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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

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

 For the fiscal year ended December 31, 2023

 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

 82-0497368

 (State or other jurisdiction of

 incorporation or organization)

 (I.R.S. Employer

 Identification No.)

 369 Inverness Parkway, Suite 350, Englewood, CO

 80112

 (Address of principal executive offices)

 (Zip Code)

 (Registrant's Telephone Number, including Area
Code): 720 - 340-4949

 Securities registered pursuant to Section 12(b) of
the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 Common Stock, $0.001 par value per share

 LWLG

 The NASDAQ Stock Market

 Securities registered pursuant to section 12(g) of
the Act: None

 Indicate by check mark if the Registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the Registrant is not required
to file reports pursuant to Section 13 or 15(d) of the Act. Yes No

 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, 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 has
filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report.

 If securities are registered pursuant to Section 12(b)
of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive
officers during the relevant recovery period pursuant to § 240.10D-1(b).

 Indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act of 1934). Yes No

 The aggregate market value of the voting and non-voting
common equity held by non-affiliates of the registrant was approximately $ 805,311,165 as of June 30, 2023.

 As of February 29, 2024, there were 119,184,778
 shares outstanding of the registrant's common stock, $.001 par value.

 Documents
incorporated by reference. Portions of the registrant's Definitive Proxy Statement for the registrant's 2024 Annual Meeting
of Shareholders are incorporated by reference in Part III of this report. The Definitive Proxy Statement or an amendment to this Form
10-K will be filed with the Securities and Exchange Commission within 120 days after the registrant's fiscal year ended December
31, 2023.

 Page

 I tem 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 Reserved

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

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

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 Item 15.

 Exhibit and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 i

 Forward-Looking Statements

 This Annual Report on Form
10-K contains forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our
plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by
terminology such as "anticipate," "estimate," "plan," "project,"
"continuing," "ongoing," "expect," "we believe," "we intend,"
"may," "should," "will," "could" and similar expressions denoting uncertainty or an
action that may, will or is expected to occur in the future. These statements involve estimates, assumptions, known and unknown
risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or
achievements expressed or implied by the forward-looking statements. You should not place undue reliance on these forward-looking
statements.

 Factors that are known to us that
could cause a different result than projected by the forward-looking statement, include, but are not limited to:

 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;

 those events and factors described by us in Item 1.A "Risk Factors";

 other risks to which our Company is subject; and

 other factors beyond the Company's control.

 Any forward-looking
statement made by us in this Annual Report on Form 10-K is based only on information currently available to us and speaks only as of
the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral,
that may be made from time to time, whether as a result of new information, future developments or otherwise.

 ii

 Item 1.

 Business.

 Overview

 Lightwave
Logic, Inc. is a technology company focused on the development of next generation electro-optic photonic devices made on its P 2 IC
technology platform which we have detailed as: 1) Polymer Stack, 2) Polymer Plus, and 3) Polymer Slot. Our unique
polymer technology platform uses in-house proprietary high-activity and high-stability organic polymers. Electro-optical devices called
modulators convert data from electric signals into optical signals for multiple applications.

 Our differentiation
at the modulator device level is in higher speed, lower power consumption, simplicity of manufacturing, small footprint (size), and reliability.
We have demonstrated higher speed and lower power consumption in packaged devices, and during 2023, we continued to make advances in techniques
to translate our world class material properties to efficient, reliable modulator devices with commercial foundries. We are currently
focused on testing and demonstrating the simplicity of manufacturability and reliability of our devices, including in conjunction with
the silicon photonics manufacturing ecosystem. In 2023 we worked with silicon-based foundry partners to help scale in volume our polymer
modulator devices and we received working modulator chips from these foundries. We have advanced and matured our interactions with our
foundry partners and we continue to receive working modulator chips for prototyping. Silicon-based foundries are large semiconductor fabrication
plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput. Partnering
with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard production lines using
standard equipment, it also allows us to efficiently utilize our capital. The foundry partnerships will allow us to scale our high-performance
polymer optical engines quickly and efficiently. We have now received silicon wafers that range up to 200mm in diameter, which aligns
well with foundry manufacturing.

 Our extremely
strong and broad patent portfolio allows us to optimize our business model in three areas: 1) Traditional focus on product development,
2) Patent licensing and 3) Technology transfer to foundries. We are continually looking to strengthen our patent portfolio both by internal
inventions and acquisition of intellectual property.

initially targeting applications in fiber optic data communications and telecommunications markets and are exploring other applications
that include automotive/LIDAR, sensing, displays etc., for our polymer technology platform. Our goal is to have our unique polymer technology
platform become ubiquitous across many market verticals over and above the optical fiber optic communications markets.

 Generative
Artificial Intelligence (G-AI) has been integrating deeper within our daily activities with applications to make us more efficient and
possibly smarter. The impact on the internet is huge, and the internet is based on an optical network that utilizes data centers to route
and switch traffic or information to and from destinations. Data centers are being upgraded today in a fashion that the industry has not
seen before with significant investments of capital. The expected demands of increased traffic, information, and data driven by G-AI is
changing the way the internet is being operated. G-AI is now creating new and interesting market opportunities to upgrade the internet.
Three of these opportunities are important today: density, speed, and low power and these are very well aligned with our high performance
electro-optic polymers modulator platform. We are designing high performance polymer modulator optical engines to support the rise and
growth of G-AI as it generates more information that will travel through the internet and optical network. While we are not directly a
G-AI company designing electronic processors, we do see immediate benefits of enabling higher levels of information to cross the internet
using our optical polymer modulator platform.

 Unless the context otherwise requires,
all references to the "Company," "we," "our" or "us" and other similar terms means Lightwave
Logic, Inc. Also, this Form 10-K Annual Report includes the names of various government agencies and the trade names of other companies.
Unless specifically stated otherwise, the use or display by us of such other parties' names and trade names in this report is not
intended to and does not imply a relationship with, or endorsement or sponsorship of us by, any of these other parties.

 Commencement of Commercial Operations

 We commenced commercial operations
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.
Our Company is also in various stages of photonic device and materials development and evaluation with potential customers
and strategic partners. We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional
revenue streams from technology transfer agreements and direct sale of our electro-optic device components. We have seen increased interest
in our materials during 2023 and we are in discussions on future license agreements.

 Materials Development

 Our Company
designs and synthesizes organic chromophores for use in its own proprietary electro-optic polymer systems and photonic
device designs. A polymer system is not solely a material, but also encompasses various technical enhancements necessary for its implementation.
These include host polymers, poling methodologies, and molecular spacer systems that are customized to achieve specific optical properties.
Our organic electro-optic polymer systems compounds are mixed into solution form that allows for thin film application. Our proprietary
electro-optic polymers are designed at the molecular level for potentially superior performance, stability, and cost-efficiency. We believe
our proprietary and unique polymers have the potential to replace more expensive, higher power consuming, slower-performance materials
such as semiconductor-based modulator devices that are used in fiber-optic communication networks today.

 Our patented
and patent pending molecular architectures are based on a well-understood chemical and quantum mechanical occurrence known as aromaticity.
Aromaticity provides a high degree of molecular stability that enables our core molecular structures to maintain stability under a broad
range of operating conditions.

 We expect
our patented and patent-pending optical materials along with trade secrets and licensed materials, to be the core of and the enabling
technology for future generations of optical devices, modules, sub-systems, and systems that we will develop or enable our partners to
fully commercialize. Examples of our partners include: electro-optic device manufacturers, contract manufacturers, original equipment manufacturers,
foundries, packaging and assembly manufacturers etc. Our Company contemplates future applications in market verticals that may address
the needs of semiconductor companies, optical network companies, Web 2.0/3.0 media companies, high performance computing companies, telecommunications
companies, aerospace companies, automotive companies, as well as for example, government agencies and defense entities.

 Device Design and Development

 Electro-optic Modulators

 Our Company
designs its own proprietary electro-optical modulation devices. Electro-optical modulators convert data from electric signals into optical
signals that can then be transmitted over high-speed fiber-optic cables. Our modulators are electro-optic, meaning they work because the
optical properties of the polymers are affected by electric fields applied by means of electrodes. Modulators are key components that
are used in fiber optic telecommunications, data communications, and data centers networks etc., to convey the high data flows that have
been driven by applications such as pictures, video streaming, movies etc., that are being transmitted through the Internet. Electro-optical
modulators are expected to continue to be an essential element as the appetite and hunger for data increases every year as well as the
drive towards lower power consumption, and smaller footprint (size).

 Polymer Photonic Integrated
Circuits (P 2 IC)

 Our Company
also designs its own proprietary Photonic Integrated Circuits (otherwise termed a polymer PIC). A polymer PIC is a photonic device that
integrates several photonic functions on a single chip. We believe that our technology can enable an ultra-miniaturization footprint that
is needed to increase the number of photonic functions residing on a semiconductor chip. We see this creating a progression like what
was seen in the computer integrated circuits, commonly referred to as Moore's Law. One type of integration is to combine several
instances of the same photonic functions such as a plurality of modulators to create a multi-channel polymer PIC. The number of channels
can be varied depending on application. For example, the number of photonic components could increase by a factor of 4, 8, or 16. Another
type of integration is to combine different types of devices including from different technology bases such as the combination of a semiconductor
laser with a polymer modulator. Our P 2 IC platform encompasses both these types of architecture.

 Current
semiconductor photonic technology today is struggling to reach faster device speeds. Our modulator devices, enabled by our electro-optic
polymer material systems, work at extremely high frequencies (wide bandwidths) and possess inherent advantages over current crystalline
electro-optic material contained in most modulator devices such as bulk lithium niobate (LiNbO3), indium phosphide (InP), silicon (Si),
and gallium arsenide (Ga As). Our advanced electro-optic polymer platform is creating a new class of modulators such as the Polymer Stack,
Polymer Plus, Polymer Slot, and associated PIC platforms that can address higher data rates in a lower cost, lower power
consuming manner, smaller footprint (size) with much simpler data encoding techniques. Our electro-optic polymer material will boost the
performance of standard PIC platforms such as silicon photonics and indium phosphide.

 Our electro-optic
polymers can be integrated with other materials platforms because they can be applied as a thin film coating in a fabrication clean room
such as may be found in semiconductor foundries using standard clean room tooling. These approaches enable our Polymer Plus and
Polymer Slot device platforms to not only be competitive but fully integrated with foundries. Our polymers are unique in that they
are stable enough to seamlessly integrate into existing CMOS, Indium Phosphide (InP), Gallium Arsenide (Ga As), and other semiconductor
manufacturing lines. Of relevance are the integrated silicon photonics platforms that combine optical and electronic functions. These
include a miniaturized modulator for ultra-small footprint applications in which we term the Polymer Slot. This design is based
on a slot modulator fabricated into semiconductor wafers that can include either silicon or indium phosphide.

 Our
Company has a fabrication facility in Colorado to apply standard fabrication processes to our electro-optic polymers which create modulator
devices. While our internal fabrication facility is capable of manufacturing modulator devices, we have partnered with commercial silicon-based
fabrication companies that are called foundries who can scale our technology with volume quickly and efficiently. The process recipe for
fabrication plants or foundries is called a 'process development kit' or PDK. We are currently working with commercial foundries
to implement our electro-optic polymers into accepted PDKs by the foundries. One of the metrics for successful implementation of PDK is
to receive working modulator chips. Our work with the foundries is being focused with the Polymer Plus and the Polymer Slot
polymer modulators.

 Glossary

 Glossary of select technology
terms to provide you with a better understanding our Company's technology and devices:

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

 Electro-optic material - Electro-optic material is the core active ingredient in high-speed fiber-optic telecommunication systems. Electro-optic materials
are materials that are engineered at the molecular level. Molecular level engineering is commonly referred to as "nanotechnology."

 Electro-optic modulators - Electro-optic (E/O) modulators are electro-optic devices that perform electric-to-optic conversions within the infrastructure
of the internet. Data centers may also benefit from this technology through devices that could significantly increase bandwidth and speed
while decreasing costs. Polymer E/O modulators can be designed and fabricated with multiple structures such as Ridge waveguide (Polymer
Stack) and slot waveguide (Polymer Slot). The waveguides allow the light to be efficiently coupled into and out of the modulators,
and provide a basis for integrating modulators together.

 Gbaud - The rate of symbol
changes in data transmission in billions of symbol changes per second. Each symbol can support one or more bits, the number of bits depending
on the modulation format.

 NRZ – See PAM2.

 PAM2 – 2 level Pulse
Amplitude Modulation, a modulation format in which the optical power in each symbol can assume either of two different levels, low or
high, representing, respectively, a 0 or a 1. PAM2 supports 1 bit per symbol so the bit rate is equal to the baud rate or symbol rate.
For example, a modulator capable of supporting 100 Gbaud can transmit 100 Gbps with PAM2 modulation. This modulation format is often called
NRZ (Non Return to Zero).

 PAM4 - 4 level Pulse Amplitude
Modulation, a modulation format in which the optical power in each symbol can assume any one of 4 different levels. PAM4 supports 2 bits
per symbol so the bit rate is equal to two times the baud rate or symbol rate. For example, a modulator capable of supporting 100 Gbaud
can transmit 200 Gbps with PAM4 modulation.

 PAM8 - 8 level Pulse Amplitude
Modulation, a modulation format in which the optical power in each symbol can assume any one of 8 different levels. PAM4 supports 3 bits
per symbol so the bit rate is equal to three times the baud rate or symbol rate. For example, a modulator capable of supporting 100 Gbaud
can transmit 300 Gbps with PAM8 modulation.

 Photonic Devices - Photonic
devices are components for creating, manipulating, or detecting light. This can include modulators, laser diodes, light-emitting diodes,
solar and photovoltaic cells, displays and optical amplifiers. Other examples are devices for modulating a beam of light and for combining
and separating beams of light of different wavelength.

 Polymers - Polymers, also
known as plastics, are large carbon-based molecules that bond many small molecules together to form a long chain. Polymer materials can
be engineered and optimized using nanotechnology to create a system in which unique surface, electrical, chemical, and electro-optic characteristics
can be controlled. Materials based on polymers are used in a multitude of industrial and consumer products, from automotive parts to home
appliances and furniture, as well as scientific and medical equipment.

 Our Business Opportunity

 Lightwave Logic, Inc. is developing
next generation proprietary photonic devices that are based on our advanced electro-optical polymer material systems. Current legacy technology
is based on inorganic crystalline materials, which has allowed for the proliferation of data over fiber optic cables. However, there are
inherent molecular deficiencies that have prevented this technology from scaling down in price and up in functionality, especially in
terms of $/Gbps. This is primarily due to a closed valence structure that does not allow for the molecular improvements. The valence or
valency of an element is a measure of its combining power with other atoms when it forms chemical compounds or molecules. Also, the physical
properties of a crystal do not allow for its implementation into highly miniaturize slot structures that are in simple terms the pathways
that light travels through in the device.

 Organic polymer materials have
free electrons that allow for limitless potential to combine with other molecular structures, which allows for multiple options and combinations
to improving performance characteristics. Importantly, because they can be applied to optical structures in thin-film liquid form, it
is possible to imbue electro-optic ability to highly miniaturized slot structures. Organic polymer materials are also more economic to
manufacture in comparison to growing exotic crystals that are prone to contamination and further must be sliced into thin wafers. Our
Company believes that the combination of less expensive manufacturing cost, ease of application, and better scalability, together with
a lower cost of ownership due to lower heat dissipation (requiring less cooling), will create enormous demand for our polymer material
through supply agreements as well as polymer based products.

 Many companies' early attempts
at developing commercially reliable organic polymers were stymied due to the difficulty of creating organic molecules that could remain
electro-optically active after being subjected to the high heat of semiconductor manufacturing temperatures (such as silicon CMOS, InP,
Ga As etc.). These early attempts also encountered difficulty synthesizing materials that could withstand photochemical bleaching (loss
of sensitivity to specific frequencies) and material degradation due to high operating temperatures.

 Over the last several years, our
Company has made various scientific breakthroughs that have allowed for the synthesis of proprietary organic polymer materials that can
withstand extremely high process temperatures that exceed 175 0 C. Additionally, these materials have demonstrated photochemical
stability, even after being subjected to high intensity light for over 5,000 hours and exhibited little electro optic degradation even
after being continuously exposed at 110 0 C. This operating temperature exceeds the maximum commercial operating temperatures
of approximately 85 0 C, found in large data centers. These devices were prototyped using ridge waveguide design. Polymer based
ridge waveguide modulators prototypes called a Polymer Stack have performed with 3dB bandwidths that exceed 70GHz.

 The Ridge Waveguide Modulator (Polymet Stack)

 A ridge waveguide modulator is
a type of modulator where the waveguide is fabricated within a layer of our electro-optic polymer system. Various cladding materials and
electrodes are layered over the core polymer. The polymer materials are then part of an integrated photonics platform that can house other
photonic devices, such as lasers, waveguides etc.

 In April 2017 we achieved bandwidth
suitable for 25Gbps data rates in an all-organic polymer ridge waveguide intensity modulator prototype, a significant improvement over
our initial 10Gbps device modulator prototype that was announced the previous year. This breakthrough was significant because a 25Gbps
data rate is important to the optical networking industry because this data rate is a key requirement for achieving 100 Gbps (using 4
channels of 25 Gbps). In July 2017 we advanced our high-speed modulation performance to satisfy 28Gbps data rates for QSFP28 standards
which are also utilized for 100Gbps data center applications.

 In September 2017 we achieved
outstanding performance of our ridge waveguide Mach-Zehnder modulators ahead of schedule, with bandwidth performance levels that will
enable 50Gbaud modulation in fiber-optic communications. This important achievement will allow users to utilize arrays of 4 x 50Gbaud
polymer modulators using PAM-4 encoding to access 400Gbps data rate systems. Pulse-Amplitude Modulation (PAM-4) is an encoding scheme
that can double the amount of data that can be transmitted.

 We are now further optimizing
our high-performance modulators for additional specifications that are beginning to be required by the fiber communications industry for
applications such as networks running at data rates of 800Gbps and 1600Gbps. 800Gbps will require combining 4 channels of 200Gbps utilizing
PAM4 encoding schemes which will prove challenging for many existing modulator technologies. Our technology platform has the capability
and potential to address 4 channels of 400Gbps utilizing PAM4 encoding schemes in the near future, thus creating a roadmap of increased
performance for the industry. Furthermore, we are collaborating with industry partners to optimize the packaging our modulators so that
potential customers can evaluate our high-performance modulators in their systems. This effort will also aid in addressing one of the
most under-evaluated processes of developing high speed devices onto a new and novel technology platform which is robustness and reliability.
We have already made extensive progress with our polymer materials on this front, and now we are integrating our robust polymer materials
onto an integrated photonics platform to provide customers with a more miniaturized, higher performance solution for their data rich systems.

 While our initial focus is to
address data communications and telecommunications network applications along with cloud computing/data center needs, we believe that
in the future we will have additional opportunities over and above G-AI to address other applications such as: backplane optical interconnects,
photovoltaic cells, medical applications, satellite reconnaissance, navigation systems, radar applications, optical filters, spatial light
modulators; and all-optical switches.

 Electro-Optic Polymer Production – Our Approach vs. the BLA Approach

 Our Electro-Optic Material Approach

 Our core material expertise relates
to the production of high-performance, high-stability electro-optic polymers for high-speed (wide bandwidth) telecommunication and data
communications applications. More specifically, it lies in a less mainstream, yet firmly established, scientific phenomenon called aromaticity.
Aromaticity causes a high degree of molecular stability. It is a molecular arrangement wherein atoms combine into multi-membered rings
and share their electrons among each other. Aromatic compounds are stable because the electronic charge distributes evenly over a great
area preventing hostile moieties, such as oxygen and free radicals, from finding an opening to attack.

 Previous and Current Competitive Organic Electro-Optic
Polymer Efforts

 For the past several decades,
diverse corporate interests, including, to our knowledge, IBM, Lockheed Martin, DuPont, AT&T Bell Labs, Honeywell, Motorola, HP, 3M,
and others in addition to numerous universities and U.S. Government Agencies, have attempted to produce high-performance, high-stability
electro-optic polymers for high-speed (wide bandwidth) telecommunication applications. These efforts were largely unsuccessful due, in
our opinion, to the industry's singular adherence to an industry pervasive engineering model known as the Bond Length Alternation
("BLA") theory model, which none of our patented molecular designs rely upon. The BLA model, like all other current industry-standard
molecular designs, consists of molecular designs containing long strings of atoms called polyene chains. Longer polyene chains provide
higher electro-optic performance, but are also more susceptible to environmental threats, which result in unacceptably low-performing,
thermally unstable electro-optic polymers.

 As a result, high frequency modulators
engineered with electro-optic polymers designed on the BLA model or any other polyene chain design models are unstable over typical operating
temperature ranges, and often exhibit performance degradation within days, hours or even minutes. Similarly, lower frequency modulators
exhibit comparable failings, but to a lesser extent. These flaws, in most cases, have prevented commercial quality polymer-based modulators
from entering the commercial marketplace. The thermal stability of these devices does not generally meet the minimum Telcordia GR-468
operating temperature range (-40 degrees Celsius to +85 degrees Celsius) much less the harsher MILSPEC 883D (military specification) range
of -55 degrees Celsius to 150 degrees Celsius. While many new applications do not require meeting full military or Telcordia GR-468 specifications
for polymers, many potential customers prefer to see polymer operate at or near these conditions to convey confidence in the material
system. We understand from initial conversations with data center architects and designers that the temperature specifications that our
materials achieve are compliant with their equipment design needs.

 We are aware of other academic
and commercial development efforts—some by larger companies with vastly more financial resources than we possess. However, we believe
that no one yet has developed organic polymer materials that have demonstrated the combination of thermal stability, photochemical stability
and reliability that can meet or exceed commercial specifications.

 Our Electro-Optic Photonic P 2 IC Device Approach

 Our electro-optic devices are
built around our proprietary organic polymer material systems that we believe will enable better performance than the current embedded
legacy technology built around inorganic materials. We also believe that the inherent flexibility of being able to apply our organic polymer
materials in liquid thin-film form will accelerate the move toward ultra-miniaturization of Polymer Photonic Integrated Circuits (P 2 IC TM)
by increasing the number of photonic circuits on a single chip. Polymer photonics is the application of polymers on to a platform such
as silicon where there are both active and passive photonic component designs. In polymer photonics, polymer devices such as modulators,
waveguides, and multiplexers can be fabricated on to a silicon platform that acts as a package as well as a base for mounting lasers (which
are needed to source the light).

 Our initial device, though highly
miniaturized, utilizes conventional design and fabrication techniques in the industry. Our future devices will utilize silicon photonics
(SiPh) technology, which can support highly miniaturized slot waveguides structures etched in large format (200mm), low cost, and less
expensive silicon wafers coated with our organic electro-optic polymers. The low-cost structure compares well to compound semiconductor
technologies such as Ga As (Gallium arsenide) and InP (Indium Phosphide), which suffer from small format wafers that do not allow the economies
of scale in high volume fabrication plants. The degree of miniaturization possible of the slot modulator using SiPh is not technically
feasible to accomplish with inorganic crystalline materials. Although this may not always remain the case, presently there are nearly
insurmountable technical difficulties that are inherent to a crystalline molecule. We now have the capability to model, simulate and design
photonic integrated circuits (PICs) in-house and we are currently developing 4 channel electro-optic polymer modulators.

 Our Intellectual Property

 Our research and development efforts
over the last 10+ years have yielded our Company an extensive patent portfolio as well as critical trade secrets, unpatented technology
and proprietary knowledge related to our optical polymer materials. Our intellectual property portfolio has expanded significantly over
the few years as we are developing our P 2 IC into prototypes. We have actively filed technical utility patents and are
currently in the process of readying a number of other inventions for formal filings in 2024 and 2025. We expect to continue innovating
with our P 2 IC platform over the next decade. We had additional patents issued or published over the past year indicating that
our technology is being recognized as being unique.

 In 2018, we acquired the polymer
technology intellectual property assets of BrPhotonics Productos Optoelectr nicos S.A., a Brazilian corporation, which significantly
advanced our patent portfolio of electro-optic polymer technology with 15 polymer chemistry materials, devices, packaging and subsystems
patents and further strengthened our design capabilities to solidify our market position as we prepare to enter the 400Gbps integrated
photonics marketplace with a highly competitive, scalable alternative to installed legacy systems.

 In
2022, we acquired the polymer technology and intellectual property assets of Chromosol Ltd (UK), which significantly
strengthened our Company's design capabilities with foundry PDKs with extremely low temperature atomic layer deposition (ALD) processes
that effectively hermetically seal polymer devices that have been prepared for high volume manufacturing. The advanced fabrication processes
of ALD with temperatures below 100C will solidify our market position with both the Company's manufacturing foundry partners as well as
end-users as we prepare to enter the 800Gbps integrated photonics marketplace. The acquisition also advanced our Company's patent
portfolio of electro-optic polymer technology with an innovative polymer chemistry device patent that has potential to increase the performance
of integrated modulators through optical amplification in a photonic integrated circuit (PIC) and enhance the functionality of the PIC
by integrating laser light sources made using the polymer-based gain and a laser optical cavity defined on the Silicon photonic platform,
with our Company's high speed, high efficiency modulators.

 In total, our patent portfolio
currently consists of 67 granted patents that include 54 from the US, 1 from World International
Property Organization (WIPO), 1 from Canada, 6 from the EU, 2 from Japan and 3 from China.

 Our materials patent portfolio
has also strengthened significantly with the filing of additional new patent applications on our core Perkinamine molecular compounds
as well as recent, innovative inventions that are expected to protect our P 2 IC polymer PIC platform from potential competition.

 Included in our patent portfolio are the following
nonlinear optic chromophore designs:

 Stable Free Radical Chromophores, processes for preparing the same

 Stable Free Radical Chromophores, processes for preparing the same

 Tricyclic Spacer Systems for Nonlinear Optical Devices

 Anti-Aromatic Chromophore Architectures

 Heterocyclical Anti-Aromatic Chromophore Architectures

 Heterocyclical Chromophore Architectures

 Heterocyclical Chromophore Architectures with Novel Electronic Acceptor Systems

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

 Our patent portfolio includes
patents not only on nonlinear optic chromophore designs, but also device designs and inventions, fabrication process inventions, packaging
design inventions, as well as novel chemistry to enable high performance, low power, small footprint polymer PIC technology.

 Our strategic plan is to utilize
our core proprietary technology and leverage our proprietary optical materials to be the core of and the enabling technology for future
generations of optical devices, modules, sub-systems and systems that we will develop or potentially out-license to electro-optic device
manufacturers. Our Company contemplates future applications that may address the needs of semiconductor companies, automotive/LiDAR companies,
sensing companies, aerospace companies and government agencies.

 We rely on a combination of patents,
patent applications, trademarks, trade secrets and contractual provisions to protect our technologies. Further, employees are required
to surrender any inventions or intellectual property developed as part of their employment agreements. We also have a policy of requiring
prospective business partners to enter into non-disclosure agreements (NDAs) before disclosure of any of our confidential or proprietary
information. Our Company can make no assurances that we will be able to effectively protect our technologies and know-how or that third
parties will not be able to develop similar technologies and know-how independently.

 Recent Significant Events and Milestones Achieved

February and March 2018, we moved our Newark, Delaware synthetic laboratory and our Longmont, Colorado optical testing laboratory and
corporate headquarters to office, laboratory and research and development space located at 369 Inverness Parkway, Suite 350, Englewood,
Colorado. The 13,420 square feet Englewood facility includes fully functional 1,000 square feet of class 1,000 cleanroom, 500 square feet
of class 10,000 cleanroom, chemistry laboratories, and analytic laboratories. The Englewood facility streamlines all of our Company's
research and development workflow for greater operational efficiencies.

March 2018, our Company, together with our packaging partner, successfully demonstrated packaged polymer modulators designed for 50Gbaud,
which we believe will allow us to scale our P 2 IC platform with our Mach-Zehnder ridge waveguide modulator design as
well as other photonics devices competitively in the 100Gbps and 400Gbps datacom and telecommunications applications market. We are currently
fine-tuning the performance parameters of these prototypes in preparation for customer evaluations.

June 2018, our Company Acquired the Polymer Technology Intellectual Property Assets of BrPhotonics Productos Optoelectr nicos S.A.,
a Brazilian corporation, which significantly advanced our patent portfolio of electro-optic polymer technology with 15 polymer chemistry
materials, devices, packaging and subsystems patent and further strengthened our design capabilities to solidify our market position as
we prepare to enter the 400Gbps integrated photonics marketplace with a highly competitive, scalable alternative to installed legacy systems.

 Also,
during June 2018, our Company promoted polymer PICs and Solidified Polymer PICs as Part of the Photonics Roadmap at the World Technology
Mapping Forum in Enschede, Netherlands, which includes our Company's technology of polymers and polymer PICs that have the potential
to drive not only 400Gbps aggregate data rate solutions, but also 800Gbps and beyond.

 In August
2018 we announced the completion (ahead of schedule) of our fully equipped on-site fabrication facility, where we are expanding our high-speed
test and design capabilities. We also announced the continuation of the building of our internal expertise with the hiring of world-class
technical personnel with 100Gbps experience.

