STOCK TITAN

Lightwave Logic (NASDAQ: LWLG) posts Q1 2026 loss but ends quarter with $75M cash

Filing Impact
(Moderate)
Filing Sentiment
(Neutral)
Form Type
10-Q

Rhea-AI Filing Summary

Lightwave Logic, Inc. reports Q1 2026 results with net sales of $29,167 from its initial polymer material supply and license agreement, up from $22,917 a year earlier, and a net loss of $6,300,540, or $0.04 per share. Research and development expenses rose to $3,490,295 and general and administrative expenses to $3,262,866, driven by higher headcount, stock-based compensation, and development activity. The company ended the quarter with $75,102,750 in cash and cash equivalents and total assets of $85,913,064, stating this cash position is expected to fund operations at least through December 2027. Management continues to focus on commercializing its Perkinamine electro‑optic polymer platform via material sales, licensing, and joint development, and does not yet rely on high-volume production revenue.

Positive

  • None.

Negative

  • None.

Insights

Lightwave remains pre-revenue with rising spend but a strong cash runway.

Lightwave Logic generated Q1 2026 net sales of only $29,167, while posting a net loss of $6.3M. Operating expenses reached $6.75M, reflecting intensified R&D and higher general and administrative costs, including share-based compensation.

The company held $75.1M of cash at March 31, 2026 and states this should finance operations through at least December 2027. There is no debt, and recent equity raises and at-the-market sales have significantly strengthened the balance sheet but diluted shareholders.

Management indicates that 2026 revenue will mainly come from material supply and development work, with meaningful volume production revenue not expected until at least 2027. Future filings will clarify whether customer programs progress from development to commercial production and how operating losses evolve relative to the current cash runway.

Net sales $29,167 Three months ended March 31, 2026
Net loss $6,300,540 Three months ended March 31, 2026
Research and development expense $3,490,295 Three months ended March 31, 2026
General and administrative expense $3,262,866 Three months ended March 31, 2026
Cash and cash equivalents $75,102,750 Balance at March 31, 2026
Total assets $85,913,064 Balance at March 31, 2026
Total stockholders’ equity $81,311,907 Balance at March 31, 2026
Operating cash outflow $4,061,179 Net cash used in operating activities, Q1 2026
electro-optic polymer technical
"a specialty materials and intellectual property company focused on the development and commercialization of proprietary electro-optic (“EO”) polymer materials"
at-the-market offering financial
"the Company may offer and sell shares of its common stock having an aggregate offering price of up to $35,000,000 from time to time through or to the investment banking company, as sales agent or principal (described as an “at-the-market offering”)"
An at-the-market offering is a method companies use to sell new shares of stock directly into the open market over time, rather than all at once. This allows them to raise money gradually, similar to selling small pieces of a product instead of a large batch. For investors, it means the company can access funding more flexibly, but it may also increase the supply of shares and influence the stock’s price.
non-recurring engineering financial
"non-recurring engineering revenue from joint development agreements"
ASC 606 regulatory
"The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers."
A U.S. accounting standard that sets consistent rules for when and how companies record revenue from contracts with customers, focusing on the transfer of promised goods or services. It matters to investors because it affects the timing and amount of reported sales and profit—like deciding whether a contractor can count payment when a job starts, progresses, or finishes—so it improves comparability and helps assess a company's true economic performance.
performance stock units financial
"Performance stock units are subject to both performance-based and service vesting requirements."
Performance stock units are a type of company award that grants employees shares of stock only if certain performance goals are met. They motivate employees to work toward specific company achievements, aligning their interests with those of shareholders. For investors, they can influence a company's future stock supply and reflect management’s confidence in reaching key targets.
Design Win Cycle technical
"We pursue customer adoption through a structured, multi-stage engagement framework that we refer to as our Design Win Cycle."
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

 

FORM 10-Q

____________________

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2026

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____________to _____________

 

Commission File Number 001-40766

 

Lightwave Logic, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

(State or other jurisdiction of

incorporation or organization)

82-0497368

 (I.R.S. Employer Identification No.)

 

369 Inverness Parkway, Suite 350

Englewood, CO

(Address of principal executive offices)

80112

(Zip Code)

 

(720) 340-4949

(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
Common Stock, $0.001 par value per share LWLG The Nasdaq Stock Market

 

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. Yes  No 

 

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). Yes  No 

 

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                  
Non-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  No 

  

The number of shares of the registrant’s common stock outstanding as of May 15, 2026 was 154,079,632.

   

 
 

 

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 24
       
  Item 3 Quantitative and Qualitative Disclosures About Market Risk 31
       
  Item 4 Controls and Procedures 31
       
Part II  Other Information 32
       
  Item 1 Legal Proceedings 32
       
  Item 1A Risk Factors 32
       
  Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 32
       
  Item 3 Defaults Upon Senior Securities 32
       
  Item 4 Mine Safety Disclosures 32
       
  Item 5 Other Information 32
       
  Item 6 Exhibits 33
       
    Signatures 34
       

 

 

  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

 

MARCH 31, 2026

 

 

(UNAUDITED)

 

 

 

 
 

 

CONTENTS

 

 

  PAGE
BALANCE SHEETS 2
STATEMENTS OF COMPREHENSIVE LOSS 3
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY 4
STATEMENTS OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6- 23

 

 

 

 

1 
 

 

LIGHTWAVE LOGIC, INC.

BALANCE SHEETS

         
   March 31, 2026   December 31, 2025 
    (Unaudited)      
 ASSETS          
 CURRENT ASSETS          
 Cash and cash equivalents  $75,102,750   $69,017,354 
 Accounts Receivable   215,753    190,753 
 Prepaid expenses and other current assets   1,183,454    601,101 
TOTAL CURRENT ASSETS    76,501,957    69,809,208 
           
 PROPERTY AND EQUIPMENT - net of accumulated depreciation of $8,277,725 and $7,802,183, respectively   5,194,882    5,222,252 
           
 OTHER ASSETS          
 Intangible assets - net of accumulated amortization of $398,202 and $473,771, respectively   1,829,433    1,713,420 
 Operating Lease - Right of Use - Building   2,386,792    2,440,369 
TOTAL OTHER ASSETS   4,216,225    4,153,789 
           
 TOTAL ASSETS  $85,913,064   $79,185,249 
           
           
 LIABILITIES AND STOCKHOLDERS' EQUITY          
 CURRENT LIABILITIES          
 Accounts payable  $779,716   $477,939 
 Accrued bonuses and accrued expenses   1,266,857    1,400,008 
 Accounts payable and accrued expenses - related parties       56,250 
 Contract liability   2,375    6,541 
 Operating lease liability   201,821    194,770 
TOTAL CURRENT LIABILITIES    2,250,769    2,135,508 
           
 LONG TERM LIABILITIES          
 Operating lease liability   2,350,388    2,403,911 
TOTAL LONG TERM LIABILITIES    2,350,388    2,403,911 
           
 TOTAL LIABILITIES   4,601,157    4,539,419 
           
 STOCKHOLDERS' EQUITY          
           
Preferred stock, $0.001 par value, 1,000,000 authorized, no shares issued or outstanding        
Common stock $0.001 par value, 250,000,000 authorized, 150,500,710 and 146,050,506 issued and outstanding at March 31, 2026 and December 31, 2025, respectively   150,502    146,051 
Additional paid-in-capital   254,934,925    242,016,025 
Deferred compensation   (160,192)   (203,458)
Accumulated deficit   (173,613,328)   (167,312,788)
           
 TOTAL STOCKHOLDERS' EQUITY   81,311,907    74,645,830 
           
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $85,913,064   $

79,185,249

 

 

  

See accompanying notes to these financial statements.

