false 2024 FY 0001325964

 2024-06-30

 2024-10-01

 us-gaap: AccountsReceivableMember
 us-gaap: CustomerConcentrationRiskMember
 lwlg: OneCustomerMember

 us-gaap: OfficeEquipmentMember

 us-gaap: OtherMachineryAndEquipmentMember

 us-gaap: OtherMachineryAndEquipmentMember

 us-gaap: FurnitureAndFixturesMember

 lwlg: SoftwareMember

 2025-03-17

 2023-02-28

 2025-01-01

 2022-12-08
 2022-12-09

 2025-01-01

 2022-09-12

 2022-09-11
 2022-09-12

 2022-01-01

 us-gaap: OfficeEquipmentMember

 us-gaap: OtherMachineryAndEquipmentMember

 us-gaap: OtherMachineryAndEquipmentMember

 us-gaap: FurnitureAndFixturesMember

 us-gaap: LeaseholdImprovementsMember

 us-gaap: LeaseholdImprovementsMember

 lwlg: SoftwareMember

 2017-10-01
 2017-10-30

 2017-10-30

 2022-11-22

 2022-11-01
 2022-11-22

 2023-06-01

 us-gaap: ResearchAndDevelopmentExpenseMember

 us-gaap: GeneralAndAdministrativeExpenseMember

 us-gaap: ResearchAndDevelopmentExpenseMember

 us-gaap: GeneralAndAdministrativeExpenseMember

 2018-01-01

 2018-01-02

 lwlg: TwoThousandTwentyOnePurchaseAgreementMember

 2021-10-04

 lwlg: TwoThousandTwentyOnePurchaseAgreementMember

 2021-10-03
 2021-10-04

 lwlg: TwoThousandTwentyOnePurchaseAgreementMember

 2021-10-05

 lwlg: TwoThousandTwentyOnePurchaseAgreementMember

 lwlg: TwoThousandTwentyThreePurchaseAgreementMember

 2023-02-28

 lwlg: TwoThousandTwentyThreePurchaseAgreementMember

 2023-02-26
 2023-02-28

 lwlg: TwoThousandTwentyFourPurchaseAgreementMember

 2023-03-01

 lwlg: TwoThousandTwentyFourPurchaseAgreementMember

 lwlg: TwoThousandTwentyThreePurchaseAgreementMember

 2023-02-24

 lwlg: TwoThousandTwentyFivePurchaseAgreementMember

 2025-01-01

 2025-01-01

 lwlg: TwoThousandsSevenPlanMember

 2019-05-16

 2019-05-16

 2023-05-25

 2023-05-25

 2023-03-15
 2023-03-16

 2023-03-16

 2023-07-30
 2023-08-01

 2023-08-01

 2024-06-01
 2024-06-18

 2024-06-18

 2024-07-30
 2024-08-01

 2024-08-01

 2024-09-01
 2024-09-04

 2024-09-04

 2024-12-01
 2024-12-10

 lwlg: EmployeeStockOptionPlan2007Member

 lwlg: EmployeeStockOptionPlan2007Member

 lwlg: TwentySixteenEquityIncentivePlanMember

 lwlg: TwentySixteenEquityIncentivePlanMember

 lwlg: TwentySixteenEquityIncentivePlanRestrictedMember

 lwlg: TwentySixteenEquityIncentivePlanRestrictedMember

 lwlg: WarrantsMember

 lwlg: WarrantsMember

 lwlg: ExercisePriceRangeOneMember

 lwlg: ExercisePriceRangeOneMember

 us-gaap: RelatedPartyMember

 us-gaap: RelatedPartyMember

 srt: DirectorMember

 srt: DirectorMember

 lwlg: AdvisoryBoardMember

 lwlg: AdvisoryBoardMember

 us-gaap: RelatedPartyMember

 us-gaap: RelatedPartyMember

 srt: DirectorMember

 srt: DirectorMember

 lwlg: AdvisoryBoardMember

 lwlg: AdvisoryBoardMember

 us-gaap: SalesRevenueNetMember
 us-gaap: GeographicConcentrationRiskMember
 country: US

 us-gaap: SalesRevenueNetMember
 us-gaap: GeographicConcentrationRiskMember
 lwlg: InternationallyMember

 us-gaap: SalesRevenueNetMember
 us-gaap: GeographicConcentrationRiskMember
 lwlg: InternationallyMember

 us-gaap: SalesRevenueNetMember
 us-gaap: CustomerConcentrationRiskMember
 lwlg: OneCustomerMember

 utr:sqft

 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, 2024

 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

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

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

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

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.

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.

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).

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 $ 358,611,406 as of June 30, 2024.

 As of March 18, 2025, there were 124,799,620
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 2025 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, 2024.

 Page

 Item 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.

 Exhibits 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 platform company leveraging its proprietary engineered electro-optic (EO) polymers, named Perkinamine
to transmit data at higher speeds with less power in a small form factor. The Company's high activity and high stability organic
polymers allow it to create next-generation photonic EO devices that convert data from electrical signals into light/optical signals
for applications in telecommunications, and for data transmission potentially used to support generative AI.

 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 the electro-optic polymers potential for higher speed and lower power
consumption in packaged devices, and during 2024, we continued to make advances in techniques to translate our world class material
properties to efficient, reliable modulator devices with commercial foundries. We are currently focused on: a) working with potential
and existing customers to integrate our proprietary materials into our customers' specific PIC and device architecture; b)
testing and demonstrating the superior performance, simplicity of manufacturability and reliability of our devices, including in
conjunction with the silicon photonics manufacturing ecosystem; and c) providing our potential and existing customers with the
proper Process Development Kits (PDKs) to enable the efficient and fast integration of our materials into their own design and
manufacturing plans. Silicon-based foundries are semiconductor fabrication
plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput.
Partnering with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard
production lines using standard equipment, it also allows us to efficiently utilize our capital. The foundry partnerships will allow
us to scale our high-performance polymer optical engines quickly and efficiently. We have now received silicon wafers that range up
to 200mm in diameter, which aligns well with foundry manufacturing.

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

initially targeting applications in fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth
optical connections deployed inside and between datacenters and/or AI clusters. In addition, we are exploring other applications that
include automotive/LIDAR, sensing, displays, storage, aerospace and defense, satellites, quantum computing etc., for our polymer technology
platform. Our goal is to have our unique polymer technology platform become ubiquitous across multiple market verticals over and above
the optical fiber optic communications markets.

 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 with
significant investments of capital. The expected demands of increased traffic, information, and data driven by AI is changing the way
the internet is being operated. AI is now creating new and interesting market opportunities to upgrade the internet. Three of these opportunities
are important today: density, speed, and low power and these are very well aligned with our high performance electro-optic polymers modulator
platform. We are designing high performance polymer modulator optical engines to support the rise and growth of AI as it generates more
information that will travel through the internet and optical network. While we are not directly an AI company designing electronic processors,
we do see immediate benefits of enabling higher levels of information to cross the internet using our optical polymer modulator platform.

 Unless the context otherwise requires,
all references to the "Company," "we," "our" or "us" and other similar terms means Lightwave
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 new materials development and evaluation with potential customers and strategic partners.
We expect to continue to obtain a revenue stream from technology licensing agreements, and to obtain additional revenue streams from technology
transfer agreements and direct sale of our electro-optic materials. We have seen increased interest in our materials during 2024, driven
by the need for higher speed connections to scale the AI-enabled network infrastructure and we are in discussions on future license agreements.
In December 2024, we made the decision to focus our commercial and R&D efforts on the EO Polymer materials development and manufacturing.
Although we continue to develop full Photonic Integrated Circuits and packaged device designs as part of our internal technology and process
development roadmap, we are not actively promoting the sale of such PICs and/or packaged devices to external customers, but rather EO
Polymer materials supply and license agreements.

 Materials Development

 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 PIC and device design and manufacturing companies, contract manufacturers,
original equipment manufacturers, foundries, packaging and assembly manufacturers etc. Our Company contemplates future applications in
market verticals that may address the needs of semiconductor companies, optical network companies, Web 2.0/3.0 media companies, high performance
computing companies, telecommunications companies, aerospace companies, automotive companies, as well as for example, government agencies
and defense entities.

 Device Design and Development

 Electro-optic Modulators

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

 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 that can be easily integrated
into various PIC platforms and can address higher data rates in a lower cost, lower power consuming manner, smaller footprint (size) with
much simpler data encoding techniques. Our electro-optic polymer material will boost the performance of standard PIC platforms such as
silicon photonics and indium phosphide.

 Our electro-optic
polymers can be integrated with other materials platforms because they can be applied as a thin film coating in a fabrication clean room
such as may be found in semiconductor foundries using standard clean room tooling. These approaches enable our device platforms to not
only be competitive but fully integrated with foundries. Our polymers are unique in that they are stable enough to seamlessly integrate
into existing CMOS, Indium Phosphide (InP), Gallium Arsenide (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.

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

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

 NRZ – See PAM2.

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

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

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

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

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

 Our Business Opportunity

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

 Organic polymer materials have
free electrons that allow for limitless potential to combine with other molecular structures, which allows for multiple options and combinations
to improving performance characteristics. Importantly, because they can be applied to optical structures in thin-film liquid form, it
is possible to imbue electro-optic ability to highly miniaturized slot structures. Organic polymer materials are also more economic to
manufacture in comparison to growing exotic crystals that are prone to contamination and further must be sliced into thin wafers. 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 C. Additionally, these materials have demonstrated photochemical stability
in devices, even after being subjected to high intensity light for over 5,000 hours. These materials also exhibited stable electro-optic
performance after being continuously aged at 85 C for over 12,000 hours. This exposure duration far exceeds industry standard stress
conditions. These devices have performed with 3dB bandwidths that exceed 70GHz.

 We are now further optimizing
our electro-optic (EO) polymer materials platform to meet additional specifications that are beginning to be required by the fiber communications
industry for applications such as networks running at data rates of 800Gbps and 1600Gbps and 3200Gbps in the future. Our technology platform
has the capability and potential to address 4 or more channels of 400Gbps utilizing PAM4 encoding schemes, thus creating a roadmap of
increased performance for the industry. Furthermore, we are collaborating with industry partners to optimize device designs and packaging.
We have already made extensive progress with our polymer materials on this front, and now we are integrating our robust polymer materials
onto an integrated photonics platform.

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

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

 Our Electro-Optic Material Approach

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

 Previous and Current Competitive Organic Electro-Optic
Polymer Efforts

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

 As a result, high frequency modulators
engineered with electro-optic polymers designed on the BLA model or any other polyene chain design models are unstable over typical operating
temperature ranges, and often exhibit performance degradation within days, hours or even minutes. Similarly, lower frequency modulators
exhibit comparable failings, but to a lesser extent. These flaws, in most cases, have prevented commercial quality polymer-based modulators
from entering the commercial marketplace. The thermal stability of these devices does not generally meet the minimum Telcordia GR-468
operating temperature range (-40 degrees Celsius to +85 degrees Celsius) much less the harsher MILSPEC 883D (military specification) range
of -55 degrees Celsius to 150 degrees Celsius. While many new applications do not require meeting full military or Telcordia GR-468 specifications
for polymers, many potential customers prefer to see polymer operate at or near these conditions to convey confidence in the material
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 device designs
are built around our proprietary organic polymer material systems that we believe will enable better performance than the current embedded
legacy technology built around inorganic materials. We also believe that the inherent flexibility of being able to apply our organic polymer
materials in liquid thin-film form will accelerate the move toward ultra-miniaturization of Polymer Photonic Integrated Circuits (P 2 IC)
by increasing the number of photonic circuits on a single chip. Polymer photonics is the application of polymers on to a platform such
as silicon where there are both active and passive photonic component designs. In polymer photonics, polymer devices such as modulators,
waveguides, and multiplexers can be fabricated on to a silicon platform that acts as a package as well as a base for mounting lasers (which
are needed to source the light). We continue to invest in R&D and process development to help accelerate the adoption of our polymer
materials by potential customers into their own PIC platforms, typically based on silicon photonics.

