Form 10Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-Q/A

(Amendment No. 1)

____________________

(Mark One)

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

For the quarterly period ended June 30, 2025

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

For the transition period from _____________to _____________

Commission File Number 001-40766

Lightwave Logic, Inc.

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of

incorporation or organization)

82-0497368

(I.R.S. Employer Identification No.)

369 Inverness Parkway, Suite 350

Englewood, CO

(Address of principal executive offices)

80112

(Zip Code)

(720) 340-4949

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.001 par value per share	LWLG	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares of the registrant’s common stock outstanding as of August 14, 2025 was 129,439,986.

TABLE OF CONTENTS

			Page

Part I	Financial Information		1

	Item 1	Financial Statements	1

	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

	Item 4	Controls and Procedures	35

Part II	Other Information		36

	Item 1A	Risk Factors	36

	Item 6	Exhibits	37

		Signatures	38

Explanatory Note

This Amendment No.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the “Form 10-Q/A”) is being filed by Lightwave Logic, Inc. (the “Company”) to correct the value of the net shares issued in non-cash option exercises and to update related disclosures within the Notes to the Financial Statements, Management’s Discussion and Analysis and Risk Factors. For the quarter ended June 30, 2025, the correction decreased non-cash compensation expense by $705,499. This non-cash adjustment resulted in a corresponding decrease to additional paid-in capital and net loss. The Form 10-Q/A also reflects a correction to the accumulated deficit and additional paid-in capital balances in the Statements of Stockholders’ Equity stemming from Company’s determination that the value of the net shares issued in non-cash option exercises was also incorrectly expensed in the financial statements for the year ended December 31, 2021. The correction resulted in adjustments of $3,407,443 to the accumulated deficit and additional paid-in capital balances in the Statements of Stockholders’ Equity in this Form 10-Q/A.

Except as described above, no other changes have been made to the Form 10-Q as originally filed on August 14, 2025. This Amendment does not reflect events occurring after the date of the original filing and does not modify or update any other disclosures contained therein.

Forward-Looking Statements

This report on Form 10-Q contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “continuing,” “ongoing,” “strategy,” “future,” “likely,” “may,” “should,” “could,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding expected operating results, such as anticipated revenue; anticipated levels of capital expenditures for our current fiscal year; our belief that we have, or will have, sufficient liquidity to fund our business operations during the next 12 months; strategy for gaining customers, growth, product development, market position, financial results and reserves.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: inability to generate significant revenue or to manage growth; lack of available funding; lack of a market for or market acceptance of our products; competition from third parties; general economic and business conditions; intellectual property rights of third parties; changes in the price of our stock and dilution; regulatory constraints and potential legal liability; ability to maintain effective internal controls; security breaches, cybersecurity attacks and other significant disruptions in our information technology systems; changes in technology and methods of marketing; delays in completing various engineering and manufacturing programs; changes in customer order patterns and qualification of new customers; changes in product mix; success in technological advances and delivering technological innovations; shortages in components; production delays due to performance quality issues with outsourced components; other risks to which our Company is subject; and other factors beyond the Company’s control.

The ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. We discuss our known material risks under Part I Item 1.A “Risk Factors” contained in our Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as amended, and Part II, Item 1.A “Risk Factors” in this report on Form 10-Q. Many factors could cause our actual results to differ materially from the forward-looking statements. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

PART I – FINANCIAL INFORMATION

Item 1: Financial Statements

LIGHTWAVE LOGIC, INC.

FINANCIAL STATEMENTS

JUNE 30, 2025

(UNAUDITED)

CONTENTS

	PAGE
BALANCE SHEETS	2
STATEMENTS OF COMPREHENSIVE LOSS	3
STATEMENTS OF STOCKHOLDERS’ EQUITY	4-5
STATEMENTS OF CASH FLOWS	6
NOTES TO FINANCIAL STATEMENTS	7- 25

LIGHTWAVE LOGIC, INC.