 

 

2 
 

 

 

LIGHTWAVE LOGIC, INC.

STATEMENTS OF COMPREHENSIVE LOSS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(UNAUDITED)

         
   2026   2025 
         
         
NET SALES  $29,167   $22,917 
           
COST AND EXPENSE          
Cost of sales   1,336    2,028 
Research and development   3,490,295    3,089,218 
General and administrative   3,262,866    1,837,052 
TOTAL COST AND EXPENSE    6,754,497    4,928,298 
           
LOSS FROM OPERATIONS   (6,725,330)   (4,905,381)
           
OTHER INCOME (EXPENSES)          
Interest income   461,275    187,848 
Commitment fee       (8,029)
Gain (loss) on disposal of property and equipment and intangible assets   (36,409)   28,800 
Other expense   (76)   (262)
           
           
NET LOSS  $(6,300,540)  $(4,697,024)
           
LOSS PER SHARE          
Basic and diluted  $(0.04)  $(0.04)
           
WEIGHTED AVERAGE NUMBER OF SHARES          
Basic and diluted   148,086,169    123,931,841 

 

See accompanying notes to these financial statements

 

 

3 
 

 

LIGHTWAVE LOGIC, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(UNAUDITED, RESTATED)

                         
   Three Months Ended March 31, 2026 
                         
 
 
 
 
 
 
 
 
 
 
Number of
Shares
 
 
 
 
 
 
 
 
 
 
 Common 
 Stock 
 
 
 
 
 
 
 
 
 
Additional
 Paid-in 
 Capital 
 
 
 
 
 
 
 
 
 
 
 Deferred 
 Compensation 
 
 
 
 
 
 
 
 
 
 
Accumulated
 Deficit 
 
 
 
 
 
 
 
 
 
 
 
 Total 
 
 
 
                               
BALANCE AT DECEMBER 31, 2025   146,050,506   $146,051   $242,016,025   $(203,458)  $(167,312,788)  $74,645,830 
                               
Common stock sales at the market by investment banking company   829,741    830    6,543,577            6,544,407 
Common stock issued to investment bank   1,750,000    1,750    4,929,178            4,930,928 
Exercise of options   1,167,936    1,168    1,860,951            1,862,119 
Cashless exercise of 200,000 options   186,030    186    (186)            
Options issued for services           331,530            331,530 
Restricted stock units issued for services, net of share settlement for taxes   516,497    517    (746,150)           (745,633)
Deferred compensation               43,266        43,266 
Net loss for the three months ended March 31, 2026                   (6,300,540)   (6,300,540)
                               
BALANCE AT MARCH 31, 2026 (UNAUDITED)   150,500,710   $150,502   $254,934,925   $(160,192)  $(173,613,328)  $81,311,907 

 

 

                         
   Three Months Ended March 31, 2025 
                         
 
 
 
 
 
 
 
 
 
 
Number of
Shares
 
 
 
 
 
 
 
 
 
 
 Common 
 Stock 
 
 
 
 
 
 
 
 
 
Additional
 Paid-in 
 Capital 
 
 
 
 
 
 
 
 
 
 
 Deferred 
 Compensation 
 
 
 
 
 
 
 
 
 
 
Accumulated
 Deficit 
 
 
 
 
 
 
 
 
 
 
 
 Total 
 
 
 
                               
BALANCE AT DECEMBER 31, 2024 (as restated) (see Note 2)   123,301,653   $123,302   $180,956,329   $(656,735)  $(146,998,991)  $33,423,905 
                               
Common stock issued to institutional investor   1,035,881    1,036    1,485,947            1,486,983 
Common stock issued for commitment shares   5,046    5    8,024            8,029 
Common stock sales at the market by investment banking company   50,000    50    116,385            116,435 
Exercise of options   225,000    225    163,275            163,500 
Cashless exercise of 50,000 options   16,942    17    20,483            20,500 
Options issued for services           749,042            749,042 
Options issued to settle accrued bonuses           48,068            48,068 
Restricted stock awards issued for services   20,000    20    29,980    (30,000)        
Deferred compensation               230,150        230,150 
Net loss for the three months ended March 31, 2025                   (4,697,024)   (4,697,024)
                               
BALANCE AT MARCH 31, 2025 (as restated) (UNAUDITED)   124,654,522   $124,655   $183,577,533   $(456,585)  $(151,696,015)  $31,549,588 

 

 

 

See accompanying notes to these financial statements

 

 

4 
 

  

 

LIGHTWAVE LOGIC, INC.

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(UNAUDITED)

         
   2026   2025 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net loss  $(6,300,540)  $(4,697,024)
Adjustments to reconcile net loss to net cash used in operating activities          
Stock options issued for services   331,530    749,042 
Amortization of deferred compensation   43,266    230,150 
Restricted stock units issued for services   1,342,733     
Cashless option exercise       20,500 
Common stock issued for commitment shares       8,029 
Depreciation and amortization of patents   496,358    454,960 
Amortization of right of use asset   53,577    50,043 
(Gain) loss on disposal of property and equipment and intangible assets   36,409    (28,800)
(Increase) decrease in assets          
Accounts receivable   (25,000)   26,815 
Prepaid expenses and other current assets   (582,353)   (86,608)
(Decrease) increase in liabilities          
Accounts payable   301,777    41,511 
Accrued bonuses and accrued expenses   347,951    (271,457)
Accounts payable and accrued expenses-related parties   (56,250)   56,945 
Contract liability   (4,166)   (4,167)
Operating lease liability   (46,471)   (40,070)
           
Net cash used in operating activities   (4,061,179)   (3,490,131)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Cost of intangibles   (170,944)   (45,878)
Purchase of property and equipment   (450,466)   (853,544)
           
Net cash used in investing activities   (621,410)   (899,422)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Exercise of options   1,862,119    163,500 
Tax payment on net issuance of vested restricted stock units   (2,088,366)    
Tax payment on net issuance of performance stock units   (481,103)    
Issuance of common stock, institutional investor       1,486,983 
Issuance of common stock to investment bank   4,930,928     
Common stock sales at the market by investment banking company   6,544,407    116,435 
           
Net cash provided by financing activities   10,767,985    1,766,918 
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   6,085,396    (2,622,635)
           
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD   69,017,354    27,667,964 
           
CASH AND CASH EQUIVALENTS - END OF PERIOD  $75,102,750   $25,045,329 
           
           
Supplemental Disclosure of Non-cash activities          
Options issued to settle accrued bonuses  $   $48,068 
Trade-in credit for purchase of property and equipment  $   $28,800 
Restricted stock awards issued for services  $   $30,000 

 

 

See accompanying notes to these financial statements

 

5 
 

 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 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 its normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting polices described in the Summary of Significant Accounting Policies included in the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 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 firmly believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the 2025 Annual Report. The interim operating results for the three months ended March 31, 2026 may not be indicative of operating results expected for the full year.

 

History and Nature of Business

Lightwave Logic, Inc. is a specialty materials and intellectual property company focused on the development and commercialization of proprietary electro-optic (“EO”) polymer materials designed to enable high-speed optical modulators for data communications and other photonic applications.

