Financial Performance - The net loss for the six months ending June 30, 2023, was $10,933,765, compared to a net loss of $7,358,359 for the same period in 2022, reflecting an increase in loss of about 48.5%[18] - Loss per share for the six months ending June 30, 2023, was $(0.10), compared to $(0.07) for the same period in 2022, indicating a worsening in per-share loss[18] - The net loss for the six months ending June 30, 2023, was $10,933,765, compared to a net loss of $7,358,359 for the same period in 2022, representing an increase in loss of approximately 49%[29] - Net cash used in operating activities for the six months ending June 30, 2023, was $7,004,008, compared to $5,298,715 for the same period in 2022, indicating a 32% increase in cash outflow[29] - The company commenced commercial operations in May 2023 and has not generated sufficient revenues to cover operating expenses, incurring substantial net losses since inception[210] Assets and Liabilities - Total assets increased to $40,552,039 as of June 30, 2023, up from $29,263,472 at December 31, 2022, representing a growth of approximately 38.5%[17] - Cash and cash equivalents rose to $32,635,787, an increase of 35.4% from $24,102,151 at the end of 2022[17] - Total liabilities decreased to $3,775,958 from $1,710,449, a reduction of approximately 78.5%[17] - The total stockholders' equity rose to $36,776,081 as of June 30, 2023, compared to $27,553,023 at the end of 2022, an increase of about 33.5%[17] - The company has no debt to service, which positions it favorably for future growth and operational expansion[48] Expenses - Research and development expenses for the three months ending June 30, 2023, were $4,166,110, up 49.8% from $2,781,215 in the same period of 2022[18] - General and administrative expenses increased to $1,174,590 for the three months ending June 30, 2023, compared to $987,137 in the same period of 2022, marking an increase of approximately 19%[18] - Total operating expenses for the three months ended June 30, 2023, were $5,340,700, a 42% increase from $3,768,352 in the prior year[212] - Research and development salary expenses increased by $498,383 in the three months ended June 30, 2023, compared to the same period in 2022[213] - Non-cash stock option amortization expenses increased by $204,269 in the three months ended June 30, 2023, compared to the same period in 2022[213] Capital Raising and Stock Issuance - The company issued 2,575,400 common shares to institutional investors, raising approximately $14,950,409 in additional paid-in capital during the six-month period ending June 30, 2023[21] - The company raised $14,950,409 from the issuance of common stock to an institutional investor during the six months ending June 30, 2023, compared to $6,705,693 in the same period of 2022, marking a 123% increase[29] - The institutional investor purchased 1,795,455 shares of common stock for proceeds of $11,103,102 from February 28, 2023, to June 30, 2023[81] - The company issued 37,670 shares of common stock as additional commitment fees, valued at $264,874 during the same period[81] Commercial Operations and Agreements - The first commercial agreement was established in May 2023, involving a four-year material supply and license agreement, with a minimum annual royalty of $50,000[49] - No revenues were recognized for the three and six months ending June 30, 2023, as the licensee did not requisition material; however, an up-front licensing fee of $50,000 was recorded as deferred revenue[50] - The company commenced commercial operations in May 2023 with a material supply license agreement to provide Perkinamine chromophore materials for polymer-based photonic devices and photonic integrated circuits (PICs)[116] Research and Development - The company is developing optical devices using proprietary electro-optical polymer material, with multiple generations of new materials being optimized for specific designs[119] - The company is actively engaging with test equipment manufacturers and industry bodies to promote its roadmap and fine-tune its business model[209] - The company has established an Advisory Board to enhance product positioning and support expansion into billion-dollar markets, leveraging the expertise of industry leaders[148] Market and Product Development - The company aims to scale high-performance polymer optical engines quickly and efficiently through partnerships with silicon-based foundries[103] - The company is targeting applications in fiber optic data communications and telecommunications markets, with plans to explore automotive/LIDAR and sensing applications[105] - The company has developed a polymer platform that