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Lightwave Logic, Inc. LWLG US Equity

Materials · CIK 1325964 · FY ends Dec 31
$5.49
-0.38 (-6.47%)
USD · as of 2026-08-28 · marketstack

Lightwave Logic, Inc. (Nasdaq: LWLG), an SEC filer in Miscellaneous Plastics Products, closed at $5.49, -6.5%, on 2026-08-28, with a market cap of $846M, a return on equity of -37.6% and a net margin of -8576.5%. Institutional ownership, earnings history and filed financials are on the tabs below.

LWLG · 10-K · period ended 2022-12-31

← all LWLG documents
filed 2023-03-01 · EDGAR original ↗

Our rendering of the filing — original pagination and typography are not reproduced, and tables are reduced to their short label cells (the figures live on FA). Nothing is summarized: every line below is the filing's own text.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2022

For the transition period from ________________________to________________________

Commission file number: 001-40766

Lightwave Logic, Inc.

(Exact name of registrant as specified in its charter)

(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:

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

Securities registered pursuant to section 12(g) of

the Act: None

Indicate by check mark if the Registrant is a well-known

seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☒ No ☐

Indicate by check mark if the Registrant is not required

to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐No☒

Indicate by check mark whether the registrant (1)

has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months

(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements

for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has

submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of

this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether

the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging

growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting

company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by checkmark

if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards

provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has

filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting

under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its

audit report. ☒

If securities are registered pursuant to Section 12(b)

of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of

an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error

corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive

officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is

a shell company (as defined in Rule 12b-2 of the Exchange Act of 1934). Yes ☐No☒

The aggregate market value of the voting and non-voting

common equity held by non-affiliates of the registrant was approximately $728,318,971 as of June 30, 2022.

As of February 28, 2023, there were 113,220,954shares 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 2023 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, 2022.

Table of Contents

Page

PART I

Item 1. Business 1

Item 1A. Risk Factors 28

Item 1B. Unresolved Staff Comments 42

Item 2. Properties 42

Item 3. Legal Proceedings 42

Item 4. Mine Safety Disclosures 42

PART II

Item 6. Reserved 45

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 53

Item 8. Financial Statements and Supplementary Data 53

Item 9A. Controls and Procedures 53

Item 9B. Other Information 54

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 54

PART III

Item 10. Directors, Executive Officers and Corporate Governance 55

Item 11. Executive Compensation 55

Item 14. Principal Accountant Fees and Services 55

PART IV

Item 15. Exhibit and Financial Statement Schedules 56

i

Forward-Looking

Statements

This 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 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;

· 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;

· the novel coronavirus (“COVID-19”) and its potential impact on our business;

· 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 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

PART I

Item 1. Business.

Overview

Lightwave Logic, Inc. is a development

stage company moving toward commercialization of next generation electro-optic photonic devices made on its P2ICTM technology

platform which we have detailed as: 1) Polymer StackTM, 2) Polymer PlusTM, and 3) Polymer SlotTM. Our unique polymer technology

platform uses in-house proprietary high-activity and high-stability organic polymers. Electro-optical devices called modulators convert

data from electric signals into optical signals for multiple applications.

Our differentiation at the modulator

device level is in higher speed, lower power consumption, simplicity of manufacturing, small footprint (size), and reliability. We have

demonstrated higher speed and lower power consumption in packaged devices, and during 2022, we continued to make advances in techniques

to translate material properties to efficient, reliable modulator devices with commercial foundries. We are currently focused on testing

and demonstrating the simplicity of manufacturability and reliability of our devices, including in conjunction with the silicon photonics

manufacturing ecosystem. In 2022 we discussed the addition of several silicon-based foundry partners to help scale in volume our polymer

modulator devices. Silicon-based foundries are large semiconductor fabrication plants developed for the electronics IC business, that

are now engaging with silicon photonics to increase their wafer throughput. Partnering with silicon-based foundries not only demonstrates

that our polymer technology can be transferred into standard production lines using standard equipment, it also allows us to efficiently

utilize our capital. The foundry partnerships will allow us to scale our high-performance polymer optical engines quickly and efficiently.

Our extremely strong and broad patent

portfolio allows us to optimize our business model in three areas: 1) Traditional focus on product development, 2) Patent licensing and

3) Technology transfer to foundries. We are continually looking to strengthen our patent portfolio both by internal inventions and acquisition

of intellectual property.