 

Our Perkinamine® family of EO polymer materials is engineered for integration into silicon photonics (“SiPh”) and other photonic integrated circuit (“PIC”) platforms. When incorporated into device architectures, these materials are designed to support high-speed, high-bandwidth optical modulation with lower drive voltage requirements relative to certain conventional silicon-based approaches and certain other traditional photonic material systems, including III-V–based 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 artificial intelligence (“AI”), cloud computing, data center, and telecommunications markets. We pursue customer adoption through a structured commercialization process designed to support evaluation, integration, qualification, and production readiness within established semiconductor manufacturing ecosystems.

 

Lightwave Logic, Inc. was organized under the laws of the State of Nevada in 1997, and it commenced with its current business plan in 2024.

 

Fair Value of Financial Instruments

 

The carrying values of the Company’s short-term financial instruments such as cash, accounts receivable, prepaid expenses and other assets, accounts payable and accrued expenses approximate fair values due to the short-term nature of these instruments.

 

Revenue Recognition and Contract Liability

 

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Under ASC 606, revenue is recognized when control of goods or services is transferred to a customer in an amount that reflects the consideration to which the Company expects to be entitled.

 

 

6 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 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 includes 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 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.

 

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 of a multi-project wafer chip produced at a mutually agreed upon foundry, the design and post processing of fabricated chips, and complete product verification and volume manufacturing preparation, with each party to the agreement having responsibility over various deliverables for each phase.

 

The Company evaluated the arrangement under ASC 808, Collaborative Arrangements, and concluded the arrangement meets the definition of a collaborative arrangement. The Company also concluded that certain promised services within the arrangement represent units of account with a customer and therefore are within the scope of ASC 606. Consideration received from the customer for such services is presented as net sales in the accompanying financial statements.

 

 

7 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

 

NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Revenue Recognition and Contract Liability (Continued)

 

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 $130,000, which the Company recognized in net sales upon completion and delivery to the customer of the Phase 1 products and services. Phase 2 consideration was $200,000, payable in installments subject to customer’s confirmation of completion and acceptance of the related deliverables. Deliverables and consideration for Phase 3 have not been determined.

 

The Company recognizes revenue at a point in time upon completion and customer acceptance of the phase deliverables, as applicable. Customer acceptance is considered the substantive indicator that control of the completed phase deliverables has transferred.

  

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. 

 

Contract Liability

 

Contract liability represents amounts received in advance for performance obligations not yet satisfied, including nonrefundable upfront license fees. The Company recognizes contract liability revenue as revenue when the related performance obligations are satisfied.

 

Cost of Sales

 

Cost of sales consists of labor costs, material costs and manufacturing overhead costs associated with the production of materials transferred to the customer under the technology license and material supply agreement at the Company’s facility.

 

Stock-based Payments

 

The Company accounts for stock-based compensation under the provisions of FASB ASC 718, "Compensation - Stock Compensation," which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The fair value of restricted stock awards and units is estimated by the market price of the Company’s common stock at the date of grant. Restricted stock awards and units are being amortized to expense over the shorter of the requisite service period or the actual vesting period. Performance stock units are subject to both performance-based and service vesting requirements. The grant-date fair value of performance stock units is based on the fair value of the Company’s stock on a grant date and is recognized over the service period based on an assessment of the likelihood that the applicable performance goals will be achieved, and compensation expense is periodically adjusted based on actual and expected performance. The Company estimates the fair value of option and warrant awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the shorter of the requisite service period or the actual vesting period, using the straight-line method. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.

 

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

 

 

8 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

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 dilutive loss per share were the same.

 

Comprehensive Loss

The Company follows FASB ASC 220.10, “Reporting Comprehensive Income (Loss).” Comprehensive loss is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net loss. Since the Company has no items of other comprehensive loss, comprehensive loss is equal to net loss.

 

Recently Issued Accounting Pronouncements Not Yet Adopted

 

ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses, such as the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, included in each relevant expense caption; disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and disclosure of the total amounts of selling expenses. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2026 and interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of this ASU on its financial statement disclosures.

 

NOTE 2 - CORRECTION OF PRIOR-PERIOD ERRORS

 

Error Identified in the Year Ended December 31, 2021

 

During the year ended December 31, 2021, the Company incorrectly expensed a portion of the value of the net shares issued by the Company in non-cash stock option exercises as compensation expense. The Company determined that the value of the net shares issued in non-cash option exercises was incorrectly expensed in the original filing, resulting in an overstatement of compensation expense. The correction of this error resulted in a decrease to accumulated deficit by $3,407,443 and a corresponding decrease to additional paid-in capital as of December 31, 2021. The cumulative impact of this correction has been reflected as an adjustment to opening accumulated deficit and additional paid-in capital in the Statements of Changes in Stockholders’ Equity as of December 31, 2024 (the beginning of the earliest period presented), and the March 31, 2025 ending balances presented in this filing.

 

Restated Financial Information

 

The following table presents the effects of the restatement on the Company’s previously reported statements of stockholders’ equity as of December 31, 2024 and as of March 31, 2025:

            
   As Previously Reported   Adjustment   As Restated 
As of December 31, 2024               
Additional paid-in-capital  $184,363,772   $(3,407,443)  $180,956,329 
Accumulated deficit  $(150,406,434)  $3,407,443   $(146,998,991)

 

               
   As Previously Reported   Adjustment   As Restated 
As of March 31, 2025               
Additional paid-in-capital  $186,984,976   $(3,407,443)  $183,577,533 
Accumulated deficit  $(155,103,458)  $3,407,443   $(151,696,015)
                

 

 

9 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

 

NOTE 3 – MANAGEMENT’S PLANS

 

The Company’s future expenditures and capital requirements will depend on numerous factors, including: the progress of our research and development efforts; the rate at which the Company can, directly or through arrangements with original equipment manufacturers, introduce and sell its polymer materials technology; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; market acceptance of the Company’s products and competing technological developments; and the Company’s ability to establish joint development, joint venture and licensing arrangements.  The Company’s current cash position enables it to finance its operations through at least December 2027. 

 

On December 15, 2025, the Company entered into an underwriting agreement with an investment bank to sell 13,416,667 shares of its common stock. The net proceeds to the Company from this offering were $37,756,628, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. On March 17, 2025, the Company entered into a purchase agreement with an institutional investor to sell up to $30,000,000 of common stock over a 36-month period (described in Note 10). This purchase agreement was terminated on December 15, 2025. As of the termination date, pursuant to the purchase agreement, the Company had received $3,646,655 under this agreement. On December 9, 2022, the Company entered into a sales agreement with an investment banking company whereby the Company may offer and sell shares of its common stock having an aggregate offering price of up to $35,000,000 from time to time through or to the investment banking company, as sales agent or principal (described in Note 10). On April 20, 2026, the Company entered into an amendment to the sales agreement to increase the amount of shares of common stock that may be sold under this agreement to $51,404,500. 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. The Company's first commercial agreement occurred in May 2023 from a material supply and license agreement that incorporates the Company's patented electro-optic polymer materials for use in manufacturing photonic devices (described in Note 4). For the three months ended March 31, 2026, the Company recognized $29,167 in revenue related to this agreement. The Company’s cash requirements are expected to increase at a rate consistent with the Company’s path to revenue as it expands its activities and operations with the objective of increasing its revenue stream from commercialization of its electro-optic polymer technology. The Company currently has no debt to service.

 

NOTE 4 – REVENUE

 

The Company's first commercial agreement occurred in May 2023, in the form of a four-year material supply and license agreement (the “License Agreement”) that incorporates the Company's patented electro-optic polymer materials for use in manufacturing of photonic devices (the “Licensed Product”). The licensee shall pay the Company a running royalty with a minimum royalty paid on an annual basis over the term of the License Agreement, and, 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, Company entered into a memorandum of agreement (also referred to as “joint development agreement”) under which it, along with other parties, performs its respective part of the development work to develop an electro-optical polymer-based modulator chip for use in communication applications. The development work consists of preparing reference documentation and support of a multi-project wafer chip produced at a mutually agreed upon foundry, the design and post processing of fabricated chips, and complete product verification and volume manufacturing preparation, with each party to the agreement having responsibility over various deliverables for each phase.