 In February
2019 we announced a major breakthrough in our development of clean technology polymer materials that target the insatiable demand for
fast and efficient data communications in the multi-billion-dollar telecom and data markets supporting Internet, 5G and IoT (Internet
of Things) webscale services. The improved thermally stable polymer has more than double the electro-optic response of our previous materials,
enabling optical device performance of well over 100 GHz with extremely low power requirements. This addition to the family of Perkinamine TM
polymers will hold back run-away consumption of resources and energy needed to support ever-growing data consumption demands. We continue
to conduct testing of the material and assessment of associated manufacturing processes and device structures prior to release to full
development.

 In
March 2019 we created an Advisory Board comprised of three world-class leaders in the photonics industry: Dr. Craig Ciesla, Dr. Christoph
S. Harder, and Mr. Andreas Umbach. In January 2022 Dr. Ciesla was named to our Board of Directors, and our Advisory Board is currently
comprised of Dr. Franky So, Dr. Christoph S. Harder, Mr. Andreas Umbach and Dr. Joseph
A. Miller, who is a former member of our Board of Directors. The Advisory Board is working closely
with our Company leadership to enhance our Company's product positioning and promote our polymer modulator made on our proprietary
Faster by Design polymer P 2 IC
platform. The mission of the Advisory Board is initially to increase our Company's outreach into the datacenter interconnect market
and later to support expansion into other billion-dollar markets. The Advisory Board members have each been chosen for their combination
of deep technical expertise, breadth of experience and industry relationships in the fields of fiber optics communications, polymer and
semiconductor materials. Each of the Advisory Board members has experience at both innovators like Lightwave Logic and large industry
leaders of the type most likely to adopt game-changing polymer-based products. In addition, they possess operational experience with semiconductor
and polymer businesses.

 Also,
in March 2019, our Company received the "Best Achievement in PIC Platform" award for our 100 GHz polymer platform from the
PIC International Conference. The award recognizes innovative advances in the development and application of key materials systems driving
today's photonic integrated circuits (PICs) and providing a steppingstone to future devices.

the second quarter of 2019, our Company promoted its polymers at CoInnovate in May and the World Technology Mapping Forum in June. CoInnovate
is a meeting of semiconductor industry experts. The World Technology Mapping Forum is a group authoring a photonics roadmap out to 2030.

 In September
2019 at the prestigious European Conference on Communications (ECOC) in Dublin, Ireland, we showed measured material response over frequency
and the resulting optical data bits stream on our clean technology polymer materials, the newest addition to our family of Perkinamine TM
polymers, that meet and exceed of our near-term target speed of 80 GHz. We also released data demonstrating stability under elevated temperatures
in the activated (poled to create data carrying capability) state.

 In October
2019, we reported that energy-saving polymer technology is highlighted in the recently published Integrated Photonics Systems Roadmap
- International (IPSR-I). The roadmap validates the need for low-voltage, high-speed technologies such as ours.

 In May
2020, we announced that our latest electro-optic polymer material has exceeded target performance metrics at 1310 nanometers (nm), a wavelength
commonly used in high-volume datacenter fiber optics. This material demonstrates an attractive combination at 1310 nm of high electro-optic
coefficient, low optical loss and good thermal stability at 85 0 Celsius. The material is expected to enable modulators with
80 GHz bandwidth and low drive power, and has an electro-optic coefficient of 200 pm/V, an industry measure of how responsive a material
is to an applied electrical signal. This metric, otherwise known as r33, is very important in lowering power consumption when the material
is used in modulator devices. This technology is applicable to shorter reach datacenter operators, for whom decreasing power consumption
is imperative to the bottom line of a facility. We considered this a truly historic moment—not only in our Company's history,
but in our industry–as we have demonstrated a polymer material that provides the basis for a world-class solution at the 1310 nm
wavelength, something which other companies have spent decades attempting to achieve.

 In July
2020, we announced the official launch of our new corporate website www.lightwavelogic.com, reflecting ongoing efforts to provide up-to-date
information for investors and potential strategic partners. The revamped website offers a clean, modern design integrated with helpful
tools and investor relations resources, including a new corporate explainer video, to illustrate the target markets and advantages of
Lightwave Logic's proprietary electro-optic polymers.

 In
August 2020, we announced the addition of Dr. Franky So, a leading authority in the OLED industry, to our Advisory Board. Dr. So is the
Walter and Ida Freeman Distinguished Professor in the Department of Materials Science and Engineering at North Carolina State University.
Previously, he was the Head of Materials and Device research for OLEDs at OSRAM Opto Semiconductors, as well as Motorola's corporate
research lab in the 1990s. Dr. So was an early researcher in electro-optic (EO) polymer modulators at Hoechst Celanese. As a member of
the Company's advisory board, Dr. So will work closely with management to enhance Lightwave's product positioning for, as
well as the promotion of, its polymer modulators made on its proprietary platform. In addition, he will provide technical support and
advisory services to the Lightwave materials and device teams.

 On
October 7, 2020 we announced the receipt of U.S. Patent number 10,754,093 that improves both the performance and reliability of our high-speed,
low-power electro-optic polymer modulators intended for datacenter and telecommunications applications. The patent allows multi-layered
electro-optic polymer modulators to perform more efficiently through the design of custom interfaces. These interfaces are designed into
the cladding layers that allow optical transmission, electrical conductivity, material integrity, as well as a prevention of solvents
affecting adjacent polymer materials. The net impact of all of this allows for our Company's modulators to improve performance across
the board, enabling higher reliability in the fiber optic communications environment.

 On October
15, 2020, we announced that our proprietary polymer technologies are compatible with currently available integrated photonics platforms.
Our proprietary electro-optic materials are currently in the prototyping phase and are fabricated onto standard silicon wafers, and this
Polymer Plus advancement, driven by the feedback our Company received from potential customers to-date, has allowed our materials
to be suitable for additive integration to integrated photonics platforms such as silicon photonics, as well as indium phosphide and other
standard platforms – therefore enabling simpler integration by customers. We believe this breakthrough allows a polymer modulator
to enhance the performance of existing integrated photonics solutions in the marketplace, enabling higher speed and lower power consumption
on foundry-fabricated photonics designs. Since our technology is additive to existing platforms such as silicon photonics, our electro-optic
polymers are not actually competing with integrated photonic platforms, but rather enabling them to be more competitive in the marketplace,
and it further validates our EO polymer platform as ideally suited to enable optical networking more efficiently than ever.

 On October
21, 2020, we announced that we have optimized a robust, photo-stable organic polymer material for use in our next-generation modulators
intended to be trialed with potential customers under NDA. Our materials show high tolerance to high-intensity infrared light, common
in a fiber optic communications environment and increasingly important as higher density of devices access the network, directly resulting
in higher intensity infrared light levels. Our preliminary results suggest that our recently developed electro-optic polymer material,
designed based on potential customer input, displays unrivaled light tolerance (also known as photostability) compared to any organic
commercial solution in use today. Our results meet both our current internal criteria and address potential customer feedback.

 On November
2, 2020, we disclosed results on our polymer material stability testing including further results for electro-optic efficiency for our
Company's materials that operate both at 1550nm as well as 1310nm. We demonstrated test materials results for electro-optic efficiency
to 4000hrs, improvement in sensitivity to oxygen as part of a broadband exposure test, and stability for polymers exposed to 1310nm light
at 100mW.

 On November
20, 2020 we announced the receipt of U.S. Patent number 10,591,755 that details an important invention that allows users of electro-optic
polymer modulators to not only operate the devices with high speed and low power directly from CMOS IC chips, but gives them the opportunity
to avoid the expense, physical footprint and power consumption of high-speed modulator driver ICs. Furthermore, this patent strengthens
our freedom of manufacturing, and directly enables our modulators to become more competitive in the marketplace.

16, 2020 we announced the development of a new sealant for our future Chip-on-Board (COB) packaged polymer platform. The sealant, which
blocks oxygen and other atmospheric gases, is a key step in our Company's development towards a polymer modulator without a package,
an important enabling technology for the industry. We plan to develop the sealant for commercial implementation in our future modulators.
Recent results suggest that our electro-optic polymer sealant material displays encouraging barrier properties and is expected to translate
to significant improvement in bare chip robustness against atmospheric gases, as compared to existing EO polymer commercial solutions
in use today. While the initial measurements are highly promising, our Company plans to continue development work to further optimize
the sealant material and barrier performance towards the chip-on-board goal.

 On
January 13, 2021, we announced the receipt of U.S. Patent number 10,886,694 that details an invention that allows electro-optic polymer
modulators to be packaged in a hermetic environment using well-known, high-volume and low-cost fabrication processes that are available
in a typical semiconductor fabrication foundry – improving suitability for mass production. Further, the design of this capsule
package can improve both the reliability and the coupling interface between fiber optic cables and their laser sources for arrayed photonic
integrated circuit solutions. The package can also interpose signals from an underlying circuit board to the polymer modulators, lasers,
and other components for data transfer. The hermetic capsule is built from a semiconductor base that contains electrical and optical circuits
and components. A hermetic capsule chamber is created by the design of a semiconductor lid that is sealed to the semiconductor base platform
by a metallization process. Using standardized fabrication techniques we can now create a package that achieves the performance, reliability,
cost, and volume requirements that has been a challenge for the photonics industry for years.

 On
May 11, 2021, we announced the receipt of U.S. Patent number 10,989,871 that details an invention that allows for improved protective
polymer layers in modulators when designed into advanced integrated photonic platforms, better positioning them for high-volume manufacturing
processes. The protective layers will enhance electro-optic polymer devices' performance through higher reliability, better optical performance
and enable the use of standardized manufacturing processes best suited for mass-production.

 On June
7, 2021, we announced that our company's common stock was added to the Solactive EPIC Core
Photonics EUR Index NTR as part of the index's semi-annual additions. The index includes global public companies with a common theme of
optoelectronics, photonics, and optical technologies in general that range from components, modules, manufacturers, and optical network
system companies. This inclusion broadens our exposure to the capital markets community, as well as credibility with potential partners
and customers.

 On
June 16, 2021, we announced test results from new modulators fabricated in 2021, which exceeded bandwidth
design targets and achieved triple the data rate as compared to competing devices in use today. The breakthrough new devices demonstrated
3dB electro-optical with electrical bandwidths that exceed 100GHz – with measurements coming close to our Company's state-of-the-art
110GHz test equipment capability. We expect this advancement to have a profound impact on the traffic flow on the internet.

 On
June 24, 2021, we announced the receipt of U.S. patent number 11,042,051 that details a breakthrough
new device design that enables mass-volume manufacturing when designed into advanced integrated photonic platforms. The device
design enhances reliability, improves optical mode control and most important, lowers by consumption through the use of direct-drive,
low-voltage operation. The patent is entitled, "Direct drive region-less polymer modulator methods of fabricating and materials therefor"
and is expected to open the opportunity for low power consumption electro-optic polymers to be developed into large foundry PDKs (process
development kits) and be ready for mass volume commercialization. The patent emphasizes our technology
platform using fabrication techniques that would naturally fit into foundry PDKs.

 On
August 4, 2021, we announced that we developed improved thermal design properties for electro-optic polymers used in our Polymer Plus
and Polymer Slot modulators, enabling the speed, flexibility and stability needed for high-volume silicon foundry processes. We
successfully created a 2x improvement in r33, while allowing higher stability during poling and post-poling. This provides better thermal
performance and enables greater design flexibility in high-volume silicon foundry PDK (process development kit) processes.

 On
August 9, 2021, we announced the receipt of U.S. patent number 11,067,748 entitled "Guide Transition Device and Method" that
covers a new invention that enables enhanced optical routing architectures for polymer-based integrated photonics that can be scaled with
partner foundries. This new invention will enable innovative, highly scalable optical routing architectures for integrated photonic platforms.
The patent provides novel optical waveguide transition designs using two planes of optical waveguides that are expected to be critical
for optical signal routing and optical switching, opening the opportunity for high speed, energy efficient electro-optic polymers to be
implemented into foundry PDKs (process development kits) to improve the performance of integrated photonic circuits. This breakthrough
technology opens the door for advanced integrated photonics architectural design. We believe t he
simplicity of the design is ideal for production in foundries and will best position our Company to enable increased data traffic on the
internet while using less power.

 On September
1, 2021, our Company's common shares began trading on the Nasdaq Capital Market ("Nasdaq"). The Company's Nasdaq listing
will help to expand our potential shareholder base, improve liquidity, elevate our public profile within the industry and should ultimately
enhance shareholder value.

 On September
15, 2021, we announced the receipt of the 2021 Industry Award for Optical Integration from the European Conference on Optical Communications
(ECOC), a premier industry exhibition that was held in Bordeaux from September 13-15, 2021. ECOC created the fiber communication industry
awards in six categories to put the spotlight on innovation happening within the industry. The awards recognize and highlight key industry
achievements in advancing optical components, photonic integration, optical transport and data center innovation. The awards are selected
from top industry players, representing significant innovation in photonics integration at our prestigious exhibition.

 On
September 16, 2021, we announced the achievement of world-record performance for a polymer modulator, as demonstrated in an optical transmission
experiment by ETH Zurich, using our Company's proprietary, advanced Perkinamine TM chromophores and Polariton Technologies Ltd.'s
newest plasmonic EO modulator, a silicon-photonics-based plasmonic racetrack modulator offering energy-efficient, low-loss, and high-speed
modulation in a compact footprint. The groundbreaking results were presented as a post-deadline paper at the prestigious European Conference
on Optical Communications (ECOC) industry exhibition and conference in Bordeaux on September 16, 2021. Polariton's plasmonic modulator
transmitted 220 Gbit/s OOK and 408 Gbit/s 8PAM. Transmission of an optical signal was conducted over 100 m using a low-voltage electrical
drive of 0.6Vp, an on-chip loss of 1 dB, and an optical 3 dB bandwidth of beyond 110 GHz.

 On
January 3, 2022, we announced the publication of our patent application 20210405504A1 by the United States Patent and Trademark Office
(USPTO) – entitled 'Nonlinear Optical Chromophores Having a Diamondoid Group Attached Thereto, Methods of Preparing the Same,
and Uses Thereof' – which significantly improves the overall stability and performance of our electro-optic polymers. The
Company's electro-optic chromophores are designed to have one or more diamondiod molecular groups attached to the chromophore. When such
chromophores are dispersed in a host polymer matrix, the electro-optic materials result in improved macroscopic electro-optic properties,
increased poling efficiency, increased loading as well as increased stability of these materials after poling. The impact of this technology
is that it will accelerate the path for very high-speed, low-power electro-optic polymers to be implemented into large foundry process
development kits (" PDKs ") to boost performance of integrated photonic circuits.

 On
January 3, 2022, we announced that we e nhanced our Company's Foundry Process Development Kit Offering with the addition of
Optical Grating Couplers. This expanded design tool kit will enable silicon foundries to implement
PDKs and fabricate modulators and optical gratings in a single fab run, further enhancing modulator efficacy. We are continuing to work
on additional design tool kit components to enable an expedited commercialization process through a more simplified manufacturing process
for our foundry partners.

 On
January 3, 2022, we announced that we appointed respected industry leader Dr. Craig Ciesla to our Board of Directors and that retired
director Dr. Joseph A. Miller transitioned to our Company's Advisory Board. Dr. Ciesla is currently
the Vice President, Head of the Advanced Platforms and Devices Group at Illumina, a leading provider of DNA sequencing and array technologies.
There he leads a team driving innovation in sequencing platforms, microfluidics, electronics, and nanofabrication. Prior to Illumina,
he was Vice President of Engineering at Kaiam, where he was responsible for the development and production of 100G transceivers for the
data-center market. He was also the founding CEO of Tactus Technology, an innovator in the user interface industry, where he was the co-inventor
of Tactus' polymer morphing screen technology. Before Tactus he had a variety of roles at Intel, JDSU (now Lumentum), Bookham (now Oclaro)
and Ignis Optics developing a wide range of products in the fiber-optics market. He started his career at Toshiba Research Europe, where
he performed early terahertz images of skin cancer. Dr. Ciesla holds a BSc (Hons.) in Applied Physics and Ph. D. in Physics from Heriot-Watt
University in Edinburgh.

 On
February 10, 2022, we announced breakthrough photostability results on our electro-optic polymer modulators that are compatible with high-volume
silicon foundry processes. The improved photostability of our polymers are expected to minimize any optical losses and provide
a more robust platform for silicon foundries. This breakthrough photostability performance is incredibly important as we optimize our
polymers for high-volume silicon foundry processes.

 On March
7, 2022, we announced the receipt of U.S. patent number 11,262,605 entitled, "Active region-less
polymer modulator integrated on a common PIC platform and method." This invention will simplify modulator integration for high-volume
foundry manufacturing operations while enhancing polymer reliability to enable a more effective photonic engine. The essence of the invention
is a complete optical engine that fits into fiber optic transceivers (either pluggable or co-packaged) that are used in routers, servers
and elsewhere in optical networks. The engine is designed for high-volume manufacturing operations using silicon foundry infrastructure.
The patent illustrates the use of our polymer modulators as a high speed, low power engine not only for data communication and telecommunication
applications, but other new market opportunities as well.

 On
March 22, 2022 we announced the achievement of world-class results for a polymer modulator, as demonstrated in an enhanced stability and
high-speed measurement by Polariton Technologies and ETH Zurich. The results were generated using the Company's proprietary, advanced
Perkinamine chromophores in Polariton's silicon-photonics-based plasmonic racetrack modulator that offers energy-efficient, low-loss,
and high-speed modulation in a compact footprint that is ideal for pluggable and/or co-packaging transceiver modules. The plasmonic modulator
performance was compared to that of silicon photonic microring modulators. The plasmonic device, using Lightwave Logic's electro-optic
polymer material, was shown to be 250-3000x more stable than the silicon devices relative to operating condition changes. In addition,
the plasmonic modulator was tested for 70+ minutes at 100 Gbps NRZ at 80C with no decrease in performance. The world-class results were
presented as a contributed peer-reviewed paper at the prestigious 2022 Optical Fiber Conference (OFC2022), the optical communication industry's
leading international technical conference and trade show, in San Diego on March 10, 2022.

 On
April 19, 2022, we announced the publication of our patent application 2022/0113566 A1 entitled "TFP
(thin film polymer) optical transition device and method" that illustrates the design of a simpler to fabricate, lower cost hybrid
integrated photonics chip using electro-optic polymers which are more advantageous for high-volume production. The invention will simplify
polymer modulator fabrication when integrated with silicon photonics for high-volume foundry manufacturing applications. The simplified
fabrication approach enables us to simplify the production of very high speed, low power proprietary polymer modulators that will enable
significantly faster data rates in the internet environment. The essence of the invention is a hybrid polymer-silicon photonics engine
that fits into fiber optic transceivers (either pluggable or co-packaged) that are used in the routers, servers and network equipment
that are proliferating with the growth of data centers, cloud computing and optical communications capacity. The hybrid polymer-silicon
photonics engine is designed to use high-volume silicon foundry infrastructure.

 On
May 25, 2022, we announced enhanced photostability results on our Company's proprietary electro-optic polymer modulators – demonstrating
the reliability necessary for commercial deployments – all based on a technology which can be ported into high-volume silicon foundries
and integrated onto a silicon photonics platform with other optical devices. Photostability is a critical performance metric required
both in high volume manufacturing processes (such as photolithography) and in offering the high reliability and network availability required
for commercial deployments. In the tests conducted, subjecting the Company's latest polymers to high intensity optical power for over
3000 hours produced no change in device performance. The ability of our proprietary polymers to pass this accelerated photostability aging
test provides assurance that they will both tolerate the optical exposures which occur in high-volume manufacturing and support the reliability
over the required operating life of optical transceivers and network elements.

 On
June 21, 2022, we announced the publication of our patent application 2022/0187637A1 entitled "Hybrid electro-optic polymer modulator
with silicon photonics" that details a novel fabrication process that allows our Company's proprietary polymers to be fabricated
by silicon foundries in a high-volume manufacturing environment. The published patent application also details a more efficient process
that allows for high yielding, high stability poling of polymers in a high-volume foundry manufacturing environment. The development of
the PDK for this new optical hybrid optical modulator design is now in progress with our Company's foundry partners.

 June
23, 2022, we announced the publication of our patent application 2022/0187638A1 entitled " Hybrid electro-optic polymer modulator
with atomic layer deposition (ALD) sealant layer" that allows our Company's proprietary polymers to be sealed to moisture
and other atmospheric gases in a very low temperature and quasi-hermetic environment through the use of a chip-scale packaging approach
that can be applied in parallel at wafer level (i.e. in volume) and that eliminates the need for a separate hermetic enclosure or "gold
box." Chip-scale packaging is a technique that has been gathering momentum in the silicon electronics industry for the past decade
to reduce device chip packaging costs and increase device performance – enabling high-volume front and back-end manufacturing as
well as extremely small sizes in miniaturization. Specifically, our electro-optic polymer modulators are sealed with a low-temperature
conformal atomic layer deposition dielectic layers that are supported on a silicon substrate with passive silicon photonics waveguides.

 On
June 27, 2022 our Company's common stock was added to the Russell 3000 Index. We expect
that the awareness of being included in one of the most widely followed benchmarks will not only benefit our existing shareholders but
will lead to a broader base of institutional investors. The annual Russell index reconstitution captures the 4,000 largest US stocks as
of May 6, ranking them by total market capitalization. Our membership in the US all-cap Russell 3000 Index, which remains
in place for one year, means automatic inclusion in the small-cap Russell 2000 Index as well as the appropriate growth and value
style indexes.

 On June
30, 2022, we announced that our CEO, Dr. Michael Lebby, was again invited to co-chair the Photonic Integrated Circuits (PIC) International
Conference that took place June 28-29, 2022 in Brussels, Belgium. At the conference, Dr. Lebby led an invited talk entitled, "Enabling
lower power consumption optical networking using high speed, low power polymer modulators", focusing on the issue of reducing power
consumption in datacenters and optical networks. He also contributed to a panel session, "Hybrid PICs technology challenges and solutions,"
on the need for hybrid integration addressing the volume production of 3D and 2.5 integrated electronic and photonic integrated circuits
(PICs) based on the utilization of large silicon foundries. This included a discussion on the use of silicon photonics with hybrid technologies
such as electro-optic polymers, polymer based plasmonics, silicon nitride and III-V laser sources.

 On September
22, 2022, we announced the achievement of world record performance for low-power consumption ultra-high-speed 'green' slot modulators
in collaboration with Karlsruhe Institute of Technology (KIT) and its spin-off SilOriX as part of a peer-reviewed post-deadline paper
presented at the prestigious 2022 European Conference on Optical Communications (ECOC) in Basel, Switzerland on September 22, 2022. The
team presented the first sub-1mm Mach Zehnder-type modulators with sub-1V drive voltage that rely on Lightwave's proprietary advanced
Perkinamine chromophores. The devices rely on the slot-waveguide device concept developed at KIT and commercialized through SilOriX.
Further, the material has experimentally proven thermal stability at 85 C and offers extreme energy-efficiency along with high-speed
modulation in a compact footprint. Additionally, this shows that our material can perform in a variety of device structures and designs
and is positioned to significantly reduce power consumption of optical networking and to become a true 'green photonics' enabler for the
industry.

 On September
22, 2022, we announced the achievement of a world-record demonstration of a 250GHz super high bandwidth electro-optical-electrical (EOE)
link through a collaboration with ETH Zurich. The link was demonstrated by ETH Zurich and uses Polariton's high-speed plasmonic modulators
containing Lightwave's proprietary Perkinamine chromophores and ETH Zurich's high-speed graphene photodetectors. The link contained
a plasmonic modulator using electro-optic polymer material as well as a novel metamaterial enhanced graphene photodetector featuring a
200 nm spectral window and a setup-limited 1 bandwidth of 500 GHz. The EOE link achieved a world record and unprecedented 250
GHz 3dB bandwidth 2. This is an optical link that utilizes devices with extremely high bandwidths, and the plasmonic demonstration
shows that hybrid technologies such as our electro-optic polymers and graphene together form an important technology platform for volume
scalability using large silicon foundries for mass commercialization. T he groundbreaking results
were presented by Stephan Koepfli as part of a peer-reviewed post-deadline paper presented at the prestigious 2022 European Conference
on Optical Communications (ECOC) in Basel, Switzerland on September 22, 2022.

 On
November 15, 2022, we announced the receipt of U.S. patent number 11,435,603 B2 entitled "TFP (thin
film polymer) optical transition device and method," which illustrates the design of a simpler to fabricate, lower cost hybrid integrated
photonics chip using electro-optic polymers which are more advantageous for high-volume production. The simplified fabrication approach
enables streamlined production of very high speed, low power proprietary polymer modulators that will enable significantly faster data
rates in the internet environment. The essence of the invention is a hybrid polymer-silicon photonics engine that fits into fiber optic
transceivers (either pluggable or co-packaged) that are used in the routers, servers and network equipment that are proliferating with
the growth of data centers, cloud computing and optical communications capacity.

 On
November 17, 2022, we announced the receipt of U.S. patent number 11,435,604 B2 entitled "Hybrid electro-optic
polymer modulator with silicon photonics," which allows Lightwave Logic's proprietary polymers to be fabricated by silicon foundries
in a high-volume manufacturing environment. The patent also details a more efficient process that allows for high yielding, high stability
poling of polymers in a high-volume foundry manufacturing environment. From a commercial standpoint, this patent enables our polymers
to be mass-produced using existing silicon foundry equipment, simplifying production for the foundry's we are working with.

 On
November 29, 2022, we announced our acquisition of the polymer technology and intellectual property assets
of Chromosol Ltd (UK). The acquisition significantly strengthened our Company's design capabilities with foundry PDKs with extremely low
temperature atomic layer deposition (ALD) processes that effectively hermetically seal polymer devices that have been prepared for high
volume manufacturing. The advanced fabrication processes of ALD with temperatures below 100C will solidify our Company's market position
with both the Company's manufacturing foundry partners as well as end-users as we prepare to enter the 800Gbps integrated photonics marketplace.
The acquisition also advanced our Company's patent portfolio of electro-optic polymer technology with an innovative polymer chemistry
device patent that has potential to increase the performance of integrated modulators through optical amplification in a photonic integrated
circuit (PIC) and enhance the functionality of the PIC by integrating laser light sources made using the polymer-based gain and a laser
optical cavity defined on the Silicon photonic platform, with our Company's high speed, high efficiency modulators. Having access
to extremely low temperature ALD allows our Company's polymer modulators to be protected from the environment without the need for expensive
and large footprint gold box packaging, propelling our Company forward with chip-scale packaging as required by major hyper-scaler end-users.
The patent opens a new class of PICs which expands our variety of devices. The Patent is US patent number 9837794, EU patent number 3017489,
China registration number 201480048236 & 201910230856, and is entitled, "Optoelectronic devices, methods of fabrication thereof
and materials therefor."

 ———————

 1 Set-up limited' indicates that the measurement was limited by the testing equipment.

 2 University of Kiel, Germany supported the digital signal processor (DSP),
and ETHZ supported the photodetector.

 On
December 12, 2022, we announced the receipt of U.S. patent number 11,506,918 B2 entitled "Hybrid electro-optic
polymer modulator with atomic layer deposition (ALD) sealant layer," which allows our proprietary polymers to be sealed to moisture
and atmospheric gases in a very low temperature and quasi-hermetic environment through the use of a chip-scale packaging approach that
can be applied in parallel at wafer level (i.e. in volume) and that eliminates the need for a separate hermetic enclosure or "gold
box." Specifically, our electro-optic polymer modulators will be sealed with low-temperature conformal atomic layer deposition dielectric
layers that are supported on a silicon substrate with passive silicon photonics waveguides. The sealant process will enable lower cost
system implementation in a high-volume foundry environment.

 On
December 13, 2022, we provided a world-class figure-of merit performance for modulators using electro-optical polymers and a plasmonic
device design in conjunction with Polariton Technologies. Building from the world record performance and demonstration of a 250 GHz super
high bandwidth electro-optical-electrical (EOE) link that was presented at the 2022 European Conference on Optical Communications ( ECOC) 3
through a collaboration with ETH Zurich, these latest figure of merit results show the potential for extreme power savings for optical
network equipment and demonstrated clearly that polymer-based technology platforms are positioned well for general implementation. These
results were achieved using Polariton's electro-optic polymer-based plasmonic devices with Lightwave's electro-optic materials, with a
bandwidth greater than 250 GHz. While these high-speed results have been reported previously, here Lightwave Logic reported for the first
time that the voltage-length product Figure of Merit (FoM) for this modulator is just 60 Vum, which is approximately 10X better than the
performance of the optical semiconductor modulators that are incumbent in the optical network and internet today. This figure of merit
will allow ultra-low voltage operation and, enabled by Polariton's plasmonic modulator, the ability to carry significantly more data per
modulator while consuming much less power. The net positive effect on system level equipment is expected not only to be significant, but
perhaps more importantly, also a strong driver of a ''green photonics" platform. These results position our Company extremely well
for next generation ultra-high-capacity interconnects for the hyper-scale market. The combination of electro-optic polymers and plasmonics
is becoming an ideal sunrise technology platform to address the 'Achilles heel' of the data industry: high power consumption. As the industry
contemplates the implementation of PAM4 200G lanes for 2023 and 2024, these optical devices already have shown capability for at least
2X these lane speeds.

