Lightwave Logic, Inc. - Quarter Report: 2014 March (Form 10-Q)

Quarterly Report

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, 2014


¨	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.)

1831 Lefthand Circle, Suite C

Longmont, CO

(Address of principal executive offices)

80501

(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 and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted 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 and post such files).Yes þ No ¨

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


Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	þ

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

The number of shares of the registrant’s Common Stock outstanding as of May 14, 2014 was 53,080,469.

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	22

	Item 4	Controls and Procedures	29

Part II	Other Information

	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	30

	Item 5	Other Information	30

	Item 6	Exhibits	30

		Signatures	31

Forward-Looking Statements

This report on Form 10-Q contains forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “should,” “will,” “could” and similar expressions denoting uncertainty or an action that may, will or is expected to occur in the future. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements. You should not place undue reliance on these forward-looking statements.

Factors that that are known to us that could cause a different result than projected by the forward-looking statement, include, but are not limited to: 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; those events and factors described by us in Item 1.A “Risk Factors” in our most recent Annual Report on Form 10-K; other risks to which our Company is subject; other factors beyond the Company's control.

Any forward-looking statement made by us in this report on Form 10-Q is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

PART I – FINANCIAL INFORMATION


Item 1	Financial Statements

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

FINANCIAL STATEMENTS

MARCH 31, 2014

(UNAUDITED)


		Page

Balance Sheets		2

Statements of Operations		3

Statement of Stockholders’ Equity		4

Statements of Cash Flow		12

Notes to Financial Statements		14

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

BALANCE SHEETS


	March 31, 2014			December 31, 2013
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,930,097		$	2,270,704
Prepaid expenses and other current assets		112,850			132,204
		2,042,947			2,402,908

PROPERTY AND EQUIPMENT - NET		326,210			298,360

OTHER ASSETS
Intangible assets - net		568,573			543,540

TOTAL ASSETS	$	2,937,730		$	3,244,808


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	195,416		$	65,410
Accounts payable and accrued expenses- related parties		67,052			48,817
Accrued expenses		50,169			7,949

TOTAL LIABILITIES		312,637			122,176

STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 1,000,000 authorized, no shares issued or outstanding		-			-
Common stock $0.001 par value, 100,000,000 authorized 53,080,469 and 52,617,789 issued and outstanding at March 31, 2014 and December 31, 2013		53,081			52,618
Additional paid-in-capital		35,904,055			35,414,206
Accumulated deficit		(15,827	)		(15,827	)
Deficit accumulated during development stage		(33,316,216	)		(32,328,365	)

TOTAL STOCKHOLDERS' EQUITY		2,625,093			3,122,632

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,937,730		$	3,244,808

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDING MARCH 31, 2014 AND 2013 AND FOR THE PERIOD

JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO MARCH 31, 2014

(UNAUDITED)


	Cumulative			For the Three Months Ending
	Since			March 31,
	Inception			2014			2013


NET SALES	$	5,700		$	2,500		$	-

COST AND EXPENSE
Research and development		15,807,744			585,506			455,382
General and administrative		16,956,119			402,165			447,618
		32,763,863			987,671			903,000

LOSS FROM OPERATIONS		(32,758,163	)		(985,171	)		(903,000	)

OTHER INCOME (EXPENSE)
Interest income		31,374			61			79
Dividend income		1,551			-			-
Realized gain on investment		3,911			-			-
Realized gain on disposal of assets		637			-			-
Litigation settlement		(47,500	)		-			-
Commitment fee and interest expense		(548,026	)		(2,741	)		(19,550	)


NET LOSS	$	(33,316,216	)	$	(987,851	)	$	(922,471	)

Basic and Diluted Loss per Share				$	(0.02	)	$	(0.02	)

Basic and Diluted Weighted Average Number of Shares					52,764,679			50,461,598

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014

(UNAUDITED)


								Subscription												Deficit
								Receivable/												Accumulated
								Receivable						Unrealized						During
	Number of		Common		Paid-in			for Issuance			Deferred			Loss			Accumulated			Development
	Shares		Stock		Capital			of Common Stock			Charges			on Securities			Deficit			Stage			Total

ENDING BALANCE AT DECEMBER 31, 2003		100	$	1	$	-		$	-		$	-		$	-		$	(15,827	)	$	-		$	(15,826	)

Retroactive recapitalization upon reverse acquisition		706,973		706		(706	)		-			-			-			-			-			-

BALANCE AT JANUARY 1, 2004		707,073		707		(706	)		-			-			-			(15,827	)		-			(15,826	)

Common stock issued to founders		13,292,927		13,293		(13,293	)		-			-			-			-			-			-
Common stock issued for future services in July 2004 at $0.16/share		1,600,000		1,600		254,400			-			-			-			-			-			256,000
Common stock issued at merger		2,000,000		2,000		(2,000	)		-			-			-			-			-			-
Common stock issued for future services in August 2004 at $0.12/share		637,500		638		74,362			-			-			-			-			-			75,000
Conversion of note payable in December 2004 at $0.16/share		187,500		187		29,813			-			-			-			-			-			30,000
Net loss for the year ended December 31, 2004		-		-		-			-			-			-			-			(722,146	)		(722,146	)

BALANCE AT DECEMBER 31, 2004		18,425,000		18,425		342,576			-			-			-			(15,827	)		(722,146	)		(376,972	)

Common stock issued in private placement in April 2005 at $0.25/share		4,000,000		4,000		996,000			-			-			-			-			-			1,000,000
Conversion of notes payable in May 2005 at $0.16/share		3,118,750		3,119		495,881			-			-			-			-			-			499,000
Subscription receivable		-		-		-			(6,500	)		-			-			-			-			(6,500	)
Common stock issued for future services in August 2005, valued at $2.79/share		210,000		210		585,290			-			-			-			-			-			585,500
Common stock issued for future services in August 2005, valued at $2.92/share		200,000		200		583,800			-			-			-			-			-			584,000
Warrants issued for services in May 2005, vested during 2005, valued at $1.13/share		-		-		37,000			-			-			-			-			-			37,000
Warrants issued for services in September 2005, vested during 2005, valued at $1.45/share		-		-		24,200			-			-			-			-			-			24,200
Warrants issued for services in October 2005, vested during 2005, valued at $0.53/share		-		-		15,900			-			-			-			-			-			15,900
Warrants issued for future services in December 2005, vested during 2005, valued at $1.45/share		-		-		435,060			-			-			-			-			-			435,060
Deferred charges for common stock issued for future services in August 2005, valued at $2.92/share		-		-		-			-			(584,000	)		-			-			-			(584,000	)
Amortization of deferred charges		-		-		-			-			265,455			-			-			-			265,455
Exercise of warrants in December 2005 at $0.25/share		300,000		300		74,700			-			-			-			-			-			75,000
Net loss for the year ended December 31, 2005		-		-		-			-			-			-			-			(1,721,765	)		(1,721,765	)

BALANCE AT DECEMBER 31, 2005		26,253,750		26,254		3,590,407			(6,500	)		(318,545	)		-			(15,827	)		(2,443,911	)		831,878

Common stock issued in private placement during 2006 at $0.50/share		850,000		850		424,150			-			-			-			-			-			425,000
Common stock issued for future services in February 2006, valued at $0.90/share		300,000		300		269,700			-			-			-			-			-			270,000
Common stock issued for future services in May 2006, valued at $1.55/share		400,000		400		619,600			-			-			-			-			-			620,000
Common stock issued for future services in June 2006, valued at $1.45/share		25,000		25		36,225			-			-			-			-			-			36,250
Common stock issued for future services in November 2006, valued at $0.49/share		60,000		60		29,340			-			-			-			-			-			29,400
Warrants issued for services in September 2005, vested during 2006, valued at $1.45/share		-		-		66,500			-			-			-			-			-			66,500
Warrants issued for future services in June 2006, vested during 2006, valued at $1.55/share		-		-		465,996			-			-			-			-			-			465,996
Options issued for services in February 2006, vested during 2006, valued at $1.01/share		-		-		428,888			-			-			-			-			-			428,888
Contributed capital related to accrued interest		-		-		35,624			-			-			-			-			-			35,624
Subscription receivable		-		-		-			6,500			-			-			-			-			6,500
Amortization of deferred charges		-		-		-			-			318,545			-			-			-			318,545
Unrealized gain (loss) on securities		-		-		-			-			-			(26,000	)		-			-			(26,000	)
Net loss for the year ending December 31, 2006		-		-		-			-			-						-			(2,933,809	)		(2,933,809	)

BALANCE AT DECEMBER 31, 2006		27,888,750	$	27,889	$	5,966,430		$	-		$	-		$	(26,000	)	$	(15,827	)	$	(5,377,720	)	$	574,772

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014 (CONTINUED)

(UNAUDITED)


										Subscription												Deficit
										Receivable/												Accumulated
										Receivable						Unrealized						During
	Number of			Common			Paid-in			for Issuance			Deferred			Loss			Accumulated			Development
	Shares			Stock			Capital			of Common Stock			Charges			on Securities			Deficit			Stage			Total

BALANCE AT DECEMBER 31, 2006		27,888,750		$	27,889		$	5,966,430		$	-		$	-		$	(26,000	)	$	(15,827	)	$	(5,377,720	)	$	574,772

Common stock issued in private placement during 2007 at $0.50/share		2,482,000			2,482			1,238,518			-			-			-			-			-			1,241,000
Common stock issued in private placement during 2007 at $0.60/share		1,767,540			1,768			1,058,756			-			-			-			-			-			1,060,524
Common stock subscription rescinded during 2007 at $0.50/share		(400,000	)		(400	)		(199,600	)		-			-			-			-			-			(200,000	)
Common stock issued for future services in February 2007, valued at $0.70/share		151,785			152			106,098			-			-			-			-			-			106,250
Common stock issued for future services in March 2007, valued at $0.58/share		1,000,000			1,000			579,000			-			-			-			-			-			580,000
Common stock issued for services and settlement for accounts payable in April 2007, valued at $0.35/share		100,000			100			34,900			-			-			-			-			-			35,000
Common stock issued for services in October 2007, valued at $0.68/share		150,000			150			101,850			-			-			-			-			-			102,000
Common stock issued for services in October 2007, valued at $0.90/share		150,000			150			134,850			-			-			-			-			-			135,000
Common stock issued for services in November 2007, valued at $0.72/share		400,000			400			287,600			-			-			-			-			-			288,000
Warrants issued for services in September 2005, vested during 2007, valued at $1.45/share		-			-			36,370			-			-			-			-			-			36,370
Warrants issued for services in March 2007, vested during 2007, valued at $0.63/share		-			-			52,180			-			-			-			-			-			52,180
Warrants issued for services in April 2007, vested during 2007, valued at $0.69/share		-			-			293,476			-			-			-			-			-			293,476
Warrants issued for services in April 2007, vested during 2007, valued at $0.63/share		-			-			140,490			-			-			-			-			-			140,490
Warrants issued for services in May 2007, vested during 2007, valued at $0.56/share		-			-			52,946			-			-			-			-			-			52,946
Warrants issued for services in October 2007, vested during 2007, valued at $0.61/share		-			-			61,449			-			-			-			-			-			61,449
Warrants issued for services in October 2007, vested during 2007, valued at $0.78/share		-			-			52,292			-			-			-			-			-			52,292
Warrants issued for services in December 2007, vested during 2007, valued at $0.55/share		-			-			1,159			-			-			-			-			-			1,159
Options issued for services in February 2006, vested during 2007, valued at $1.01/share		-			-			17,589			-			-			-			-			-			17,589
Options issued for services in February 2006, vested during 2007, valued at $1.09/share		-			-			43,757			-			-			-			-			-			43,757
Options issued for services in November 2007, vested during 2007, valued at $0.60/share		-			-			41,653			-			-			-			-			-			41,653
Warrants issued for future services in April 2007, vested during 2007, valued at $0.70/share		-			-			348,000			-			-			-			-			-			348,000
Deferred charges for common stock issued for future services in March 2007, valued at $0.58/share		-			-			-			-			(928,000	)		-			-			-			(928,000	)
Amortization of deferred charges		-			-			-			-			773,333			-			-			-			773,333
Unrealzed gain (loss) on securities		-			-			-			-			-			(32,610	)		-			-			(32,610	)
Net loss for the year ending December 31, 2007		-			-			-			-			-			-			-			(4,223,449	)		(4,223,449	)

