10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-Q

____________________

(Mark One)

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

For the quarterly period ended March 31, 2019

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 0-52567

Lightwave Logic, Inc.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of Incorporation or Organization)	82-049-7368  (I.R.S. Employer Identification No.)
369 Inverness Parkway, Suite 350 Englewood, CO (Address of principal executive offices)	80112 (Zip Code)
(720) 340-4949 (Registrant’s telephone number, including area code)

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 þ 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 þ 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                  þ
Non-accelerated filer   ¨	Smaller reporting company þ
	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 is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ¨ No þ

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class Trading Symbol(s) Name of exchange on which registered

The number of shares of the registrant’s common stock outstanding as of May 9, 2019 was 82,294,902.

TABLE OF CONTENTS

			Page
Part I	Financial Information
	Item 1	Financial Statements	1
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Item 4	Controls and Procedures	23
Part II	Other Information
	Item 6	Exhibits	24
		Signatures	25

i

Forward-Looking Statements

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

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: lack of available funding; general economic and business conditions; competition from third parties; intellectual property rights of third parties; regulatory constraints; changes in technology and methods of marketing; delays in completing various engineering and manufacturing programs; changes in customer order patterns; changes in product mix; success in technological advances and delivering technological innovations; shortages in components; production delays due to performance quality issues with outsourced components; and other factors beyond the Company's control.

The ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. We discuss our known material risks under Item 1.A “Risk Factors” contained in our Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Many factors could cause our actual results to differ materially from the forward-looking statements. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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

ii

PART I – FINANCIAL INFORMATION

Item 1

Financial Statements

LIGHTWAVE LOGIC, INC.

FINANCIAL STATEMENTS

MARCH 31, 2019

(UNAUDITED)

	Page
Balance Sheets	2
Statements of Operations	3
Statement of Stockholders’ Equity	4
Statements of Cash Flows	5
Notes to Financial Statements	6

1

LIGHTWAVE LOGIC, INC.

BALANCE SHEETS

	March 31, 2019			December 31, 2018
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,285,631		$	2,174,625
Prepaid expenses and other current assets		295,424			537,959
		2,581,055			2,712,584
PROPERTY AND EQUIPMENT - NET		1,725,485			1,800,769
OTHER ASSETS
Intangible assets - net		929,639			938,239
Operating Lease - Right of Use - Building		885,094			—
		1,814,733			938,239
TOTAL ASSETS	$	6,121,273		$	5,451,592
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	121,625		$	150,741
Current portion of equipment purchase		71,435			178,482
Accounts payable and accrued expenses - related parties		29,488			13,824
Deferred lease liability		33,858			51,148
Operating lease liability		63,300			—
Accrued expenses		9,333			1,155
		329,039			395,350
LONG TERM LIABILITIES
Deferred lease liability		158,005			149,180
Operating lease liability		821,794			—
		979,799			149,180
TOTAL LIABILITIES		1,308,838			544,530
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 1,000,000 authorized,
no shares issued or outstanding		—			—
Common stock $0.001 par value, 250,000,000 authorized,
81,572,469 and 79,176,330 issued and outstanding at
March 31, 2019 and December 31, 2018		81,573			79,177
Additional paid-in-capital		64,278,609			62,356,854
Accumulated deficit		(59,547,747	)		(57,528,969	)
TOTAL STOCKHOLDERS' EQUITY		4,812,435			4,907,062
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	6,121,273		$	5,451,592

See accompanying notes to these financial statements.

2

LIGHTWAVE LOGIC, INC.

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDING MARCH 31, 2019 AND 2018

(UNAUDITED)

	For the Three			For the Three
	Months Ending			Months Ending
	March 31, 2019			March 31, 2018
NET SALES	$	—		$	—
COST AND EXPENSE
Research and development		1,152,053			901,672
General and administrative		568,430			574,595
		1,720,483			1,476,267
LOSS FROM OPERATIONS		(1,720,483	)		(1,476,267	)
OTHER INCOME (EXPENSE)
Interest income		62			62
Commitment fee		(298,357	)		(37,194	)
NET LOSS	$	(2,018,778	)	$	(1,513,399	)
Basic and Diluted Loss per Share	$	(0.03	)	$	(0.02	)
Basic and Diluted Weighted Average Number of Shares		80,434,957			74,543,897

See accompanying notes to these financial statements.

3

LIGHTWAVE LOGIC, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

MARCH 31, 2019

(UNAUDITED)

					Additional
	Number of		Common		Paid-in		Accumulated
	Shares		Stock		Capital		Deficit			Total
BALANCE AT DECEMBER 31, 2018		79,176,330	$	79,177	$	62,356,854	$	(57,528,969	)	$	4,907,062
Common stock issued to institutional investor		2,000,000		2,000		1,417,585		—			1,419,585
Common stock issued for commitment shares		396,139		396		297,960		—			298,356
Options issued for services		—		—		187,383		—			187,383
Warrants issued for services		—		—		18,827		—			18,827
Net loss for the three months ending March 31, 2019		—		—		—		(2,018,778	)		(2,018,778	)
BALANCE AT MARCH 31, 2019		81,572,469	$	81,573	$	64,278,609	$	(59,547,747	)	$	4,812,435

					Additional
	Number of		Common		Paid-in		Accumulated
	Shares		Stock		Capital		Deficit			Total
BALANCE AT DECEMBER 31, 2017		74,068,259	$	74,068	$	56,698,658	$	(51,756,011	)	$	5,016,715
Common stock issued to institutional investor		900,000		900		992,800		—			993,700
Common stock issued for additional commitment shares		32,298		33		37,161		—			37,194
Options issued for services		—		—		176,575		—			176,575
Warrants issued for services		—		—		25,337		—			25,337
Net loss for the three months ending March 31, 2018		—		—		—		(1,513,399	)		(1,513,399	)
BALANCE AT MARCH 31, 2018		75,000,557	$	75,001	$	57,930,531	$	(53,269,410	)	$	4,736,122

See accompanying notes to these financial statements.

4

LIGHTWAVE LOGIC, INC.

STATEMENTS OF CASH FLOW

(UNAUDITED)

	For the Three			For the Three
	Months Ending			Months Ending
	March 31, 2019			March 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,018,778	)	$	(1,513,399	)
Adjustment to reconcile net loss to net cash used in operating activities
Warrants issued for services		18,827			25,337
Stock options issued for services		187,383			176,575
Common stock issued for services and fees		298,356			37,194
Depreciation and amortization of patents		138,832			58,372
(Gain) loss on disposal of property and equipment		—			10,084
Decrease in assets
Prepaid expenses and other current assets		242,535			17,960
(Decrease) increase in liabilities
Accounts payable		(29,116	)		115,710
Accounts payable and accrued expenses-related parties		15,664			25,369
Deferred lease liability		(8,465	)		—
Accrued expenses		8,178			(1,453	)
Net cash used in operating activities		(1,146,584	)		(1,048,251	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cost of intangibles		(11,810	)		(21,527	)
Purchase of property and equipment		(43,138	)		(514,859	)
Sale of property and equipment		—			2,500
Net cash used in investing activities		(54,948	)		(533,886	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock, institutional investor		1,419,585			993,700
Repayment of equipment purchased		(107,047	)		(83,129	)
Net cash provided by financing activities		1,312,538			910,571
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		111,006			(671,566	)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		2,174,625			3,482,327
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	2,285,631		$	2,810,761
Supplemental Disclosure of Non-cash operational activity:
Operating Lease - Right of Use - Building and Operating lease liability	$	885,094		$	—

See accompanying notes to these financial statements.

5

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2019 AND 2018

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

Financial Statements

The accompanying unaudited financial statements have been prepared by Lightwave Logic, Inc. (the Company). These statements include all adjustments (consisting only of its normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting polices described in the Summary of Accounting Policies included in the 2018 Annual Report. Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company firmly believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission. The interim operating results for the three months ending March 31, 2019 may not be indicative of operating results expected for the full year.

Nature of Business

Lightwave Logic, Inc. is a technology company focused on the development of next generation photonic devices and non-linear optical polymer materials systems for applications in high speed fiber-optic data communications and optical computing markets. Currently the Company is in various stages of photonic device and materials development and evaluation with potential customers and strategic partners. The Company expects to obtain a revenue stream from datacom and telecom devices, sales of non-linear optical polymers, and product development agreements prior to moving into full-scale production.

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

Stock-based Payments

The Company accounts for stock-based compensation under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, "Compensation - Stock Compensation", which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. The amendments in this Update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Prior to this Update, Topic 718 applied only to share-based transactions to employees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The adoption of this pronouncement on June 30, 2018 had no material impact on the Company’s consolidated financial statements.

6

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2019 AND 2018

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

Loss Per Share

The Company follows FASB ASC 260, “Earnings per Share”, resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss in 2019 and 2018, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same.

Comprehensive Income

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

Recently Issued Accounting Pronouncements Not Yet Adopted

As of March 31, 2019, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequent related updates. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from operating leases. The Company adopted the standard effective January 1, 2019 under the optional transition method which allows the entity to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the period of adoption. The standard had a material impact on the consolidated balance sheet (see Note 7).

Reclassifications

Certain reclassifications have been made to the 2018 financial statement in order to conform to the 2019 financial statement presentation.

NOTE 2 – MANAGEMENT’S PLANS

As a technology company focusing on the development of the next generation photonic devices and non-linear optical polymer materials systems, substantial net losses have been incurred since inception. The Company has satisfied capital requirements since inception primarily through the issuance and sale of its common stock. In January 2019, the Company signed a purchase agreement (“Purchase Agreement”) with an institutional investor to sell up to $25,000,000 of common stock. Under the Purchase Agreement and at Company's sole discretion, the institutional investor has committed to invest up to $25,000,000 in common stock over a 36-month period with the remaining available amount of $24,592,000 as of March 31, 2019. Since March 31, 2019, the Company has raised an additional $690,250. As of May 10, 2019, the Company has a cash position of approximately $2,290,000. Based upon the current cash position and expected expenditures over subsequent periods and no debt service, management believes the Company has sufficient funds to finance its operations through August 2019 before the Company will replenish cash reserves pursuant to the Purchase Agreement.

