Lightwave Logic Q3 2026 net loss widens to $7.22M
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Lightwave Logic, Inc. (LWLG) reported third-quarter 2026 revenue of $37,500, compared with $29,166 a year earlier, and a net loss of $7,221,953 versus $5,100,559. For the first nine months, revenue was $99,418, compared with $77,688, while net loss was $20,136,290 versus $14,764,216, an increase of 36%. Research and development and general and administrative expenses also increased.
Net cash used in operating activities was $15,044,699 in the first nine months, versus $10,436,426 in the prior-year period. At September 30, 2026, cash and cash equivalents were $17,566,678 and marketable securities were $70,277,228. Through its at-the-market sales agreement, the company sold 2,623,926 shares for net proceeds of $27,883,977 in the nine months; it made no sales under the agreement in the third quarter.
Management said it does not currently expect significant revenue from volume commercial production of customer products until 2028 at the earliest. The company develops and licenses electro-optic polymer materials for photonic devices and does not manufacture finished optical transceivers or modules.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Minor pointNine-month revenue was $99,418, versus $77,688 in 2025.
Negative
- Moderate pointNine-month net loss reached $20,136,290, up 36% from 2025.
- Moderate pointOperating cash use was $15,044,699, versus $10,436,426 in 2025.
Filing Explained
The $200,000 phase-two payment depends on accepted completion, while phase-three deliverables and consideration remain undetermined.
At
The company increased the amount under its amended sales agreement to
Under the joint-development arrangement, phase two has
Key Figures
Key Terms
electro-optic polymer materials technical
silicon photonics technical
photonic integrated circuits technical
non-recurring engineering financial
at-the-market offering financial
contract liability financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did LWLG report for Q3 2026?
How much did LWLG raise through its at-the-market program in 2026?
What commission does LWLG pay on at-the-market sales?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM
____________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____________to _____________
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
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( (Registrant’s telephone number, including area code) | |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered |
| The |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐
The
number of shares of the registrant’s common stock outstanding as of November 13, 2026 was
TABLE OF CONTENTS
| Page | |||
| Part I Financial Information | 1 | ||
| Item 1 | Financial Statements | 1 | |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 | |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 36 | |
| Item 4 | Controls and Procedures | 36 | |
| Part II Other Information | 37 | ||
| Item 1 | Legal Proceedings | 37 | |
| Item 1A | Risk Factors | 37 | |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 37 | |
| Item 3 | Defaults Upon Senior Securities | 37 | |
| Item 4 | Mine Safety Disclosures | 37 | |
| Item 5 | Other Information | 37 | |
| Item 6 | Exhibits | 38 | |
| Signatures | 39 | ||
i
Forward-Looking Statements
This report on Form 10-Q contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “continuing,” “ongoing,” “strategy,” “future,” “likely,” “may,” “should,” “could,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding expected operating results, such as anticipated revenue; anticipated levels of capital expenditures for our current fiscal year; our belief that we have, or will have, sufficient liquidity to fund our business operations during the next 12 months; strategy for gaining customers, growth, product development, market position, financial results and reserves.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: inability to generate significant revenue or to manage growth; lack of available funding; lack of a market for or market acceptance of our products; competition from third parties; general economic and business conditions; intellectual property rights of third parties; changes in the price of our stock and dilution; regulatory constraints and potential legal liability; ability to maintain effective internal controls; security breaches, cybersecurity attacks and other significant disruptions in our information technology systems; changes in technology and methods of marketing; delays in completing various engineering and manufacturing programs; changes in customer order patterns and qualification of new customers; changes in product mix; success in technological advances and delivering technological innovations; shortages in components; production delays due to performance quality issues with outsourced components; other risks to which our Company is subject; and other factors beyond the Company’s control.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions including without limitation our known material risks under Part I Item 1.A “Risk Factors” contained in our Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and Part II, Item 1.A “Risk Factors” in this report on Form 10-Q. Many factors could cause our actual results to differ materially from the forward-looking statements. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
ii
PART I – FINANCIAL INFORMATION
Item 1: Financial Statements
LIGHTWAVE LOGIC, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 2026
(UNAUDITED)
CONTENTS
| PAGE | |
| BALANCE SHEETS | 2 |
| STATEMENTS OF COMPREHENSIVE LOSS | 3 |
| STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY | 4-5 |
| STATEMENTS OF CASH FLOWS | 6 |
| NOTES TO FINANCIAL STATEMENTS | 7-27 |
| 1 |
LIGHTWAVE LOGIC, INC.
BALANCE SHEETS
| September 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Marketable securities | — | |||||||
| Accounts receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| PROPERTY AND EQUIPMENT - net of accumulated depreciation of $ | ||||||||
| OTHER ASSETS | ||||||||
| Intangible assets - net of accumulated amortization of $ | ||||||||
| Operating lease - right of use asset | ||||||||
| TOTAL OTHER ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued bonuses and accrued expenses | ||||||||
| Accounts payable and accrued expenses - related parties | — | |||||||
| Contract liability | ||||||||
| Current operating lease liability | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| LONG TERM LIABILITIES | ||||||||
| Long-term operating lease liability | ||||||||
| Long-term operating lease liability | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Preferred stock, $ | — | — | ||||||
| Common stock $ | ||||||||
| Additional paid-in-capital | ||||||||
| Deferred compensation | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | — | |||||
| TOTAL STOCKHOLDERS' EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | ||||||
See accompanying notes to these financial statements.
| 2 |
LIGHTWAVE LOGIC, INC.
STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
| Three Months | Three Months | Nine Months | Nine Months Ended | |||||||||||||
Ended September 30, 2026 | Ended September 30, 2025 | Ended September 30, 2026 | September 30, 2025 (As Revised) | |||||||||||||
| NET SALES | $ | $ | $ | $ | ||||||||||||
| COST AND EXPENSE | ||||||||||||||||
| Cost of sales | — | |||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| TOTAL COST AND EXPENSE | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest income and interest amortization on marketable securities | ||||||||||||||||
| Commitment fee | — | ( | ) | — | ( | ) | ||||||||||
| Loss on disposal of property and equipment and intangible assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ( | ) | ( | ) | ||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| OTHER COMPREHENSIVE LOSS | ||||||||||||||||
| Net unrealized holding loss on available-for-sale debt securities | ( | ) | — | ( | ) | — | ||||||||||
| COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| LOSS PER SHARE | ||||||||||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| WEIGHTED AVERAGE NUMBER OF SHARES | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
See accompanying notes to these financial statements
| 3 |
LIGHTWAVE LOGIC, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||||
| |
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Number of Shares |
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Common Stock |
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|
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Additional Paid-in Capital |
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Deferred Compensation |
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Accumulated Other Comprehensive Loss |
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Accumulated Deficit |
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Total |
|
| BALANCE AT JUNE 30, 2026 (UNAUDITED) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Exercise of options | — | — | — | |||||||||||||||||||||||||
| Options issued for services | — | — | — | — | — | |||||||||||||||||||||||
| Restricted stock units (RSUs) issued for services, net of share settlement for taxes | ( | ) | — | — | — | ( | ) | |||||||||||||||||||||
| Deferred compensation | — | — | — | — | — | |||||||||||||||||||||||
| Restricted Stock Award (RSA) forfeiture | ( | ) | — | — | — | — | — | — | ||||||||||||||||||||
| Net unrealized loss on available-for-sale debt securities | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
| Net loss for the three months ended September 30, 2026 | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE AT SEPTEMBER 30, 2026 (UNAUDITED) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||||
| |
|
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Number of Shares |
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Common Stock |
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Additional Paid-in Capital |
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Deferred Compensation |