 On
January 12, 2023, our Chief Executive Officer, Dr. Michael Lebby, hosted a presentation and participated
in an industry panel discussion at the 2023 Photonics Spectra Conference,
a prominent virtual conference within the photonics industry. In the panel discussion, Dr. Lebby and a panel of industry experts from
the entire photonics integrated chip (PIC) value chain, discussed lessons learned when scaling PIC production for volume applications.
In his presentation, Dr. Lebby reviewed the potential solutions that electro-optical polymer modulators offer to integrated and hybrid
photonics integrated chips (PICs), discussing their relevance to PIC packaging operations as well as how electro-optic polymers boost
PIC speed and power efficiency.

 On
January 30, 2023, our Chief Executive Officer, Dr. Michael Lebby, participated in an industry panel discussion
at the 2023 Laser Focus World Executive Forum. The Laser Focus World Executive Forum is one of the
industry's premier events for senior-level executives, technology directors, and business managers from technology companies around the
world, delivering an in-depth analysis of the global laser and photonics market. In this discussion, Dr. Lebby joined a panel of industry
experts to discuss how the success of Silicon Photonics is based on the premise that it is a semiconductor technology, and hence it can
be manufactured in volume by semiconductor fabs. The panel addressed the manufacturing plans of photonic integrated circuits (PICs) by
semiconductor fabs and how the photonic industry can transfer their processes to the semiconductor industry.

 On March
22, 2023, we announced that our latest commercial-class electro-optic polymer material achieved
breakthrough performance metrics at 1310 nanometers (nm), a wavelength popular in hyperscale datacenter applications. These
commercial-class improvements include a significantly higher electro-optic coefficient exceeding 200 pm/V, which allows for very
low drive power of 1 volt or less. Other characteristics include optimized chromophore loading, superior low optical loss, excellent temporal
stability at 85 0 Celsius, and extremely high thermal and photo stability. The breakthrough commercial-class electro-optic material is
expected to enable ultra-small footprint modulators with at least 100 GHz bandwidth as well as meeting all critical requirements for pluggable
transceivers, on-board optics and co-packaging solutions. Additionally, the achievement of these results at the 1310nm bandwidth positions
us for potential near-term licensing opportunities in datacenter applications.

 ———————

 The groundbreaking results were presented by Stefan
Koepfli (ETH Zurich) as part of a peer-reviewed post-deadline paper presented at the prestigious
2022 European Conference on Optical Communications (ECOC) in Basel, Switzerland on September 22, 2022. The post-deadline
paper is titled ">500 GHz Bandwidth Graphene Photodetector Enabling Highest-Capacity Plasmonic-to-Plasmonic Links."

 In
April 2023, our Chief Executive Officer, Dr. Michael Lebby, co-chaired the Photonic Integrated Circuits (PIC) International Conference
in Brussels, Belgium. Industry-leading insiders delivered more than 30 presentations spanning six sectors at the conference. The conference
provided attendees with an up-to-date overview of the status of the global photonics industry as well as the opportunity to meet many
other key players within the community. In addition to serving as co-chair of the event, Dr. Lebby hosted a presentation for in-person
attendees within the "Scaling PICs in Volume Using Foundries" track, focusing on the industry's consideration of electro-optic
polymer modulators due to their increased modulation speed, lower power consumption, and potential for future multi-Tbps aggregated data-rates
in the next decade. Additionally, Dr. Lebby discussed the latest results on foundry fabricated EO polymers, as well as the latest work
in photonics roadmaps on both the integrated photonics (PIC) level as well as PIC packaging level.

 On
May 4, 2023, we announced, that in conjunction with our research partners at the Karlsruhe Institute of Technology and Solarix, the achievement
of record optical modulator performance using our Company's latest Perkinamine Series 5 material at extremely low
cryogenic temperatures, delivering the potential to revolutionize applications in supercomputers, quantum circuits and advanced computing
systems. Building from the world record performance and demonstration of super high bandwidth, and super low voltage electro-optic
modulators with Karlsruhe Institute of Technology and Silorix over the past year, the results have the potential to enable supercomputing
and quantum systems to be more competitive than standard computational systems given its faster speeds at low temperatures. This achievement
opens huge opportunities to our Company in the areas of supercomputing and quantum systems by giving access to very high data rate, low
power optical modulators.

 On
May 18, 2023, we announced the receipt of U.S. patent number 11,614,670 B2 entitled "Electro-optic polymer devices having high performance
claddings and methods of preparing the same," which is a cutting-edge design technique, enhancing the performance of polymer modulators
through the use of innovative polymer cladding design that is amenable for high-volume foundry fabrication when integrated with silicon
photonics. The patent details a novel fabrication process that allows our proprietary polymers to perform more effectively and to be fabricated
by silicon foundries in a high-volume manufacturing environment. It also introduces a more efficient process for improving the performance
of the polymer claddings, leading to increased poling efficiency and lower losses in both optical and RF aspects. This patent is helping
us move forward with our commercial discussions through the enabling of enhanced performance and simplified manufacturing of our polymer
modulators with silicon photonics.

 On
May 25, 2023, we announced our Company's first commercial material supply license agreement for our Perkinamine chromophore
materials. This agreement is to provide Perkinamine chromophore materials for polymer based photonic devices and
photonic integrated circuits (PICs). Supplying licensed materials is one prong of our Company's three-prong revenue model and business
strategy that includes polymer modulator products as well as technology transfer. This agreement recognizes market acceptance and competitive
advantage of our technology and validates the first prong of our business model. Further, it represents tangible commercial progress for
electro-optic polymers as part of our business plan.

 On
May 31, 2023, we announced the receipt of U.S. patent number 11,661,428 entitled "Nonlinear Optical Chromophores, Nonlinear Optical
Materials Containing the Same, and Uses Thereof in Optical Devices," which details an innovative organic chromophore design using
a novel 'thiophene bridge' to significantly improve material performance in a production environment. This is accomplished by designing
thiophene-containing bridging groups that are positioned between the electron-donating and electron-accepting ends of the chromophore.
These designs provide nonlinear optical chromophores with significantly improved optical properties and improved stability. We expect
this patent will help us progress our commercial discussions with potential customers.

 In
June 2023, we announced the publication of World International Property Organization (WIPO) PCT Patent Publication - PCT Patent No. WO
2023/102066 entitled "Nonlinear Optical Materials Containing High Boiling Point Solvents, and Methods of Efficiently Poling The
Same," which illustrates novel organic chemical structural designs that offer increased poling efficiency, as well as thermal stability
for electro-optic materials. These designs provide non-linear optical chromophores with significantly improved material properties and
stability for processing and fabrication by commercial foundries. Specifically, the patent teaches material processing and poling methods
that directly leads to significantly enhanced electro-optic efficiency (r33) as compared to previous poling techniques. We consider this
WIPO PCT Patent Publication to be a strong step forward in the scaling and volume commercialization of our polymer technology platform.

 On
August 1, 2023, we appointed respected industry executive Laila Partridge to our Board of Directors. Ms. Partridge brings over
30 years of executive experience in technology, corporate innovation and finance to our Board – having worked with a wide range
of technologies, including telecommunications, internet infrastructure, AI, internet of things and more. She was named by Boston Business
Journal as one of the ten "2017 Women to Watch in Science and Technology". She currently serves as Founder and Chief Executive
Officer of The HardTech Project, a new venture with a novel approach to early-stage hardware investing. Previously, she was Managing Director
of the STANLEY + Techstars Accelerator where she directed a global effort for Stanley Black & Decker's Chief Technology
Officer to identify and invest in innovative technologies for industrial applications with an emphasis on electrification, sustainability
and advanced manufacturing. Prior to that, she began her technology career at Intel Capital, serving as a Director of Strategic Investments.
Ms. Partridge began her career at Wells Fargo, where she ultimately achieved the role of VP of Corporate Banking, having led complex corporate
finance transactions for the company's senior secured debt agencies in the Midwest. Ms. Partridge brings significant board experience
to the Board of Directors, including at Intel Capital serving privately-held technology companies, and in her current role as an independent
Director at Cambridge Trust (NASDAQ: CATC). She holds a Bachelor's degree with Honors from Wellesley College.

 On
August 21, 2023, we announced the completion of new laboratory production facilities, expanding our corporate headquarters by over 65%,
nearly 10,000 square feet, for a total of approximately 23,500 square feet to support new commercial activity, including enabling commercial
device testing and evaluation, production reliability testing, laser characterization, SEM analysis and the expansion of our Company's
chemical synthesis production line.

 On
October 3, 2023, we announced our receipt of the 2023 Industry Award for Most Innovative Hybrid PIC/Optical Integration Platform from
the European Conference on Optical Communications (ECOC) – a premier industry exhibition – held in Glasgow,
Scotland from October 2-4, 2023. ECOC is one of the leading conferences on optical communication and attracts top industry minds
from across the world. The ECOC awards emphasize technology and product commercialization, highlighting significant achievements in advancing
the business of optical communications, transport, networking, fiber-based products, photonic integration circuits and related developments.
The Innovative Product category with 5 subcategories looks across the industry at new products driving change in their respective market
segment, and what is timely and helping to increase the use of optics. Metrics include design features that are photonics, electronics,
thermal, mechanical, chemical, environmental and carbon footprint based.

 As we
move forward to diligently meet our goals, we continue to work closely with our packaging and foundry partners for 112Gbaud prototypes,
and we are advancing our reliability and characterization efforts to support our prototyping. Depending on electrical encoding schemes
such as PAM4, or PAM8, or wavelength optical multiplexing, these Gigabaud rates roughly translate to 200Gbps and 300Gbps per lane, and
are the key speed rates for emerging 800Gbps to future possible 1200Gbps applications. Our partnership with silicon-based foundries will
allow us to scale commercial volumes of electro-optic polymer modulator devices using large silicon wafers, and we are currently working
to have our fabrication processes accepted into foundry PDKs (process development kits). These are the recipes that foundries use to manufacture
devices in their fabrication plants.

actively engaged with test equipment manufacturers of the most advanced test equipment to test our state-of-the-art polymer devices. We
continue to engage with multiple industry bodies to promote our roadmap. We continue to fine tune our business model with target markets,
customers, and technical specifications. Our business model includes the licensing of our strong IP and Patent portfolio, as well as technology
transfer to entities such as foundries. Discussions with prospective customers are validating that our modulators are ideally suited for
the datacenter and telecommunications markets that are over 10km in length. Details and feedback of what these prospective customers are
seeking from a prototype are delivered to our technical team.

 The Global Photonic Device Market

 General Overview

 Lightwave Logic has been reviewing
the latest market data as well as its own internal data for its business strategy, and below we detail the global market dynamics both
in terms of data traffic as well as how co-packaged optical solutions which will require optimized modulators will grow in the fiber communications
segment of the market.

 As we have already seen with
products such as smart phones, lap top computers, and personal digital assistants (PDAs), Internet traffic, and especially mobile internet
traffic is one of the important metrics that is being used to show activity in fiber communications, and particularly telecommunications
as well as data communications (which includes datacenters and high-performance computing). Internet Protocol (IP) traffic has typically
been used to gauge the amount of data that is being used on the internet as shown in the graph below (sourced from Cisco VNI in 2022).
The metric is Exabytes per month. An Exabyte is 1E18 which is 1000 Petabytes, or 1000,000 Terabytes or a billion Gigabytes of data. As
seen from the graph which has a strong growth of 26% CAGR (2017-2022) of global IP traffic, with the majority traffic being driven by
internet video. The traffic rates are fast approaching the metric of Zetta which is 1E21 bytes of data. Some estimates are discussing
the further metric of Yotta which is 1E24 bytes of data over the next decade, which is also expected to be driven for the most part by
internet video.

 Within the overall market trends
of IP traffic growth and in particular mobile video, the internet will need to be able to support high volumes of data traffic. To do
this, the fiber-optic infrastructure that allows data to be communicated between network nodes such as datacenters, within datacenters,
and optical network switches etc., needs to be upgraded. Today, fiber-optic networks are a combination of long, medium and short optical
interconnects that range from 3 meters (or 1yard) to over 1000km depending on application in the optical network. Optical components,
typically known as photonics components are used to build the fiber-optic infrastructure and consist of things such as: laser diodes,
photodetectors, multipliers, modulators, transceivers etc. These are known as discrete components, while a mix of these components that
are integrated or connected on a single substrate (such as silicon, InP, Ga As etc.) are called PICs (Photonic Integrated Components).
All of these components are packaged and put into transceivers.

 Computing power is increasing significantly in part due to Generative Artificial
Intelligenc (G-AI). In the graph above, large language models are requiring large GPU clusters, which is driving more information on the
internet. This coupled with the heavy power consumption becomes a driving factor to reduce power in data centers and other nodes that
utilize computational processing. The leverage of low power, high speed polymer modulators will alleviate these issues in the near future.

 The above graphic shows that for large Graphical Processing Units (GPUs),
power consumption is a key metric to be addressed. The graphic also shows that the role of optics is now becoming significant, and lower
power optical components and PICs such as polymer modulators have the potential to address and mitigate the growing trend of increased
power consumption in G-AI datacenter applications.

 Within the datacenter environment, the power contribution of incumbent
modulators is very high and needs to be reduced, especially at the new network nodes of 800Gbps, and more so at 1600Gbps. The role of
polymer PIC based electro-optic modulators will be to reduce power consumption at these higher data rates, and provide power competitive
fiber optic transceivers at 800Gbps, 1600Gbps and even 3200Gbps in the near future. In the graphic above, there are huge polymer modulator
opportunities that include fiber optic transceivers, silicon photonics, and other platforms such as high-performance computing, RF, quantum
computing etc. Electro-optic polymers enable higher performance data communcations in a number of fiber optic market verticals.

 The global device and connection
growth market share as forecasted by Yole Developpment (see below) in their optical transceivers for datacom and telecom report (2021)
is expected to grow from $18B in 2018 to approximately $30B in 2023 as can be seen by the figure below (Source: Yole Developpment). The
compound annual growth is expected to reach a healthy 10% for the period 2018 to 2023. This market has machine to machine market vertical
at nearly 50% of the market share by 2023, followed by smartphones, TVs and game consoles, non-smartphones, Personal computers, other,
and tablets.

 The datacom optics revenue forecast
ranging from 2020 through 2026, and onto 2032 is shown in the graphic below. This data is also sourced from Yole Developpment and is reported
in their co-packaged optics for data centers report in 2022. The data shows that the datacom optics revenues have grown from nearly $6B
in 2020 to a forecast that exceeds $15B in 2026, and over $28B by 2032. The respective compound annual growth rates are a very healthy
19% for 2020-2026, and a healthy 11% for the period 2026-2032. The market is segmented into three major categories that include: Active
optical cable and embed optical modules, ethernet, and co-packaged optics/on-board optics. In all of these categories the growth of PIC
based engines for optical transceivers being utilized in datacom optics is expected to grow quickly. In all of these segments today, many
of the optical engines are either indium phosphide or silicon photonics based. These optical engines are expected to be upgraded with
hybrid PIC solutions that improve the overall performance of the PIC.

 The optical transceiver revenue
forecast ranging from 2020 through 2026 by market segment is shown in the figure below. This data is also sourced from Yole Development,
and is reported in their optical transceivers for datacom and telecom market report published in 2021. The data shows that the optical
transceiver revenues have grown from nearly $10B in 2020 to forecast that approaches $21B in 2026. The respective compound annual growth
rates are a healthy 14% for the period 2020-2026. The market is segmented into two major categories that include: Datacom and telecom.
In these categories the growth of PIC based engines for optical transceivers being utilized in both datacom and telecom is expected to
grow quickly using hybrid solutions that are expected to incorporate electro-optic polymer technologies.

 A large driver of the growth of
the optical transceiver market is the corresponding growth of - and the "need for speed" by - the large data center operators
lead by Amazon. Data sourced from Lightcounting shows the rapid adoption and growth of each generation of speed. As noted earlier, our
unique polymer technology platform has inherent advantages for the requirements of 800Gbps. While this graphic does not show market revenue for 1600Gbps and 3200Gbps,
these higher performing datarates are being planned on roadmaps today.

 As the Company is developing polymer
based photonic devices such as fiber-optic modulators, these devices translate electric signals into optical signals and allow laser-based
technology to operate effectively at, 100G, 200G, and beyond. Lasers with modulators are used in fiber communication systems to transfer
data over fiber-optic networks today and are expected to be a key driver in photonics components for PIC based technological solutions
over the next decade. Optical data transfer using lasers and modulators is significantly faster and more efficient than transfer technologies
using only electric signals, permitting more cost-effective use of bandwidth for broadband Internet and voice services.

 Our Target Markets

 Cloud computing and data
centers

 Big
data is a general term used to describe the voluminous amount of unstructured and semi-structured data a Company creates –
data that would take too much time and cost too much money to load into a relational database for analysis. Companies are looking to cloud
computing in their data centers to access all the data. Inherent speed and bandwidth limits of traditional solutions and the potential
of organic polymer devices offer an opportunity to increase the bandwidth, reduce costs, improve speed of access, and to reduce power
consumption both at the device as well as the system level.

 Datacenters
have grown to enormous sizes with hundreds of thousands and even millions of servers in a single datacenter. The number of so-called "hyperscale"
datacenters are expected to continue to increase in number. Due to their size, a single "datacenter" may consist of multiple
large warehouse-size buildings on a campus or even several locations distributed around a metropolitan area. Data centers are confronted
with the problem of moving vast amounts of data not only around a single data center building, but also between buildings in distributed
data center architecture. Links within a single datacenter building may be shorter than 500 meters, though some will require optics capable
of 2 km. Between datacenter buildings, there is an increasing need for high performance interconnects over 10km in reach.

 Our modulators
are suitable for single-mode fiber optic links. We believe that our single mode modulator solutions will be competitive at 500m to 10km
link distance lengths, with inherent advantages for 800Gbps applications.

 Telecommunications/Data Communications

 The
telecommunications industry has evolved from transporting traditional analogue voice data over copper wire into the movement of digital
voice and data. Telecommunication companies are faced with the enormous increasing challenges to keep up with the resulting tremendous
explosion in demand for bandwidth. The metropolitan network is especially under stress now and into the near future. Telecommunications
companies provide services to some data center customers for the inter-data center connections discussed above. 5G mobile upgrade, autonomous
driving and IoT are expected to increase the need for data stored and processed close to the end user in edge data centers. This application
similarly requires optics capable of very high speeds and greater than 10 km reach.

 Industry issues of scaling

 The
key issues facing the fiber-optic communications industry are the economic progress and scalability of any PIC based technological platform.
Our polymer platform is unique in that it is truly scalable and is expected to become a high-performance engine for transceiver modules.
Scalable means being able to scale up for high-speed data rates, while simultaneously being able to scale down in cost, and lower power
consumption. This allows a competitive cost per data rate or cost per Gbps metric to be achieved.

 Fiber
optic datacenter and high-performance computing customers want to achieve the metric of $1/Gbps @ 800Gbps (this essentially means a single
mode fiber optic link that has a total cost of $800 and operates with a data rate of 800Gbps). Equally importantly, the datacenter industry
would like to reduce the power consumption of optical ports for 400Gbps, 800Gbps, etc., significantly. As industry tries to match this
target, it needs scalable PIC platforms to achieve this goal, of which our polymer platform is uniquely suited.

 An article
by Dr, Michael Lebby that was recently published in broadband communities (BBC) magazine in early February 2023 discusses the virtues
of polymer-based technologies as part of an industry technology roadmap. The article is entitled "The internet is the brick wall
Nostradamus did not see coming." In this article cost/performance metrics are discussed that show the trend to higher and higher
data rates using PIC platforms that include very high speed, low power modulator devices.

 The article
also shows that electro-optic polymers play an important role in PICs over the next decade as they can reduce or close the gap between
customer expectations and technical performance through effective scaling increase of high performance with low cost for short distance
transceiver optical links.

 Some
of the things needed to achieve the scaling performance of polymers in integrated photonics platforms is within sight today:

 1.

 Increased r33 (which leads to very low Vpi in modulator devices) and we are currently optimizing our polymers for this. With Vpi levels of 1V or less will enable direct from associated electronics and potentially save network architects the cost of individual driver ICs.

 2.

 Increase temperature stability so that the polymers can operate at broader temperature ranges effective, where we have made significant progress over the past few years.

 3.

 Low optical loss in waveguides and active/passive devices for improved optical budget metrics which is currently an ongoing development program at our Company.

 4.

 Higher levels of hermeticity for lower cost packaging of optical sub-assemblies within a transceiver module, where our advanced designs are being implemented into polymer-based packages that utilize atomic layer deposition (ALD) that is being developed in-house.

 Scalability in terms of cost reduction
and high-volume manufacturing can be enhanced by:

 1.

 Leverage of commercial
silicon photonics manufacturing capacity through the use of silicon-based foundries. Our Polymer Plus platform seeks to be additive
to standard silicon photonics circuits.

 Reduction of optical packaging costs by integration at the chip level of multiple modulators and also with other optical devices. Our P2IC platform seeks to address device integration

 The above graphic shows the Company
electro-optic material design philosophy of increased glass transition temperature. When the materials are designed with Tg above 170C,
this equates to approximately 100C above the normal operating temperatures in a data center environment. This feature increases the material
reliability significantly. Further, as the spider chart on the right of the above graphic indicates that key performance metrics of the
Company's electro-optic chromophores perform well against competition in parameters such as photostability, decomposition temperature,
voltage, absorbance, glass transition temperature, and r33 (electro-optic efficiency). This positions the Company's materials very
well in the marketplace and eliminates the need to cross-link the polymers which jeopardizes stability and reliability.

 The above graphic shows the
 increasing trend of improved electro-optic chromophores that have been developed by the Company. The graphic details improvements in r33,
 a measure of electro-optic efficiency of Perkinamine electro-optic material. The r33 has improved using a box plot, approximately
 over 5X during the past 7 years, and is now very stable in testing.

 The above graphic shows the increasing trend of improved electro-optic
chromophores that have been developed by the Company in respect to decomposition temperature. The graphic details improvements in Td showing
through the box plot extremely tight and improved material thermal stability over the past 3 years, and excellent results over the past
year.

 The above graphic shows the increasing trend of improved electro-optic
chromophores that have been developed by the Company in respect to glass transition temperature. The graphic details improvements in Tg
showing through the box plot extremely tight and improved material with Tg's above 170C with tight control of the materials performance
as measured in thin films.

 Business Strategy

 Our first revenue stream was obtained
from our entry into a material supply license agreement to provide Perkinamine chromophore
materials for polymer based photonic devices and photonic integrated circuits (PICs). Our Company is also in various stages
of photonic device and materials development and evaluation with potential customers and strategic partners. We expect to continue to
obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements
and direct sale of our electro-optic device components.

 Specifically,
our business strategy provides that our revenue stream will be derived from one or some combination of the following: (i) technology licensing
for specific product application; (ii) joint venture relationships with significant industry leaders; and (iii) the production and direct
sale of our own electro-optic device components. Our objective is to be a leading provider of proprietary technology and know-how in the
electro-optic device market. In order to meet this objective, we intend to continue to:

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

 Develop photonic devices based on our P 2 IC TM technology

 Develop proprietary intellectual property

 Grow our commercial device development capabilities

 Partner with silicon-based foundries who can scale volume quickly

 Grow our product reliability and quality assurance capabilities

 Grow our optoelectronic packaging and testing capabilities

 Grow our commercial material manufacturing capabilities

 Maintain/develop strategic relationships with major telecommunications and data communications companies to further the awareness and commercialization of our technology platform

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

 Create Organic Polymer-Enabled Electro-Optic Modulators

 We
intend to utilize our proprietary optical polymer technology to create an initial portfolio of commercial electro-optic polymer product
devices with applications for various markets, including telecommunications, data communications and data centers. These product devices
will be part of our proprietary photonics integrated circuit (PIC) technology platform.

 We expect our initial modulator
products will operate at symbol rates at least 112 Gigabaud which is roughly 200Gbps when utilized with PAM4 encoding schemes. Our devices
are highly linear, and can also enable the performance required to take advantage of more advance complex encoding schemes if required.

 Our Research and Development Process

 Our research and development process consist of the
following steps:

 We develop novel polymer materials utilizing our patented and patent pending technology to meet certain performance specifications. We then develop methods to synthesize larger quantities of such material.

 We conduct a full battery of tests at the completion of the synthesis of each new polymer material to evaluate its characteristics. We also create development strategies to optimize materials to meet specifications for specific applications. We model and simulate each new polymer material so that we can further understand how to optimize the material for device operation.

 We integrate data from the material characterization and test results to fabricate devices. We analyze device-testing results to refine and improve fabrication processes and methods. In addition, we investigate alternative material and design variations to possibly create more efficient fabrication processes.

 We create an initial device design using simulation software. Following device fabrication, we run a series of optical and electronic tests on the device.

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

 We have and expect to continue
to make significant operating and capital expenditures for research and development. Our research and development expenses were $15,903,689,
$12,805,374, and $12,476,040 for the years ended December 31, 2023, 2022 and 2021, respectively.

 Our Proprietary Products in Development

 As
part of a tactical marketing strategy, our Company is developing several optical devices using our proprietary electro-optical polymer
material, which are in various stages of development. These include:

 Ridge Waveguide Modulator,
Polymer Stack

 Our
ridge electro-optic waveguide modulator was designed and fabricated in our in-house laboratory. The fabrication of our first in-house
device is significant to our entire device program and is an important starting point for modulators that are being developed for target
markets. We have multiple generations of new materials that we will soon be optimizing for this specific design. In September 2017 we
announced that our initial alpha prototype ridge waveguide modulator, enabled by our P 2 IC
polymer system, demonstrated bandwidth performance levels that will enable 112 Gbaud modulation in fiber-optic communications. This device
demonstrated true amplitude (intensity) modulation in a Mach-Zehnder modulator structure incorporating our polymer waveguides. This important
achievement will allow users to utilize arrays of 4 x 112 Gbaud symbol rate (4x 200 Gbps data rate) polymer modulators using PAM-4 encoding
to enable 800 Gbps data rate systems. These ridge waveguide modulators are currently being packaged with our partner into prototype packages.

 These
prototype packages will enable potential customers to evaluate the performance at 112 Gbaud. Once a potential customer generates technical
feedback on our prototype, we expect to be asked to optimize the performance to their specifications. Assuming this is successful, we
expect to enter a qualification phase where our prototypes will be evaluated more fully.

 In
parallel, we are developing modulators for scalability to higher symbol rates above 112 Gbaud. In September 2018, we showed in conference
presentations the potential of our polymer modulator platform to operate at over 100 GHz bandwidth. This preliminary result corresponds
to 100 Gbps data rates using a simple NRZ data encoding scheme or 200 Gbps with PAM-4 encoding. With 4 channel arrays in our P 2 IC
platform, the Company thus has the potential to address both 400 Gbps and 800 Gbps markets. While customers may start the engagement at
112 Gbaud, we believe potential customers recognize that scalability to higher speeds is an important differentiator of the polymer technology.

 We
believe the ridge waveguide modulator Polymer Stack represents our first commercially viable device and targets the fiber optics
communications market. We have completed internal market analysis and are initially targeting interconnect reach distances of less than
1km. In these markets, the system network companies are looking to implement modulator-based transceivers that can handle aggregated data
rates 800 Gbps and above. The market opportunity for less than 10km is worth over $2B over the next decade.

 Polymer Plus

 Using
our novel waveguide design, we are developing a more compact modulator to be implemented directly with existing integrated photonics platforms
such as silicon photonics and Indium Phosphide. As our electro-optic polymers are applied in liquid form, they can be deposited as a thin
film coating in a fabrication clean room such as may be found in semiconductor foundries. This approach we call Polymer Plus. The
advantage of this approach is that it allows existing semiconductor integrated photonics platforms such as silicon photonics and indium
phosphide to be upgraded with higher speed modulation functionality with the use of polymers in a straight-forward and simple approach.
Further, our polymers are unique in that they are stable enough to seamlessly integrate into existing CMOS, Indium Phosphide (InP), Gallium
Arsenide (Ga As), and other semiconductor manufacturing lines.

 A
large majority of commercial silicon photonics platforms utilize large silicon photonics foundries such as those that manufacture IC products
for a number of applications such as communications, computing, consumer, etc. In order to seamlessly integrate our polymer materials
to upgrade for example, silicon photonics designs, partnering with a silicon foundry is necessary.

 Polymer Slot

 As
part of supporting further improvement and scalability of our platform, we continue to develop more advanced device structures that include
the Polymer Slot. Our high performance, low power, extremely small footprint polymer photonics slot waveguide modulator utilizes
a slot design that is part of PIC platform such as silicon photonics with one of our proprietary electro-optic polymer material systems
as the enabling material layer. Performance results in 2023 from commercial foundries achieved key design specifications for the
slot modulator.

 Preliminary
testing and initial data on our polymer photonics slot waveguide modulators fabricated at commercial foundries demonstrated extremely
high performance suitable for the hyperscaler and fiber optics markets. The tested polymer photonic slot chip had less than 1-millimeter
square footprint, enabling the possibility of sophisticated PIC architecture designs on a single silicon substrate. In addition, the waveguide
structure was a fraction of the length of a typical inorganic-based silicon photonics modulator waveguide and is suitable to be used as
an engine for state-of-the-art pluggable transceiver modules such as the OSFP and the QSFP-DD.