BALANCE AT DECEMBER 31, 2007		33,690,075			33,690			10,449,763			-			(154,667	)		(58,610	)		(15,827	)		(9,601,169	)		653,180

Common stock issued in private placement during 2008 at $0.60/share		690,001			690			413,310			-			-			-			-			-			414,000
Common stock issued for services in March 2008, valued at $0.75/share		100,000			100			74,900			-			-			-			-			-			75,000
Common stock issued for services in August 2008, valued at $1.80/share		200,000			200			359,800			-			-			-			-			-			360,000
Exercise of warrants at $0.25/share		320,000			320			79,680			-			-			-			-			-			80,000
Exercise of warrants at $0.25/share, pursuant to November 2008 adjusted stock offering		641,080			641			159,629			-															160,270
Exercise of warrants at $0.50/share		270,000			270			134,730			-			-			-			-			-			135,000
Warrants issued for services in September 2005, vested during 2008, valued at $1.45/share		-			-			27,014			-			-			-			-			-			27,014
Warrants issued for services in March 2007, vested during 2008, valued at $0.63/share		-			-			10,885			-			-			-			-			-			10,885
Warrants issued for services in April 2007, vested during 2008, valued at $0.69/share		-			-			121,713			-			-			-			-			-			121,713
Warrants issued for services in April 2007, vested during 2008, valued at $0.63/share		-			-			48,738			-			-			-			-			-			48,738
Warrants issued for services in May 2007, vested during 2008, valued at $0.56/share		-			-			31,444			-			-			-			-			-			31,444
Warrants issued for services in December 2007, vested during 2008, valued at $0.55/share		-			-			12,487			-			-			-			-			-			12,487
Options issued for services in November 2007, vested during 2008, valued at $0.60/share		-			-			286,803			-			-			-			-			-			286,803
Options issued for services in January 2008, vested during 2008, valued at $0.60/share		-			-			30,750			-			-			-			-			-			30,750
Options issued for services in July 2008, vested during 2008, valued at $1.48/share		-			-			114,519			-			-			-			-			-			114,519
Options issued for services in August 2008, vested during 2008, valued at $1.36/share		-			-			525,263			-			-			-			-			-			525,263
Options issued for services in November 2008, vested during 2008, valued at $0.50/share		-			-			6,439			-			-			-			-			-			6,439
Warrants issued for future services in March 2008, vested through September 2008, valued at $0.83/share		-			-			332,000			-			(332,000	)		-			-			-			-
Warrants issued for services in May 2008, vested through September 2008, valued at $1.63/share		-			-			976,193			-			-			-			-			-			976,193
Amortization of deferred charges		-			-			-			-			431,337			-			-			-			431,337
Receivable for the issuance of common stock		-			-			-			(12,500	)		-			-			-			-			(12,500	)
Realized loss reclassification		-			-			-			-			-			58,610			-			-			58,610
Net loss for the year ending December 31, 2008		-			-			-			-			-			-			-			(4,340,607	)		(4,340,607	)

BALANCE AT DECEMBER 31, 2008		35,911,156		$	35,911		$	14,196,060		$	(12,500	)	$	(55,330	)	$	-		$	(15,827	)	$	(13,941,776	)	$	206,538

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014 (CONTINUED)

(UNAUDITED)


							Subscription											Deficit
							Receivable/											Accumulated
							Receivable						Unrealized					During
	Number of		Common		Paid-in		for Issuance			Deferred			Loss		Accumulated			Development
	Shares		Stock		Capital		of Common Stock			Charges			on Securities		Deficit			Stage			Total

BALANCE AT DECEMBER 31, 2008		35,911,156	$	35,911	$	14,196,060	$	(12,500	)	$	(55,330	)	$	-	$	(15,827	)	$	(13,941,776	)	$	206,538

Rights to purchase shares issued in January 2009, vested during 2009, valued at $0.33/share		-		-		132,058		-			-			-		-			-			132,058
Common stock issued for services in January 2009, valued at $0.58/share		100,000		100		57,900		-			-			-		-			-			58,000
Common stock issued for services & settlement for accounts payable January 2009 valued at $0.25/share		100,000		100		24,900		-			-			-		-			-			25,000
Exercise of purchase right agreement in January 2009 at $0.25/share		180,550		181		44,957		-			-			-		-			-			45,138
Exercise of warrants at $0.25/share, pursuant to November 2008 adjusted stock offering		1,279,336		1,279		318,555		-			-			-		-			-			319,834
Exercise of warrants at $0.001/share		400,000		400		-		-			-			-		-			-			400
Exercise of warrants at $1.00/share		355,000		355		354,645		-			-			-		-			-			355,000
Options issued for services in November 2007, vested during 2009, valued at $0.60/share		-		-		199,234		-			-			-		-			-			199,234
Options issued for services in January 2008, vested during 2009, valued at $0.60/share		-		-		13,583		-			-			-		-			-			13,583
Options issued for services in July 2008, vested during 2009, valued at $1.48/share		-		-		67,838		-			-			-		-			-			67,838
Options issued for services in August 2008, vested during 2009, valued at $1.36/share		-		-		623,246		-			-			-		-			-			623,246
Options issued for services in November 2008, vested during 2009, valued at $0.50/share		-		-		61,346		-			-			-		-			-			61,346
Options issued for services in January 2009, vested during 2009, valued at $0.53/share		-		-		13,136		-			-			-		-			-			13,136
Options issued for services in February 2009, vested during 2009, valued at $0.38/share		-		-		9,583		-			-			-		-			-			9,583
Options issued for services in June 2009, vested during 2009, valued at $0.85/share		-		-		21,085		-			-			-		-			-			21,085
Warrants issued for services in June 2009, vested during 2009, valued at $0.85/share		-		-		177,881		-			-			-		-			-			177,881
Contribution of accrued payroll in February 2009		-		-		52,129		-			-			-		-			-			52,129
Amortization of deferred charges		-		-		-		-			55,330			-		-			-			55,330
Payment for the issuance of common stock		-		-		-		12,500			-			-		-			-			12,500
Common stock issued for services in June 2009, valued at $0.34/share		116,000		116		39,884		-			-			-		-			-			40,000
Common stock issued for services & settlement for accounts payable June 2009 valued at $0.34/share		145,000		145		49,855		-			-			-		-			-			50,000
Common stock issued in private placement during June 2009 at $0.34/share		2,479,500		2,480		852,520		-			-			-		-			-			855,000
Common stock issued for services in July 2009, valued at $0.75/share		100,000		100		74,900		-			-			-		-			-			75,000
Net loss for the year ending December 31, 2009		-		-		-		-			-			-		-			(2,721,871	)		(2,721,871	)

BALANCE AT December 31, 2009		41,166,542		41,167		17,385,295		-			-			-		(15,827	)		(16,663,647	)		746,988

Options issued for services in November 2007, vested during 2010, valued at $0.60/share		-		-		174,866		-			-			-		-			-			174,866
Options issued for services in January 2008, vested during 2010, valued at $0.60/share		-		-		14,873		-			-			-		-			-			14,873
Options issued for services in July 2008, vested during 2010, valued at $1.48/share		-		-		74,061		-			-			-		-			-			74,061
Options issued for services in August 2008, vested during 2010, valued at $1.36/share		-		-		643,812		-			-			-		-			-			643,812
Options issued for services in November 2008, vested during 2010, valued at $0.50/share		-		-		31,478		-			-			-		-			-			31,478
Warrants issued for services in June 2009, vested during 2010, valued at $0.85/share		-		-		213,459		-			-			-		-			-			213,459
Warrants issued for services in January 2010, vested during 2010, valued at $1.83/share						580,167		-			-			-		-			-			580,167
Warrants issued for services in March 2010, vested during 2010, valued at $1.86/share		-		-		214,063		-			-			-		-			-			214,063
Options issued for services in August 2010, vested during 2010, valued at $1.31/share						27,434		-			-			-		-			-			27,434
Options issued for services in December 2010, vested during 2010, valued at $1.14/share						286,002		-			-			-		-			-			286,002
Exercise of warrants at $0.25/share		947,200		947		235,853		-			-			-		-			-			236,800
Exercise of options at $0.25/share		15,000		15		3,735		-			-			-		-			-			3,750
Exercise of warrants at $0.345/share		10,000		10		3,440		-			-			-		-			-			3,450
Exercise of warrants at $0.50/share		25,000		25		12,475		-			-			-		-			-			12,500
Exercise of warrants at $1.00/share		282,500		283		282,218		-			-			-		-			-			282,500
Common stock issued in private placement during 2010 at $1.00/share		1,500,000		1,500		1,498,500		-			-			-		-			-			1,500,000
Common stock issued for services in August 2010, valued at $1.25/share		4,800		4		5,996		-			-			-		-			-			6,000
Common stock issued for services in November 2010, valued at $0.93/share		5,000		5		4,645		-			-			-		-			-			4,650
Common stock issued for services in December 2010, valued at $01.20/share		10,000		10		11,990		-			-			-		-			-			12,000
Net loss for the year ending December 31, 2010		-		-		-		-			-			-		-			(3,713,232	)		(3,713,232	)

BALANCE AT DECEMBER 31, 2010		43,966,042	$	43,966	$	21,704,361	$	-		$	-		$	-	$	(15,827	)	$	(20,376,879	)	$	1,355,621

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014 (CONTINUED)