7

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2019 AND 2018

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

	March 31, 2019		December 31, 2018
Insurance	$	44,211	$	226,363
Prepaid material		28,255		46,120
Rent		155,557		222,224
Other		67,401		37,210
Stock award		—		6,042
	$	295,424	$	537,959

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	March 31, 2019		December 31, 2018
Office equipment	$	83,272	$	79,886
Lab equipment		2,553,211		2,513,459
Furniture		33,128		33,128
Leasehold Improvements		220,389		220,389
		2,890,000		2,846,862
Less: Accumulated depreciation		1,164,515		1,046,093
	$	1,725,485	$	1,800,769

Depreciation expense for the three months ending March 31, 2019 and 2018 was $118,422 and $46,629. During the three months ending March 31, 2018, the Company sold equipment for proceeds of $2,500 and a gain of $2,500. During the three months ending March 31, 2018, the Company retired assets and recorded a loss on the retirement of $12,584. During the three months ending March 31, 2019, the Company did not retire or sell any property and equipment.

8

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2019 AND 2018

NOTE 5 – INTANGIBLE ASSETS

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

On June 11, 2018, the Company purchased patents for $315,000.

Patents consists of the following:

	March 31, 2019		December 31, 2018
Patents	$	1,196,692	$	1,184,882
Less: Accumulated amortization		267,053		246,643
	$	929,639	$	938,239

Amortization expense for the three months ending March 31, 2019 and 2018 was $20,410 and $11,743. There were no patent costs written off for the three months ending March 31, 2019 and 2018.

NOTE 6 – LONG TERM EQUIPMENT PURCHASE PAYABLE

Outstanding long term equipment purchase payable is comprised of the following:

Final Year		Interest			March 31,		December 31,
of Maturity	Classification	Rate			2019		2018
2019	Current		0.00	%	$	71,435	$	178,482

9

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2019 AND 2018

NOTE 7 – LEASES

On October 30, 2017, the Company entered into a new lease to lease approximately 13,420 square feet of office, laboratory and research and development space located in Colorado for the Company’s new principal executive offices and research and development facility. The term of the lease is sixty- one (61) months, beginning on November 1, 2017 and ending on November 30, 2022. The term shall be extended for an additional twenty-four (24) months, subject to certain conditions, waivable solely by Landlord in its sole and absolute discretion. Base rent for the first year of the lease term is approximately $168,824, with an increase in annual base rent of approximately 3% in each subsequent year of the lease term. As specified in the lease, the Company paid the landlord (i) all base rent for the period November 1, 2017 and ending on October 31, 2019, in the sum of $347,045; and (ii) the estimated amount of tenant’s proportionate share of operating expenses for the same period in the sum of $186,293. Commencing on November 1, 2019, monthly installments of base rent and one-twelfth of landlord’s estimate of tenant’s proportionate share of annual operating expenses shall be due on the first day of each calendar month. The lease also provides that (i) on November 1, 2019 landlord shall pay the Company for the cost of the cosmetic improvements in the amount of $3.00 per rentable square foot of the premises, and (ii) on or prior to November 1, 2019, the Company shall deposit with Landlord the sum of $36,524 as a security deposit which shall be held by landlord to secure the Company’s obligations under the lease. The lease contains an option to extend the term to October 31, 2024. On October 30, 2017, the Company entered into an agreement with the tenant leasing the premise from the landlord (“Original Lessee”) whereby the Original Lessee agreed to pay the Company the sum of $260,000 in consideration of the Company entering into the lease and landlord agreeing to the early termination of the Original Lessee’s lease agreement with landlord. The consideration of $260,000 was received on November 1, 2017.

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

As of January 1, 2019 the operating lease right-of-use asset and operating lease liability amounted to $885,094 with no cumulative-effect adjustment to the opening balance of retained earnings/accumulated deficit. The Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases.

There are no other material operating leases.

The Company is obligated under an operating lease for office and laboratory space. The aggregate minimum future lease payments under the operating leases, including the extended term are as follows:

YEARS ENDING
DECEMBER 31,	AMOUNT
2019	$	32,432
2020		195,574
2021		201,501
2022		207,563
2023		213,781
2024		182,624
		1,033,475
Less discounted interest		(148,381	)
TOTAL	$	885,094

Rent expense approximating $28,409 and $9,470 is included in research and development and general and administrative expenses for the three months ended March 31, 2019. Rent expense approximating $60,065 and $18,715 is included in research and development and general and administrative expenses for the three months ended March 31, 2018.

10

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2019 AND 2018

NOTE 8 – INCOME TAXES

There is no income tax benefit for the losses for the three months ended March 31, 2019 and 2018 since management has determined that the realization of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of such benefits.

The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2019, the Company had no unrecognized tax benefits, or any tax related interest or penalties. There were no changes in the Company’s unrecognized tax benefits during the period ended March 31, 2019. The Company did not recognize any interest or penalties during 2018 related to unrecognized tax benefits. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2015 and thereafter are subject to examination by the relevant taxing authorities.

NOTE 9 – STOCKHOLDERS’ EQUITY

Preferred Stock

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

Common Stock Options and Warrants

In January 2016, the Company signed a Purchase Agreement with an institutional investor to sell up to $20,000,000 of common stock. The Company also entered into a registration rights agreement with the institutional investor whereby the Company agreed to file a registration statement related to the transaction with the U.S. Securities and Exchange Commission registering 5,000,000 shares of the Company’s common stock. The registration statement was filed on March 25, 2016. The registration statement became effective April 7, 2016. The Company registered an additional 5,000,000 shares pursuant to a registration statement filed on April 19, 2017 which became effective June 15, 2017. The Company registered an additional 5,000,000 shares pursuant to a registration statement filed on May 2, 2018 which became effective May 11, 2018. Under the Purchase Agreement and at Company's sole discretion, the institutional investor has committed to invest up to $20,000,000 in common stock over a 36-month period. The Company issued 350,000 shares of restricted common stock to the institutional investor as an initial commitment fee valued at $237,965, fair value, and 650,000 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the Purchase Agreement. During the period August 2016 through March 31, 2019, the institutional investor purchased 14,000,000 shares of common stock for proceeds of $13,150,370 and the Company issued 427,405 shares of common stock as additional commitment fee, valued at $456,367, fair value, leaving 222,595 in reserve for additional commitment fees. During the three month period ending March 31, 2019, the institutional investor purchased 1,550,000 shares of common stock for proceeds of $1,011,585 and the Company issued 32,879 shares of common stock as additional commitment fee, valued at $24,162, fair value. The 2016 Purchase Agreement expired April, 2019. In January 2019, the Company signed a Purchase Agreement with the institutional investor to sell up to $25,000,000 of common stock. The Company registered 9,500,000 shares pursuant to a registration statement filed on January 30, 2019 which became effective February 13, 2019. The Company issued 350,000 shares of common stock to the institutional investor as an initial commitment fee valued at $258,125, fair value, and 812,500 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the Purchase Agreement. During the three month period ending March 31, 2019, the institutional investor purchased 450,000 shares of common stock for proceeds of $408,000 and the Company issued 13,260 shares of common stock as additional commitment fee, valued at $16,069, fair value. During April through May 2019, the institutional investor purchased 700,000 shares of common stock for proceeds of $690,250 and the Company issued 22,433 shares of common stock as additional commitment fee, valued at $22,766, fair value, leaving 776,807 in reserve for additional commitment fees.

11

LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2019 AND 2018

NOTE 10 – STOCK BASED COMPENSATION

During 2007, the Board of Directors of the Company adopted the 2007 Employee Stock Plan (“2007 Plan”) that was approved by the shareholders. Under the Plan, the Company is authorized to grant options to purchase up to 10,000,000 shares of common stock to directors, officers, employees and consultants who provide services to the Company. The Plan is intended to permit stock options granted to employees under the 2007 Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the 2007 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options (“Non-Statutory Stock Options”). Effective June 24, 2016, the 2007 Plan was terminated. As of March 31, 2019, options to purchase 4,450,000 shares of common stock have been issued and are outstanding.

During 2016, the Board of Directors of the Company adopted the 2016 Equity Incentive Plan (“2016 Plan”) that was approved by the shareholders at the 2016 annual meeting of shareholders on May 20, 2016. Under the 2016 Plan, the Company is authorized to grant awards of incentive and non-qualified stock options and restricted stock to purchase up to 3,000,000 shares of common stock to employees, directors and consultants. As of March 31, 2019, options to purchase 2,605,000 shares of common stock have been issued and are outstanding and 395,000 shares of common stock remain available for grants under the 2016 Plan.

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

The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award, with the following assumptions for 2019: no dividend yield in all years, expected volatility, based on the Company’s historical volatility, 60% to 80.5%, risk-free interest rate between 2.49% to 2.71% and expected option life of 5.0 to 10 years. The expected life is based on the estimated average of the life of options using the “simplified” method, as prescribed in FASB ASC 718, due to insufficient historical exercise activity during recent years.

As of March 31, 2019, there was $409,613 of unrecognized compensation expense related to non-vested market-based share awards that is expected to be recognized through August 30, 2020.

Share-based compensation was recognized as follows:

	For the Three		For the Three
	Months Ending		Months Ending
	March 31, 2019		March 31, 2018
2007 Employee Stock Option Plan	$	—	$	5,803
2016 Equity Incentive Plan		187,383		170,772
Warrants		18,827		25,337
Total share-based compensation	$	206,210	$	201,912

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LIGHTWAVE LOGIC, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2019 AND 2018

NOTE 10 – STOCK BASED COMPENSATION (CONTINUED)

The following tables summarize all stock option and warrant activity of the Company during the three months ended March 31, 2019:

	Non-Qualified Stock Options and Warrants Outstanding and Exercisable
						Weighted
	Number of			Exercise		Average
	Shares			Price		Exercise Price
Outstanding, December 31, 2018		18,964,867			$0.57 - $1.69	$	0.91
Granted		445,000			$0.64 - $0.84	$	0.81
Forfeited		(147,500	)		$0.77 - $0.92		0.89
Outstanding, March 31, 2019		19,262,367			$0.57 - $1.69	$	0.91
Exercisable, March 31, 2019		18,537,999			$0.57 - $1.69	$	0.90

The aggregate intrinsic value of options and warrants outstanding and exercisable as of March 31, 2019 was $5,494,991. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and warrants and the closing stock price of $1.18 for the Company’s common stock on March 31, 2019. No options or warrants were exercised during the three month period ending March 31, 2019.