is scalable, allowing for high-speed data rates while reducing costs and power consumption, which is crucial for competitive performance metrics[137] Intellectual Property and Patents - The company received U.S. Patent number 10,591,755, which allows electro-optic polymer modulators to operate with low power directly from CMOS IC chips, reducing the need for high-speed modulator driver ICs[162] - The company acquired polymer technology intellectual property assets from BrPhotonics, enhancing its patent portfolio with 15 new patents related to electro-optic polymer technology[144] - The company received U.S. patent number 11,042,051 for a new device design that lowers power consumption and enhances reliability for mass-volume manufacturing[168] Performance Metrics and Achievements - The company announced a world-record performance for a polymer modulator, achieving 220 Gbit/s OOK and 408 Gbit/s 8PAM in an optical transmission experiment[173] - Enhanced photostability results were reported, demonstrating no performance change after 3000 hours of high-intensity optical power exposure[181] - The company achieved a world record demonstration of a 250 GHz super high bandwidth electro-optical-electrical (EOE) link, showcasing a 500 GHz setup-limited bandwidth[187]

Financial Performance - The net loss for the three months ending March 31, 2023, was $5,476,018, compared to a net loss of $3,555,761 for the same period in 2022, indicating an increase in loss of 54%[20] - Net loss increased by 54% to $5,476,018 for the three months ended March 31, 2023, compared to $3,555,761 for the same period in 2022[195] - Other income (expenses) decreased significantly by 600% to $(316,141) for the three months ended March 31, 2023, compared to $(45,193) for the same period in 2022[194] - The company reported a net cash used in operating activities of $3,748,656 for the three months ending March 31, 2023, compared to $2,545,689 in the same period of 2022[24] - For the three months ended March 31, 2022, net cash used in operating activities was $2,545,689, primarily due to a net loss of $3,555,761 adjusted by various expenses[212] Research and Development - Research and development expenses rose to $3,799,707 for the three months ending March 31, 2023, up from $2,625,138 in the prior year, reflecting a 44.7% increase[20] - Research and development expenses increased by 45% to $3,799,707 for the three months ended March 31, 2023, compared to $2,625,138 for the same period in 2022[188] - The company is focused on developing next-generation photonic devices and expects to generate revenue from technology licensing and direct sales of electro-optic device components[29] - The company is focused on commercializing its next-generation electro-optic photonic devices based on its PIC™ technology platform, which includes Polymer Stack™, Polymer Plus™, and Polymer Slot™[90] Cash and Assets - Total current assets increased to $26,871,412 as of March 31, 2023, compared to $25,355,616 at December 31, 2022, representing a growth of 5.96%[18] - Cash and cash equivalents at the end of the period were $26,168,214, an increase of 8.7% from $24,102,151 at the beginning of the period[24] - As of March 31, 2023, cash and cash equivalents totaled $26,168,214, with total assets of $30,810,139 and liabilities of $976,973, resulting in stockholders' equity of $29,833,166[211] - Total stockholders' equity increased to $29,833,166 as of March 31, 2023, from $27,553,023 at December 31, 2022, marking a growth of 8.25%[18] Financing Activities - The company issued common stock to institutional investors, raising $5,499,377 during the three months ending March 31, 2023[24] - For the three months ended March 31, 2023, net cash provided by financing activities was $5,525,127, consisting of $25,750 from options and warrants exercise and $5,499,377 from resale of common stock to an institutional investor[211] - The company has entered into a purchase agreement to sell up to $30,000,000 of common stock over a 36-month period, with $26,999,998 remaining available as of April and May 2023[40] - The company received $5,499,377 in proceeds from the 2021 Purchase Agreement during the three months ended March 31, 2023[198] Expenses - General and administrative expenses rose by 54% to $1,360,170 for the three months ended March 31, 2023, compared to $885,430 for the same period in 2022[188] - Legal expenses increased by $239,406 for the three months ended March 31, 2023, compared to the same period in 2022[193] - The Company expects to incur approximately $1,675,000 in expenditures per month over the next 12 months[200] - The company anticipates cash requirements to increase