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Accumulated Other Comprehensive Loss |
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Accumulated Deficit |
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Total |
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| BALANCE AT DECEMBER 31, 2025 | $ | $ | $ | ( | ) | $ | — | $ | ( | ) | $ | |||||||||||||||||
| Common stock sales at the market by investment banking company | — | — | — | |||||||||||||||||||||||||
| Common stock issued to investment bank | — | — | — | |||||||||||||||||||||||||
| Exercise of options | — | — | — | |||||||||||||||||||||||||
| Cashless exercise of 200,000 options | ( | ) | — | — | — | — | ||||||||||||||||||||||
| Exercise of warrants | — | — | — | |||||||||||||||||||||||||
| Options issued for services | — | — | — | — | — | |||||||||||||||||||||||
| Restricted stock units (RSUs) issued for services, net of share settlement for taxes | ( | ) | — | — | — | ( | ) | |||||||||||||||||||||
| Deferred compensation | — | — | — | — | — | |||||||||||||||||||||||
| Restricted Stock Award (RSA) modification | — | — | ( | ) | — | — | — | |||||||||||||||||||||
| Restricted Stock Award (RSA) forfeiture | ( | ) | — | — | — | — | — | — | ||||||||||||||||||||
| Net unrealized loss on available-for-sale debt securities | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
| Net loss for the nine months ended September 30, 2026 | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE AT SEPTEMBER 30, 2026 (UNAUDITED) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
See accompanying notes to these financial statements
| 4 |
LIGHTWAVE LOGIC, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||
| Number of | Common | Additional Paid-in | Deferred | Accumulated Other Comprehensive | Accumulated | |||||||||||||||||||||||
| Shares | Stock | Capital | Compensation | Loss | Deficit | Total | ||||||||||||||||||||||
BALANCE AT JUNE 30, 2025 (UNAUDITED) (as revised) (see Note 2) | $ | $ | $ | ( | ) | $ | — | $ | ( | ) | $ | |||||||||||||||||
| Common stock issued to institutional investor | — | — | — | |||||||||||||||||||||||||
| Common stock issued for commitment shares | — | — | — | |||||||||||||||||||||||||
| Common stock sales at the market by investment banking company | — | — | — | |||||||||||||||||||||||||
| Exercise of options | — | — | — | |||||||||||||||||||||||||
| Options issued for services | — | — | — | — | — | |||||||||||||||||||||||
| Performance stock units (PSUs) issued for services | — | — | — | — | — | |||||||||||||||||||||||
| Restricted stock units (RSUs) issued for services | — | — | — | |||||||||||||||||||||||||
| Deferred compensation | — | — | — | — | — | |||||||||||||||||||||||
| Net loss for the three months ended September 30, 2025 | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2025 (UNAUDITED) (as revised) | $ | $ | $ | ( | ) | $ | — | $ | ( | ) | $ | |||||||||||||||||
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||
| Number of | Common | Additional Paid-in | Deferred | Accumulated Other Comprehensive | Accumulated | |||||||||||||||||||||||
| Shares | Stock | Capital | Compensation | Loss | Deficit | Total | ||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2024 (as revised) (see Note 2) | $ | $ | $ | ( | ) | $ | — | $ | ( | ) | $ | |||||||||||||||||
| Common stock issued to institutional investor | — | — | — | |||||||||||||||||||||||||
| Common stock issued for commitment shares | — | — | — | |||||||||||||||||||||||||
| Common stock sales at the market by investment banking company | — | — | — | |||||||||||||||||||||||||
| Exercise of options | — | — | — | |||||||||||||||||||||||||
| Cashless exercise of 1,350,000 options | ( | ) | — | — | — | ( | ) | |||||||||||||||||||||
| Options issued for services | — | — | — | — | — | |||||||||||||||||||||||
| Options issued to settle accrued bonuses | — | — | — | — | — | |||||||||||||||||||||||
| Performance stock units (PSUs) issued for services | — | — | — | — | — | |||||||||||||||||||||||
| Restricted stock units (RSUs) issued for services | — | — | — | |||||||||||||||||||||||||
| Restricted stock awards issued for services, net of forfeitures and share settlement for taxes | ( | ) | — | — | ( | ) | ||||||||||||||||||||||
| Deferred compensation | — | — | — | — | — | |||||||||||||||||||||||
| Net loss for the nine months ended September 30, 2025 | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| BALANCE AT SEPTEMBER 30, 2025 (UNAUDITED) (as revised) | $ | $ | $ | ( | ) | $ | — | $ | ( | ) | $ | |||||||||||||||||
See accompanying notes to these financial statements
| 5 |
LIGHTWAVE LOGIC, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Nine Months | Nine Months Ended | |||||||
Ended September 30, 2026 | September 30, 2025 (As Revised) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Stock options issued for services | ||||||||
| Amortization of deferred compensation | ||||||||
| Performance stock units issued for services | — | |||||||
| Restricted stock units issued for services | ||||||||
| Phantom units issued for services | — | |||||||
| Common stock issued for commitment shares | — | |||||||
| Depreciation and amortization of patents | ||||||||
| Amortization of right of use asset | ||||||||
| Accretion of interest on marketable securities | ( | ) | — | |||||
| Loss on disposal of property and equipment and intangible assets | ||||||||
| (Increase) decrease in assets | ||||||||
| Accounts receivable | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| (Decrease) increase in liabilities | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued bonuses, accrued expenses and other liabilities | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses-related parties | ( | ) | ( | ) | ||||
| Contract liability | ( | ) | ||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Cost of intangibles | ( | ) | ( | ) | ||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Purchases of marketable securities | ( | ) | — | |||||
| Maturities of marketable securities | — | |||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Exercise of options and warrants | ||||||||
| Cashless option exercise tax payments | — | ( | ) | |||||
| Cashless tax payment on vested restricted stock awards | — | ( | ) | |||||
| Tax payment on net issuance of vested restricted stock units | ( | ) | — | |||||
| Tax payment on net issuance of performance stock units | ( | ) | — | |||||
| 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 | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | $ | ||||||
| Supplemental Disclosure of Non-cash activities: | ||||||||
| Options issued to settle accrued bonuses | $ | — | $ | |||||
| Trade-in credit for purchase of property and equipment | $ | — | $ | |||||
| Non-cash repurchases of shares issued for net option exercises | $ | — | $ | |||||
| Restricted stock awards issued for services | $ | — | $ | |||||
| Non-cash repurchases of shares issued for vested restricted stock units | $ | $ | — | |||||
See accompanying notes to these financial statements
| 6 |
LIGHTWAVE LOGIC, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2026 AND 2025
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
As used herein, “we,” “us,” “our,” and the “Company” refer to Lightwave Logic, Inc.
Financial Statements
The accompanying unaudited financial statements have been prepared by Lightwave Logic, Inc. These statements include all adjustments (consisting only of normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting policies described in the Summary of Significant Accounting Policies included in the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as originally filed with the Securities and Exchange Commission on March 20, 2026 (the “2025 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the 2025 Annual Report. The interim operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the full year.
History and Nature of Business
Lightwave Logic, Inc. is a technology platform company focused on the development and commercialization of proprietary electro-optic (“EO”) polymers designed to enable next-generation photonic devices for high-speed data transmission.
Our Perkinamine® family of EO polymer materials is engineered for integration into silicon photonics (“SiPh”) and other photonic integrated circuit (“PIC”) platforms. When incorporated into device architectures, these materials are designed to enable high-speed optical modulation at low drive voltage and low power in compact device footprints 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. Reduced drive voltage operation may enable lower system-level power consumption and simplified driver electronics in specific implementations.
We do not manufacture optical transceivers, photonic devices, or complete optical modules. Instead, our strategy is to commercialize our technology through a combination of material sales, intellectual property licensing, process design kit (“PDK”) enablement, and royalty or other fee-based arrangements tied to customer production.
Our customers and prospective customers include semiconductor foundries, silicon photonics device designers, optical module manufacturers, and system integrators serving data center, cloud computing, telecommunications, and emerging artificial intelligence (“AI”) infrastructure 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 2024.
| 7 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash, Cash Equivalents and Marketable Securities
The Company considers all highly liquid investments with a maturity date of three months or less to be cash equivalents. Marketable securities consist of highly liquid available-for-sale debt securities with maturities of greater than three months but less than 1 year when purchased.
Available-for-sale debt securities are carried at fair value, with unrealized holding gains and losses reported as a component of accumulated other comprehensive loss within stockholders' equity. Accrued interest receivable is excluded from the amortized cost basis of the securities and is included in prepaid expenses and other current assets in the accompanying balance sheet.