BALANCE SHEETS

(Restated)


	June 30, 2025			December 31, 2024
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	22,106,946		$	27,667,964
Accounts Receivable		10,753			45,565
Prepaid expenses and other current assets		638,856			401,741
TOTAL CURRENT ASSETS		22,756,555			28,115,270

PROPERTY AND EQUIPMENT - net of accumulated depreciation of $6,902,263 and $6,037,723		5,724,559			5,691,545

OTHER ASSETS
Intangible assets - net of accumulated amortization of $825,040 and $771,631		1,410,368			1,355,445
Operating Lease - Right of Use - Building		2,544,785			2,645,723
TOTAL OTHER ASSETS		3,955,153			4,001,168

TOTAL ASSETS	$	32,436,267		$	37,807,983


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	320,543		$	515,955
Accrued bonuses and accrued expenses		434,222			877,165
Accounts payable and accrued expenses - related parties		147,420			200,779
Contract liability		14,875			23,208
Operating lease liability		181,248			168,289
TOTAL CURRENT LIABILITIES		1,098,308			1,785,396

LONG TERM LIABILITIES
Operating lease liability		2,503,789			2,598,682
TOTAL LONG TERM LIABILITIES		2,503,789			2,598,682

TOTAL LIABILITIES		3,602,097			4,384,078

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, 126,466,708 and 123,301,653 issued and outstanding at June 30, 2025 and December 31, 2024		126,467			123,302
Additional paid-in-capital		185,723,412			180,956,329
Deferred compensation		(353,061	)		(656,735	)
Accumulated deficit		(156,662,648	)		(146,998,991	)

TOTAL STOCKHOLDERS' EQUITY		28,834,170			33,423,905

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	32,436,267		$	37,807,983

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)


	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	June 30, 2025 (Restated)			June 30, 2024			June 30, 2025 (Restated)			June 30, 2024

NET SALES	$	25,605		$	19,355		$	48,522		$	49,772

COST AND EXPENSE
Cost of sales		3,463			—			5,491			5,175
Research and development		2,621,441			4,362,258			5,710,659			8,982,920
General and administrative		2,300,884			1,896,672			4,137,936			3,152,122
TOTAL COST AND EXPENSE		4,925,788			6,258,930			9,854,086			12,140,217

LOSS FROM OPERATIONS		(4,900,183	)		(6,239,575	)		(9,805,564	)		(12,090,445	)

OTHER INCOME (EXPENSE)
Interest income		168,253			251,730			356,101			505,066
Commitment fee		(235,801	)		(28,982	)		(243,830	)		(105,959	)
Gain (loss) on disposal of property and equipment		—			—			28,800			(3,166	)
Other income (expense)		1,098			(2,857	)		836			(5,091	)


NET LOSS	$	(4,966,633	)	$	(6,019,684	)	$	(9,663,657	)	$	(11,699,595	)

LOSS PER SHARE
Basic and diluted	$	(0.04	)	$	(0.05	)	$	(0.08	)	$	(0.10	)

WEIGHTED AVERAGE NUMBER OF SHARES
Basic and diluted ⁽¹⁾		125,271,407			120,179,570			124,605,324			119,552,430

⁽¹⁾

For the three and six months ended June 30, 2025, the Company excluded from the calculation of diluted loss per share 668,844 and 1,012,128, shares, respectively, potentially issuable for exercises of options and warrants under incentive compensation plans, as their effect, if included, would have been anti-dilutive due to the Company's net loss position. For the three and six months ended June 30, 2024, the Company excluded from the calculation of diluted loss per share 4,160,711 and 4,265,583 shares, respectively, potentially issuable for exercises of options and warrants under incentive compensation plans, as their effect, if included, would have been anti-dilutive due to the Company's net loss position.

The calculation of diluted loss per common share also excludes non-vested restricted stock units and earned performance stock units that are anti-dilutive based upon the terms of the awards. Such shares were 363,637 and 182,823 for the three and six months ended June 30, 2025, respectively, and zero 0 for the three and six months ended June 30, 2024.