We are initially targeting applications

in fiber optic data communications and telecommunications markets and are exploring other applications that include automotive/LIDAR,

sensing, displays etc., for our polymer technology platform. Our goal is to have our unique polymer technology platform become ubiquitous.

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.

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 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 potentially out-license to electro-optic device manufacturers,

contract manufacturers, original equipment manufacturers, etc. Our Company contemplates future applications 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.

Device Design and Development

Electro-optic Modulators

Our Company designs its own proprietary

electro-optical modulation devices. Electro-optical modulators convert data from electric signals into optical signals that can then be

transmitted over high-speed fiber-optic cables. Our modulators are electro-optic, meaning they work because the optical properties of

the polymers are affected by electric fields applied by means of electrodes. Modulators are key components that are used in fiber optic

telecommunications, data communications, and data centers networks etc., to convey the high data flows that have been driven by applications

such as pictures, video streaming, movies etc., that are being transmitted through the Internet. Electro-optical modulators are expected

to continue to be an essential element as the appetite and hunger for data increases every year as well as the drive towards lower power

consumption, and smaller footprint (size).

Polymer Photonic Integrated Circuits

Our Company also designs its own

proprietary Photonic Integrated Circuits (otherwise termed a polymer PIC). A polymer PIC is a photonic device that integrates several

photonic functions on a single chip. We believe that our technology can enable the ultra-miniaturization footprint needed to increase

the number of photonic functions residing on a semiconductor chip to create a progression like what was seen in the computer integrated

circuits, commonly referred to as Moore’s Law. One type of integration is to combine several instances of the same photonic functions

such as a plurality of modulators to create a multi-channel polymer PIC. The number of channels can be varied depending on application.

For example, the number of photonic components could increase by a factor of 4, 8, or 16. Another type of integration is to combine different

types of devices including from different technology bases such as the combination of a semiconductor laser with a polymer modulator.

Our P2ICTM platform encompasses both these types of architecture.

Current semiconductor photonic technology

today is struggling to reach faster device speeds. Our modulator devices, enabled by our electro-optic polymer material systems, work

at extremely high frequencies (wide bandwidths) and possess inherent advantages over current crystalline electro-optic material contained

in most modulator devices such as bulk lithium niobate (LiNbO3), indium phosphide (InP), silicon (Si), and gallium arsenide GaAs). Our

advanced electro-optic polymer platform is creating a new class of modulators such as the Polymer Stack TM, Polymer PlusTM,

Polymer SlotTM, and associated PIC platforms that can address higher data rates in a lower cost, lower power consuming manner, smaller

footprint (size) with much simpler data encoding techniques. Our electro-optic polymer material will boost the performance of standard

PIC platforms such as silicon photonics and indium phosphide.

Our electro-optic polymers can be

integrated with other materials platforms because they can be applied as a thin film coating in a fabrication clean room such as may be

found in semiconductor foundries using standard clean room tooling. This approach we call Polymer PlusTM. Our polymers are unique

in that they are stable enough to seamlessly integrate into existing CMOS, Indium Phosphide (InP), Gallium Arsenide (GaAs), 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 SlotTM. This

design is based on a slot modulator fabricated into semiconductor wafers that include both silicon and 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. Our work with the foundries is being focused with the Polymer PlusTM and the Polymer

SlotTM polymer modulators.

Glossary

Glossary of select technology terms

to provide you with a better understanding our Company’s technology and devices:

Electro-optic devices-

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

for high-speed data transfer.

Electro-optic material-

Electro-optic material is the core active ingredient in high-speed fiber-optic telecommunication systems. Electro-optic materials

are materials that are engineered at the molecular level. Molecular level engineering is commonly referred to as “nanotechnology.”

Electro-optic modulators- Electro-optic (E/O) modulators are electro-optic devices that perform electric-to-optic conversions within the infrastructure

of the internet. Data centers may also benefit from this technology through devices that could significantly increase bandwidth and speed

while decreasing costs. Polymer E/O modulators can be designed and fabricated with multiple structures such as Ridge waveguide (PolymerTM

Stack) and slot waveguide (Polymer SlotTM). The waveguides allow the light to be efficiently coupled into and out of the modulators,

and provide a basis for integrating modulators together.

Gbaud - The rate of symbol

changes in data transmission in billions of symbol changes per second. Each symbol can support one or more bits, the number of bits depending

on the modulation format.

NRZ – See PAM2.