 With
the combination of our proprietary electro-optic polymer material and the extremely high optical field concentration in the slot waveguide,
the test modulators demonstrated very low operating voltage. Initial speeds exceeded 70GHz in the telecom, 1310nm, and 1550 nanometer
frequency bands, and there were devices that exceeded over 100GHz 3dB bandwidth.

also continuing our collaborative development of our polymer photonic slot waveguide modulators (Polymer Slot) with a partner that
has advanced device design capabilities using Plasmonic technologies. Some of these devices demonstrated performance levels that exceeded
250GHz in 2022 with our partners.

 Our
Long-Term Device Development Goal - Multichannel Polymer Photonic Integrated Circuit (P 2 IC)

 Our P 2 IC
platform is positioned to address markets with aggregated data rates of 100 Gbps, 400 Gbps, 800 Gbps and beyond. Our P 2 IC
platform will contain several photonic devices that may include, over and above polymer-based modulators, photonic devices such as lasers,
multiplexers, demultiplexers, detectors, fiber couplers.

 While
our polymer-based ridge waveguide and slot modulators are currently under development to be commercially viable products, our long-term
device development goal is to produce a platform for the 400 Gbps, 800 Gbps, 1600Gbps and beyond fiber optic transceiver market. This
has been stated in our photonics product roadmap that is publicly available on our website. The roadmap shows a progression in speed from
50 Gbaud based modulators to 100 Gbaud based modulators. The roadmap shows a progression in integration in which the modulators are arrayed
to create a flexible, multichannel P 2 IC platform that spans 100 Gbps, 400 Gbps, 800 Gbps, 1.6Tbps (or 1600Gbps), and
a scaling philosophy that will grow to 3.2Tbps line rates.

 We
showed bandwidths of polymer-based modulator devices at a major international conference (ECOC – European Conference on Optical
Communications 2018) with bandwidths that exceeded 100GHz. We noted that to achieve 100Gbaud, the polymer-based modulator only needs to
achieve 80GHz bandwidth. During ECOC 2019, we showed environmental stability. We continue to develop our polymer materials and device
designs to optimize additional metrics. We are now optimizing the device parameters for very low voltage operation. At the ECOC
2022 conference we demonstrated two different world record performances using polymer slot-based modulators.

 Other Potential Applications for Our Products

 We believe that there are myriad
potential applications for our organic polymer materials and devices outside of our initial focus of data communications, telecommunications
and data centers. These potential applications encompass areas as diverse as military, space, optical computing, and life sciences. We
believe that as viable organic polymer materials gain acceptance, their increased flexibility, functionality and low cost will create
new applications that may not yet be technically feasible. Two such future applications with revolutionary potential are:

 All-Optical Switches

 An all-optical switch is one that
enables signals in optical fibers or networks to be selectively switched from one fiber or circuit to another. Many device designs have
been developed and commercialized in today's telecom networks to effect optical switching by using mechanical or electrical control
elements to accomplish the switching event. Future networks will require all-optical switches that can be more rapidly activated with
a low energy and short duration optical (light) control pulse.

 Multi-Channel Optical Modem

 The availability of low-cost electro-optic
modulators will enable low-cost multichannel optical modems that will use many wavelengths in parallel and employ high efficiency modulation
techniques such as QAM (quadrature amplitude modulation). Such modems would enable an order of magnitude increase in the Internet capacity
of legacy fiber. Our Company is in the early feasibility stage of such a multichannel optical modem.

 Our Past Government Program Participation

 Our Company has been a participant
in several vital government sponsored research and development programs with various government agencies that protect the interests of
our country. The following is a list of some of the various divisions of government agencies that have provided us with advisory, financial
and/or materials support in the pursuit of high-speed electro-optic materials. Our previous relationships included:

 National Reconnaissance Office (NRO)

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

 Defense Advance Research Project Agency (DARPA)

 Naval Air Warfare Center Weapons Division in China Lake, California

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

 We are aware of a multitude of government programs that include for example
the Chips and Science Act amongst others. As noted above, we are not currently partnered with or financially supported by any governmental
agency at this time, however, we are exploring future opportunities as our Company grows and gains the additional resources and personnel
necessary to support these efforts.

 Our Competition

 Competitive Technologies - PIC Based Technologies

 PIC technologies have historically
been driven using III-V compound semiconductors, namely InP, although Ga As remains a strong PIC platform, and is expected to strengthen
via the VCSEL based 3D sensing applications. Indium Phosphide has been used since the 1980s as the first PIC platform with laser modulator
chips where both the laser and modulator were fabricated monolithically. Since the 1980s, there have been InP based transmitters, receivers,
and other functional elements that all support the fiber-communications industry. In fact, over the past 3 decades, the fiber communications
industry has driven the increased performance, miniaturization and simplicity in packaging for PIC based technologies. Also, back in the
1980s, 'optoelectronics' was the key word to describe having both electronic and photonic functions or devices on a single
chip. This was known in early publications as an optoelectronics integrated circuit (OEIC). Today optoelectronics is synonymous with 'photonics',
and hence the common-place use of 'photonics integrated circuits' for PICs.

 In the below figure that discusses
hybrid PICs, it can be seen in red that the incumbent technology for PICs is InP. InP can provide a number of devices and opportunities
in both electronics as well as photonics. InP main weakness from a function standpoint is that although it can provide HFETs, JFETs, bipolar
electronic devices, it has not been able to successfully penetrate LSI, VLSI, or ULSI etc., with digital IC circuitry. Chips such as ASICs
and DSPs are not practically available with the InP platform – mostly due to advancement in electronic transistor design, and also
through limited maturity in large format wafer manufacturing. Today the majority of InP fabrication is based on 4" or 100mm wafers,
and only in the past two years have folks been seriously looking at 6" or 150mm InP wafer infrastructure. From the photonics standpoint,
there are very good reasons why InP is the incumbent technology – it provides world class performance in lasers, modulators, simple
electronics such as drivers and TIAs (transimpedance amplifiers), as well as highly performing active and passive devices such as SOAs,
waveguides, spot-size converters, and mux/demux blocks such as AWG and Eschelle gratings.

 Over the past decade, the rise
of silicon-based photonics has accelerated quickly (as can be seen in green in the Figure). Silicon has a huge history in electronics,
and it's been said by many that if the existing infrastructure could be utilized effectively, then the cost of producing photonics
with similar fabrication, design, testing, and simulation tools, would become competitive with the current incumbent technology: InP.
As can be seen by the figure, silicon is capable of handling many photonics devices in addition to all electronic functionality with CMOS
and BiCMOS based technologies. The only photonic device that remains impossible (at least for the time being) is the emitter or laser
where light is generated. This has spawned a new segment for silicon photonics (SiPh) where engineers and scientists have developed creative
ways to implement InP into device, wafer, and epi-designs that are silicon based. These solutions are typically referred to as heterogeneous
solutions or Hybrid PICs where both InP and silicon are utilized to create PIC platforms with emitter or laser-based functionality.

 While the red area of the Figure
represents the incumbent technology InP, the green areas, Silicon Photonics, the middle areas that are shaded yellow represent PIC based
technologies that can utilize either III-V compound semiconductor platforms such as InP, Ga As, even GaN, as well as silicon platforms
such as silicon wafers, and various combinations of silicon-based materials such as SOI (silicon on insulator), SiGe etc. The yellow areas
are represented by both polymers and dielectric materials that can be deposited onto either silicon or III-V material wafers. These combinations
of technology allow flexibility in PIC designs where both polymers and dielectrics can provide a multitude of active and passive photonic
devices such as: waveguides (W/G), spot size converters (SSC), modulators (such as Mach Zehnder and slot types), multipliers and demultipliers
(Mux/Demux variants such as AWGs, MMI, and Echelle gratings). The interesting part of the polymer and dielectric technology is that combinations
of active and passive devices can be mixed and matched with either III-V compound devices as well as silicon based, heterogeneous based
devices to design more effective and efficient PICs. For polymers, very low voltage can be utilized for low cost, low power consumption,
very high-speed modulators that can be deposited onto a semiconductor platform. For dielectric photonics, very low temperature sensitivity
mux/demux devices (such as athermal designs) can be deposited onto a semiconductor platform. As can be seen from the Figure, polymer and
dielectric technology suffers from that the fact that high density ICs and laser-based emitters are not available but could be integrated
with the appropriate designs for the PIC with III-V compound semiconductors and/or silicon-based technology that have both DSP/ASIC type
circuits and laser emitters.

 PIC technologies have a number
various and broad applications as can be seen by the Figure below and highlighted in green. In this Figure applications range from fiber
optic communications (green lines), to other market verticals such as: display/ projection display, automotive/LIDAR for self-driving
vehicles, optical sensing/3D, bio-photonic sensing, medical, instrumentation etc..Market TAMs are forecasted over the next decade with
estimations for the opportunities for PICs.

 PIC technologies are based upon
semiconductor wafers (such as III-V compound semiconductors – InP, Ga As etc.) as well as silicon wafers (which can be tailored to
become SiGe heterogeneous, SOI, etc.). As these platforms are semiconductor based, the wafers are processed in fabs or fabrication facilities
to produce devices. As a general rule, silicon has the largest wafers with 8" (200mm) and 12" (300mm) format discs. Ga As typically
is running 3" (75mm), 4" (100mm) and 6" (150mm) wafers in production fabs or fabrication plants around the world. There
is an expectation that Ga As will eventually move to 8" (200mm) wafers in the next 5 years. InP is in production today on 2"
(50mm), 3" (75mm) and 4" (100mm) wafers with an expectation to move to 6" (150mm) in the next 5 years. Heterogeneous
solutions with silicon photonics that utilize materials such as SiGe and InP are typically 8" (200mm) and 12" (300mm) format
wafers. Polymer photonics can be deposited on either III-V compound semiconductor wafers as well as silicon wafers which makes it suitable
for the next generation of PIC based technological platforms for the fiber communications industry.

 The supply chain for the PIC industry
starts with the wafer development and continues through epitaxial growth, device fabrication, optical sub-assembly, module or transceiver
builds, and sub-systems which are implemented into optical networking applications. Within these supply chain segments, several combinations
of technology can be utilized. For example, CMOS IC circuits can be fabricated onto silicon wafers together with silicon photonics, heterogeneous
solutions, that could have the advantage of polymer active devices, and dielectric passive devices on board. InP may be combined with
polymer photonics to house on-board or on-wafer emitters to source light for the optical signaling with modulators. Included in the wafers
can be combinations of electrical and optical circuitry. Electrical circuitry is usually set up as both as single as well as multilevel
interconnects. Optical circuitry is usually set up as a waveguide or optical layer as part of the device fabrication design. PICs can
interconnect electrical devices with photonic devices, and also increase chip functionality through the use of electrical and optical
active and passive device solutions. Polymer technologies can provide active device function through for example Mach Zehnder modulators,
as well as providing passive device function with waveguides, multipliers, and demultipliers.

 Competitors

 The markets we are targeting for
our electro-optic polymer technology are intensely competitive. While there are no major multi-national companies that compete directly
with us on electro-polymers, there are other companies that do manufacture optical modulators. These companies that have incumbent optical
modulators using semiconductors include: Lumentum, Broadcom, Intel, Ciena, Fujitsu, and Coherent. These companies are heavily invested
in the production of crystalline-based semiconductor electro-optic modulator technologies, as well as the development of novel manufacturing
techniques and modulator designs.

 Smaller companies that
compete with us on optical modulators using new and novel technologies include: Hyperlite (who are developing thin film lithium niobate
(TFLN) and Lumiphase (who are developing Barium Titanate or BTO).

 Our Plan to Compete

 We believe that as our organic
polymer technology gains industry acceptance, we will be poised to obtain a significant portion of the component manufacturing market
and have our technology become ubiquitous. Electro-optic polymers demonstrate several advantages over other technologies, such as inorganic-based
technologies, due to their reduced manufacturing and processing costs, higher performance, and lower power requirements. Our patented
organic polymers and future electro-optic photonic devices have demonstrated significant stability advantages over our known competitor's
materials.

 We believe the principal competitive factors in our
target markets are:

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

 The ability to obtain appropriate patent and proprietary rights protection.

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

 Lower cost, high production yield for these products.

 The ability to enable integration and implement advanced technologies.

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

 We believe that our current business
planning will position our Company to compete adequately with respect to these factors. Our future success is difficult to predict because
we are an early-stage company with most of products still in development.

 Many of our existing and potential
competitors have substantially greater research and product development capabilities and financial, scientific, marketing and human resources
than we do. As a result, these competitors may:

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

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

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

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

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

 Withstand price competition more successfully than we can.

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

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

 Employees and Human Capital

 We currently have 33 full-time employees, and we retain
several independent contractors on an as-needed basis. Based on our current development plan we expect to add 2 additional full-time employees
in 2024.

 People

 As a technology and innovation-driven
company, we depend on a highly skilled workforce. Attracting, developing, advancing and retaining the best talent is critical for us to
execute our strategy and grow our business. Individuals with technical, engineering, chemistry and other science backgrounds, experience,
or interests are particularly important for us to succeed. We strive to advance a diverse, equitable and inclusive work environment.

 Technical Team

 Our team is composed of world-class
technologists, including materials scientists, design engineers, device engineers, synthetic organic chemists, test and material engineers
and technicians.

 Diversity, Inclusion and Equity

 We recognize and view equity as
key to our success. We work to create a culture of diversity and inclusion so that all of our employees feel they are respected and treated
equally, regardless of gender, race, ethnicity, age, disability, sexual orientation, gender identity, cultural background or religious
belief. We strive to provide our employees a diverse, equitable, and inclusive work environment.

 Compensation and benefits

 Our total
rewards package includes market-competitive pay, stock option grants and bonuses, healthcare benefits, retirement savings plans, life
insurance, disability insurance, paid time off and family leave, and flexible work schedules.

 The principal
purposes of our equity incentive plan is to attract and retain employees who will contribute to our Company's long range success,
to provide incentives that align the interests of our employees with those of our shareholders, and to promote the success of our Company's
business.

 Health
and Safety

committed to providing a healthy environment and safe workplace by operating in accordance with established health and safety protocols
within our facility and maintaining a strong health and safety compliance program. We prioritize, manage, and carefully track safety performance
at our facility and integrate sound safety practices in every aspect of our operations. We regularly conduct self-assessments to examine
our safety culture and processes.

 Available Information

 We maintain
a website at www.lightwavelogic.com. We make available on our website under "Investors" – "Financial & Filings,"
free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those
reports as soon as reasonably practicable after we electronically file or furnish such material with the SEC. References to our website
in this report are provided as a convenience, and the information on our website is not, and shall not be deemed to be a part of this
Annual Report on Form 10-K or incorporated into any other filings we make with the SEC. The SEC maintains an Internet site (www.sec.gov)
that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
In addition, we make available on our website under "Investors" – "Corporate Governance", free of charge,
our Audit Committee Charter, Compensation Committee Charter, Nominating And Corporate Governance Committee Charter, Operations Committee
Charter and Code of Ethics and Business Conduct. In addition, the foregoing information is available in print, without charge, to any
stockholder who requests these materials from us.

 Item 1A.

 Risk Factors.

 Investing in our common stock
is risky. In addition to the other information contained in this Annual Report on Form 10-K, you should consider carefully the following
risk factors in evaluating our business and us. If any of the following events actually occur, our business, operating results, prospects
or financial condition could be materially and adversely affected. This could cause the trading price of our common stock to decline and
you may lose all or part of your investment. The risks described below are not the only ones that we face. Additional risks not presently
known to us or that we currently deem immaterial may also significantly impair our business operations and could result in a complete
loss of your investment.

 We have incurred substantial operating losses since
our inception and will continue to incur substantial operating losses for the foreseeable future.

 Since our inception, we have
been engaged primarily in the research and development of our electro-optic polymer materials technologies and products. As a result
of these activities, we incurred significant losses and experienced negative cash flow since our inception. We incurred a net loss
of $21,038,032 for the year ended December 31, 2023, $17,230,480 for the year ended December 31, 2022, and $18,631,381 for the year
ended December 31, 2021. We anticipate that we will continue to incur operating losses through at least 2024.

 We may not be able to generate
significant revenue either through customer contracts for our existing or future products or technologies or through development contracts
from the U.S. government or government subcontractors. We expect to continue to make significant operating and capital expenditures for
research and development and to improve and expand production, sales, marketing and administrative systems and processes. As a result,
we will need to generate significant revenue to achieve profitability. We cannot assure you that we will ever achieve profitability.

 We are subject to the risks frequently experienced by early-stage companies.

 The likelihood of our success
must be considered in light of the risks frequently encountered by early-stage companies, especially those formed to develop and market
new technologies. These risks include our potential inability to:

 Establish significant product sales and marketing capabilities;

 Establish and maintain significant markets for our products and future products;

 Identify, attract, retain and motivate qualified personnel;

 Continue to develop and upgrade our technologies to keep pace with changes in technology and the growth of markets using polymer based materials;

 Develop expanded product production facilities, along with silicon-based foundry and other outside contractor relationships;

 Maintain our reputation and build trust with customers;

 Scale up from small pilot or prototype quantities to large quantities of product on a consistent basis;

 Contract for or develop the internal skills needed to master large volume production of our products; and

 Fund the capital expenditures required to develop volume production due to the limits of our available financial resources.

 If we fail to effectively manage our growth, and
effectively transition from our focus on research and development activities to commercially successful products, our business could suffer.

 Failure to manage growth of operations
could harm our business. To date, a large number of our activities and resources have been directed at the research and development of
our technologies and development of potential related products including work in association with external partners. The transition from
a focus on research and development to being a vendor of products requires effective planning and management. Additionally, growth arising
from expected synergies from any future acquisitions will require effective planning and management. Future expansion will be expensive
and will likely strain management and other resources.

 In order to effectively manage growth, we must:

 Continue to develop an effective planning and management process to implement our business strategy;

 Hire, train and integrate new personnel in all areas of our business;

 Expand our facilities and increase capital investments; and

 Continue to successfully partner with silicon-based foundries.

 We cannot assure you that we will be able to accomplish
these tasks effectively or otherwise effectively manage our growth.

 We will require additional capital to continue
to fund our operations and if we do not obtain additional capital, we may be required to substantially limit our operations.

 Our business does not presently
generate the cash needed to finance our current and anticipated operations. Based on our current operating plan and budgeted cash requirements,
we believe that we have sufficient funds to finance our operations through July 2025; however, we will need to obtain additional future
financing after that time to finance our operations until such time that we can conduct profitable revenue-generating activities. We expect
that we will need to seek additional funding through public or private financings, including equity financings, and through other arrangements,
including collaborative arrangements. Poor financial results, unanticipated expenses or unanticipated opportunities could require additional
financing sooner than we expect. Other than with respect to (i) the purchase agreement for up to $30 million we entered into with Lincoln
Park on February 28, 2023 (the " 2023 Purchase Agreement "); and (ii) the sales agreement for up to $35 million we entered
into with Roth Capital Partners, LLC (" Roth Capital ") on December 9, 2022 (the
" Roth Sales Agreement "); we have no plans or arrangements with respect
to the possible acquisition of additional financing, and such financing may be unavailable when we need it or may not be available on
acceptable terms. We currently have a remaining amount of $10.5 million that is available to our Company pursuant to the 2023 Purchase
Agreement with Lincoln Park, and $33.4 million that is available to our Company pursuant to the Roth Sales Agreement with Roth Capital.

 Our forecast of the period of
time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks
and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this
Annual Report on Form 10-K. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital
resources sooner than we currently expect.

 Additional financing may not be
available to us, due to, among other things, our Company not having a sufficient credit history, income stream, profit level, asset base
eligible to be collateralized, or market for its securities. If we raise additional funds by issuing equity or convertible debt securities,
the percentage ownership of our existing shareholders may be reduced, and these securities may have rights superior to those of our common
stock. If adequate funds are not available to satisfy our long-term capital requirements, or if planned revenues are not generated, we
may be required to substantially limit our operations.

 We are entering new markets, and if we fail to
accurately predict growth in these new markets, we may suffer substantial losses.

 We are devoting significant resources
to develop next generation proprietary photonic devices that are based on our advanced electro-optical polymer material systems for future
applications in data communications and telecommunications markets and we are exploring other applications that include automotive/LIDAR,
sensing, displays etc. We expect to continue to develop products for these markets and to seek to identify new markets. These markets
change rapidly, and we cannot assure you that they will grow or that we will be able to accurately forecast market demand, or lack thereof,
in time to respond appropriately. Our investment of resources to develop products for these markets may either be insufficient to meet
actual demand or result in expenses that are excessive in light of actual sales volumes. Failure to predict growth and demand accurately
in new markets may cause us to suffer substantial losses. In addition, as we enter new markets, there is a significant risk that:

 The market may not accept the price and/or performance of our products;

 There may be issued patents we are not aware of that could block our entry into the market or could result in excessive litigation; and

 The time required for us to achieve market acceptance of our products may exceed our capital resources that would require additional investment.

 Our plan to develop relationships with strategic partners may not be
successful.

 Part of our business strategy
is to maintain and develop strategic relationships with private firms, such as packaging companies and silicone-based foundries, and to
a lesser extent, government agencies and academic institutions, to conduct research and development and testing of our products and technologies.
For these efforts to be successful, we must identify partners whose competencies complement ours. We must also successfully enter into
agreements with them on terms attractive to us, and integrate and coordinate their resources and capabilities with our own. We may be
unsuccessful in entering into agreements with acceptable partners or negotiating favorable terms in these agreements. Also, we may be
unsuccessful in integrating the resources or capabilities of these partners. In addition, our strategic partners may prove difficult to
work with or less skilled than we originally expected. If we are unsuccessful in our collaborative efforts, our ability to develop and
market products could be severely limited.

 The failure to establish and maintain collaborative relationships may
have a materially adverse affect on our business.

 We are initially targeting applications
in data communications and telecommunications markets and are exploring other applications that include automotive/LIDAR, sensing, displays
etc. Our ability to generate significant revenues depends significantly on the extent to which potential customers and other potential
industry partners develop, promote and sell systems that incorporate our products, which, of course, we cannot control. Any failure by
potential customers and other potential industry partners to successfully develop and market systems that incorporate our products could
adversely affect our sales. The extent to which potential customers and other industry partners develop, promote and sell systems incorporating
our products is based on a number of factors that are largely beyond our ability to control.

 We may participate in joint ventures that expose us to operational and
financial risk.

 We may participate in one or more
joint ventures for the purpose of assisting us in carrying out our business expansion, especially with respect to new product and/or market
development. We may experience with our joint venture partner(s) issues relating to disparate communication, culture, strategy, and resources.
Further, our joint venture partner(s) may have economic or business interests or goals that are inconsistent with ours, exercise their
rights in a way that prohibits us from acting in a manner which we would like, or they may be unable or unwilling to fulfill their obligations
under the joint venture or other agreements. We cannot assure you that the actions or decisions of our joint venture partners will not
affect our operations in a way that hinders our corporate objectives or reduces any anticipated cost savings or revenue enhancement resulting
from these ventures.

 If we fail to develop and introduce new or enhanced
products on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

 We plan to operate in a dynamic
environment characterized by rapidly changing technologies and industry standards and technological obsolescence. To compete successfully,
we must design, develop, market and sell products that provide increasingly higher levels of performance and reliability and meet the
cost expectations of our customers. The introduction of new products by our competitors, the market acceptance of products based on new
or alternative technologies, or the emergence of new industry standards could render our anticipated products obsolete. Our failure to
anticipate or timely develop products or technologies in response to technological shifts could adversely affect our operations. In particular,
we may experience difficulties with product design, manufacturing, marketing or certification that could delay or prevent our development,
introduction or marketing of products. If we fail to introduce products that meet the needs of our customers or penetrate new markets
in a timely fashion our Company will be adversely affected.

 Our future growth will suffer if we do not achieve
sufficient market acceptance of our organic nonlinear optical material products or our proprietary photonic devices.

 We expect our patented and patent-pending
optical materials along with trade secrets and licensed materials, to be the core of and the enabling technology for future generations
of optical devices, modules, sub-systems and systems that we will develop or potentially out-license to electro-optic device manufacturers.
Most of our products are still in the development stage, and we do not know when a market for these products will develop, if at all.
Our success depends, in part, upon our ability to gain market acceptance of our products. To be accepted, our products must meet the technical
and performance requirements of our potential customers. OEMs, suppliers or government agencies may not accept polymer-based products.
In addition, even if we achieve some degree of market acceptance for our products in one industry, we may not achieve market acceptance
in other industries for which we are developing products.

 Achieving widespread market acceptance
for our products will require marketing efforts and the expenditure of financial and other resources to create product awareness and demand
by customers. We may be unable to offer products that compete effectively due to our limited resources and operating history. Also, certain
large corporations may be predisposed against doing business with a company of our limited size and operating history. Failure to achieve
broad acceptance of our products by customers and to compete effectively would harm our operating results.

 Our potential customers require our products to
undergo a lengthy and expensive qualification process, which does not assure product sales.

 Prior to purchasing our products,
our potential customers will require that our products undergo extensive qualification processes. These qualification processes may continue
for several months or more. However, qualification of a product by a customer does not assure any sales of the product to that customer.
Even after successful qualification and sales of a product to a customer, a subsequent revision to the product, changes in our customer's
manufacturing process or our selection of a new supplier may require a new qualification process, which may result in additional delays.
Also, once one of our products is qualified, it could take several additional months or more before a customer commences volume production
of components or devices that incorporate our products. Despite these uncertainties, we are devoting substantial resources, including
design, engineering, sales, marketing and management efforts, to qualifying our products with customers in anticipation of sales. If we
are unsuccessful or delayed in qualifying any of our products with a customer, sales of our products to a customer may be precluded or
delayed, which may impede our growth and cause our business to suffer.

 Obtaining a sales contract with a potential customer
does not guarantee that a potential customer will not decide to cancel or change its product plans, which could cause us to generate no
revenue from a product and adversely affect our results of operations.

 Even after we secure a sales contract
with a potential customer, we may experience delays in generating revenue from our products as a result of a lengthy development cycle
that may be required. Potential customers will likely take a considerable amount of time to evaluate our products; it could take 12 to
24 months from early engagement by our sales team to actual product sales. The delays inherent in these lengthy sales cycles increase
the risk that a customer will decide to cancel, curtail, reduce or delay its product plans, causing us to lose anticipated sales. In addition,
any delay or cancellation of a customer's plans could materially and adversely affect our financial results, as we may have incurred
significant expense and generated no revenue. Finally, our customers' failure to successfully market and sell their products could
reduce demand for our products and materially and adversely affect our business, financial condition and results of operations. If we
were unable to generate revenue after incurring substantial expenses to develop any of our products, our business would suffer.

 Many of our products will have long sales cycles,
which may cause us to expend resources without an acceptable financial return and which makes it difficult to plan our expenses and forecast
our revenue.

 Many of our products will have
long sales cycles that involve numerous steps, including initial customer contacts, specification writing, engineering design, prototype
fabrication, pilot testing, regulatory approvals (if needed), sales and marketing and commercial manufacture. During this time, we may
expend substantial financial resources and management time and effort without any assurance that product sales will result. The anticipated
long sales cycle for some of our products makes it difficult to predict the quarter in which sales may occur. Delays in sales may cause
us to expend resources without an acceptable financial return and make it difficult to plan expenses and forecast revenues.

 Successful commercialization of our current and future products will
require us to maintain a high level of technical expertise.

 Technology in our target markets
is undergoing rapid change. To succeed in our target markets, we will have to establish and maintain a leadership position in the technology
supporting those markets. Accordingly, our success will depend on our ability to:

 Accurately predict the needs of our target customers and develop, in a timely manner, the technology required to support those needs;

 Provide products that are not only technologically sophisticated but are also available at a price acceptable to customers and competitive with comparable products;

 Establish and effectively defend our intellectual property; and

 Enter into relationships with other companies that have developed complementary technology into which our products may be integrated.

 We cannot assure you that we will be able to achieve
any of these objectives.

 One of our significant target markets is the telecommunications market,
which historically has not accepted polymer modulators.

 One of our significant target
markets is the telecommunications market, which demands high reliability optical components. Historically, polymer modulators have not
been accepted into this market even though polymer modulators have achieved Telcordia based specifications. It is clear that the
telecommunications market is demanding higher and higher data rates for its optical components, and may again decide that polymer based
modulators are not suitable even if higher data rates, high reliability, and low power consumption are demonstrated.

 Another of our significant target markets is the
data communications (datacenter and/or high performance computing) market, which may be subject to heavy competition from other PIC based
technologies such as silicon photonics and Indium Phosphide.

 Another of our significant target
markets is the data communications (datacenter and/or high performance computing) market, which may be subject to heavy competition from
other PIC based technologies such as silicon photonics and Indium Phosphide. As the demands for high performance, low cost ($/Gbps) is
implemented into next generation architectures, polymer modulators and polymer based PIC products may be subject to significant competition.
Furthermore, there is a potential that technologies such as silicon photonics and Indium Phosphide might reach the metric of $1/Gbps at
400Gbps before ours. Customers may then be less willing to purchase new technology such as ours
or invest in new technology development such as ours for next generation systems.

 Our inability to successfully acquire and integrate
other businesses, assets, products or technologies could harm our business and cause us to fail at achieving our anticipated growth.