The Company evaluates its available-for-sale debt securities for expected credit losses in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 326. The Company has elected to exclude accrued interest receivable from its estimate of credit losses and writes off uncollectible accrued interest receivable in a timely manner.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash, cash equivalents, prepaid expenses and other assets, marketable securities, accounts receivable, accounts payable and accrued expenses. The carrying values of cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses approximate fair values due to the short-term nature of these instruments.
The Company measures cash equivalents and available-for-sale debt securities at fair value on a recurring basis. These instruments are classified within Level 1 or Level 2 of the fair value hierarchy based on the observability of the inputs used to determine fair value. Level 1 instruments are valued using quoted prices in active markets for identical assets. Level 2 instruments are valued using observable market-based inputs, including quoted prices for similar instruments, benchmark yields, broker/dealer quotations, and pricing models utilizing observable market data.
Revenue Recognition and Contract Liability
The Company recognizes revenue in accordance with FASB 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.
| 8 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue Recognition and Contract Liability (Continued)
To achieve this, the Company applies the five-step model:
| 1. | Identify the contract with a customer. |
| 2. | Identify the performance obligations in the contract. |
| 3. | Determine the transaction price for the contract. |
| 4. | Allocate the transaction price to the performance obligations. |
| 5. | Recognize revenue as performance obligations are satisfied. |
The Company’s primary revenue streams include technology license and material supply agreements and non-recurring engineering revenue from joint development agreements.
Technology License and Material Supply Agreements
The Company enters into technology license and material supply agreements, under which it grants customers a non-exclusive, royalty-bearing license to use its patented electro-optic polymer technology (the “Licensed Product”). The Company also supplies proprietary polymers to licensees for use in their manufacturing of photonic devices.
The Company assesses whether the license and the supply of proprietary polymers represent distinct performance obligations. Based on this assessment, the Company has determined that the license and material supply are not distinct for financial reporting purposes because they are highly interdependent. Accordingly, the Company accounts for these as a single performance obligation.
Revenue under these agreements is recognized as follows:
Upfront License Fees – Nonrefundable upfront license fees are recorded as a 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.
| 9 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Joint 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 for a multi-project wafer run 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 statements.
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 level. Accordingly, each phase is accounted for as a single combined performance obligation. Phases 1 and 2 are within the scope of ASC 606.
Phase 1 consideration was $
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.
Contract Costs
The Company capitalizes incremental costs to obtain contracts if they are expected to be recoverable, in accordance with ASC 340-40, Other Assets and Deferred Costs – Contracts with Customers. These capitalized costs are amortized over the expected contract term in a manner consistent with the related revenue recognition. 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.
| 10 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Contract Liability
Contract liability represents amounts received in advance for performance obligations not yet satisfied, including non-refundable upfront license fees. The Company recognizes amounts recorded as contract liabilities 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.
Stock-based Payments
The Company accounts for stock-based compensation under the provisions of FASB ASC 718, "Compensation - Stock Compensation," which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The fair value of restricted stock awards and units is estimated by the market price of the Company’s common stock at the date of grant. Restricted stock awards and units are being amortized to expense over the shorter of the requisite service period or the actual vesting period. Performance stock units are subject to both performance-based and service vesting requirements. The grant-date fair value of performance stock units is based on the fair value of the Company’s stock on the 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's liability-classified awards are cash-settled phantom units, which are remeasured to fair value at each reporting date based on the closing price of the Company's common stock. Compensation expense is recognized on a straight-line basis over the requisite service period. The Company estimates the fair value of option and warrant awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the shorter of the requisite service period or the actual vesting period, using the straight-line method. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.
The Company has elected to account for forfeiture of stock-based awards as they occur.
Loss Per Share
The Company follows FASB ASC 260, “Earnings per Share,” resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss in 2026 and 2025, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and diluted loss per share were the same.
| 11 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Comprehensive Loss
The Company follows FASB ASC 220.10, “Reporting Comprehensive Income (Loss).” Comprehensive loss is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net loss. The Company records unrealized gains and losses on available-for-sale securities as accumulated other comprehensive loss on the balance sheet. Accordingly, comprehensive loss includes both net loss and other comprehensive loss.
Recently 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. The Company is evaluating the impact of this ASU on its financial statement disclosures.
Reclassifications
Certain reclassifications have been made to the 2025 financial statements in order to conform to the 2026 financial statement presentation.
| 12 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 2 – REVISION OF COMPARATIVE INFORMATION FOR THE NINE-MONTHS PERIOD ENDED SEPTEMBER 30, 2025
As previously disclosed, the Company identified an error related
to the accounting for non-cash stock option exercises during the three months ended June 30, 2025, which resulted in an overstatement
of non-cash compensation expense of $
The Company previously concluded that the error was not material to its financial statements for the nine months ended September 30, 2025, individually or in the aggregate, and therefore did not amend its Quarterly Report on Form 10-Q for that period. The comparative financial information for the nine months ended September 30, 2025 presented herein has been revised to reflect the correction of the error.
The correction decreased non-cash compensation expense and net
loss by $
The comparative statements of stockholders’ equity also
reflect the previously disclosed correction of the 2021 error of $
The following tables present the effects of the correction on the Company’s previously reported financial information for the nine months ended September 30, 2025 and the affected comparative stockholders’ equity information:
Statements of Comprehensive Loss (Unaudited)
(For the Nine Months Ended September 30, 2025)
(in dollars)
| Schedule of restated financial information | ||||||||||||
| As Previously Reported | Adjustment | As Revised | ||||||||||
| Research and development expenses | $ | $ | ( | ) | $ | |||||||
| General and administrative expenses | ( | ) | ||||||||||
| Total cost and expense | ( | ) | ||||||||||
| Net Loss | $ | ( | ) | $ | $ | ( | ) | |||||
Statements of Cash Flows (Unaudited)
(For the Nine Months Ended September 30, 2025)
(in dollars)
| As Previously Reported | Adjustment | As Revised | ||||||||||
| Net Loss | $ | ( | ) | $ | $ | ( | ) | |||||
| Non-cash compensation expense from stock option exercises | ( | ) | — | |||||||||
| Supplemental Disclosure | ||||||||||||
| Non-cash repurchases of shares issued for net option exercises | $ | — | $ | $ | ||||||||
Statement of Stockholders’ Equity (Unaudited)
(For the Nine Months Ended and As of September 30, 2025)
(in dollars)
| As Previously Reported | Adjustment | As Revised | ||||||||||
| Additional paid-in capital related to cashless exercise of 1,350,000 options | $ | $ | ( | ) | $ | ( | ) | |||||
| Additional Paid-in-Capital | ( | ) | ||||||||||
| Accumulated Deficit | $ | ( | ) | $ | $ | ( | ) | |||||
| 13 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 3 – CASH EQUIVALENTS AND MARKETABLE SECURITIES
The Company invests primarily in U.S. Treasury securities and U.S. government agency securities. The following tables present the Company’s cash equivalents and marketable securities by significant investment category as of September 30, 2026:
| Schedule of cash equivalents and marketable securities | ||||||||||||||||||||||||||
| Reported As | ||||||||||||||||||||||||||
| Assets | Fair Value Hierarchy | Amortized Cost | Unrealized Gain | Unrealized Loss | Fair Value | Cash Equivalents | Marketable Securities | |||||||||||||||||||
| Money Market Funds | Level 1 | $ | $ | — | $ | — | $ | $ | $ | — | ||||||||||||||||
| U.S. Treasury Securities | Level 2 | — | ( | ) | — | |||||||||||||||||||||
| U.S. Agency Securities | Level 2 | — | ( | ) | — | |||||||||||||||||||||
| Total | $ | $ | — | $ | ( | ) | $ | $ | $ | |||||||||||||||||
Accrued interest receivable of $
As of September 30, 2026, all of the Company’s
available-for-sale marketable securities were in an unrealized loss position; however, the Company concluded that the unrealized losses
were attributable to changes in market interest rates and not to credit-related factors. Accordingly,
As of September 30, 2026, all of the Company’s available-for-sale marketable securities had contractual maturities of less than one year. The Company did not hold any marketable securities or cash equivalents classified as available-for-sale debt securities as of December 31, 2025.