PAM2 – 2 level Pulse

Amplitude Modulation, a modulation format in which the optical power in each symbol can assume either of two different levels, low or

high, representing, respectively, a 0 or a 1. PAM2 supports 1 bit per symbol so the bit rate is equal to the baud rate or symbol rate.

For example, a modulator capable of supporting 100 Gbaud can transmit 100 Gbps with PAM2 modulation. This modulation format is often called

NRZ (Non Return to Zero).

PAM4 - 4 level Pulse Amplitude

Modulation, a modulation format in which the optical power in each symbol can assume any one of 4 different levels. PAM4 supports 2 bits

per symbol so the bit rate is equal to two times the baud rate or symbol rate. For example, a modulator capable of supporting 100 Gbaud

can transmit 200 Gbps with PAM4 modulation.

PAM8 - 8 level Pulse Amplitude

Modulation, a modulation format in which the optical power in each symbol can assume any one of 8 different levels. PAM4 supports 3 bits

per symbol so the bit rate is equal to three times the baud rate or symbol rate. For example, a modulator capable of supporting 100 Gbaud

can transmit 300 Gbps with PAM8 modulation.

Photonic Devices - Photonic

devices are components for creating, manipulating, or detecting light. This can include modulators, laser diodes, light-emitting diodes,

solar and photovoltaic cells, displays and optical amplifiers. Other examples are devices for modulating a beam of light and for combining

and separating beams of light of different wavelength.

Polymers - Polymers, also

known as plastics, are large carbon-based molecules that bond many small molecules together to form a long chain. Polymer materials can

be engineered and optimized using nanotechnology to create a system in which unique surface, electrical, chemical, and electro-optic characteristics

can be controlled. Materials based on polymers are used in a multitude of industrial and consumer products, from automotive parts to home

appliances and furniture, as well as scientific and medical equipment.

Our Business Opportunity

Lightwave Logic, Inc. is developing

next generation proprietary photonic devices that are based on our advanced electro-optical polymer material systems. Current legacy technology

is based on inorganic crystalline materials, which has allowed for the proliferation of data over fiber optic cables. However, there are

inherent molecular deficiencies that have prevented this technology from scaling down in price and up in functionality, especially in

terms of $/Gbps. This is primarily due to a closed valence structure that does not allow for the molecular improvements. The valence or

valency of an element is a measure of its combining power with other atoms when it forms chemical compounds or molecules. Also, the physical

properties of a crystal do not allow for its implementation into highly miniaturize slot structures that are in simple terms the pathways

that light travels through in the device.

Organic polymer materials on the

other hand, 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

vastly cheaper 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 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,

GaAs 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 1750C. Additionally, these materials have demonstrated photochemical

stability, even after being subjected to high intensity light for over 5,000 hours and exhibited little electro optic degradation even

after being continuously exposed at 1100C. This operating temperature exceeds the maximum commercial operating temperatures

of approximately 850C, found in large data centers. After successfully achieving material test results that either met or exceeded

commercial requirements (subsequently confirmed by an outside entity), in late 2016, the Company began production of its first photonic

prototype device, a ridge waveguide modulator which is called a Polymer StackTM.

Our First Product – The Ridge Waveguide Modulator

A ridge waveguide modulator is a

type of modulator where the waveguide is fabricated within a layer of our electro-optic polymer system. Various cladding materials and

electrodes are layered over the core polymer. The polymer materials are then part of an integrated photonics platform that can house other

photonic devices, such as lasers, waveguides etc.

In April 2017 we achieved bandwidth

suitable for 25Gbps data rates in an all-organic polymer ridge waveguide intensity modulator prototype, a significant improvement over

our initial 10Gbps device modulator prototype that was announced in 2016. This breakthrough was significant because a 25Gbps data rate

is important to the optical networking industry because this data rate is a key requirement for achieving 100 Gbps (using 4 channels

of 25 Gbps). In July 2017 we advanced our high-speed modulation performance to satisfy 28Gbps data rates for QSFP28 standards which are

also utilized for 100Gbps data center applications.

In September 2017 we achieved outstanding

performance of our ridge waveguide Mach-Zehnder modulators ahead of schedule, with bandwidth performance levels that will enable 50Gbaud

modulation in fiber-optic communications. This important achievement will allow users to utilize arrays of 4 x 50Gbaud polymer modulators

using PAM-4 encoding to access 400Gbps data rate systems. Pulse-Amplitude Modulation (PAM-4) is an encoding scheme that can double the

amount of data that can be transmitted.