 Our initial device, though highly miniaturized, utilizes conventional
design and fabrication techniques in the industry. Our future device designs will utilize silicon photonics (SiPh) technology, which can
support highly miniaturized slot waveguides structures etched in large format (200mm), low cost, and less expensive silicon wafers coated
with our organic electro-optic polymers. The low-cost structure compares well to compound semiconductor technologies such as 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.

 Our Intellectual Property

 Our research and development efforts
over the last 10+ years have yielded our Company an extensive patent portfolio as well as critical trade secrets, unpatented technology
and proprietary knowledge related to our optical polymer materials. Our intellectual property portfolio has expanded significantly over
the few years. We have actively filed technical utility patents and are currently in the process of readying a number of other inventions
for formal filings in 2025 and 2026. We expect to continue innovating our technology platform over the next decade. We had additional
patents issued or published over the past year indicating that our technology is being recognized as being unique.

 In 2018, we acquired the polymer
technology intellectual property assets of BrPhotonics Productos 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 77 granted patents that include 46 from the US, 2 from Canada, 3 from the United Kingdom, 18 from the EU, 1 from
Japan, 6 from China (including Hong Kong), and 1 from Australia.

 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

 •
 Device Design Fabrication
Methods

 •
 Modulators and
Waveguides

 •
 Hermetic Capsulation

 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

 During
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.

 During
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.

 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
November 29, 2022, we announced our acquisition of the polymer technology and intellectual property assets
of Chromosol Ltd (UK). The acquisition significantly strengthened our Company's design capabilities with foundry PDKs with extremely
low temperature atomic layer deposition (ALD) processes that effectively hermetically seal polymer devices that have been prepared for
high volume manufacturing. Having access to extremely low temperature ALD allows our Company's polymer modulators to be protected from
the environment without the need for expensive and large footprint gold box packaging, propelling our Company forward with chip-scale
packaging as required by major hyper-scaler end-users.

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

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

 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.

 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.

 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
March 24, 2024, at the 2024 Optical Fiber Conference in San Diego, California (OFC 2024), we presented world-class results for our Company's
200Gbps heterogeneous polymer/silicon photonic modulator at a record low drive voltage, which are based on a novel packaged heterogeneous
polymer EO modulator design leveraging silicon photonics devices from a 200mm production foundry process and Lightwave Logic's proprietary
high temperature, high performance EO Polymer material. Each modulator was operated at 100GBaud PAM4 and achieved all drive voltages below
2V, and as low as 1V which is excellent for low power operation. We discussed the test set-up for the high-speed results, and how electro-optic
polymer-based modulators based on 200mm silicon foundry wafers are ideal for 4 lane 200Gbps per lane 800Gbps pluggable optical transceivers
for datacenter applications. We also shared updated lifetime and reliability data for both the electro-optic polymer materials and electro-optic
polymer devices. Our results demonstrate that a hybrid approach, leveraging the cost and integration benefits of silicon photonics along
with the unparalleled bandwidth and low power advantages of Lightwave Logic's proprietary EO polymers, lays a clear path for competitive
performance and integration for today's and future optical pluggable transceivers, and we expect these results will position our
Company to support the burgeoning demand of generative AI as datacenters around the world begin to upgrade their hardware faster than
expected to meet the demands of the future.

 On
March 28, 2024, we announced world-class performance of the Company's Perkinamine EO polymer material operating in an optical
interconnect link, at 437.1Gbps employing a PAM8 178GBaud signal encoded by a plasmonic Mach Zehnder modulator (MZM). In this work, intensity
modulated, direct detection (IM/DD) techniques were utilized to drive higher performance. The paper, authored by our teammates ETH Zurich
and Polariton Technologies, demonstrated data rates beyond 400Gbps for a IM/Dd optical interconnect link for the first time. This world-class
result, achieving data rates of 400Gbps per lane, demonstrates that our Company's EO polymers are capable of exceeding double the
current industry expectation. This has the potential to enable 4 lane 1.6Tbps (1600Gbps) pluggable transceiver modules, which is on the
roadmap of datacenter operators today.

 On
May 21, 2024, we announced our collaboration with Advanced Micro Foundry (AMF), a leading Silicon Photonics volume foundry, to develop
state-of art polymer slot modulators utilizing AMF's silicon photonics platform. These modulators have been shown to achieve a record
low drive voltage below 1V and data rates of 200Gbps PAM4. This performance will enable a new generation of 800 Gb/s and 1.6T Gb/s pluggable
transceivers to address fast growing requirements for optical connectivity for large generative AI computing clusters. Lightwave Logic
and AMF have collaborated over the past year to develop the electro optic polymer slot modulators utilizing AMF's standard manufacturing
process flow on 200-mm wafers. This successful demonstration marked a significant milestone in integrated photonics, blending Silicon
photonics with polymer materials. Building on this demonstration, both parties are aiming to enhance the modulators to ensure these advanced
components are readily accessible to product companies on a manufacturing scale. This accomplishment puts our Company in a very strong
position to ramp volume both for our polymers as well as 200-mm silicon wafer volume with AMF. It also opens exciting opportunities to
develop novel solutions for commercial-grade-compatible EO polymer modulators seamlessly integrated with AMF's standard processes.

 On
September 24, 2024, we announced a collaboration with Polariton Technologies to demonstrate a packaged device with over
110 GHz super high bandwidth packaged electro-optic polymer modulators using Polariton's plasmonic modulator device design that
contains Lightwave's proprietary Perkinamine chromophores at the European Conference on Optical Communications (ECOC) held
in Frankfurt, Germany from September 22-26, 2024. The packaged device contains a plasmonic modulator using
electro-optic polymer material and platform chips have demonstrated 400 Gbps, which is the current specification that datacenters
are looking for in optical transceiver modules. This collaboration forms an important technology platform for scalability using
large silicon foundries for mass commercialization with 200mm silicon wafers. The combination of electro-optic polymers and
plasmonics can support datacenters around the world which are responding to high power consumption and the burgeoning demand for
higher speed data transmission from artificial intelligence, machine learning, and other cloud-based services. This device enables
ultra-high bandwidths, which are extremely well suited for next generation internet and optical networking transceivers that require
200Gbps per lane today, and 400Gbps per lane soon.

 On
December 11, 2024, we strengthened our Company's management team to reinforce our competitive position and accelerate product and commercial
strategic initiatives, including capitalizing on high-growth opportunities across the AI and datacenter networking sector, expediting
commercialization for our proprietary electro-optic materials, and opening new markets and applications for our advanced polymer-based
solutions. We named optical communications industry veteran Yves LeMaitre as our Chief Executive Officer and former CEO and
Chairman Thomas E. Zelibor as our President. Ronald Bucchi, lead independent director, was appointed as our new non-executive
independent Chairman, and James S. Marcelli, principal financial officer, was named as our Chief Financial Officer and continues to serve
as Chief Operating Officer. Dr. Michael Lebby retired as Chairman and Chief Executive Officer of Lightwave Logic, effective December
10, 2024.

 On March 10, 2025, we announced the advancement of our technical collaboration
with Polariton Technologies, a technology leader of high-speed EO components for the communication market, and our transition from being
a material supplier to collaborating on market development through end-user engagement and technical cooperation. Lightwave Logic and
Polariton will work together to jointly develop technical solutions to enable the faster adoption and integration of combined plasmonics
and polymer-based products, with semiconductor fabrication plants, outsourced assembly, and test operations. In addition to manufacturing
transmitter PICs with inherent superior electro-optic performance, both teams will be working together on an extensive qualification and
reliability program, high-speed RF and optical testing and back-end manufacturing process integration.

 As we
move forward to diligently meet our goals, we continue to work closely with our packaging and foundry partners for 200Gbps and 400Gbps/lane
device designs and prototypes, and we are advancing our reliability and characterization efforts to support our prototyping. Our partnership
with silicon-based foundries will allow us to scale commercial volumes of electro-optic polymer modulator devices using large silicon
wafers, and we are currently working to have our fabrication processes accepted into foundry PDKs (process development kits). 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 materials are ideally suited for
the datacenter, AI connectivity and telecommunications markets. Details and feedback of what these prospective customers are seeking from
a prototype are delivered to our technical team.

 The Global Photonic Device Market and Our Target Markets

 Our initial
target market is the AI focused datacenter eco-system that is exponentially expanding to address the need for accurate Large Language
Models – LLMs - for a variety of applications. To address these requirements, datacenters have grown in number and scope to include
hundreds of thousands of servers, switches and associated equipment per datacenter to address the computing needs required for LLMs –
a process often known as "scaling up and scaling out". The number of "hyperscale" datacenters are expected to
continue to increase in number both in the US, but also in the rest of the world.

 Figure 1: Number of Data
Center Sites (by Size)

 Source: "How Many
Data Centers Are There and Where Are They being Built", Yih-Khai Wong, ABI Research, July 16, 2024

 A "single"
hyperscale datacenter may consist of multiple large warehouse-size buildings on a campus or even several locations distributed around
a metropolitan area. Regardless of the design, these datacenters will require transmitting and receiving vast amounts of data - not only
around a single data center building – but often also between buildings in distributed data center architecture. The connectivity
required between servers, switches and related electronics within a single datacenter building is often shorter than 500 meters, with
a growing requirement for opto-electronics for connecting equipment that may be in facilities that are up to 10km apart. The ideal method
for addressing these links has been – and will continue to be - single mode fiber cabling. Correspondingly, the minimum "speeds"
or bandwidth required for transmitting data on these connections is expected to be 800Gigabits/second – a speed that eventually
be supplanted with 1.6Terabit/second and 3.2 Terabit/second connections, (2 times and 4 times faster than 800Gibaits/second), as shown
in Figure 2. Each connection speed will require either 4 or 8 modulators which results in a multimillion unit opportunity on a yearly
basis.

 Figure 2: Number of Opto-Electronic
Connectivity Requirements (by "speed")

 Source: "Optical
Communications market Forecast", Lightcounting, October, 2024

 The combined
growth in number of datacenters and speed requirements has generated considerable discussion of the need for reduction in the growth of
energy demands needed for operations. Our polymers will enable low power modulators that will be required for the opto-electronics utilized
for interconnecting the switches and servers deployed at these required speeds on this cabling infrastructure.

 Figure 3: Datacenter
Power Consumption Forecast

 Source: "Investing
in the Rising Data Center Economy", McKinsey, January 17, 2023

 Business Strategy

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

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

 •

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

 •

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

 •

 Develop proprietary intellectual property.

 •

 Grow
 our commercial device design and development capabilities.

 •

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

 •

 Grow our product reliability and quality assurance capabilities.

 •

 Grow our optoelectronic and RF testing capabilities.

 •

 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 process development programs.

 Create Organic Polymer-Enabled Electro-Optic Modulators

 We
intend to utilize our proprietary optical polymer technology to enable the creation by our customers of a portfolio of commercial electro-optic
polymer product devices with applications for various markets, including telecommunications, data communications and data centers.

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

 Our Research and Development Process

 Our research and development process consists of the
following steps:

 •

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

 •

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

 •

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

 •

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

 •

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

 We have and expect to continue to make significant operating and capital
expenditures for research and development. Our research and development expenses were $16,806,548 and $15,903,689, for the years ended
December 31, 2024, and 2023, respectively.

 Our Past Government Program Participation

 Our Company has been a participant
in several vital government sponsored research and development programs with various government agencies that protect the interests of
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

 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 based on alternative material platforms
such as Indium Phosphide, Silicon or Silicon Nitride and Lithium Niobate. These companies that have incumbent optical modulators using
semiconductors include: Lumentum, Broadcom, Marvell, Cisco, Intel, Ciena, Fujitsu, and Coherent. These companies are heavily invested
in the production of crystalline-based semiconductor electro-optic modulator technologies, as well as the development of novel manufacturing
techniques and modulator designs.

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

 Our Plan to Compete

 We believe that as our organic
polymer technology gains industry acceptance, we will be poised to obtain a significant portion of the component manufacturing market
and have our technology become ubiquitous. Electro-optic polymers demonstrate several advantages over other technologies, such as inorganic-based
technologies, due to their reduced manufacturing and processing costs, higher performance, and lower power requirements. 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 31 full-time
employees, and we retain several independent contractors on an as-needed basis. Based on our current development plan we expect to add
4 additional full-time employees in 2025.