(UNAUDITED)


							Subscription									Deficit
							Receivable/									Accumulated
							Receivable				Unrealized					During
	Number of		Common		Paid-in		for Issuance		Deferred		Loss		Accumulated			Development
	Shares		Stock		Capital		of Common Stock		Charges		on Securities		Deficit			Stage			Total

BALANCE AT DECEMBER 31, 2010		43,966,042	$	43,966	$	21,704,361	$	-	$	-	$	-	$	(15,827	)	$	(20,376,879	)	$	1,355,621

Common stock issued for services in March 2011, valued at $1.45/share		10,000		10		14,490		-		-		-		-			-			14,500
Options issued for services in January 2008, vested during 2011, valued at $0.60/share		-		-		285		-		-		-		-			-			285
Options issued for services in July 2008, vested during 2011, valued at $1.48/share		-		-		39,829		-		-		-		-			-			39,829
Options issued for services in August 2008, vested during 2011, valued at $1.36/share		-		-		383,881		-		-		-		-			-			383,881
Options issued for services in November 2008, vested during 2011, valued at $0.50/share		-		-		26,648		-		-		-		-			-			26,648
Warrants issued for services in January 2010, vested during 2011, valued at $1.83/share		-		-		306,765		-		-		-		-			-			306,765
Warrants issued for services in March 2010, vested during 2011, valued at $1.86/share		-		-		64,983		-		-		-		-			-			64,983
Options issued for services in August 2010, vested during 2011, valued at $1.31/share		-		-		65,447		-		-		-		-			-			65,447
Options issued for services in December 2010, vested during 2011, valued at $1.14/share		-		-		212,136		-		-		-		-			-			212,136
Warrants issued for services in January 2011, vested during 2011, valued at $1.05/share		-		-		36,585		-		-		-		-			-			36,585
Warrants issued for services in April 2011, vested during 2011, valued at $0.98/share		-		-		109,820		-		-		-		-			-			109,820
Options issued for services in May 2011, vested during 2011, valued at $0.97/share		-		-		79,702		-		-		-		-			-			79,702
Options issued for services in August 2011, vested during 2011, valued at $0.82/share		-		-		17,204		-		-		-		-			-			17,204
Options issued for services in November 2011, vested during 2011, valued at $0.53/share		-		-		4,384		-		-		-		-			-			4,384
Options issued for services in December 2011, vested during 2011, valued at $0.82/share		-		-		53,124		-		-		-		-			-			53,124
Warrants issued for services in December 2011, vested during 2011, valued at $1.05/share		-		-		1,288		-		-		-		-			-			1,288
Common stock issued for commitment shares, valued at $1.08/share		150,830		151		162,746		-		-		-		-			-			162,896
Common stock issued to institutional investor, valued at $1.08/share		185,185		185		199,815		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.15/share		3,017		3		3,467		-		-		-		-			-			3,470
Common stock issued for services in June 2011, valued at $1.04/share		10,000		10		10,390		-		-		-		-			-			10,400
Common stock issued in private placement during 2011 at $1.00/share		1,000,000		1,000		999,000		-		-		-		-			-			1,000,000
Common stock issued for services in September 2011, valued at $1.45/share		10,000		10		14,490		-		-		-		-			-			14,500
Common stock issued for services in May 2011 through August 2011, valued at $0.90/share to $1.25/share		2,018		2		2,161		-		-		-		-			-			2,163
Net loss for the year ending December 31, 2011		-		-		-		-		-		-		-			(3,482,622	)		(3,482,622	)

BALANCE AT DECEMBER 31, 2011		45,337,092	$	45,337	$	24,513,000	$	-	$	-	$	-	$	(15,827	)	$	(23,859,501	)	$	683,009

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014 (CONTINUED)

(UNAUDITED)


							Subscription									Deficit
							Receivable/									Accumulated
							Receivable				Unrealized					During
	Number of		Common		Paid-in		for Issuance		Deferred		Loss		Accumulated			Development
	Shares		Stock		Capital		of Common Stock		Charges		on Securities		Deficit			Stage			Total

BALANCE AT DECEMBER 31, 2011		45,337,092	$	45,337	$	24,513,000	$	-	$	-	$	-	$	(15,827	)	$	(23,859,501	)	$	683,009

Common stock issued to institutional investor, valued at $1.013/share		197,433		198		199,802		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.64/share		3,017		3		4,945		-		-		-		-			-			4,948
Common stock issued to institutional investor, valued at $1.197/share		167,084		167		199,832		-		-		-		-			-			199,999
Common stock issued for additional commitment shares, valued at $1.67/share		3,017		3		5,035		-		-		-		-			-			5,038
Common stock issued to institutional investor, valued at $1.58/share		316,455		317		499,682		-		-		-		-			-			499,999
Common stock issued for additional commitment shares, valued at $2.87/share		7,542		7		21,638		-		-		-		-			-			21,645
Common stock issued to institutional investor, valued at $1.66/share		120,482		120		199,880		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.97/share		3,017		3		5,940		-		-		-		-			-			5,943
Common stock issued to institutional investor, valued at $1.897/share		158,144		158		299,841		-		-		-		-			-			299,999
Common stock issued for additional commitment shares, valued at $2.60/share		4,525		5		11,760		-		-		-		-			-			11,765
Common stock issued to institutional investor, valued at $2.073/share		96,479		97		199,904		-		-		-		-			-			200,001
Common stock issued for additional commitment shares, valued at $2.64/share		3,017		3		7,962		-		-		-		-			-			7,965
Common stock issued to institutional investor, valued at $2.19/share		91,324		92		199,908		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $2.23/share		3,017		3		6,725		-		-		-		-			-			6,728
Common stock issued to institutional investor, valued at $1.68/share		119,048		119		199,882		-		-		-		-			-			200,001
Common stock issued for additional commitment shares, valued at $1.80/share		3,017		3		5,428		-		-		-		-			-			5,431
Common stock issued to institutional investor, valued at $1.81/share		220,994		221		399,778		-		-		-		-			-			399,999
Common stock issued for additional commitment shares, valued at $1.88/share		3,017		3		5,669		-		-		-		-			-			5,672
Common stock issued for additional commitment shares, valued at $1.92/share		3,017		3		5,790		-		-		-		-			-			5,793
Common stock issued to institutional investor, valued at $1.53/share		130,719		131		199,870		-		-		-		-			-			200,001
Common stock issued for additional commitment shares, valued at $1.60/share		3,017		3		4,824		-		-		-		-			-			4,827
Common stock issued to institutional investor, valued at $1.667/share		119,976		120		199,880		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.93/share		3,017		3		5,820		-		-		-		-			-			5,823
Common stock issued to institutional investor, valued at $1.51/share		132,450		132		199,867		-		-		-		-			-			199,999
Common stock issued for additional commitment shares, valued at $1.70/share		6,034		6		10,252		-		-		-		-			-			10,258
Common stock issued to institutional investor, valued at $1.677/share		119,261		119		199,882		-		-		-		-			-			200,001
Common stock issued for additional commitment shares, valued at $1.35/share		3,017		3		4,070		-		-		-		-			-			4,073
Common stock issued to institutional investor, valued at $1.13/share		176,991		177		199,823		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.28/share		3,017		3		3,859		-		-		-		-			-			3,862
Common stock issued to institutional investor, valued at $1.1267/share		177,510		178		199,823		-		-		-		-			-			200,001
Common stock issued for additional commitment shares, valued at $1.28/share		3,017		3		3,859		-		-		-		-			-			3,862
Common stock issued to institutional investor, valued at $1.107/share		180,668		180		199,820		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.18/share		3,017		3		3,557		-		-		-		-			-			3,560
Common stock issued to institutional investor, valued at $1.10/share		181,818		182		199,818		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.08/share		3,017		3		3,255		-		-		-		-			-			3,258
Common stock issued to institutional investor, valued at $1.063/share		188,147		188		199,812		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.09/share		3,017		3		3,286		-		-		-		-			-			3,289
Common stock issued to institutional investor, valued at $1.02/share		196,078		196		199,803		-		-		-		-			-			199,999
Common stock issued for additional commitment shares, valued at $1.04/share		1,508		2		1,566		-		-		-		-			-			1,568
Common stock issued to institutional investor, valued at $1.02/share		98,039		98		99,902		-		-		-		-			-			100,000
Common stock issued for additional commitment shares, valued at $1.10/share		2,262		2		2,486		-		-		-		-			-			2,488
Common stock issued to institutional investor, valued at $1.00/share		350,000		350		349,650		-		-		-		-			-			350,000
Common stock issued for additional commitment shares, valued at $1.00/share		3,017		3		3,014		-		-		-		-			-			3,017

Subtotal		48,949,352	$	48,950	$	29,490,199	$	-	$	-	$	-	$	(15,827	)	$	(23,859,501	)	$	5,663,821

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014 (CONTINUED)

(UNAUDITED)


							Subscription									Deficit
							Receivable/									Accumulated
							Receivable				Unrealized					During
	Number of		Common		Paid-in		for Issuance		Deferred		Loss		Accumulated			Development
	Shares		Stock		Capital		of Common Stock		Charges		on Securities		Deficit			Stage			Total

Subtotal		48,949,352	$	48,950	$	29,490,199	$	-	$	-	$	-	$	(15,827	)	$	(23,859,501	)	$	5,663,821