as it expands research and development efforts and hires additional staff[202] Market and Product Development - The company is currently in various stages of development and evaluation with potential customers and strategic partners, indicating ongoing market expansion efforts[29] - The company aims for its initial modulator products to operate at symbol rates of at least 112 Gigabaud, translating to approximately 200 Gbps with PAM4 encoding[105] - The ridge waveguide modulator, Polymer Stack™, is designed for fiber optics communications and targets aggregated data rates of 800 Gbps and above, with a market opportunity worth over $2 billion over the next decade[109] - The company is developing a multichannel Polymer Photonic Integrated Circuit (PIC™) platform to address markets with aggregated data rates of 100 Gbps, 400 Gbps, and 800 Gbps[116] Intellectual Property and Innovation - The company is continually strengthening its patent portfolio through internal inventions and acquisitions[92] - The company acquired polymer technology intellectual property assets, enhancing its patent portfolio with 15 new patents related to electro-optic polymer technology[129] - The company received a patent for multi-layered electro-optic polymer modulators, improving performance and reliability in fiber optic communications[141] - The company received U.S. Patent number 10,591,755, enabling electro-optic polymer modulators to operate with high speed and low power directly from CMOS IC chips, reducing costs and power consumption[145] Corporate Developments - The company appointed Dr. Craig Ciesla to its Board of Directors, bringing significant industry experience to the leadership team[159] - The company was added to the Russell 3000 Index on June 27, 2022, which is expected to broaden its institutional investor base[167] - The company’s common stock was added to the Solactive EPIC Core Photonics EUR Index NTR, enhancing its credibility and exposure in the capital markets[149]

| --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------------------------------------------|------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Faster by Design | | | | | | | Investor Presentation Michael Lebby, CEO | | | | | | | | Lightwave Logic (NASDAQ:LWLG) | | | | Safe harbor NASDAQ: LWLG • 2 The information in this presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identi ...

| --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------------------------------------------|------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | Faster by Design | | | | | | | Investor Presentation Michael Lebby, CEO | | | | | | | | Lightwave Logic (NASDAQ:LWLG) | | | | Safe harbor NASDAQ: LWLG • 2 The information in this presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identi ...

Financial Performance - Lightwave Logic, Inc. had no revenues for the years ended December 31, 2022, 2021, and 2020, as it is in various stages of photonic device and materials development [297]. - Net loss for the year ended December 31, 2022, was $17,230,480, a decrease of 8% from $18,631,381 in 2021 [310]. - Research and development expenses for the year ended December 31, 2022, were $12,805,374, an increase of 3% from $12,476,040 in 2021 [298]. - Research and development expenses increased by $7,885,495 (172%) from $4,590,545 in 2020 to $12,476,040 in 2021 [298]. - General and administrative expenses decreased to $4,334,290 for the year ended December 31, 2022, down 4% from $4,520,403 in 2021 [298]. - Other income (expenses) improved significantly, decreasing to $(90,816) in 2022 from $(1,634,938) in 2021, a reduction of 94% [308]. Cash Flow and Financing - Net cash used in operating activities for 2022 was $10,465,880, primarily due to the net loss adjusted by various expenses [324]. - Cash and cash equivalents as of December 31, 2022, totaled $24,102,151, with total assets of $29,263,472 and stockholders' equity of $27,553,023 [326]. - The company received $12,775,268 in proceeds from the 2021 purchase agreement with an institutional investor during 2022 [315]. - Net cash provided by financing activities for 2022 was $13,345,141, consisting of proceeds from the exercise of options and warrants and resale of common stock [326]. - The 2021 Purchase Agreement allows the company to sell up to $33 million of common stock over a 36-month period, with $2,126,557 remaining as of the latest filing [314]. - The 2023 Purchase Agreement enables the company to sell up to $30 million of common stock over a 36-month period, with $30 remaining as of the latest filing [314]. - The company anticipates cash used in operations will continue to increase in 2023 due