 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 and Inclusion

 We work to create a culture of diversity and inclusion so that all of our employees feel they are respected and treated
equally, regardless of gender, race, ethnicity, age, disability, sexual orientation, gender identity, cultural background or religious
belief.

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

 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 $22,535,041
for the year ended December 31, 2024, and $21,038,032 for the year ended December 31, 2023. We anticipate that we will continue to incur
operating losses through at least 2025.

 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; and

 Maintain our reputation and build trust with customers.

 Our failure to effectively manage our growth and
effectively transition from our focus on research and development activities to commercial operations could harm our business.

 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 April 2026; 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 "); (ii) the purchase agreement for up to $30 million we entered
into with Lincoln Park on March 17, 2025 (the " 2025 Purchase Agreement "); and (iii) 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 $0 million and
$30 million pursuant to the 2023 Purchase Agreement and 2025 Purchase Agreement with Lincoln Park, subject to the conditions set forth
therein, respectively, and $31.5 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.

initially targeting applications in fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth
optical connections deployed inside and between datacenters and/or AI clusters. In addition, we are exploring other applications that
include automotive/LIDAR, sensing, displays, storage, aerospace and defense, satellites, quantum computing etc., for our polymer technology
platform. 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 fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth optical connections deployed inside
and between datacenters and/or AI clusters. In addition, we are exploring other applications that include automotive/LIDAR, sensing, displays,
storage, aerospace and defense, satellites, quantum computing etc., for our polymer technology platform. 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 materials.

 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 out-license to electro-optic device manufacturers. Most of
our materials are still in the development stage, and we do not know when a market for our materials will develop, if at all. Our success
depends, in part, upon our ability to gain market acceptance of our organic nonlinear optical materials. To be accepted, our materials
must meet the technical and performance requirements of our potential customers. OEMs, suppliers or government agencies may not accept
polymer-based materials. In addition, even if we achieve some degree of market acceptance for our materials in one industry, we may not
achieve market acceptance in other industries that we are targeting. Also, certain large corporations may be predisposed against doing
business with a company of our limited size and operating history.

 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 fiber optic data communications market, in particular ultra-high bandwidth optical connections deployed inside and between
datacenters and/or AI clusters, 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 800Gbps 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.

 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 materials and product integration expertise that is equal to or superior to our offerings or that will achieve greater market acceptance than our offerings and future offerings;

 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 obsolete;

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

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

 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 Yves LeMaitre, our Chief Executive Officer,
Thomas E. Zelibor, our President and James S. Marcelli our Chief Financial Officer, Chief Operating Officer, and Secretary. Accordingly,
the loss of the services of any 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
integration and design processes, our operating results would be harmed.

 The manufacture and integration
of our materials for devices is a multi-stage process that requires the use of high-quality materials and advanced manufacturing technologies
and design. Also, polymer-related device development and manufacturing, whether performed by a silicon photonics design house or elsewhere,
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 our manufacturing design processes, if stringent
quality controls are not maintained, or if contamination problems arise, our operating results would be harmed.

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

 Organic nonlinear optical materials
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 and integration of materials with production defects or reliability, quality or compatibility problems could significantly
delay or hinder market acceptance of our materials or result in a costly recall and could damage our reputation and adversely affect our
ability to sell our materials. If our organic nonlinear optical materials experience defects, we may need to undertake a redevelopment
of the materials, 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, 2024, we have
outstanding options and warrants to purchase an aggregate of 8,848,908 shares of our common stock at exercise prices ranging from $0.51
to 16.81 per share with a weighted average exercise price of $3.00 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 2025 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 $1.00 to a high of $4.82.
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 2025 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 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 the 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 $387,666.

 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 March 18, 2025, we had approximately
67 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, 2024.

 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)

 9,499,859

 $3.17

 3,480,845

 Equity compensation plans not approved by security
 holders (2)

 400,000

 $0.60

 —

 Total

 9,899,859

 $3.07

 3,480,845

 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, 2019 and December 31, 2024,
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, 2019 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, 2019 of $0.70 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

 January 2024

 Common Stock — 19,000 shares of Common Stock at $0.75 per share pursuant to a warrant exercise.

 December 2024

 Common Stock — 100,000 shares of Common Stock at $0.77 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 platform company leveraging its proprietary engineered electro-optic (EO) polymers to transmit data at higher
speeds with less power in a small form factor. The Company's high activity and high stability organic polymers allow it to create
next-generation photonic EO devices that convert data from electrical signals into light/optical signals for applications in telecommunications,
and for data transmission potentially used to support generative AI.

 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 the electro-optic polymers potential for higher speed and lower power consumption in packaged devices, and during
2024, we continued to make advances in techniques to translate our world class material properties to efficient, reliable modulator devices
with commercial foundries. We are currently focused on a) working with potential and existing customers to integrate our proprietary materials
into our customers' specific PIC and device architecture. b) testing and demonstrating the superior performance, simplicity of manufacturability
and reliability of our devices, including in conjunction with the silicon photonics manufacturing ecosystem c) providing our potential
and existing customers with the proper Process Development Kits (PDKs) to enable the efficient and fast integration of our materials into
their own design and manufacturing plans. In 2024 we continued to work 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 semiconductor
fabrication plants developed for the electronics IC business, that are now engaging with silicon photonics to increase their wafer throughput.
Partnering with silicon-based foundries not only demonstrates that our polymer technology can be transferred into standard production
lines using standard equipment, it also allows us to efficiently utilize our capital. The foundry partnerships will allow us to scale
our high-performance polymer optical engines quickly and efficiently. We have now received silicon wafers that range up to 200mm in diameter,
which aligns well with foundry manufacturing.

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

initially targeting applications in fiber optic data communications and telecommunications markets, in particular ultra-high bandwidth
optical connections deployed inside and between datacenters and/or AI clusters. In addition, we are exploring other applications that
include automotive/LIDAR, sensing, displays, storage, aerospace and defense, etc., for our polymer technology platform. Our goal is to
have our unique polymer technology platform become ubiquitous across multiple market verticals over and above the optical fiber optic
communications markets.

 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 with
significant investments of capital. The expected demands of increased traffic, information, and data driven by AI is changing the way
the internet is being operated. AI is now creating new and interesting market opportunities to upgrade the internet. Three of these opportunities
are important today: density, speed, and low power and these are very well aligned with our high performance electro-optic polymers modulator
platform. We are designing high performance polymer modulator optical engines to support the rise and growth of AI as it generates more
information that will travel through the internet and optical network. While we are not directly an AI company designing electronic processors,
we do see immediate benefits of enabling higher levels of information to cross the internet using our optical polymer modulator platform.

 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 proprietary device designs 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 sale of our electro-optic proprietary device designs.

 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 designs 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 sale of our proprietary electro-optic devices.

 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 sale of our own proprietary
electro-optic device designs. Our objective is to be a leading provider of proprietary technology and know-how in the electro-optic materials
and devices. In order to meet this objective, we intend to continue to:

 •

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

 •

 Develop photonic device designs based on our
 P 2 IC technology

 •

 Develop proprietary intellectual property

 •

 Grow our device design 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

 Create Organic Polymesr-Enabling design and production
of Electro-Optic Modulators

 We
intend to utilize our proprietary optical polymer technology to create an initial portfolio of commercial electro-optic polymer product
devices designs 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.

 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, 2024 to year ended December 31, 2023

 Revenues

 During the year ended December
31, 2024, we recognized $81,855 of licensing and royalty revenue and $13,750 of revenue for the device processing work on the device supplied
by a customer. During the year ended December 31, 2023, we recognized $40,502 of licensing and royalty revenue.

 Cost of sales

 During the year ended December 31, 2024,
we recognized $7,395 in cost of sales. During the year ended December 31, 2023, we recognized $2,513 in cost of sales.

 Operating expenses

 Ended

 Ended December
31, 2023

Prior
 Year

 Percent

Prior Year

 Research and development

 16,806,548

 $
 15,903,689

 $
 902,859

 %

 General and administrative

 6,370,805

 5,359,565

 1,011,240

 %

 $
 23,177,353

 $
 21,263,254

 $
 1,914,099

 %

 Research and development
expenses increased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to increases in
research and development salary and benefits expenses, research and development equipment depreciation expense, prototype device development
and wafer fabrication expenses, research and development travel expenses, rent expenses, property tax expenses, research and development
consulting expenses, software expenses, and laboratory and wafer fabrication materials and supplies expenses, offset by decreases in research
and development non-cash stock option amortization expenses, research and development recruiting fees, and research and development employee
relocation expenses in the year ended December 31, 2024, compared to the same period in 2023.

 Research and development salary
and benefits expenses increased by $1,472,979 in the year ended December 31, 2024, compared to the same period in 2023.

 Depreciation expense increased
by $424,232 in the year ended December 31, 2024, compared to the same period in 2023.

 Prototype device development
and wafer fabrication expenses increased by $341,555 in the year ended December 31, 2024, compared to the same period in 2023.

 Research and development travel
expenses increased by $107,351 in the year ended December 31, 2024, compared to the same period in 2023.

 Research and development rent
expenses increased by $99,898 in the year ended December 31, 2024, compared to the same period in 2023.

 Property tax expenses increased
by $98,181 in the year ended December 31, 2024, compared to the same period in 2023.

 Research and development consulting
expenses increased by $65,261 in the year ended December 31, 2024, compared to the same period in 2023.

 Research and development software
expenses increased by $64,318 in the year ended December 31, 2024, compared to the same period in 2023.

 Laboratory and wafer fabrication
materials and supplies expenses increased by $59,090 in the year ended December 31, 2024, compared to the same period in 2023.

 These increases were offset
by a $1,571,632 decrease in research and development non-cash stock option amortization expenses, a $216,115 decrease in research and
development recruiting fees, and a $108,305 decrease in research and development employee relocation expenses in the year ended December
31, 2024, compared to the same period in 2023.

 We expect to continue to incur
substantial research and development expenses developing and commercializing our 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
and create next-generation photonic EO device designs; working with semiconductor foundries; hiring additional technical and support
personnel; engaging senior technical advisors; pursuing other potential business opportunities and collaborations; customer testing and
evaluation; and incurring related operating expenses.

 General and administrative expenses
increased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to increases in general
and administrative salary and benefits expenses, consulting fees, depreciation expense, investor relations expenses, and sales and marketing
expenses, offset by decreases general and administrative non-cash stock option amortization expenses, and accounting expenses.

 General and administrative salary
and benefits expenses increased by $866,829 in the year ended December 31, 2024, compared to the same period in 2023.

 General and administrative consulting
fees increased by $215,707 in the year ended December 31, 2024, compared to the same period in 2023.

 Depreciation expense increased
by $103,624 in the year ended December 31, 2024, compared to the same period in 2023.

 Investor relations expenses
increased by $54,259 in the year ended December 31, 2024, compared to the same period in 2023.

 Sales and marketing expenses
increased by $52,623 in the year ended December 31, 2024, compared to the same period in 2023.

 These increases were offset
by a $263,822 decrease in general and administrative non-cash stock option amortization expense and a $183,722 decrease in accounting
fees in the year ended December 31, 2024, compared to the same period in 2023.

 Other Income

 Ended

 Ended

Prior
 Year

 Percent

Prior Year

 Other Income

 $
 554,102

 $
 187,233

 $
 366,869

 %

 Other income increased
for the year ended December 31, 2024, as compared to year ended December 31, 2023, primarily due to a $519,368 decrease in commitment
fee associated with the purchase of shares by an institutional investor for sale under a stock purchase agreement, a $280,433 increase
in interest income on money market account, and a recognition of a $210,274 loss on retirement of certain expired patent applications
and patents.

 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.