 

10 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 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 $50,000 was paid during the period ended December 31, 2023. $2,375 and $6,541 of this amount is recorded as a contract liability in current liabilities on the Company’s balance sheets as of March 31, 2026 and December 31, 2025, respectively. For the three months ended March 31, 2026 and 2025, the Company recognized $29,167 and $22,917, respectively, in revenue related to this agreement.

 

Revenues related to the joint development agreement are recognized at a point of time, when control over the performance obligations is transferred to a customer. For the three months ended March 31, 2026, the Company did not recognize any non-recurring engineering revenue related to this agreement.

 

Contract balances are as follows:

         
   March 31, 2026   December 31, 2025 
         
Accounts receivable, net  $215,753   $190,753 
Short-term contract assets  $   $ 
Long-term contract assets  $   $ 
Short-term contract liability  $2,375   $6,541 

 

Significant changes in the contract balances for the three months ended March 31, 2026 are as follows:

         
   Three Months Ended March 31, 2026 
   Assets   Liabilities 
Balance at December 31, 2025  $190,753   $(6,541)
Revenue recognized that was previously included in contract liability       4,166 
Decreases/increases due to cash received        
Billed receivables recorded   130,000     
Transferred to receivables from unbilled receivables   (130,000)    
Unbilled receivables recorded   25,000     
Balance at March 31, 2026  $215,753   $(2,375)

 

Assets Recognized for the Costs to Obtain a Contract

 

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

 

 

11 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

 

NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

 

Prepaid expenses and other current assets consist of the following:

         
   March 31, 2026   December 31, 2025 
         
Wafer fabrication deposits  $418,500   $ 
Deposits for equipment purchases   234,664    172,937 
Software licenses   232,672    75,257 
Insurance   112,426    194,258 
Investor relations   77,744    6,127 
Subscriptions   55,204    39,934 
Rent   36,525    89,468 
Other   15,719    23,120 
 Prepaid expenses and other current assets  $1,183,454   $601,101 

 

NOTE 6 – PROPERTY AND EQUIPMENT

 

Property and equipment consist of the following:

         
   March 31, 2026   December 31, 2025 
         
Office equipment  $199,999   $189,694 
Lab equipment   12,551,603    12,194,071 
Furniture   78,096    66,438 
Leasehold improvements   462,532    440,855 
Software   180,377    133,377 
    13,472,607    13,024,435 
Less: Accumulated depreciation   8,277,725    7,802,183 
           
Property and equipment, net  $5,194,882   $5,222,252 

 

 

12 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

NOTE 6 – PROPERTY AND EQUIPMENT (CONTINUED)

 

Depreciation expense for the three months ended March 31, 2026 and 2025 was $477,836 and $428,452, respectively. During the three months ended March 31, 2026, the Company did not retire any property and equipment. During the three months ended March 31, 2025, the Company traded in property and equipment with a cost and accumulated depreciation of $25,140 for a gain of $28,800.

 

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:

         
   March 31, 2026   December 31, 2025 
         
Patents  $2,227,635   $2,187,191 
Less: Accumulated amortization   398,202    473,771 
           
Intangible assets, net  $1,829,433   $1,713,420 

 

Amortization expense for the three months ended March 31, 2026 and 2025 was $18,522 and $26,508, respectively. During the three months ended March 31, 2026, the Company retired certain expired patents with a cost of $130,500 and accumulated amortization of $94,091 for a loss of $36,409. There were no patent costs written off for the three months ended March 31, 2025 

 

 

13 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

NOTE 8 – LEASES

 

On October 30, 2017, the Company entered into a lease agreement (the “Lease”) to lease approximately 13,420 square feet of office, chemistry, clean room and research and development space located in Colorado for the Company’s principal executive offices and research and development facility. The term of the lease was sixty-one (61) months, beginning on November 1, 2017 and ending on November 30, 2022. In January 2022, the term was extended for an additional twenty-four (24) months.

 

On November 22, 2022, the Company entered into an amendment to the Lease (“the Amended Lease”) to lease an additional approximately 9,684 square feet of adjacent office and warehouse space.  The term of the Amended Lease is one hundred twenty-eight (128) months, with an effective date of June 1, 2023. Base rent through January 31, 2024 of the Amended Lease term was approximately $30,517 per month. The base rent for the next full year of the Amended Lease term is approximately $377,288, with an increase in annual base rent of approximately 3% in each subsequent year of the lease term.  Commencing on June 1, 2023, monthly installments of base rent and one-twelfth of landlord’s estimate of tenant’s proportionate share of annual operating expenses shall be due on the first day of each calendar month. The Amended Lease also provides an allowance of up to $43,216 to be used solely for the cost of renovations to the additional lease premises.

 

For purposes of calculating operating lease liability, lease term includes the initial non-cancelable term plus any term under renewal options that are reasonably assured. Any rent escalations, along with rent abatements, are included in the computation of rent expense calculated on a straight-line basis over the lease term. The interest rate implicit in lease contracts is typically not readily determinable and as such the Company uses the appropriate incremental borrowing rate based on information available at the lease commencement date in determining the present value of the lease payments.

 

Undiscounted future minimum lease payments under the Amended Lease as of March 31, 2026, by year and in aggregate, including the extended term, are as follows:

 

      
YEARS ENDING     
DECEMBER 31,   AMOUNT 
      
 Remainder of 2026   $300,121 
 2027    411,174 
 2028    423,612 
 2029    436,300 
 2030    449,431 
 Thereafter    1,471,840 
      3,492,478 
 Less discounted interest    (940,269)
        
 TOTAL   $2,552,209 

 

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.

 

 

14 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 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: 

    
   March 31, 2026 
Weighted average remaining lease term (in years)   7.83 
Weighted average discount rate   8.25%

 

As of March 31, 2026, current operating leases had remaining terms between 9 months and 7.83 years, with some leases having options to extend the lease terms.

 

Current lease agreements do not contain any residual value guarantees or material restrictive covenants. As of March 31, 2026, the Company did not have any finance leases.

 

Operating and short-term lease costs totaling $87,587 and $27,340 are included in research and development and general and administrative expense, respectively, for the three months ended March 31, 2026. Operating and short-term lease costs totaling $86,408 and $20,956 are included in research and development and general and administrative expenses, respectively, for the three months ended March 31, 2025.

 

NOTE 9 – INCOME TAXES

 

There is no income tax benefit for the losses for the three months ended March 31, 2026 and 2025 since management has determined that the realization of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of such benefits.

 

The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2026, the Company had no unrecognized tax benefits, or any tax related interest or penalties, and it does not expect significant changes in the amount of unrecognized tax benefits to occur within the next twelve months. There were no changes in the Company’s unrecognized tax benefits during the three-month period ended March 31, 2026. The Company did not recognize any interest or penalties during 2026 related to unrecognized tax benefits.

 

With few exceptions, the U.S. and state income tax returns filed for the tax years ended on December 31, 2022 and thereafter are subject to examination by the relevant taxing authorities. Net operating loss (NOL) carryforwards are subject to examination in the year they are utilized regardless of whether the tax year in which they are generated has been closed by the statute. The amount subject to disallowance is limited to the NOL utilized. Accordingly, the Company may be subject to examination for prior NOLs generated as such NOLs are utilized.