 We may grow our business through
strategic acquisitions and investments, and we are actively evaluating acquisitions and strategic investments in businesses, products
or technologies that we believe could complement or expand our product offering, create and/or expand a client base, enhance our technical
capabilities or otherwise offer growth or cost-saving opportunities. From time to time, we may enter into letters of intent with companies
with which we are negotiating potential acquisitions or investments or as to which we are conducting due diligence. Although we are currently
not a party to any binding material definitive agreement with respect to potential investments in, or acquisitions of, complementary businesses,
products or technologies, we may enter into these types of arrangements in the future, which could materially decrease the amount of our
available cash or require us to seek additional equity or debt financing. We have limited experience in successfully acquiring and integrating
businesses, products and technologies. We may not be successful in negotiating the terms of any potential acquisition, conducting thorough
due diligence, financing the acquisition or effectively integrating the acquired business, product or technology into our existing business
and operations. Our due diligence may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired
business, product or technology, including issues related to intellectual property, product quality or product architecture, regulatory
compliance practices, revenue recognition or other accounting practices, or employee or customer issues.

 Additionally, in connection with
any acquisitions we complete, we may not achieve the synergies or other benefits we expected to achieve, and we may incur write-downs,
impairment charges or unforeseen liabilities that could negatively affect our operating results or financial position or could otherwise
harm our business. If we finance acquisitions using existing cash, the reduction of our available cash could cause us to face liquidity
issues or cause other unanticipated problems in the future. If we finance acquisitions by issuing convertible debt or equity securities,
the ownership interest of our existing stockholders may be diluted, which could adversely affect the market price of our stock. Further,
contemplating or completing an acquisition and integrating an acquired business, product or technology could divert management and employee
time and resources from other matters, which could harm our business, financial condition and operating results.

 Public health emergencies or outbreaks of epidemics,
pandemics, or contagious diseases have disrupted, and could in the future disrupt, our operations and materially and adversely affect
our business, financial condition, and results of operations.

 Widespread
public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases, such as the COVID-19 pandemic, have had, and could
in the future have, a material adverse effect on our business, financial condition, and results of operations. The full extent to which
a global health crisis may impact our business and operating results would depend on future developments that are highly uncertain and
cannot be accurately predicted, including new medical and other information that may emerge as a result and the actions by governmental
entities or others to contain it or treat its impact.

 The impacts
of a severe health crisis could pose the risk that we or our employees, suppliers, customers and others may be restricted or prevented
from conducting, or adversely modify, our business activities for indefinite or intermittent periods of time, including as a result of
employee health and safety concerns, shutdowns, shelter in place orders, travel restrictions and other actions and restrictions that may
be prudent or required by governmental authorities. A global health crisis could also impact our customers' purchasing behavior
or decisions, including reduced demand for our products that could continue for an extended period of time.

 Any or
all of the foregoing in jurisdictions where we or our customers, suppliers, or operations are located have had and could in the future
have a material adverse effect on our business, results of operations, cash flows, and financial condition. In addition, fluctuations
in demand and other implications associated with public health emergencies have resulted in, and could in the future result in, certain
supply chain constraints and challenges.

 We may incur debt in the future that might be secured
with our intellectual property as collateral, which could subject our Company to the risk of loss of all of our intellectual property.

 We currently have no debt to service.
If we incur debt in the future, we may be required to secure the debt with our intellectual property, including all of our patents and
patents pending. In the event we default on the debt, we could incur the loss of all of our intellectual property, which would materially
and adversely affect our Company and cause you to lose your entire investment in our Company.

 Our failure to compete successfully could harm our business.

 The markets that we are targeting
for our proprietary electro-optic polymer systems and photonic devices are intensely competitive. Most of our present and potential competitors
have or may have substantially greater research and product development capabilities, financial, scientific, marketing, manufacturing
and human resources, name recognition and experience than we have. As a result, these competitors may:

 succeed in developing products that are equal to or superior to our products and future products or that will achieve greater market acceptance than our products and future products;

 devote greater resources to developing, marketing or selling their products;

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

 introduce products that make the continued development of our products and future products uneconomical;

 obtain patents that block or otherwise inhibit our ability to develop and commercialize our products and future products;

 withstand price competition more successfully than we can;

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

 Our failure to compete successfully against these existing
or future competitors could harm our business.

 We may be unable to obtain effective intellectual
property protection for our products and technology.

 Our intellectual property, or
any intellectual property that we have or may acquire, license or develop in the future, may not provide meaningful competitive advantages.
Our patents and patent applications, including those we license, may be challenged by competitors, and the rights granted under such patents
or patent applications may not provide meaningful proprietary protection. For example, numerous patents held by third parties relate to
polymer materials and electro-optic devices. These patents could be used as a basis to challenge the validity or limit the scope of our
patents or patent applications. A successful challenge to the validity or limitation of the scope of our patents or patent applications
could limit our ability to commercialize our polymer materials technology and, consequently, reduce our revenues.

 Moreover, competitors may infringe
our patents or those that we license, or successfully avoid these patents through design innovation. To combat infringement or unauthorized
use, we may need to resort to litigation, which can be expensive and time-consuming and may not succeed in protecting our proprietary
rights. In addition, in an infringement proceeding a court may decide that our patents or other intellectual property rights are not valid
or are unenforceable, or may refuse to stop the other party from using the intellectual property at issue on the ground that it is non-infringing.
Policing unauthorized use of our intellectual property is difficult and expensive, and we may not be able to, or have the resources to,
prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect these rights as fully as
the laws of the United States.

 We also rely on the law of trade
secrets to protect unpatented technology and know-how. We try to protect this technology and know-how by limiting access to those employees,
contractors and strategic partners with a need to know this information and by entering into confidentiality agreements with these parties.
Any of these parties could breach the agreements and disclose our trade secrets or confidential information to our competitors, or these
competitors might learn of the information in other ways. Disclosure of any trade secret not protected by a patent could materially harm
our business.

 We may be subject to patent infringement claims,
which could result in substantial costs and liability and prevent us from selling our products.

 Third parties may claim that our
products or related technologies infringe their patents. Any patent infringement claims brought against us may cause us to incur significant
expenses, divert the attention of our management and key personnel from other business concerns and, if successfully asserted against
us, require us to pay substantial damages. In addition, as a result of a patent infringement suit, we may be forced to stop or delay developing,
manufacturing or selling products that are claimed to infringe a patent covering a third party's intellectual property unless that
party grants us rights to use its intellectual property. We may be unable to obtain these rights on terms acceptable to us, if at all.
Even if we are able to obtain rights to a third party's patented intellectual property, these rights may be non-exclusive, and therefore
our competitors may obtain access to the same intellectual property. Ultimately, we may be unable to sell our products or may have to
cease some of our business operations as a result of patent infringement claims, which could severely harm our business.

 If our products infringe the intellectual
property rights of others, we may be required to indemnify customers for any damages they suffer. Third parties may assert infringement
claims against our current or potential customers. These claims may require us to initiate or defend protracted and costly litigation
on behalf of customers, regardless of the merits of these claims. If any of these claims succeed, we may be forced to pay damages on behalf
of these customers or may be required to obtain licenses for the products they use. If we cannot obtain all necessary licenses on commercially
reasonable terms, we may be unable to continue selling such products.

 Our technology may be subject to government rights.

 We may have obligations to government
agencies in connection with the technology that we have developed, including the right to require that a compulsory license be granted
to one or more third parties selected by certain government agencies. It may be difficult to monitor whether these third parties will
limit their use of our technology to these licensed uses, and we could incur substantial expenses to enforce our rights to our licensed
technology in the event of misuse.

 The loss of certain of our key personnel, or any
inability to attract and retain additional personnel, could impair our ability to attain our business objectives.

 Our future success depends to
a significant extent on the continued service of our key management personnel, particularly Dr. Michael Lebby, our Chief Executive Officer
and James S. Marcelli our President, Chief Operating Officer, Secretary and Principal Financial Officer. Accordingly, the loss of the
services of either of these persons would adversely affect our business and our ability to continue to commercialize our products, and
impede the attainment of our business objectives.

 Our future success will also depend
on our ability to attract, retain and motivate highly skilled personnel to assist us with product development and commercialization. Competition
for highly educated qualified personnel in the polymer industry is intense. If we fail to hire and retain a sufficient number of qualified
management, engineering, sales and technical personnel, we will not be able to attain our business objectives.

 If we fail to develop and maintain the quality of our manufacturing
processes, our operating results would be harmed.

 The manufacture of our products
is a multi-stage process that requires the use of high-quality materials and advanced manufacturing technologies. Also, polymer-related
device development and manufacturing must occur in a highly controlled, clean environment to minimize particles and other yield and quality-limiting
contaminants. In spite of stringent quality controls, weaknesses in process control or minute impurities in materials may cause a substantial
percentage of a product in a lot to be defective. If we are not able to develop and continue to improve on our manufacturing processes
or to maintain stringent quality controls, or if contamination problems arise, our operating results would be harmed.

 The complexity of our products may lead to errors,
defects and bugs, which could result in the necessity to redesign products and could negatively, impact our reputation with customers.

 Products as complex as those we
market and intend to market might contain errors, defects and bugs when first introduced or as new versions are released. Delivery of
products with production defects or reliability, quality or compatibility problems could significantly delay or hinder market acceptance
of our products or result in a costly recall and could damage our reputation and adversely affect our ability to sell our products. If
our products experience defects, we may need to undertake a redesign of the product, a process that may result in significant additional
expenses.

 We may also be required to make
significant expenditures of capital and resources to resolve such problems. There is no assurance that problems will not be found in new
products after commencement of commercial production, despite testing by our suppliers, our customers and us.

 If we decide to make commercial quantities of products
at our facilities, we will be required to make significant capital expenditures to increase capacity.

 We lack the internal ability to
manufacture products at a level beyond the stage of early commercial introduction. To the extent we do not have an outside vendor to manufacture
our products, we will have to increase our internal production capacity and we will be required to expand our existing facilities or to
lease new facilities or to acquire entities with additional production capacities. These activities would require us to make significant
capital investments and may require us to seek additional equity or debt financing. We cannot assure you that such financing would be
available to us when needed on acceptable terms, or at all. Further, we cannot assure you that any increased demand for our products would
continue for a sufficient period of time to recoup our capital investments associated with increasing our internal production capacity.

 In addition, we do not have experience
manufacturing our products in large quantities. In the event of significant demand for our products, large-scale production might prove
more difficult or costly than we anticipate and lead to quality control issues and production delays.

 We may not be able to manufacture products at competitive prices.

 To date, we have produced limited
quantities of materials for license and sale and materials and devices for research, development, demonstration and prototype purposes.
The cost per unit for these products currently exceeds the price at which we could expect to profitably sell them. If we cannot substantially
lower our cost of production as we move into sales of products in significant commercial quantities, our financial results will be harmed.

 We may be unable to export our products or technology
to other countries, convey information about our technology to citizens of other countries or sell certain products commercially, if the
products or technology are subject to United States export or other regulations.

 We develop certain polymer-based
products that we believe the United States government and other governments may be interested in using for military and information gathering
or antiterrorism activities. United States government export regulations may restrict us from selling or exporting certain products into
other countries, exporting our technology to those countries, conveying information about our technology to citizens of other countries
or selling certain products to commercial customers. We may be unable to obtain export licenses for products or technology, if they become
necessary. We currently cannot assess whether national security concerns would affect our future products and, if so, what procedures
and policies we would have to adopt to comply with applicable existing or future regulations.

 We are subject to regulatory compliance related to our operations.

 We are subject to various U.S.
governmental regulations related to occupational safety and health, labor and business practices. Failure to comply with current or future
regulations could result in the imposition of substantial fines, suspension of production, alterations of our production processes, cessation
of operations, or other actions, which could harm our business.

 We may incur liability arising from the use of hazardous materials.

 Our business and our facilities
are subject to a number of federal, state and local laws and regulations relating to the generation, handling, treatment, storage and
disposal of certain toxic or hazardous materials and waste products that we use or generate in our operations. Many of these environmental
laws and regulations subject current or previous owners or occupiers of land to liability for the costs of investigation, removal or remediation
of hazardous materials. In addition, these laws and regulations typically impose liability regardless of whether the owner or occupier
knew of, or was responsible for, the presence of any hazardous materials and regardless of whether the actions that led to the presence
were taken in compliance with the law. In our business, we use hazardous materials that are stored on site. We use various chemicals in
our manufacturing process that may be toxic and covered by various environmental controls. An unaffiliated waste hauler transports the
waste created by use of these materials off-site. Many environmental laws and regulations require generators of waste to take remedial
actions at an off-site disposal location even if the disposal was conducted lawfully. The requirements of these laws and regulations are
complex, change frequently and could become more stringent in the future. Failure to comply with current or future environmental laws
and regulations could result in the imposition of substantial fines, suspension of production, alteration of our production processes,
cessation of operations or other actions, which could severely harm our business.

 Our data and information systems and network
infrastructure may be subject to hacking or other cybersecurity threats. If our security measures are breached and an unauthorized
party obtains access to our proprietary business information, our information systems may be perceived as being unsecure, which
could harm our business and reputation, and our proprietary business information could be misappropriated which could have an
adverse effect on our business and results of operations.

 Our Company stores and transmits
its proprietary information on its computer systems. Despite our security measures, our information systems and network infrastructure
may be vulnerable to cyber-attacks or could be breached due to an employee error or other disruption that could result in unauthorized
disclosure of sensitive information that has the potential to significantly interfere with our business operations. Breaches of our security
measures could expose us to a risk of loss or misuse of this information, litigation and potential liability. Since techniques used to
obtain unauthorized access or to sabotage information systems change frequently and generally are not recognized until launched against
a target, we may be unable to anticipate these techniques or to implement adequate preventive measures in advance of such an attack on
our systems. In addition, we use third party vendors to store our proprietary information who use cyber or "Cloud" storage
of information as part of their service or product offerings, and despite our attempts to validate the security of such services, our
proprietary information may be misappropriated by other parties. In the event of an actual or perceived breach of our security, or the
security of one of our vendors, the market perception of the effectiveness of our security measures could be harmed and we could suffer
damage to our reputation or our business. Additionally, misappropriation of our proprietary business information could prove competitively
harmful to our business.

 We conduct significantly all of our research and
development activities at our Englewood, CO facility, and circumstances beyond our control may result in considerable business interruptions.

 We conduct significantly all of
our research and development activities at our Englewood, CO facility. Our operations are vulnerable to interruption by fire, earthquake,
floods or other natural disaster, quarantines or other disruptions associated with infectious diseases, national catastrophe, terrorist
activities, war, disruptions in our computing and communications infrastructure due to power loss, telecommunications failure, human error,
physical or electronic security breaches and computer viruses, and other events beyond our control. We do not have a detailed disaster
recovery plan.

 We could be negatively affected as a result
of a proxy contest and the actions of activist stockholders.

 A proxy
contest with respect to election of our directors, or other activist stockholder activities, could adversely affect our business because:
(1) responding to a proxy contest and other actions by activist stockholders can be costly and time-consuming, disruptive to our operations
and divert the attention of management and our employees; (2) perceived uncertainties as to our future direction caused by activist activities
may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and
business partners; and (3) if individuals are elected to our Board of Directors with a specific agenda, it may adversely affect our ability
to effectively and timely implement our strategic plans.

 The requirements of being a public company are
a strain on our systems and resources, are a diversion to management's attention and are costly.

 As a public company, we are subject
to the reporting requirements of the Securities Exchange Act of 1934 (" Exchange Act ") the Sarbanes-Oxley Act of 2002
(" Sarbanes-Oxley Act "), the Dodd-Frank Wall Street Reform and Consumer Protection Act (" Dodd-Frank Act "),
and the rules and regulations of The NASDAQ Stock Market. The requirements of these rules and regulations increase our legal, accounting
and financial compliance costs, make some activities more difficult, time-consuming and costly and may also place undue strain on our
personnel, systems and resources.

 The Exchange Act requires, among
other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley
Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
We are continuing the costly process of implementing and testing our systems to report our results as a public company, to continue to
manage our growth and to implement internal controls. We are and will continue to be required to implement and maintain various other
control and business systems related to our equity, finance, treasury, information technology, other recordkeeping systems and other operations.
As a result of this implementation and maintenance, management's attention may be diverted from other business concerns, which could adversely
affect our business. Furthermore, we rely on third-party software and system providers for ensuring our reporting obligations and effective
internal controls, and to the extent these third parties fail to provide adequate service including as a result of any inability to scale
to handle our growth and the imposition of these increased reporting and internal controls and procedures, we could incur material costs
for upgrading or switching systems and our business could be materially affected.

 In addition, changing laws, regulations
and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and
financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying
interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time
as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters
and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with
evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion
of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws,
regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application
and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

 In addition, we expect these laws,
rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may
be required to incur substantial costs to maintain appropriate levels of coverage. These factors could also make it more difficult for
us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee, and qualified executive
officers.

 As a result of being a public
company, our business and financial condition are more visible, which we believe may result in threatened or actual litigation, including
by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected,
and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to
resolve them, could divert the time and resources of our management and adversely affect our business and operating results.

 If we fail to maintain an effective system of disclosure
controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with
applicable regulations could be impaired.

 As a public company, we are subject
to the reporting requirements of the Securities Exchange Act of 1934 (Exchange Act) the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act),
the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), and the rules and regulations of The NASDAQ Stock Market.
We expect that compliance with these rules and regulations will continue to increase our legal, accounting and financial compliance costs,
make some activities more difficult, time consuming and costly, and place significant strain on our personnel, systems and resources.

 The Sarbanes-Oxley Act requires,
among other things, that we assess the effectiveness of our internal control over financial reporting annually and the effectiveness of
our disclosure controls and procedures quarterly. In particular, Section 404 of the Sarbanes-Oxley Act, (Section 404), requires us to
perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and
our independent registered public accounting firm to attest to, the effectiveness of our internal control over financial reporting. Our
compliance with applicable provisions of Section 404 requires that we incur substantial accounting expense and expend significant management
time on compliance-related issues as we implement additional corporate governance practices and comply with reporting requirements. Moreover,
if we are not able to comply with the requirements of Section 404 applicable to us in a timely manner, or if we or our independent registered
public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses,
the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities,
stockholder or other third-party litigation, all of which would require additional financial and management resources.

 Furthermore, investor perceptions
of our Company may suffer if deficiencies are found, and this could cause a decline in the market price of our stock or hinder our ability
to raise capital. Irrespective of compliance with Section 404, any failure of our internal control over financial reporting could have
a material adverse effect on our stated operating results and harm our reputation. If we are unable to continue to implement and maintain
these requirements effectively or efficiently, it could harm our operations, financial reporting, or financial results and could result
in an adverse opinion on our internal controls from our independent registered public accounting firm.

 The exercise of options and warrants and other
issuances of shares of common stock or securities convertible into common stock will dilute your interest.

 Our Board may determine from time
to time that it needs to raise additional capital by issuing additional shares of our common stock or other securities and we are not
restricted from issuing additional common stock, including securities that are convertible into or exchangeable for, or that represent
the right to receive, shares of our common stock. Because our decision to issue securities in any future offering will depend on market
conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future offerings,
or the prices at which such offerings may be affected. Additional equity offerings may dilute the holdings of existing stockholders or
reduce the market price of our common stock.

 As of December 31, 2023, we have
outstanding options and warrants to purchase an aggregate of 7,967,605 shares of our common stock at exercise prices ranging from $0.51
to 16.81 per share with a weighted average exercise price of $2.49 per share. The exercise of options and warrants at prices below the
market price of our common stock could adversely affect the price of shares of our common stock. Additional dilution may result from the
issuance of shares of our capital stock in connection with any collaboration (although none are contemplated at this time) or in connection
with other financing efforts, including pursuant to the 2023 Purchase Agreement with Lincoln Park, and the Roth Sales Agreement with Roth
Capital. Any issuance of our common stock that is not made solely to then-existing stockholders proportionate to their interests, such
as in the case of a stock dividend or stock split, will result in dilution to each stockholder by reducing his, her or its percentage
ownership of the total outstanding shares. Moreover, if we issue options or warrants to purchase our common stock in the future and those
options or warrants are exercised or we issue restricted stock, stockholders may experience further dilution. Holders of shares of our
common stock have no preemptive rights that entitle them to purchase their pro rata share of any offering of shares of any class or series.

 The trading
price of our common stock has been, and may continue to be, volatile, and the value of our common stock may decline. This
volatility, as well as general market conditions, may cause our stock price to fluctuate greatly and even potentially expose us to litigation.

 Our common stock may be
subject to continued volatility. During the past 52 weeks, the share price for our common stock ranged from a low of $3.79 to a high
of $9.18. We cannot assure you that the market price for our common stock will be less volatile or will remain at its current level.
A decrease in the market price for our shares could result in substantial losses for investors. The market price of our common stock
may be significantly affected by one or more of the following factors, many of which are beyond our control, including:

 our Company's ability to execute on its business plan;

 the status of particular development programs and the timing of performance under specific development agreements;

 actual or anticipated demand for our products and future products and technologies;

 amount and timing of our costs related to our development and marketing efforts or other initiatives and expansion of our operations;

 changes in anticipated commercial deployment of certain products and financial results;

 our ability to enter into, renegotiate or renew key agreements or strategic relationships,

 our ability to develop expanded product production facilities, along with silicon-based foundry and other outside contractor relationships;

 issuance of new or updated research or reports by securities analysts;

 the use by investors or analysts of third-party data regarding our business that may not reflect our operations;

 fluctuations in the valuation of companies perceived by investors to be comparable to us;

 share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

 large trades, block trades or short selling of our common stock,

 actual or anticipated changes in our competitive position relative to our industry competitors;

 announcements or implementation by our competitors of technological innovations or new products;

 changes in laws or regulations applicable to our products or industry;

 additions or departures of key personnel;

 capital-raising activities or commitments;

 product shortages requiring suppliers to allocate minimum quantities;

 the commencement or conclusion of legal proceedings that involve us;

 costs related to possible future acquisitions of technologies or businesses;

 economic conditions specific to our industry, as well as general economic and market conditions; or

 other events or factors, including those resulting from civil unrest, war, foreign invasions, terrorism, or public health crises or responses to such events.

 Furthermore,
the stock markets frequently experience extreme price and volume fluctuations that affect the market prices of equity securities of many
companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad
market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, elections, interest
rate changes, or international currency fluctuations, may negatively impact the market price of our common stock. As a result of such
fluctuations, you may not realize any return on your investment in us and may lose some or all of your investment. In the past, companies
that have experienced volatility in the market price of their stock have been subject to securities class action litigation or derivative
litigation.

 A sale of a substantial number of shares of our common stock may cause
the price of our common stock to decline and may impair our ability to raise capital in the future.

 Our common stock is traded on
The NASDAQ Capital Market and, despite certain increases of trading volume from time to time, there have been periods when the market
for our common stock could be considered "thinly-traded," meaning that the number of persons interested in purchasing our
common stock at or near bid prices at any given time may be relatively small. Finance transactions or option/warrant exercises resulting
in a large amount of newly issued shares that become readily tradable, or other events that cause current stockholders to sell shares,
could place downward pressure on the trading price of our stock the trading price of our stock could decline. Additionally, we believe
a significant portion of our shares are held by shareholders that accumulated their shares during a time when our shares prices were significantly
less than our current share prices. If these shareholders, some of which hold a substantial number of shares of our common stock, decide
to sell some or all of their shares at once without regard to the impact of their sales on the market price of our stock, the trading
price of our stock could decline. In addition, the lack of a robust resale market may require a stockholder who desires to sell a large
number of shares of common stock to sell the shares in increments over time to mitigate any adverse impact of the sales on the market
price of our stock.

 If our existing stockholders sell,
or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, including
shares issued upon the exercise of outstanding options or warrants or pursuant to the 2023 Purchase Agreement with Lincoln Park, and the
Roth Sales Agreement with Roth Capital, the market price of our common stock could decline. Sales of a substantial number of shares of
our common stock may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that
we deem reasonable or appropriate. We may become involved in securities class action litigation that could divert management's attention
and harm our business.

 Our common stock will be subject to potential delisting
if we do not maintain the listing requirements of the Nasdaq Capital Market.

 Our common stock commenced trading
on The NASDAQ Capital Market on September 1, 2021. We cannot assure you that that an active trading market for our common stock will continue
to be sustained. Nasdaq has rules for continued listing, including, without limitation, minimum market capitalization and other requirements.
Failure to maintain our listing, or de-listing from Nasdaq, would make it more difficult for stockholders to dispose of our securities
and more difficult to obtain accurate price quotations on our securities. This could have an adverse effect on the price of our common
stock. Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need
in the future, may also be materially and adversely affected if our common stock and/or other securities are not traded on a national
securities exchange.

 If securities or industry analysts do not publish
research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading
volume could decline.

 The trading market for most listed
companies' securities depends in part on the research and reports that securities or industry analysts publish about them or their
business. We currently have no independent research analysts that cover our stock and we may not obtain research coverage by securities
and industry analysts until our products are commercialized and we obtain revenues, and there is no assurances that we will ever obtain
independent research analysts coverage. If no securities or industry analysts commence coverage of us, the trading price for our common
stock could be negatively affected. In the event any analyst who covers us downgrades our securities, the price of our securities would
likely decline. If one or more of these analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase
of our securities could decrease, which could cause the price of our common stock and its trading volume to decline.

 Our board of directors has the authority, without
stockholder approval, to issue preferred stock with terms that may not be beneficial to existing common stockholders and with the ability
to affect adversely stockholder voting power and perpetuate their control over us.

 Our articles of incorporation,
as amended, allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors
has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority
to issue preferred stock without further stockholder approval, including large blocks of preferred stock. As a result, our board of directors
could authorize the issuance of a series of preferred stock that would grant to holders thereof the preferred right to our assets upon
liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock or other preferred
stockholders and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock or existing
preferred stock, if any.

 Preferred stock could be used
to dilute a potential hostile acquirer. Accordingly, any future issuance of preferred stock or any rights to purchase preferred stock
may have the effect of making it more difficult for a third party to acquire control of us. This may delay, defer or prevent a change
of control or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings attributable
to, and assets available for distribution to, the holders of our common stock and could adversely affect the rights and powers, including
voting rights, of the holders of our common stock and preferred stock.

 Our articles of incorporation and amended and restated
bylaws, and certain provisions of Nevada corporate law, as well as certain of our contracts, contain provisions that could delay or prevent
a change in control even if the change in control would be beneficial to our stockholders.

 Nevada law, as well as our articles
of incorporation, as amended, and amended and restated bylaws, contain anti-takeover provisions that could delay or prevent a change in
control of our Company, even if the change in control would be beneficial to our stockholders. These provisions could lower the price
that future investors might be willing to pay for shares of our common stock. These anti-takeover provisions:

 authorize our board of directors to create and issue, without stockholder approval, preferred stock, thereby increasing the number of outstanding shares, which can deter or prevent a takeover attempt;

 prohibit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;

 empower our board of directors to fill any vacancy on our board of directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise;

 provide that our board of directors be divided into three classes, with approximately one-third of the directors to be elected each year;

 provide that special meetings of our stockholders may only be called by t he chairperson, president or chief executive officer, or by resolution of the board of directors or at the request in writing of stockholders owning 66 2/3% in amount of the entire capital stock of the Company issued and outstanding and entitled to vote;

 establish advance notice procedures with regard to stockholder proposals relating to stockholder nominees for director and other stockholder proposals

 provide that our board of directors is expressly authorized to adopt, amend or repeal our bylaws; and

 provide that our directors will be elected by a plurality of the votes cast in the election of directors.

 Nevada Revised Statutes, the terms
of our employee stock option agreements and other contractual provisions may also discourage, delay or prevent a change in control of
our Company. Nevada Revised Statutes sections 78.378 to 78.3793 provide state regulation over the acquisition of a controlling interest
in certain Nevada corporations unless the articles of incorporation or bylaws of the corporation provide that the provisions of these
sections do not apply. Our articles of incorporation, as amended, and amended and restated bylaws do not state that these provisions do
not apply. The statute creates a number of restrictions on the ability of a person or entity to acquire control of a Nevada company by
setting down certain rules of conduct and voting restrictions in any acquisition attempt, among other things. The statute contains certain
limitations and it may not apply to our Company. Our 2016 Equity Incentive Plan includes change-in-control provisions that allow us to
grant options that may become vested immediately upon a change in control. Our board of directors also has the power to adopt a stockholder
rights plan that could delay or prevent a change in control of our Company even if the change in control is generally beneficial to our
stockholders. These plans, sometimes called "poison pills," are oftentimes criticized by institutional investors or their
advisors and could affect our rating by such investors or advisors. If our board of directors adopts such a plan, it might have the effect
of reducing the price that new investors are willing to pay for shares of our common stock.

 Together, these charter, statutory
and contractual provisions could make the removal of our management and directors more difficult and may discourage transactions that
otherwise could involve payment of a premium over prevailing market prices for our common stock. Furthermore, the existence of the foregoing
provisions, as well as the significant common stock beneficially owned by our founders, executive officers, and members of our board of
directors, could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also
deter potential acquirers of our Company, thereby reducing the likelihood that you could receive a premium for your common stock in an
acquisition.

 Item 1B.

 Unresolved Staff Comments.

 None.

 Item 1C.

 Cybersecurity.

 Cybersecurity Risk
Management and Strategy. We depend on software applications, information technology systems, computing infrastructure and
cloud service providers to operate our business. Certain of these systems are managed, hosted, provided or used by third parties, to assist
in conducting our business and which have their own cyber security measures in place. We implement generally applicable industry standards
and best practices processes for the assessment, identification, and management of material risks from cybersecurity threats to our information
technology systems. We have an Information Security Coordinator who oversees our information security policies and procedures. Our Information
Security Coordinator maintains a cyber incident reporting and response process and provides management notifications based on the seriousness
of any incident. Our information security policies and procedures are required to be reviewed on a regular basis.