 Net Loss

 Ended

 Ended

Prior
 Year

 Percent

Prior Year

 Net Loss

 $
 22,535,041

 $
 21,038,032
 $
 1,497,009

 %

 Net loss was $22,535,041 and $21,038,032
for the year ended December 31, 2024 and 2023, respectively, for an increase of $1,497,009 due primarily to increases in salary and benefits
expenses, depreciation expense, prototype device development and wafer fabrication expenses, and consulting fees, recognition of loss
on retirement of certain expired patent applications and patents, travel expenses, rent expense, property tax expenses, software expenses,
laboratory and wafer fabrication materials and supplies expenses, investor relations expenses, and sales and marketing expenses. These
increases were offset by decreases in non-cash stock option amortization expense, commitment fee associated with the purchase of shares
by an institutional investor for sale under a stock purchase agreement, recruiting fees, accounting fees, and employee relocation expenses,
and an increase in interest income on money market account.

 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 (i) 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 10 to the Financial Statements and (ii) proceeds received pursuant to the exercise of options and
warrants.

 On July 2, 2021, our Company
filed a $100 million universal shelf registration statement which became effective on July 9, 2021, and expired on July 8, 2024. On July
26, 2024, the Company filed a new $100 million universal shelf registration statement which became effective on August 5, 2024. On October
4, 2021, our Company entered into the 2021 purchase agreement with Lincoln Park to sell up to $33 million of registered 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
December 31, 2023. On February 28, 2023, our Company entered into the 2023 Purchase Agreement with Lincoln Park to sell up to $30 million
of registered common stock over a 36-month period. As of the date of this filing, $0 remains on the 2023 Purchase Agreement. On March
17, 2025, our Company entered into the 2025 Purchase Agreement with Lincoln Park to sell up to $30 million of registered common stock
over a 36-month period, subject to the conditions set forth therein. As of the date of this filing, $30 million remains on the 2025 Purchase
Agreement. 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 million in shares of our registered common stock, from time
to time through Roth Capital. As of the date of this filing, $31.5 million remains available to our Company pursuant to the at the market
sale agreement.

 During the year ended December
31, 2024, the Company received $12,366,965 in proceeds pursuant to the 2023 Purchase Agreement with Lincoln Park, $1,779,976 in proceeds
pursuant to the at the market sale agreement with Roth Capital, $337,350 in proceeds pursuant to the exercise of options and warrants
and $63,884 in cash collections from customer contracts, of which $50,000 related to the proceeds received under a material supply and
license agreement and $13,884 – to the proceeds received for a contact for processing work on the devices supplied by a customer.
During 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 a contract liability as of December 31, 2023.

 During
the year ended December 31, 2024, our primary sources of cash outflows from operations included payroll, rent, utilities, payments to
vendors including prototypes development and foundries expenses, laboratory and wafer fabrication materials and supplies expenses, and
third-party service providers. During 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.

 Sources and Uses of Cash

 Our future expenditures
and capital requirements will depend on numerous factors, including: the progress of our research and development efforts; the rate at
which we can, directly or through arrangements with original equipment manufacturers, introduce and sell 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 $1,727,000 of expenditures per month over the next 12
months.

 We
expect the proceeds received pursuant to the 2023 and the 2025 Lincoln Park purchase agreements and, 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 April 2026
before we will be required to replenish our cash reserves. Our cash requirements are expected to increase at a rate consistent with our
Company's revenue growth as we expand our activities and operations with the objective of increasing our revenue stream from the
commercialization of our electro-optic polymer technology. We currently have no debt to service. We expect that our cash used in operations
will continue to increase during 2025 and beyond because 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
and 2025 Purchase Agreements 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 conditions) from time to time over a 36-month period. On March 17, 2025, our Company entered
into the 2025 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 conditions) from time to time over a 36-month period. Pursuant to the 2025 Purchase Agreement, subject
to the conditions set forth therein, Lincoln Park is obligated to make purchases as the Company directs in accordance with the 2025 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 a look back formula for market prices of our common stock immediately preceding the sales to Lincoln
Park.

 There
are no trading volume requirements or restrictions on the 2025 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 the 2025 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 in the 2025 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 million 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 2025 Purchase Agreement 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, which could result
in our Company reducing some capital expenditures or reducing staff and discretionary costs.

 Analysis of Cash Flows

 For the year ended December 31, 2024

 Net cash used in operating
activities was $15,550,515 for the year ended December 31, 2024, primarily attributable to the net loss of $22,535,041 adjusted by $4,440,003
in options issued for services, $446,628 amortization of deferred compensation, $154,210 in common stock issued for services, $1,682,760
in depreciation expenses and patent amortization expenses, $192,487 amortization of right of use asset, $213,440 loss on disposal of property
and equipment and retirement of certain expired patent applications and patents, $(15,189) in accounts receivable, $835,880 in prepaid
expenses and other current assets, and ($965,693) in accounts payable, accrued bonuses, accrued expenses, contract liability and other
liabilities. Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting
expenses, rent and other expenditures necessary to develop our business infrastructure.

 Net cash used by investing
activities was $2,697,899 for the year ended December 31, 2024, consisting of $430,501 in cost for intangibles and $2,267,398 in asset
additions for the Colorado headquarter facility and labs.

 Net cash provided by
financing activities was $14,484,291 for the year ended December 31, 2024, and consisted of $337,350 in proceeds from exercise of options
and warrants, $12,366,965 in proceeds from resale of common stock to an institutional investor and $1,779,976 in proceeds from at the
market sale of common stock by an investment banking company.

 On December
31, 2024, our cash and cash equivalents totaled $27,667,964, our assets totaled $37,807,983, our liabilities totaled $4,384,078 and we
had stockholders' equity of $33,423,905.

 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.

 On December
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.

 Contractual Obligations

 See "Note
8–Leases" 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, 2024, we had $27.6
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, 2024, 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, 2024, 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, 2024, our Company
evaluated the effectiveness and design and operation of its disclosure controls and procedures. Our Company's disclosure controls
and procedures are the controls and other procedures that we designed to ensure that our Company records, processes, summarizes, and reports
in a timely manner the information that it must disclose in reports that our Company files with or submits to the Securities and Exchange
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,
2024.

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

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

 Attestation Report of
the Registered Public Accounting Firm

 This
Annual Report does not include an attestation report of our Company's independent registered public accounting firm regarding internal
control over financial reporting. Management's report was not subject to attestation by our Company's registered public accounting
firm pursuant to rules of the Securities and Exchange Commission that permit our Company to provide only management's attestation
in this Annual Report.

 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

 (a)
 Lincoln
 Park Purchase Agreement

 On March 17, 2025,
Lightwave Logic, Inc. (the " Company "), entered into a purchase agreement (the " Purchase Agreement ")
with Lincoln Park Capital Fund, LLC (" Lincoln Park " or " Investor ") (each, a " Party ",
and together, the " Parties "), which provides that, upon the terms and subject to the conditions and limitations set
forth therein, the Company may sell to Lincoln Park up to $30,000,000 of shares (the " Purchase Shares ") of its common
stock, par value $0.001 per share (the " Common Stock ").

 Concurrently with entering
into the Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park, pursuant to which it agreed
to provide Lincoln Park with certain registration rights related to the shares issued under the Purchase Agreement (the " Registration
Rights Agreement ").

 Beginning one
business day following the date of satisfaction of certain conditions set forth in the Purchase Agreement (the " Commencement
Date ") and over the thirty-six (36) month term following the Commencement Date, the Company has the right, but not the
obligation, on any business day selected by the Company (each, a " Purchase
Date "), to require Lincoln Park to purchase up to 250,000 shares of Common Stock (the " Regular
Purchase Share Limit ") (each such purchase, a " Regular
Purchase "). Lincoln Park's committed obligation under each Regular Purchase shall not exceed $3,000,000 (subject
to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar
transaction as provided in the Purchase Agreement), provided that the Parties may mutually agree at any time to increase the Regular
Purchase Share Limit. The Company shall have the right to submit multiple Regular Purchase notices to the Investor as often as every
business day, provided that the Company has not failed to deliver shares for the most recent prior Regular Purchase.

 The purchase price
per share for each such Regular Purchase (the " Purchase Price ") shall be equal to the lesser of: (i) the lowest sale
price of the Common Stock during the Purchase Date and (ii) the average of the three (3) lowest closing sale prices of the Common Stock
during the ten (10) business days immediately preceding such Purchase Date.

 In addition to Regular
Purchases and provided that the Company has directed a Regular Purchase in full, the Company in its sole discretion may require Lincoln
Park on each Purchase Date to purchase on the following business day (each, an " Accelerated Purchase Date ") up to the
lesser of: (i) three (3) times the number of shares purchased pursuant to such Regular Purchase and (ii) 30% of the trading volume on
Nasdaq during all or, if certain trading volume or market price thresholds specified in the Purchase Agreement are crossed on the applicable
Accelerated Purchase Date, the portion of the normal trading hours on the applicable Accelerated Purchase Date prior to such time that
any one of such thresholds is crossed, which period of time on the applicable Accelerated Purchase Date (each such purchase, an " Accelerated
Purchase ").

 The purchase price
per share for each such Accelerated Purchase shall be equal to the lesser of: (i) the closing sale price on the Accelerated Purchase Date
or (ii) 96.5% of the Accelerated Purchase Date's volume weighted average price (the " Accelerated Purchase Price ").
The Parties may mutually agree to increase the number of shares of Common Stock sold to the Investor pursuant to any Accelerated Purchase.

 The Company may also
direct Lincoln Park, on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder
have been properly delivered to Lincoln Park in accordance with the Purchase Agreement, to make additional purchases upon the same terms
as an Accelerated Purchase, (an " Additional Accelerated Purchase "). The Company may direct multiple Additional Accelerated
Purchases in a day provided that delivery of shares has been completed with respect to any prior Regular and Accelerated Purchases that
Lincoln Park has purchased.

 The purchase price
of Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases and the minimum closing sale price for a Regular Purchase
will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction
occurring during the business days used to compute the purchase price. The aggregate number of shares that the Company can sell to Lincoln
Park under the Purchase Agreement may in no case exceed 24,910,904 shares (subject to adjustment as described above), which is equal to
approximately 19.99% of the shares of Common Stock outstanding immediately prior to the execution of the Purchase Agreement (the " Exchange
Cap "), unless (i) stockholder approval is obtained to issue shares above the Exchange Cap, in which the Exchange Cap will no
longer apply, or (ii) the average price of all applicable sales of Common Stock to Lincoln Park under the Purchase Agreement equals or
exceeds $1.06 per share (subject to adjustment as described above) (which represents the lower of (A) the official closing price
of the Common Stock on Nasdaq immediately preceding the signing of the Purchase Agreement and (B) the average official closing price of
the Common Stock on Nasdaq for the five consecutive trading days ending on the trading day immediately preceding the date of the Purchase
Agreement). In any event, the Purchase Agreement specifically provides that the Company may not issue or sell any shares of Common Stock
under the Purchase Agreement if such issuance or sale would breach any applicable rules or regulations of Nasdaq.

 The Purchase Agreement
also prohibits the Company from directing Lincoln Park to purchase any shares of Common Stock if those shares, when aggregated with all
other shares of Common Stock then beneficially owned by Lincoln Park, would result in Lincoln Park beneficially owning more than 4.99%
of its outstanding shares of Common Stock, or at the option of Lincoln Park following the satisfaction of certain conditions, 9.99% of
the outstanding shares of Common Stock.

 On March 17, 2025,
we issued 245,098 shares of Common Stock to Lincoln Park as an initial fee for its commitment to purchase shares of our common stock under
the Purchase Agreement (the " Initial Commitment Shares "). We may issue up to 490,196 additional shares of Common Stock
pro-rata in connection with the sale of Purchase Shares (the " Additional Commitment Shares " and together with the Initial
Commitment Shares, the " Commitment Shares ").

 The Purchase Agreement
contains customary representations, warranties, covenants, Suspension Events (as defined in the Purchase Agreement), closing conditions,
indemnification and termination provisions. During any Suspension Event specified in the Purchase Agreement, we may not initiate any sales
to Lincoln Park until such Suspension Event is cured. Lincoln Park does not have the right to terminate the Purchase Agreement upon the
occurrence of a Suspension Event. There are no restrictions on future financings, rights of first refusal, participation rights, penalties
or liquidated damages in the Purchase Agreement or the Registration Rights Agreement, other than the Company's agreement not to
enter into any Variable Rate Transactions (as defined in the Purchase Agreement) with any third party, subject to certain exceptions set
forth in the Purchase Agreement, over the thirty-six (36) month term following the date of the Purchase Agreement (irrespective of any
earlier termination of the Purchase Agreement in accordance with the terms therein).