Non-Qualified Stock Options and Warrants Outstanding
	Number Outstanding	Weighted Average	Weighted Average
Range of	Currently Exercisable	Remaining	Exercise Price of Options and
Exercise Prices	at March 31, 2019	Contractual Life	Warrants Currently Exercisable
$0.57 - $1.69	18,537,999	3.42 Years	$0.90

NOTE 11 – RELATED PARTY

At March 31, 2019 the Company had a legal accrual to a related party of $22,700, expense reimbursement to a related party of $476 and travel and office expense accruals of officers in the amount of $6,312. At December 31, 2018 the Company had a legal and accounting service accrual to related party of $10,999 and travel and office expense accruals of officers in the amount of $2,825.

During July 2018, the Company issued a warrant to purchase 100,000 shares of common stock at a purchase price of $1.15 per share for professional services to be rendered over a twelve month period commencing July 1, 2018. The warrant was valued at $62,637, fair value upon issuance, using the Black-Scholes Option Pricing Formula. The expense is being recognized based on service terms of the agreement over a twelve month period. For the three months ending March 31, 2019, the Company recognized $15,659 of expense. During July 2017, the Company issued a warrant to purchase 150,000 shares of common stock at a purchase price of $1.48 per share for professional services to be rendered over a twelve month period commencing July 1, 2017. The warrant was valued at $124,788, fair value upon issuance, using the Black-Scholes Option Pricing Formula. For the three months ending March 31, 2018, the Company recognized $25,337 of expense.

NOTE 12 – RETIREMENT PLAN

The Company established a 401(k) retirement plan covering all eligible employees beginning November 15, 2013. For the three months ending March 31, 2019 and 2018, a contribution of $9,543 and $5,607 was charged to expense for all eligible non-executive participants.

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Item 2

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

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. This information should also be read in conjunction with our audited historical financial statements which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission on March 18, 2019.

Overview

Lightwave Logic, Inc. is a development stage company whose P²IC^TM technology addresses advanced telecommunication, data communications, and data center markets utilizing its advanced organic electro-optic polymer systems. The Company currently has development activities in both polymer materials as well as device design.

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 they have the potential to replace more expensive, higher power consuming, slower-performance materials and devices used in fiber-optic communication networks.

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. Our Company contemplates future applications that may address the needs of semiconductor companies, optical network companies, Web 2.0 media companies, high performance computing companies, telecommunications companies, aerospace companies, and 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.

Polymer Photonic Integrated Circuits (P²IC^TM)

Our Company also designs its own proprietary polymer 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 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 4 channel polymer PIC. In this case, the number of photonic components would increase by a factor of 4. Another type 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 P²IC™ platform encompasses both these types of architecture.

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Current 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 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 and associated PIC platforms that can address higher data rates in a lower cost, lower power consuming manner, with much simpler modulation techniques.

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. 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.

Business Strategy

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

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

· Develop photonic devices based on our P²IC^TM technology

· Continue to develop proprietary intellectual property

· Grow our commercial device development capabilities

· Grow our product reliability and quality assurance capabilities

· Grow our optoelectronic packaging and testing capabilities

· Grow our commercial material manufacturing capabilities

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

· Continue to add high-level personnel with industrial and manufacturing experience in key areas of our materials and device development programs.

Create Organic Polymer-Enabled Electro-Optic Modulators

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

We expect our initial modulator products will operate at data rates at least 50 Gbaud (capable of 50 Gbps with standard data encoding of NRZ and 100 Gbps with more complex PAM-4 encoding). Our devices are highly linear, enabling the performance required to take advantage of the more advance complex encoding schemes. We are currently developing our polymer technology to operate at the next industry node of 100Gbaud.

Our Proprietary Products in Development

As part of a two-pronged marketing strategy, our Company is developing several optical devices, which are in various stages of development and that utilize our polymer optical materials. They include:

Ridge Waveguide Modulator

Our ridge electro-optic waveguide modulator was designed and fabricated in our in-house laboratory. The fabrication of our first in-house device is significant to our entire device program and is an important starting point for modulators that are being developed for target markets. We have multiple generations of new materials that we will soon be optimizing for this specific design. In September 2017 we announced that our initial alpha prototype ridge waveguide modulator, enabled by our P²IC™ polymer system, demonstrated bandwidth performance levels that will enable 50 Gbaud modulation in fiber-optic communications. This device demonstrated true amplitude (intensity) modulation in a Mach-Zehnder modulator structure incorporating our polymer waveguides. This important achievement will allow users to utilize arrays of 4 x 50 Gbaud (4x 100 Gbps) polymer modulators using PAM-4 encoding to access 400 Gbps data rate systems. These ridge waveguide modulators are currently being packaged with our partner into prototype packages. We showed an example packaged modulator at our Annual Shareholders Meeting in May 2018.

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These prototype packages will enable potential customers to evaluate the performance at 50 Gbaud. Once a potential customer generates technical feedback on our prototype, we expect to be asked to optimize the performance to their specifications. Assuming this is successful, we expect to enter a qualification phase where our prototypes will be evaluated more fully.

In parallel, we are developing modulators for scalability to higher data rates above 50 Gbaud. In September 2018, we showed in conference presentations the potential of our polymer modulator platform to operate at over 100 GHz bandwidth. This preliminary result corresponds to 100 Gbaud data rates using a simple NRZ data encoding scheme or 200 Gbps with PAM-4 encoding. With 4 channel arrays in our P²IC™ platform, the Company thus has the potential to address both 400 Gbps and 800 Gbps markets. While customers may start the engagement at 50 Gbaud, we believe potential customers recognize that scalability to higher speeds is an important differentiator of the polymer technology.

We believe the ridge waveguide modulator represents our first commercially viable device and targets the fiber optics communications market. We have completed internal market analysis and are initially targeting interconnect reach distances of greater than 10km. In these markets, the system network companies are looking to implement modulator-based transceivers that can handle aggregated data rates 100 Gbps and above. The market opportunity for greater than 10km is worth over $1B over the next decade.

Advanced Modulator Structures

As part of supporting further improvement and scalability of our platform, we continue to explore more advanced device structures. Our functional polymer photonics slot waveguide modulator utilizes an existing modulator structure with one of our proprietary electro-optic polymer material systems as the enabling material layer and is functional as an operating prototype device.

Preliminary testing and initial data on our polymer photonics slot waveguide modulators demonstrated several promising characteristics. The tested polymer photonic chip had a 1-millimeter square footprint, enabling the possibility of sophisticated integrated optical circuits on a single silicon substrate. In addition, the waveguide structure was approximately 1/20 the length of a typical inorganic-based silicon photonics modulator waveguide.

With the combination of our proprietary electro-optic polymer material and the extremely high optical field concentration in the slot waveguide modulator, the test modulators demonstrated less than 2.2 volts to operate. Initial speeds exceeded 30-35 GHz in the telecom, 1550 nanometer frequency band. This is equivalent to 4 x 10Gbps, inorganic, lithium niobate modulators that would require approximately 12-16 volts to move the same amount of information.

We continued with our collaborative development of our polymer photonic slot waveguide modulator in 2014 and continued our collaboration with an associated third-party research group in 2017 and 2018. We are now designing slot modulators to operate at data rates greater than 50 Gbaud.

Our Long-Term Device Development Goal - Multichannel Polymer Photonic Integrated Circuit (P²IC™)

Our P²IC™ platform is positioned to address markets with aggregated data rates of 100 Gbaud, 400 Gbaud, 800 Gbaud and beyond. Our P²IC™ platform will contain a number of photonic devices that may include, over and above polymer-based modulators, photonic devices such as lasers, multiplexers, demultiplexers, detectors, fiber couplers.

While our polymer-based ridge waveguide and slot modulators are currently under development to be commercially viable products, our long-term device development goal is to produce a platform for the 400 Gbps and beyond transceiver market. This has been stated in our photonics product roadmap that is publicly available on our website. The roadmap shows a progression from: 10 Gbaud ridge waveguide modulators; to 25 Gbaud based ridge waveguide modulators; to 50 Gbaud based ridge waveguide modulators, and potentially 100 Gbaud based ridge waveguide modulators. These modulators are then arrayed to create a multichannel P²IC™ platform for the 100 Gbps, 400 Gbps, 800 Gbps, and potentially 1.6 Tbps aggregated data-rate markets. As the performance of the modulator is capable of up to 100 Gbaud, the next major milestone on our roadmap will be to create a multichannel polymer-based P²IC™ platform for the 400 Gbps market. This will be composed of either 4 channels each carrying 100 Gbps, implemented either with NRZ modulation on 100 Gbaud modulators or PAM-4 modulation on 50 Gbaud modulators.

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For our device goals, we are developing polymer materials that perform even faster at a serial single channel 100Gbps using a NRZ modulation format. We showed bandwidths of polymer-based modulator devices at a major international conference (ECOC – European Conference on Optical Communications) this year with bandwidths that exceeded 100GHz. We noted that to achieve 100Gbaud, the polymer-based modulator only has to achieve 80GHz bandwidth. We were pleased with the polymer modulator performance, and we are now optimizing the device parameters for very low voltage operation.

Our Target Markets

Cloud computing and data centers

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

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

Our modulators are suitable for single-mode fiber optic links. We believe that our single mode modulator solutions will be competitive at 500m to 10km link distances, but it will be ideally suited at greater than 10km link distances.

Telecommunications/Data Communications

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

Recent Significant Events and Milestones Achieved

In December 2016 we achieved high-speed modulation in our first all-organic polymer ridge waveguide intensity modulator prototype, which constituted one of the most significant moments in the history of our Company. Our initial "alpha" prototype device, enabled by our P²IC™ polymer system, demonstrated bandwidth suitable for data rates up to about 10 Gbps. This performance exceeds the telecom OC-48 standard (2.5 Gbps). This device demonstrated true amplitude (intensity) modulation in a Mach-Zehnder modulator structure incorporating our polymer waveguides.

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. This breakthrough was significant because a 25Gbps data rate is important to the optical networking industry because this data rate is a major node to achieve 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 and 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 50Gbps modulation in fiber-optic communications. This important achievement will allow users to utilize arrays of 4 x 50Gbps 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.

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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 50Gbps, which we believe will allow us to scale our P²IC™ 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 ofBrPhotonics 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. Since June 2018, we have made significant progress on integrating this technology into our P²IC (polymer photonic integrated circuit) platform.