 We have not
experienced a cybersecurity incident that resulted in a material adverse impact to our business or operations; however, there can be no
guarantee that we will not experience such an incident in the future. For a description of the risks from cybersecurity threats that may
materially affect our Company and how they may do so, please see "Risk Factors" included in Part I, Item 1A of this
Annual Report on Form 10-K, including " Our data and information systems and network infrastructure may be subject to hacking
or other cyber security threats. If our security measures are breached and an unauthorized party obtains access to our proprietary business
information, our information systems may be perceived as being unsecure, which could harm our business and reputation, and our proprietary
business information could be misappropriated which could have an adverse effect on our business and results of operations. "

 Cybersecurity Governance. Our Audit
Committee has primary responsibility for overseeing our risk-management program relating to cybersecurity, although our Board of Directors
participates in periodic reviews and discussion dedicated to cyber risks, threats, and protections.

 Item 2.

 Properties.

 Our principal executive office
and research and development facility is located at 369 Inverness Parkway, Suite 350, Englewood, Colorado. The 23,104 square feet facility
includes fully functional 1,000 square feet of class 1,000 cleanroom, 500 square feet of class 10,000 cleanroom, chemistry laboratories,
and analytic laboratories, and serves as our office, laboratory and research and development space. Our total annual base rent during
2024 is expected to be approximately $376,364.

 Item 3.

 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 4.

 Mine Safety Disclosures.

 Not Applicable.

 Item 5.

 Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity Securities.

 Market Information

 Our common stock trades on the
 Nasdaq Capital Market under the symbol LWLG.

 Holders of
Common Stock

 On February 28, 2024, we had approximately
70 holders of our common stock, not including persons who hold our common stock in nominee or "street
name" accounts through brokers or banks.

 Dividend
Policy

 Our Company has never paid
a cash dividend and has no present plans to pay cash dividends.

 Securities Authorized for Issuance under Equity Compensation Plans

 Equity Compensation Plans as of December 31, 2023.

 Equity Compensation
 Plan Information

 Number
 of securities to be
 issued
 upon exercise of
 outstanding
 options,
 warrants
 and rights

 Weighted-average
 exercise
 price
 of outstanding options,
 warrants
 and rights

 Number
 of securities remaining
 available
 for future issuance
 under
 equity compensation plans
 (excluding
 securities reflected in
 column
 (a))

 Plan category

 (a)

 (b)

 (c)

 Equity compensation plans approved by security holders (1)

 8,290,807

 $2.90

 5,291,784

 Equity compensation plans not approved by security holders (2)

 519,000

 $0.64

 Total

 8,809,807

 $2.76

 5,291,784

 1.

 Reflects shares of common stock to be issued pursuant to our 2016 Equity Incentive Plan and our 2007 Employee Stock Plan, both of which are for the benefit of our directors, officers, employees and consultants. We have reserved 13,000,000 shares of common stock for such persons pursuant to our 2016 Equity Incentive Plan. We terminated our 2007 Employee Stock Plan in June 2016 and no additional awards are made under that plan.

 2.

 Comprised of common stock purchase warrants we issued for services.

 Stock Performance Graph

 The graph
set forth below compares the cumulative total stockholder return on our common stock between December 31, 2018 and December 31, 2023,
with the cumulative total return of (a) the NASDAQ Composite Index and (b) Solactive EPIC Core Photonics USD Index NTR, over the same
period. This graph assumes the investment of $100 on December 31, 2018 in our common stock, the NASDAQ Composite Index and the Solactive
EPIC Core Photonics USD Index NTR and assumes the reinvestment of dividends, if any. The graph assumes our closing sales price on December
31, 2018 of $.71 per share as the initial value of our common stock.

 The
comparisons shown in the graph below are based upon historical data. The stock price performance shown in the graph below is not necessarily
indicative of, nor is it intended to forecast, the potential future performance of our common stock. Information used in the graph was
obtained from the NASDAQ Stock Market LLC and Solactive AG, financial data providers and sources believed to be reliable.

 The above
graph and related information shall not be deemed "soliciting material" or to be "filed" with the Securities and
Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange
Act except to the extent we specifically incorporate it by reference into such filing. Our stock price performance shown in the graph
below is not indicative of future stock price performance.

 Recent Sales of Unregistered Securities

 During the period covered by this
report, our Company has sold the following securities without registering the securities under the Securities Act:

 Date

 Security

 Jan 5, 2023

 Common Stock — 25,000 shares of Common Stock at $.75 per share pursuant to a warrant exercise.

 June 5, 2023

 Common Stock — 100,000 shares of Common Stock at $1.15 per share pursuant to a warrant exercise.

 June 20, 2023

 Common Stock — 25,000 shares of Common Stock at $.67 per share pursuant to a warrant exercise.

 July 18, 2023

 Common Stock —19,000 shares of Common Stock at $.75 per share pursuant to a warrant exercise.

 Dec 14, 2023

 Common Stock —100,000 shares of Common Stock at $.72 per share pursuant to a warrant exercise.

 No underwriters
were utilized, and no commissions or fees were paid with respect to any of the above transactions. These persons were the only offerees
in connection with these transactions. We relied on Section 4(a)(2) and Rule 506 of Regulation D of the Securities Act since the transaction
does not involve any public offering.

 Purchases of Equity Securities by the Issuer
or Affiliated Purchasers

 None.

 Item 6.

 RESERVED.

 Item 7.

 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 The following management's
discussion and analysis of financial condition and results of operations provides information that management believes is relevant to
an assessment and understanding of our plans and financial condition. The following selected financial information is derived from our
historical financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere
within this Annual Report on Form 10-K and the "Forward-Looking Statements" explanation included elsewhere herein.

 Overview

 Lightwave
Logic, Inc. is a technology company focused on the development of next generation electro-optic photonic devices made on its P 2 IC
technology platform which we have detailed as: 1) Polymer Stack, 2) Polymer Plus, and 3) Polymer Slot. Our unique
polymer technology platform uses in-house proprietary high-activity and high-stability organic polymers. Electro-optical devices called
modulators convert data from electric signals into optical signals for multiple applications.

 Our differentiation
at the modulator device level is in higher speed, lower power consumption, simplicity of manufacturing, small footprint (size), and reliability.
We have demonstrated higher speed and lower power consumption in packaged devices, and during 2022 and 2023, we continued to make advances
in techniques to translate material properties to efficient, reliable modulator devices with commercial foundries. We are currently focused
on testing and demonstrating the simplicity of manufacturability and reliability of our devices, including in conjunction with the silicon
photonics manufacturing ecosystem. In 2022 we discussed the addition of several silicon-based foundry partners to help scale in volume
our polymer modulator devices and we started to receive working modulator chips from the foundries. We have advanced our interactions
with our foundries, and we continue to receive working modulator chips for prototyping. Silicon-based foundries are large semiconductor
fabrication plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput.
Partnering with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard production
lines using standard equipment, it also allows us to efficiently utilize our capital. The foundry partnerships will allow us to scale
our high-performance polymer optical engines quickly and efficiently.

 Our extremely
strong and broad patent portfolio allows us to optimize our business model in three areas: 1) Traditional focus on product development,
2) Patent licensing and 3) Technology transfer to foundries. We are continually looking to strengthen our patent portfolio both by internal
inventions and acquisition of intellectual property.

initially targeting applications in fiber optic data communications and telecommunications markets and are exploring other applications
that include automotive/LIDAR, sensing, displays etc., for our polymer technology platform. Our goal is to have our unique polymer technology
platform become ubiquitous.

 Artificial
Intelligence (AI) has been integrating deeper within our daily activities with applications to make us more efficient and possibly smarter.
The impact on the internet is huge, and the internet is based on an optical network that utilizes data centers to route and switch traffic
or information to and from destinations. Data centers are being upgraded today in a fashion that the industry has not seen before. The
expected demands of increased traffic, information, and data driven by AI is changing the way the internet is being operated. AI is now
creating new and interesting market opportunities to upgrade the internet. Three of these are important today: density, speed, and low
power and these are very well aligned with our high performance electro-optic polymers. We are designing high performance polymer modulator
optical engines to support the rise and growth of AI as it generates more information that will travel through the internet and optical
network.

 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.
Our Company is also in various stages of photonic device and materials development and evaluation with potential customers
and strategic partners. We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional
revenue streams from technology transfer agreements and direct sale of our electro-optic device components.

 Business Strategy

 Our first revenue stream was obtained
from our entry into a material supply license agreement to provide Perkinamine chromophore
materials for polymer based photonic devices and photonic integrated circuits (PICs). Our Company is also in various stages
of photonic device and materials development and evaluation with potential customers and strategic partners. We expect to continue to
obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology transfer agreements
and direct sale of our electro-optic device components.

 Specifically,
our business strategy provides that our revenue stream will be derived from one or some combination of the following: (i) technology licensing
for specific product application; (ii) joint venture relationships with significant industry leaders; and (iii) the production and direct
sale of our own electro-optic device components. Our objective is to be a leading provider of proprietary technology and know-how in the
electro-optic device market. In order to meet this objective, we intend to continue to:

 •

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

 •

 Develop photonic devices based on our P 2 IC TM technology

 •

 Develop proprietary intellectual property

 •

 Grow our commercial device development capabilities

 •

 Partner with silicon-based foundries who can scale volume quickly

 •

 Grow our product reliability and quality assurance capabilities

 •

 Grow our optoelectronic packaging and testing capabilities

 •

 Grow our commercial material manufacturing capabilities

 •

 Maintain/develop strategic relationships with major telecommunications and data communications companies to further the awareness and commercialization of our technology platform

 •

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

 Create Organic Polymer-Enabled Electro-Optic Modulators

 We
intend to utilize our proprietary optical polymer technology to create an initial portfolio of commercial electro-optic polymer product
devices with applications for various markets, including telecommunications, data communications and data centers. These product devices
will be part of our proprietary photonics integrated circuit (PIC) technology platform.

 We expect
our initial modulator products will operate at symbol rates at least 112 Gigabaud which is roughly 200Gbps when utilized with PAM4 encoding
schemes. Our devices are highly linear and can also enable the performance required to take advantage of more advance complex encoding
schemes if required.

 Capital Requirements

 We
commenced commercial operations in May 2023, and we do not generate sufficient revenues to pay for our operating expenses. We have incurred
substantial net losses since inception. We have satisfied our capital requirements since inception primarily through the issuance and
sale of our common stock.

 Results of Operations

 Comparison of year ended December 31, 2023 to year
ended December 31, 2022 and year ended December 31, 2022 to year ended December 31, 2021

 Revenues

 During the year ended
December 31, 2023, we recognized $40,502 of licensing and royalty revenue. As a development stage company during the years ended
December 31, 2022 and December 31, 2021, we had no revenues. The Company is in various stages of photonic device and materials
development and evaluation with potential customers and strategic partners, and commercialization. The Company expects to continue
obtaining a revenue stream from technology licensing agreements, to obtain additional revenue streams from technology transfer
agreements and direct sale of its own electro-optic device components.

 Cost of Sales

 During the year ended December
31, 2023, we recognized $2,513 in Cost of Sales, and $0 in Cost of Sales during the years ended December 31, 2022 and 2021.

 Operating Expenses

Prior
 Year

 Research and development

 15,903,689

 $
 12,805,374

 $
 3,098,315

 %

 General and administrative

 5,359,565

 4,334,290

 1,025,275

 %

 $
 21,263,254

 $
 17,139,664

 $
 4,123,590

 %

Prior
 Year

 Research and development

 $
 12,805,374

 $
 12,476,040

 $
 329,334

 %

 General and administrative

 4,334,290

 4,520,403

 (186,113
)

 -4
 %

 $
 17,139,664

 $
 16,996,443

 $
 143,221

 %

 Research and development expenses
increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to increases in research
and development salary and bonus expenses, research and development non-cash stock option and RSA amortization, recruiting fees, employee
relocation expenses, rent expense, chemistry and wafer fabrication materials and supplies, testing expenses, software expenses, research
and development consulting expenses, and travel expenses, offset by a decrease in prototype expenses.

 Research and development salary
and bonus expenses increased by $1,636,577 in the year ended December 31, 2023, compared to the same period in 2022. Research and development
non-cash stock option and RSA amortization expenses increased by $690,879 in the year ended December 31, 2023, compared to the same period
in 2022. Recruiting fees increased by $195,697 in the year ended December 31, 2023, compared to the same period in 2022. Employee relocation
expenses increased by $178,626 in the year ended December 31, 2023, compared to the same period in 2022. Rent expense increased by $153,949
in the year ended December 31, 2023, compared to the same period in 2022. Chemistry and wafer fabrication materials and supplies increased
by $143,581 in the year ended December 31, 2023, compared to the same period in 2022. Research and development testing expenses increased
by $129,593 in the year ended December 31, 2023 compared to the same period in 2022. Software expenses increased by $126,854 in the year
ended December 31, 2023, compared to the same period in 2022. Research and development consulting expenses increased by $112,261 in the
year ended December 31, 2023, compared to the same period in 2022. Research and development travel expenses increased by $96,923 in the
year ended December 31, 2023, compared to the same period in 2022. These increases were offset by a $483,617 decrease in prototype expenses
in the year ended December 31, 2023, compared to the same period in 2022.

 Research and development expenses
increased for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to increases in research
and development non-cash stock option amortization, prototype device development expenses, research and development salary expenses, laboratory
and wafer fabrication materials and supplies, research and development consulting expenses, depreciation and research and development
travel expenses offset by a decrease in expense for cashless option exercises and research and development bonus expenses.

 Research and development non-cash
stock option amortization expenses increased by $3,732,646 in the year ended December 31, 2022, compared to the same period in 2021. Prototype
device development expenses increased by $1,460,419 in the year ended December 31, 2022, compared to the same period in 2021. Research
and development salary expenses increased by $617,627 in the year ended December 31, 2022, compared to the same period in 2021. Laboratory
and wafer fabrication materials and supplies increased by $242,737 in the year ended December 31, 2022, compared to the same period in
2021. Research and development consulting expenses increased by $224,435 in the year ended December 31, 2022, compared to the same period
in 2021. Depreciation expenses increased by $173,206 in the year ended December 31, 2022, compared to the same period in 2021. Research
and development travel expenses increased by $147,136 in the year ended December 31, 2022, compared to the same period in 2021. The expense
for research and development cashless option exercises decreased by $3,382,582 in the year ended December 31, 2022, compared to the same
period in 2021. Research and development bonus expenses decreased by $3,003,169 in the year ended December 31, 2022, compared to the same
period in 2021.

 We expect to continue to incur
substantial research and development expense developing and commercializing our photonic devices, and electro-optic materials platform.
These expenses will increase as a result of accelerated development effort to support commercialization of our non-linear optical polymer
materials technology; to build photonic device prototypes; 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 year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to increases in general
and administrative salary and bonus expenses, accounting fees, general and administrative consulting fees, general and administrative
non-cash stock option and RSA amortization, D&O insurance expenses, investor relations expenses, travel expenses, office expenses,
rent expense, general and administrative recruiting fees, and software expenses, offset by a decrease in legal fees.

 General and administrative salary
and bonus expenses increased by $172,690 in the year ended December 31, 2023, compared to the same period in 2022. Accounting fees increased
by $191,803 in the year ended December 31, 2023, compared to the same period in 2022. General and administrative consulting fees increased
by $144,600 in the year ended December 31, 2023, compared to the same period in 2022. General and administrative non-cash stock option
and RSA amortization expenses increased by $125,863 in the year ended December 31, 2023, compared to the same period in 2022. D&O
insurance expenses increased by $99,555 in the year ended December 31, 2023, compared to the same period in 2022. Investor relations expenses
increased by $67,670 in the year ended December 31, 2023, compared to the same period in 2022. Travel expenses increased by $58,999 in
the year ended December 31, 2023, compared to the same period in 2022. Office expenses increased by $53,949 in the year ended December
31, 2023, compared to the same period in 2022. Rent expense increased by $48,350 in the year ended December 31, 2023, compared to the
same period in 2022. General and administrative recruiting fees increased by $43,255 in the year ended December 31, 2023, compared to
the same period in 2022. Software expenses increased by $33,222 in the year ended December 31, 2023, compared to the same period in 2022.
These increases were offset by a $38,374 decrease in legal fees in the year ended December 31, 2023, compared to the same period in 2022.

 General and administrative expenses
decreased for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to decreases in general
and administrative bonus and salary expenses and general and administrative expense for cashless option exercises offset by increases
general and administrative non-cash stock option amortization, legal expenses, director fees, insurance and general and administrative
travel expenses.

 General and administrative bonus
and salary expenses decreased by $2,054,916 in the year ended December 31, 2022, compared to the same period in 2021 primarily for bonus
expenses in the year ended December 31, 2021. The expense for general and administrative cashless option exercises decreased by $170,137
in the year ended December 31, 2022, compared to the same period in 2021. General and administrative non-cash stock option amortization
increased by $1,138,708 in the year ended December 31, 2022, compared to the same period in 2021. Legal expenses increased by $417,624
in the year ended December 31, 2022, compared to the same period in 2021. Director fees increased by $149,750 in the year ended December
31, 2022, compared to the same period in 2021. Insurance expenses increased by $136,771 in the year ended December 31, 2022, compared
to the same period in 2021. General and administrative travel expenses increased by $75,652 in the year ended December 31, 2022, compared
to the same period in 2021.

 Other Income (Expense)

Prior
 Year

 Other Income (Expense)

 $
 187,233

 $
 (90,816
)

 $
 278,049

 -306
 %

Prior
 Year

 Other Expense

 $
 (90,816
)

 $
 (1,634,938
)

 $
 1,544,122

 -94
 %

 Other income increased for the
year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in interest income earned
on money market account of $568,137 and a gain on disposal of fixed assets of $215,509, offset by an increase in commitment fee associated
with the purchase of shares by an institutional investor for sale under a stock purchase agreement in the amount of $463,869.

 Other expenses decreased for the
year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to a decrease in commitment fee associated
with the purchase of shares by an institutional investor for sale under a stock purchase agreement in the amount of $1,849,755 offset
by the forgiveness by the Small Business Administration during 2021 of a loan funding from the Paycheck Protection Program in the amount
of $410,700.

 Net Loss

Prior
 Year

 Net Loss

 $
 21,038,032

 $
 17,230,480

 $
 3,807,552

 %

Prior
 Year

 Net Loss

 $
 17,230,480

 $
 18,631,381

 $
 (1,400,901
)

 -8
 %

 Net loss was $21,038,032 and $17,230,480
for the year ended December 31, 2023 and 2022, respectively, for an increase of $3,807,552 due primarily to increases in salary and bonus
expense, non-cash stock option and RSA amortization, commitment fee associated with the purchase of shares by an institutional investor
for sale under a stock purchase agreement, consulting fees, recruiting fees, rent expense, accounting fees, research and development employee
relocation costs, software costs, research and development travel expenses, chemistry and wafer fabrication materials and supplies, testing
expenses, D&O insurance, investor relations fees, and office expenses, offset by decrease primarily related to prototype and legal
expenses, a higher interest income earned on money market account, and a gain on property and equipment disposal.

 Net loss was $17,230,480 and $18,631,381
for the year ended December 31, 2022 and 2021, respectively, for a decrease of $1,400,901 due primarily to decreases in expense for cashless
option exercises, bonus expenses and commitment fee associated with the purchase of shares by an institutional investor for sale under
a stock purchase agreement offset by increases in non-cash stock option amortization, prototype device development expenses, research
and development salary expenses, legal expenses, the forgiveness by the Small Business Administration during 2021 of a loan funding from
the Paycheck Protection Program, laboratory and wafer fabrication materials and supplies, research and development consulting fees, travel
expenses, depreciation, director fees and insurance expenses.

 Significant Accounting Policies

 Our Company's accounting
policies are more fully described in Note 1 of Notes to Financial Statements. As disclosed in Note 1 of Notes to Financial Statements,
the preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management
to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Although
these estimates are based on our management's best knowledge of current events and actions our Company may undertake in the future,
actual results could differ from the estimates.

 Liquidity and Capital Resources

 Our primary
source of operating cash inflows was proceeds from the sale of common stock to Lincoln Park (institutional investor) pursuant to purchase
agreements with Lincoln Park and proceeds from sale of common stock by Roth Capital (investment banking company) pursuant to the at the
market sale agreement with Roth Capital as described in Note 11 to the Financial Statements and below, proceeds received pursuant to the
exercise of options and warrants and a proceed received under a material supply and license agreement of which $39,875 is recorded as
deferred revenue as of December 31, 2023.

 All of the registered shares under
the January 21, 2019 purchase agreement with Lincoln Park have been issued as of June 30, 2021. On July 2, 2021, the Company filed
a $100 million universal shelf registration statement which became effective on July 9, 2021. On October 4, 2021, our Company entered
into the 2021 purchase agreement with Lincoln Park to sell up to $33 million of common stock over a 36-month period. All of the registered
shares under the October 4, 2021 purchase agreement with Lincoln Park have been issued as of June 30, 2023. On February 28, 2023, our
Company entered into the 2023 purchase agreement with Lincoln Park to sell up to $30 million of common stock over a 36-month period, with
$10.5 million remaining on the 2023 purchase agreement as of the date of this filing. On December 9, 2022, our Company entered into the
at the market sale agreement with Roth Capital, as sales agent, whereby pursuant to the at the market sale agreement, our Company may
offer and sell up to $35,000,000 in shares of our common stock, from time to time through Roth Capital. As of the date of this filing
$33.4 million remains available to our Company pursuant to the at the market sale agreement.

the year ended December 31, 2023, the Company received $19,993,359 in proceeds pursuant to the 2021 purchase agreement and 2023 purchase
agreement with Lincoln Park, $1,515,878 in proceeds pursuant to the at the market sale agreement with Roth Capital, $1,013,924 in proceeds
pursuant to the exercise of options and warrants and $50,000 in a proceed received under a material supply and license agreement of which
$39,875 is recorded as deferred revenue as of December 31, 2023. During the year ended December 31, 2022, the Company received $12,775,268
in proceeds pursuant to the 2021 purchase agreement with Lincoln Park and $653,895 in proceeds pursuant to the exercise of options and
warrants. During the year ended December 31, 2021, the Company received $30,350,674 in proceeds pursuant to purchase agreements with Lincoln
Park and $2,379,225 in proceeds pursuant to the exercise of options and warrants.

the year ended December 31, 2023, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to
vendors including prototypes development and foundries expenses and third-party service providers. During the year ended December 31,
2022, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to vendors including prototypes
development and foundries expenses, third-party service providers and payroll taxes related to cashless option exercise. During the year
ended December 31, 2021, our primary sources of cash outflows from operations included payroll and bonus, payroll taxes related to cashless
option exercise, rent, utilities, payments to vendors including prototypes development and foundries expenses and third-party service
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, continue to introduce and sell products incorporating our polymer
materials technology; 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 or continue to establish cooperative
development, joint venture and licensing arrangements. We expect that we will incur approximately $1,830,000 of expenditures per month
over the next 12 months.

 We expect the proceeds
received pursuant to the 2023 purchase agreement and future purchase agreements with Lincoln Park, the at the market sale agreement
with Roth Capital, 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 through July 2025
before we will be required to replenish our cash reserves pursuant to the 2023 Purchase Agreement or the Roth Sales Agreement.
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 2024 and beyond as a result of the following planned activities:

 The addition of management, sales, marketing, technical 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.

 2023 Purchase Agreement with Lincoln Park

 On February 28, 2023, our Company
entered into the 2023 purchase agreement with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $30 million
of our common stock (subject to certain limitations) from time to time over a 36-month period. Pursuant to the 2023 purchase agreement,
Lincoln Park is obligated to make purchases as the Company directs in accordance with the purchase agreement, which may be terminated
by the Company at any time, without cost or penalty. Sales of shares will be made in specified amounts and at prices that are based upon
the market prices of our common stock immediately preceding the sales to Lincoln Park. We expect this and any future purchase agreements
with Lincoln Park to provide us with sufficient funds to maintain our operations for the foreseeable future. With the additional capital,
we expect to achieve a level of revenues attractive enough to fulfill our development activities and adequate enough to support our business
model for the foreseeable future.

 There
are no trading volume requirements or restrictions under the 2023 purchase agreement, and we will control the timing and amount of any
sales of our common stock to Lincoln Park. Lincoln Park has no right to require any sales by us, but is obligated to make purchases from
us as we direct in accordance with each of the 2023 purchase agreement. We can also accelerate the amount of common stock to be purchased
under certain circumstances. There are no limitations on the use of proceeds, financial or business
covenants, restrictions on future financings (other than restrictions on the Company's ability to enter into a similar type of agreement
or equity line of credit during the term, excluding an at-the-market transaction with a registered broker-dealer), rights of first refusal,
participation rights, penalties or liquidated damages under the 2023 purchase agreement.

 At
the Market Sale Agreement – Roth Capital

 On
December 9, 2022, we entered into the at the market sale agreement with Roth Capital, as sales agent. Pursuant to the at the market sale
agreement, our Company may offer and sell up to $35,000,000 in shares of our common stock, from time to time through Roth Capital. Upon
delivery of a placement notice based on our Company's instructions and subject to the terms and conditions of the at the market
sale agreement, Roth Capital may sell the shares by methods deemed to be an "at the market offering" as defined in Rule 415(a)(4) promulgated
under the Securities Act, including sales made directly on or through The Nasdaq Capital Market, on any other existing trading market
for the Company's common stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related
to such prevailing market prices, or by any other method permitted by law, including negotiated transactions, subject to the prior written
consent of our Company. We are not obligated to make any sales of shares under this agreement. The Company or Roth Capital may suspend
or terminate the offering of shares upon notice to the other party, subject to certain conditions. Roth Capital will act as sales agent
on a commercially reasonable efforts basis consistent with its normal trading and sales practices and applicable state and federal law,
rules and regulations and the rules of Nasdaq. We have agreed to pay Roth Capital commissions for its services of acting as
agent of 3.0% of the gross proceeds from the sale of the shares pursuant to the at the market sale agreement.

 The amount of proceeds we receive
from the at the market sale agreement, if any, will depend upon the number of shares of our common stock sold and the market price at
which they are sold. There can be no assurance that we will be able to sell any shares under or fully utilize this agreement. Roth Capital
is not required to sell any specific number of shares of our common stock under the agreement. We intend to use net proceeds from the
at the market sale agreement for general corporate purposes, including, without limitation, sales and marketing activities, product development,
making acquisitions of assets, businesses, companies or securities, capital expenditures, and for working capital needs.

 We cannot assure you that we will
meet the conditions of the 2023 purchase agreements with Lincoln Park in order to obligate Lincoln Park to purchase our shares of common
stock, and we cannot assure you that we will be able to sell any shares under or fully utilize the at the market sale agreement with Roth
Capital. In the event we fail to do so, and other adequate funds are not available to satisfy long-term capital requirements, or if planned
revenues are not generated, we may be required to substantially limit our operations. This limitation of operations may include reductions
in capital expenditures and reductions in staff and discretionary costs.

 Analysis of Cash Flows

 For the year ended December 31, 2023

 Net cash used in operating activities
was $12,236,024 for the year ended December 31, 2023, primarily attributable to the net loss of $21,038,032 adjusted by $6,459,387 in
options issued for services, $262,697 amortization of deferred compensation, $673,578 in common stock issued for services, $1,119,141
in depreciation expenses and patent amortization expenses, $184,835 amortization of right of use asset, $215,509 gain on disposal of property
and equipment, ($587,540) in prepaid expenses, $935,795 in accounts receivable, accounts payable, accrued bonuses, accrued expenses, deferred
revenue and other liabilities. Net cash used in operating activities consisted of payments for research and development, legal, professional
and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.

 Net cash used by investing activities
was $2,957,201 for the year ended December 31, 2023, consisting of $307,687 in cost for intangibles, $3,292,224 in asset additions for
the Colorado headquarter facility and labs offset by $642,120 in a loan repayment and $590 in proceeds on sale of property and equipment.

 Net cash provided by financing
activities was $22,523,161 for the year ended December 31, 2023, and consisted of $1,013,924 in proceeds from exercise of options and
warrants, $19,993,359 in proceeds from resale of common stock to an institutional investor and $1,515,878 in proceeds from at the market
sale of common stock by an investment banking company.

31, 2023, our cash and cash equivalents totaled $31,432,087, our assets totaled $41,783,585, our liabilities totaled $5,349,771 and we
had stockholders' equity of $36,433,814.

 For the year ended December 31, 2022

 Net cash used in operating activities
was $10,465,880 for the year ended December 31, 2022, primarily attributable to the net loss of $17,230,480 adjusted by $5,813,628 in
options issued for services, $91,713 amortization of deferred compensation, $209,709 in common stock issued for services, $1,045,208 in
depreciation expenses and patent amortization expenses, ($379,037) in prepaid expenses, ($135,661) in accounts payable, accrued bonuses
and accrued expenses and $119,040 in cashless option exercise expense. Net cash used in operating activities consisted of payments for
research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.