NOTE 4 – REVENUE
The Company's first commercial agreement was executed in May 2023, in the form of a four-year material supply and license agreement (the “License Agreement”) that incorporates the Company's patented electro-optic polymer materials for use in manufacturing of photonic devices (the “Licensed Product”). The licensee shall pay the Company a running royalty with a minimum royalty paid on an annual basis over the term of the License Agreement, and, if applicable, royalties that exceed the minimum royalty payments and milestone license fees. The License Agreement is a non-exclusive material supply and license agreement.
In December 2025, the 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 run 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.
| 14 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 4 – REVENUE (Continued)
Timing of Revenue Recognition and Contract Balances
Revenues related to the initial license fee and
a minimum annual royalty are recognized over time commencing with the License Agreement in May 2023. An up-front license fee in the amount
of $
For the three months ended September 30, 2026
and 2025, the Company recognized revenue of $
Revenues related to the joint development agreement
are recognized at a point in time, when control of the related performance obligations is transferred to a customer. For the three and
nine months ended September 30, 2026, the Company did
Contract balances are as follows:
| Schedule of contract balances | ||||||||
| September 30, 2026 | December 31, 2025 | |||||||
| Accounts receivable, net | $ | $ | ||||||
| Short-term contract liability | $ | $ | ||||||
Significant changes in the contract balances for the nine months ended September 30, 2026 are as follows:
| Schedule of significant changes in the contract balances | ||||||||
| Nine Months Ended September 30, 2026 | ||||||||
| Assets | Liabilities | |||||||
| Balance at December 31, 2025 | $ | $ | ( | ) | ||||
| 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 September 30, 2026 | $ | $ | ( | ) | ||||
Assets Recognized for the Costs to Obtain a Contract
There are no assets recognized for the costs to obtain the License Agreement.
| 15 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following:
| Schedule of prepaid expenses and other current assets | ||||||||
| September 30, 2026 | December 31, 2025 | |||||||
| Insurance | $ | $ | ||||||
| Deposits for equipment purchases | ||||||||
| Software licenses and subscriptions | ||||||||
| Wafer fabrication deposits | — | |||||||
| Third-party services | — | |||||||
| Rent | ||||||||
| Deferred equity issuance costs | — | |||||||
| Investor relations | ||||||||
| Deposits for conferences | — | |||||||
| Other | ||||||||
| Prepaid Expenses | $ | $ | ||||||
| Accrued interest on marketable securities | — | |||||||
| Prepaid expenses and other current assets | $ | $ | ||||||
NOTE 6 – PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
| Schedule of property and equipment | ||||||||
| September 30, 2026 | December 31, 2025 | |||||||
| Office equipment | $ | $ | ||||||
| Lab equipment | ||||||||
| Furniture | ||||||||
| Leasehold improvements | ||||||||
| Software | ||||||||
| Equipment not yet placed in service | ||||||||
| Less: Accumulated depreciation | ||||||||
| Property and equipment, net | $ | $ | ||||||
| 16 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 6 – PROPERTY AND EQUIPMENT (CONTINUED)
Depreciation expense for the three months ended
September 30, 2026 and 2025 was $
NOTE 7 – INTANGIBLE ASSETS
Intangible assets represent legal fees and patent fees associated with the prosecution of patent applications. The Company has recorded amortization expense on patents granted, which are amortized over the remaining legal life. Maintenance patent fees are paid to a government patent authority to maintain a granted patent in force. Some countries require the payment of maintenance fees for pending patent applications. Maintenance fees paid after a patent is granted are expensed, as these are considered ongoing costs to “maintain a patent”. Maintenance fees paid prior to a patent grant date are capitalized to patent costs, as these are considered “patent application costs”. No amortization expense 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 | ||||||||
| September 30, 2026 | December 31, 2025 | |||||||
| Patents | $ | $ | ||||||
| Less: Accumulated amortization | ||||||||
| Intangible assets, net | $ | $ | ||||||
Amortization expense for the three months ended
September 30, 2026 and 2025 was $
| 17 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 8 – LEASES
The Company leases approximately
For purposes of calculating operating lease liability, lease term includes the initial non-cancelable term plus any term under renewal options that are reasonably assured. Any rent escalations, along with rent abatements, are included in the computation of rent expense calculated on a straight-line basis over the lease term. The interest rate implicit in lease contracts is typically not readily determinable and as such the Company uses the appropriate incremental borrowing rate based on information available at the lease commencement date in determining the present value of the lease payments.
Undiscounted future minimum lease payments under the Amended Lease as of September 30, 2026, by year and in aggregate, including the extended term, are as follows:
| Schedule of future lease payments of operating leases | ||||||
| YEARS ENDING | ||||||
| DECEMBER 31, | AMOUNT | |||||
| Remainder of 2026 | $ | |||||
| 2027 | ||||||
| 2028 | ||||||
| 2029 | ||||||
| 2030 | ||||||
| Thereafter | $ | |||||
| Less discounted interest | ( | ) | ||||
| TOTAL | $ | |||||
The Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases. There are no other material operating leases.
| 18 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 8 – LEASES (CONTINUED)
The following table presents weighted average assumptions used to compute the Company’s right-of-use assets and lease liabilities:
| Schedule of operating lease right-of-use assets | ||||
| September 30, 2026 | ||||
| Weighted average remaining lease term (in years) | ||||
| Weighted average discount rate | % | |||
As of September 30, 2026, current operating leases
had remaining terms between
Current lease agreements do not contain any residual value guarantees or material restrictive covenants. As of September 30, 2026, the Company did not have any finance leases.
Operating
and short-term lease costs totaling $
NOTE 9 – INCOME TAXES
There is
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, 2026,
the Company had
| 19 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 10 – STOCKHOLDERS’ EQUITY
Preferred Stock
Pursuant to the Company’s Articles of Incorporation, the Company’s Board of Directors is empowered, without stockholder approval, to issue series of preferred stock with any designations, rights and preferences as they may from time to time determine. The rights and preferences of this preferred stock may be superior to the rights and preferences of the Company’s common stock; consequently, preferred stock, if issued could have dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the common stock. Additionally, preferred stock, if issued, could be utilized, under special circumstances, as a method of discouraging, delaying or preventing a change in control of the Company’s business or a takeover from a third party.
Common Stock
On March 17, 2025, the Company entered into a
purchase agreement with an institutional investor to sell up to $
On December 17, 2025, the Company closed an offering
with an investment bank to sell
On December 17, 2025 and January 8, 2026,
the Company sold
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 had the ability
to offer and sell up to $
During
the three-month period ended September 30, 2026, the investment banking company did not sell any shares pursuant to the sales agreement.
During the nine-month period ended September 30, 2026, pursuant to the sales agreement, the investment banking company sold
| 20 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 11 – STOCK BASED COMPENSATION
Common Stock Options and Warrants
The Company maintains the 2016 Equity Incentive Plan (the "2016 Plan"), under which no additional awards may be granted following its termination on May 15, 2025. Outstanding awards granted under the 2016 Plan remain outstanding in accordance with their original terms.
The Company also maintains the 2025 Equity Incentive
Plan (the "2025 Plan"), which was approved by shareholders on May 15, 2025 and authorizes the issuance of up to
The Company uses the
The
As of September 30, 2026, there was $
| 21 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)
Common Stock Options and Warrants (Continued)
Modification of Equity Awards
During the nine months ended September 30, 2026, the Company modified certain equity awards during the second quarter of 2026 in connection with consulting agreements entered into with two former employees whose employment terminated during the period. Under the consulting agreements, the former employees will provide consulting services through December 30, 2026.
In connection with the consulting agreements, the Company modified certain outstanding stock options and unvested restricted stock awards ("RSAs") by permitting continued vesting through December 30, 2026. Stock options that were scheduled to vest after December 30, 2026 were forfeited. In addition, all unvested restricted stock units ("RSUs") held by the former employees were forfeited upon termination of employment in accordance with the terms of the applicable award agreements.