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

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

In February 2019 we announced a major breakthrough in our development of clean technology polymer materials that target the insatiable demand for fast and efficient data communications in the multi-billion-dollar telecom and data markets supporting Internet, 5G and IoT (Internet of Things) webscale services.  The improved thermally stable polymer has more than double the electro-optic response of our previous materials, enabling optical device performance of well over 100 GHz with extremely low power requirements.  This addition to the family of Perkinamine^TM polymers will hold back run-away consumption of resources and energy needed to support ever-growing data consumption demands. We anticipate we will continue rigorous testing of the material and its performance in device structures during the remainder of this year before releasing it into full device 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. The Advisory Board will work closely with our Company leadership to enhance our Company’s product positioning and promote our polymer modulator made on our proprietary Faster by Design™ polymer P²IC™ platform. The mission of the Advisory Board will initially be 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.

As we move forward to diligently to meet our goals, we continue to work closely with our packaging partner for the 50Gbaud prototypes, and we are advancing our reliability and characterization efforts to support our prototyping. We are actively engaged with test equipment manufacturers to deliver the most advanced test equipment for our state-of-the-art polymer results. We continue to engage with multiple industry bodies to promote our roadmap. We continue to fine tune our business model with target markets, customers, and technical specifications. Discussions with prospective customers are validating that our modulators are ideally suited for the datacenter and telecommunications markets that are over 10km in length. Details of what these prospective customers are seeking from a prototype are delivered to our technical team.

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Capital Requirements

As a development stage company, we do not generate revenues. We have incurred substantial net losses since inception. We have satisfied our capital requirements since inception primarily through the issuance and sale of our common stock.

Results of Operations

Comparison of three months ended March 31, 2019 to three months ended March 31, 2018

Revenues

As a development stage company, we had no revenues during the three months ended March 31, 2019 and March 31, 2018.  Our Company is in various stages of photonic device and material development and evaluation. We expect the next revenue stream to be in product development agreements and prototype devices prior to moving into production.

Operating Expenses

Our operating expenses were $1,720,483 and $1,476,267 for the three months ended March 31, 2019 and 2018, respectively, for an increase of $244,216. This increase in operating expenses was due primarily due to increases in salaries and wages, laboratory and wafer fabrication materials and supplies, depreciation, product development consulting expenses, device prototypes and testing expenses, legal fees and general and administrative non-cash stock option and warrant amortization offset by decreases in office expenses, rent and utility expenses, moving expenses, research and development non-cash stock option amortization and other tax expenses.

Included in our operating expenses for the three months ended March 31, 2019 was $1,152,053 for research and development expenses compared to $901,672 for the three months ended March 31, 2018, for an increase of $250,381.  This is primarily due to increases in research and development salaries and wages, laboratory and wafer fabrication materials and supplies, depreciation, product development consulting expenses and device prototypes and testing expenses offset by decreases in rent and utility expenses and non-cash stock option amortization.

Research and development expenses currently consist primarily of compensation for employees and consultants engaged in internal research, product development activities; laboratory operations, internal material and device fabrication testing and prototype electro-optic device design, development and prototype device processing; costs; and related operating expenses.  

We expect to continue to incur substantial research and development expense to develop and commercialize our photonic devices, PIC development and electro-optic materials platform. These expenses will increase as a result of accelerated development effort to support commercialization of our non-linear optical polymer materials technology; to build photonic device prototypes in our in-house laboratories; hiring additional technical and support personnel; engaging a senior technical advisor; pursuing other potential business opportunities and collaborations; customer testing and evaluation; and incurring related operating expenses.

Wages and salaries increased $85,272 from $422,443 for the three months ended March 31, 2018 to $507,715 for the three months ended March 31, 2019.  The reason for the variation was primarily due to an increase in full time technical personnel working on device and material development.

Laboratory and wafer fabrication materials and supplies increased $73,509 from $60,979 for the three months ended March 31, 2018 to $134,488 for the three months ended March 31, 2019.  The primary reason for the increase was fabrication of prototype wafers and devices, and electro-optic polymer material systems.

Depreciation expense increased $70,414 from $44,971 for the three months ended March 31, 2018 to $115,385 for the three months ended March 31, 2019.  The primary reason for the increase was due to the addition of capital equipment for wafer fabrication.

Product development consulting expenses increased $57,371 from $91,664 for the three months ended March 31, 2018 to $149,035 for the three months ended March 31, 2019.  The primary reason for the increase was due to engaging outside consultants to speed up device development and packaging.

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Device prototypes and testing expenses increased $27,175 from $7,325 for the three months ended March 31, 2018 to $34,500 for the three months ended March 31, 2019.  The primary reason for the increase was wafer fabrication, packaging and testing.

Rent and utilities decreased $39,900 from $84,153 for the three months ended March 31, 2018 to $44,253 for the three months ended March 31, 2019 due to facility consolidation into a single location.

Research and development non-cash stock option amortization decreased $15,957 from $106,451 for the three months ended March 31, 2018 to $90,494 for the three months ended March 31, 2019.  The reason for the variation was due to stock options and warrants vesting schedules.

General and administrative expense consists primarily of compensation and support costs for management staff, and for other general and administrative costs, including executive, sales and marketing, investor relations, accounting and finance, legal, consulting and other operating expenses.

General and administrative expenses decreased $6,165 to $568,430 for the three months ended March 31, 2019 compared to $574,595 for the three months ended March 31, 2018. The decrease is primarily due to decreases in office expenses, moving expenses, rent and utility expenses and other tax expenses offset by increases in general and administrative salary and wages, legal fees and general and administrative non-cash stock option and warrant amortization.

Office expenses decreased $43,117 to $17,438 for the three months ending March 31, 2019 from $60,555 for the three months ended March 31, 2018.  The reason for the variation was due to facility consolidation into a single location during the first quarter of 2018.

Moving expenses decreased $20,606 to $0 for the three months ending March 31, 2019 from $20,606 for the three months ending March 31, 2018. The reason for the variation was due to facility consolidation into a single location during the first quarter of 2018.

Rent and utilities decreased $14,464 to $18,189 for the three months ending March 31, 2019 from $32,653 for the three months ended March 31, 2018.  The reason for the variation was due to facility consolidation into a single location.

Other tax expenses decreased $12,768 to $57 for the three months ending March 31, 2019 from $12,825 for the three months ending March 31, 2018. The reason for the variation was due to the timing of payments of personal property tax.

General and Administrative wages and salaries increased $26,534 from $117,266 for the three months ended March 31, 2018 to $143,800 for the three months ended March 31, 2019.  The primary reason for the increase was due to non-executive officer salary increase.

Legal fees increased $21,140 to $77,355 for the three months ended March 31, 2019 compared to $56,215 for the three months ended March 31, 2018.  The reason for the variation was due to legal services for the working capital funding agreement.

General and administrative non-cash stock option and warrant amortization increased $20,255 to $115,716 for the three months ending March 31, 2019 from $95,461 for the three months ended March 31, 2018.  The reason for the variation was due to stock options and warrants vesting schedules.

We expect general and administrative expense to increase in future periods as we increase the level of corporate and administrative activity, including increases associated with our operation as a public company; and significantly increase expenditures related to the future production and sales of our products.

Other Income (Expense)

Other expenses increased $261,163 to $298,295 for the three months ending March 31, 2019 from $37,132 for the three months ending March 31, 2018, relating to the commitment fee associated with the purchase agreement.

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Net Loss

Net loss was $2,018,778 and $1,513,399 for the three months ended March 31, 2019 and 2018, respectively, for an increase of $505,379, due primarily to increases in commitment fee associated with the purchase agreement, salaries and wages, laboratory and wafer fabrication materials and supplies, depreciation, product development consulting expenses, device prototypes and testing expenses, legal fees and general and administrative non-cash stock option and warrant amortization offset by decreases in office expenses, rent and utility expenses, moving expenses,  research and development non-cash stock option amortization and other tax expenses.

Significant Accounting Policies

We believe our significant accounting policies affect our more significant estimates and judgments used in the preparation of our financial statements. Our Annual Report on Form 10-K for the year ended December 31, 2018 contains a discussion of these significant accounting policies.

Recently Adopted Accounting Pronouncements. For information on recent accounting pronouncements, see Recently Adopted Accounting Pronouncements in Note 1 in our unaudited financial statements for the three months ended March 31, 2019 as set forth herein.

Reclassifications. Certain reclassifications have been made to the 2018 financial statement in order to conform to the 2019 financial statement presentation.

Liquidity and Capital Resources

During the three months ended March 31, 2019, net cash used in operating activities was $1,146,584 and net cash used in investing activities was $54,948, which was due primarily to the Company’s research and development activities and general and administrative expenditures.  Net cash provided by financing activities for the three months ended March 31, 2019 was $1,312,538.  At March 31, 2019, our cash and cash equivalents totaled $2,285,631, our assets totaled $6,121,273, our liabilities totaled $1,308,838, and we had stockholders’ equity of $4,812,435.

During the three months ended March 31, 2018, net cash used in operating activities was $1,048,251 and net cash used in investing activities was $533,886, which was due primarily to the Company’s research and development activities, capital equipment and general and administrative expenditures. Net cash provided by financing activities for the three months ended March 31, 2018 was $910,571. At March 31, 2018, our cash and cash equivalents totaled $2,810,761, our assets totaled $5,625,674, our liabilities totaled $889,552, and we had stockholders’ equity of $4,736,122.

Sources and Uses of Cash

Our future expenditures and capital requirements will depend on numerous factors, including: the progress of our research and development efforts; the rate at which we can, directly or through arrangements with original equipment manufacturers, introduce and sell products incorporating our polymer materials technology; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; market acceptance of our products and competing technological developments; and our ability to establish cooperative development, joint venture and licensing arrangements. We expect that we will incur approximately $535,000 of expenditures per month over the next 12 months. We expect our Lincoln Park financing (described below) to provide us with sufficient funds to maintain our operations over that period of time. Our current cash position enables us to finance our operations through August 2019 before we will be required to replenish our cash reserves pursuant to the Lincoln Park financing. Our cash requirements are expected to increase at a rate consistent with the Company’s path to revenue growth as we expand our activities and operations with the objective of commercializing our electro-optic polymer technology. We currently have no debt to service.