Exercise of options at $0.65/share		250,000		250		162,250		-		-		-		-			-			162,500
Exercise of warrants at $1.25/share		40,000		40		49,960		-		-		-		-			-			50,000
Exercise of warrants at $0.34/share		20,000		20		6,880		-		-		-		-			-			6,900
Exercise of warrants at $0.25/share		900,000		900		224,100														225,000
Common stock issued for services in October 2011 through January 2012, valued at $0.65/share to $2.70/share		1,406		1		1,606		-		-		-		-			-			1,607
Options issued for services in August 2010, vested during 2012, valued at $1.31/share		-		-		38,194		-		-		-		-			-			38,194
Options issued for services in December 2010, vested during 2012, valued at $1.14/share		-		-		85,290		-		-		-		-			-			85,290
Warrants issued for services in April 2011, vested during 2012, valued at $0.98/share		-		-		36,605		-		-		-		-			-			36,605
Options issued for services in May 2011, vested during 2012, valued at $0.97/share		-		-		48,510		-		-		-		-			-			48,510
Options issued for services in August 2011, vested during 2012, valued at $0.82/share		-		-		41,156		-		-		-		-			-			41,156
Options issued for services in November 2011, vested during 2012, valued at $0.53/share		-		-		26,304		-		-		-		-			-			26,304
Options issued for services in December 2011, vested during 2012, valued at $0.82/share		-		-		51,392		-		-		-		-			-			51,392
Warrants issued for services in December 2011, vested during 2012, valued at $1.05/share		-		-		157,127		-		-		-		-			-			157,127
Options issued for services in March 2012, vested during 2012, valued at $1.37/share		-		-		139,755		-		-		-		-			-			139,755
Options issued for services in March 2012, vested during 2012, valued at $1.37/share		-		-		42,227		-		-		-		-			-			42,227
Warrants issued for services in March 2012, vested during 2012, valued at $1.37/share		-		-		13,709		-		-		-		-			-			13,709
Options issued for services in May 2012, vested during 2012, valued at $1.23/share		-		-		462,455		-		-		-		-			-			462,455
Warrants issued for services in May 2012, vested during 2012, valued at $0.97/share		-		-		55,648		-		-		-		-			-			55,648
Options issued for services in June 2012, vested during 2012, valued at $0.73/share		-		-		56,568		-		-		-		-			-			56,568
Options issued for services in August 2012, vested during 2012, valued at $0.74/share		-		-		15,611		-		-		-		-			-			15,611
Options issued for services in August 2012, vested during 2012, valued at $0.75/share		-		-		7,137		-		-		-		-			-			7,137
Warrants issued for services in December 2012, vested during 2012, valued at $0.78/share		-		-		28,237		-		-		-		-			-			28,237
Options extended for services in November 2012, vested during 2012, valued at $0.27/share		-		-		266,710		-		-		-		-			-			266,710
Options extended for services in November 2012, vested during 2012, valued at $0.25/share		-		-		25,420		-		-		-		-			-			25,420
Options extended for services in November 2012, vested during 2012, valued at $0.24/share		-		-		60,283		-		-		-		-			-			60,283
Options extended for services in November 2012, vested during 2012, valued at $0.29/share		-		-		309,049		-		-		-		-			-			309,049
Options extended for services in November 2012, vested during 2012, valued at $0.29/share		-		-		29,375		-		-		-		-			-			29,375
Options extended for services in November 2012, vested during 2012, valued at $0.26/share		-		-		39,270		-		-		-		-			-			39,270
Options extended for services in November 2012, vested during 2012, valued at $0.30/share		-		-		29,529		-		-		-		-			-			29,529
Options extended for services in November 2012, vested during 2012, valued at $0.28/share		-		-		42,195		-		-		-		-			-			42,195
Net loss for the year ending December 31, 2012		-		-		-		-		-		-		-			(4,556,538	)		(4,556,538	)

BALANCE AT DECEMBER 31, 2012		50,160,758	$	50,161	$	32,042,751	$	-	$	-	$	-	$	(15,827	)	$	(28,416,039	)	$	3,661,046

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014 (CONTINUED)

(UNAUDITED)


									Subscription									Deficit
									Receivable/									Accumulated
									Receivable				Unrealized					During
	Number of			Common			Paid-in		for Issuance		Deferred		Loss		Accumulated			Development
	Shares			Stock			Capital		of Common Stock		Charges		on Securities		Deficit			Stage			Total

BALANCE AT DECEMBER 31, 2012		50,160,758		$	50,161		$	32,042,751	$	-	$	-	$	-	$	(15,827	)	$	(28,416,039	)	$	3,661,046

Common stock issued to institutional investor, valued at $1.07/share		186,916			187			199,813		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.11/share		3,017			3			3,346		-		-		-		-			-			3,349
Common stock issued to institutional investor, valued at $1.027/share		196,078			196			199,803		-		-		-		-			-			199,999
Common stock issued for additional commitment shares, valued at $1.07/share		3,017			3			3,225		-		-		-		-			-			3,228
Common stock issued to institutional investor, valued at $1.037/share		192,864			193			199,807		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.36/share		3,017			3			4,100		-		-		-		-			-			4,103
Common stock issued to institutional investor, valued at $1.1367/share		175,948			176			199,824		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.35/share		3,017			3			4,070		-		-		-		-			-			4,073
Common stock issued to institutional investor, valued at $1.2533/share		159,579			160			199,841		-		-		-		-			-			200,001
Common stock issued for additional commitment shares, valued at $2.59/share		3,017			3			4,794		-		-		-		-			-			4,797
Common stock issued to institutional investor, valued at $1.34/share		149,254			149			199,851		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.55/share		3,017			3			4,674		-		-		-		-			-			4,677
Common stock issued to institutional investor, valued at $1.14/share		175,439			175			199,825		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.19/share		3,017			3			3,587		-		-		-		-			-			3,590
Common stock issued to institutional investor, valued at $1.04/share		192,308			192			199,808		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.08/share		3,017			3			3,256		-		-		-		-			-			3,259
Common stock issued to institutional investor, valued at $1.00/share		200,000			200			199,800		-		-		-		-			-			200,000
Common stock issued for additional commitment shares, valued at $1.06/share		3,017			3			3,195		-		-		-		-			-			3,198
Common stock issued for commitment shares, valued at $0.85/share		200,000			200			169,800		-		-		-		-			-			170,000
Common stock issued to institutional investor, valued at $0.865/share		100,000			100			86,400		-		-		-		-			-			86,500
Common stock issued for additional commitment shares, valued at $1.03/share		1,730			2			1,780		-		-		-		-			-			1,782
Common stock issued to institutional investor, valued at $$0.9083/share		100,000			100			90,730		-		-		-		-			-			90,830
Common stock issued for additional commitment shares, valued at $1.06/share		1,370			1			1,451		-		-		-		-			-			1,452
Common stock issued to institutional investor, valued at $1.0117/share		100,000			100			101,070		-		-		-		-			-			101,170
Common stock issued for additional commitment shares, valued at $1.04/share		1,526			2			1,585		-		-		-		-			-			1,587
Common stock issued to institutional investor, valued at $1.00/share		100,000			100			99,900		-		-		-		-			-			100,000
Common stock issued for additional commitment shares, valued at $1.03/share		1,508			1			1,552		-		-		-		-			-			1,553
Common stock issued to institutional investor, valued at $1.00/share		100,000			100			99,900		-		-		-		-			-			100,000
Common stock issued for additional commitment shares, valued at $1.00/share		1,508			2			1,506		-		-		-		-			-			1,508
Exercise of warrants at $1.25/share		12,500			13			15,612		-		-		-		-			-			15,625
Exercise of warrants at $0.345/share		20,000			20			6,880		-		-		-		-			-			6,900
Reversal of common stock issuance during 2013 at $0.50/share		(2,000	)		(2	)		2		-		-		-		-			-			-
Exercise of options at $1.01/share		38,350			38			38,695		-		-		-		-			-			38,733
Exercise of options at $0.45/share		25,000			25			11,225		-		-		-		-			-			11,250
Options issued for services in December 2010, vested during 2013, valued at $1.14/share		-			-			80,634		-		-		-		-			-			80,634
Options issued for services in May 2011, vested during 2013, valued at $0.97/share		-			-			48,378		-		-		-		-			-			48,378
Options issued for services in August 2011, vested during 2013, valued at $0.82/share		-			-			13,531		-		-		-		-			-			13,531
Options issued for services in November 2011, vested during 2013, valued at $0.53/share		-			-			26,232		-		-		-		-			-			26,232
Options issued for services in December 2011, vested during 2013, valued at $0.82/share		-			-			51,252		-		-		-		-			-			51,252
Options issued for services in March 2012, vested during 2013, valued at $1.69/share		-			-			29,154		-		-		-		-			-			29,154
Options issued for services in May 2012, vested during 2013, valued at $1.23/share		-			-			151,350		-		-		-		-			-			151,350
Warrants issued for services in May 2012, vested during 2013, valued at $0.97/share		-			-			41,738		-		-		-		-			-			41,738
Options issued for services in June 2012, vested during 2013, valued at $0.73/share		-			-			36,287		-		-		-		-			-			36,287
Options issued for services in August 2012, vested during 2013, valued at $0.74/share		-			-			37,242		-		-		-		-			-			37,242
Options issued for services in August 2012, vested during 2013, valued at $0.75/share		-			-			6,920		-		-		-		-			-			6,920
Warrants issued for services in December 2012, vested during 2013, valued at $0.78/share		-			-			69,455		-		-		-		-			-			69,455
Options issued for services in March 2013, vested during 2013, valued at $1.08/share		-			-			33,986		-		-		-		-			-			33,986
Options issued for services in May 2013, vested during 2013, valued at $0.96/share		-			-			2,394		-		-		-		-			-			2,394
Options issued for services in May 2013, vested during 2013, valued at $0.81/share		-			-			60,399		-		-		-		-			-			60,399
Warrants issued for services in July 2013, vested during 2013, valued at $0.49/share		-			-			24,658		-		-		-		-			-			24,658
Options issued for services in August 2013, vested during 2013, valued at $0.71/share		-			-			46,337		-		-		-		-			-			46,337
Options issued for services in November 2013, vested during 2013, valued at $0.87/share		-			-			50,801		-		-		-		-			-			50,801
Net loss for the year ending December 31, 2013		-			-			-		-		-		-		-			(3,912,326	)		(3,912,326	)

BALANCE AT DECEMBER 31, 2013		52,617,789		$	52,618		$	35,414,206	$	-	$	-	$	-	$	(15,827	)	$	(32,328,365	)	$	3,122,632

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014 (CONTINUED)

(UNAUDITED)


							Subscription									Deficit
							Receivable/									Accumulated
							Receivable				Unrealized					During
	Number of		Common		Paid-in		for Issuance		Deferred		Loss		Accumulated			Development
	Shares		Stock		Capital		of Common Stock		Charges		on Securities		Deficit			Stage			Total