The Company evaluated the consulting arrangements
under ASC 718 and recognized the entire incremental compensation cost associated with the modified awards on the modification date since
the consulting services did not represent substantive future services. The net incremental compensation cost recognized as a result of
the modifications totaled $
Share-based compensation was recognized as follows:
| Schedule of share-based compensation | ||||||||||||||||
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||
| Stock options | $ | $ | $ | $ | ||||||||||||
| Restricted stock awards | ||||||||||||||||
| Restricted stock units | ||||||||||||||||
| Performance stock units | — | — | ||||||||||||||
| Phantom unit award | — | — | ||||||||||||||
| Total share-based compensation | $ | $ | $ | $ | ||||||||||||
The following tables summarize all stock option and warrant activity of the Company during the nine months ended September 30, 2026:
| Schedule of stock option and warrant activity | ||||||||||||||
| Non-Qualified Stock Options and Warrants Outstanding and Exercisable | ||||||||||||||
| Number of | Exercise | Weighted Average | ||||||||||||
| Shares | Price | Exercise Price | ||||||||||||
| Outstanding, December 31, 2025 | $ | $ | ||||||||||||
| Granted | $ | $ | ||||||||||||
| Forfeited | ( | ) | $ | $ | ||||||||||
| Exercised | ( | ) | $ | $ | ||||||||||
| Outstanding, September 30, 2026 | $ | $ | ||||||||||||
| Exercisable, September 30, 2026 | $ | $ | ||||||||||||
The aggregate intrinsic value of options and warrants
outstanding and exercisable as of September 30, 2026 was $
During the nine months ended September 30, 2026,
| 22 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
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 Currently Exercisable | ||||||||
|
Range of Exercise Prices |
Number Outstanding Currently Exercisable at September 30, 2026 |
Weighted Average Remaining Contractual Life |
Weighted Average Exercise Price of Options and Warrants Outstanding Currently Exercisable |
|||||
| $ |
$ | |||||||
| Non-Qualified Stock Options and Warrants Outstanding | ||||||||||
|
Range of Exercise Prices |
Number Outstanding at September 30, 2026 |
Weighted Average Remaining Contractual Life |
Weighted Average Exercise Price of Options and Warrants Outstanding |
|||||||
| $ |
$ | |||||||||
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 satisfied.
The fair value of RSAs and RSUs is recognized as stock-based compensation expense on a straight-line basis over the shorter of the requisite service period or the vesting period. Vesting terms range from immediate vesting to monthly or quarterly vesting schedules, with certain awards subject to cliff vesting provisions.
Restricted stock activity during the nine months ended September 30, 2026 is as follows:
| Schedule of fair value of restricted stock awards | ||||||||||||||||
| Restricted Stock Awards Nine-Month Period Ended September 30, 2026 | Restricted Stock Units Nine-Month Period Ended September 30, 2026 | |||||||||||||||
| Number of Shares | Weighted Average Grant Date Fair Value per Share | Number of Shares | Weighted Average Grant Date Fair Value per Share | |||||||||||||
| Non-vested, beginning of period | $ | $ | ||||||||||||||
| Granted | — | — | ||||||||||||||
| Vested | ( | ) | ( | ) | ||||||||||||
| Cancelled and forfeited | ( | ) | ( | ) | ||||||||||||
| Non-vested, end of period | $ | $ | ||||||||||||||
As of September 30, 2026 and 2025, the unamortized
value of the RSAs was $
| 23 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)
Performance Stock Units
During the nine months ended September 30, 2025,
the Company granted
On September 12, 2025, in connection with a new
employment agreement with the Company's Chief Executive Officer (“CEO”), the Company modified
For the three and nine months ended September
30, 2025, the Company recorded $
Liability-Classified Awards
During the nine months ended September 30, 2026, the Company granted a cash settled stock-based payment award, designated as a “Phantom Unit Award,” to an employee. Each Phantom Unit represents the right to receive a cash payment equal to the fair market value of one share of the Company's common stock as of the applicable vesting date. The award vests over three years, consisting of an initial one-year cliff vesting period followed by quarterly vesting over the remaining two years, subject to continued service.
In accordance with ASC 718, the award is classified
as a liability because it is settled in cash. The underlying liability is remeasured to fair value at each reporting date based on the
Company’s closing stock price, with changes in fair value recognized as compensation expense on a straight-line basis over the requisite
service period. During the three and nine months ended September 30, 2026, the Company recognized $
The following table summarizes the Company’s Phantom Unit activity during the nine months ended September 30, 2026:
| Schedule of phantom unit activity | ||||||||
| |
|
Phantom Units Nine-Month Period Ended September 30, 2026 |
|
|||||
| Number of Phantom Units | Weighted Average Fair Value per Phantom Unit | |||||||
| Balance as of January 1, 2026 | — | $ | — | |||||
| Granted | ||||||||
| Vested | — | — | ||||||
| Cancelled and forfeited | — | — | ||||||
| Balance as of September 30, 2026 | $ | |||||||
As of September 30, 2026, unrecognized compensation cost related to
unvested Phantom Units, based on the fair value of the awards as of September 30, 2026, was $
| 24 |
LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 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. For the three and nine months ended September 30, 2026 and 2025, 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:
| · | Options and warrants: |
| · | Unvested RSUs: |
| · | Earned but unissued PSUs: |
| · | Total anti-dilutive securities excluded from the
calculation of diluted loss per share were |
NOTE 13 – RELATED PARTIES
There were
During the three and nine months ended September 30, 2025, the Company engaged in transactions with related parties, including consultants, directors, and entities affiliated with members of the Board of Directors. These transactions primarily relate to legal services, consulting fees, director compensation, accounting services, and expense reimbursements.
Related party transactions for the three and nine months ended September 30, 2025 were as follows:
| · | The Company incurred $ |
| · | The Company incurred $ |
| · | The Company incurred $ |
| · | The Company incurred $ |
As of December 31, 2025, accrued liabilities included
$
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LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 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’s contribution, up to 4%
for all eligible employees. Matching contributions vest immediately. Participants are entitled to receive distributions of all vested
amounts beginning at age 59 1/2. Matching contributions to all eligible participants charged to expense were $
NOTE 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 three and nine months ended September 30, 2026 and 2025:
| Schedule of reconciliation of segment operating loss | ||||||||||||||||
| Three Months ended September 30, 2026 | Three Months ended September 30, 2025 | Nine Months Ended September 30, 2026 | Nine Months Ended (As Revised) | |||||||||||||
| NET SALES | $ | $ | $ | $ | ||||||||||||
| COST OF SALES | — | |||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| SEGMENT OPERATING LOSS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest income and interest amortization on marketable securities | ||||||||||||||||
| Commitment fee | — | ( | ) | — | ( | ) | ||||||||||
| Loss on disposal of property and equipment and intangible assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ( | ) | ( | ) | ||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The CODM regularly reviews the following significant expense categories in evaluating the segment performance:
| · |
Research and Development: includes costs related to personnel, laboratory and wafer fabrication materials and supplies, prototype device development and wafer fabrication expenses, and third-party consulting costs aimed at developing high-performance electro-optic polymer materials.
| |
| · |
General and Administrative: includes personnel costs, professional fees, and other overhead expenses.
| |
| · | Cost of Sales: represents labor costs, material costs and manufacturing overhead costs associated with the production of materials transferred to the customer under the technology license and material supply agreement at the Company’s facility. |
There were
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LIGHTWAVE LOGIC, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2026 AND 2025 |
NOTE 15 – SEGMENT REPORTING (CONTINUED)
Segment assets
The CODM does not regularly review asset information by segment; accordingly, the Company has not disclosed segment assets.
Entity-Wide Disclosures
| · | Geographic Revenue Information: For the three and nine months ended September 30, 2026 and 2025, | |
| · | Long-lived assets: long-lived assets, consisting of property and equipment, intangible assets, and right of use assets under operating leases were all located in the United States and totaled $ | |
| · | Major Customers: For the three and nine months ended September 30, 2026 and 2025, one customer accounted for |
NOTE 16 – SUBSEQUENT EVENTS
On September 23, 2026, the Board of Directors
appointed Edward Kennedy to serve as a Class I director. In connection with his appointment, on October 26, 2026, the Compensation Committee
approved two grants of RSU awards to Mr. Kennedy.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. This information should also be read in conjunction with our audited historical financial statements which are included in our 2025 Form 10-K for the fiscal year ended December 31, 2025 (“2025 Form 10-K”).
Overview
Lightwave Logic, Inc. is a technology platform company focused on the development and commercialization of proprietary electro-optic (“EO”) polymers designed to enable next-generation photonic devices for high-speed data transmission.