21

On January 21, 2019, our Company entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park agreed to purchase from us up to $25,000,000 of our common stock (subject to certain limitations) from time to time over a 36-month period. Pursuant to the Purchase Agreement, Lincoln Park is obligated to make purchases as the Company directs in accordance with the Purchase Agreement, which may be terminated by the Company at any time, without cost or penalty. Sales of shares will be made in specified amounts and at prices that are based upon the market prices of our common stock immediately preceding the sales to Lincoln Park. We expect this financing to provide us with sufficient funds to maintain our operations for the foreseeable future. With the additional capital, we expect to achieve a level of revenues attractive enough to fulfill our development activities and adequate enough to support our business model for the foreseeable future. We cannot assure you that we will meet the conditions of the Purchase Agreement with Lincoln Park in order to obligate Lincoln Park to purchase our shares of common stock. In the event we fail to do so, and other adequate funds are not available to satisfy long-term capital requirements, or if planned revenues are not generated, we may be required to substantially limit our operations. This limitation of operations may include reductions in capital expenditures and reductions in staff and discretionary costs.

There are no trading volume requirements or restrictions under the Purchase Agreement, and we will control the timing and amount of any sales of our common stock to Lincoln Park. Lincoln Park has no right to require any sales by us, but is obligated to make purchases from us as we direct in accordance with the Purchase Agreement. We can also accelerate the amount of common stock to be purchased under certain circumstances. There are no limitations on use of proceeds, financial or business covenants, restrictions on future funding, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement. Lincoln Park may not assign or transfer its rights and obligations under the purchase agreement.

We expect that our cash used in operations will continue to increase during 2019 and beyond as a result of the following planned activities:

· The addition of management, sales, marketing, technical and other staff to our workforce;

· Increased spending for the expansion of our research and development efforts, including purchases of additional laboratory and production equipment;

· Increased spending in marketing as our products are introduced into the marketplace;

· Developing and maintaining collaborative relationships with strategic partners;

· Developing and improving our manufacturing processes and quality controls; and

· Increases in our general and administrative activities related to our operations as a reporting public company and related corporate compliance requirements.

Analysis of Cash Flows

For the three months ended March 31, 2019

Net cash used in operating activities was $1,146,584 for the three months ended March 31, 2019, primarily attributable to the net loss of $2,018,778 adjusted by $18,827 in warrants issued for services, $187,383 in options issued for services, $298,356 in common stock issued for services, $138,832 in depreciation expenses and patent amortization expenses, $242,535 in prepaid expenses and ($13,739) in accounts payable and accrued expenses.  Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.

Net cash used by investing activities was $54,948 for the three months ended March 31, 2019, consisting of $11,810 in cost for intangibles and $43,138 in asset additions primarily for the new Colorado headquarter facility.

Net cash provided by financing activities was $1,312,538 for the three months ended March 31, 2019 and consisted of $1,419,585 in proceeds from resale of common stock to an institutional investor offset by $107,047 repayment of equipment purchased.

22

For the three months ended March 31, 2018

Net cash used in operating activities was $1,048,251 for the three months ended March 31, 2018, primarily attributable to the net loss of $1,513,399 adjusted by $25,337 in warrants issued for services, $176,575 in options issued for services, $37,194 in common stock issued for services, $58,372 in depreciation expenses and patent amortization expenses, ($2,500) gain on the sale of equipment, $12,584 loss on asset write off, $17,960 in prepaid expenses and $139,626 in accounts payable and accrued expenses. Net cash used in operating activities consisted of payments for research and development, legal, professional and consulting expenses, rent and other expenditures necessary to develop our business infrastructure.

Net cash used by investing activities was $533,886 for the three months ended March 31, 2018, consisting of $21,527 in cost for intangibles and $514,859 in asset additions primarily for the new Colorado headquarter facility offset by proceeds of $2,500 on the sale of equipment.

Net cash provided by financing activities was $910,571 for the three months ended March 31, 2018 and consisted of $993,700 in proceeds from resale of common stock to an institutional investor, offset by $83,129 repayment of equipment purchased.

Contractual Obligations

There have been no material changes outside the ordinary course of business in our contractual commitments during the three months ended March 31, 2019.

Off-Balance Sheet Arrangements

As of March 31, 2019, we do not have an interest in any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Item 4

Controls and Procedures

Evaluation of Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2019. Based on this evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that, as of March 31, 2019 the Company’s disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

23

PART II – OTHER INFORMATION

Item 6

Exhibits

The following exhibits are included herein:

Exhibit No.	Description of Exhibit	Location
31.1	Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Executive Officer of the Company.	Filed herewith
31.2	Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Financial Officer of the Company.	Filed herewith
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Executive Officer of the Company.	Filed herewith
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Financial Officer of the Company.	Filed herewith
101	XBRL

24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LIGHTWAVE LOGIC, INC.

Registrant

By:	/s/ Michael S. Lebby
	Michael S. Lebby,
	Chief Executive Officer
	(Principal Executive Officer)

Date: May 10, 2019

By:	/s/ James S. Marcelli
	James S. Marcelli,
	President, Chief Operating Officer
	(Principal Financial Officer)

Date: May 10, 2019

25

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael S. Lebby, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Lightwave Logic, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 10, 2019	/s/ Michael S. Lebby
	Michael S. Lebby,
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, James S. Marcelli, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Lightwave Logic, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 10, 2019	/s/ James S. Marcelli
	James S. Marcelli,
	President, Chief Operating Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Lightwave Logic, Inc. (the “Company”) for the period ending March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael S. Lebby, Chief Executive Officer of our Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

1.

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of our Company.

Date:  May 10, 2019	/s/ Michael S. Lebby
	Michael S. Lebby,
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Lightwave Logic, Inc. (the “Company”) for the period ending March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James S. Marcelli, Chief Operating Officer of our Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

1.

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of our Company.

Date:  May 10, 2019	/s/ James S. Marcelli
	James S. Marcelli,
	President, Chief Operating Officer
	(Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 09, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	Lightwave Logic, Inc.
Entity Central Index Key	0001325964
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		82,294,902
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019

XML

BALANCE SHEETS - USD ($)	Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 2,285,631	$ 2,174,625
Prepaid expenses and other current assets	295,424	537,959
Total Current Assets	2,581,055	2,712,584
PROPERTY AND EQUIPMENT - NET	1,725,485	1,800,769
OTHER ASSETS
Intangible assets - net	929,639	938,239
Operating Lease - Right of Use - Building	885,094
TOTAL OTHER ASSETS	1,814,733	938,239
TOTAL ASSETS	6,121,273	5,451,592
CURRENT LIABILITIES
Accounts payable	121,625	150,741
Current portion of equipment purchase	71,435	178,482
Accounts payable and accrued expenses - related parties	29,488	13,824
Deferred lease liability	33,858	51,148
Operating lease liability	63,300
Accrued expenses	9,333	1,155
TOTAL CURRENT LIABILITIES	329,039	395,350
LONG TERM LIABILITIES
Deferred lease liability	158,005	149,180
Operating lease liability	821,794
TOTAL LONG TERM LIABILITIES	979,799	149,180
TOTAL LIABILITIES	1,308,838	544,530
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 1,000,000 authorized, no shares issued or outstanding
Common stock $0.001 par value, 250,000,000 authorized, 81,572,469 and 79,176,330 issued and outstanding at March 31, 2019 and December 31, 2018	81,573	79,177
Additional paid-in-capital	64,278,609	62,356,854
Accumulated deficit	(59,547,747)	(57,528,969)
TOTAL STOCKHOLDERS' EQUITY	4,812,435	4,907,062
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 6,121,273	$ 5,451,592

XML

BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	81,572,469	79,176,330
Common stock, shares outstanding	81,572,469	79,176,330

XML

STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
NET SALES
COST AND EXPENSE
Research and development	1,152,053	901,672
General and administrative	568,430	574,595
TOTAL COST AND EXPENSE	1,720,483	1,476,267
LOSS FROM OPERATIONS	(1,720,483)	(1,476,267)
OTHER INCOME (EXPENSE)
Interest income	62	62
Commitment fee	(298,357)	(37,194)
NET LOSS	$ (2,018,778)	$ (1,513,399)
Basic and Diluted Loss per Share	$ (0.03)	$ (0.02)
Basic and Diluted Weighted Average Number of Shares	80,434,957	74,543,897

XML

STATEMENT OF STOCKHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2017	$ 74,068	$ 56,698,658	$ (51,756,011)	$ 5,016,715
Balance, shares at Dec. 31, 2017	74,068,259			74,068,259
Common stock issued to institutional investor	$ 900	992,800		$ 993,700
Common stock issued to institutional investor, shares	900,000
Common stock issued for commitment shares	$ 33	37,161		37,194
Common stock issued for commitment shares, shares	32,298
Options issued for services		176,575		176,575
Warrants issued for services		25,337		25,337
Net loss			(1,513,399)	(1,513,399)
Balance at Mar. 31, 2018	$ 75,001	57,930,531	(53,269,410)	$ 4,736,122
Balance, shares at Mar. 31, 2018	75,000,557			75,000,557
Balance at Dec. 31, 2018	$ 79,177	62,356,854	(57,528,969)	$ 4,907,062
Balance, shares at Dec. 31, 2018	79,176,330			79,176,330
Common stock issued to institutional investor	$ 2,000	1,417,585		$ 1,419,585
Common stock issued to institutional investor, shares	2,000,000
Common stock issued for commitment shares	$ 396	297,960		$ 298,356
Common stock issued for commitment shares, shares	396,139
Exercise of options, shares
Options issued for services		187,383		$ 187,383
Warrants issued for services		18,827		18,827
Net loss			(2,018,778)	(2,018,778)
Balance at Mar. 31, 2019	$ 81,573	$ 64,278,609	$ (59,547,747)	$ 4,812,435
Balance, shares at Mar. 31, 2019	81,572,469			81,572,469

XML

STATEMENTS OF CASH FLOW (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (2,018,778)	$ (1,513,399)
Adjustment to reconcile net loss to net cash used in operating activities
Warrants issued for services	18,827	25,337
Stock options issued for services	187,383	176,575
Common stock issued for services and fees	298,356	37,194
Depreciation and amortization of patents	138,832	58,372
(Gain) loss on disposal of property and equipment		10,084
Decrease in assets
Prepaid expenses and other current assets	242,535	17,960
(Decrease) increase in liabilities
Accounts payable	(29,116)	115,710
Accounts payable and accrued expenses-related parties	15,664	25,369
Deferred lease liability	(8,465)
Accrued expenses	8,178	(1,453)
Net cash used in operating activities	(1,146,584)	(1,048,251)
CASH FLOWS FROM INVESTING ACTIVITIES
Cost of intangibles	(11,810)	(21,527)
Purchase of property and equipment	(43,138)	(514,859)
Sale of property and equipment		2,500
Net cash used in investing activities	(54,948)	(533,886)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock, institutional investor	1,419,585	993,700
Repayment of equipment purchased	(107,047)	(83,129)
Net cash provided by financing activities	1,312,538	910,571
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	111,006	(671,566)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	2,174,625	3,482,327
CASH AND CASH EQUIVALENTS - END OF PERIOD	2,285,631	2,810,761
Supplemental Disclosure of Non-cash operational activity:
Operating Lease - Right of Use - Building and Operating lease liability	$ 885,094

XML

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Financial Statements

The accompanying unaudited financial statements have been prepared by Lightwave Logic, Inc. (the Company). These statements include all adjustments (consisting only of its normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting polices described in the Summary of Accounting Policies included in the 2018 Annual Report. Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company firmly believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission. The interim operating results for the three months ending March 31, 2019 may not be indicative of operating results expected for the full year.