We are now further optimizing our

high-performance modulators for additional specifications that are beginning to be required by the fiber communications industry for applications

such as networks running at data rates of 800Gbps. 800Gbps will require combining 4 channels of 200Gbps utilizing PAM4 encoding schemes

which will prove challenging for many existing modulator technologies. Furthermore, we are collaborating with industry partners to optimize

the packaging our modulators so that potential customers can evaluate our high-performance modulators in their systems. This effort will

also aid in addressing one of the most under-evaluated processes of developing high speed devices onto a new and novel technology platform

which is robustness and reliability. We have already made extensive progress with our polymer materials on this front, and now we are

integrating our robust polymer materials onto an integrated photonics platform to provide customers with a more miniaturized, higher performance

solution for their data rich systems.

While our initial focus is to address

data communications and telecommunications network applications along with cloud computing/data center needs, we believe that in the future

we will have additional opportunities to address other applications such as: backplane optical interconnects, photovoltaic cells, medical

applications, satellite reconnaissance, navigation systems, radar applications, optical filters, spatial light modulators; and all-optical

switches.

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

Our Electro-Optic Material Approach

Our core material expertise relates

to the production of high-performance, high-stability electro-optic polymers for high-speed (wide bandwidth) telecommunication and data

communications applications. More specifically, it lies in a less mainstream, yet firmly established, scientific phenomenon called aromaticity.

Aromaticity causes a high degree of molecular stability. It is a molecular arrangement wherein atoms combine into multi-membered rings

and share their electrons among each other. Aromatic compounds are stable because the electronic charge distributes evenly over a great

area preventing hostile moieties, such as oxygen and free radicals, from finding an opening to attack.

Previous and Current Competitive Organic Electro-Optic

Polymer Efforts

For the past several decades, diverse

corporate interests, including, to our knowledge, IBM, Lockheed Martin, DuPont, AT&T Bell Labs, Honeywell, Motorola, HP, 3M, and others

in addition to numerous universities and U.S. Government Agencies, have attempted to produce high-performance, high-stability electro-optic

polymers for high-speed (wide bandwidth) telecommunication applications. These efforts were largely unsuccessful due, in our opinion,

to the industry’s singular adherence to an industry pervasive engineering model known as the Bond Length Alternation ("BLA")

theory model, which none of our patented molecular designs rely upon. The BLA model, like all other current industry-standard molecular

designs, consists of molecular designs containing long strings of atoms called polyene chains. Longer polyene chains provide higher electro-optic

performance, but are also more susceptible to environmental threats, which result in unacceptably low-performing, thermally unstable electro-optic

polymers.

As a result, high frequency modulators

engineered with electro-optic polymers designed on the BLA model or any other polyene chain design models are unstable over typical operating

temperature ranges, and often exhibit performance degradation within days, hours or even minutes. Similarly, lower frequency modulators

exhibit comparable failings, but to a lesser extent. These flaws, in most cases, have prevented commercial quality polymer-based modulators

from entering the commercial marketplace. The thermal stability of these devices does not generally meet the minimum Telcordia GR-468

operating temperature range (-40 degrees Celsius to +85 degrees Celsius) much less the harsher MILSPEC 883D (military specification) range

of -55 degrees Celsius to 150 degrees Celsius. While many new applications do not require meeting full military or Telcordia GR-468 specifications

for polymers, many potential customers prefer to see polymer operate at or near these conditions to convey confidence in the material

system. We understand from initial conversations with data center architects and designers that the temperature specifications that our

materials achieve are compliant with their equipment design needs.

We are aware of other academic and

commercial development efforts—some by larger companies with vastly more financial resources than we possess. However, we believe

that no one yet has developed organic polymer materials that have demonstrated the combination of thermal stability and photochemical

stability that can meet or exceed commercial specifications.

Our Electro-Optic Photonic P2ICTM Device Approach

Our electro-optic devices are built

around our proprietary organic polymer material systems that we believe will enable better performance than the current embedded legacy

technology built around inorganic materials. We also believe that the inherent flexibility of being able to apply our organic polymer

materials in liquid thin-film form will accelerate the move toward ultra-miniaturization of Polymer Photonic Integrated Circuits (P2ICTM)

by increasing the number of photonic circuits on a single chip. Polymer photonics (previously referred in industry as silicon organic

hybrid (SOH)) is the application of polymers on to a platform such as silicon where there are both active and passive photonic component

designs. In polymer photonics, polymer devices such as modulators, waveguides, and multiplexers can be fabricated on to a silicon platform

that acts as a package as well as a base for mounting lasers (which are needed to source the light).