to planned activities and expansion efforts [319]. - The company had no debt to service as of the latest reporting period [318]. Investment and Assets - Net cash used by investing activities was $217,984 for the year ended December 31, 2020, primarily for intangibles and asset additions for the new Colorado headquarters and labs [333]. - Net cash provided by financing activities was $6,162,093 for the year ended December 31, 2020, including $1,658,442 from warrant exercises and $5,173,300 from common stock resale [334]. - As of December 31, 2020, cash and cash equivalents totaled $3,306,590, with total assets of $7,366,778 and stockholders' equity of $5,775,446 [334]. - As of December 31, 2022, cash and cash equivalents increased to $24,102,151, indicating strong liquidity [336]. Business Strategy and Market Focus - The company aims to partner with silicon-based foundries to scale volume quickly and efficiently for its polymer modulator devices [287]. - The patent portfolio is being optimized through traditional product development, patent licensing, and technology transfer to foundries [288]. - The company anticipates revenue streams from technology licensing agreements, joint ventures, and direct sales of electro-optic device components [290]. - Lightwave Logic is targeting applications in fiber optic data communications and telecommunications, with plans to explore automotive/LIDAR and sensing markets [289]. - The company expects initial modulator products to operate at symbol rates of at least 112 Gigabaud, equating to roughly 200Gbps with PAM4 encoding [293]. Risk Management - The company does not use market risk sensitive instruments for hedging or trading purposes, minimizing financial market risk exposure [338]. - A 10% change in interest rates as of December 31, 2022, would not have materially affected the fair value of the investment portfolio [337].

Financial Performance - The net loss for the nine months ending September 30, 2022, was $12.16 million, compared to a net loss of $10.52 million for the same period in 2021, indicating an increase in losses of 15.6%[18]. - The net loss for the three months ended September 30, 2022, was $4,803,383, an increase of $555,261 (13%) compared to the same period in 2021[176]. - The net loss for the nine months ended September 30, 2022, was $12,161,742, an increase of $1,639,091 (16%) compared to the same period in 2021[183]. - The company incurred a net loss of $12,161,742 for the nine months ended September 30, 2022, with an accumulated deficit of $101,764,623[210]. - The company anticipates continuing to incur operating losses through at least 2022, requiring significant revenue generation to achieve profitability[211]. Revenue and Sales - The company reported no net sales for the three and nine months ending September 30, 2022[18]. - The company had no revenues during the nine months ended September 30, 2022, as it is in various stages of photonic device and materials development[177]. - The company expects to generate revenue from technology licensing agreements and direct sales of its electro-optic device components[28]. Expenses - Research and development expenses for the nine months ending September 30, 2022, were $8.99 million, up 15.9% from $7.76 million in the same period of 2021[18]. - General and administrative expenses increased to $3.02 million for the nine months ending September 30, 2022, compared to $1.84 million in 2021, reflecting a rise of 64.0%[18]. - General and administrative expenses increased by $1,176,125 (64%) for the nine months ended September 30, 2022, compared to the same period in 2021, primarily due to increases in non-cash stock option amortization, legal expenses, and director fees[181]. - Research and development expenses rose by $1,232,946 (16%) for the nine months ended September 30, 2022, compared to the same period in 2021, driven by increases in non-cash stock option amortization and prototype device development expenses[178]. - Research and development expenses for the three months ended September 30, 2022, were $3,587,692, a slight decrease from $3,600,793 in the same period in 2021[172]. Assets and Liabilities - Total assets increased to $30.15 million as of September 30, 2022, compared to $27.23 million at December 31, 2021, representing an increase of 10.7%[17]. - Cash and cash equivalents rose to $25.02 million from $23.43 million, a growth of 6.8%[17]. - Total stockholders' equity increased to $28.79 million as of September 30, 2022, from $25.20 million at December 31, 2021, marking an increase of 10.3%[17]. - The total current liabilities decreased to $1.09 million from $1.59 million, a reduction of 31.2%[17]. - Long-term