Nature of Business

Lightwave Logic, Inc. is a technology company focused on the development of next generation photonic devices and non-linear optical polymer materials systems for applications in high speed fiber-optic data communications and optical computing markets. Currently the Company is in various stages of photonic device and materials development and evaluation with potential customers and strategic partners. The Company expects to obtain a revenue stream from datacom and telecom devices, sales of non-linear optical polymers, and product development agreements prior to moving into full-scale production.

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

Stock-based Payments

The Company accounts for stock-based compensation under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, "Compensation - Stock Compensation", which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. The amendments in this Update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Prior to this Update, Topic 718 applied only to share-based transactions to employees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The adoption of this pronouncement on June 30, 2018 had no material impact on the Company’s consolidated financial statements.

Loss Per Share

The Company follows FASB ASC 260, “Earnings per Share”, resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss in 2019 and 2018, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same.

Comprehensive Income

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

Recently Issued Accounting Pronouncements Not Yet Adopted

As of March 31, 2019, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequent related updates. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from operating leases. The Company adopted the standard effective January 1, 2019 under the optional transition method which allows the entity to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the period of adoption. The standard had a material impact on the consolidated balance sheet (see Note 7).

Reclassifications

Certain reclassifications have been made to the 2018 financial statement in order to conform to the 2019 financial statement presentation.

XML

MANAGEMENT'S PLANS

3 Months Ended

Mar. 31, 2019

MANAGEMENT'S PLANS [Abstract]

MANAGEMENT'S PLANS

NOTE 2 – MANAGEMENT’S PLANS

As a technology company focusing on the development of the next generation photonic devices and non-linear optical polymer materials systems, substantial net losses have been incurred since inception. The Company has satisfied capital requirements since inception primarily through the issuance and sale of its common stock. In January 2019, the Company signed a purchase agreement (“Purchase Agreement”) with an institutional investor to sell up to $25,000,000 of common stock. Under the Purchase Agreement and at Company's sole discretion, the institutional investor has committed to invest up to $25,000,000 in common stock over a 36-month period with the remaining available amount of $24,592,000 as of March 31, 2019. Since March 31, 2019, the Company has raised an additional $690,250. As of May 10, 2019, the Company has a cash position of approximately $2,290,000. Based upon the current cash position and expected expenditures over subsequent periods and no debt service, management believes the Company has sufficient funds to finance its operations through August 2019 before the Company will replenish cash reserves pursuant to the Purchase Agreement.

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PREPAID EXPENSES AND OTHER CURRENT ASSETS

3 Months Ended

Mar. 31, 2019

Prepaid Expense, Current [Abstract]

PREPAID EXPENSES AND OTHER CURRENT ASSETS

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

	March 31, 2019		December 31, 2018
Insurance	$	44,211	$	226,363
Prepaid material		28,255		46,120
Rent		155,557		222,224
Other		67,401		37,210
Stock award		—		6,042
	$	295,424	$	537,959

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2019

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	March 31, 2019		December 31, 2018
Office equipment	$	83,272	$	79,886
Lab equipment		2,553,211		2,513,459
Furniture		33,128		33,128
Leasehold Improvements		220,389		220,389
		2,890,000		2,846,862
Less: Accumulated depreciation		1,164,515		1,046,093
	$	1,725,485	$	1,800,769

Depreciation expense for the three months ending March 31, 2019 and 2018 was $118,422 and $46,629. During the three months ending March 31, 2018, the Company sold equipment for proceeds of $2,500 and a gain of $2,500. During the three months ending March 31, 2018, the Company retired assets and recorded a loss on the retirement of $12,584. During the three months ending March 31, 2019, the Company did not retire or sell any property and equipment.

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INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 5 – INTANGIBLE ASSETS

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

On June 11, 2018, the Company purchased patents for $315,000.

Patents consists of the following:

	March 31, 2019		December 31, 2018
Patents	$	1,196,692	$	1,184,882
Less: Accumulated amortization		267,053		246,643
	$	929,639	$	938,239

Amortization expense for the three months ending March 31, 2019 and 2018 was $20,410 and $11,743. There were no patent costs written off for the three months ending March 31, 2019 and 2018.

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LONG TERM EQUIPMENT PURCHASE PAYABLE

3 Months Ended

Mar. 31, 2019

Payables and Accruals [Abstract]

LONG TERM EQUIPMENT PURCHASE PAYABLE

NOTE 6 – LONG TERM EQUIPMENT PURCHASE PAYABLE

Outstanding long term equipment purchase payable is comprised of the following:

Final Year		Interest			March 31,		December 31,
of Maturity	Classification	Rate			2019		2018
2019	Current		0.00	%	$	71,435	$	178,482

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LEASES

3 Months Ended

Mar. 31, 2019

Lessee Disclosure [Abstract]

LEASES

NOTE 7 – LEASES

On October 30, 2017, the Company entered into a new lease to lease approximately 13,420 square feet of office, laboratory and research and development space located in Colorado for the Company’s new principal executive offices and research and development facility. The term of the lease is sixty- one (61) months, beginning on November 1, 2017 and ending on November 30, 2022. The term shall be extended for an additional twenty-four (24) months, subject to certain conditions, waivable solely by Landlord in its sole and absolute discretion. Base rent for the first year of the lease term is approximately $168,824, with an increase in annual base rent of approximately 3% in each subsequent year of the lease term. As specified in the lease, the Company paid the landlord (i) all base rent for the period November 1, 2017 and ending on October 31, 2019, in the sum of $347,045; and (ii) the estimated amount of tenant’s proportionate share of operating expenses for the same period in the sum of $186,293. Commencing on November 1, 2019, monthly installments of base rent and one-twelfth of landlord’s estimate of tenant’s proportionate share of annual operating expenses shall be due on the first day of each calendar month. The lease also provides that (i) on November 1, 2019 landlord shall pay the Company for the cost of the cosmetic improvements in the amount of $3.00 per rentable square foot of the premises, and (ii) on or prior to November 1, 2019, the Company shall deposit with Landlord the sum of $36,524 as a security deposit which shall be held by landlord to secure the Company’s obligations under the lease. The lease contains an option to extend the term to October 31, 2024. On October 30, 2017, the Company entered into an agreement with the tenant leasing the premise from the landlord (“Original Lessee”) whereby the Original Lessee agreed to pay the Company the sum of $260,000 in consideration of the Company entering into the lease and landlord agreeing to the early termination of the Original Lessee’s lease agreement with landlord. The consideration of $260,000 was received on November 1, 2017.

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

As of January 1, 2019 the operating lease right-of-use asset and operating lease liability amounted to $885,094 with no cumulative-effect adjustment to the opening balance of retained earnings/accumulated deficit. The Company has elected not to recognize right-of-use assets and lease liabilities arising from short-term leases.

There are no other material operating leases.

The Company is obligated under an operating lease for office and laboratory space. The aggregate minimum future lease payments under the operating leases, including the extended term are as follows:

YEARS ENDING
DECEMBER 31,	AMOUNT
2019	$	32,432
2020		195,574
2021		201,501
2022		207,563
2023		213,781
2024		182,624
		1,033,475
Less discounted interest		(148,381	)
TOTAL	$	885,094

Rent expense approximating $28,409 and $9,470 is included in research and development and general and administrative expenses for the three months ended March 31, 2019. Rent expense approximating $60,065 and $18,715 is included in research and development and general and administrative expenses for the three months ended March 31, 2018.

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INCOME TAXES

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 8 – INCOME TAXES

There is no income tax benefit for the losses for the three months ended March 31, 2019 and 2018 since management has determined that the realization of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of such benefits.

The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2019, the Company had no unrecognized tax benefits, or any tax related interest or penalties. There were no changes in the Company’s unrecognized tax benefits during the period ended March 31, 2019. The Company did not recognize any interest or penalties during 2018 related to unrecognized tax benefits. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2015 and thereafter are subject to examination by the relevant taxing authorities.

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STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 9 – STOCKHOLDERS’ EQUITY

Preferred Stock

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

Common Stock Options and Warrants

In January 2016, the Company signed a Purchase Agreement with an institutional investor to sell up to $20,000,000 of common stock. The Company also entered into a registration rights agreement with the institutional investor whereby the Company agreed to file a registration statement related to the transaction with the U.S. Securities and Exchange Commission registering 5,000,000 shares of the Company’s common stock. The registration statement was filed on March 25, 2016. The registration statement became effective April 7, 2016. The Company registered an additional 5,000,000 shares pursuant to a registration statement filed on April 19, 2017 which became effective June 15, 2017. The Company registered an additional 5,000,000 shares pursuant to a registration statement filed on May 2, 2018 which became effective May 11, 2018. Under the Purchase Agreement and at Company's sole discretion, the institutional investor has committed to invest up to $20,000,000 in common stock over a 36-month period. The Company issued 350,000 shares of restricted common stock to the institutional investor as an initial commitment fee valued at $237,965, fair value, and 650,000 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the Purchase Agreement. During the period August 2016 through March 31, 2019, the institutional investor purchased 14,000,000 shares of common stock for proceeds of $13,150,370 and the Company issued 427,405 shares of common stock as additional commitment fee, valued at $456,367, fair value, leaving 222,595 in reserve for additional commitment fees. During the three month period ending March 31, 2019, the institutional investor purchased 1,550,000 shares of common stock for proceeds of $1,011,585 and the Company issued 32,879 shares of common stock as additional commitment fee, valued at $24,162, fair value. The 2016 Purchase Agreement expired April, 2019. In January 2019, the Company signed a Purchase Agreement with the institutional investor to sell up to $25,000,000 of common stock. The Company registered 9,500,000 shares pursuant to a registration statement filed on January 30, 2019 which became effective February 13, 2019. The Company issued 350,000 shares of common stock to the institutional investor as an initial commitment fee valued at $258,125, fair value, and 812,500 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the Purchase Agreement. During the three month period ending March 31, 2019, the institutional investor purchased 450,000 shares of common stock for proceeds of $408,000 and the Company issued 13,260 shares of common stock as additional commitment fee, valued at $16,069, fair value. During April through May 2019, the institutional investor purchased 700,000 shares of common stock for proceeds of $690,250 and the Company issued 22,433 shares of common stock as additional commitment fee, valued at $22,766, fair value, leaving 776,807 in reserve for additional commitment fees.