Our initial device, a ridge waveguide

modulator, though highly miniaturized utilizes conventional design and fabrication techniques in the industry. Our future devices will

utilize silicon photonics (SiPh) technology, which can support highly miniaturized slot waveguides structures etched in large format,

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 GaAs (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.

Although we believe that our polymers

will be the key differentiating factor in Polymer photonic devices, we do not currently possess the technical skills and instrumentation

necessary to fabricate and test PICs at this dramatically reduced scale and intend to seek an external partner to assist with development.

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 last year as we are developing our P2ICTM into prototypes. We actively filed technical utility patents over the past

few years, and are currently in the process of readying a number of other inventions for formal filings in 2023. We expect to continue

innovating with our P2IC platform for the next couple of years. We had a number of patents issued over the past few months

indicating that our technology is being recognized as being unique.

In 2018, we acquired the polymer

technology intellectual property assets of BrPhotonics Productos Optoelectrónicos 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 66 granted patents that include 52 from the US, 1 from Canada, 6 from the EU, 2 from Japan and 3 from China.

Our materials patent portfolio has

also strengthened significantly with the filing of additional new patent applications on our core PerkinamineTM molecular compounds

as well as recent, innovative inventions that are expected to protect our P2IC 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

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

Our patent portfolio includes patents not only on nonlinear optic chromophore

designs, but also device designs and inventions, fabrication process inventions, packaging design inventions, as well as novel chemistry

to enable high performance, low power, small footprint polymer PIC technology.

Our strategic plan is to utilize

our core proprietary technology and leverage our proprietary optical materials to be the core of and the enabling technology for future

generations of optical devices, modules, sub-systems and systems that we will develop or potentially out-license to electro-optic device

manufacturers. Our Company contemplates future applications that may address the needs of semiconductor companies, automotive/LiDAR companies,

sensing companies, aerospace companies and government agencies.

We rely on a combination of patents,

patent applications, trademarks, trade secrets and contractual provisions to protect our technologies. Further, employees are required

to surrender any inventions or intellectual property developed as part of their employment agreements. We also have a policy of requiring

prospective business partners to enter into non-disclosure agreements (NDAs) before disclosure of any of our confidential or proprietary

information. Our Company can make no assurances that we will be able to effectively protect our technologies and know-how or that third

parties will not be able to develop similar technologies and know-how independently.

The anti-aromatic nature of these

structures dramatically improves the "zwitterionic-aromatic push-pull" of the systems, providing for low energy charge transfer.

Low energy charge transfer is important for the production of extremely high electro-optic character.

Heterocyclical Steric Hindering

System This patent describes a nitrogenous heterocyclical structure for the integration of steric hindering groups that are necessary

for the nanoscale material integration. Due to the [pi]-orbital configuration of the nitrogen bridge, this structure has been demonstrated

not to interfere with the conductive nature of the electronic conductive pathway and thus is non-disruptive to the electro-optic character

of the core molecular construction. The quantum mechanical design of the system is designed to establish complete molecular planarity

(flatness) for optimal performance.

Totally Integrated Material Engineering

System. This patent covers material integration structures under a design strategy known as Totally Integrated Material Engineering. These

integration structures provide for the "wrapping" of the core molecule in sterically hindering groups that maximally protect

the molecule from environmental threats and maximally protect it from microscopic aggregation (which is a major cause of performance degradation

and optical loss) within a minimal molecular volume. These structures also provide for the integration of polymerizable groups for integration

of materials into a highly stable cross-linked material matrix.

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

March 2018, our Company, together with our packaging partner, successfully demonstrated packaged polymer modulators designed for 50Gbaud,

which we believe will allow us to scale our P2ICTM platform with our Mach-Zehnder ridge waveguide modulator design as

well as other photonics devices competitively in the 100Gbps and 400Gbps datacom and telecommunications applications market. We are currently

fine-tuning the performance parameters of these prototypes in preparation for customer evaluations.

During

June 2018, our Company Acquired the Polymer Technology Intellectual Property Assets of BrPhotonics Productos Optoelectrónicos S.A.,

a Brazilian corporation, which significantly advanced our patent portfolio of electro-optic polymer technology with 15 polymer chemistry

materials, devices, packaging and subsystems patent and further strengthened our design capabilities to solidify our market position as

we prepare to enter the 400Gbps integrated photonics marketplace with a highly competitive, scalable alternative to installed legacy systems.