 

On July 4, 2025, the U.S. H.R.1, an act to provide for reconciliation pursuant to title II of H. Con. Res. 14. (the “OBBBA”) was enacted. The OBBBA introduces multiple tax law and other legislative changes, including modifications to income tax provisions such as existing 21% corporate income tax rate made permanent, domestic research and development expenses, the restoration of 100% bonus depreciation, changes to Section 163(j) interest limitations, and U.S. taxation of international earnings; the repeal or acceleration of the sunset of certain tax credits under the 2022 Inflation Reduction Act and elimination of certain penalties for violations of certain regulatory credit programs. The Company recognized the effects of the OBBBA provisions in its financial results to the extent they are applicable to the year ended December 31, 2025 and will continue to evaluate the impact of these provisions on its 2026 and subsequent financial statements.

 

  

15 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 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 July 26, 2024, the Company filed a $100,000,000 universal shelf registration statement with the U.S. Securities and Exchange Commission which became effective on August 5, 2024.

 

On February 28, 2023, the Company entered into a purchase agreement with an institutional investor to sell up to $30,000,000 of common stock over a 36-month period. Concurrently with entering into the purchase agreement, the Company also entered into a registration rights agreement which provides the institutional investor with certain registration rights related to the shares issued under the purchase agreement.  Pursuant to the purchase agreement, the Company issued 50,891 shares of common stock to the institutional investor as an initial commitment fee valued at $279,391 fair value, and 101,781 shares of common stock were reserved for additional commitment fees to the institutional investor in accordance with the terms of the purchase agreement.

 

During the period February 28, 2023 through March 31, 2025, the institutional investor purchased 7,756,336 shares of common stock for proceeds of $30,000,000 and the Company issued 101,781 shares of common stock as additional commitment fee, valued at $518,265 fair value, leaving zero in reserve for additional commitment fees. During the three months ended March 31, 2025, pursuant to the purchase agreement, the institutional investor purchased 1,035,881 shares of common stock for proceeds of $1,486,983 and the Company issued 5,046 shares of common stock as additional commitment fee, valued at $8,029 fair value. 

 

 

16 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

NOTE 10 – STOCKHOLDERS’ EQUITY (CONTINUED)

 

Common Stock (Continued)

 

On March 17, 2025, the Company entered into a new purchase agreement with the same institutional investor to sell up to $30,000,000 of common stock over a 36-month period. Concurrently with entering into the purchase agreement, the Company also entered into a registration rights agreement which provides the institutional investor with certain registration rights related to the shares issued under the purchase agreement.  Pursuant to the purchase agreement, the Company issued 245,098 shares of common stock to the institutional investor as an initial commitment fee valued at $222,990 fair value, and 490,196 shares of common stock were reserved for additional commitment fees to the institutional investor in accordance with the terms of the purchase agreement. During the three months ended March 31, 2025, the institutional investor did not purchase any shares of common stock under this agreement. This purchase agreement was terminated on December 15, 2025 in conjunction with an offering to sell shares of the Company’s common stock to an investment bank.

 

On December 17, 2025, the Company closed the offering with an investment bank to sell up to 13,416,667 shares of its common stock, including up to 1,750,000 shares to cover over-allotments. Pursuant to the underwriting agreement for the offering, the Company agreed to issue to the underwriter warrants to purchase up to 350,000 shares of common stock, or three percent (3%) of the total number of shares of common stock sold in the offering, as well as additional underwriter warrants to purchase up to an aggregate of 52,500 shares of common stock in connection with the exercise of the over-allotment option by the underwriter. During the period from December 17, 2025 through March 31, 2026, the Company sold 13,416,667 shares under this agreement for the net proceeds of $37,756,628, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. 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. As of March 31, 2026, 402,500 underwriter warrants were outstanding and no underwriting warrants were exercised during the three months period ended March 31, 2026. On April 16, 2026, all 402,500 underwriter warrants were exercised for proceeds of $1,388,625.

 

On December 9, 2022, the Company entered into a sales agreement with an investment banking company. In accordance with the terms of this sales agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $35,000,000 from time to time through or to the investment banking company, as sales agent or principal. Sales of shares of the Company’s common stock, if any, may be made by any method deemed to be an “at-the-market offering”. The sales agent is entitled to compensation under the terms of the sales agreement at a commission rate equal to 3% of the gross proceeds of the sales price of common stock that they sell. On April 20, 2026, the Company entered into an amendment to the sales agreement to increase the amount of shares of common stock that may be sold under this agreement to $51,404,500.

 

During the three months period ended March 31, 2026, pursuant to the sales agreement, the investment banking company sold 829,741 shares of the Company’s common stock for proceeds of $6,544,407 after a payment of the commission in the amount of $203,602 to the investment banking company and underwriting expenses of $38,722. During the three months period ended March 31, 2025, pursuant to the sales agreement, the investment banking company sold 50,000 shares of the Company’s common stock for proceeds of $116,435 after a payment of the commission in the amount of $3,602 to the investment banking company. During the period from April 1, 2026 through May 15, 2026, pursuant to the sales agreement, the investment banking company sold 1,794,185 shares of the Company’s common stock for proceeds of $21,357,710 after a payment of the commission in the amount of $491,451 to the investment banking company.

 

 

17 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

NOTE 11 – STOCK BASED COMPENSATION

 

Common Stock Options and Warrants

 

During 2007, the Board of Directors of the Company adopted the 2007 Employee Stock Plan (“2007 Plan”) that was approved by the shareholders. Under the 2007 Plan, the Company is authorized to grant options to purchase up to 10,000,000 shares of common stock to directors, officers, employees and consultants who provide services to the Company.  The 2007 Plan is intended to permit stock options granted to employees under the 2007 Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the 2007 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options (“Non-Statutory Stock Options”).

 

Effective June 24, 2016, the 2007 Plan was terminated. As of March 31, 2026, there are no options to purchase shares of common stock outstanding under the 2007 Plan.

 

During 2016, the Board of Directors of the Company adopted the 2016 Equity Incentive Plan (“2016 Plan”) that was approved by the shareholders at the 2016 annual meeting of shareholders on May 20, 2016. Under the 2016 Plan, the Company is authorized to grant awards of incentive and non-qualified stock options and restricted stock to purchase up to 3,000,000 shares of common stock to employees, directors and consultants. Effective May 16, 2019, the number of shares of the Company’s common stock available for issuance under the 2016 Plan was increased from 3,000,000 to 8,000,000 shares. Effective May 25, 2023, the number of shares of the Company’s common stock available for issuance under the 2016 Plan was increased from 8,000,000 to 13,000,000 shares and awards of restricted stock units were authorized for issuance. Effective May 15, 2025, the 2016 Plan was terminated. As of March 31, 2026, options to purchase 6,590,023 shares of common stock have been issued and are outstanding, 498,694 restricted shares of common stock have been granted, net of forfeitures, 1,616,380 restricted stock units have been granted, and 542,566 performance stock units have been issued under the 2016 Plan.

 

During 2025, the Board of Directors of the Company adopted the 2025 Equity Incentive Plan (“2025 Plan”) that was approved by the shareholders at the 2025 annual meeting of shareholders on May 15, 2025. Under the 2025 Plan, the Company is authorized to grant awards of incentive and non-qualified stock options and restricted stock to purchase up to 6,000,000 shares of common stock to employees, directors and consultants. As of March 31, 2026, options to purchase 601,244 shares of common stock have been issued and are outstanding and 2,621,813 restricted stock units have been granted under the 2025 Plan, net of forfeitures. As of March 31, 2026, 2,738,812 shares of common stock remain available for grants under the 2025 Plan.

