Lightwave Logic, Inc. Segments Disclosure

NOTE 15 – SEGMENT REPORTING

 

The Company operates as a single reportable segment, as the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer (“CEO”), evaluates the business as a whole and does not receive discrete financial information for separate business units. The CODM is responsible for evaluating financial results and making resource allocation decisions. The Company determined that it has one operating and reportable segment based on the way the CODM organizes, manages, and evaluates the Company’s operations on a consolidated basis.

 

The CODM assesses the Company's financial performance based on operating loss, which aligns with the amount reported in the statements of comprehensive loss. The following table presents a reconciliation of segment operating loss to net loss for the years ended December 31, 2025 and 2024:

Schedule of reconciliation of segment operating loss
		2025				2024
NET SALES		$	236,855			$	95,605
COST AND EXPENSE
Cost of sales			6,823				7,395
Research and development			11,489,687				16,806,548
General and administrative			9,501,769				6,370,805
Total significant segment expenses			20,998,279				23,184,748
LOSS FROM OPERATIONS			(20,761,424	)			(23,089,143	)
OTHER INCOME (EXPENSE)
Interest income			842,445				926,854
Commitment fee			(370,311	)			(154,210	)
Loss on disposal of property and equipment and intangible assets			(25,152	)			(213,440	)
Other income (expense)			645				(5,102	)
NET LOSS		$	(20,313,797	)		$	(22,535,041	)

 

Significant Segment Expenses

 

The Company considers the following as significant expenses in evaluating its segment performance:

 

•		Research and Development: includes costs related to personnel, laboratory and wafer fabrication materials and supplies, prototype device development and wafer fabrication expenses, and third-party consulting costs aimed at developing high-performance electro-optic polymer materials.
•		General and Administrative: includes personnel costs, professional fees, and other overhead expenses.
•		Cost of Sales: represents labor costs, material costs and manufacturing overhead costs associated with the production of materials transferred to the customer under the technology license and material supply agreement at the Company’s facility.

Other segment items were $0 for the years ended December 31, 2025 and 2024. Other segment items were $0 because cost of sales, research and development, and general and administrative expenses comprise all expenses included in the CODM measure of segment operating loss.

 

Segment assets

 

 

The CODM does not regularly review asset information by segment; accordingly, the Company has not disclosed segment assets.

 

Entity-Wide Disclosures

 

•		Geographic Revenue Information: for the year ended December 31, 2025, $236,855 of the Company’s net sales were generated outside the United States. For the year ended December 31, 2024, $13,750 of the Company's net sales were generated in the United States and $81,855 were generated outside the United States. Revenue is attributed to geographic areas based on the customer’s bill-to location. For the years ended December 31, 2025 and 2024, 100% of net sales were generated in two countries, which represented 10% or more of consolidated net sales.
•		Long-lived assets: long-lived assets, consisting primarily of property and equipment, intangible assets, and right of use assets under operating leases were all located in the United States and totaled $9,376,041 and $9,692,713 as of December 31, 2025 and 2024, respectively.

•

Major Customers: for the year ended December 31, 2025 and 2024, the Company has two customers that accounted for 10% or more of total revenue. For the year ended December 31, 2025, Customer A and Customer B accounted for approximately 55% and 45% of total net sales, respectively. For the year ended December 31, 2024, Customer A and Customer B accounted for approximately 14% and 86% of total net sales, respectively. The related revenues were attributable to the Company’s single reportable segment.