Also, during

June 2018, our Company promoted polymer PICs and Solidified Polymer PICs as Part of the Photonics Roadmap at the World Technology Mapping

Forum in Enschede, Netherlands, which includes our Company’s technology of polymers and polymer PICs that have the potential to

drive not only 400Gbps aggregate data rate solutions, but also 800Gbps and beyond.

In August

2018 we announced the completion (ahead of schedule) of our fully equipped on-site fabrication facility, where we are expanding our high-speed

test and design capabilities. We also announced the continuation of the building of our internal expertise with the hiring of world-class

technical personnel with 100Gbps experience.

In February

2019 we announced a major breakthrough in our development of clean technology polymer materials that target the insatiable demand for

fast and efficient data communications in the multi-billion-dollar telecom and data markets supporting Internet, 5G and IoT (Internet

of Things) webscale services. The improved thermally stable polymer has more than double the electro-optic response of our previous materials,

enabling optical device performance of well over 100 GHz with extremely low power requirements. This addition to the family of PerkinamineTM

polymers will hold back run-away consumption of resources and energy needed to support ever-growing data consumption demands. We continue

to conduct testing of the material and assessment of associated manufacturing processes and device structures prior to release to full

development.

In

March 2019 we created an Advisory Board comprised of three world-class leaders in the photonics industry: Dr. Craig Ciesla, Dr. Christoph

S. Harder, and Mr. Andreas Umbach. In January 2022 Dr. Ciesla was named to our Board of Directors, and our Advisory Board is currently

comprised of Dr. Franky So, Dr. Christoph S. Harder, Mr. Andreas Umbach and Dr. Joseph

A. Miller, who is a former member of our Board of directors. The Advisory Board is working closely

with our Company leadership to enhance our Company’s product positioning and promote our polymer modulator made on our proprietary

Faster by DesignTM polymer P2ICTM

platform. The mission of the Advisory Board is initially to increase our Company’s outreach into the datacenter interconnect market

and later to support expansion into other billion-dollar markets. The Advisory Board members have each been chosen for their combination

of deep technical expertise, breadth of experience and industry relationships in the fields of fiber optics communications, polymer and

semiconductor materials. Each of the Advisory Board members has experience at both innovators like Lightwave Logic and large industry

leaders of the type most likely to adopt game-changing polymer-based products. In addition, they possess operational experience with semiconductor

and polymer businesses.

Also, in

March 2019, our Company received the “Best Achievement in PIC Platform” award for our 100 GHz polymer platform from the PIC

International Conference. The award recognizes innovative advances in the development and application of key materials systems driving

today’s photonic integrated circuits (PICs) and providing a steppingstone to future devices.

During

the second quarter of 2019, our Company promoted its polymers at CoInnovate in May and the World Technology Mapping Forum in June. CoInnovate

is a meeting of semiconductor industry experts. The World Technology Mapping Forum is a group authoring a photonics roadmap out to 2030.

In September

2019 at the prestigious European Conference on Communications (ECOC) in Dublin, Ireland, we showed measured material response over frequency

and the resulting optical data bits stream on our clean technology polymer materials, the newest addition to our family of PerkinamineTM

polymers, that meet and exceed of our near-term target speed of 80 GHz. We also released data demonstrating stability under elevated temperatures

in the activated (poled to create data carrying capability) state.

In October

2019, we reported that energy-saving polymer technology is highlighted in the recently published Integrated Photonics Systems Roadmap

- International (IPSR-I). The roadmap validates the need for low-voltage, high-speed technologies such as ours.

In May

2020, we announced that our latest electro-optic polymer material has exceeded target performance metrics at 1310 nanometers (nm), a wavelength

commonly used in high-volume datacenter fiber optics. This material demonstrates an attractive combination at 1310 nm of high electro-optic

coefficient, low optical loss and good thermal stability at 850 Celsius. The material is expected to enable modulators with

80 GHz bandwidth and low drive power, and has an electro-optic coefficient of 200 pm/V, an industry measure of how responsive a material

is to an applied electrical signal. This metric, otherwise known as r33, is very important in lowering power consumption when the material

is used in modulator devices. This technology is applicable to shorter reach datacenter operators, for whom decreasing power consumption

is imperative to the bottom line of a facility. We considered this a truly historic moment—not only in our Company’s history,

but in our industry–as we have demonstrated a polymer material that provides the basis for a world-class solution at the 1310 nm

wavelength, something which other companies have spent decades attempting to achieve.