See accompanying notes to these financial statements

LIGHTWAVE LOGIC, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(Restated)


	Three Months Ended June 30, 2025
	Number of Shares		Common Stock		Additional Paid-in Capital			Deferred Compensation			Accumulated Deficit			Total

BALANCE AT MARCH 31, 2025 (UNAUDITED)		124,654,522	$	124,655	$	183,577,533		$	(456,585	)	$	(151,696,015	)		31,549,588

Common stock issued to institutional investor		650,000		650		687,350			—			—			688,000
Common stock issued for commitment shares		256,340		256		235,545			—			—			235,801
Common stock sales at the market by investment banking company		318,411		318		390,495			—			—			390,813
Exercise of options		57,500		58		40,442			—			—			40,500
Cashless exercise of 1,300,000 options		417,206		417		(192,842	)		—			—			(192,425	)
Options issued for services		—		—		533,650			—			—			533,650
Performance stock units (PSUs) issued for services		—		—		384,925			—			—			384,925
Restricted stock units (RSUs) issued for services		—		—		11,113			—			—			11,113
Restricted stock awards issued for services, net of forfeitures and share settlement for taxes		112,729		113		55,201			(68,189	)		—			(12,875	)
Deferred compensation		—		—		—			171,713			—			171,713
Net loss for the three months ended June 30, 2025		—		—		—			—			(4,966,633	)		(4,966,633	)

BALANCE AT JUNE 30, 2025 (UNAUDITED)		126,466,708	$	126,467	$	185,723,412		$	(353,061	)	$	(156,662,648	)	$	28,834,170


	Six Months Ended June 30, 2025

	Number of Shares		Common Stock		Additional Paid-in Capital			Deferred Compensation			Accumulated Deficit			Total

BALANCE AT DECEMBER 31, 2024		123,301,653	$	123,302	$	180,956,329		$	(656,735	)	$	(146,998,991	)	$	33,423,905

Common stock issued to institutional investor		1,685,881		1,686		2,173,297			—			—			2,174,983
Common stock issued for commitment shares		261,386		261		243,569			—			—			243,830
Common stock sales at the market by investment banking company		368,411		368		506,880			—			—			507,248
Exercise of options		282,500		283		203,717			—			—			204,000
Cashless exercise of 1,350,000 options		434,148		434		(172,359	)		—			—			(171,925	)
Options issued for services		—		—		1,282,692			—			—			1,282,692
Options issued to settle accrued bonuses		—		—		48,068			—			—			48,068
Performance stock units (PSUs) issued for services		—		—		384,925			—			—			384,925
Restricted stock units (RSUs) issued for services		—		—		11,113			—			—			11,113
Restricted stock awards issued for services, net of forfeitures and share settlement for taxes		132,729		133		85,181			(98,189	)		—			(12,875	)
Deferred compensation		—		—		—			401,863			—			401,863
Net loss for the six months ended June 30, 2025		—		—		—			—			(9,663,657	)		(9,663,657	)

BALANCE AT JUNE 30, 2025 (UNAUDITED)		126,466,708	$	126,467	$	185,723,412		$	(353,061	)	$	(156,662,648	)	$	28,834,170

See accompanying notes to these financial statements

LIGHTWAVE LOGIC, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(Restated)


	Three Months Ended June 30, 2024

	Number of Shares		Common Stock		Additional Paid-in Capital		Deferred Compensation			Accumulated Deficit			Total

BALANCE AT MARCH 31, 2024 (UNAUDITED)		119,795,941		119,796		167,591,403		(368,094	)		(130,143,861	)		37,199,244

Common stock issued to institutional investor		700,000		700		2,342,550		—			—			2,343,250
Common stock issued for commitment shares		7,949		8		28,975		—			—			28,983
Common stock sales at the market by investment banking company		50,000		50		169,380		—			—			169,430
Exercise of options		60,000		60		50,340		—			—			50,400
Options issued for services		—		—		1,710,948		—			—			1,710,948
Restricted stock awards issued for services		92,475		93		307,849		(307,942	)		—			—
Deferred compensation		—		—		—		139,322			—			139,322
Net loss for the three months ended June 30, 2024		—		—		—		—			(6,019,684	)		(6,019,684	)

BALANCE AT JUNE 30, 2024 (UNAUDITED)		120,706,365	$	120,707	$	172,201,445	$	(536,714	)	$	(136,163,545	)	$	35,621,893


	Six Months Ended June 30, 2024

	Number of Shares		Common Stock		Additional Paid-in Capital		Deferred Compensation			Accumulated Deficit			Total