liabilities decreased to $0.27 million from $0.44 million, a decline of 39.2%[17]. - Cash and cash equivalents totaled $25,021,642 as of September 30, 2022, with total assets of $30,148,946 and stockholders' equity of $28,794,197[194]. Financing and Capital - The company expects to incur approximately $1,380,000 in expenditures per month over the next 12 months, with current cash enabling operations through March 2024[39]. - The company has sufficient funds to finance operations through March 2024 but will need additional capital thereafter[212]. - The company plans to seek additional funding through public or private financings, including equity financings[212]. - The company received $10,709,293 in proceeds from the resale of common stock to an institutional investor during the nine months ended September 30, 2022[188]. - The company has a remaining available amount of $4,943,057 under a purchase agreement with an institutional investor for common stock sales[39]. Stock and Options - The weighted average number of shares outstanding for the nine months ending September 30, 2022, was 111.54 million, compared to 103.91 million in 2021, an increase of 7.8%[18]. - The company has 2,895,000 stock options outstanding as of September 30, 2022, under the 2007 Employee Stock Plan[66]. - The total share-based compensation recognized was $4,355,639, a significant increase from $799,197 in the same period of 2021, reflecting a growth of approximately 444%[73]. - The company reported stock options issued for services amounting to $4,288,172 for the nine months ending September 30, 2022[25]. Research and Development Focus - The company is focused on developing next-generation photonic devices and expects to generate revenue from technology licensing agreements and direct sales of its electro-optic device components[28]. - The company is developing electro-optic modulators that convert electric signals into optical signals, essential for high-speed fiber-optic telecommunications[89]. - The company is working closely with packaging and foundry partners for 50Gbaud and 100Gbaud prototypes, aiming for commercial volume scalability[167]. - The company expects to incur substantial research and development expenses as it accelerates efforts to commercialize its electro-optic polymer materials technology[173]. - The company is focusing on developing proprietary organic electro-optic polymer material systems to improve product reliability and quality assurance capabilities[99]. Technology and Innovation - Lightwave Logic, Inc. is focused on commercialization of next-generation electro-optic photonic devices using its proprietary PIC™ technology platform, targeting applications in data communications and telecommunications markets[83]. - The company is expanding its partnerships with silicon-based foundries to scale production of polymer modulator devices, enhancing manufacturability and reliability[84]. - The proprietary electro-optic polymers are designed for superior performance and stability, with potential applications across various industries including telecommunications, automotive, and aerospace[88]. - The company achieved a breakthrough with new modulators fabricated in 2021, exceeding bandwidth design targets and achieving triple the data rate compared to competing devices, with electrical bandwidths exceeding 100 GHz[145]. - The company received U.S. Patent number 10,754,093, enhancing the performance and reliability of high-speed, low-power electro-optic polymer modulators for datacenter and telecommunications applications[136].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________ FORM 10-Q ____________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________to _____________ Commission File Number 001-40766 Lightwave Logic, Inc. (Exact name of registrant as sp ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________ FORM 10-Q ____________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________to _____________ Commission File Number 001-40766 Lightwave Logic, Inc. (Exact name of registrant as s ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) Lightwave Logic develops high-speed, low-power electro-optic photonic devices using proprietary polymer technology for data and telecommunications markets - The company is a development-stage entity commercializing electro-optic photonic devices using its proprietary **PIC™ technology platform**, including Polymer Stack™, Polymer Plus™, and Polymer Slot™[16](index=16&type=chunk) - The business model focuses on **product development, patent licensing, and technology transfer** to foundries[18](index=18&type=chunk) - Initial target markets include **data communications and telecommunications**, with explorations into automotive/LIDAR, sensing, and displays[18](index=18&type=chunk) [Overview and Technology](index=5&type=section&id=Item%201.