 

These plans are administered by the Company’s Board of Directors or its compensation committee which determines the persons to whom awards will be granted, the number of awards to be granted, and the specific terms of each grant. Options granted under the 2025 Plan are generally exercisable for a period of 10 years from the date of grant and may vest on the grant date, another specified date or over a period of time.

 

The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award, with the following assumptions for the three months ended March 31, 2026: no dividend yield, expected volatility, based on the Company’s historical volatility, 83.6%, risk-free interest rate of  4.14% and expected option life of 10 years, which is based on the legal contractual life of the options.

 

The Black-Scholes option pricing model assumptions for the three months ended March 31, 2025 are as follows: no dividend yield, expected volatility, based on the Company’s historical volatility, 78.7% to 79.0%, risk-free interest rate between 4.18% to 4.40% and expected option life of 10 years, which is based on the legal contractual life of the options.

 

 

18 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

 

Common Stock Options and Warrants (Continued)

 

As of March 31, 2026, there was $1,732,150 of unrecognized compensation expense related to non-vested market-based share awards that is expected to be recognized through December 2028.

 

Share-based compensation was recognized as follows:

         
   Three Months Ended 
March 31, 2026
   Three Months Ended 
March 31, 2025
 
         
Stock options  $331,530   $749,042 
Restricted stock awards   43,266    230,150 
Restricted stock units   1,342,733     
           
  Total share-based compensation  $1,717,529   $979,192 

 

 

The following tables summarize all stock option and warrant activity of the Company during the three months ended March 31, 2026:

             
      Non-Qualified Stock Options and Warrants Outstanding and Exercisable 
                  
      Number of
Shares
    Exercise
Price
    Weighted Average
Exercise Price
 
                  
 Outstanding, December 31, 2025    8,996,078     $0.51 - $16.81    $3.47 
                  
 Granted    252,500     $3.24 - $3.45    $3.28 
 Forfeited    (11,875)    $0.99 - $1.96    $1.15 
 Exercised    (1,367,936)    $0.60 - $5.51    $1.45 
                  
 Outstanding, March 31, 2026    7,868,767     $0.51 - $16.81    $3.82 
                  
 Exercisable, March 31, 2026    7,007,097     $0.51 - $16.81    $3.97 

 

The aggregate intrinsic value of options and warrants outstanding and exercisable as of March 31, 2026 was $27,556,963 and $23,740,665, respectively. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and warrants and the closing stock price of $7.03 for the Company’s common stock on March 31, 2026. During the three months ended March 31, 2026, 1,367,936 options with the aggregate intrinsic value of $7,670,268 were exercised for proceeds of $1,862,119 and no warrants were exercised. Of this amount, 200,000 options were exercised via cashless settlement.

 

 

19 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2026 AND 2025

 

 

 

NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

 

Common Stock Options and Warrants (Continued)

             
Non-Qualified Stock Options and Warrants Outstanding Currently Exercisable
 Range of
Exercise Prices
   Number Outstanding
Currently Exercisable
at March 31, 2026
    Weighted Average
Remaining
Contractual Life
    Weighted Average
Exercise Price of Options and
Warrants Currently Exercisable
 
                
 $0.51 - $16.81   7,007,097    5.6 Years   $3.97 

 

 

Non-Qualified Stock Options and Warrants Outstanding 
 
Range of
Exercise Prices
    
Number Outstanding
at March 31, 2026
    Weighted Average
Remaining
Contractual Life
    Weighted Average
Exercise Price of Options and
Warrants Outstanding
 
                
 $0.51 - $16.81   7,868,767    5.7 Years   $3.82 

 

Restricted Stock Awards and Units

 

The Company grants restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) to employees and directors. RSUs represent the right to receive shares of common stock upon vesting, while RSAs are shares issued at the grant date that remain subject to forfeiture until vesting conditions are met. These awards are amortized on a straight-line basis over the vesting period into stock-based compensation expense. The vesting period ranges from immediate vesting to monthly or quarterly vesting.

 

Upon the occurrence of a Change in Control, 100% of the unvested RSAs and RSUs shall vest as of the date of the Change in Control. Upon vesting, the restrictions on the shares lapse.

 

The fair value of restricted stock awards and units is estimated by the market price of the Company’s common stock at the date of grant. Restricted stock activity during the three months ended March 31, 2026 is as follows:

 

                 
 
 
 
 
 
 
Restricted Stock Awards
Three Month Period Ended
March 31, 2026
 
 
 
 
 
 
Restricted Stock Units
Three Month Period Ended
March 31, 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   153,596   $1.54    2,836,742   $3.07 
                     
Granted           1,074,737    3.30 
Vested   (22,462)   1.93    (811,465)   2.94 
Cancelled and forfeited           (14,043)   3.24 
                     
Non-vested, end of period   131,134   $1.47    3,085,971   $3.18 

 

Restricted stock awards and units are being amortized to expense over the shorter of the requisite service period or the vesting period. As of March 31, 2026 and 2025, the unamortized value of the RSAs was $160,192 and $384,927, respectively. As of March 31, 2026 and 2025, the unamortized value of the RSUs was $7,999,929 and $0, respectively.

 

 

20 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 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 months ended March 31, 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: 2,687,699 shares (2026), 1,869,604 shares (2025)

  · Unvested RSUs: 1,401,844 shares (2026), 0 shares (2025).

  

NOTE 13 – RELATED PARTIES

 

During the three months period ended March 31, 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 months ended March 31, 2025 and as of December 31, 2025 were as follows:

 

·The Company incurred $67,543 in legal fees and expense reimbursements with a related party law firm during the three months ended March 31, 2025. Related accrual was $0 as of December 31, 2025.

·The Company incurred $22,760 in accounting and IT service fees and expense reimbursements to related parties during the three months ended March 31, 2025. Related accrual was $0 as of December 31, 2025.
·The Company incurred $54,795 in fees and travel expenses to directors during the three months ended March 31, 2025. Related accrual was $56,250 as of December 31, 2025.
·The Company incurred $82,500 in consulting fees to board of directors and advisory board members during the three months ended March 31, 2025. Related accrual was $0 as of December 31, 2025.

 

For the three months period ended March 31, 2026, there were no material transactions with related parties.

 

 

21 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 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 $62,328 and $39,587 for the three months ended March 31, 2026 and 2025, respectively. The plan is subject to the annual IRS elective deferral limit of $24,500 per employee for 2026, $8,000 catch-up for those aged 50 and over, and $11,250 special catch-up limit for those aged 60-63.

   

NOTE 15 – SEGMENT REPORTING

 

The Company operates as a single reportable segment, as the Chief Operating Decision Maker (“3”), 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 months ended March 31, 2026 and 2025:

         
 
 
 
 
Three months ended
March 31, 2026
 
 
 
 
Three months ended
March 31, 2025
 
 
         
         
NET SALES  $29,167   $22,917 
           
COST OF SALES   1,336    2,028 
           
OPERATING EXPENSES          
Research and development   3,490,295    3,089,218 
General and administrative   3,262,866    1,837,052 
    6,753,161    4,926,270 
           
SEGMENT OPERATING LOSS   (6,725,330)   (4,905,381)
           
OTHER INCOME (EXPENSES)          
Interest income   461,275    187,848 
Commitment fee       (8,029)
Gain (loss) on disposal of property and equipment and intangible assets   (36,409)   28,800 
Other expense   (76)   (262)
           
           
NET LOSS  $(6,300,540)  $(4,697,024)

 

Significant Segment Expenses

 

 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 no other segment items for the three months ended March 31, 2026 and 2025.