 The Purchase Agreement
may be terminated by the Company at any time after the Commencement Date, at its sole discretion, without any cost or penalty, by giving
one business day notice to Lincoln Park to terminate the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any
manner whatsoever, any direct or indirect short selling or hedging of the Common Stock.

 The foregoing is a
summary description of certain terms of the Purchase Agreement and the Registration Rights Agreement and, by its nature, is incomplete.
Copies of the Purchase Agreement and the Registration Rights Agreement are filed as Exhibits 10.33 and 10.34 attached hereto. The foregoing
descriptions of the Purchase Agreement and the Registration Rights Agreement are qualified in their entirety by reference to such exhibits.
The Purchase Agreement and Registration Rights Agreement contain customary representations and warranties, covenants and indemnification
provisions that the parties made to, and solely for the benefit of, each other in the context of all of the terms and conditions of such
agreements and in the context of the specific relationship between the parties thereto. The provisions of the Purchase Agreement and
the Registration Rights Agreement, including any representations and warranties contained therein, are not for the benefit of any party
other than the parties thereto and are not intended as documents for investors and the public to obtain factual information about the
current state of affairs of the parties thereto. Rather, investors and the public should look to other disclosures contained in the Company's
annual, quarterly and current reports it may file with the Securities and Exchange Commission.

 The information contained in this Item
9B shall not constitute an offer to sell or the solicitation of an offer to buy the shares of the Company's Common Shares discussed
herein, nor shall there be any offer, solicitation or sale of the shares in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

 (b)
 Trading Arrangements

 During
the three months ended December 31, 2024, none of
our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written
plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under
the Exchange Act or any "non-Rule 10b5-1 arrangement" as defined in Item 408(c) of Regulation S-K.

 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, 2024,

 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, 2024,

 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, 2024,

 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, 2024,

 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, 2024,

 Item 15.

 Exhibits and 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

 Second Amended and Restated Bylaws – June 18, 2024

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

 4.1

 Description of Registrant's Securities

 10.1

 Employee Agreement - Yves Lemaitre

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

 10.2

 Employee Agreement - Thomas Zelibor

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

 10.3

 Employee Agreement - James Marcelli

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

 10.4

 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

 10.5

 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

 10.6

 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

 10.7

 Employee Agreement Amendment – James S. Marcelli

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

 10.8

 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

 10.9

 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

 10.10

 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

 10.11

 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

 10.12

 Employee Agreement Amendment – Michael Lebby

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

 10.13

 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

 10.14

 Form of Director Agreement

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

 10.15

 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

 10.16

 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

 Exhibit No.

 Description of Exhibit

 Location

 10.17

 Operations Committee Charter

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

 10.18

 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

 10.19

 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

 10.20

 2007 Employee Stock Plan

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

 10.21

 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

 10.22

 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

 10.23

 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

 10.24

 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

 10.25

 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

 10.26

 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

 10.27

 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

 10.28

 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

 10.29

 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

 10.30

 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

 10.31

 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

 10.33

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

 10.34

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

 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

 16.1

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

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

 19.1

 Insider Trading Policy

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

 21.1

 Subsidiaries of the Registrant

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

 Exhibit No.

 Description of Exhibit

 Location

 23.1

 Consent of Independent Registered Public Accounting Firm - Stephano Slack LLC

 23.2

 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.

 Furnished

 32.2

 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Financial Officer of the Company.

 Furnished

 97.1

 Compensation Clawback Policy

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

 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/ Yves LeMaitre

 Yves LeMaitre,

 Chief Executive Officer

 (Principal Executive Officer)

 Date: March 18, 2025

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

 Signature

 Title

 Date

 /s/ Yves LeMaitre

 Chief Executive Officer, Principal Executive Officer, Director

 Yves LeMaitre

 /s/ James S. Marcelli

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

 James S. Marcelli

 /s/ Ronald A. Bucchi

 Director, Chair of the Board of Directors

 Ronald A. Bucchi

 /s/ Siraj Nour El-Ahmadi

 Director

 Siraj Nour El-Ahmadi

 /s/ Craig Ciesla

 Director

 Craig Ciesla

 /s/ Laila Partridge

 Director

 Laila Partridge

 /s/ Thomas M. Connelly, Jr.

 Director

 Thomas M. Connelly, Jr.

 FINANCIAL STATEMENTS

 CONTENTS

 PAGE

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

 F-2 - F-3

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

 F-4 - F-5

 BALANCE SHEETS

 STATEMENTS OF COMPREHENSIVE LOSS

 STATEMENTS OF STOCKHOLDERS' EQUITY

 STATEMENTS OF CASH FLOWS

 F-10 - F-29

 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 sheet of
Lightwave Logic, Inc. (the Company) as of December 31, 2024, and the related statements of comprehensive loss, stockholders' equity,
and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the financial statements).

 In our opinion, the financial statements present fairly,
in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash
flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.

 We conducted our audit in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. The company is not required to have, nor were we engaged to perform,
an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal
control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the company's internal
control over financial reporting. Accordingly, we express no such opinion.

 Our audit included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 F- 2

 To the Board of Directors and

 Stockholders of Lightwave Logic, Inc.

 (Continued)

 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/ Stephano Slack LLC

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

 Wayne, Pennsylvania

 F- 3

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

 In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its
operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States
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 Opinions

 The Company's management is responsible for
these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness
of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial
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 audit in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was
maintained in all material respects.

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

 F- 4

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

 Blue
Bell, Pennsylvania

 February
29, 2024

 F- 5

 BALANCE SHEETS

 ASSETS

 CURRENT ASSETS

 Cash and cash equivalents

 $
 27,667,964

 $
 31,432,087

 Accounts Receivable

 45,565

 30,376

 Prepaid expenses and other current assets

 401,741

 1,237,621

 TOTAL CURRENT ASSETS

 28,115,270

 32,700,084

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

 5,691,545

 4,990,790

 OTHER ASSETS

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

 1,355,445

 1,254,501

 Operating Lease - Right of Use - Building

 2,645,723

 2,838,210

 TOTAL OTHER ASSETS

 4,001,168

 4,092,711

 TOTAL ASSETS

 $
 37,807,983

 $
 41,783,585

 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES

 Accounts payable

 $
 515,955

 $
 1,447,596

 Accrued bonuses and accrued expenses

 877,165

 599,430

 Accounts payable and accrued expenses - related parties

 200,779

 313,483

 Contract liability

 23,208

 39,875

 Deferred lease liability

 —

 38,297

 Operating lease liability

 168,289

 144,120

 TOTAL CURRENT LIABILITIES

 1,785,396

 2,582,801

 LONG TERM LIABILITIES

 Operating lease liability

 2,598,682

 2,766,970

 TOTAL LONG TERM LIABILITIES

 2,598,682

 2,766,970

 TOTAL LIABILITIES

 4,384,078

 5,349,771

 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,

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

 December 31, 2024 and December 31, 2023

 123,302

 118,137

 Additional paid-in-capital

 184,363,772

 164,619,363

 Deferred compensation

 ( 656,735
)

 ( 432,293
)

 Accumulated deficit

 ( 150,406,434
)

 ( 127,871,393
)

 TOTAL STOCKHOLDERS' EQUITY

 33,423,905

 36,433,814

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $
 37,807,983

 $
 41,783,585

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

 F- 6

 STATEMENTS OF COMPREHENSIVE LOSS

 FOR THE YEARS ENDED DECEMBER
31, 2024 AND 2023

 2024

 2023

 NET SALES

 $
 95,605

 $
 40,502

 COST AND EXPENSE

 Cost of sales

 7,395

 2,513

 Research and development

 16,806,548

 15,903,689

 General and administrative

 6,370,805

 5,359,565

 TOTAL COST AND EXPENSE

 23,184,748

 21,265,767

 LOSS FROM OPERATIONS

 ( 23,089,143
)

 ( 21,225,265
)

 OTHER INCOME (EXPENSE)

 Interest income

 926,854

 657,546

 Commitment fee

 ( 154,210
)

 ( 673,578
)

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

 ( 213,440
)

 215,509

 Other (expense)

 ( 5,102
)

 ( 12,244
)

 NET LOSS

 $
)

 $
)

 LOSS PER SHARE

 Basic

 $
 ( 0.19
)

 $
 ( 0.18
)

 Diluted

 $
 ( 0.19
)

 $
 ( 0.18
)

 WEIGHTED AVERAGE NUMBER OF SHARES

 Basic

 120,599,885

 115,467,300

 Diluted

 120,599,885

 115,467,300

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

 F- 7

 STATEMENTS OF STOCKHOLDERS' EQUITY

 FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 Additional

 Number of

 Common

 Paid-in

 Deferred

 Accumulated

 Shares

 Stock

 Capital

 Compensation

 Deficit

 Total

 BALANCE AT DECEMBER 31, 2023

 118,137,309

 $
 118,137

 $
 164,619,363

 $
 ( 432,293
)

 $
 ( 127,871,393
)

 $
 36,433,814

 Common stock issued to institutional investor

 3,850,000

 3,850

 12,363,115

 —

 —

 12,366,965

 Common stock issued for commitment shares

 41,956

 154,168

 —

 —

 154,210

 Common stock sales at the market by investment banking company

 551,501

 1,779,424

 —

 —

 1,779,976

 Exercise of options

 375,000

 245,725

 —

 —

 246,100

 Exercise of warrants

 119,000

 91,131

 —

 —

 91,250

 Options issued for services

 —

 —

 4,440,003

 —

 —

 4,440,003

 Restricted stock awards issued for future services

 226,887

 670,843

 ( 671,070
)

 —

 —

 Deferred compensation

 —

 —

 —

 446,628

 —

 446,628

 Net loss for the year ended December 31, 2024

 —

 —

 —

 —

)

)

 BALANCE AT DECEMBER 31, 2024

 123,301,653

 $
 123,302

 $
 184,363,772

 $
 ( 656,735
)

 $
 ( 150,406,434
)

 $
 33,423,905

 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 ended December 31, 2023

 —

 —

 —

 —

)

)

 BALANCE AT DECEMBER 31, 2023

 118,137,309

 $
 118,137

 $
 164,619,363

 $
 ( 432,293
)

 $
 ( 127,871,393
)

 $
 36,433,814

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

 F- 8

 STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 2024

 2023

 CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss

 $
)

 $
)

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

 Stock options issued for services

 4,440,003

 6,459,387

 Amortization of deferred compensation

 446,628

 262,697

 Common stock issued for commitment shares

 154,210

 673,578

 Depreciation and amortization of patents

 1,682,760

 1,119,141

 Amortization of right of use asset

 192,487

 184,835

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

 213,440

 ( 215,509
)

 Decrease (increase) in assets

 Accounts receivable

 ( 15,189
)

 ( 30,376
)

 Prepaid expenses and other current assets

 835,880

 ( 587,540
)

 (Decrease) increase in liabilities

 Accounts payable

 ( 931,641
)

 655,925

 Accrued bonuses, accrued expenses and other liabilities

 277,735

 219,150

 Accounts payable and accrued expenses-related parties

 ( 112,704
)

 213,314

 Contract liability

 ( 16,667
)

 39,875

 Deferred lease liability

 ( 38,297
)

 ( 41,778
)

 Operating lease liability

 ( 144,119
)

 ( 150,691
)

 Net cash used in operating activities

 ( 15,550,515
)

 ( 12,236,024
)

 CASH FLOWS FROM INVESTING ACTIVITIES

 Cost of intangibles

 ( 430,501
)

 ( 307,687
)

 Purchase of property and equipment

 ( 2,267,398
)

 ( 3,292,224
)

 Repayment of loan

 —

 642,120

 Sale of property and equipment

 —

 Net cash used in investing activities

 ( 2,697,899
)

 ( 2,957,201
)

 CASH FLOWS FROM FINANCING ACTIVITIES

 Exercise of options and warrants

 337,350

 1,013,924

 Issuance of common stock, institutional investor

 12,366,965

 19,993,359

 Common stock sales at the market by investment banking company

 1,779,976

 1,515,878

 Net cash provided by financing activities

 14,484,291

 22,523,161

 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 ( 3,764,123
)

 7,329,936

 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

 31,432,087

 24,102,151

 CASH AND CASH EQUIVALENTS - END OF YEAR

 $
 27,667,964

 $
 31,432,087

 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- 9

 DECEMBER 31, 2024 AND
2023

POLICIES

 History and
Nature of Business

 Lightwave Logic, Inc is a technology platform
company leveraging its proprietary engineered electro-optic (EO) polymers, named Perkinamine to transmit data at higher speeds with
less power in a small form factor. The Company's high activity and high stability organic polymers allow it to create next-generation
photonic EO devices that convert data from electrical signals into light/optical signals for applications in telecommunications, and
for data transmission potentially used to support generative AI.