BALANCE AT DECEMBER 31, 2013		52,617,789	$	52,618	$	35,414,206	$	-	$	-	$	-	$	(15,827	)	$	(32,328,365	)	$	3,122,632

Common stock issued to institutional investor, valued at $0.8883/share		200,000		200		177,460		-		-		-		-			-			177,660
Common stock issued for additional commitment shares, valued at $1.03/share		1,340		2		1,379		-		-		-		-			-			1,381
Common stock issued for additional commitment shares, valued at $1.016/share		1,340		1		1,361		-		-		-		-			-			1,362
Exercise of options at $0.25/share		10,000		10		2,490		-		-		-		-			-			2,500
Exercise of warrants at $0.345/share		250,000		250		86,000		-		-		-		-			-			86,250
Options issued for services in May 2011, vested during 2013, valued at $0.97/share		-		-		11,929		-		-		-		-			-			11,929
Options issued for services in November 2011, vested during 2013, valued at $0.53/share		-		-		6,468		-		-		-		-			-			6,468
Options issued for services in December 2011, vested during 2013, valued at $0.82/share		-		-		12,638		-		-		-		-			-			12,638
Options issued for services in June 2012, vested during 2013, valued at $0.73/share		-		-		8,948		-		-		-		-			-			8,948
Options issued for services in August 2012, vested during 2013, valued at $0.74/share		-		-		3,012		-		-		-		-			-			3,012
Options issued for services in March 2013, vested during 2013, valued at $1.08/share		-		-		9,996		-		-		-		-			-			9,996
Options issued for services in May 2013, vested during 2013, valued at $0.81/share		-		-		20,201		-		-		-		-			-			20,201
Warrants issued for services in July 2013, vested during 2013, valued at $0.49/share		-		-		12,061		-		-		-		-			-			12,061
Options issued for services in August 2013, vested during 2013, valued at $0.71/share		-		-		7,139		-		-		-		-			-			7,139
Options issued for services in November 2013, vested during 2013, valued at $0.87/share		-		-		10,733		-		-		-		-			-			10,733
Warrants issued for services in January 2014, vested during 2014, valued at $0.53/share		-		-		13,146		-		-		-		-			-			13,146
Options issued for services in January 2014, vested during 2014, valued at $0.59/share		-		-		70,396		-		-		-		-			-			70,396
Options issued for services in March 2014, vested during 2014, valued at $0.74/share		-		-		7,152		-		-		-		-			-			7,152
Options issued for services in March 2014, vested during 2014, valued at $0.77/share		-		-		11,612		-		-		-		-			-			11,612
Options issued for services in March 2014, vested during 2014, valued at $0.74/share		-		-		5,364		-		-		-		-			-			5,364
Options issued for services in March 2014, vested during 2014, valued at $0.78/share		-		-		5,046		-		-		-		-			-			5,046
Warrants issued for services in March 2014, vested during 2014, valued at $0.67/share		-		-		5,318		-		-		-		-			-			5,318
Net loss for the three months ending March 31, 2014		-		-		-		-		-		-		-			(987,851	)		(987,851	)

BALANCE AT MARCH 31, 2014		53,080,469	$	53,081	$	35,904,055	$	-	$	-	$	-	$	(15,827	)	$	(33,316,216	)	$	2,625,093

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOW

FOR THE THREE MONTHS ENDING MARCH 31, 2014 AND 2013 AND

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014

(UNAUDITED)


	Cumulative			For the Three Months Ending
	Since			March 31,
	Inception			2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(33,316,216	)	$	(987,851	)	$	(922,471	)
Adjustment to reconcile net loss to net cash used in operating activities
Amortization of deferred charges		4,392,456			-			-
Amortization of prepaid expenses		75,000			-			-
Warrants issued for services		4,225,149			30,525			38,934
Stock options issued for services		7,655,339			190,634			230,990
Common stock issued for services and fees		1,671,190			2,743			19,550
Purchase right agreement amortization		132,058			-			-
Depreciation and amortization of patents		383,341			33,924			26,328
Realized gain on investments		(3,911	)		-			-
Realized gain on disposal of assets		(637	)		-			-
(Increase) decrease in assets
Receivables		(30,461	)		-			-
Prepaid expenses and other current assets		(112,850	)		19,354			14,868
Increase (decrease) in liabilities
Accounts payable		328,331			130,006			29,067
Accounts payable and accrued expenses- related parties		(23,874	)		18,235			20,181
Accrued expenses		127,709			42,220			6,400
Net cash used in operating activities		(14,497,376	)		(520,210	)		(536,153	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cost of intangibles		(621,658	)		(28,748	)		(10,722	)
Proceeds from sale of available for sale securities		203,911			-			-
Proceeds from receipt of note receivable		100,000			-			-
Purchase of available for sale securities		(200,000	)		-			-
Purchase of equipment, furniture and leasehold improvements		(619,216	)		(58,059	)		(86,371	)
Net cash used in investing activities		(1,136,963	)		(86,807	)		(97,093	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock, private placement		7,495,524			-			-
Common stock rescinded, private placement		(200,000	)		-			-
Issuance of common stock, exercise of options and warrants		2,182,662			88,750			15,625
Issuance of common stock, exercise of purchase right agreement		45,138			-			-
Issuance of common stock, institutional investor		7,506,159			177,660			1,000,000
Repayment of notes payable		(14,970	)		-			-
Proceeds from subscription receivable		19,000			-			-
Advances to stockholders		(4,933	)		-			-
Proceeds from convertible notes		529,000			-			-
Advances from officers		1,498			-			-
Net cash provided by financing activities		17,559,078			266,410			1,015,625

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		1,924,739			(340,607	)		382,379

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		5,358			2,270,704			2,936,879

CASH AND CASH EQUIVALENTS - END OF PERIOD	$	1,930,097		$	1,930,097		$	3,319,258

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOW

FOR THE THREE MONTHS ENDING MARCH 31, 2014 AND 2013 AND

FOR THE PERIOD JANUARY 1, 2004 (INCEPTION OF DEVELOPMENT STAGE) TO

MARCH 31, 2014 (CONTINUED)

(UNAUDITED)


	Cumulative		For the Three Months Ending
	Since		March 31,
	Inception		2014		2013


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID DURING THE PERIOD FOR:
Interest	$	23,341	$	-	$	-


SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

Common stock issued in exchange for deferred charges	$	3,142,400	$	-	$	-
	`
Warrants issued in exchange for deferred charges	$	1,581,056			$	-

Common stock issued as settlement for accounts payable	$	74,708	$	-	$	-

Accrued interest contributed as capital	$	35,624	$	-	$	-

Common stock issued in the conversion of notes payable	$	529,000	$	-	$	-

Acquisition of automobile through loan payable	$	24,643	$	-	$	-

Common stock issued upon exercise of a warrant
in exchange for receivable	$	75,000	$	-	$	-

Insurance company pay off of note payable	$	9,673	$	-	$	-

Receivable for issuance of common stock	$	210,001	$	-	$	-

Contribution of officer accrued payroll	$	52,129	$	-	$	-

Common stock issued for prepaid expense	$	75,000	$	-	$	-

See accompanying notes to these financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2013

NOTE 1- 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 2013 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 those rules and regulations, 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, 2013, as filed with the Securities and Exchange Commission. The interim operating results for the three months ending March 31, 2014 may not be indicative of operating results expected for the full year.

Loss Per Share

The Company follows Financial Accounting Standards Board Accounting Standards Codification (“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 2014 and 2013, 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. Since the Company has no items of other comprehensive income, comprehensive income (loss) is equal to net loss.

Recently Adopted Accounting Pronouncements

As of March 31, 2014 and for the period then ended, there were no recently adopted accounting pronouncements that had a material effect on the Company’s financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

As of March 31, 2014, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2013

NOTE 2 – MANAGEMENT’S PLANS

As a development stage company, 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 June 2013, the Company signed an agreement with an institutional investor to sell up to $20 million of common stock. Under the agreement subject to certain conditions and at the Company's sole discretion, the institutional investor has committed to invest up to $20 million in the Company's common stock over a 30-month period with the remaining available amount of $19,343,840. The Company filed a registration statement with the U.S. Securities and Exchange Commission covering the resale of the shares that may be issued to the institutional investor. The institutional investor is obligated to make purchases as the Company directs in accordance with the agreement that 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 the Company's common stock. Management believes the Company has raised sufficient capital to finance its operations through October 2014. Additional funding may also be provided by the exercise of 1,191,000 outstanding options and warrants expiring during 2014 at an exercise price of $0.34 and $0.72, which may raise additional capital up to approximately $787,000. Also, historically the Company has successfully raised sufficient cash to fund its operations. The Company continues to develop and test its next generation Electro-Optic and third-order material platform to support and cultivate potential customers, strategic partners and develop photonic devices. Management believes the Company’s initial revenue stream will be in prototype devices, application and non-recurring engineering charges, and material charges for specialty non-linear application prior to moving into full commercialization and production. However, there can be no assurances that the Company will achieve an adequate sales level or meet all the conditions to obligate the institutional investor to make purchases. The Company has incurred significant losses and experienced negative cash flow during the development stage. If these conditions continue beyond the next five months and if the Company is unable to raise capital, it will raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 –EQUIPMENT

Equipment consists of the following:


	March 31, 2014		December 31, 2013

Office equipment	$	33,899	$	24,244
Lab equipment		489,221		474,049
Furniture		17,022		4,061
Leasehold Improvements		57,790		37,519
		597,932		539,873
Less: Accumulated depreciation		271,722		241,513

	$	326,210	$	298,360

Depreciation expense for the three months ending March 31, 2014 and 2013 was $30,209 and $22,613.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2013

NOTE 4 – INTANGIBLE ASSETS

This represents legal fees and patent fees associated with the prosecution of patent applications. The Company has recorded amortization expenses on the Spacer and Chromophore patents granted by the United States Patent and Trademark Office in February 2011, April 2011 and September 2012, which are amortized over its legal life of 20 years and Chromophore patent granted by the Australian Patent Office in November 2012 which is amortized over its legal life of 20 years. Certain patent applications are abandoned by the Company when the claims are covered by patents already granted to the Company. Patent applications abandoned have been written off at full capitalized cost. No amortization expense has been recorded on the remaining patent applications since patents have yet to be granted. Once the patents are granted, the cost of the patents will be amortized over their legal lives, which is generally 20 years.

Patents consists of the following:


	March 31, 2014		December 31, 2013

Patents	$	607,984	$	579,235
Less: Accumulated amortization		39,411		35,695

	$	568,573	$	543,540

Amortization expense for the three months ending March 31, 2014 and 2013 was $3,715 and $3,715. Expense for abandoned patents for claims covered by patents already granted to the Company are recorded in research and development expenses and for the three months ending March 31, 2014 and 2013 were $0 and $0.

NOTE 5 – INCOME TAXES

There is no income tax benefit for the losses for the three months ended March 31, 2014 and 2013 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, 2014, the Company had no unrecognized tax benefits, or any tax related interest of penalties. There were no changes in the Company’s unrecognized tax benefits during the period ended March 31, 2014. The Company did not recognize any interest or penalties during 2014 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, 2010 and thereafter are subject to examination by the relevant taxing authorities.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2013

NOTE 6 – 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 and Warrants

In January 2009, an employee was granted with an option to purchase up to 25,000 shares of common stock at a purchase price of $.25 per share. Using the Black-Scholes Option Pricing Formula, the options were valued at $13,136, fair value. These options expire in 5 years and vest immediately. The expense recognized during 2009 is $13,136. In May 2010, the option was partially exercised to purchase 15,000 shares of common stock for proceeds of $3,750. In January 2014, the remaining 10,000 options were exercised to purchase 10,000 shares of common stock for proceeds of $2,500.

During June 2009, the Company issued a warrant to purchase 464,000 shares of common stock at a purchase price of $0.34 per share for accounting services rendered. The warrant was valued at $391,342 using the Black-Scholes Option Pricing Formula, vesting 46,400 immediately and the remaining on equal monthly installments of 23,200 over the next eighteen months. The warrant expires in 5 years. The expense is being recognized based on service terms of the agreement over a twenty two month period. The expense recognized during 2010 and 2009 is $213,459 and $177,883. In April 2010, the warrant was partially exercised to purchase 10,000 shares of common stock for proceeds of $3,450. In February 2012, the warrant was partially exercised to purchase 20,000 shares of common stock for proceeds of $6,900. In June 2013, the warrant was partially exercised to purchase 20,000 shares of common stock for proceeds of $6,900. In March 2014, warrants were exercised to purchase 250,000 shares of common stock for proceeds of $86,250. As of March 31, 2014, warrants to purchase 164,000 shares of common stock are still outstanding.