 

 

22 

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 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 months ended March 31, 2026, $29,167 of the Company’s net sales were generated outside the United States. For the three months ended March 31, 2025, $22,917 of the Company's net sales were generated outside the United States. Revenue is attributed to geographic areas based on the customer’s bill-to location. For the three months ended March 31, 2026 and 2025, 100% of net sales were generated in Switzerland.
  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 $9,411,107 and $9,376,041 as of March 31, 2026 and December 31, 2025, respectively.
  Major Customers: for three months ended March 31, 2026 and 2025, one customer accounted for 10% or more of total revenue. The related revenue was attributable to the Company’s single reportable segment.

 

NOTE 16 – SUBSEQUENT EVENTS

 

On April 16, 2026, 402,500 underwriter warrants issued to an investment bank as a part of the December 17, 2025 offering were exercised for proceeds of $1,388,625.

 

On April 20, 2026, the Company entered into an amendment to its sales agreement with Roth Capital Partners, LLC, as sales agent, to increase the amount of shares of common stock that may be sold under the Sales Agreement to $51,404,500. As of the date of this filing, $3,385 remains available pursuant to the Roth Sales Agreement.

 

23 
 

 

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 specialty materials and intellectual property company focused on the development and commercialization of proprietary electro-optic (“EO”) polymer materials designed to enable high-speed optical modulators for data communications and other photonic applications.

 

Our Perkinamine® family of EO polymer materials is engineered for integration into silicon photonics (“SiPh”) and other photonic integrated circuit (“PIC”) platforms. When incorporated into device architectures, these materials are designed to support high-speed, high-bandwidth optical modulation with lower drive voltage requirements relative to certain conventional silicon-based approaches and certain other traditional photonic material systems, including III-V–based compound semiconductor technologies. The electro-optic properties of these materials can allow shorter interaction lengths in modulator designs, which can contribute to more compact device footprints and increased integration density. In addition, our materials are intended to be compatible with complementary metal-oxide-semiconductor (“CMOS”) fabrication processes, which may facilitate integration into established semiconductor foundry workflows. 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 artificial intelligence (“AI”), cloud computing, data center, and telecommunications markets. We pursue customer adoption through a structured commercialization process designed to support evaluation, integration, qualification, and production readiness within established semiconductor manufacturing ecosystems.

 

As of May 2026, multiple customer programs are progressing through defined development stages under our commercialization framework. The timing and scale of potential production revenue depend on customer product qualification and adoption cycles, technical validation, manufacturing readiness, end-market demand, and broader industry conditions.

 

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 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

 

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

 

 

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Because electro-optic polymers can be applied directly within waveguide structures, they may allow modulator architectures with shorter interaction lengths compared to certain alternative material systems. Shorter interaction lengths can contribute to more compact device geometries and increased integration density within photonic integrated circuits.

 

The compatibility of our materials with complementary metal oxide semiconductor (“CMOS”) fabrication processes, including back-end-of-line integration flows, is designed to facilitate incorporation into silicon photonics platforms using established foundry infrastructure rather than requiring dedicated fabrication facilities.

 

We continue to invest in material optimization, including improvements in electro-optic efficiency, thermal stability, wavelengths expansion, environmental robustness, and process integration parameters. Material formulation, device architecture, and integration techniques are developed in parallel to support customer-specific performance and reliability requirements.

 

Commercial deployment of devices incorporating our materials depends on successful integration within customer and foundry process flows, achievement of reliability standards, and attainment of yield and cost targets.

  

Business Model - Material + IP Licensing

 

Our business model is centered on the commercialization of proprietary electro-optic polymer materials and related intellectual property through material supply and licensing arrangements.

 

We do not currently intend to manufacture finished optical transceivers, discrete photonic devices, or complete optical modules. Our strategy is to enable customers to incorporate our materials into their own device platforms and manufacturing ecosystems, leveraging established semiconductor foundry infrastructure.

 

Our revenue model may include one or more of the following components:

 

Material Sales

 

We supply EO polymer materials to customers for evaluation, prototyping, and potential commercial production. Material sales may occur during development phases as well as during volume manufacturing, subject to customer qualification and demand.

 

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

 

Intellectual Property 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 2027 at the earliest. The timing and magnitude of any production-related revenue depend on successful product qualification, yield validation, customer adoption decisions, end-market demand, and broader industry conditions.

 

There can be no assurance that development-stage programs will transition to volume production, that anticipated timelines will be achieved, or that commercial revenues will occur as expected.

 

 

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Strategic Flexibility

 

 While our current strategy is focused on materials supply and intellectual property licensing, we may evaluate selective opportunities to participate more directly in device-level development in limited circumstances. Such participation, if pursued, would likely be application-specific and would depend on market conditions, partnership opportunities, capital requirements, and strategic considerations.

 

We have not committed to entering device manufacturing as a core component of our business model, and any such activity would be evaluated in the context of our overall capital allocation priorities and commercialization strategy.

 

Operating Leverage

 

Our model is designed to leverage existing semiconductor fabrication infrastructure rather than require capital-intensive wafer fabrication facilities. By integrating into established foundry process flows, we seek to enable scalable production through customer and foundry manufacturing capacity.

 

If customer programs advance to high-volume production, incremental material demand and royalty streams may provide operating leverage due to the intellectual property-driven nature of our model. However, realization of such leverage depends on successful qualification, customer adoption, competitive dynamics, and end-market demand.

 

Commercialization Process (Design Win Cycle)

 

We pursue customer adoption through a structured, multi-stage engagement framework that we refer to as our Design Win Cycle. This process is designed to guide customer programs from initial technology evaluation through potential production ramp within established semiconductor manufacturing ecosystems.

 

While program timelines vary based on customer requirements, foundry schedules, application complexity, and market conditions, the Design Win Cycle typically spans approximately 18 to 24 months.

 

Progression between stages depends on the achievement of defined technical and commercial milestones. Advancement to later stages does not assure commercial production.

 

Stage 1 – Technology 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 2027 at the earliest.

 

There can be no assurance that programs currently in development will successfully transition to commercial production, that foundry capacity will be available as anticipated, or that projected timelines will be achieved.

 

Capital Requirements

 

We have satisfied our capital requirements since inception primarily through the issuance and sale of our common stock.

 

 

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Results of Operations

 

Comparison of three months ended March 31, 2026 and March 31, 2025

 

Revenues

 

During the three months ended March 31, 2026, we recognized $29,167 of licensing and royalty revenue. During the three months ended March 31, 2025, we recognized $22,917 of licensing and royalty revenue.

  

Cost of Sales

 

During the three months ended March 31, 2026, we recognized $1,336 in cost of sales. During the three months ended March 31, 2025, we recognized $2,028 in Cost of Sales.

  

Operating Expenses

                 
   Three Months Ended
March 31, 2026
   Three Months Ended
March 31, 2025
   Change   Percent
Change
 
                 
Research and development  3,490,295   3,089,218   $401,077    13%
General and administrative   3,262,866    1,837,052    1,425,814    78%
   $6,753,161   $4,926,270   $1,826,891    37%

 

Research and development expenses increased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to increases in salary and employee benefits expenses and prototype device development and wafer fabrication 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 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 three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to increases in non-cash stock-based compensation expenses, salary and employee benefits expenses and payroll taxes, director fees, recruiting fees, and travel expenses.