 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 materials development
and evaluation with potential customers and strategic partners. The Company expects to continue to obtain a revenue stream from technology
licensing agreements, and to obtain additional revenue streams from technology transfer agreements and direct sale of its electro-optic
materials.

 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

 The Company considers all highly liquid investments
with an original maturity from the date of purchase of three months or less 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, 2024, the Company
did have deposits with a financial institution that exceed the Federal Depository Insurance coverage.

 Accounts Receivable

 Accounts receivable are carried at their contractual amounts, less an estimated
allowance for credit losses. Management estimates the allowance for credit losses using a loss-rate approach based on historical loss
information, adjusted for management's expectations about current and future economic conditions, as the basis to determine expected
credit losses. Management exercises significant judgment in determining expected credit losses. Key inputs include macroeconomic factors,
industry trends, the creditworthiness of counterparties, historical experience, the financial conditions of the customers, and the amount
and age of past due accounts. Management believes that the composition of receivables at year-end is consistent with historical conditions
as credit terms and practices and the client base has not changed significantly. Receivables are considered past due if full payment is
not received by the contractual due date, which is typically 30 days from the invoice date. Past due accounts are generally written off
against the allowance for credit losses only after all collection attempts have been exhausted. The allowance for credit losses was zero
 0 as of December 31, 2024 and 2023.

 There was one customer who represented 100 % of total accounts receivable
as of December 31, 2024.

 F- 10

 Property and Equipment

 Property and equipment is stated at the Company's original cost or
fair value for acquired property and equipment net of accumulated depreciation. Depreciation of property and equipment is computed using
the straight-line method over the estimated useful lives of the respective assets, which are generally as follows: 3 years for office
equipment, 3 to 5 years for lab equipment, 7 years for furniture and 3 years for software. Leasehold improvements are amortized over the
lesser of remaining life of the lease or. Leasehold improvements are amortized over the lesser of remaining life of the lease or useful
life of the asset, using the straight-line method. The cost of normal maintenance and repairs is charged to operating expenses as incurred.
Material expenditures that increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the
asset. The cost of assets sold, or otherwise disposed of, and the related accumulated depreciation is relieved from the property accounts,
and any gains or losses are recognized in income from continued operations.

 Intangible Assets

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

 Fair Value of Financial Instruments

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

 Revenue Recognition and Contract Liability

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

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

 1.
 Identify the contract with a customer.

 2.
 Identify the performance obligations in the contract.

 3.
 Determine the transaction price for the contract.

 4.
 Allocate the transaction price to the performance obligations.

 5.
 Recognize revenue as performance obligations are satisfied.

 The Company's primary revenue stream includes technology license
and material supply agreements.

 F- 11

 Revenue Recognition and Contract Liability (Continued)

 Technology License and Material Supply Agreements

 The Company enters into technology license and material
supply agreements, under which it grants customers a non-exclusive, royalty-bearing license to use its patented electro-optic polymer
technology (the "Licensed Product"). The Company also supplies proprietary polymers to licensees for use in their manufacturing
of photonic devices.

 The Company assesses whether the license and the
supply of proprietary polymers represent distinct performance obligations. Based on this assessment, the Company has determined that the
license and material supply are not distinct for financial reporting purposes because they are highly interdependent. Accordingly, the
Company accounts for these as a single performance obligation.

 Revenue under these agreements is recognized as follows:

 Upfront License Fees – Nonrefundable upfront
license fees are recorded as contract liability and recognized on a pro-rata basis over the contract term.

 Minimum Annual Royalties – Fixed royalty payments
required under the contract are also recognized on a pro-rata basis over the contract term.

 Variable Royalties – Royalties exceeding the
minimum annual amount are recognized when earned, typically when the licensee's sales exceed the minimum threshold.

 Milestone Payments – Recognized only when the
contractual milestone is achieved, such as when the licensee sells a specified number of units of the Licensed Product.

 Contract Costs

 The Company capitalizes incremental costs to obtain
contracts if they are expected to be recoverable, in accordance with ASC 340-40, Other Assets and Deferred Costs – Contracts with
Customers. These capitalized costs are amortized over the expected contract term in a manner consistent with the related revenue recognition.

 Contract Liability

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

 Cost of Sales

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

 F- 12

 Income Taxes

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

 Stock-based Payments

 The Company
accounts for stock-based compensation under the provisions of FASB ASC 718, "Compensation - Stock Compensation", which
requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated
fair values on the grant date. The fair value of restricted stock awards is estimated by the market price of the Company's common
stock at the date of grant. Restricted stock awards are being amortized to expense over the shorter of the requisite service period or
the actual vesting period. The Company estimates the fair value of option and warrant awards on the date of grant using the Black-Scholes
model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the shorter of the requisite
service period or the actual vesting period, using the straight-line method. In June 2018, the FASB issued Accounting Standard Update
("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 2024 and 2023, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the
amounts reported for basic and dilutive loss per share were the same.

 Leases

 The Company is a lessee in operating
leases primarily incurred to facilitate manufacturing, research and development, and selling, general and administrative activities. At
contract inception, the Company determines if an arrangement is or contains a lease, and if so, recognizes a right-of-use asset and lease
liability at the lease commencement date. For operating leases, the lease liability is measured at the present value of the unpaid lease
payments at the lease commencement date, whereas for finance leases, the lease liability is initially measured at the present value of
the unpaid lease payments and subsequently measured at amortized cost using the interest method. Operating lease right-of-use assets are
included in other assets on the Balance Sheets. The short-term portion of operating lease liabilities is included in other current liabilities
on the Balance Sheets and the long-term portion is included in long term liabilities on the Balance Sheets. As of December 31, 2024, the
Company had no leases that qualified as financing arrangements.

 F- 13

 Leases (Continued)

 Key estimates and judgments
include how the Company determines the discount rate used to discount the unpaid lease payments to present value and the lease term. The
Company monitors for events or changes in circumstances that could potentially require recognizing an impairment loss.

 The Company elected a short-term
lease exemption practical expedient under ASU 2026-02, "Leases" (Topic 842), which allows the Company to not recognize leases
with the total lease term of 12 months or less on the balance sheet.

 Impairment of Long Lived and Finite-Lived Intangible Assets

 Long lived assets, such as property,
equipment, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset group may not be recoverable, such as a significant decrease in market price of an asset group, a
significant adverse change in legal factors or business climate that could affect the value of an asset group, or a continuous deterioration
of the Company's financial condition. Recoverability of asset groups to be held and used is measured by comparing the undiscounted
future cash flows expected to be generated by the asset group to the carrying amount of the asset group. If the carrying amount of the
asset group exceeds its estimated undiscounted future cash flows, impairment is recognized to the extent that the carrying value exceeds
its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values,
and third-party independent appraisals, as considered necessary.

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

 Comprehensive
Loss

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

 Recently Adopted Accounting Pronouncements

 In November 2023, the FASB issued ASU 2023-07, Segment Reporting
(Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose significant segment expenses
and other segment items on an interim and annual basis and provide in interim periods all disclosures about a reportable segment's profit
or loss and assets that are currently required annually. The ASU does not change how a public entity identifies its operating segments,
aggregates them, or applies the quantitative threshold to determine its reportable segments. The new disclosure requirements are also
applicable to entities that account and report as a single operating segment entity. ASU 2023-07 is effective for fiscal years beginning
after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted the guidance
for the annual reporting period ended December 31, 2024. There was no impact on the Company's reportable segments identified and
additional required disclosures have been included in Note 14 - Segment Reporting.

 Recently Issued Accounting Pronouncements Not Yet
Adopted

 ASU 2023-09 – Income Taxes
(Topic 740) requires disclosures related to the rate reconciliation and income taxes paid disclosures improve the transparency of income
tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income
taxes paid disaggregated by jurisdiction. The other amendments in this Update improve the effectiveness and comparability of disclosures
by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange
Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense,
and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in
this Update are effective for annual periods beginning after December 15, 2024. The Company does not expect this ASU to have material
impact on its disclosures in the year of adoption.

 F- 14

 Recently Issued Accounting Pronouncements Not
Yet Adopted (Continued)

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

 NOTE 2 – MANAGEMENT'S PLANS

 The Company's future expenditures and capital
requirements will depend on numerous factors, including: the progress of our research and development efforts; the rate at which the
Company can, directly or through arrangements with original equipment manufacturers, introduce and sell its polymer materials technology;
the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; market acceptance
of the Company's products and competing technological developments; and the Company's ability to establish cooperative development,
joint venture and licensing arrangements. The Company expects that it will incur approximately $ 1,727,000 of
expenditures per month over the next 12 months. The Company's current cash position enables it to finance its operations through
April 2026. On March 17, 2025, the Company entered into a purchase agreement with an institutional investor to sell up to $ 30,000,000
 of common stock over a 36-month period. As of the date of this filing, $ 30,000,000
 remains available to the Company per the agreement. On February 28, 2023, the Company entered into a purchase agreement
with an institutional investor to sell up to $ 30,000,000
 of common stock over a 36-month period (described in Note 10). Pursuant to the purchase agreement, the Company received $ 1,486,983
 during the period from January 1 through March 18, 2025 and the remaining available amount of $ 0
 is available to the Company per the agreement. On December 9, 2022, the Company entered into a sales agreement with an investment
banking company whereby the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 35,000,000
 from time to time through or to the investment banking company, as sales agent or principal (described in Note 10). Pursuant to
the sales agreement, the Company received $ 116,435
 during the period from January 1 through March 18, 2025 and the remaining available amount of $ 31,482,032
 is available to the Company per the agreement. The Company's first commercial agreement occurred in May 2023 from a material supply
and license agreement that incorporates the Company's patented electro-optic polymer materials for use in manufacturing photonic devices
(described in Note 3). For the year ended December 31, 2024, the Company recognized $ 81,855
 in revenue related to this agreement. The Company's cash requirements are expected to increase at a rate consistent with
the Company's path to revenue as it expands its activities and operations with the objective of increasing its revenue stream from
commercialization of its electro-optic polymer technology. The Company currently has no debt to service.

 NOTE 3 – REVENUE

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

 F- 15

 NOTE 3 – REVENUE (CONTINUED)

 Additional future revenue will be
generated from royalties from the licensee's sale of Licensed Product that exceed the minimum royalty payments and milestone
license fees.

 During 2024, the Company also performed device processing
work for a customer.

 Timing of Revenue Recognition and Contract Balances

 Revenues related
to the initial license fee and a minimum annual royalty are recognized over time commencing with the License Agreement in May 2023. An
up-front license fee in the amount of $ 50,000 was paid during the period ended December 31, 2023. $ 23,208 and $ 39,875 of this amount is
recorded as a contract liability in current liabilities on the Company's balance sheets as of December 31, 2024 and December 31,
2023, respectively. For the years ended December 31, 2024 and December 31, 2023, the Company recognized
$ 81,855 and $ 40,502 in revenue related to this agreement.

 In March 2024, the Company completed device processing
work on the devices supplied by a customer. Revenue for this contract was recognized at the time of shipment of the devices back to the
customer and amounted to $ 13,750 for the year ended December 31, 2024.

