $ 0.93 .

On September 12, 2025, in conjunction with entering

into a multi-year employment agreement with the Company’s Chief Executive Officer (“CEO”), the Company modified 1,616,380

of the PSUs held by the CEO by removing the performance conditions and converting the awards into RSUs, with vesting subject to continued

Consistent with ASC 718, $ 298,311

compensation expense recognized from the grant date through the modification date was based on the original grant-date fair value of

per share and the probability of achieving performance conditions based on the evaluation as of the modification date.

Upon the modification,

the Company determined the fair values of the modified and the original awards, and the incremental fair value of the modified award

together with the remaining unrecognized original grant-date fair value, totaling $ 3,365,938

will be recognized prospectively, over the remaining vesting period.

The Company determined that achievement of some

performance conditions for the remaining PSUs is probable as of December 31, 2025, and recorded $ 503,284

stock-based compensation expense related to the PSU vesting.

The Company issued 542,566

shares for the PSUs earned based on the achievement of the performance conditions and repurchased 148,490

shares to cover the employee portion of payroll taxes, thus issuing 394,076

As of December 31, 2025, no

PSUs remain outstanding.

No PSUs were outstanding or expensed as of and during the year ended December 31, 2024.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2025 AND 2024

12 – LOSS PER SHARE

The Company calculates earnings (loss) per share

("EPS") in accordance with FASB ASC 260, Earnings Per Share.

Basic EPS is computed by dividing the net loss attributable to common

stockholders by the weighted-average number of common shares outstanding during the period.

Diluted loss per share reflects the potential

dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

years ended December 31, 2025 and 2024, the Company reported a net loss;

therefore, diluted EPS is calculated the same as basic EPS,

as the inclusion of all potentially dilutive securities would be anti-dilutive.

The following securities were excluded from the

calculation of diluted loss per share because their effect would have been anti-dilutive:

and warrants:

shares (2025),

shares (2024)

shares (2025),

Shares (2024).

13 – RELATED PARTIES

During the years ended December 31, 2025, and

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

Board of Directors.

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

and expense reimbursements.

Party Transactions for the Year Ended December 31, 2024

• The Company incurred $ 90,360

2024, the Company engaged in transactions with related parties, including consultants, directors, and entities affiliated with members

of the Board of Directors.

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

services, and expense reimbursements.

Related party transactions for the year ended December 31, 2025 were

Company incurred $ 228,976

in fees and travel expenses to directors, with $ 56,250

accrued as of December 31, 2025.

Company incurred $ 241,696

in consulting fees and travel expenses to a member of the Board

of Directors under his consulting agreement, with $ 0

accrued as of December 31, 2025.

Related party transactions for the year ended December 31, 2024 were

Company incurred $ 90,360

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

remained accrued as of December 31, 2024.

• The Company incurred $ 207,269 in accounting and

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

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

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

• The Company incurred $ 438,716 in consulting fees

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

Company incurred $ 207,269

in accounting and IT service fees and expense reimbursements

to related parties, with $ 8,326

accrued as of December 31, 2024.

Company incurred $ 251,194

in fees and travel expenses to directors, with $ 72,748

accrued as of December 31, 2024.

Company incurred $ 438,716

in consulting fees and travel reimbursements to advisory board

members, with $ 29,345

accrued as of December 31, 2024.

14 – RETIREMENT PLAN

The Company established a 401(k) retirement plan

covering all eligible employees beginning November 15, 2013, which was amended effective February 15, 2025.

The plan offers two types

of elected deferrals:

pre-tax deferrals and Roth deferrals.

The Company matches 100% of each participant contribution, up to 4%

for all eligible employees.

Matching contributions vest immediately.

Participants are entitled to receive distributions of all vested

amounts beginning at age 59 1/2.

Matching contributions to all eligible non-executive participants charged to expense were $ 187,630

and $ 134,766 for the years ending

December 31, 2025 and 2024, respectively.

The plan is subject to the annual IRS elective deferral limit of $ 23,500

per employee for 2025, $7,500

catch-up for those aged 50 and over, and $11,250 or 150% of the regular catch-up limit for those aged 60-63.

LIGHTWAVE LOGIC, INC.

1 unchanged sentence

DECEMBER 31, 2025 AND 2024

NOTE 12 – RELATED PARTY (CONTINUED)

Party Transactions for the Year Ended December 31, 2023:

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

• The Company incurred

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

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

as of December 31, 2023.

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

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

NOTE 13 – RETIREMENT PLAN

The Company established a 401(k)

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

The plan offers two types of elected deferrals:

deferrals and Roth deferrals.

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

contributions vest immediately.

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

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

and $ 72,520 for the years

ending December 31, 2024 and 2023, respectively.

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

per employee for 2024 and $7,500

catch-up for 50 and over .

NOTE 14 – SEGMENT REPORTING

The Company operates as a single reportable segment, as

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

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

Measure of Segment Profit or Loss

The CODM assesses the Company's financial performance based

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

The following table presents a

reconciliation of segment operating loss to net loss:

Schedule of reconciliation of segment

operating loss

15 – SEGMENT REPORTING

The Company operates as a single reportable

segment, as the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer (“CEO”), evaluates the business

as a whole and does not receive discrete financial information for separate business units.