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STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2019

Share-based Payment Arrangement [Abstract]

STOCK BASED COMPENSATION

NOTE 10 – STOCK BASED COMPENSATION

During 2007, the Board of Directors of the Company adopted the 2007 Employee Stock Plan (“2007 Plan”) that was approved by the shareholders. Under the Plan, the Company is authorized to grant options to purchase up to 10,000,000 shares of common stock to directors, officers, employees and consultants who provide services to the Company. The Plan is intended to permit stock options granted to employees under the 2007 Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the 2007 Plan, which are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options (“Non-Statutory Stock Options”). Effective June 24, 2016, the 2007 Plan was terminated. As of March 31, 2019, options to purchase 4,450,000 shares of common stock have been issued and are outstanding.

During 2016, the Board of Directors of the Company adopted the 2016 Equity Incentive Plan (“2016 Plan”) that was approved by the shareholders at the 2016 annual meeting of shareholders on May 20, 2016. Under the 2016 Plan, the Company is authorized to grant awards of incentive and non-qualified stock options and restricted stock to purchase up to 3,000,000 shares of common stock to employees, directors and consultants. As of March 31, 2019, options to purchase 2,605,000 shares of common stock have been issued and are outstanding and 395,000 shares of common stock remain available for grants under the 2016 Plan.

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

The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award, with the following assumptions for 2019: no dividend yield in all years, expected volatility, based on the Company’s historical volatility, 60% to 80.5%, risk-free interest rate between 2.49% to 2.71% and expected option life of 5.0 to 10 years. The expected life is based on the estimated average of the life of options using the “simplified” method, as prescribed in FASB ASC 718, due to insufficient historical exercise activity during recent years.

As of March 31, 2019, there was $409,613 of unrecognized compensation expense related to non-vested market-based share awards that is expected to be recognized through August 30, 2020.

Share-based compensation was recognized as follows:

	For the Three		For the Three
	Months Ending		Months Ending
	March 31, 2019		March 31, 2018
2007 Employee Stock Option Plan	$	—	$	5,803
2016 Equity Incentive Plan		187,383		170,772
Warrants		18,827		25,337
Total share-based compensation	$	206,210	$	201,912

The following tables summarize all stock option and warrant activity of the Company during the three months ended March 31, 2019:

	Non-Qualified Stock Options and Warrants Outstanding and Exercisable
						Weighted
	Number of			Exercise		Average
	Shares			Price		Exercise Price
Outstanding, December 31, 2018		18,964,867			$0.57 - $1.69	$	0.91
Granted		445,000			$0.64 - $0.84	$	0.81
Forfeited		(147,500	)		$0.77 - $0.92		0.89
Outstanding, March 31, 2019		19,262,367			$0.57 - $1.69	$	0.91
Exercisable, March 31, 2019		18,537,999			$0.57 - $1.69	$	0.90

The aggregate intrinsic value of options and warrants outstanding and exercisable as of March 31, 2019 was $5,494,991. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and warrants and the closing stock price of $1.18 for the Company’s common stock on March 31, 2019. No options or warrants were exercised during the three month period ending March 31, 2019.

Non-Qualified Stock Options and Warrants Outstanding
	Number Outstanding	Weighted Average	Weighted Average
Range of	Currently Exercisable	Remaining	Exercise Price of Options and
Exercise Prices	at March 31, 2019	Contractual Life	Warrants Currently Exercisable
$0.57 - $1.69	18,537,999	3.42 Years	$0.90

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RELATED PARTY

3 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

RELATED PARTY

NOTE 11 – RELATED PARTY

At March 31, 2019 the Company had a legal accrual to a related party of $22,700, expense reimbursement to a related party of $476 and travel and office expense accruals of officers in the amount of $6,312. At December 31, 2018 the Company had a legal and accounting service accrual to related party of $10,999 and travel and office expense accruals of officers in the amount of $2,825.

During July 2018, the Company issued a warrant to purchase 100,000 shares of common stock at a purchase price of $1.15 per share for professional services to be rendered over a twelve month period commencing July 1, 2018. The warrant was valued at $62,637, fair value upon issuance, using the Black-Scholes Option Pricing Formula. The expense is being recognized based on service terms of the agreement over a twelve month period. For the three months ending March 31, 2019, the Company recognized $15,659 of expense. During July 2017, the Company issued a warrant to purchase 150,000 shares of common stock at a purchase price of $1.48 per share for professional services to be rendered over a twelve month period commencing July 1, 2017. The warrant was valued at $124,788, fair value upon issuance, using the Black-Scholes Option Pricing Formula. For the three months ending March 31, 2018, the Company recognized $25,337 of expense.

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RETIREMENT PLAN

3 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

RETIREMENT PLAN

NOTE 12 – RETIREMENT PLAN

The Company established a 401(k) retirement plan covering all eligible employees beginning November 15, 2013. For the three months ending March 31, 2019 and 2018, a contribution of $9,543 and $5,607 was charged to expense for all eligible non-executive participants.

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NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Financial Statements

Financial Statements

The accompanying unaudited financial statements have been prepared by Lightwave Logic, Inc. (the Company). These statements include all adjustments (consisting only of its normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting polices described in the Summary of Accounting Policies included in the 2018 Annual Report. Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company firmly believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission. The interim operating results for the three months ending March 31, 2019 may not be indicative of operating results expected for the full year.

Nature of Business

Nature of Business

Lightwave Logic, Inc. is a technology company focused on the development of next generation photonic devices and non-linear optical polymer materials systems for applications in high speed fiber-optic data communications and optical computing markets. Currently the Company is in various stages of photonic device and materials development and evaluation with potential customers and strategic partners. The Company expects to obtain a revenue stream from datacom and telecom devices, sales of non-linear optical polymers, and product development agreements prior to moving into full-scale production.

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

Stock-based Payments

Stock-based Payments

The Company accounts for stock-based compensation under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 718, "Compensation - Stock Compensation", which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. The amendments in this Update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Prior to this Update, Topic 718 applied only to share-based transactions to employees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The adoption of this pronouncement on June 30, 2018 had no material impact on the Company’s consolidated financial statements.

Loss Per Share

Loss Per Share

The Company follows FASB ASC 260, “Earnings per Share”, resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss in 2019 and 2018, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same.

Comprehensive Income

Comprehensive Income

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

Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted

As of March 31, 2019, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequent related updates. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from operating leases. The Company adopted the standard effective January 1, 2019 under the optional transition method which allows the entity to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the period of adoption. The standard had a material impact on the consolidated balance sheet (see Note 7).

Reclassifications

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequent related updates. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from operating leases. The Company adopted the standard effective January 1, 2019 under the optional transition method which allows the entity to apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the period of adoption. The standard had a material impact on the consolidated balance sheet (see Note 7).

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PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

3 Months Ended

Mar. 31, 2019

Prepaid Expense, Current [Abstract]

Schedule of Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:

	March 31, 2019		December 31, 2018
Insurance	$	44,211	$	226,363
Prepaid material		28,255		46,120
Rent		155,557		222,224
Other		67,401		37,210
Stock award		—		6,042
	$	295,424	$	537,959

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2019

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consists of the following:

	March 31, 2019		December 31, 2018
Office equipment	$	83,272	$	79,886
Lab equipment		2,553,211		2,513,459
Furniture		33,128		33,128
Leasehold Improvements		220,389		220,389
		2,890,000		2,846,862
Less: Accumulated depreciation		1,164,515		1,046,093
	$	1,725,485	$	1,800,769

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Patents

Patents consists of the following:

	March 31, 2019		December 31, 2018
Patents	$	1,196,692	$	1,184,882
Less: Accumulated amortization		267,053		246,643
	$	929,639	$	938,239

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LONG TERM EQUIPMENT PURCHASE PAYABLE (Tables)

3 Months Ended

Mar. 31, 2019

Payables and Accruals [Abstract]

Schedule of Outstanding Long Term Equipment Purchase Payable

Outstanding long term equipment purchase payable is comprised of the following:

Final Year		Interest			March 31,		December 31,
of Maturity	Classification	Rate			2019		2018
2019	Current		0.00	%	$	71,435	$	178,482

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LEASES (Tables)

3 Months Ended

Mar. 31, 2019

Lessee Disclosure [Abstract]

Schedule of Future Lease Payments of Operating Leases

The aggregate minimum future lease payments under the operating leases, including the extended term are as follows:

YEARS ENDING
DECEMBER 31,	AMOUNT
2019	$	32,432
2020		195,574
2021		201,501
2022		207,563
2023		213,781
2024		182,624
		1,033,475
Less discounted interest		(148,381	)
TOTAL	$	885,094

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STOCK BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2019

Share-based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Plans

Share-based compensation was recognized as follows:

	For the Three		For the Three
	Months Ending		Months Ending
	March 31, 2019		March 31, 2018
2007 Employee Stock Option Plan	$	—	$	5,803
2016 Equity Incentive Plan		187,383		170,772
Warrants		18,827		25,337
Total share-based compensation	$	206,210	$	201,912

Schedule of Non-Qualified Stock Options and Warrants Outstanding and Exercisable

The following tables summarize all stock option and warrant activity of the Company during the three months ended March 31, 2019:

	Non-Qualified Stock Options and Warrants Outstanding and Exercisable
						Weighted
	Number of			Exercise		Average
	Shares			Price		Exercise Price
Outstanding, December 31, 2018		18,964,867			$0.57 - $1.69	$	0.91
Granted		445,000			$0.64 - $0.84	$	0.81
Forfeited		(147,500	)		$0.77 - $0.92		0.89
Outstanding, March 31, 2019		19,262,367			$0.57 - $1.69	$	0.91
Exercisable, March 31, 2019		18,537,999			$0.57 - $1.69	$	0.90

Schedule of Non-Qualified Stock Options and Warrants Outstanding, by Exercise Price Range