%20Business.Overview) The company develops proprietary organic polymers for electro-optic devices, offering superior performance, stability, and cost-efficiency, integrated with semiconductor manufacturing processes - The company designs proprietary organic chromophores for electro-optic polymer systems, engineered for **superior performance and stability** at a molecular level[20](index=20&type=chunk) - The **Polymer Plus™ platform** enables integration of electro-optic polymers as thin film coatings with CMOS and Indium Phosphide (InP) material platforms[27](index=27&type=chunk) - Lightwave Logic collaborates with commercial foundries to implement electro-optic polymers into **Process Development Kits (PDKs)** for Polymer Plus™ and Polymer Slot™ modulators[28](index=28&type=chunk) [Intellectual Property](index=10&type=section&id=Item%201.%20Business.Intellectual%20Property) The company protects its technology with an extensive portfolio of **59 granted patents**, including 47 in the US, significantly expanded by a 2018 acquisition - The company's patent portfolio comprises **59 granted patents**, including 47 from the US, 5 from the EU, and others from Canada, Japan, and China[58](index=58&type=chunk) - In 2018, the company acquired **BrPhotonics' Polymer Technology IP Assets**, adding 15 patents and strengthening its position for the 400Gbps integrated photonics market[57](index=57&type=chunk) [Recent Milestones and Events](index=11&type=section&id=Item%201.%20Business.Recent%20Milestones) From 2020-2022, the company achieved significant technical and corporate milestones, including world-record polymer modulator performance and Nasdaq listing - The company's common stock began trading on the **Nasdaq Capital Market** on September 1, 2021[92](index=92&type=chunk) - Achieved **world-record performance** for a polymer modulator, demonstrating **220 Gbit/s OOK** and **408 Gbit/s 8PAM transmission** in collaboration with ETH Zurich and Polariton Technologies[94](index=94&type=chunk) - Announced **breakthrough photostability results** on electro-optic polymer modulators, crucial for high-volume silicon foundry compatibility[98](index=98&type=chunk) [Market Overview and Target Markets](index=15&type=section&id=Item%201.%20Business.Market%20Overview) The global photonics components market is projected to reach **$80 billion by 2030**, with PICs comprising **52%**, targeting data center and telecommunications interconnects - The photonics market is forecasted to grow to **$80 billion by 2030** with a **17% CAGR** (2020-30)[103](index=103&type=chunk) - **PIC-based technologies** are forecasted to reach approximately **$41 billion by 2030**, representing about **52%** of the photonics components market[106](index=106&type=chunk) - The company's modulators are suited for single-mode fiber optic links **greater than 10km**, targeting data center and telecommunication applications[117](index=117&type=chunk)[136](index=136&type=chunk) [Business Strategy and Products in Development](index=22&type=section&id=Item%201.%20Business.Strategy%20and%20Products) The company's strategy is to develop a portfolio of **50 Gbaud and higher** electro-optic modulators using its PIC platform, targeting multi-channel data rates up to 1.6 Tbps - The business strategy anticipates revenue from **technology licensing, joint ventures, and direct sales** of electro-optic device components[128](index=128&type=chunk) - The **Ridge Waveguide Modulator (Polymer Stack™)** is the first commercially viable device, targeting fiber optics communications for links **over 10km**[133](index=133&type=chunk)[136](index=136&type=chunk) - The long-term goal is a flexible, multichannel **PIC™ platform** to address aggregated data-rate markets from **100 Gbps up to 1.6 Tbps**[144](index=144&type=chunk) [Competition](index=25&type=section&id=Item%201.%20Business.Competition) The company competes in a highly competitive market against established InP and SiP technologies, leveraging its organic polymer advantages against major fiber-optic component manufacturers - The incumbent PIC technology, **Indium Phosphide (InP)**, offers world-class performance but has limitations in large-format wafer manufacturing[151](index=151&type=chunk) - **Silicon Photonics (SiP)** leverages existing semiconductor infrastructure for cost reduction but requires hybrid solutions as it cannot natively generate light[153](index=153&type=chunk) - Key competitors include **II-VI, Lumentum, Molex, Broadcom, Intel, and Ciena**, heavily invested in crystalline-based modulator technologies[160](index=160&type=chunk) [Human Capital](index=28&type=section&id=Item%201.