 Contract balances
are as follows:

 Schedule of contract balances

 December
 31, 2024

 December
 31, 2023

 Accounts receivable, net

 $
 45,565

 $
 30,376

 Short-term contract assets

 $
 —

 $
 —

 Long-term contract assets

 $
 —

 $
 —

 Short-term contract liability

 $
 23,208

 $
 39,875

 Significant changes in the contract balances
for the years ended December 31, 2024 are as follows:

 Schedule of significant changes in the contract balances

 Year Ended December 31, 2024

 Assets

 Liabilities

 Balance at December 31, 2023

 $
 30,376

 $
 ( 39,875
)

 Revenue recognized that was previously included in contract liability

 —

 16,667

 Decreases/increases due to cash received

 ( 63,884
)

 —

 Billed receivables recorded

 109,449

 —

 Transferred to receivables from unbilled receivables

 ( 95,564
)

 —

 Unbilled receivables recorded

 65,188

 —

 Balance at December 31, 2024

 $
 45,565

 $
 ( 23,208
)

 A rollforward of contract balances is
not disclosed for the year ended December 31, 2023 since there were no contracts as of December 31, 2022.

 Assets Recognized for the Costs to
Obtain a Contract

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

 F- 16

 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

 Insurance

 $
 154,945

 $
 237,791

 License

 151,451

 241,936

 Prototype devices

 44,134

 161,267

 Rent

 36,525

 36,525

 Other

 9,415

 53,373

 Investor relations

 5,271

 6,313

 Materials fabrication

 —

 475,936

 Deposit for equipment

 —

 20,000

 Lease incentive receivable

 —

 4,480

 Prepaid expenses and other current assets

 $
 401,741

 $
 1,237,621

 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 ended December 31, 2022 for interest income. The loan and interest were repaid
in February and March 2023. The Company recorded $ 11,125 of interest income for the period ended December 31, 2023 and used the average
exchange rate for the conversion of the EUR denominated interest income for the period.

 F- 17

 NOTE 6 – PROPERTY AND EQUIPMENT

 Property and equipment consist of the following:

 Schedule of property and equipment

 Office equipment

 $
 155,511

 $
 146,196

 Lab equipment

 10,953,487

 8,937,847

 Furniture

 54,493

 74,119

 Leasehold improvements

 432,400

 396,111

 Software

 133,377

 111,077

 11,729,268

 9,665,350

 Less: Accumulated depreciation

 6,037,723

 4,674,560

 $
 5,691,545

 $
 4,990,790

 Depreciation expense for the years ended December
31, 2024 and 2023 was $ 1,563,477 and $ 1,035,620, respectively. During the year ended December 31, 2024, the Company retired property and
equipment with a cost of $ 203,480 and accumulated depreciation of $ 200,314 for a loss of $ 3,166. During the year ended December 31, 2023,
the Company disposed of equipment for proceeds of $ 590, trade-in credit of $ 216,090 and a gain of $ 215,509.

 NOTE 7 – INTANGIBLE ASSETS

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

 $
 2,127,076

 $
 1,913,751

 Less: Accumulated amortization

 771,631

 659,250

 Intangible assets - net

 $
 1,355,445

 $
 1,254,501

 Amortization expense for the years ended
December 31, 2024 and 2023 was $ 119,283
and $ 83,521,
respectively. During the year ended December 31, 2024, the Company retired certain expired patent applications and patents with a
cost of $ 217,176 and
accumulated amortization of $ 6,902
for a loss of $ 210,274
included in the statements of comprehensive loss in the (Loss) gain on disposal of property and equipment and intangible assets.
There were no
patent costs written off for the year ended December 31, 2023.

 F- 18

 NOTE 8 – LEASES

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

 On November 22, 2022, the Company entered into an
amendment to the Lease ("the Amended Lease") to lease an additional approximately 9,684 square feet of adjacent office and
warehouse space. The term of the Amended Lease is one hundred twenty ( 128) months, with an effective date of June 1, 2023. 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 and $ 2,984,058, respectively. As of December 30,
2024, the operating lease right-of-use asset and operating lease liability amounted to $ 2,645,723 and $ 2,766,971, respectively.

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

 Undiscounted future minimum lease payments under
the Amended Lease as of December 31, 2024, by year and in aggregate, including the extended term, are as follows:

 Schedule of future lease payments of operating leases

 YEARS ENDED

 DECEMBER 31,

 AMOUNT

 2025

 387,666

 2026

 399,199

 2027

 411,174

 2028

 423,612

 2029

 436,300

 Thereafter

 1,921,271

 3,979,222

 Less discounted interest

 ( 1,212,251
)

 TOTAL

 $
 2,766,971

 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.

 The following table presents weighted average assumptions
used to compute the Company's right-of-use assets and lease liabilities:

 Schedule of operating lease right-of-use assets

 Weighted average remaining lease term (in years)

 9.08

 Weighted average discount rate

 8.25
 %

 As of December 31, 2024, current operating leases
had remaining terms between 13 months and 9 years, with some leases having options to extend the lease terms.

 Current lease agreements do not contain any residual
value guarantees or material restrictive covenants. As of December 31, 2024, the Company did not have any finance leases.

 Operating and short-term lease costs totaling $ 513,428
and $ 102,077 are included in research and development and general and administrative expenses for the year ended December 31, 2024. Operating
and short-term lease costs totaling $ 334,051 and $ 79,083 are included in research and development and general and administrative expenses
for the year ended December 31, 2023.

 F- 19

 NOTE 9 – INCOME TAXES

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

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

 Schedule of income tax benefit provision

 2024

 2023

 Current

 $
 —

 $
 —

 Deferred

 ( 4,220,000
)

 ( 6,526,000
)

 Change in valuation allowance

 4,220,000

 6,526,000

 Total

 $
 —

 $
 —

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

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

 2024

 2023

 Amount

 %

 Amount

 %

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

 $
 ( 4,732,000
)

 ( 21
)

 $
 ( 4,418,000
)

 ( 21
)

 State tax benefit, net of federal tax effect

 ( 763,000
)

 ( 3
)

 ( 957,000
)

 ( 5
)

 Federal deduction net of tax

 —

 —

 44,000

 —

 Non-deductible share-based compensation

 —

 —

 1,653,000

 Exercised share based compensation

 ( 280,000
)

 ( 1
)

 ( 2,850,000
)

 ( 13
)

 Other

 1,555,000

 2,000

 —

 Change in valuation allowance

 4,220,000

 6,526,000

 $
 —

 —

 $
 —

 —

 The components of deferred tax assets as of December 31, 2024 and 2023
are as follows:

 Schedule of components of deferred tax assets

 2024

 2023

 Deferred tax asset for NOL carryforwards

 $
 29,737,000

 $
 29,018,000

 Share-based compensation

 4,901,000

 3,889,000

 Section 174 research and development expenses

 4,932,000

 —

 Section 481(a) adjustment

 ( 2,264,000
)

 —

 Other

 ( 281,000
)

 ( 102,000
)

 Valuation allowance

 ( 37,025,000
)

 ( 32,805,000
)

 Total

 $
 —

 $
 —

 The valuation allowance for deferred tax assets as
of December 31, 2024 and 2023 was $ 37,025,000 and $ 32,805,000, respectively. The change in the total valuation for the year ended December
31, 2024 was an increase of $ 4,220,000, and for the year ended December 31, 2023 was an increase of $ 6,526,000. In assessing the realization
of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will
not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the
periods in which the net operating losses and temporary differences become deductible. Management considered projected future taxable
income and tax planning strategies in making this assessment. The value of the deferred tax assets was offset by a valuation allowance,
due to the current uncertainty of the future realization of the deferred tax assets.

 F- 20

 NOTE 9 – INCOME TAXES (CONTINUED)

 As of December 31, 2024, the Company had net operating
loss carry forwards of approximately $ 121,349,000, comprised of net operating losses in the amount of approximately $ 36,485,000 recorded
in tax years beginning prior to January 1, 2018 expiring through the year ending December 31, 2038 and net operating losses recorded in
tax years beginning January 1, 2018 and after in the amount of approximately $ 84,864,000 which are allowed for an indefinite carryforward
period but may be subject to limitations. This amount can be used to offset future taxable income of the Company.

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

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

 The Company's policy is to record interest and
penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2024,
the Company had no unrecognized tax benefits and no charge during 2024, and accordingly, the Company did no t recognize any interest or
penalties during 2024 related to unrecognized tax benefits. There is no accrual for uncertain tax positions as of December 31, 2024.

 The Company 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 ended on December 31, 2021 and
thereafter are subject to examination by the relevant taxing authorities.

 NOTE 10 – STOCKHOLDERS' EQUITY

 Preferred
Stock

 Pursuant to the Company's Articles of
Incorporation, the Company's board of directors is empowered, without stockholder approval, to issue series of preferred stock
with any designations, rights and preferences as they may from time to time determine. The rights and preferences of this preferred stock
may be superior to the rights and preferences of the Company's common stock; consequently, preferred stock, if issued could have
dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the common
stock. Additionally, preferred stock, if issued, could be utilized, under special circumstances, as a method of discouraging, delaying
or preventing a change in control of the Company's business or a takeover from a third party.

 Common Stock

 On July 2, 2021, the Company filed a
$100,000,000 universal shelf registration statement with the U.S. Securities and Exchange Commission which became effective on July 9,
2021 and expired on July 8, 2024.

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

 F- 21

 NOTE 10 – STOCKHOLDERS' EQUITY (CONTINUED)

 Common Stock (Continued)

 On October 4, 2021, the Company entered
into a purchase agreement with an institutional investor to sell up to $ 33,000,000 of common stock over a 36-month period. 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 ended December 31, 2023, pursuant to the purchase agreement, the institutional investor
purchased 779,945 shares of common stock for proceeds of $ 3,847,307 and the Company issued 7,069 shares of common stock as additional
commitment fee, valued at $ 38,161 fair value. All of the registered shares under the purchase agreement have been issued as of December
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, 2024, the institutional investor purchased 6,720,455
 shares of common stock for proceeds of $ 28,513,017
 and the Company issued 96,735
 shares of common stock as additional commitment fee, valued at $ 510,236
 fair value, leaving 5,046
 in reserve for additional commitment fees. During the year ended December 31, 2024, pursuant to the purchase agreement, the institutional
investor purchased 3,850,000
 shares of common stock for proceeds of $ 12,366,965,
and the Company issued 41,956
 shares of common stock as additional commitment fee, valued $ 154,210
 fair value. 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 the period from January 1, 2025 through March 18, 2025, pursuant to the purchase agreement, the institutional
investor purchased 1,035,881
 shares of common stock for proceeds of $ 1,486,983
 and the Company issued 5,046
 shares of common stock as additional commitment fee, valued at $ 8,029
 fair value, leaving zero 0
 in reserve for additional commitment fees.

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

 F- 22

 NOTE 11 – STOCK BASED COMPENSATION

 Common Stock (Continued)

 During the year ended December 31, 2024, pursuant
to the sales agreement, the investment banking company sold 551,501
 shares of the Company's common stock for proceeds of $ 1,779,976
 after a payment of the commission in the amount of $ 55,054
 to the investment banking company. During the year ended December 31, 2023, pursuant to the sales agreement, the investment banking
company sold 202,115
 shares of the Company's common stock for proceeds of $ 1,515,878
 after a payment of the commission in the amount of $ 46,884
 to the investment banking company. During the period from January 1, 2025 through March 18, 2025, pursuant to the sales agreement,
the investment banking company sold 50,000
 shares of the Company's common stock for proceeds of $ 116,435
 after a payment of the commission in the amount of $ 3,601
 to the investment banking company.

 Common Stock Options and Warrants

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

 Effective June 24, 2016, the 2007 Plan was terminated.
As of December 31, 2024, options to purchase 2,053,000 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, 2024, options to purchase 7,446,859 shares of common
stock have been issued and are outstanding and 356,061 restricted shares of common stock have been granted. As of December 31, 2024, 3,480,845
shares of common stock remain available for grants under the 2016 Plan.