In January 2011, the Company issued a warrant to a related party to purchase 10,000 shares of common stock for legal services at an exercise price of $1.25 per share. Using the Black-Scholes Option Pricing Formula, the warrants were valued at $10,453, fair value. These warrants expire in 3 years and vest immediately. The expense recognized during 2011 is $10,453. In January 2014, the warrant to purchase 10,000 shares of common stock forfeited.

In August 2012, the board of directors approved a grant to a new employee of an option to purchase up to 100,000 shares of common stock at a purchase price of $0.925 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $74,486, fair value. The option expires in 5 years with 12,500 vesting every 3 months from date of grant. The option is expensed over the vesting terms. For the years ending December 31, 2013 and 2012, the Company recognized $37,242 and $15,611 of expense. For the three months ending March 31, 2014 and 2013, the Company recognized $3,012 and $9,183 of expense. In February 2014, the option to purchase 25,000 shares of common stock forfeited. As of March 31, 2014, options to purchase 75,000 shares of common stock are still outstanding.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2013

NOTE 6 – STOCKHOLDERS’ EQUITY (CONTINUED)

Common Stock and Warrants (Continued)

In May 2013, the board of directors approved a grant to a new employee of an option to purchase up to 10,000 shares of common stock at a purchase price of $1.03 per share. Using the Black-Scholes Option Pricing Formula, the option was valued at $9,574, fair value. The option expires in 10 years with 1,250 vesting quarterly from date of grant. The option is expensed over the vesting terms. In December 2013, the option to purchase 7,500 shares of common stock forfeited. For the year ending December 31, 2013, the Company recognized a net expense of $2,394. For the three months ending March 31, 2014, the Company recognized $0 of expense. As of December 31, 2013, options to purchase 2,500 shares of common stock are still outstanding. In March 2014, the options to purchase 2,500 shares of common stock forfeited.

In June 2013, the Company signed a Purchase Agreement and Registration Rights Agreement with an institutional investor to sell up to $20 million of common stock. Under the agreement subject to certain conditions and at the Company's sole discretion, the institutional investor has committed to invest up to $20 million in the Company's common stock over a 30-month period. The Company filed the registration statement with the U.S. Securities and Exchange Commission in September 2013. The institutional investor is obligated to make purchases as the Company directs in accordance with the 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 the Company's common stock immediately preceding the sales to the institutional investor. The Company issued 200,000 shares of restricted common stock to the institutional investor as an initial commitment fee valued at $170,000, fair value and 400,000 shares of common stock are reserved for additional commitment fees to the institutional investor in accordance with the terms of the agreement. During June 2013 through March 2014, the institutional investor purchased 700,000 shares of common stock for proceeds of $656,160 and the Company issued 10,322 shares of common stock as additional commitment fee, valued at $10,623, fair value, leaving 389,678 in reserve for additional commitment fees. For the three months ending March 31, 2014, the institutional investor purchased 200,000 shares of common stock for proceeds of $177,660 and the Company issued 2,680 shares of common stock as additional commitment fee, valued at $2,741, fair value.

In December 2013, the board of directors approved a grant to a senior advisor effective January 2014 of a warrant to purchase up to 100,000 shares of common stock at a purchase price of $0.715 per share. Using the Black-Scholes Option Pricing Formula, the warrant was valued at $53,313, fair value. The warrant expires in 5 years and vests 25,000 immediately and the remaining in equal monthly installments of 7,500 over the next 10 months. The warrant is expensed over the vesting terms. For the three month ending March 31, 2014, the Company recognized $13,146 of expense. As of March 31, 2014, the warrants to purchase 100,000 shares of common stock are still outstanding.

In January 2014, the Company issued options to the Company’s 4 independent directors to each purchase 50,000 shares of common stock at a purchase price of $0.715 per share. The options were each valued at $29,440, fair value, using the Black-Scholes Option Pricing Formula. The options expire in 10 years with 20,000 vesting immediately and the remainder vesting in quarterly equal installments of 10,000 commencing April 1, 2014. The options are expensed over the vesting terms. For the three month ending March 31, 2014, the Company recognized $70,396 of expense. As of March 31, 2014, the options to purchase 200,000 shares of common stock are still outstanding.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2013

NOTE 6 – STOCKHOLDERS’ EQUITY (CONTINUED)

Common Stock and Warrants (Continued)

In March 2014, the Company issued options to a new employee to purchase 30,000 shares of common stock at a purchase price of $0.92 per share. The options were valued at $23,304, fair value, using the Black-Scholes Option Pricing Formula. The options expire in 10 years vesting in quarterly equal installments of 3,750 from date of employment. The options are expensed over the vesting terms. For the three month ending March 31, 2014, the Company recognized $1,073 of expense. As of March 31, 2014, the options to purchase 30,000 shares of common stock are still outstanding.

In March 2014, the Company issued options to a new employee to purchase 75,000 shares of common stock at a purchase price of $0.92 per share. The options were valued at $58,384, fair value, using the Black-Scholes Option Pricing Formula. The options expire in 10 years vesting in quarterly equal installments of 9,375 from date of employment. The options are expensed over the vesting terms. For the three month ending March 31, 2014, the Company recognized $2,492 of expense. As of March 31, 2014, the options to purchase 75,000 shares of common stock are still outstanding.

In March 2014, the Company issued options to a new employee to purchase 50,000 shares of common stock at a purchase price of $0.92 per share. The options were valued at $38,922, fair value, using the Black-Scholes Option Pricing Formula. The options expire in 10 years vesting in quarterly equal installments of 6,250 from date of employment. The options are expensed over the vesting terms. For the three month ending March 31, 2014, the Company recognized $1,481 of expense. As of March 31, 2014, the options to purchase 50,000 shares of common stock are still outstanding.

In March 2014, the Company issued options to an employee to purchase 125,000 shares of common stock at a purchase price of $0.92 per share. The options were valued at $96,211, fair value, using the Black-Scholes Option Pricing Formula. The options expire in 10 years vesting in quarterly equal installments of 15,625 commencing April 1, 2014. The options are expensed over the vesting terms. For the three month ending March 31, 2014, the Company recognized $11,612 of expense. As of March 31, 2014, the options to purchase 125,000 shares of common stock are still outstanding.

In March 2014, the Company issued options to an employee to purchase 30,000 shares of common stock at a purchase price of $0.92 per share. The options were valued at $22,222, fair value, using the Black-Scholes Option Pricing Formula. The options expire in 10 years vesting in quarterly equal installments of 7,500 commencing April 1, 2014. The options are expensed over the vesting terms. For the three month ending March 31, 2014, the Company recognized $5,364 of expense. As of March 31, 2014, the options to purchase 30,000 shares of common stock are still outstanding.

In March 2014, the Company issued options to purchase 40,000 shares of common stock at a purchase price of $0.92 per share to its Chief Executive Officer as part of a new employment agreement. The options were valued at $29,630, fair value, using the Black-Scholes Option Pricing Formula. The options expire in 10 years vesting in quarterly equal installments of 10,000 commencing April 1, 2014. The options are expensed over the vesting terms. For the three month ending March 31, 2014, the Company recognized $7,152 of expense. As of March 31, 2014, the options to purchase 40,000 shares of common stock are still outstanding.

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2013

NOTE 6 – STOCKHOLDERS’ EQUITY (CONTINUED)

Common Stock and Warrants (Continued)

In March 2014, the Company issued warrants to purchase 100,000 shares of common stock for consulting services at an exercise price of $0.92 per share. The warrants were valued at $66,936, fair value, using the Black-Scholes Option Pricing Formula. The warrants expire in 5 years vesting 25,000 immediately with the remaining 75,000 vesting in monthly equal installments of 7,500 commencing April 1, 2014. The warrants are expensed over the vesting terms. For the three month ending March 31, 2014, the Company recognized $5,318 of expense. As of March 31, 2014, the warrants to purchase 100,000 shares of common stock are still outstanding.

NOTE 7 – STOCK BASED COMPENSATION

The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award, with the following assumptions for 2014: no dividend yield, expected volatility, based on the Company’s historical volatility, 96% to 109%, risk-free interest rate 1.46% to 2.08% and expected option life of 5 to 7.25 years.

As of March 31, 2014, there was $651,493 of unrecognized compensation expense related to non-vested market-based share awards that is expected to be recognized through October 2016.

The following tables summarize all stock option and warrant activity of the Company during the three months ended March 31, 2014:


	Non-Qualified Stock Options and Warrants Outstanding and Exercisable

					Weighted
					Average
	Number of			Exercise	Exercise
	Shares			Price	Price

Outstanding, December 31, 2013		7,146,000		$0.25 - $1.75	$	1.16

Granted		750,000		$0.72 - $0.92	$	0.84
Expired		(10,000	)	$1.25	$	1.25
Forfeited		(27,500	)	$0.93 - $1.03	$	0.93
Exercised		(260,000	)	$0.25 - $0.35	$	0.34

Outstanding, March 31, 2014		7,598,500		$0.34 - $1.75	$	1.15

Exercisable, March 31, 2014		6,495,997		$0.34 - $1.75	$	1.20


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, 2014	Contractual Life	Warrants Currently Exercisable

$0.34 - $1.75	6,495,997	3.25 Years	$1.20

LIGHTWAVE LOGIC, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2013

NOTE 8 – RELATED PARTY

At March 31, 2014 the Company had accrued salaries to two beneficial owners of $42,088, legal accrual to related party of $23,000 and travel and office expense accruals of officers in the amount of $1,964. At December 31, 2013 the Company had accrued salaries to two beneficial owners of $42,088, legal accrual to related party of $5,500 and travel and office expense accruals of officers in the amount of $1,229.

NOTE 9 – RETIREMENT PLAN

During 2013, the Company established a 401(k) retirement plan covering all eligible employees beginning November 15, 2013. There were no contributions charged to expense.

NOTE 10 – SUBSEQUENT EVENTS

In May 2014, the Company issued options to a new director to purchase 200,000 shares of common stock at a purchase price of $0.763 per share. The options were valued at $122,515 using the Black-Scholes Option Pricing Formula. The options expire in 10 years with 50,000 vesting immediately and the remainder vesting in annual equal installments of 50,000 commencing on the one year anniversary of the date of grant. The options are expensed over the vesting terms.


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

The following management’s discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following selected financial information is derived from our historical financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein and the "Forward-Looking Statements" explanation included herein.