%20Business.Human%20Capital) The company has **19 full-time employees**, with plans to add 5 more in 2022, relying on a skilled workforce and offering competitive compensation to attract talent - The company currently has **19 full-time employees** and expects to add **5 additional full-time employees in 2022**[163](index=163&type=chunk) - The company's total rewards package includes **market-competitive pay, stock options, bonuses, and various benefits** to attract and retain talent[167](index=167&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including substantial operating losses, need for future capital, market acceptance challenges, intellectual property protection, and reliance on strategic partnerships - The company has a history of substantial operating losses, incurring a **net loss of $18.6 million in 2021**, and anticipates continued losses[173](index=173&type=chunk) - The company will require **additional capital** to fund operations beyond December 2023, which may not be obtainable on acceptable terms[179](index=179&type=chunk) - Targeted markets are intensely competitive, with competitors possessing **substantially greater resources**, potentially hindering the company's success[201](index=201&type=chunk) - Success depends on gaining market acceptance for products, involving a **lengthy and expensive customer qualification process** with no sales guarantee[188](index=188&type=chunk)[190](index=190&type=chunk) - The **COVID-19 pandemic** continues to pose risks, potentially impacting research and development, financial results, and fundraising ability[198](index=198&type=chunk) [Unresolved Staff Comments](index=44&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[247](index=247&type=chunk) [Properties](index=44&type=section&id=Item%202.%20Properties) The company's principal executive and R&D facility is a **13,420 sq. ft. leased space** in Englewood, Colorado, including cleanrooms and laboratories - The company's main facility is a **13,420 sq. ft. leased space** in Englewood, Colorado, including cleanrooms and laboratories[248](index=248&type=chunk) [Legal Proceedings](index=44&type=section&id=Item%203.%20Legal%20Proceedings) The company is not a party to any material litigation, nor is it aware of any threatened material litigation - The company is not a party to any litigation of a material nature[249](index=249&type=chunk) [Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[250](index=250&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=45&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock began trading on the **Nasdaq Capital Market** on September 1, 2021, with no cash dividends paid, and has significantly outperformed the NASDAQ Composite Index - The company's common stock has traded on the **Nasdaq Capital Market** under the symbol "LWLG" since September 1, 2021[253](index=253&type=chunk) - No cash dividends have been declared or paid on common stock to date[255](index=255&type=chunk) | Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 6,748,248 | $1.05 | 3,210,250 | | Equity compensation plans not approved by security holders | 1,138,000 | $0.85 | 0 | | **Total** | **7,886,248** | **$1.02** | **3,210,250** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The development-stage company reported no revenue in 2021 or 2020, with a **net loss of $18.6 million** in 2021 due to increased operating expenses, primarily funded by common stock sales [Results of Operations (FY 2021 vs. FY 2020)](index=49&type=section&id=Item%207.%20MD%26A.Results%20of%20Operations) In FY2021, the company reported no revenue, with operating expenses increasing **158% to $17.0 million**, leading to a **net loss of $18.6 million**, up **177%** from 2020 | | Year Ending Dec 31, 2021 | Year Ending Dec 31, 2020 | Change from Prior Year ($) | Change from Prior Year (%) | | :--- | :--- | :--- | :--- | :--- | | **Research and development** | $12,476,040 | $4,590,545 | $7,885,495 | 172% | | **General and administrative** | $4,520,403 | $2,009,429 | $2,510,974 | 125% | | **Total Operating Expenses** | **$16,996,443** | **$6,599,974** | **$10,396,469** | **158%** | | | Year Ending Dec 31, 2021 | Year Ending Dec 31, 2020 | Change from Prior Year ($) | Change from Prior Year (%) | | :--- | :--- | :--- | :--- | :--- | | **Net Loss** | $18,631,381 | $6,715,564 | $11,915,817 | 177% | - The increase in R&D expenses was primarily due to **$3.5 million in cashless option exercise expenses** and a **$3.3 million increase in salary expenses**[276](index=276&type=chunk) - The increase in G&A expenses was primarily due to a **$2.0 million increase in salary expenses** and Nasdaq uplisting costs[279](index=279&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Item%207.