 Net cash used by investing activities
was $2,209,722 for the year ended December 31, 2022, consisting of $260,415 in cost for intangibles, $1,307,187 in asset additions for
the Colorado headquarter facility and labs and $642,120 in a loan issuance.

 Net cash provided by financing
activities was $13,345,141 for the year ended December 31, 2022 and consisted of $653,895 in proceeds from exercise of options and warrants,
$12,775,268 in proceeds from resale of common stock to an institutional investor offset by $84,022 in cashless option exercise tax payments.

31, 2022, our cash and cash equivalents totaled $24,102,151, our assets totaled $29,263,472, our liabilities totaled $1,710,449 and we
had stockholders' equity of $27,553,023.

 For the year ended December 31, 2021

 Net cash used in operating activities
was $10,038,626 for the year ended December 31, 2021, primarily attributable to the net loss of $18,631,381 adjusted by $11,001 in warrants
issued for services, $1,022,985 in options issued for services, $2,059,464 in common stock issued for services, $878,520 in depreciation
expenses and patent amortization expenses, ($410,700) in Paycheck Protection Program loan forgiveness, $334,877 in prepaid expenses, $1,023,785
in accounts payable, accrued bonuses and accrued expenses and $3,672,823 in cashless option exercise expense. Net cash used in operating
activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures
necessary to develop our business infrastructure.

 Net cash used by investing activities
was $1,116,179 for the year ended December 31, 2021, consisting of $18,649 in cost for intangibles and $1,097,530 in asset additions primarily
for the Colorado headquarter facility and labs.

 Net cash provided by financing
activities was $31,280,827 for the year ended December 31, 2021 and consisted of $2,379,225 in proceeds from exercise of options and warrants,
$30,350,674 in proceeds from resale of common stock to an institutional investor offset by $1,435,965 in cashless option exercise tax
payments and $13,107 repayment of equipment purchased.

31, 2021, our cash and cash equivalents totaled $23,432,612, our assets totaled $27,228,575, our liabilities totaled $2,024,303 and we
had stockholders' equity of $25,204,272.

 Contractual Obligations

 See "Note 8–Commitments"
of the notes to the financial statements contained elsewhere within this Annual Report on Form 10-K for a discussion of our operating
lease for office and laboratory space.

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 At December 31, 2023, we had $31.4
million in cash and cash equivalents. For the purposes of this Item 7A. we consider all highly liquid instruments with maturities of three
months or less at the time of purchase to be cash equivalents. The fair value of all of our cash equivalents is determined based on "Level
1" inputs, which are based upon quoted prices for identical or similar instruments in markets that are active. We
do not use any market risk sensitive instruments to hedge any risks, and we hold no market risk sensitive instruments for trading or speculative
purposes. We place our cash investments in instruments that meet credit quality standards. At December 31, 2022, we had deposits
with a financial institution that exceeded the Federal Depository Insurance coverage.

 Market
Interest Rate Risk

 We are exposed to market risk
related to changes in interest rates. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in
the general level of U.S. interest rates. If a 10% change in interest rates had occurred on December 31, 2023, this change would not have
had a material effect on the fair value of our investment portfolio as of that date.

 Due to the short holding period
of our investments and the nature of our investments, we have concluded that we do not have a material financial market risk exposure.

 Item 8.

 Financial Statements and Supplementary Data

 Our Financial Statements are
attached as Appendix A (following Exhibits) and included as part of this Form 10-K Report. A list of our Financial Statements is provided
in response to Item 15 of this Form 10-K Report.

 Item 9.

 Changes In and Disagreements With Accountants On Accounting and Financial Disclosure

 None.

 Item 9A.

 Controls and Procedures.

 Evaluation of Disclosure Controls and Procedures

 As of December 31, 2023, our Company
evaluated the effectiveness and design and operation of its disclosure controls and procedures. Our Company's disclosure controls
and procedures are the controls and other procedures that we designed to ensure that our Company records, processes, summarizes, and reports
in a timely manner the information that it must disclose in reports that our Company files with or submits to the Securities and Exchange
Commission. Our principal executive officer and principal financial officer reviewed and participated in this evaluation. Based on this
evaluation, our Company made the determination that its disclosure controls and procedures were effective.

 Management's Annual Report on Internal Control Over Financial
Reporting

 Our management is responsible
for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f)
and 15d-15(f). Under the supervision and with the participation of management, including our principal executive officer and principal
financial officer, we conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the framework
in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31,
2023.

 The Company's internal control
over financial reporting includes policies and procedures that (1) pertain to maintenance of records that, in reasonable detail, accurately
and fairly reflect transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
Company's assets that could have a material effect on the financial statements.

 Our management, including our
principal executive officer and principal financial officer, does not expect that our disclosure controls or our internal control over
financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide
only reasonable, not absolute, assurance that the control system's objectives will be met. Internal control over financial reporting
is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.
In addition, the design of any system of controls is based in part on certain assumptions about the likelihood of future events, and controls
may become inadequate if conditions change. There can be no assurance that any design will succeed in achieving its stated goals under
all potential future conditions.

 Audit Report on Internal
Controls Over Financial Reporting of the Registered Public Accounting Firm

 Morison
Cogen LLP, the Company's independent registered public accounting firm has audited the financial statements included in this Annual
Report on Form 10-K and, as part of their audit, has issued their report, included herein, on the effectiveness of the Company's
internal control over financial reporting as of December 31, 2023.

 Changes in Internal Control Over Financial Reporting

 No change in our Company's
internal control over financial reporting occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.

 Item 9B.

 Other Information

 Trading Arrangements

6, 2023, Ronald Bucchi, a member of our Company's Board of Directors, adopted a non-Rule 10b5–1 trading
arrangement as defined in Item 408(c) of Regulation S-K. The arrangement provided for the sale of 27,000 shares of
the Company's common stock and it terminated on December 6, 2023, after all of the shares were sold. The trading
arrangement was adopted during an open trading window and satisfied the Company's policies regarding insider transactions.

13, 2023, Fred Leonberger, a member of our Company's Board of Directors, adopted a non-Rule 10b5–1 trading
arrangement as defined in Item 408(c) of Regulation S-K. The arrangement provided for the sale of 75,000 shares of
the Company's common stock and it terminated on December 13, 2023, after all of the shares were sold. The trading
arrangement was adopted during an open trading window and satisfied the Company's policies regarding insider transactions.

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 None.

 Item 10.

 Directors, Executive Officers and Corporate Governance.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

 Item 11.

 Executive Compensation.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

 Item 12.

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

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

 Item 14.

 Principal Accountant Fees and Services.

required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023,

 Item 15.

 Exhibits, Financial Statement Schedules

 (a)

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

 Report of Independent Registered Public Accounting Firm

 Balance Sheets

 Statements of Comprehensive Loss

 Statement of Stockholders' Equity

 Statements of Cash Flows

 Notes to Financial Statements

 (b)

 The following exhibits are filed as part of this report.

 Exhibit No.

 Description of Exhibit

 Location

 3.1

 Articles of Incorporation

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

 3.2

 Certificate of Amendment to Articles of Incorporation

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

 3.3

 Certificate of Amendment to Articles of Incorporation

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

 3.4

 Amended and Restated Bylaws

 Incorporated by reference to the Company's Form 10-Q as filed with the SEC on November 9, 2023

 4.1

 Description of Registrant's Securities

 10.1

 Employee Agreement – Michael Lebby

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

 10.2

 Employee Agreement Amendment - Michael Lebby

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

 10.3

 Employee Agreement Amendment - Michael Lebby

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

 10.4

 Employee Agreement Amendment – Michael Lebby

 Incorporated by reference to the Company's Current Report on Form 8-K as filed with the SEC on March 20, 2023

 10.5

 Employee Agreement Amendment – Michael Lebby

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

 10.6

 Employee Agreement - James Marcelli

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

 10.7

 Employee Agreement Amendment - James Marcelli

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

 10.8

 Employee Agreement Amendment - James Marcelli

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

 10.9

 Employee Agreement Amendment – James Marcelli

 Incorporated by reference to the Company's Current Report on Form 8-K as filed with the SEC on March 20, 2023

 10.10

 Employee Agreement Amendment – James Marcelli

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

 10.11

 Form of Executive Paid Time Off Waiver Agreement

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

 10.12

 Form of Director Agreement

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

 10.13

 Form of Director and Officer Indemnification Agreement

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

 10.14

 Form of Director's Non-Disclosure Agreement

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

 10.15

 Operations Committee Charter

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

 10.16

 Statement of Operations Committee Work - Frederick J. Leonberger

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

 10.17

 Statement of Operations Committee Work - Siraj Nour El-Ahmadi

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

 10.18

 2007 Employee Stock Plan

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

 10.19

 2007 Employee Stock Plan Amendment

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

 10.20

 2016 Equity Incentive Plan

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

 10.21

 2016 Equity Incentive Plan Amendment

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

 10.22

 2016
 Equity Incentive Plan Amendment No. 2

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

 10.23

 Form of Non-qualified Stock Option Award Agreement - Employees

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

 10.24

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

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

 10.25

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

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

 10.26

 Form of Restricted Stock Award Agreement -Non Employee Directors

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

 10.27

 Lease Agreement dated October 26, 2017

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

 10.28

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

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

 10.29

 Purchase Agreement, dated October 4, 2021, by and between the Company and Lincoln Park

 Incorporated by reference to the Company's Current Report on Form 8-K as filed with the SEC on October 5, 2021

 10.30

 Registration Rights Agreement, dated October 4, 2021, by and between the Company and Lincoln Park

 Incorporated by reference to the Company's Current Report on Form 8-K as filed with the SEC on October 5, 2021

 10.31

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

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

 10.32

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

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

 14.1

 Code of Ethics and Business Conduct

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

 19.1

 Insider Trading Policy

 21.1

 Subsidiaries of the Registrant

 23.1

 Consent of Independent Registered Public Accounting Firm - Morison Cogen LLP

 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.

 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.

 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.

 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.

 97.1

 Compensation Clawback Policy

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 Item 16.

 Form 10-K Summary

 None

 SIGNATURES

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

 Registrant

 By:

 /s/ Michael Lebby

 Michael Lebby,

 Chief Executive Officer

 (Principal Executive Officer)

 Date: February 29, 2024

 Pursuant to the requirements of
the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/ Michael Lebby

 Chief Executive Officer, Principal Executive Officer, Chair of the Board of Directors

 Michael Lebby

 /s/ James S. Marcelli

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

 James S. Marcelli

 /s/ Ronald A. Bucchi

 Ronald A. Bucchi

 /s/ Siraj Nour El-Ahmadi

 Siraj Nour El-Ahmadi

 /s/ Frederick J. Leonberger

 Frederick J. Leonberger

 /s/ Craig Ciesla

 Craig Ciesla

 /s/ Laila Partridge

 Laila Partridge

 CONTENTS

 PAGE

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

 F-2 - F-3

 BALANCE SHEETS

 STATEMENTS OF COMPREHENSIVE LOSS

 STATEMENT OF STOCKHOLDERS' EQUITY

 STATEMENTS OF CASH FLOWS

 F-8 - F-22

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Board of Directors and

 Stockholders of Lightwave Logic, Inc.

 Opinions on the Financial Statements and Internal
Control over Financial Reporting

 We have audited the accompanying balance sheets of
Lightwave Logic, Inc. (the Company) as of December 31, 2023 and 2022, and the related statements of comprehensive loss, stockholders'
equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred
to as the financial statements). We also have audited the Company's internal control over financial reporting as of December 31,
2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).

 In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results
of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting
principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control –
Integrated Framework (2013) issued by COSO.

 Basis for Opinion

 The Company's management is responsible for
these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness
of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial
Reporting. Our responsibility is to express an opinion on the Company's financial statements and an opinion on the Company's
internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was
maintained in all material respects.

 Our audits of the financial statements included
performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing
such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

 F- 2

 To the Board of Directors and

 Stockholders of Lightwave Logic, Inc.

 (Continued)

 Definition and Limitations of Internal Control
over Financial Reporting

 A company's internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the company's assets that could have a material effect on the financial statements.

 Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

 Critical Audit Matters

 Critical audit matters are matters arising from
the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and
that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. We determined that there are no critical audit matters.

 /s/ Morison Cogen LLP

 We have served as the Company's auditor since
2005.

 Blue Bell, Pennsylvania

 F- 3

 BALANCE SHEETS

 ASSETS

 CURRENT ASSETS

 Cash and cash equivalents

 $
 31,432,087

 $
 24,102,151

 Accounts Receivable

 30,376

 —

 Prepaid expenses and other current assets

 1,237,621

 611,345

 Loan receivable

 —

 642,120

 TOTAL CURRENT ASSETS

 32,700,084

 25,355,616

 PROPERTY AND EQUIPMENT - NET

 4,990,790

 2,519,267

 OTHER ASSETS

 Intangible assets - net

 1,254,501

 1,030,335

 Operating Lease - Right of Use - Building

 2,838,210

 358,254

 TOTAL OTHER ASSETS

 4,092,711

 1,388,589

 TOTAL ASSETS

 $
 41,783,585

 $
 29,263,472

 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES

 Accounts payable

 $
 1,447,596

 $
 791,671

 Accrued bonuses and accrued expenses

 599,430

 380,280

 Accounts payable and accrued expenses - related parties

 313,483

 100,169

 Deferred revenue

 39,875

 —

 Deferred lease liability

 38,297

 41,778

 Operating lease liability

 144,120

 190,125

 TOTAL CURRENT LIABILITIES

 2,582,801

 1,504,023

 LONG TERM LIABILITIES

 Deferred lease liability

 —

 38,297

 Operating lease liability

 2,766,970

 168,129

 TOTAL LONG TERM LIABILITIES

 2,766,970

 206,426

 TOTAL LIABILITIES

 5,349,771

 1,710,449

 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, 118,137,309 and 112,882,793
 issued and outstanding at December 31, 2023 and December 31, 2022

 118,137

 112,883

 Additional paid-in-capital

 164,619,363

 134,406,825

 Deferred compensation

 ( 432,293
)

 ( 133,324
)

 Accumulated deficit

 ( 127,871,393
)

 ( 106,833,361
)

 TOTAL STOCKHOLDERS' EQUITY

 36,433,814

 27,553,023

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $
 41,783,585

 $
 29,263,472

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

 F- 4

 STATEMENTS OF COMPREHENSIVE LOSS

 FOR THE YEARS ENDING DECEMBER 31, 2023, 2022 AND
2021

 NET SALES

 $
 40,502

 $
 —

 $
 —

 COST AND EXPENSE

 Cost of sales

 2,513

 —

 —

 Research and development

 15,903,689

 12,805,374

 12,476,040

 General and administrative

 5,359,565

 4,334,290

 4,520,403

 TOTAL COST AND EXPENSE

 21,265,767

 17,139,664

 16,996,443

 LOSS FROM OPERATIONS

 ( 21,225,265
)

 ( 17,139,664
)

 ( 16,996,443
)

 OTHER INCOME (EXPENSE)

 Paycheck Protection Program loan forgiveness

 —

 —

 410,700

 Interest income

 657,546

 91,659

 13,826

 Commitment fee

 ( 673,578
)

 ( 209,709
)

 ( 2,059,464
)

 Gain on disposal of property and equipment

 215,509

 —

 —

 Other (expense) income

 ( 12,244
)

 27,234

 —

 NET LOSS

 $
 ( 21,038,032
)

 $
 ( 17,230,480
)

 $
 ( 18,631,381
)

 LOSS PER SHARE

 Basic

 $
 ( 0.18
)

 $
 ( 0.15
)

 $
 ( 0.18
)

 Diluted

 $
 ( 0.18
)

 $
 ( 0.15
)

 $
 ( 0.18
)

 WEIGHTED AVERAGE NUMBER OF SHARES

 Basic

 115,467,300

 111,814,926

 105,223,959

 Diluted

 115,467,300

 111,814,926

 105,223,959

 The accompanying notes are an integral part of these financial statements

 F- 5

 LIGHTWAVE
LOGIC, INC.

 STATEMENT
OF STOCKHOLDERS' EQUITY

 FOR
THE YEARS ENDING DECEMBER 31, 2023, 2022 AND 2021

 Additional

 Number of

 Common

 Paid-in

 Deferred

 Accumulated

 Shares

 Stock

 Capital

 Compensation

 Deficit

 Total

 BALANCE AT DECEMBER 31, 2022

 112,882,793

 $
 112,883

 $
 134,406,825

 $
 ( 133,324
)

 $
 ( 106,833,361
)

 $
 27,553,023

 Common stock issued to institutional investor

 3,650,400

 3,650

 19,989,709

 —

 —

 19,993,359

 Common stock issued for commitment shares

 112,739

 673,465

 —

 —

 673,578

 Common stock sales at the market by investment banking company

 202,115

 1,515,676

 —

 —

 1,515,878

 Exercise of options

 914,408

 776,760

 —

 —

 777,674

 Exercise of warrants

 269,000

 235,981

 —

 —

 236,250

 Options issued for services

 —

 —

 6,459,387

 —

 —

 6,459,387

 Restricted stock awards issued for future services

 105,854

 561,560

 ( 561,666
)

 —

 —

 Deferred compensation

 —

 —

 —

 262,697

 —

 262,697

 Net loss for the year ending December 31, 2023

 —

 —

 —

 —

 ( 21,038,032
)

 ( 21,038,032
)

 BALANCE AT DECEMBER 31, 2023

 118,137,309

 $
 118,137

 $
 164,619,363

 $
 ( 432,293
)

 $
 ( 127,871,393
)

 $
 36,433,814

 Additional

 Number of

 Common

 Paid-in

 Deferred

 Accumulated

 Shares

 Stock

 Capital

 Compensation

 Deficit

 Total

 BALANCE AT DECEMBER 31, 2021

 110,555,459

 $
 110,556

 $
 114,696,597

 $
 —

 $
 ( 89,602,881
)

 $
 25,204,272

 Common stock issued to institutional investor

 1,625,000

 1,625

 12,773,643

 —

 —

 12,775,268

 Common stock issued for commitment shares

 23,468

 209,687

 —

 —

 209,709

 Exercise of options

 302,950

 257,592

 —

 —

 257,895

 Cashless exercise of 4,375 options

 2,596

 35,015

 —

 —

 35,018

 Exercise of warrants

 350,000

 395,650

 —

 —

 396,000

 Options issued for services

 —

 —

 5,813,628

 —

 —

 5,813,628

 Restricted stock awards issued for future services

 28,500

 274,995

 ( 275,024
)

 —

 —

 Forfeiture restricted stock awards issued for future services

 ( 5,180
)

 ( 5
)

 ( 49,982
)

 49,987

 —

 —

 Deferred compensation

 —

 —

 —

 91,713

 —

 91,713

 Net loss for the year ending December 31, 2022

 —

 —

 —

 —

 ( 17,230,480
)

 ( 17,230,480
)

 BALANCE AT DECEMBER 31, 2022

 112,882,793

 $
 112,883

 $
 134,406,825

 $
 ( 133,324
)

 $
 ( 106,833,361
)

 $
 27,553,023

 Additional

 Number of

 Common

 Paid-in

 Deferred

 Accumulated

 Shares

 Stock

 Capital

 Compensation

 Deficit

 Total

 BALANCE AT DECEMBER 31, 2020

 97,775,789

 $
 97,776

 $
 76,649,170

 $
 —

 $
 ( 70,971,500
)

 $
 5,775,446

 Common stock issued to institutional investor

 9,290,011

 9,291

 30,341,383

 —

 —

 30,350,674

 Common stock issued for commitment shares

 514,536

 2,058,950

 —

 —

 2,059,464

 Exercise of options

 2,046,250

 2,046

 1,948,829

 —

 —

 1,950,875

 Cashless exercise of 445,252 options

 251,873

 2,236,606

 —

 —

 2,236,858

 Exercise of warrants

 677,000

 427,673

 —

 —

 428,350

 Options issued for services

 —

 —

 1,022,985

 —

 —

 1,022,985

 Warrants issued for services

 —

 —

 11,001

 —

 —

 11,001

 Net loss for the year ending December 31, 2021

 —

 —

 —

 —

 ( 18,631,381
)

 ( 18,631,381
)

 BALANCE AT DECEMBER 31, 2021

 110,555,459

 $
 110,556

 $
 114,696,597

 $
 —

 $
 ( 89,602,881
)

 $
 25,204,272

 The accompanying notes are an integral part of these financial statements

 F- 6

 STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDING DECEMBER 31, 2023, 2022 AND 2021

 CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss

 $
 ( 21,038,032
)

 $
 ( 17,230,480
)

 $
 ( 18,631,381
)

 Adjustments to reconcile net loss to net cash used in
 operating activities

 Warrants issued for services

 —

 —

 11,001

 Stock options issued for services

 6,459,387

 5,813,628

 1,022,985

 Amortization of deferred compensation

 262,697

 91,713

 —

 Cashless option exercise

 —

 53,219

 3,407,444

 Common stock issued for services and fees

 673,578

 209,709

 2,059,464

 Depreciation and amortization of patents

 1,119,141

 1,045,208

 878,520

 Amortization of right of use asset

 184,835

 178,192

 167,007

 Gain on disposal of property and equipment

 ( 215,509
)

 —

 —

 Paycheck Protection Program loan forgiveness

 —

 —

 ( 410,700
)

 Decrease (increase) in assets

 Accounts receivable

 ( 30,376
)

 —

 —

 Prepaid expenses and other current assets

 ( 587,540
)

 ( 379,037
)

 334,877

 Increase (decrease) in liabilities

 Accounts payable

 655,925

 575,937

 46,487

 Accrued bonuses and accrued expenses

 219,150

 ( 737,800
)

 1,036,684

 Accounts payable and accrued expenses-related parties

 213,314

 67,980

 ( 17,608
)

 Deferred revenue

 39,875

 —

 —

 Deferred lease liability

 ( 41,778
)

 ( 41,778
)

 ( 41,778
)

 Operating lease liability

 ( 150,691
)

 ( 178,192
)

 ( 167,007
)

 Net cash used in operating activities

 ( 12,236,024
)

 ( 10,531,701
)

 ( 10,304,005
)

 CASH FLOWS FROM INVESTING ACTIVITIES

 Cost of intangibles

 ( 307,687
)

 ( 260,415
)

 ( 18,649
)

 Purchase of property and equipment

 ( 3,292,224
)

 ( 1,307,187
)

 ( 1,097,530
)

 Repayment (issuance) of loan

 642,120

 ( 642,120
)

 —

 Sale of property and equipment

 —

 —

 Net cash used in investing activities

 ( 2,957,201
)

 ( 2,209,722
)

 ( 1,116,179
)

 CASH FLOWS FROM FINANCING ACTIVITIES

 Exercise of options and warrants

 1,013,924

 653,895

 2,379,225

 Cashless option exercise tax payments

 —

 ( 18,201
)

 ( 1,170,586
)

 Issuance of common stock, institutional investor

 19,993,359

 12,775,268

 30,350,674

 At the market sale by investment banking company

 1,515,878

 —

 —

 Repayment of equipment purchase payable

 —

 —

 ( 13,107
)

 Net cash provided by financing activities

 22,523,161

 13,410,962

 31,546,206

 NET INCREASE IN CASH AND CASH EQUIVALENTS

 7,329,936

 669,539

 20,126,022

 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

 24,102,151

 23,432,612

 3,306,590

 CASH AND CASH EQUIVALENTS - END OF YEAR

 $
 31,432,087

 $
 24,102,151

 $
 23,432,612

 Supplemental
 Disclosure of Non-cash investing and financing activities:

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

 $
 2,703,527

 $
 —

 $
 —

 The accompanying notes are an integral part of these financial statements

 F- 7

 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

 History and
Nature of Business

 Lightwave Logic, Inc. (the
"Company") is a technology company focused on the development of next generation photonic devices and electro-optic polymer
materials systems for applications in high speed fiber-optic data communications, telecommunications and optical computing markets. The Company's
first revenue stream is from a technology material supply and licensing agreement that incorporates the Company's patented electro-optic polymer
materials for use in manufacturing photonic devices. Currently, the Company is in various stages of photonic device and materials
development and evaluation with potential customers and strategic partners. The Company expects to obtain additional revenue from material
supply and licensing agreements, technology transfer agreements and the production and direct sale of its own photonic devices.

 The Company's current
development activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize
the Company's technology now under development.

 Lightwave Logic, Inc. was organized under the laws
of the State of Nevada in 1997, and it commenced with its current business plan in 2004.

 Basis of Presentation

 The accompanying financial statements are presented
in accordance with accounting principles generally accepted in the United States of America.

 Estimates

 The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying disclosures. Although these estimates are based on management's best
knowledge of current events and actions the Company may undertake in the future, actual results could differ from the estimates.

 Cash Equivalents

 For the purposes of the statement of cash flows, the
Company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents.

 Concentration
of Credit Risk

 Certain financial instruments potentially subject
the Company to concentrations of credit risk. These financial instruments consist primarily of cash. At December 31, 2023, the Company
did have deposits with a financial institution that exceed the Federal Depository Insurance coverage.

 Property and Equipment

 Equipment is stated at cost. Depreciation is principally
provided by use of straight-line methods for financial and tax reporting purposes over the estimated useful lives of the assets, generally
 5 years. When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any
resulting gain or loss is included in operations.

 F- 8

 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 Intangible Assets

 Definite-lived intangible assets are stated at cost.
Patents are amortized over their estimated useful lives, commencing from the date of grant for the remaining legal lives of the patents.
The patents generally have a term of up to 20 years from the date of filing of the earliest related patent application. When certain patent
applications are abandoned by the Company for claims that are covered by patents already granted to the Company, the cost of patent applications
are removed from the accounts and the resulting expense is reflected in the statement of comprehensive loss.

 Fair Value of Financial Instruments

 The carrying value of the Company's short-term
financial instruments such as cash, accounts payable and accrued expenses approximate their fair values because of their short maturities.

 Revenue Recognition and Deferred Revenue

 The rights and benefits to the Company's patented electro-optic polymer
materials are conveyed to the customer through technology license and material supply agreements where the Company provides the licensee
a supply of its proprietary polymers for use in the licensee's manufacturing of photonic devices (the "Licensed Product")
as well as non-exclusive, royalty-bearing license to intellectual property rights in the Company's patented polymer technology.
The Company receives license and royalty payments under such commercial agreements, some of which are nonrefundable upfront payments for
license fees. These advances are initially recorded as deferred revenue on the Company's balance sheets. The Company believes that
the licenses provided and materials transferred under such agreements are not distinct from each other for financial reporting purposes
and as such, they are accounted for as a single performance obligation. Advance payments for license fees and minimum annual royalties
are recognized on a pro-rata basis over the related contract term. Royalties from licensee's sale of the Licensed Product that exceed
the minimum annual royalty are recognized when cumulative royalties exceed the minimum royalty. Milestone license fees are recognized
when the licensee reaches the milestone of selling a contractually specified number of units of the Licensed Product.

 Revenue associated with the sale of the Company's patented electro-optic
polymer materials for incorporation into the customers' commercial photonic devices or for their device development and evaluation
activities will be recognized at the time title passes, which is typically at the time of shipment or at the time of delivery, depending
upon the contractual agreement between the parties.

 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.

 Income Taxes

 The Company follows Financial Accounting Standards
Board ("FASB") Accounting Standards Codification ("ASC") 740, "Income Taxes," which requires an asset
and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed
annually for temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable
or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to
be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred
tax assets and liabilities.

 F- 9

 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 Stock-based Payments

 The Company
accounts for stock-based compensation under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) 718, "Compensation - Stock Compensation", which requires the measurement
and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the
grant date. The fair value of restricted stock awards is estimated by the market price of the Company's common stock at the date
of grant. Restricted stock awards are being amortized to expense over the vesting period. The Company estimates the fair value of option
and warrant awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected
to vest is recognized as expense over the requisite service periods using the straight-line method. In June 2018, the FASB issued
ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting
(the "2018 Update). The amendments in the 2018 Update expand the scope of Topic 718
to include share-based payment transactions for acquiring goods and services from non-employees. Prior to the 2018 Update, Topic 718 applied
only to share- based transactions to employees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee
share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity
is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the
right to benefit from the instruments have been satisfied.

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

 Loss Per Share

 The Company follows
FASB ASC 260, "Earnings per Share", resulting in the presentation of basic and diluted earnings per share. Because the Company
reported a net loss in 2023, 2022 and 2021, 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.

 Recoverability
of Long-Lived Assets

 The Company follows FASB ASC 360, "Property,
Plant, and Equipment". Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances
indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized
based on the excess of the asset's carrying amount.

 Comprehensive
Income (Loss)

 The Company
follows FASB ASC 220.10, "Reporting Comprehensive Income (Loss)." Comprehensive income (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 income (loss). Since the Company has no items of other comprehensive income (loss), comprehensive income (loss) is equal to net
income (loss).

 Recently Adopted Accounting Pronouncements

 As of December 31, 2023 and for the period then ended,
there are no recently adopted accounting standards that have a material effect on the Company's financial statements.

 Recently Issued Accounting Pronouncements Not Yet
Adopted

 As of December 31, 2023, there are no recently issued
accounting standards not yet adopted which would have a material effect on the Company's financial statements.

 F- 10

 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

 Reclassifications

 Certain reclassifications have been
made to the 2022 financial statement in order to conform to the 2023 financial statement presentation.