Our Perkinamine® family of EO polymer materials is engineered for integration into silicon photonics (“SiPh”) and other photonic integrated circuit (“PIC”) platforms. When incorporated into device architectures, these materials are designed to enable high-speed optical modulation at low drive voltage and low power in compact device footprints 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. Reduced drive voltage operation may enable lower system-level power consumption and simplified driver electronics in specific implementations.
We do not manufacture optical transceivers, photonic devices, or complete optical modules. Instead, our strategy is to commercialize our technology through a combination of material sales, intellectual property licensing, process design kit (“PDK”) enablement, and royalty or other fee-based arrangements tied to customer production.
Our customers and prospective customers include semiconductor foundries, silicon photonics device designers, optical module manufacturers, and system integrators serving data center, cloud computing, telecommunications, and emerging artificial intelligence (“AI”) infrastructure markets. We pursue customer adoption through a structured commercialization process designed to support evaluation, integration, qualification, and production readiness within established semiconductor manufacturing ecosystems.
As of the date of this report, multiple customer programs are progressing through defined development stages under our commercialization framework. The timing and scale of potential production revenue depend on customer product qualification and adoption cycles, technical validation, manufacturing readiness, end-market demand, and broader industry conditions.
Unless the context otherwise requires, all references to the “Company,” “we,” “our” or “us” and other similar terms means Lightwave Logic, Inc. Also, this Form 10-Q Quarterly Report may include the names of various government agencies and the trade names of other companies. Unless specifically stated otherwise, the use or display by us of such other parties’ names and trade names in this report is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, any of these other parties.
Commencement of Commercial Operations
We commenced commercial operations in May 2023. Presently, our commercial operations consist of a material supply and license agreement to provide Perkinamine® chromophore materials for polymer based photonic devices and photonic integrated circuits (PICs). The license agreement represents tangible commercial progress for electro-optic polymers as part of our Company's business plan. During 2025, we entered into a non-recurring engineering joint development arrangement with a customer to develop an electro-optical polymer-based modulator chip for use in communication applications.
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Our Electro-Optic Polymer Technology
Our technology platform is based on the design, synthesis, and integration of proprietary electro-optic polymer materials engineered to exhibit strong electro-optic (“EO”) activity, optical transparency in relevant wavelength bands, and compatibility with semiconductor fabrication processes.
Electro-optic polymers utilize engineered chromophore molecules embedded within a polymer matrix. When an electric field is applied, the optical properties of the material change in a manner that can be used to modulate light propagating through a waveguide structure. The strength of this electro-optic response, combined with the material’s processability, is central to device performance and manufacturability.
Our Perkinamine® materials are designed to:
| • | Support high-speed optical modulation suitable for advanced data rate standards, |
| • | Enable high-bandwidth performance through strong electro-optic coefficients, |
| • | Operate at relatively low drive voltages, |
| • | Be deposited and patterned using processes compatible with semiconductor manufacturing environments, and |
| • | Maintain stability under operational and environmental stress conditions required by customer applications. |
Because electro-optic polymers can be applied directly within waveguide structures, they may allow modulator architectures with shorter interaction lengths compared to certain alternative material systems. Shorter interaction lengths can contribute to more compact device geometries and increased integration density within photonic integrated circuits.
The compatibility of our materials with complementary metal oxide semiconductor (“CMOS”) fabrication processes, including back-end-of-line integration flows, is designed to facilitate incorporation into silicon photonics platforms using established foundry infrastructure rather than requiring dedicated fabrication facilities.
We continue to invest in material optimization, including improvements in electro-optic efficiency, thermal stability, expansion across additional wavelengths, environmental robustness, and process integration parameters. Material formulation, device architecture, and integration techniques are developed in parallel to support customer-specific performance and reliability requirements.
Commercial deployment of devices incorporating our materials depends on successful integration within customer and foundry process flows, achievement of reliability standards, and attainment of yield and cost targets.
Business Model - Material + IP Licensing
Our business model is centered on the commercialization of proprietary electro-optic polymer materials and related intellectual property through material supply and licensing arrangements.
We do not currently intend to manufacture finished optical transceivers, discrete photonic devices, or complete optical modules. Our strategy is to enable customers to incorporate our materials into their own device platforms and manufacturing ecosystems, leveraging established semiconductor foundry infrastructure.
Our revenue model may include one or more of the following components:
Material Sales
We supply EO polymer materials to customers for evaluation, prototyping, and potential commercial production. Material sales may occur during development phases as well as during volume manufacturing, subject to customer qualification and demand.
If customer programs transition to commercial production incorporating our materials, material revenue would be expected to scale with device volumes.
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Intellectual Property Licensing
We may enter into licensing agreements covering aspects of our polymer compositions, device designs, integration processes, and related intellectual property. Licensing arrangements may include: upfront license fees, development or milestone-based payments, and field-of-use or application-specific licenses.
The structure and economics of such agreements vary depending on customer requirements and the scope of intellectual property granted.
Royalty or Production-Based Fees
In certain arrangements, we may receive royalties or other production-based payments tied to the manufacture or sale of devices incorporating our materials or licensed technology. The structure, rate, and duration of such payments depend on negotiated terms and customer product lifecycles.
There can be no assurance that any given customer program will result in royalty-bearing production.
Revenue Timing Considerations
Customer engagements typically progress through multi-stage development cycles. During early stages, revenue may consist primarily of material sales, non-recurring engineering (“NRE”) fees, prototype-related activities, or development support.
Based on the current status of customer programs, we anticipate that revenues, if any, recognized during 2026 would primarily relate to material supply, NRE arrangements, or prototype and development activities. We do not currently expect significant revenue from volume commercial production of customer products until 2028 at the earliest. The timing and magnitude of any production-related revenue depend on successful product qualification, yield validation, customer adoption decisions, end-market demand, and broader industry conditions.
There can be no assurance that development-stage programs will transition to volume production, that anticipated timelines will be achieved, or that commercial revenues will occur as expected.
Strategic Flexibility
While our current strategy is focused on materials supply and intellectual property licensing, we may evaluate selective opportunities to participate more directly in device-level development in limited circumstances. Such participation, if pursued, would likely be application-specific and would depend on market conditions, partnership opportunities, capital requirements, and strategic considerations.
We have not committed to entering device manufacturing as a core component of our business model, and any such activity would be evaluated in the context of our overall capital allocation priorities and commercialization strategy.
Operating Leverage
Our model is designed to leverage existing semiconductor fabrication infrastructure rather than require capital-intensive wafer fabrication facilities. By integrating into established foundry process flows, we seek to enable scalable production through customer and foundry manufacturing capacity.
If customer programs advance to high-volume production, incremental material demand and royalty streams may provide operating leverage due to the intellectual property-driven nature of our model. However, realization of such leverage depends on successful qualification, customer adoption, competitive dynamics, and end-market demand.
Commercialization Process (Design Win Cycle)
We pursue customer adoption through a structured, multi-stage engagement framework that we refer to as our Design Win Cycle. This process is designed to guide customer programs from initial technology evaluation through potential production ramp within established semiconductor manufacturing ecosystems.
While program timelines vary based on customer requirements, foundry schedules, application complexity, and market conditions, the Design Win Cycle typically spans approximately 18 to 24 months.
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Progression between stages depends on the achievement of defined technical and commercial milestones. Advancement to later stages does not assure commercial production.
Stage 1 – Technology Selection
(Typically 3–6 Months)
Stage 2 – Product Design
(Typically 3–6 Months)
Stage 3 – Prototype to Final Product
(Typically 12–18 Months)
Stage 4 – Production Ramp to High Volume
Commercial production typically requires achievement of customer-defined qualification milestones, acceptable manufacturing yields, cost targets, and confirmed end-market demand.
Based on the current status of customer programs, we anticipate that revenues, if any, recognized during 2026 would primarily relate to material supply, NRE arrangements, or prototype and development activities. We do not currently expect significant revenue from high-volume commercial production of customer products until 2028 at the earliest.
There can be no assurance that programs currently in development will successfully transition to commercial production, that foundry capacity will be available as anticipated, or that projected timelines will be achieved.
Capital Requirements
We have satisfied our capital requirements since inception primarily through the issuance and sale of our common stock.