Non-Qualified Stock Options and Warrants Outstanding
	Number Outstanding	Weighted Average	Weighted Average
Range of	Currently Exercisable	Remaining	Exercise Price of Options and
Exercise Prices	at March 31, 2019	Contractual Life	Warrants Currently Exercisable
$0.57 - $1.69	18,537,999	3.42 Years	$0.90

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MANAGEMENT'S PLANS (Details) - USD ($)	1 Months Ended		3 Months Ended
	May 10, 2019	Jan. 31, 2019	Mar. 31, 2019
Institutional Investor Two [Member]
Agreement with an institutional investor to sell common stock and investor committed to invest in common stock (upper limit)		$ 25,000,000
Agreement with an institutional investor to sell common stock and investor committed to invest in common stock, amount remaining			$ 24,592,000
Term of agreement with institutional investor		36 months
Proceeds from sale of stock pursuant to purchase agreement with institutional investor			$ 408,000
Subsequent Event [Member]
Approximate cash position	$ 2,290,000
Subsequent Event [Member] | Institutional Investor Two [Member]
Proceeds from sale of stock pursuant to purchase agreement with institutional investor	$ 690,250

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PREPAID EXPENSES AND OTHER CURRENT ASSETS (Schedule of Prepaid expenses and other current assets consist) (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Prepaid Expense, Current [Abstract]
Insurance	$ 44,211	$ 226,363
Prepaid material	28,255	46,120
Rent	155,557	222,224
Other	67,401	37,210
Stock award		6,042
Prepaid expenses and other current assets	$ 295,424	$ 537,959

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PROPERTY AND EQUIPMENT (Schedule of Equipment) (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,890,000	$ 2,846,862
Less: Accumulated depreciation	1,164,515	1,046,093
Property and equipment, net	1,725,485	1,800,769
Office equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	83,272	79,886
Lab equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,553,211	2,513,459
Furniture [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	33,128	33,128
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 220,389	$ 220,389

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PROPERTY AND EQUIPMENT (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 118,422	$ 46,629
Sale of property and equipment		2,500
Gain (loss) on disposal of property and equipment		(10,084)
Equipment [Member]
Property, Plant and Equipment [Line Items]
Sale of property and equipment		2,500
Gain (loss) on disposal of property and equipment		2,500
Retired Property and Equipment [Member]
Property, Plant and Equipment [Line Items]
Gain (loss) on disposal of property and equipment		$ 12,584

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INTANGIBLE ASSETS (Schedule of Patents) (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018	Jun. 11, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Patents	$ 1,196,692	$ 1,184,882	$ 315,000
Less: Accumulated amortization	267,053	246,643
Intangible assets - net	$ 929,639	$ 938,239

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INTANGIBLE ASSETS (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Jun. 11, 2018
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 20,410	$ 11,743
Patents	1,196,692		$ 1,184,882	$ 315,000
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Patent costs written off

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LONG TERM EQUIPMENT PURCHASE PAYABLE (Schedule of Outstanding Long Term Equipment Purchase Payable (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Final Year of Maturity	2019
Interest rate	0.00%
Current portion of equipment purchase	$ 71,435	$ 178,482

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LEASES (Narrative) (Details) - USD ($)	1 Months Ended		3 Months Ended
	Nov. 30, 2017	Oct. 30, 2017	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Operating Leased Assets [Line Items]
Lease term		61 months
Lease term beginning		Nov. 01, 2017
Lease term ending		Nov. 30, 2022
Additional Lease term		24 months
Lease rent for first year		$ 168,824	$ 32,432
Percentage of rent increase annual base rent		3.00%
Prepaid rent for November 1, 2017 through October 31, 2019		$ 347,045
Prepaid estimated tenant's proportionate share of operating expenses		186,293
Security deposit		$ 36,524
Rental income received from current premise tenant	$ 260,000
Percentage of estimated incremental borrowing rate	6.50%
Right-of-use asset			885,094
Operating lease liability			885,094
Research and Development Expense [Member]
Operating Leased Assets [Line Items]
Rent expense			28,409	$ 60,065
General and Administrative Expense [Member]
Operating Leased Assets [Line Items]
Rent expense			$ 9,470	$ 18,715

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LEASES (Schedule of Future Lease Payments of Operating Leases) (Details)	Mar. 31, 2019 USD ($)
Lessee Disclosure [Abstract]
2019	$ 32,432
2020	195,574
2021	201,501
2022	207,563
2023	213,781
2024	182,624
Total operating lease obligation	1,033,475
Less discounted interest	(148,381)
TOTAL	$ 885,094

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STOCKHOLDERS' EQUITY (Details) - USD ($)	1 Months Ended				3 Months Ended	32 Months Ended
	May 10, 2019	Feb. 13, 2019	Jan. 31, 2019	Jan. 31, 2016	Mar. 31, 2019	Mar. 31, 2019	May 11, 2018	Jun. 15, 2017
Institutional Investor [Member]
Equity Issuance [Line Items]
Agreement with an institutional investor to sell common stock and investor committed to invest in common stock (upper limit)				$ 20,000,000
Agreement with institutional investor term				36 months
Common stock issued to institutional investor as commitment fee, shares				350,000	32,879	427,405
Common stock issued to institutional investor as commitment fee, value				$ 237,965	$ 24,162	$ 456,367
Common stock reserved for additional commitment fees to the institutional investor				650,000		222,595
Registering shares of common stock				5,000,000			5,000,000	5,000,000
Shares sold to institutional investor pursuant to purchase agreement, shares					1,550,000	14,000,000
Proceeds from sale of stock pursuant to purchase agreement with institutional investor					$ 1,011,585	$ 13,150,370
Institutional Investor Two [Member]
Equity Issuance [Line Items]
Agreement with an institutional investor to sell common stock and investor committed to invest in common stock (upper limit)			$ 25,000,000
Agreement with institutional investor term			36 months
Common stock issued to institutional investor as commitment fee, shares		350,000			13,260
Common stock issued to institutional investor as commitment fee, value		$ 258,125			$ 16,069
Common stock reserved for additional commitment fees to the institutional investor		812,500
Registering shares of common stock		9,500,000
Shares sold to institutional investor pursuant to purchase agreement, shares					450,000
Proceeds from sale of stock pursuant to purchase agreement with institutional investor					$ 408,000
Institutional Investor Two [Member] | Subsequent Event [Member]
Equity Issuance [Line Items]
Common stock issued to institutional investor as commitment fee, shares	22,433
Common stock issued to institutional investor as commitment fee, value	$ 22,766
Common stock reserved for additional commitment fees to the institutional investor	776,807
Shares sold to institutional investor pursuant to purchase agreement, shares	700,000
Proceeds from sale of stock pursuant to purchase agreement with institutional investor	$ 690,250

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STOCK BASED COMPENSATION (Narrative) (Details)	3 Months Ended
	Mar. 31, 2019 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pricing model used in calculation of grant-date fair value	Black-Scholes
Expected dividend yield
Expected volatility, minimum	60.00%
Expected volatility, maximum	80.50%
Risk-free interest rate, minimum	2.49%
Risk-free interest rate, maximum	2.71%
Unrecognized compensation expense related to non-vested market-based share awards | $	$ 409,613
Warrants exercised
Options exercised
Non Qualified Stock Options And Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value of options and warrants outstanding and exercisable | $	$ 5,494,991
Closing stock price of common stock | $ / shares	$ 1.18
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected option life	5 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected option life	10 years
2007 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common shares available to be purchased through options, issued and outstanding	4,450,000
Number of shares authorized under plan	10,000,000
2016 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common shares available to be purchased through options, issued and outstanding	2,605,000
Number of shares authorized under plan	3,000,000
Common stock remaining for grants	395,000
Exercisable period	10 years

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STOCK BASED COMPENSATION (Schedule of Stock-based Compensation Plans) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 206,210	$ 201,912
2007 Employee Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation		5,803
2016 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	187,383	170,772
Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 18,827	$ 25,337

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STOCK BASED COMPENSATION (Schedule of Stock Option and Warrant Outstanding and Exercisable) (Details)	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Number of Shares
Exercised | shares
Non Qualified Stock Options And Warrants [Member]
Number of Shares
Outstanding | shares	18,964,867
Granted | shares	445,000
Forfeited | shares	(147,500)
Outstanding | shares	19,262,367
Exercisable | shares	18,537,999
Exercise Price
Outstanding (Lower Limit)	$ 0.57
Outstanding (Upper Limit)	1.69
Granted (Lower Limit)	0.64
Granted (Upper Limit)	0.84
Forfeited (Lower Limit)	0.77
Forfeited (Upper Limit)	0.92
Outstanding (Lower Limit)	0.57
Outstanding (Upper Limit)	1.69
Exercisable (Lower Limit)	0.57
Exercisable (Upper Limit)	1.69
Weighted Average Exercise Price
Outstanding	0.91
Granted	0.81
Forfeited	0.89
Outstanding	0.91
Exercisable	$ 0.90

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STOCK BASED COMPENSATION (Summary of Stock Option and Warrant Outstanding) (Details) - Non Qualified Stock Options And Warrants [Member]	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices (Lower Limit)	$ 0.57
Exercise Prices (Upper Limit)	1.69
$0.57 - $1.69 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices (Lower Limit)	0.57
Exercise Prices (Upper Limit)	$ 1.69
Number Outstanding Currently Exercisable | shares	18,537,999
Weighted Average Remaining Contractual Life	3 years 5 months 1 day
Weighted Average Exercise Price of Options and Warrants Currently Exercisable	$ 0.90

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RELATED PARTY (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jul. 31, 2017	Mar. 31, 2019	Dec. 31, 2018	Jul. 31, 2018
Issued Warrant For Accounting Services [Member]
Related Party Transaction [Line Items]
Options issued	150,000
Purchase price of options	$ 1.48
Option granted, fair value	$ 124,788
Stock option expense		$ 15,659
Warrant to purchase common stock				100,000
Warrants purchase price				$ 1.15
Warrants value				$ 62,637
Related party expense		25,337
Related Party [Member]
Related Party Transaction [Line Items]
Legal accrual		22,700	$ 10,999
Travel and office expense accruals		476
Officer [Member]
Related Party Transaction [Line Items]
Travel and office expense accruals		$ 6,312	$ 2,825

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RETIREMENT PLAN (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Retirement Plan Narrative
Expenses related to contribution to retirement plan	$ 9,543	$ 5,607