In July

2020, we announced the official launch of our new corporate website www.lightwavelogic.com, reflecting ongoing efforts to provide up-to-date

information for investors and potential strategic partners. The revamped website offers a clean, modern design integrated with helpful

tools and investor relations resources, including a new corporate explainer video, to illustrate the target markets and advantages of

Lightwave Logic’s proprietary electro-optic polymers.

In

August 2020, we announced the addition of Dr. Franky So, a leading authority in the OLED industry, to our Advisory Board. Dr. So is the

Walter and Ida Freeman Distinguished Professor in the Department of Materials Science and Engineering at North Carolina State University.

Previously, he was the Head of Materials and Device research for OLEDs at OSRAM Opto Semiconductors, as well as Motorola’s corporate

research lab in the 1990s. Dr. So was an early researcher in electro-optic (EO) polymer modulators at Hoechst Celanese. As a member of

the Company’s advisory board, Dr. So will work closely with management to enhance Lightwave’s product positioning for, as

well as the promotion of, its polymer modulators made on its proprietary platform. In addition, he will provide technical support and

advisory services to the Lightwave materials and device teams.

On

October 7, 2020 we announced the receipt of U.S. Patent number 10,754,093 that improves both the performance and reliability of our high-speed,

low-power electro-optic polymer modulators intended for datacenter and telecommunications applications. The patent allows multi-layered

electro-optic polymer modulators to perform more efficiently through the design of custom interfaces. These interfaces are designed into

the cladding layers that allow optical transmission, electrical conductivity, material integrity, as well as a prevention of solvents

affecting adjacent polymer materials. The net impact of all of this allows for our Company’s modulators to improve performance across

the board, enabling higher reliability in the fiber optic communications environment.

On October

15, 2020, we announced that our proprietary polymer technologies are compatible with currently available integrated photonics platforms.

Our proprietary electro-optic materials are currently in the prototyping phase and are fabricated onto standard silicon wafers, and this

Polymer PlusTM advancement, driven by the feedback our Company received from potential customers to-date, has allowed our materials

to be suitable for additive integration to integrated photonics platforms such as silicon photonics, as well as indium phosphide and other

standard platforms – therefore enabling simpler integration by customers. We believe this breakthrough allows a polymer modulator

to enhance the performance of existing integrated photonics solutions in the marketplace, enabling higher speed and lower power consumption

on foundry-fabricated photonics designs. Since our technology is additive to existing platforms such as silicon photonics, our electro-optic

polymers are not actually competing with integrated photonic platforms, but rather enabling them to be more competitive in the marketplace,

and it further validates our EO polymer platform as ideally suited to enable optical networking more efficiently than ever.

On October

21, 2020, we announced that we have optimized a robust, photo-stable organic polymer material for use in our next-generation modulators

intended to be trialed with potential customers under NDA. Our materials show high tolerance to high-intensity infrared light, common

in a fiber optic communications environment and increasingly important as higher density of devices access the network, directly resulting

in higher intensity infrared light levels. Our preliminary results suggest that our recently developed electro-optic polymer material,

designed based on potential customer input, displays unrivaled light tolerance (also known as photostability) compared to any organic

commercial solution in use today. Our results meet both our current internal criteria and address potential customer feedback.

On November

2, 2020, we disclosed results on our polymer material stability testing including further results for electro-optic efficiency for our

Company’s materials that operate both at 1550nm as well as 1310nm. We demonstrated test materials results for electro-optic efficiency

to 4000hrs, improvement in sensitivity to oxygen as part of a broadband exposure test, and stability for polymers exposed to 1310nm light

at 100mW.

On November

20, 2020 we announced the receipt of U.S. Patent number 10,591,755 that details an important invention that allows users of electro-optic

polymer modulators to not only operate the devices with high speed and low power directly from CMOS IC chips, but gives them the opportunity

to avoid the expense, physical footprint and power consumption of high-speed modulator driver ICs. Furthermore, this patent strengthens

our freedom of manufacturing, and directly enables our modulators to become more competitive in the marketplace.

On December

16, 2020 we announced the development of a new sealant for our future Chip-on-Board (COB) packaged polymer platform. The sealant, which

blocks oxygen and other atmospheric gases, is a key step in our Company’s development towards a polymer modulator without a package,

an important enabling technology for the industry. We plan to develop the sealant for commercial implementation in our future modulators.