BALANCE AT DECEMBER 31, 2023		118,137,309	$	118,137	$	161,211,920	$	(432,293	)	$	(124,463,950	)	$	36,433,814

Common stock issued to institutional investor		1,950,000		1,950		7,493,650		—			—			7,495,600
Common stock issued for commitment shares		25,431		26		105,934		—			—			105,960
Common stock sales at the market by investment banking company		127,150		127		499,756		—			—			499,883
Exercise of options		355,000		355		230,645		—			—			231,000
Exercise of warrants		19,000		19		14,231		—			—			14,250
Options issued for services		—		—		2,337,460		—			—			2,337,460
Restricted stock awards issued for services		92,475		93		307,849		(307,942	)		—			—
Deferred compensation		—		—		—		203,521			—			203,521
Net loss for the six months ended June 30, 2024		—		—		—		—			(11,699,595	)		(11,699,595	)

BALANCE AT JUNE 30, 2024 (UNAUDITED)		120,706,365	$	120,707	$	172,201,445	$	(536,714	)	$	(136,163,545	)	$	35,621,893

See accompanying notes to these financial statements

LIGHTWAVE LOGIC, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended June 30, 2025 (Restated)			Six Months Ended June 30, 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(9,663,657	)	$	(11,699,595	)
Adjustments to reconcile net loss to net cash used in operating activities
Stock options issued for services		1,282,692			2,337,460
Amortization of deferred compensation		401,863			203,521
Performance stock units issued for services		384,925			—
Restricted stock units issued for services		11,113			—
Common stock issued for commitment shares		243,830			105,960
Depreciation and amortization of patents		943,089			804,737
Amortization of right of use asset		100,938			94,753
(Gain) loss on disposal of property and equipment		(28,800	)		3,166
(Increase) decrease in assets
Accounts receivable		34,812			22,311
Prepaid expenses and other current assets		(237,115	)		476,730
(Decrease) increase in liabilities
Accounts payable		(195,412	)		(529,626	)
Accrued bonuses, accrued expenses and other liabilities		(394,875	)		(382,652	)
Accounts payable and accrued expenses-related parties		(53,359	)		(161,223	)
Contract liability		(8,333	)		(8,334	)
Deferred lease liability		—			(20,889	)
Operating lease liability		(81,934	)		(70,107	)

Net cash used in operating activities		(7,260,222	)		(8,823,788	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cost of intangibles		(108,332	)		(67,445	)
Purchase of property and equipment		(893,894	)		(1,585,772	)

Net cash used in investing activities		(1,002,226	)		(1,653,217	)

CASH FLOWS FROM FINANCING ACTIVITIES
Exercise of options and warrants		204,000			245,250
Cashless option exercise tax payments		(171,926	)		—
Cashless tax payment on vested restricted stock awards		(12,875	)		—
Issuance of common stock, institutional investor		2,174,983			7,495,600
Common stock sales at the market by investment banking company		507,248			499,883

Net cash provided by financing activities		2,701,430			8,240,733

NET DECREASE IN CASH AND CASH EQUIVALENTS		(5,561,018	)		(2,236,272	)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		27,667,964			31,432,087

CASH AND CASH EQUIVALENTS - END OF PERIOD	$	22,106,946		$	29,195,815


Supplemental Disclosure of Non-cash activities:
Options issued to settle accrued bonuses	$	48,068		$	—
Trade-in credit for purchase of property and equipment	$	28,800		$	—
Non-cash repurchases of shares issued for net option exercises	$	172,359		$	—
Restricted stock awards issued for services	$	169,846		$	307,942

See accompanying notes to these financial statements

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

NOTE 1 – NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Statements

The accompanying unaudited financial statements have been prepared by Lightwave Logic, Inc. (the “Company”). These statements include all adjustments (consisting only of its normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting polices described in the Summary of Significant Accounting Policies included in the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as amended, as originally filed with the Securities and Exchange Commission on March 18, 2025 and Amendment No. 1 to the Form 10-K filed on March 28, 2025 (the “2024 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company firmly believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the 2024 Annual Report. The interim operating results for the three and six months ending June 30, 2025 may not be indicative of operating results expected for the full year.

