Lightwave Logic, Inc. Revenue Disclosure
NOTE 4 – REVENUE
The Company's first commercial agreement occurred in May 2023, in the form of a four-year material supply and license agreement (the “License Agreement”) that incorporates the Company's patented electro-optic polymer materials for use in manufacturing of photonic devices (the “Licensed Product”). The licensee shall pay the Company a running royalty with a minimum royalty paid on an annual basis over the term of the License Agreement the minimum royalty payments and milestone license fees. The License Agreement is a non-exclusive material supply and license agreement.
Additional future revenue will be generated from royalties from the licensee’s sale of Licensed Product that exceed the minimum royalty payments and milestone license fees.
In December 2025, Company entered into a memorandum of agreement (also referred to as “joint development agreement”) under which it, along with other parties, performs its respective part of the development work to develop an electro-optical polymer-based modulator chip for use in communication applications. The development work consists of preparing reference documentation and support of a multi-project wafer chip produced at a mutually agreed upon foundry, the design and post processing of fabricated chips, and complete product verification and volume manufacturing preparation, with each party to the agreement having responsibility over various deliverables for each phase.
During 2024, the Company also performed device processing work for a customer.
Timing of Revenue Recognition and Contract Balances
Revenues related to the initial license fee and a minimum annual royalty are recognized over time commencing with the License Agreement in May 2023. An up-front license fee in the amount of $50,000 was paid during the period ended December 31, 2023. $6,541 and $23,208 of this amount is recorded as a contract liability in current liabilities on the Company’s balance sheets as of December 31, 2025 and December 31, 2024, respectively. For the years ended December 31, 2025 and December 31, 2024, the Company recognized $106,855 and $81,855 in revenue related to this agreement.
Revenues related to the joint development agreement are recognized at a point of time, when control over the performance obligations is transferred to a customer. For the year ended December 31, 2025, the Company recognized $130,000 in non-recurring engineering revenue related to this agreement.
In March 2024, the Company completed device processing work on the devices supplied by a customer. Revenue for this contract was recognized at the time of shipment of the devices back to the customer and amounted to $13,750 for the year ended December 31, 2024.
Contract balances are as follows:
| December 31, 2025 | December 31, 2024 | |||||||
| Accounts receivable, net | $ | 190,753 | $ | 45,565 | ||||
| Short-term contract assets | $ | $ | ||||||
| Long-term contract assets | $ | $ | ||||||
| Short-term contract liability | $ | 6,541 | $ | 23,208 | ||||
Significant changes in the contract balances for the years ended December 31, 2025 and December 31, 2024 are as follows:
| Year Ended December 31, 2025 | ||||||||
| Assets | Liabilities | |||||||
| Balance at December 31, 2024 | $ | 45,565 | $ | (23,208 | ) | |||
| Revenue recognized that was previously included in contract liability | — | 16,667 | ||||||
| Decreases/increases due to cash received | (75,000 | ) | — | |||||
| Billed receivables recorded | 29,435 | — | ||||||
| Transferred to receivables from unbilled receivables | (29,435 | ) | — | |||||
| Unbilled receivables recorded | 220,188 | — | ||||||
| Balance at December 31, 2025 | $ | 190,753 | $ | (6,541 | ) | |||
| Year Ended December 31, 2024 | ||||||||
| Assets | Liabilities | |||||||
| Balance at December 31, 2023 | $ | 30,376 | $ | (39,875 | ) | |||
| Revenue recognized that was previously included in contract liability | — | 16,667 | ||||||
| Decreases/increases due to cash received | (63,884 | ) | — | |||||
| Billed receivables recorded | 109,449 | — | ||||||
| Transferred to receivables from unbilled receivables | (95,564 | ) | — | |||||
| Unbilled receivables recorded | 65,188 | — | ||||||
| Balance at December 31, 2024 | $ | 45,565 | $ | (23,208 | ) | |||
Assets Recognized for the Costs to Obtain a Contract
There are no assets recognized for the costs to obtain the License Agreement.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 20, 2026 | Showing above |
| 2024 | Mar 18, 2025 | |
| 2023 | Feb 29, 2024 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.