 F- 23

 NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

 Common Stock Options and Warrants (Continued)

 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.

 The Company uses the Black-Scholes option pricing
model to calculate the grant-date fair value of an award, with the following assumptions for 2024: no dividend yield, expected volatility,
based on the Company's historical volatility, 76.3 % to 78.5 %, risk-free interest rate between 3.73 % to 4.47 % and expected option
life of 10 years, which is based on the legal contractual life of the options.

 The Black-Scholes option pricing model assumptions
for 2023 are as follows: no dividend yield, expected volatility, based on the Company's historical volatility, 73.7 % to 77.2 %, risk-free
interest rate between 3.37 % to 4.82 % and expected option life of 10 years.

 As of December 31, 2024, there was $ 2,755,783 of unrecognized
compensation expense related to non-vested market-based share awards that is expected to be recognized through December 2027. As of December
31, 2023, there was $ 3,295,335 of unrecognized compensation expense related to non-vested market-based share awards.

 Share-based compensation was recognized as follows:

 Schedule of share-based compensation

 2024

 2023

 2007 Employee Stock Option Plan

 $
 —

 $
 —

 2016 Equity Incentive Plan

 4,440,003

 6,459,387

 2016 Equity Incentive Plan restricted stock awards

 446,628

 262,697

 Warrants

 —

 —

 Total share-based compensation

 $
 4,886,631

 $
 6,722,084

 F- 24

 NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

 Common Stock Options and Warrants (Continued)

 The following tables summarize all stock option
and warrant activity of the Company during the years ended December 31, 2024 and 2023:

 Schedule of stock option and warrant activity

 Non-Qualified
 Stock Options and Warrants Outstanding and Exercisable

 Number
 of

 Exercise

 Weighted
 Average

 Shares

 Price

 Exercise
 Price

 Outstanding, December 31, 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

 Granted

 1,628,000

 $ 1.96 - $ 5.00

 $
 4.05

 Forfeited

 ( 43,948
)

 $ 4.28 - $ 7.67

 $
 5.70

 Exercised

 ( 494,000
)

 $ 0.57 - $ 1.15

 $
 0.68

 Outstanding, December 31, 2024

 9,899,859

 $
 3.07

 Exercisable, December 31, 2024

 8,848,908

 $
 3.00

 The aggregate intrinsic value of options and warrants outstanding and exercisable
as of December 31, 2024 was $ 6,418,443 and $ 6,400,033, respectively. The aggregate intrinsic value is calculated as the difference between
the exercise price of the underlying options and warrants and the closing stock price of $ 2.10 for the Company's common stock on
December 31, 2024. During the year ending December 31, 2024, 375,000 options with the aggregate intrinsic value of $ 1,399,958 were exercised
for proceeds of $ 246,100. During the year ending December 31, 2024, 119,000 warrants with the aggregate intrinsic value of $ 171,550 were
exercised for proceeds of $ 91,250. During the year ending December 31, 2023, 914,408 options with the aggregate intrinsic value of $ 4,698,996
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.

 F- 25

 NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

 Common Stock Options and Warrants (Continued)

 Schedule of non-qualified stock options and warrants outstanding

 Non-Qualified
 Stock Options and Warrants Outstanding

 Range of
 Exercise Prices

 Number Outstanding
 Currently Exercisable
 at December 31, 2024

 Weighted Average
 Remaining
 Contractual Life

 Weighted Average
 Exercise Price of Options and
 Warrants Currently Exercisable

 8,848,908

 5.3 Years

 $
 3.00

 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 Statement of Comprehensive Loss. Such RSAs were granted under the 2016 Equity Incentive Plan ("2016 Plan")
and vest in total 8,338 shares on March 16, 2023, with the remaining vesting in 33 equal monthly installments in total of 2,766 shares
beginning April 1, 2023.

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

 On June 18, 2024, the Compensation Committee of the
Board of Directors approved grants totaling 92,475 Restricted Stock Awards to the Company's five outside directors. Each RSA had
a grant date fair value of $ 3.33 which shall be amortized on a straight-line basis over the vesting period into director's compensation
expenses within the Statement of Comprehensive Loss. Such RSAs were granted under the 2016 Equity Incentive Plan ("2016 Plan")
and vested in total 15,455 shares on June 18, 2024, with the remaining vesting in 10 equal quarterly installments in total of 7,702 shares
beginning July 1, 2024.

 On August 1, 2024, the Compensation Committee of the
Board of Directors approved a grant totaling 12,924 Restricted Stock Awards to the Company's outside director. Each RSA had a grant
date fair value of $ 3.16 which shall be amortized on a straight-line basis over the vesting period into director's compensation
expenses within the Statement of Comprehensive Loss. Such RSA was granted under the 2016 Equity Incentive Plan ("2016 Plan")
and vests in 9 equal quarterly installments of 1,436 shares beginning September 1, 2024.

 On September 4, 2024, the Compensation Committee of
the Board of Directors approved a grant totaling 11,488 Restricted Stock Awards to the Company's outside director. Each RSA had
a grant date fair value of $ 2.68 which shall be amortized on a straight-line basis over the vesting period into director's compensation
expenses within the Statement of Comprehensive Loss. Such RSA was granted under the 2016 Equity Incentive Plan
("2016 Plan") and vests in 8 equal quarterly installments of 1,436 shares beginning October 1, 2024.

 F- 26

 NOTE 11 – STOCK BASED COMPENSATION (CONTINUED)

 Restricted
Stock Awards (Continued)

 On December 10, 2024, the Compensation Committee of
the Board of Directors approved a grant totaling 110,000 Restricted Stock Awards to the two Company's executives and an outside
director for consulting services. Each RSA had a grant date fair value of $ 2.65 which shall be amortized on a straight-line basis over
the vesting period into stock-based compensation expenses within the Statement of Comprehensive Loss. The RSAs were granted under the
2016 Equity Incentive Plan ("2016 Plan") and cliff vest on March 10, 2025 for an outside director and on June 10, 2025 for
the executives.

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

 The fair value of restricted stock awards is estimated
by the market price of the Company's common stock at the date of grant. Restricted stock activity during the year ending December
31, 2024 and 2023 are as follows:

 Schedule of fair value of restricted stock awards

 Restricted Stock Awards

 Year Ended

 Number of Shares

 Weighted Average Grant Date Fair Value per Share

 Number of Shares

 Weighted Average Grant Date Fair Value per Share

 Non-vested, beginning of period

 78,452

 $
 5.71

 13,816

 $
 9.65

 Granted

 226,887

 2.96

 105,854

 5.31

 Vested

 ( 77,847
)

 4.79

 ( 41,218
)

 6.00

 Cancelled and forfeited

 —

 —

 —

 —

 Non-vested, end of period

 227,492

 $
 3.28

 78,452

 $
 5.71

 Restricted stock awards are being amortized to expense
over the vesting period. As of December 31, 2024 and 2023, the unamortized value of the restricted stock awards was $ 656,735 and $ 432,292,
respectively.

 NOTE 12 – RELATED PARTY

 During the years ended December 31, 2024, and 2023,
the Company engaged in transactions with related parties, including consultants, directors, and entities affiliated with members of the
Board of Directors. These transactions primarily relate to legal services, consulting fees, director compensation, accounting services,
and expense reimbursements.

 Related
Party Transactions for the Year Ended December 31, 2024

 •
 The Company incurred $ 90,360
 in legal fees with a related party law firm, of which $ 90,360
 remained accrued as of December 31, 2024.

 •
 The Company incurred $ 207,269 in accounting and
IT service fees and expense reimbursements to related parties, with $ 8,326 accrued as of December
31, 2024.

 •
 The Company incurred $ 251,194 in fees and travel
expenses to directors, with $ 72,748 accrued as of December 31, 2024.

 •
 The Company incurred $ 438,716 in consulting fees
and travel reimbursements to advisory board members, with $ 29,345 accrued as of December 31,
2024.

 F- 27

 NOTE 12 – RELATED PARTY (CONTINUED)

 Related
Party Transactions for the Year Ended December 31, 2023:

 •
 The
Company incurred $ 175,737 in legal fees with a related party law firm, of which $ 115,160 remained accrued as of December 31, 2023.

 •
 The Company incurred
$ 382,910 in accounting and IT service fees and expense reimbursements to related parties, with $ 102,351 accrued as of December 31, 2023.

 •
 The Company incurred $ 207,563 in fees and travel expenses to directors, with $ 62,226 accrued
as of December 31, 2023.

 •
 The Company incurred $ 390,483 in consulting fees and travel reimbursements to advisory board
members, with $ 33,746 accrued as of December 31, 2023.

 NOTE 13 – RETIREMENT PLAN

 The Company established a 401(k)
retirement plan covering all eligible employees beginning November 15, 2013. The plan offers two types of elected deferrals: pre-tax
deferrals and Roth deferrals. The Company matches 100% of each participant contribution, up to 4% for all eligible employees. Matching
contributions vest immediately. Participants are entitled to receive distributions of all vested amounts beginning at age 59 1/2.
Matching contributions to all eligible non-executive participants charged to expense were $ 134,766
 and $ 72,520 for the years
ending December 31, 2024 and 2023, respectively. The plan is subject to the annual IRS elective deferral limit of $ 23,000
 per employee for 2024 and $7,500
catch-up for 50 and over.

 NOTE 14 – SEGMENT REPORTING

 The Company operates as a single reportable segment, as
the Chief Operating Decision Maker ("CODM"), the Chief Executive Officer ("CEO"), evaluates the business on a consolidated
basis and does not receive discrete financial information for multiple business units.

 Measure of Segment Profit or Loss

 The CODM assesses the Company's financial performance based
on operating loss, which aligns with the amount reported in the statements of comprehensive loss. The following table presents a
reconciliation of segment operating loss to net loss:

 Schedule of reconciliation of segment
 operating loss

 2024

 2023

 NET SALES

 $
 95,605

 $
 40,502

 COST OF SALES

 7,395

 2,513

 GROSS PROFIT

 88,210

 37,989

 OPERATING EXPENSES

 Research and development

 16,806,548

 15,903,689

 General and administrative

 6,370,805

 5,359,565

 23,177,353

 21,263,254

 SEGMENT OPERATING LOSS

 ( 23,089,143
)

 ( 21,225,265
)

 OTHER INCOME (EXPENSE)

 Interest income

 926,854

 657,546

 Commitment fee

 ( 154,210
)

 ( 673,578
)

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

 ( 213,440
)

 215,509

 Other (expense)

 ( 5,102
)

 ( 12,244
)

 NET LOSS

 $
)

 $
)

 F- 28

 Significant Segment Expenses

 The Company considers the following as significant expenses
in evaluating its segment performance:

 •
 Research and Development: includes costs related to personnel, laboratory and wafer
fabrication materials and supplies, prototype device development and wafer fabrication expenses, and third-party consulting costs aimed
at developing high-performance electro-optic polymer materials.

 •
 General and Administrative: includes personnel costs, professional fees, and other overhead
expenses.

 •
 Cost of Sales: represents labor costs, material costs and manufacturing overhead costs
associated with the production of materials transferred to the customer under the technology license and material supply agreement at
the Company's facility.

 Since the Company has only one reportable segment, no additional
segment disclosures are required beyond entity-wide disclosures presented below.

 Entity-Wide Disclosures

 •
 Geographic Revenue Information: For the year ended December 31,
 2024, 14 %
 of the Company's net sales were generated in the United States and 86 %
 internationally. For the year ended December 31, 2023, 100 % of the Company's
net sales were generated internationally.

 •
 Major Customers: The Company has one customer that accounted for 10 % or more of total
revenue.

 Chief Operating Decision Maker (CODM)

 The CODM of the Company is the Chief Executive Officer (CEO),
who is responsible for evaluating financial results and making resource allocation decisions.

 NOTE
15 – SUBSEQUENT EVENTS

 On March 17, 2025, the Company entered into a purchase
agreement with an institutional investor to sell up to $ 30,000,000
 of common stock over a 36-month period. Concurrently with entering into the purchase agreement, the Company also entered
into a registration rights agreement which provides the institutional investor with certain registration rights related to the shares
issued under the purchase agreement.