Results of Operations
Comparison of three months ended September 30, 2026 and September 30, 2025
Revenues
During the three months ended September 30, 2026, we recognized $37,500 of licensing and royalty revenue. During the three months ended September 30, 2025, we recognized $29,166 of licensing and royalty revenue.
Cost of Sales
During the three months ended September 30, 2026, we recognized $705 in cost of sales. During the three months ended September 30, 2025, we recognized $0 in cost of sales.
Operating Expenses
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | Change | Percent Change | |||||||||||||
| Research and development | $ | 4,342,078 | $ | 2,917,473 | $ | 1,424,605 | 49 | % | ||||||||
| General and administrative | 3,677,238 | 2,290,839 | 1,386,399 | 61 | % | |||||||||||
| $ | 8,019,316 | $ | 5,208,312 | $ | 2,811,004 | 54 | % | |||||||||
Research and development expenses increased for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to increases in salary and employee benefits expenses and payroll taxes, prototype device development expenses, and laboratory materials and supplies expenses.
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We expect to continue to incur substantial research and development expenses developing and commercializing our electro-optic materials platform. These expenses will increase because of accelerated development efforts to support commercialization of our electro-optic polymer materials technology and create next-generation photonic EO device designs; working with semiconductor foundries; hiring additional technical and support personnel; engaging senior technical advisors; pursuing other potential business opportunities and collaborations; customer testing and evaluation; and incurring related operating expenses.
General and administrative expenses increased for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to increases in non-cash stock-based compensation expenses, accounting and professional services fees, travel expenses, salary and employee benefits expenses and payroll taxes, recruiting fees, legal fees, insurance expenses, and outside services fees.
Other Income, net
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | Change | Percent Change | |||||||||||||
| Other Income | $ | 760,568 | $ | 78,587 | $ | 681,981 | 868 | % | ||||||||
Other income increased for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to an increase in interest income earned on higher cash balances and investments in marketable securities, offset by a loss due to disposal of certain expired patents and patent applications and fixed assets.
Net Loss
| Three Months Ended September 30, 2026 |
Three Months Ended September 30, 2025 |
Change | Percent Change |
|||||||||||||
| Net Loss | $ | 7,221,953 | $ | 5,100,559 | $ | 2,121,394 | 42 | % | ||||||||
Net loss was $7,221,953 and $5,100,559 for the three months ended September 30, 2026 and 2025, respectively, for an increase of $2,121,394 due primarily to increases in entity-wide salary and employee benefits expenses and payroll taxes, prototype and device development expenses, non-cash stock-based compensation expenses, accounting, professional and outside service fees, laboratory materials and supplies expenses, travel expenses, recruiting fees, legal fees, insurance fees, and loss on disposal of certain expired patents and patent applications and fixed assets, offset by an increase in interest income.
Comparison of nine months ended September 30, 2026 and September 30, 2025
Revenues
During the nine months ended September 30, 2026, we recognized $99,418 of licensing and royalty revenue. During the nine months ended September 30, 2025, we recognized $77,688 of licensing and royalty revenue.
Cost of Sales
During the nine months ended September 30, 2026, we recognized $2,041 in cost of sales. During the nine months ended September 30, 2025, we recognized $5,491 in cost of sales.
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Operating Expenses
| Nine Months Ended September 30, 2026 |
Nine Months Ended September 30, 2025 |
Change |
Percent Change |
|||||||||||||
| Research and development | $ | 11,711,076 | $ | 8,628,132 | $ | 3,082,944 | 36 | % | ||||||||
| General and administrative | 10,363,292 | 6,428,775 | 3,934,517 | 61 | % | |||||||||||
| $ | 22,074,368 | $ | 15,056,907 | $ | 7,017,461 | 47 | % | |||||||||
Research and development expenses increased for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to increases in salary and employee benefits expenses and payroll taxes, prototype development expenses, laboratory materials and supplies expenses, and non-cash stock-based compensation expenses.
We expect to continue to incur substantial research and development expenses developing and commercializing our electro-optic materials platform. These expenses will increase because of accelerated development efforts to support commercialization of our non-linear optical polymer materials technology and create next-generation photonic EO device designs; working with semiconductor foundries; hiring additional technical and support personnel; engaging senior technical advisors; pursuing other potential business opportunities and collaborations; customer testing and evaluation; and incurring related operating expenses.
General and administrative expenses increased for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to increases in non-cash stock-based compensation expenses, salary and employee benefits expenses and payroll taxes, accounting and professional services fees, recruiting fees, travel expenses, board of directors fees, legal fees, software expenses, and insurance expenses.
Other Income, net
| |
|
Nine Months Ended September 30, 2026 |
|
|
Nine Months Ended September 30, 2025 |
|
|
Change |
|
|
Percent Change |
|
||||
| Other Income | $ | 1,840,701 | $ | 220,494 | $ | 1,620,207 | 735 | % | ||||||||
Other income increased for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to an increase in interest income earned on higher cash balances and investments in marketable securities, offset by a loss due to disposal of certain expired patents and patent applications and fixed assets.
Net Loss
| Nine Months Ended September 30, 2026 |
Nine Months Ended September 30, 2025 |
Change |
Percent Change |
|||||||||||||
| Net Loss | $ | 20,136,290 | $ | 14,764,216 | $ | 5,372,074 | 36 | % | ||||||||
Net loss was $20,136,290 and $14,764,216 for the nine months ended September 30, 2026 and 2025, respectively, for an increase of $5,372,074 due primarily to increases in entity-wide salary and employee benefits expenses and payroll taxes, non-cash stock compensation expense, prototype device development expenses, laboratory materials and supplies expenses, accounting and professional services fees, recruiting fees, travel expenses, board of directors fees, and loss on disposal of certain expired patents and patent applications and fixed assets, offset by an increase in interest income.
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Liquidity and Capital Resources
Our primary sources of liquidity during the nine months ended September 30, 2026 were (i) proceeds from sale of common stock by Roth Capital Partners, LLC (investment banking company) (“Roth Capital”) pursuant to the at-the-market sales agreement with Roth Capital as described in Note 10 to the Financial Statements, (ii) proceeds from the sale of common stock to Titan Partners Group LLC (investment banker) (“Titan”), and (iii) proceeds received pursuant to the exercise of options and warrants.
On December 15, 2025, we entered into an underwriting agreement (the “Underwriting Agreement”) with Titan Partners Group LLC, a division of American Capital Partners, LLC, as the underwriter (the “Underwriter”), relating to an underwritten public offering of 11,666,667 shares of the Company’s common stock, par value $0.001 per share, at a price to the public of $3.00 per share (the “Titan Offering”). Pursuant to the Underwriting Agreement, we granted to the Underwriter an option, exercisable not later than thirty (30) days after the date of the closing of the Offering, to purchase from us up to 1,750,000 additional shares of common stock for the purpose of covering over-allotments, if any. The Offering closed on December 17, 2025. On January 8, 2026, the Company closed on the Underwriter’s exercise of the option, and issued an additional 1,750,000 shares of its common stock. The net proceeds to us from the Offering were approximately $32.8 million during the year ended December 31, 2025, and approximately $4.9 million in January 2026, after deducting underwriting discounts and commissions and other estimated offering expenses payable by us. We intend to use the net proceeds from the Offering for working capital and other general corporate purposes and may use a portion of the net proceeds to accelerate our commercialization timeline, accelerate and expand our U.S. production capacity to support customer partnerships and design-ins, to pursue strategic mergers and acquisitions or to invest in complementary technologies or businesses. Pursuant to the Underwriting Agreement, we 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 of 52,500 shares of common stock, which were issued upon the exercise by the Underwriter of its over-allotment option. The underwriter warrants were immediately exercisable at an exercise price of $3.45 per share during the five-year period following the date of the Underwriting Agreement. On April 14, 2026, all 402,500 underwriter warrants were exercised for proceeds of $1,388,625.
On December 9, 2022, we entered into the at-the-market sales agreement with Roth Capital, as sales agent, (the “Roth Sales Agreement”) pursuant to which we could offer and sell up to $35,000,000 in shares of our registered common stock, from time to time through Roth Capital. On April 20, 2026, the Company entered into an amendment to its sales agreement with Roth Capital to increase the amount of shares of common stock that may be sold under the Roth Sales Agreement to $51,404,500. As of September 30, 2026 and as of the date of this filing, pursuant to the sales agreement, the Company has sold $51,401,115 in shares of common stock and has $3,385 in shares remaining available to the Company per the agreement.