   

Other Income (Expenses), net

                 
    Three Months Ended
March 31, 2026
    Three Months Ended
March 31, 2025
    Change    Percent
Change
 
                     
Other Income (Expenses), net  $424,790   $208,357   $216,433    104%

 

Other income increased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to an increase in interest income earned on higher cash balances, offset by a loss due to disposal of certain expired patents.

 

Net Loss

                 
    Three Months Ended
March 31, 2026
    Three Months Ended
March 31, 2025
    Change    Percent
Change
 
                     
Net Loss  $6,300,540   $4,697,024   $1,603,516    34%

 

Net loss was $6,300,540 and $4,697,024 for the three months ended March 31, 2026 and 2025, respectively, for an increase of $1,603,516 due primarily to increases in general and administrative non-cash stock compensation expenses, entity-wide salary and employee benefits expenses and payroll taxes, prototype device development and wafer fabrication expenses, director fees, recruiting fees, travel expenses, and loss due to disposal of certain expired patents, offset by an increase in interest income.

 

 

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Liquidity and Capital Resources

 

Our primary source of operating cash inflows was (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 “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. The net proceeds to us from the Offering were approximately $32,800,000 during the year ended December 31, 2025, and approximately $4,900,000 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 16, 2026, all 402,500 underwriter warrants were exercised for proceeds of $1,388,625.

 

On March 17, 2025, we entered into a purchase agreement with Lincoln Park (the “2025 Purchase Agreement”) to sell up to $30,000,000 of registered common stock over a 36-month period. On December 12, 2025, the 2025 Purchase Agreement was terminated in conjunction with the Titan Offering.

 

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 Sales Agreement to $51,404,500. As of the date of this filing, $3,385 remains available pursuant to the Roth Sales Agreement.

 

During the three months ended March 31, 2026, the Company received $6,544,407 in proceeds pursuant to the Roth Sales Agreement, $4,930,928 in proceeds from the exercise of over-allotment option from the Titan Offering, and $1,862,119 in proceeds from the exercise of options.

 

During the three months ended March 31, 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 March 31, 2026, our cash and cash equivalents totaled $75,102,750.

 

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 maintain our operations over the next 12 months. Our current cash position enables us to finance our operations at least through December 2027 before we will be required to replenish our cash reserves. Our cash requirements are expected to increase at a rate consistent with our Company’s revenue growth as we expand our activities and operations with the objective of increasing our revenue stream from the commercialization of our electro-optic polymer technology. 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:

 

 

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  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 in marketing as our products are introduced into the marketplace;

  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 three months ended March 31, 2026

 

Net cash used in operating activities was $4,061,179 for the three months ended March 31, 2026, primarily attributable to the net loss of $6,300,540 adjusted by $331,530 in options issued for services, $43,266 amortization of deferred compensation, $1,342,733 amortization of restricted stock units, $496,358 in depreciation expenses and patent amortization expenses, $53,577 amortization of right of use asset, $36,409 loss due to disposal of certain expired patents, ($25,000) in accounts receivable, ($582,353) in prepaid expenses and other current assets, and $542,841 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 $621,410 for the three months ended March 31, 2026, consisting of $170,944 in cost for intangibles and $450,466 in asset additions for the Colorado headquarter facility and labs.

 

Net cash provided by financing activities was $10,767,985 for the three months ended March 31, 2026, and consisted of $1,862,119 in proceeds from exercise of options, ($2,088,366) tax payment on net issuance of vested restricted stock units, ($481,103) tax payment on net issuance of performance stock units in the prior period, $4,930,928 in proceeds from the exercise of the overallotment option from the Titan Offering and $6,544,407 in proceeds from the sale of common stock pursuant to the Roth Sales Agreement.

 

On March 31, 2026, our cash and cash equivalents totaled $75,102,750, our assets totaled $85,913,064, our liabilities totaled $4,601,157 and we had stockholders’ equity of $81,311,907.

 

For the three months ended March 31, 2025

 

Net cash used in operating activities was $3,490,131 for the three months ended March 31, 2025, primarily attributable to the net loss of $4,697,024 adjusted by $749,042 in options issued for services, $230,150 amortization of deferred compensation, $20,500 cashless options exercise, $8,029 in common stock issued as commitment shares, $454,960 in depreciation expenses and patent amortization expenses, $50,043 amortization of right of use asset, $28,800 gain on disposal of property and equipment, $26,815 in accounts receivable, ($86,608) in prepaid expenses and other current assets, and ($217,238) 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 $899,422 for the three months ended March 31, 2025, consisting of $45,878 in cost for intangibles and $853,544 in asset additions for the Colorado headquarter facility and labs.

 

Net cash provided by financing activities was $1,766,918 for the three months ended March 31, 2025, and consisted of $163,500 in proceeds from exercise of options, $1,486,983 in proceeds from the sale of common stock pursuant to the 2023 Purchase Agreement and $116,435 in proceeds from the sale of common stock pursuant to the Roth Sales Agreement.

 

On March 31, 2025, our cash and cash equivalents totaled $25,045,329, our assets totaled $35,639,560, our liabilities totaled $4,089,972 and we had stockholders’ equity of $31,549,588.

 

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.

 

 

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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 March 31, 2026. Based on this evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that, as of March 31, 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 March 31, 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 March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 arrangement” as defined in Item 408(c) of Regulation S-K.

 

 

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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 - June 18, 2024   8-K   3.1   6/25/2024    
10.1   Amendment to Sales Agreement by and between the Company and Roth Capital Partners, LLC, dated April 20, 2026   8-K   10.1   4/21/2026    
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: May 15, 2026

 

 

By: /s/ Snizhana Quan  
  Snizhana Quan,  
 

Principal Financial Officer and

Principal Accounting Officer

 

 

Date: May 15, 2026

 

 

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FAQ

How much revenue did Lightwave Logic (LWLG) generate in Q1 2026?

Lightwave Logic generated $29,167 in net sales for Q1 2026, up from $22,917 in Q1 2025. This revenue comes primarily from the company’s first commercial material supply and license agreement for its electro-optic polymer technology.

What was Lightwave Logic (LWLG)'s net loss and EPS in Q1 2026?

Lightwave Logic reported a net loss of $6,300,540 in Q1 2026, compared with $4,697,024 a year earlier. Basic and diluted loss per share remained at $0.04, reflecting higher operating expenses offset by increased interest income on larger cash balances.

How much cash does Lightwave Logic (LWLG) have and what is its runway?

Lightwave Logic held $75,102,750 in cash and cash equivalents as of March 31, 2026. Management states this cash position is expected to finance operations at least through December 2027, supported by recent equity offerings and at-the-market share sales.

What drove Lightwave Logic (LWLG)'s higher operating expenses in Q1 2026?

Operating expenses rose to $6,753,161 in Q1 2026 from $4,926,270 in Q1 2025. The increase was mainly due to higher research and development spending and higher general and administrative costs, including stock-based compensation, salaries, benefits, and prototype development and wafer fabrication expenses.

When does Lightwave Logic (LWLG) expect meaningful production revenue?

Management indicates that 2026 revenue will mainly come from material supply, non-recurring engineering, and development activities. They do not currently expect significant revenue from high-volume commercial production of customer products until 2027 at the earliest, subject to customer qualification and adoption.

How is Lightwave Logic (LWLG) funding its operations and growth plans?

Lightwave Logic is funding operations primarily through equity financing, including an underwritten offering completed in December 2025, an at-the-market sales agreement, and option and warrant exercises. The company currently has no debt and plans to use proceeds for working capital and commercialization efforts.