Overview

Lightwave Logic, Inc. (the “Company”) is a development stage, electro-optical device and organic nonlinear materials company. Our primary area of expertise is the chemical synthesis of chromophore dyes used in the development of organic Application Specific Electro-Optic Polymers (ASEOP) and Organic Non-Linear All-Optical Polymers (NLAOP) that have high electro-optic and optical activity. Our family of materials are thermally and photo-chemically stable, which we believe could have utility across a broad range of applications in devices that address markets like, telecommunication, data communications, high-speed computing and photovoltaic cells. Secondarily, the Company is developing proprietary electro-optical and all-optical devices utilizing the advanced capabilities of our materials for the application in the fields mentioned above.

In order to transmit digital information at extremely high-speeds (wide bandwidth) over the Internet, it is necessary to convert the electrical signals produced by a computer into optical signals for transmission over long-distance fiber-optic cable. Molecularly engineered materials known as electro-optic polymers when designed into optical devices perform the actual conversion of an electrical signal to an optical signal.

We are currently developing electro-optic polymers that promise performance many times faster than any technology currently available and that have unprecedented thermal stability. High-performance electro-optic materials produced by our Company have demonstrated stability as high as 350 degrees Celsius. Stability above 250 degrees Celsius is necessary for vertical integration into many semi-conductor production lines. In December 2011 one of our non-linear optical polymers, Perkinamine Indigo^TM demonstrated an unusually high electro-optical effect of greater than 250 picometers per volt on 1.5-micron films with excellent thermal and photo stability. Independent research laboratories at Photon-X and The University of Colorado confirmed these characteristics. We continued our development program on Perkinamine Indigo^TM to better understand the properties that gave us the results reported in December 2011. More recent measurements have shown an electro-optical effect closer to 100 picometers per volt in a 500 nm thin films. We are continuing to perform development work to better understand these results. In January 2014 we created a new methodology to combine multiple chromophores into a single polymer host that will significantly improve their ability to generate more powerful organic, nonlinear electro-optical (EO) polymer systems. The new synthetic chemistry process can enable multiple chromophores (dyes) to work in concert with each other within a single polymer host. This proprietary process has created two new material systems, which have demonstrated outstanding electro-optic values. In addition, initial thermal stability results exceed any commercially available organic nonlinear polymer material systems.

Our non-linear all optical polymers have demonstrated resonantly enhanced third-order properties about 2,630 times larger than fused silica, which means that they are very photo-optically active in the absence of an RF layer. In this way they differ from our electro-optical polymers and are considered more advanced next-generation materials.

Our revenue model relies substantially on the assumption that we will be able to successfully develop non-linear polymer materials and photonic device products, which will use non-linear all-optical and electro-optic polymers for applications within the industries named below. When appropriate, we intend to create specific materials for each of these applications and use our proprietary knowledge base to continue to enhance its discoveries.

telecommunications/data communications

backplane optical interconnects

cloud computing and data centers

photovoltaic cells

medical applications

satellite reconnaissance

navigation systems

radar applications

optical filters

spacial light modulators

all-optical transistors

entertainment

To be successful, we must, among other things:

Develop and maintain collaborative relationships with strategic partners;

Continue to expand our research and development efforts for our products;

Develop and continue to improve on our manufacturing processes and maintain stringent quality controls;

Produce commercial quantities of our products at commercially acceptable prices;

Rapidly respond to technological advancements;

Attract, retain and motivate qualified personnel; and

Obtain and retain effective intellectual property protection for our products and technology.

We believe that Moore's Law (a principle which states the number of transistors on a silicon chip doubles approximately every eighteen months) will create markets for our high-performance electro-optic materials and photonic device products.

Plan of Operation

Since inception, we have been engaged primarily in the research and development of our polymer materials technologies and potential photonic device products. We are devoting significant resources to engineer next-generation electro-optic polymers for future applications to be utilized by electro-optic device manufacturers, such as telecommunications component and systems manufacturers, networking and switching suppliers, semiconductor companies, aerospace companies, government agencies and internal device development. We expect to continue to develop products that we intend to introduce to these rapidly changing markets and to seek to identify new markets. We expect to continue to make significant operating and capital expenditures for research and development activities.

As we move from a development stage company to a product supplier, we expect that our financial condition and results of operations will undergo substantial change. In particular, we expect to record both revenue and expense from product sales, to incur increased costs for sales and marketing and to increase general and administrative expense. Accordingly, the financial condition and results of operations reflected in our historical financial statements are not expected to be indicative of our future financial condition and results of operations.

Some of our more significant milestones that we achieved during 2013 and 2014 include:

In February 2013 we delivered to a potential large system supplier customer prototype devices that were coated with our advanced organic nonlinear electro-optical polymer, Perkinamine IndigoTM. Tests conducted by the University of Colorado, Boulder on coupons coated with the material demonstrated consistent R₃₃ measurements from 100-125 picometers per volt at 1550 nm, which as tested by the University of Colorado exceeded the potential large system supplier customer's stated requirements.

In March 2013 we entered into a product development contractor agreement with EM Photonics (EMP) of Newark, Delaware to fabricate and test waveguides and phase modulators during an initial development phase using existing EMP polymer modulator design and processes. In June 2013 we consolidated the EMP design program into our University of Colorado, Boulder (UCB) program after we fabricated structures with UCB that will be used as the basic building blocks of our Integrated Optical Device effort for the construction of both our advanced telecom modulator and data communications transceiver. In August 2013 in a combined effort of the Company’s chemists, the University of Colorado, Boulder, and a third party research group we successfully fabricated Silicon Organic Hybrid (SOH) slot waveguide modulators. The devices utilize an existing modulator structure with one of our proprietary electro-optic polymer material systems as the enabling material layer. In October 2013, we confirmed the functionality of the SOH slot waveguide modulators as operating devices.

In April 2013 our potential large system supplier customer informed us that their preliminary testing results on the prototype devices coated with Perkinamine Indigo™ that we delivered to them in February 2013 demonstrated several of the key performance parameters that they desired. There are still additional tests that need to be completed. We are working with our potential customer utilizing our Perkinamine family of chromophores in a number of host polymers and will evaluate these polymers in conjunction with our chromophores for a specific performance attributes for their application.

In April 2013 Japan granted our Company Japanese Patent No. 5241234 entitled Heterocyclical Chromophore Architectures. This patent protects the unique molecular structures that give our chromophores the thermal stability necessary to withstand CMOS processing temperatures without compromising electro-optical effects.

In June 2013 we signed a new agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) to sell up to $20 million of common stock. Under the agreement subject to certain conditions and at our sole discretion, Lincoln Park has committed to invest up to $20 million in the Company’s common stock over a 30-month period. In October 2013 the U.S. Securities and Exchange Commission declared effective our registration statement covering the resale of the shares that may be issued to Lincoln Park. Sales of shares will be made in specified amounts and at prices that are based upon the market prices of our Company's common stock.

In August 2013 in a combined effort of the Company’s chemists, the University of Colorado, Boulder, and a third party research group we successfully fabricated Silicon Organic Hybrid (SOH) slot waveguide modulators. The devices utilize an existing modulator structure with one of our proprietary electro-optic polymer material systems as the enabling material layer. In October 2013 we confirmed the functionality of the SOH slot waveguide modulators as operating prototype devices. These first-generation devices have achieved greater electro-optical activity and dramatically lower drive voltage than industry standard modulators based on inorganic materials.

In November 2013 preliminary testing and initial data on our SOH slot waveguide modulators demonstrated several promising characteristics. The tested SOH 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 data rates exceeded 30-35 Gb/sec in the telecom, 1550 nanometer frequency band. This is equivalent to four, 10Gb/sec, inorganic, lithium niobate modulators that would require approximately 12-16 volts to move the same amount of information. Our material also operates in the 1310 nanometer frequency band, which is suitable for data communications applications.

In February 2014 we received our first purchase order for our advanced organic nonlinear electro-optic (EO) polymer from Boulder Nonlinear Systems (BNS) of Boulder, Colorado in connection with the development of a next generation LADAR system. It is a radar system that utilizes a pulse laser to calculate the distance to a target, but is also capable of rendering a 3-D image.

In March 2014 we began the process of manufacturing an advanced design Silicon Organic Hybrid Transceiver prototype and have released the completed chip design to the OpSIS Center at the University of Delaware who will be producing initial silicon chips. Delivery of the chips is expected in early summer 2014, which will be used for qualification and testing. The OpSIS Center at the University of Delaware will be providing us with chips that we will process with various combinations of our electro-optic polymer systems. The initial application will target inter-data center interconnections of more than 10 kilometers. Our next design will utilize a different frequency and address the current bottleneck in the rack-to-server layer.

In April 2014, we entered into a sole worldwide license agreement with Corning Incorporated enabling us to integrate Corning's organic electro-optical chromophores into our portfolio of electro-optic polymer materials. The agreement allows us to use the licensed patents within a defined license field that includes communications, computing, power, and power storage applications utilizing the nonlinear optical properties of their materials. As a result of obtaining this license agreement, we created a new powerful and durable nonlinear organic electro-optical (EO) material that will be used in photonic device development and is based on our new multi-chromophore approach that allows two or more chromophores to work in concert. This multi-chromophore system has achieved a 50% increase in chromophore concentration, leading to higher electro-optical activity when compared to an equivalent single chromophore system. Further, the system does not cause the high chromophore density loading issues such as reduced effective electro-optic activity due to a non-uniform concentration of chromophore in the polymer host. Repeated, multi-point measurements multi-chromophore system shows twice the electro-optic effect of Lithium Niobate with excellent durability.

We ultimately intend to use our next-generation non-linear all-optical and electro-optic polymers for future applications vital to the following industries. We expect to create specific materials for each of these applications as appropriate:

telecommunications/data communications

backplane optical interconnects

cloud computing and data centers

photovoltaic cells

medical applications

satellite reconnaissance

navigation systems

radar applications

optical filters

spatial light modulators

all-optical transistors

entertainment

In an effort to maximize our future revenue stream from our non-linear all-optical and electro-optic polymer products, our business model anticipates that our revenue stream will be derived from one or some combination of the following: (i) technology licensing for specific product applications; (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 photonic device markets. In order to meet this objective, subject to successful testing of our technology and having available financial resources, we intend to:

Develop non-linear all-optical and electro-optic polymers and photonic devices;

Continue to develop proprietary intellectual property;

Streamline our product development process;

Develop a comprehensive marketing plan;

Maintain/develop strategic relationships with government agencies, private firms, and academic institutions; and

Continue to attract and retain high-level science and technology personnel to our Company.

Our Proprietary Products in Development

As part of a two-pronged marketing strategy, our Company is developing several devices, which are in various stages of development that utilize our organic nonlinear optical materials.

They include:

datacomm/telecomm photonic transceiver

telecommunications modulator

spatial light modulator

optical filter

all-optical switch

multi-channel optical modem

Additionally, we must create an infrastructure, including operational and financial systems, and related internal controls, and recruit qualified personnel. Failure to do so could adversely affect our ability to support our operations.