 NOTE 2 – MANAGEMENT'S PLANS

 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 products incorporating our polymer materials technology;
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. We expect that we will incur approximately $ 1,830,000 of expenditures per month over the next 12 months.
Our current cash position enables us to finance our operations through July 2025. On February 28, 2023, the Company entered
into a purchase agreement with the institutional investor to sell up to $ 30,000,000 of common stock over a 36-month period (described
in Note 11). Pursuant to the purchase agreement, the Company received $ 3,335,300 in January and February 2024 and a remaining available
amount of $ 10,518,648 is available to the Company per the agreement. On December 9, 2022, the Company entered into a sales agreement
with an investment banking company whereby the Company may offer and sell shares of its common stock having an aggregate offering price
of up to $ 35,000,000 from time to time through or to the investment banking company, as sales agent or principal (described in Note 11).
Pursuant to the sales agreement, the Company received $ 52,669 in January and February 2024 and the remaining available amount of $ 33,382,897
is available to the Company per the agreement. The Company's first commercial agreement occurred in May 2023 from a material supply and
license agreement that incorporates the Company's patented electro-optic polymer materials for use
in manufacturing photonic devices (described in Note 3). For the year ended December 31,
2023, we recognized $ 40,502 in revenue related to this agreement. Our cash requirements are expected to increase at a rate consistent
with the Company's path to revenue as we expand our activities and operations with the objective of commercializing our electro-optic
polymer technology. We currently have no debt to service.

 NOTE 3 – REVENUE

 The Company recognizes revenue in accordance with
ASC Topic 606, Revenue from Contracts with Customers (Topic 606). The standard establishes the principles that an entity shall apply to
report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows
from a contract with a customer.

 The Company's first commercial agreement occurred
in May 2023, in the form of a four-year material supply and license agreement (the "License Agreement") that incorporates
the Company's patented electro-optic polymer materials for use in manufacturing of photonic devices (the "Licensed Product").
The licensee shall pay the Company a running royalty with a minimum royalty paid on an annual basis over the term of the License Agreement.
Additional future revenue will be generated from royalties from the licensee's sale of Licensed Product that exceed the minimum
royalty payments and milestone license fees. The License Agreement is a non-exclusive material supply and license agreement.

 F- 11

 NOTE 3 – 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 ending December 31, 2023. $ 39,875 of this
amount is recorded in short term liability deferred revenue in the Company's balance sheet as of December 31, 2023.

 For the year ended
December 31, 2023, the Company recognized $ 40,502 in revenue related to this agreement.

 Contract balances
are as follows:

 Schedule of contract balances

 December
 31, 2023

 Accounts receivable, net

 $
 30,376

 Short-term contract assets

 $
 —

 Long-term contract assets

 $
 —

 Short-term liability deferred revenue

 $
 39,875

 Long-term liability deferred revenue

 $
 —

 A roll forward of contract balances is
not disclosed since there were no contracts as of December 31, 2022.

 Assets Recognized for the Costs to
Obtain a Contract

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

 NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT
ASSETS

 Prepaid expenses and other current assets consist of the following:

 Schedule of prepaid expenses and other current assets

 Materials fabrication

 $
 475,936

 $
 —

 License

 241,936

 94,195

 Insurance

 237,791

 218,767

 Prototype devices

 161,267

 40,473

 Other

 53,373

 45,675

 Rent

 36,525

 36,525

 Deposit for equipment

 20,000

 59,850

 Investor relations

 6,313

 18,250

 Lease incentive receivable

 4,480

 —

 Legal

 —

 83,941

 Loan interest receivable

 —

 13,669

 prepaid expenses and other current

 $
 1,237,621

 $
 611,345

 NOTE 5 – LOAN RECEIVABLE

 On September 7, 2022, the Company entered into a
convertible loan agreement (the "Loan") with an entity and issued a loan on September 12, 2022 in the amount of EUR 600,000
bearing interest at 7 % per annum with a maturity date of March 31, 2023. The Company recorded $ 13,375 of interest income for the
year ended December 31, 2022. The exchange rates used for the conversion of the EUR denominated loan were the December 31,
2022 reporting period end date exchange rate for the loan principal resulting in a balance of $ 642,120 and interest receivable resulting
in a balance of $ 13,669 and the average exchange rate for the period ending December 31, 2022 for interest income. The loan and
interest were repaid in February and March 2023. The Company recorded $ 11,125 of interest income for the period ended December 31, 2023
and used the average exchange rate for the conversion of the EUR denominated interest income for the period.

 F- 12

 NOTE 6 – PROPERTY AND EQUIPMENT

 Property and equipment consist of the following:

 schedule of property and equipment

 Office equipment

 $
 146,196

 $
 119,404

 Lab equipment

 8,937,847

 6,234,777

 Furniture

 74,119

 33,128

 Leasehold improvements

 396,111

 184,843

 Software

 111,077

 —

 9,665,350

 6,572,152

 Less: Accumulated depreciation

 4,674,560

 4,052,885

 $
 4,990,790

 $
 2,519,267

 Depreciation expense for the years ending December
31, 2023, 2022 and 2021 was $ 1,035,620, $ 966,995 and $ 792,004. During the year ending December 31, 2023, the Company disposed of equipment
for proceeds of $ 590, trade-in credit of $ 216,090 and a gain of $ 215,509. During the year ending December 31, 2022, the Company retired
$ 70,963 of leasehold improvements. During the year ended December 31, 2021, the Company did no t sell or retire property and equipment.

 NOTE 7 – INTANGIBLE ASSETS

 This represents legal fees and patent fees associated
with the prosecution of patent applications. The Company has recorded amortization expense on patents granted, which are amortized
over the remaining legal life. Maintenance patent fees are paid to a government patent authority to maintain a granted patent in
force. Some countries require the payment of maintenance fees for pending patent
applications. Maintenance fees paid after a patent is granted are expensed, as these are considered ongoing costs to "maintain
a patent". Maintenance fees paid prior to a patent grant date are capitalized to patent costs, as these are considered "patent
application costs". No amortization expense has been recorded on the remaining patent applications since patents on these applications
have yet to be granted.

 Intangible assets consist of the following:

 Schedule of intangible assets

 Patents

 $
 1,913,751

 $
 1,606,064

 Less: Accumulated amortization

 659,250

 575,729

 Intangible assets - net

 $
 1,254,501

 $
 1,030,335

 Amortization expense for the years ending December
31, 2023, 2022 and 2021 was $ 83,521, $ 78,213 and $ 86,516. There were no patent costs written off for the years ended December 31, 2023,
2022 and 2021.

 F- 13

 NOTE 8 – COMMITMENTS

 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 is sixty- one ( 61) months, beginning on November 1, 2017 and ending on November 30, 2022. During January 2022, the term
was extended for an additional twenty-four ( 24) months. This extension did not require a lease modification as the additional option
period was included in the original computation as of January 1, 2019. Base rent for the first year of the lease term is approximately
$ 168,824, with an increase in annual base rent of approximately 3 % in each subsequent year of the lease term. As specified in the
lease, the Company paid the landlord (i) all base rent for the period November 1, 2017 and ending on October 31, 2019, in the sum of
$ 347,045; and (ii) the estimated amount of tenant's proportionate share of operating expenses for the same period in the sum of
$ 186,293. Commencing on November 1, 2019, 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 lease also provides that (i)
on November 1, 2019 landlord shall pay the Company for the cost of the cosmetic improvements in the amount of $3.00 per rentable square
foot of the premises, and (ii) on or prior to November 1, 2019, the Company shall deposit with Landlord the sum of $ 36,525 as a security
deposit which shall be held by landlord to secure the Company's obligations under the lease. On October 30, 2017, the Company
entered into an agreement with the tenant leasing the premise from the landlord ("Original Lessee") whereby the Original
Lessee agreed to pay the Company the sum of $260,000 in consideration of the Company entering into the lease and landlord agreeing to
the early termination of the Original Lessee's lease agreement with landlord. The consideration of $ 260,000 was received
on November 1, 2017.

 Due to the adoption of the new lease standard, the
Company has capitalized the present value of the minimum lease payments commencing November 1, 2019, including the additional option period
using an estimated incremental borrowing rate of 6.5 %. The minimum lease payments do not include common area annual expenses which are
considered to be non-lease components.

 As of January 1, 2019 the operating lease right-of-use
asset and operating lease liability amounted to $ 885,094 with no cumulative-effect adjustment to the opening balance of retained earnings/accumulated
deficit.

 On November 22, 2022, the Company entered into an
amendment to the Lease ("the Amended Lease") to lease an additional approximately 9,684 square feet of adjacent office and
warehouse space. The term of the Amended Lease is one hundred twenty ( 128) months, with an effective date of June 1, 2023. Base
rent through January 31, 2024 of the Amended Lease term is approximately $ 30,517 per month. The base rent for the next full year of the
Amended Lease term is approximately $ 377,288, with an increase in annual base rent of approximately 3 % in each subsequent year of the
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. As of June 1, 2023, the
operating lease right-of-use asset and operating lease liability amounted to $ 2,945,322.

 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.

 F- 14

 NOTE 8 – COMMITMENTS (CONTINUED)

 The Company is obligated under the Amended Lease for
office, chemistry, clean room and research and development space. The aggregate minimum future lease payments under the Amended Lease,
including the extended term are as follows:

 Schedule of future lease payments of operating leases

 YEARS ENDING

 DECEMBER
 31,

 AMOUNT

 2024

 $
 376,364

 2025

 387,666

 2026

 399,199

 2027

 411,174

 2028

 423,612

 Thereafter

 2,357,570

 4,355,585

 Less discounted interest

 ( 1,444,495
)

 TOTAL

 $
 2,911,090

 Rent expense totaling $ 236,170 and $ 78,724 is included
in research and development and general and administrative expenses for the year ended December 31, 2023. Rent expense totaling $ 138,394
and $ 46,132 is included in research and development and general and administrative expenses for the year ended December 31, 2022. Rent
expense totaling $ 134,243 and $ 44,747 is included in research and development and general and administrative expenses for the year ended
December 31, 2021.

 NOTE 9 – PAYCHECK PROTECTION PROGRAM
ADVANCE

 On April 24, 2020, the Company received $ 410,700 in
loan funding from the Paycheck Protection Program, established pursuant to the Coronavirus Aid, Relief, and Economic Security Act enacted
on March 27, 2020 and administered by the U.S. Small Business Administration. The unsecured loan is evidenced by a promissory note of
the Company dated April 23, 2020 in the principal amount of $ 410,700, to Community Banks of Colorado, a division of NBH Bank, the lender.
The loan proceeds have been used to cover payroll costs, rent and utility costs. The loan was eligible for forgiveness as part of the
CARES Act if certain requirements were met. The loan was forgiven by the Small Business Administration in its entirety on January 22,
2021.

 NOTE 10 – INCOME TAXES

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

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

 Schedule of income tax benefit provision

 2023

 2022

 2021

 Current

 $
 —

 $
 —

 $
 —

 Deferred

 ( 6,526,000
)

 ( 5,071,000
)

 ( 3,692,000
)

 Change in valuation allowance

 6,526,000

 5,071,000

 3,692,000

 Total

 $
 —

 $
 —

 $
 —

 F- 15

 NOTE 10 – INCOME TAXES (CONTINUED)

 The reconciliation of the statutory federal rate to the Company's
effective income tax rate is as follows:

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

 2023

 2022

 2021

 Amount

 %

 Amount

 %

 Amount

 %

 Income tax benefit at U.S. federal income tax rate

 $
 ( 4,418,000
)

 ( 21
)

 $
 ( 3,618,000
)

 ( 21
)

 $
 ( 3,913,000
)

 ( 21
)

 State tax benefit, net of federal tax effect

 ( 957,000
)

 ( 5
)

 ( 784,000
)

 ( 4
)

 ( 838,000
)

 ( 4
)

 Federal deduction net of tax

 44,000

 —

 35,000

 —

 38,000

 —

 Tax exempt income

 —

 —

 —

 —

 ( 111,000
)

 ( 1
)

 Non-deductible share-based compensation

 1,653,000

 1,430,000

 899,000

 Exercised share based compensation

 ( 2,850,000
)

 ( 13
)

 ( 2,981,000
)

 ( 17
)

 —

 —

 Other

 2,000

 —

 847,000

 233,000

 Change in valuation allowance

 6,526,000

 5,071,000

 3,692,000

 $
 —

 —

 $
 —

 —

 $
 —

 —

 The components of deferred tax assets as of December 31, 2023, 2022 and
2021 are as follows:

 Schedule of components of deferred tax assets

 2023

 2022

 2021

 Deferred tax asset for NOL carryforwards

 $
 29,018,000

 $
 23,930,000

 $
 19,966,000

 Share-based compensation

 3,889,000

 2,451,000

 1,242,000

 Other

 ( 102,000
)

 ( 102,000
)

 —

 Valuation allowance

 ( 32,805,000
)

 ( 26,279,000
)

 ( 21,208,000
)

 Total

 $
 —

 $
 —

 $
 —

 The valuation allowance for deferred tax assets as
of December 31, 2023, 2022 and 2021 was $ 32,805,000, $ 26,279,000 and $ 21,208,000, respectively. The change in the total valuation for
the year ended December 31, 2023 was an increase of $ 6,526,000, for the year ended December 31, 2022 was an increase of $ 5,071,000 and
for the year ended December 31, 2021 was an increase of $ 3,692,000. In assessing the realization of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization
of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the net operating losses
and temporary differences become deductible. Management considered projected future taxable income and tax planning strategies in making
this assessment. The value of the deferred tax assets was offset by a valuation allowance, due to the current uncertainty of the future
realization of the deferred tax assets.

 As of December 31, 2023, the Company had net operating
loss carry forwards of approximately $ 117,985,000 and is comprised of net operating losses in the amount of approximately $ 38,275,000
recorded in tax years beginning prior to January 1, 2018 expiring through the year ending December 31, 2038 and net operating losses recorded
in tax years beginning January 1, 2018 and after in the amount of approximately $ 79,710,000 which are allowed for an indefinite carryforward
period but may be subject to limitations. This amount can be used to offset future taxable income of the Company.

 F- 16

 NOTE 10 – INCOME TAXES (CONTINUED)

 The timing and manner in which the Company can utilize
operating loss carryforwards in any year may be limited by provisions of the Internal Revenue Code regarding changes in ownership of corporations.
Such limitation may have an impact on the ultimate realization of its carryforwards and future tax deductions.

 The Company follows FASB ASC 740-10, which provides
guidance for the recognition and measurement of certain tax positions in an enterprise's financial statements. Recognition involves
a determination of whether it is more likely than not that a tax position will be sustained upon examination with the presumption that
the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information. The adoption
of FASB ASC 740-10 did not require an adjustment to the Company's financial statements.

 The Company's policy is to record interest and
penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2023,
the Company had no unrecognized tax benefits and no charge during 2023, and accordingly, the Company did not recognize any interest or
penalties during 2023 related to unrecognized tax benefits. There is no accrual for uncertain tax positions as of December 31, 2023.

 The Company files U.S. income tax returns and a state
income tax return. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2020 and
thereafter are subject to examination by the relevant taxing authorities.

 NOTE 11 – 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 Options and Warrants

 In January 2019, the Company signed a purchase agreement
with the institutional investor to sell up to $ 25,000,000 of common stock. The Company registered 9,500,000 shares pursuant to a registration
statement filed on January 30, 2019 which became effective February 13, 2019. The Company issued 350,000 shares of common stock to the
institutional investor as an initial commitment fee valued at $ 258,125, fair value, and 812,500 shares of common stock are reserved for
additional commitment fees to the institutional investor in accordance with the terms of the purchase agreement. The Company registered
an additional 6,000,000 shares pursuant to a registration statement filed on January 24, 2020 which became effective February 4, 2020.
The Company registered an additional 8,000,000 shares pursuant to a registration statement filed on November 20, 2020 which became effective
November 20, 2020. During the period January 2019 through December 31, 2023, the institutional investor purchased 22,337,500 shares of
common stock for proceeds of $ 23,773,924 and the Company issued 772,666 shares of common stock as additional commitment fee, valued at
$ 1,575,509, fair value, leaving 39,834 in reserve for additional commitment fees. During the year ending December 31, 2023, the institutional
investor did not purchase any shares of common stock. All the registered shares under the purchase agreement have been issued as of December
31, 2023.

 F- 17

 NOTE 11 – STOCKHOLDERS' EQUITY (CONTINUED)

 Common Stock Options and Warrants (Continued)

 On July 2, 2021, the Company filed a $100,000,000
universal shelf registration statement with the U.S. Securities and Exchange Commission which became effective on July 9, 2021.

 On October 4, 2021, the Company entered into a purchase
agreement with the institutional investor to sell up to $ 33,000,000 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 30,312 shares of common stock to the institutional investor as an initial commitment fee valued at $ 279,174, fair value, and 60,623
shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the purchase
agreement. During the period October 4, 2021 through December 31, 2023, the institutional investor purchased 3,632,456 shares of common
stock for proceeds of $ 33,000,000 and the Company issued 60,623 shares of common stock as additional commitment fee, valued at $ 694,531
fair value. During the year ending December 31, 2023, pursuant to the purchase agreement, the institutional investor purchased 779,945
shares of common stock for proceeds of $ 3,847,307 and the Company issued 7,069 shares of common stock as additional commitment fee, valued
at $ 38,161 fair value. All of the registered shares under the purchase agreement have been issued as of December 31, 2023.

 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 are reserved for additional commitment fees to the institutional investor in accordance with
the terms of the purchase agreement. During the period February 28, 2023 through December 31, 2023, the institutional investor purchased
 2,870,455 shares of common stock for proceeds of $ 16,146,052 and the Company issued 54,779 shares of common stock as additional commitment
fee, valued at $ 356,026 fair value. During January and February 2024, pursuant to the purchase agreement, the institutional investor
purchased 800,000 shares of common stock for proceeds of $ 3,335,300 and the Company issued 11,319 shares of common stock as additional
commitment fee, valued at $ 50,841 fair value, leaving 35,683 in reserve for additional commitment fees.

 On December 9, 2022, the Company entered into a sales
agreement with an investment banking company. In accordance with the terms of this sales agreement, the Company may offer and sell shares
of its common stock having an aggregate offering price of up to $ 35,000,000 from time to time through or to the investment banking company,
as sales agent or principal. Sales of shares of the Company's common stock, if any, may be made by any method deemed to be an "at
the market offering". The sales agent is entitled to compensation under the terms of the sales agreement at a commission rate equal
to 3 % of the gross proceeds of the sales price of common stock that they sell. During the twelve months period ending December 31, 2023,
pursuant to the sales agreement, the investment banking company sold 202,115 shares of the Company's common stock for proceeds
of $ 1,515,878 after a payment of the commission in the amount of $ 46,884 to the investment banking company. During January and February
2024, pursuant to the sales agreement, the investment banking company sold 12,150 shares of the Company's common stock for proceeds
of $ 52,669 after a payment of the commission in the amount of $ 1,629 to the investment banking company.

 F- 18

 NOTE 11 – STOCKHOLDERS' EQUITY (CONTINUED)

 Restricted Stock Awards

 On March 16, 2023, the Compensation Committee of the
Board of Directors approved grants totaling 99,616 Restricted Stock Awards to the Company's four outside directors. Each RSA had
a grant date fair value of $ 5.22 which shall be amortized on a straight-line basis over the vesting period into director's compensation
expenses within the Consolidated Statement of Comprehensive Loss. Such RSAs were granted under the 2016 Equity Incentive Plan ("2016
Plan") and vest in total 8,338 shares on March 16, 2023, with the remaining vesting in 33 equal monthly installments in total of
 2,766 shares beginning April 1, 2023.

 On August 1, 2023, the Compensation Committee of the
Board of Directors approved a grant totaling 6,238 Restricted Stock Awards to the Company's outside director. The new RSA had a
grant date fair value of $ 6.68 which shall be amortized on a straight-line basis over the vesting period into director's compensation
expenses within the Consolidated Statement of Comprehensive Loss. Such RSA was granted under the 2016 Plan. 218 shares from this grant
vested on August 1, with the remaining vesting in 28 equal monthly installments in total of 215 shares beginning September 1, 2023.

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

 NOTE 12 – STOCK BASED COMPENSATION

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

 Effective June 24, 2016, the 2007 Plan was terminated.
As of December 31, 2023, options to purchase 2,063,000 shares of common stock have been issued and are outstanding.

 During 2016, the Board of Directors of the Company
adopted the 2016 Plan that was approved by the shareholders at the 2016 annual meeting of shareholders on May 20, 2016. Under the 2016
Plan, the Company is authorized to grant awards of incentive and non-qualified stock options and restricted stock to purchase up to 3,000,000
shares of common stock to employees, directors and consultants. Effective May 16, 2019, the number of shares of the Company's common
stock available for issuance under the 2016 Plan was increased from 3,000,000 to 8,000,000 shares. Effective May 25, 2023, the number
of shares of the Company's common stock available for issuance under the 2016 Plan was increased from 8,000,000 to 13,000,000 shares
and awards of restricted stock units are authorized for issuance. As of December 31, 2023, options to purchase 6,227,807 shares of common
stock have been issued and are outstanding and 129,174 restricted shares of common stock have been granted. As of December 31, 2023, 5,291,784
shares of common stock remain available for grants under the 2016 Plan.

 Both plans are administered by the Company's
Board of Directors or its compensation committee which determines the persons to whom awards will be granted, the number of awards to
be granted, and the specific terms of each grant. Subject to the provisions regarding Ten Percent Shareholders, (as defined in the 2016 Plan), the exercise
price per share of each option cannot be less than 100% of the fair market value of a share of common stock on the date of grant.
Options granted under the 2016 Plan are generally exercisable for a period of 10 years from the date of grant and may vest on the
grant date, another specified date or over a period of time.

 F- 19

 NOTE 12 – STOCK BASED COMPENSATION (CONTINUED)

 The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of an award, with the following assumptions for 2023: no dividend yield in all years, expected
volatility, based on the Company's historical volatility, 73.7 % to 77.2 %, risk-free interest rate between 3.37 % to 4.82 % and expected
option life of 10 years. Prior to May 2018, the expected life is based on the estimated average of the life of options using the "simplified"
method, as prescribed in FASB ASC 718, due to insufficient historical exercise activity during recent years. Starting in May 2018, the
expected life is based on the legal contractual life of options.

 The Black-Scholes option pricing model assumptions
for 2022 are as follows: no dividend yield in all years, expected volatility, based on the Company's historical volatility, 74.7 %
to 76.4 %, risk-free interest rate between 1.87 % to 3.84 % and expected option life of 10 years.

 The Black-Scholes option pricing model assumptions
for 2021 are as follows: no dividend yield in all years, expected volatility, based on the Company's historical volatility, 70.4 %
to 77.1 %, risk-free interest rate between 1.15 % to 1.73 % and expected option life of 10 years.

 As of December 31, 2023, there was $ 3,295,335 of unrecognized
compensation expense related to non-vested market-based share awards that is expected to be recognized through December 2026.

 Share-based compensation was recognized as follows:

 Schedule of share-based compensation

 2023

 2022

 2021

 2007 Employee Stock Option Plan

 $
 —

 $
 —

 $
 —

 2016 Equity Incentive Plan

 6,459,387

 5,813,628

 1,022,985

 2016 Equity Incentive Plan restricted stock awards

 262,697

 91,713

 —

 Warrants

 —

 —

 11,001

 Total share-based compensation

 $
 6,722,084

 $
 5,905,341

 $
 1,033,986

 F- 20

 NOTE 12 – STOCK BASED COMPENSATION (CONTINUED)

 The following tables summarize all stock option and
warrant activity of the Company during the years ended December 31, 2023, 2022 and 2021:

 Schedule of stock option and
warrant activity

 Non-Qualified
 Stock Options and Warrants Outstanding and Exercisable

 Number of

 Exercise

 Weighted Average Exercise

 Shares

 Price

 Price

 Outstanding, December 31, 2020

 10,022,500

 $ 0.51 - $ 1.69

 $
 0.85

 Granted

 1,061,000

 $ 1.27 - $ 16.81

 $
 2.32

 Forfeited

 ( 28,750
)

 $ 0.64 - $ 0.86

 $
 0.82

 Exercised

 ( 3,168,502
)

 $ 0.60 - $ 1.50

 $
 0.88

 Outstanding, December 31, 2021

 7,886,248

 $
 1.02

 Granted

 884,500

 $ 5.81 - $ 10.86

 $
 9.18

 Expired

 ( 25,000
)

 $ 1.69

 $
 1.69

 Forfeited

 ( 15,250
)

 $ 1.46 - $ 7.53

 $
 5.71

 Exercised

 ( 657,325
)

 $ 0.64 - $ 5.81

 $
 1.00

 Outstanding, December 31, 2022

 8,073,173

 $
 1.91

 Granted

 1,959,667

 $ 4.28 - $ 7.67

 $
 5.24

 Forfeited

 ( 39,625
)

 $ 6.25 - $ 8.93

 $
 7.12

 Exercised

 ( 1,183,408
)

 $ 0.67 - $ 5.22

 $
 0.86

 Outstanding, December 31, 2023

 8,809,807

 $
 2.76

 Exercisable, December 31, 2023

 7,967,605

 $
 2.49

 The aggregate intrinsic value of options and warrants
outstanding and exercisable as of December 31, 2023 was $ 24,308,723
 and $ 24,214,724,
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 $ 4.98 for the Company's
common stock on December 31, 2023. During the year ending December 31, 2023, 914,408
 options with the aggregate intrinsic value of $ 4,698,996
 were exercised for proceeds of $ 777,674.
During the year ending December 31, 2023, 269,000
 warrants with the aggregate intrinsic value of $ 1,162,230
 were exercised for proceeds of $ 236,250.
During the year ending December 31, 2022, 302,950
 options with the aggregate intrinsic value of $ 2,920,861 were exercised for proceeds of $ 257,895
 and 4,375
 options with the aggregate intrinsic value of $ 53,219
 were exercised via cashless method. During the year ending December 31, 2022, 350,000
 warrants with the aggregate intrinsic value of $ 2,555,750
 were exercised for proceeds of $ 396,000.
During the year ending December 31, 2021, 2,046,250
 options with the aggregate intrinsic value of $ 22,351,788
 were exercised for proceeds of $ 1,950,875.
During the year ending December 31, 2021, 677,000
 warrants with the aggregate intrinsic value of $ 6,796,400
 were exercised for proceeds of $ 428,350
 and 445,252
 options with the aggregate intrinsic value of $ 3,406,530
 were exercised via cashless method.

 Schedule of non-qualified stock options and warrants outstanding

 Non-Qualified
 Stock Options and Warrants Outstanding

 Range of Exercise Prices

 Number Outstanding Currently Exercisable
 at December 31, 2023

 Weighted Average Remaining Contractual
 Life

 Weighted
 Average Exercise Price of Options and Warrants Currently Exercisable

 7,967,605

 5.4 Years

 $ 2.49

 F- 21

 NOTE 12 – STOCK BASED COMPENSATION (CONTINUED)

 The fair value of restricted stock awards is estimated
by the market price of the Company's common stock at the date of grant. Restricted stock activity during the year ending December
31, 2023, 2022 and 2021 are as follows:

 Schedule of fair value of restricted stock awards

 Restricted Stock Awards

 Year ended

 Weighted Average

 Weighted Average

 Weighted Average

 Number of Shares

 Grant Date Fair Value per Share

 Number of Shares

 Grant Date Fair Value per Share

 Number of Shares

 Grant Date Fair Value per Share

 Non-vested, beginning of period

 13,816

 $
 9.65

 —

 $
 —

 —

 $
 —

 Granted

 105,854

 5.31

 28,500

 9.65

 —

 —

 Vested

 ( 41,218
)

 6.00

 ( 9,504
)

 9.65

 —

 —

 Cancelled and forfeited

 —

 —

 ( 5,180
)

 9.65

 —

 —

 Non-vested, end of period

 78,452

 $
 5.71

 13,816

 $
 9.65

 —

 $
 —

 Restricted stock awards are being amortized to expense
over the vesting period. As of December 31, 2023 and 2022, the unamortized value of the restricted stock awards was $ 432,292 and $ 133,324,
respectively.

 NOTE 13 – RELATED PARTY

 At December 31, 2023 the Company had a legal accrual
to a related party of $ 115,160, accounting service fee accrual and expense reimbursement to related parties of $ 102,351, fees and travel
expense accruals to directors in the amount of $ 53,776, fees, consulting expense and travel expense accruals of advisory board members
in the amount of $ 33,746, and travel and office expense accruals of officers in the amount of $ 8,450. At December 31, 2022 the Company
had a legal accrual to a related party of $ 60,577, fees and consulting expense accruals of advisory board members in the amount of $ 18,000,
fees to directors in the amount of $ 13,500, travel and office expense accruals of officers in the amount of $ 4,859 and accounting service
fee accrual and expense reimbursement to related parties of $ 3,233.

 NOTE 14 – RETIREMENT PLAN

 The Company established a 401(k) retirement plan covering
all eligible employees beginning November 15, 2013. A contribution of $ 72,570 was charged to expense and accrued for the year ending December
31, 2023 to all eligible non-executive participants. A contribution of $ 57,126 was charged to expense and accrued for the year ending
December 31, 2022 to all eligible non-executive participants. A contribution of $ 53,035 was charged to expense and accrued for the year
ending December 31, 2021 to all eligible non-executive participants.

 F- 22