%20MD%26A.Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from common stock sales, ending 2021 with **$23.4 million in cash**, believed sufficient to fund operations through December 2023 - The company's primary cash source is common stock sales to Lincoln Park, with **$13.4 million remaining** under the current purchase agreement[284](index=284&type=chunk)[285](index=285&type=chunk) - The company believes it has sufficient funds to finance operations through **December 2023**, with expected monthly expenditures of approximately **$1.015 million** over the next 12 months[288](index=288&type=chunk) | Cash Flow Item | For the Year Ended Dec 31, 2021 | For the Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,038,626) | $(4,873,863) | | Net cash used in investing activities | $(1,116,179) | $(217,984) | | Net cash provided by financing activities | $31,280,827 | $6,162,093 | | **Cash and cash equivalents - End of Year** | **$23,432,612** | **$3,306,590** | [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has minimal market risk exposure, holding **$23.4 million in highly liquid cash and equivalents**, and does not use market risk sensitive instruments for hedging - The company holds no market risk sensitive instruments for trading or speculative purposes and has concluded it does not have a material financial market risk exposure[299](index=299&type=chunk)[301](index=301&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2021, management concluded that the company's disclosure controls and internal control over financial reporting were effective - Management concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2021[304](index=304&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2021, based on the COSO framework[305](index=305&type=chunk) - No material changes in internal control over financial reporting occurred during the fourth fiscal quarter[309](index=309&type=chunk) Part III Information for Items 10-14, including Directors, Executive Compensation, and Security Ownership, is incorporated by reference from the definitive proxy statement to be filed within 120 days [Directors, Executive Officers and Corporate Governance](index=55&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information is incorporated by reference from the definitive proxy statement - Information required under this item will be contained in the definitive proxy statement to be filed within **120 days of December 31, 2021**[313](index=313&type=chunk) [Executive Compensation](index=55&type=section&id=Item%2011.%20Executive%20Compensation) Information is incorporated by reference from the definitive proxy statement - Information required under this item will be contained in the definitive proxy statement to be filed within **120 days of December 31, 2021**[314](index=314&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=55&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information is incorporated by reference from the definitive proxy statement - Information required under this item will be contained in the definitive proxy statement to be filed within **120 days of December 31, 2021**[315](index=315&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=55&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information is incorporated by reference from the definitive proxy statement - Information required under this item will be contained in the definitive proxy statement to be filed within **120 days of December 31, 2021**[316](index=316&type=chunk) [Principal Accountant Fees and Services](index=55&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information is incorporated by reference from the definitive proxy statement - Information required under this item will be contained in the definitive proxy statement to be filed within **120 days of December 31, 2021**[317](index=317&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=56&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the audited financial statements and all exhibits filed as part of the Form 10-K report, including corporate governance documents and material contracts - This section lists the financial statements and exhibits filed with the Form 10-K[319](index=319&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________ FORM 10-Q ____________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________to _____________ Commission File Number 001-40766 Lightwave Logic, Inc. (Exact name of registrant ...