Recent results suggest that our electro-optic polymer sealant material displays encouraging barrier properties and is expected to translate

to significant improvement in bare chip robustness against atmospheric gases, as compared to existing EO polymer commercial solutions

in use today. While the initial measurements are highly promising, our Company plans to continue development work to further optimize

the sealant material and barrier performance towards the chip-on-board goal.

On

January 13, 2021, we announced the receipt of U.S. Patent number 10,886,694 that details an invention that allows electro-optic polymer

modulators to be packaged in a hermetic environment using well-known, high-volume and low-cost fabrication processes that are available

in a typical semiconductor fabrication foundry – improving suitability for mass production. Further, the design of this capsule

package can improve both the reliability and the coupling interface between fiber optic cables and their laser sources for arrayed photonic

integrated circuit solutions. The package can also interpose signals from an underlying circuit board to the polymer modulators, lasers,

and other components for data transfer. The hermetic capsule is built from a semiconductor base that contains electrical and optical circuits

and components. A hermetic capsule chamber is created by the design of a semiconductor lid that is sealed to the semiconductor base platform

by a metallization process. Using standardized fabrication techniques we can now create a package that achieves the performance, reliability,

cost, and volume requirements that has been a challenge for the photonics industry for years.

On

May 11, 2021, we announced the receipt of U.S. Patent number 10,989,871 that details an invention that allows for improved protective

polymer layers in modulators when designed into advanced integrated photonic platforms, better positioning them for high-volume manufacturing

processes. The protective layers will enhance electro-optic polymer devices' performance through higher reliability, better optical performance

and enable the use of standardized manufacturing processes best suited for mass-production.

On June

7, 2021, we announced that our company’s common stock was added to the Solactive EPIC Core

Photonics EUR Index NTR as part of the index's semi-annual additions. The index includes global public companies with a common theme of

optoelectronics, photonics, and optical technologies in general that range from components, modules, manufacturers, and optical network

system companies. This inclusion broadens our exposure to the capital markets community, as well as credibility with potential partners

and customers.

On

June 16, 2021, we announced test results from new modulators fabricated in 2021, which exceeded bandwidth

design targets and achieved triple the data rate as compared to competing devices in use today. The breakthrough new devices demonstrated

3dB electro-optical with electrical bandwidths that exceed 100GHz – with measurements coming close to our Company’s state-of-the-art

110GHz test equipment capability. We expect this advancement to have a profound impact on the traffic flow on the internet.

On

June 24, 2021, we announced the receipt of U.S. patent number 11,042,051 that details a breakthrough

new device design that enables mass-volume manufacturing when designed into advanced integrated photonic platforms. The device

design enhances reliability, improves optical mode control and most important, lowers by consumption through the use of direct-drive,

low-voltage operation. The patent is entitled, "Direct drive region-less polymer modulator methods of fabricating and materials therefor"

and is expected to open the opportunity for low power consumption electro-optic polymers to be developed into large foundry PDKs (process

development kits) and be ready for mass volume commercialization. The patent emphasizes our technology

platform using fabrication techniques that would naturally fit into foundry PDKs.

On

August 4, 2021, we announced that we developed improved thermal design properties for electro-optic polymers used in our Polymer PlusTM

and Polymer SlotTM modulators, enabling the speed, flexibility and stability needed for high-volume silicon foundry processes. We

successfully created a 2x improvement in r33, while allowing higher stability during poling and post-poling. This provides better thermal

performance and enables greater design flexibility in high-volume silicon foundry PDK (process development kit) processes.

On

August 9, 2021, we announced the receipt of U.S. patent number 11,067,748 entitled "Guide Transition Device and Method" that

covers a new invention that enables enhanced optical routing architectures for polymer-based integrated photonics that can be scaled with

partner foundries. This new invention will enable innovative, highly scalable optical routing architectures for integrated photonic platforms.

The patent provides novel optical waveguide transition designs using two planes of optical waveguides that are expected to be critical

for optical signal routing and optical switching, opening the opportunity for high speed, energy efficient electro-optic polymers to be

implemented into foundry PDKs (process development kits) to improve the performance of integrated photonic circuits. This breakthrough

technology opens the door for advanced integrated photonics architectural design. We believe the

Source: SEC EDGAR (public domain) · 10-K for the period ended 2022-12-31, filed 2023-03-01 · accession 0001553350-23-000151

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