During the nine months ended September 30, 2026, the Company received $27,883,977 in net proceeds pursuant to the Roth Sales Agreement, $4,930,928 in net proceeds from the exercise of over-allotment option from the Titan Offering, $1,362,932 in net proceeds from the exercise of underwriter warrants, and $6,948,719 in proceeds from the exercise of options.
During the nine months ended September 30, 2026, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including laboratory and wafer fabrication materials and supplies expenses, and third-party consultants and professional services providers.
Sources and Uses of Cash
Our future expenditures and capital requirements will depend on numerous factors, including: the progress of our research and development efforts; the rate at which we can, directly or through arrangements with original equipment manufacturers, introduce and sell our products; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; market acceptance of our products and competing technological developments; and our ability to establish cooperative development, joint venture and licensing arrangements. On September 30, 2026, our cash and cash equivalents totaled $17,566,678 and our liquid investments in marketable securities totaled $70,277,228.
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We expect the proceeds received pursuant to the Titan Offering and the Roth Sales Agreement, the exercise of options and warrants, and commercial operations to provide us with sufficient funds to finance our operations at least through March 2028. Our cash requirements are expected to increase as we continue to advance the commercialization of our electro-optic polymer technology and expand our research and development, production-readiness, commercial, and other operating activities. We currently have no debt to service. We expect that our cash used in operations will continue to increase during 2026 and beyond because of the following planned activities:
| • | The addition of management, sales, marketing, technical, production and other staff to our workforce; | |
| • | Increased spending for the expansion of our research and development efforts, including purchases of additional laboratory and production equipment; | |
| • | Increased spending on commercial and marketing activities as customer programs advance through evaluation, qualification and production readiness; | |
| • | Partnering with commercial foundries to implement our electro-optic polymers into accepted PDKs by the foundries; | |
| • | Developing and maintaining collaborative relationships with strategic partners; | |
| • | Developing and improving our manufacturing processes and quality controls; and | |
| • | Increases in our general and administrative activities related to our operations as a reporting public company and related corporate compliance requirements. |
Analysis of Cash Flows
For the nine months ended September 30, 2026
Net cash used in operating activities was $15,044,699 for the nine months ended September 30, 2026, primarily attributable to the net loss of $20,136,290 adjusted by $1,192,173 in stock options issued for services, $217,085 in amortization of deferred compensation, $3,710,518 in amortization of restricted stock units, $6,146 in stock-based compensation expense related to phantom units, $1,519,388 in depreciation and amortization of patents, $163,708 in amortization of a right-of-use asset, ($303,152) in accretion of interest on marketable securities, $94,590 in loss on disposal of property and equipment and intangible assets, $137,124 in accounts receivable, ($1,297,476) in prepaid expenses and other current assets, and ($348,513) in accounts payable, accrued bonuses, accrued expenses, contract liabilities, and lease liabilities. Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, salaries, rent and other expenditures necessary to develop our business infrastructure.
Net cash used by investing activities was $73,337,841 for the nine months ended September 30, 2026, consisting of $340,569 in cost of intangibles, $2,896,088 in asset additions for the Colorado headquarters facility and labs, and $72,101,184 in purchases of marketable securities, partially offset by $2,000,000 in maturities of marketable securities.
Net cash provided by financing activities was $36,931,864 for the nine months ended September 30, 2026, and consisted of $6,948,719 in proceeds from exercise of options, $1,362,932 in proceeds from the exercise of underwriter warrants under the Titan agreement, ($3,713,589) in tax payments on net issuance of vested restricted stock units, ($481,103) in tax payment on net issuance of performance stock units in the prior period, $4,930,928 in proceeds from common stock issuance from the exercise of the overallotment option from the Titan Offering, and $27,883,977 in proceeds from the sale of common stock pursuant to the Roth Sales Agreement.
On September 30, 2026, our cash and cash equivalents totaled $17,566,678, our assets totaled $100,631,124, our liabilities totaled $3,715,949 and we had stockholders’ equity of $96,915,175.
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For the nine months ended September 30, 2025
Net cash used in operating activities was $10,436,426 for the nine months ended September 30, 2025, primarily attributable to the net loss of $14,764,216 adjusted by $1,693,640 in options issued for services, $482,613 amortization of deferred compensation, $556,575 amortization of performance stock units, $488,978 amortization of restricted stock units, $324,040 in common stock issued as commitment shares under the 2023 and 2025 Purchase Agreements, $1,434,610 in depreciation expenses and patent amortization expenses, $152,702 amortization of right of use asset, $28,800 gain on disposal of property and equipment, $34,425 loss due to retirement of certain expired patent applications, $9,812 in accounts receivable, ($80,950) in prepaid expenses and other current assets, and ($739,855) in accounts payable, accrued bonuses, accrued expenses, contract liability and other liabilities. Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, salaries, rent and other expenditures necessary to develop our business infrastructure.
Net cash used by investing activities was $1,226,376 for the nine months ended September 30, 2025, consisting of $273,192 in cost for intangibles and $953,184 in asset additions for the Colorado headquarter facility and labs.
Net cash provided by financing activities was $18,936,908 for the nine months ended September 30, 2025, and consisted of $250,679 in proceeds from exercise of options, $171,926 cashless option exercise tax payments, $12,875 cashless tax payment on vested restricted stock awards, $4,493,488 in proceeds from the sale of common stock pursuant to the 2023 and 2025 Purchase Agreements and $14,377,542 in proceeds from the sale of common stock pursuant to the Roth Sales Agreement.
On September 30, 2025, our cash and cash equivalents totaled $34,942,070, our assets totaled $44,786,666, our liabilities totaled $3,596,154 and we had stockholders’ equity of $41,190,512.
Contractual Obligations
See “Note 8–Leases” of the notes to the financial statements herein for a discussion of our operating lease for office and laboratory space.
Significant Accounting Policies
We believe our significant accounting policies affect our more significant estimates and judgments used in the preparation of our financial statements. Our 2025 Form 10-K contains a discussion of these significant accounting policies. The Company’s significant accounting policies have not materially changed since that report was filed.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are not required to provide quantitative and qualitative disclosures about market risk because we are a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of September 30, 2026. Based on this evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that, as of September 30, 2026 the Company’s disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any litigation of a material nature, nor are we aware of any threatened litigation of a material nature.
Item 1A. Risk Factors
In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors in our 2025 Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or future results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
During the three months ended
September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
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Item 6. Exhibits
The following exhibits are included herein:
| Incorporated by Reference | Filed or | |||||||||
| Exhibit No. | Exhibit Description | Form | Exhibit Number | Filing Date |
Furnished Herewith | |||||
| 3.1 | Amended and Restated Articles of Incorporation of Lightwave Logic, Inc. (conformed copy incorporating all amendments through June 8, 2015) | 10-Q | 3.1 | 11/14/2025 | ||||||
| 3.2 | Second Amended and Restated Bylaws - September 18, 2024 | 8-K | 3.1 | 6/25/2024 | ||||||
| 10.1 | Employment Agreement between Fred Graffam and Lightwave Logic, Inc., dated July 20, 2026 | 8-K | 10.1 | 7/20/2026 | ||||||
| 31.1 | 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. | Filed herewith | ||||||||
| 31.2 | 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. | Filed herewith | ||||||||
| 32.1 | 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 | ||||||||
| 32.2 | 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 | ||||||||
| 101-INS | 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) | Filed herewith | ||||||||
| 101-SCH | Inline XBRL Taxonomy Extension Schema Document | Filed herewith | ||||||||
| 101-CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | ||||||||
| 101-DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith | ||||||||
| 101-LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Filed herewith | ||||||||
| 101-PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith | ||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | Filed herewith | ||||||||
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SIGNATURES
Pursuant to the requirements 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.
Registrant
| By: | /s/ Yves LeMaitre | |
| Yves LeMaitre, | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Date: November 13, 2026
| By: | /s/ Fred Graffam | |
|
Fred Graffam, Chief Financial Officer |
||
| (Principal Financial Officer) |
Date: November 13, 2026
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