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. During 2013 we received $2,351,008 in cash proceeds from the issuance and sale of our common stock. During the first quarter of 2014 we received $266,410 in cash proceeds from the issuance and sale of our common stock.

Results of Operations

Comparison of three months ended March 31, 2014 to three months ended March 31, 2013

Revenues

As a development stage company, we had revenues of $2,500 during the three months ended March 31, 2014 and $0 for the three months ending March 31, 2013. The Company is in various stages of material development and evaluation, and product development with potential customers and expects the next revenue stream to be in sale of nonlinear optical polymer materials, prototype devices, application and non-recurring engineering charges prior to moving into production.

Operating Expenses

Our operating expenses were $987,671 and $903,000 for the three months ended March 31, 2014 and 2013, respectively, for an increase of $84,671. This increase in operating expenses was due primarily to increases in research and development salaries and wages, laboratory electro-optic device prototype, development and outsourced testing expenses, laboratory materials and supplies, research and development non-cash stock option and warrant amortization, depreciation, investor relations expenses, software expense, rent and utility expenses, lodging and moving expenses, offset by decreases in general and administrative non-cash amortization of options and warrants, general and administrative wages and salaries and legal expenses.

Included in our operating expenses for the three months ended March 31, 2014 was $585,506 for research and development expenses compared to $455,382 for the three months ended March 31, 2013, for an increase of $130,124. This is primarily due to increases in research and development salaries and wages, laboratory electro-optic device prototype, development and outsourced testing expenses, laboratory materials and supplies, research and development non-cash stock option and warrant amortization, depreciation, lodging and moving expenses.

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

We expect to continue to incur substantial research and development expense to develop and commercialize our electro-optic material platform. These expenses will increase as a result of accelerated development effort to support commercialization of our non-linear optical polymer materials technology; outsourcing work to build device prototypes; expanding and equipping 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.

Research and development wages and salaries increased $38,938 from $172,334 for the three months ended March 31, 2013 to $211,272 for the three months ended March 31, 2014, primarily due to additional employees hired to perform in-house material development, testing and device development in the Company’s laboratory facilities. Accordingly laboratory materials and supplies increased $9,763 from $12,363 for the three months ended March 31, 2013 to $22,126 for the three months ended March 31, 2014. Also, laboratory electro-optic device prototype, development and outsourced testing expenses increased $46,448 from $57,884 for the three months ended March 31, 2013 to $104,332 for the three months ended March 31, 2014 as the Company expands its prototype development efforts.

Depreciation expense increased $7,266 from $22,350 for the three months ended March 31, 2013 to $29,616 for the three months ended March 31, 2014 primarily due to the additional equipment purchased for the Company’s laboratory facilities.

Research and development non-cash stock compensation and stock option and warrant amortization increased $14,166 from $130,285 for the three months ended March 31, 2013 to $144,451 for the three months ended March 31, 2014.

Research and development lodging expenses increased $6,119 from $2,469 for the three months ended March 31, 2013 to $8,588 for the three months ended March 31, 2014.

Moving expenses incurred during the three months ending March 31, 2014, for the move of the optical lab to the Company’s new headquarter facility in Colorado were $3,972.

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 $45,453 to $402,165 for the three months ended March 31, 2014 compared to $447,618 for the three months ended March 31, 2013. The decrease is due primarily to decreases in general and administrative non-cash amortization of options and warrants, general and administrative wages and salaries and legal expenses offset by increases in investor relations expenses, software expense, rent and utility expenses and general and administrative moving expenses.

General and administrative non-cash stock option and warrant amortization decreased $62,931 from $139,639 for the three months ended March 31, 2013 to $76,708 for the three months ended March 31, 2014.

General and administrative wages and salaries decreased $12,912 from $128,577 for the three months ended March 31, 2013 to $115,665 for the three months ended March 31, 2014.

Legal fees decreased $5,556 to $32,278 for the three months ended March 31, 2014 compared to $37,834 for the three months ended March 31, 2013.

Investor relations expenses increased $16,780 to $16,810 for the three months ended March 31, 2014 from $30 for the three months ended March 31, 2013 in an effort to expand the Company’s exposure to a broader base of investors.

Software expenses increased $4,266 from $0 for the three months ended March 31, 2013 to $4,266 for the three months ended March 31, 2014 primarily for the implementation during the second quarter of 2012, of an employee stock option software program for interactive option exercises by employees and directors under the 2007 Employee Stock Plan.

Rent and utility expenses increased $4,583 from $3,900 for the three months ended March 31, 2013 to $8,483 for the three months ended March 31, 2014 for the expenses of the new headquarter facility in Colorado.

Moving expenses incurred during the three months ending March 31, 2014, for the move of the Company’s corporate office to the new headquarter facility in Colorado were $7,736.

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 income (expense) decreased $16,791 to ($2,680) for the three months ending March 31, 2014 from ($19,471) for the three months ending March 31, 2013, relating primarily to the commitment fee associated with the resale of shares to an institutional investor of an amended agreement for resale during the corresponding three-month period.

Net Loss

Net loss was $987,851 and $922,471 for the three months ended March 31, 2014 and 2013, respectively, for an increase of $65,380, due primarily to increases in research and development salaries and wages, laboratory electro-optic device prototype, development and outsourced testing expenses, laboratory materials and supplies, research and development non-cash stock option and warrant amortization, depreciation, investor relations expenses, software expense, rent and utility expenses, lodging and moving expenses, offset by decreases in general and administrative non-cash amortization of options and warrants, general and administrative wages and salaries, legal expenses and commitment fee to institutional investor.

Significant Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based upon historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates.

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, 2013 contains a discussion of these significant accounting policies. There have been no significant changes in our significant accounting policies since December 31, 2013. See our Note 1 in our unaudited financial statements for the three months ended March 31, 2014, as set forth herein.

Liquidity and Capital Resources

During the three months ended March 31, 2014, net cash used in operating activities was $520,210 and net cash used in investing activities was $86,807, 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, 2014 was $266,410. At March 31, 2014, our cash and cash equivalents totaled $1,930,097, our assets totaled $2,937,730, our liabilities totaled $312,637, and we had stockholders’ equity of $2,625,093.

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 $3,240,000 of expenditures over the next 12 months. 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 during 2014.

Our business does not presently generate the cash needed to finance our current and anticipated operations. We believe we have raised sufficient capital to finance our operations through October 2014, however, we will need to obtain additional future financing after that time to finance our operations until such time that we can conduct profitable revenue-generating activities.

Such future sources of financing may include cash from equity offerings, exercise of stock options, warrants and proceeds from debt instruments; but we cannot assure you that such equity or borrowings will be available or, if available, will be at rates or prices acceptable to us.

In May 2011 we signed our stock purchase agreement with Lincoln Park whereby subject to certain conditions and at our sole discretion, Lincoln Park has committed to purchase up to $20 million of our common stock over a 30-month period. We registered for resale by Lincoln Park 10,000,000 shares of our common stock in June 2011. The stock purchase agreement expired in December 2013. In June 2013 we signed our new stock purchase agreement with Lincoln Park to sell up to $20 million of common stock whereby subject to certain conditions and at our sole discretion, Lincoln Park has committed to purchase up to $20 million of our common stock over a 30-month period. We registered for resale by Lincoln Park 10,000,000 shares of our common stock in October 2013. Pursuant to the new stock 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 Company's common stock immediately preceding the sales to Lincoln Park. We expect this financing to provide our Company with sufficient funds to maintain its 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 stock 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 either short-term or 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 new stock 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. We may terminate the stock purchase agreement at any time, at our discretion, without any penalty or cost to us. Lincoln Park may not assign or transfer its rights and obligations under stock the purchase agreement.

We expect that our cash used in operations will increase during 2014 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, 2014

Net cash used in operating activities was $520,210 for the three months ended March 31, 2014, primarily attributable to the net loss of $987,851 adjusted by $30,525 in warrants issued for services, $190,634 in options issued for services, $2,743 in common stock issued for services, $33,924 in depreciation expenses and patent amortization expenses, $19,354 in prepaid expenses and $190,461 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 $86,807 for the three months ended March 31, 2014, consisting of $28,748 in cost for intangibles and $58,059 in asset additions primarily for the lab facility and new corporate office.

Net cash provided by financing activities was $266,410 for the three months ended March 31, 2014 and consisted of $177,660 in proceeds from resale of common stock to an institutional investor and $88,750 from the exercise of options and warrants.

Inflation and Seasonality

We do not believe that our operations are significantly impacted by inflation. Our business is not seasonal in nature.


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, 2014. Based on this evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that, as of March 31, 2014 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, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION


Item 2	Unregistered Sales of Equity Securities and Use of Proceeds


Date		Security/Value

January 2014		Warrant – right to buy 100,000 shares of common stock at $0.715 per share issued for services.

January 2014		Common Stock – 10,000 shares of common stock at $0.25 per share pursuant to an option exercise for total proceeds of $2,500.

January 2014		Options – right to buy 200,000 shares of common stock at $0.715 per share issued for services.

March 2014		Common Stock – 250,000 shares of common stock at $0.345 per share pursuant to a warrant exercise for total proceeds of $86,250.

March 2014		Options – right to buy 350,000 shares of common stock at $0.92 per share issued for services.

March 2014		Warrant – right to buy 100,000 shares of common stock at $0.92 per share issued for services.

No underwriters were utilized and no commissions or fees were paid with respect to any of the above transactions. We relied on Section 4(2) of the Securities Act of 1933, as amended, since the transactions did not involve any public offering.


Item 5	Other Information

On March 3, 2014, we entered into a new employee agreement with Thomas E. Zelibor with respect to his position as Chief Executive Officer of our Company. Pursuant to the employee agreement, among other things, Mr. Zelibor is entitled to receive as compensation a stock award whereby 25,000 shares of our common stock would be issued to him on March 3, 2014 and 25,000 shares of our common stock would be issued to him on each successive contract anniversary of the commencement term of his employee agreement. To date, no shares have been issued to Mr. Zelibor pursuant to the stock award provision of his employee agreement. On May 12, 2014, Mr. Zelibor delivered a letter to our Company confirming to our Company that he is declining the award of all current and future shares of common stock awards that he is entitled to under the stock award provision of his employee agreement.


Item 6	Exhibits

The following exhibits are included herein:


Exhibit No.	Description of Exhibit	Location
10.1	Employment Agreement - Thomas E. Zelibor	*
10.2	Letter Agreement Re: Employment Agreement - Thomas E. Zelibor	Filed herewith
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	Furnished herewith

Incorporated by reference to our Form 8-K filed on March 5, 2014.

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/ Thomas E. Zelibor
	Thomas E. Zelibor,
	Chief Executive Officer
	(Principal Executive Officer)

Date: May 14, 2014


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

Date: May 14, 2014