The CODM is responsible for evaluating financial

results and making resource allocation decisions.

The Company determined that it has one operating and reportable segment based on the

way the CODM organizes, manages, and evaluates the Company’s operations on a consolidated basis.

The CODM assesses the Company's financial performance

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

The following table presents

a reconciliation of segment operating loss to net loss for the years ended December 31, 2025 and 2024:

Schedule of reconciliation of segment operating loss

COST AND EXPENSE

Cost of sales

OPERATING EXPENSES

Research and development

General and administrative

SEGMENT OPERATING LOSS

Total significant segment expenses

LOSS FROM OPERATIONS

( 20,761,424 )

3 unchanged sentences

Commitment fee

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

Other (expense)

Loss on disposal of property and equipment and intangible assets

Other income (expense)

$ ( 20,313,797 )

$ ( 22,535,041 )

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

Significant Segment Expenses

The Company considers the following as significant expenses

in evaluating its segment performance:

The Company considers the following as significant

expenses in evaluating its segment performance:

Research and Development:

includes costs related to personnel, laboratory and wafer

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

at developing high-performance electro-optic polymer materials.

includes costs related

to personnel, laboratory and wafer fabrication materials and supplies, prototype device development and wafer fabrication expenses,

and third-party consulting costs aimed at developing high-performance electro-optic polymer materials.

General and Administrative:

includes personnel costs, professional fees, and other overhead

includes personnel

costs, professional fees, and other overhead expenses.

Cost of Sales:

represents labor costs, material costs and manufacturing overhead costs

associated with the production of materials transferred to the customer under the technology license and material supply agreement at

the Company’s facility.

Since the Company has only one reportable segment, no additional

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

represents labor costs, material

costs and manufacturing overhead costs associated with the production of materials transferred to the customer under the technology

license and material supply agreement at the Company’s facility.

Other segment items were $ 0

for the years ended December 31, 2025 and 2024.

Other segment items were $ 0

because cost of sales, research and development, and general and administrative expenses comprise all expenses included in the CODM measure

of segment operating loss.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2025 AND 2024

NOTE 15 – SEGMENT REPORTING (CONTINUED)

Segment assets

The CODM does not regularly review asset information

accordingly, the Company has not disclosed segment assets.

Entity-Wide Disclosures

Geographic Revenue Information:

for the year ended

December 31, 2025, $ 236,855

of the Company’s net sales were generated outside the United States.

For the year ended December

31, 2024, $ 13,750

of the Company's net sales were generated in the United States and $ 81,855

internationally.

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

net sales were generated internationally.

were generated outside the United States.

Revenue is attributed to geographic areas based on the customer’s

bill-to location.

For the years ended December 31, 2025 and 2024, 100 %

of net sales were generated in two countries, which represented 10 %

or more of consolidated net sales.

long-lived assets, consisting primarily of property and equipment, intangible assets, and right of use assets under operating

leases were all located in the United States and totaled $ 9,376,041

and $ 9,692,713

as of December 31, 2025 and 2024, respectively.

Major Customers:

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

Chief Operating Decision Maker (CODM)

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

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

for the year ended December 31, 2025 and 2024, the

Company has two customers that accounted for 10 %

or more of total revenue.

For the year ended December 31, 2025, Customer A and Customer B accounted

for approximately 55 %

of total net sales, respectively.

For the year ended December 31, 2024, Customer A and Customer B accounted

for approximately 14 %

of total net sales, respectively.

The related revenues were attributable to the Company’s single

reportable segment.

16 – SUBSEQUENT EVENTS

On March 17, 2025, the Company entered into a purchase

agreement with an institutional investor to sell up to $ 30,000,000

of common stock over a 36-month period.

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

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

issued under the purchase agreement.

On January 8, 2026, investment bank exercised

an option to purchase from the Company up to 1,750,000

additional shares of common stock for the purpose of covering over-allotments.

Pursuant to the underwriting agreement for the offering,

the Company issued to the underwriter warrants to purchase up to 52,500

shares of Common Stock.

The Company received $ 4,930,928

in cash proceeds, after deducting underwriting discounts and commissions and other estimated offering expenses payable by the Company.

The underwriter warrants will be immediately exercisable at an exercise price of $ 3.45

per share during the five-year period following the date of the underwriting agreement.

Pursuant to the requirements

of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf

by the undersigned, thereunto duly authorized.

LIGHTWAVE LOGIC, INC.

/s/ Yves LeMaitre

Yves LeMaitre

Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.

/s/ Yves LeMaitre

Chief Executive Officer, Principal Executive Officer, Director

March 20, 2026

Yves LeMaitre

/s/ Snizhana Quan

Principal Financial Officer and Principal Accounting Officer

March 20, 2026

Snizhana Quan

/s/ Ronald A.

Director, Chair of the Board of Directors

March 20, 2026

/s/ Siraj Nour El-Ahmadi

March 20, 2026

Siraj Nour El-Ahmadi

/s/ Craig Ciesla

March 20, 2026

/s/ Laila Partridge

March 20, 2026

Laila Partridge

/s/ Thomas M.

Connelly, Jr.

March 20, 2026

Connelly, Jr.

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

What changed 10-K

Item 9A. Controls and Procedures