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 revenue from technology licensing agreements, and to obtain additional revenue 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 2024.

Fair Value of Financial Instruments

The carrying value of the Company’s short-term financial instruments such as cash, accounts receivable, prepaid expenses and other assets, 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.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

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

Revenue Recognition and Contract Liability (Continued)

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

Identify the contract with a customer.

Identify the performance obligations in the contract.

Determine the transaction price for the contract.

Allocate the transaction price to the performance obligations.

Recognize revenue as performance obligations are satisfied.

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

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.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

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

Stock-based Payments

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

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

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 2025 and 2024, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same.

Comprehensive Loss

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

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09 – Income Taxes (Topic 740), which requires disclosures related to the rate reconciliation and income taxes paid 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 is adopting the guidance for the annual reporting period ended December 31, 2025 and does not expect this ASU to have a material impact on its year-end disclosures.

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2025 AND 2024

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

Recently Issued Accounting Pronouncements Not Yet Adopted (Continued)

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

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

The Company identified errors related to the accounting for non-cash stock option exercises in previously issued financial statements. As a result, the Company has (i) restated its previously issued financial statements for the three and six months ended June 30, 2025 and (ii) recorded the cumulative impact of a prior-period error identified in the year ended December 31, 2021 through opening equity.

Error Identified in the Quarter Ended June 30, 2025

During the quarter ended June 30, 2025, the Company incorrectly expensed a portion of the value of the net shares issued in connection with non-cash stock option exercises as compensation expense. The Company determined that the value of the net shares issued in these non-cash option exercises was incorrectly expensed in the originally issued interim financial statements, resulting in an overstatement of non-cash compensation expense.

The correction of this error decreased non-cash compensation expense by $705,499, with a corresponding decrease to additional paid-in capital for the three and six months ended June 30, 2025. This non-cash adjustment also resulted in a corresponding decrease to net loss for the three and six months ended June 30, 2025.

Because the error related solely to non-cash stock-based compensation arising from non-cash option exercises, the decrease in net loss was fully offset by a corresponding decrease in non-cash stock-based compensation adjustments within operating activities. As a result, there was no impact on net cash used in operating activities or on the Company’s statements of cash flows.

Error Identified in the Year Ended December 31, 2021

During the year ended December 31, 2021, the Company incorrectly expensed a portion of the value of the net shares issued by the Company in non-cash stock option exercises as compensation expense. The Company determined that the value of the net shares issued in non-cash option exercises was incorrectly expensed in the original filing, resulting in an overstatement of compensation expense. The correction of this error resulted in a decrease to accumulated deficit by $3,407,443 and a corresponding decrease to additional paid-in capital as of December 31, 2021. The cumulative impact of this correction has been reflected as an adjustment to opening accumulated deficit and additional paid-in capital in the Statements of Stockholders’ Equity for March 31, 2025, December 31, 2024, March 31, 2024, and December 31, 2023 presented in this filing, and all other period-ends subsequent to December 31, 2021. The correction of the 2021 error was recorded through opening equity and did not require the amendment or restatement of the Company’s previously issued annual financial statements.

Restated Financial Information

The following tables present the effects of the restatement on the Company’s previously reported statements of comprehensive loss and stockholders’ equity for the three and six months ended June 30, 2025.

Statements of Comprehensive Loss (Unaudited)

(Three Months Ended June 30, 2025)

(in dollars, except per-share data)


	As Previously Reported			Adjustment			As Restated
Research and development expenses	$	2,641,941		$	(20,500	)	$	2,621,441
General and administrative expenses	$	2,985,883		$	(684,999	)	$	2,300,884
Total Operating Expenses	$	5,631,287		$	(705,499	)	$	4,925,788
Net Loss	$	(5,672,132	)	$	705,499		$	(4,966,633	)
Basic and Diluted Loss per Share	$

Amendment: SEC Form 10-Q/A filed by Lightwave Logic Inc.