# EDGAR Filing Document

**Accession Number:** 0001808377
**File Stem:** 0001829126-25-009128
**Filing Date:** 2025-11
**Character Count:** 132604
**Document Hash:** 1d245fec13e6c35192f542192bbe8348
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001829126-25-009128.hdr.sgml**: 20251113

**ACCESSION NUMBER**: 0001829126-25-009128

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 57

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251113

**DATE AS OF CHANGE**: 20251113

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Innovative Eyewear Inc
- **CENTRAL INDEX KEY:** 0001808377
- **STANDARD INDUSTRIAL CLASSIFICATION:** OPHTHALMIC GOODS [3851]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 842794274
- **STATE OF INCORPORATION:** FL
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41392
- **FILM NUMBER:** 251478386

**BUSINESS ADDRESS:**
- **STREET 1:** 11900 BISCAYNE BLVD
- **STREET 2:** STE 630
- **CITY:** MIAMI
- **STATE:** FL
- **ZIP:** 33181
- **BUSINESS PHONE:** 786-910-1898

**MAIL ADDRESS:**
- **STREET 1:** 66 W FLAGLER ST. SUITE 900
- **STREET 2:** STE 216
- **CITY:** MIAMI
- **STATE:** FL
- **ZIP:** 33130

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

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

For the quarterly period ended September 30, 2025

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

For the transition period from __________ to __________

Commission file number 001-41392

---

| |
|:---|
| **INNOVATIVE EYEWEAR, INC.**<br> ![](img_001.jpg)<br>|
| (Exact name of registrant as specified in its charter) |

---

---

| | |
|:---|:---|
| **Florida** | **85-0734861** |
| (State or other jurisdiction of <br> incorporation or organization) | (I.R.S. Employer <br> Identification No.) |

---

---

| |
|:---|
| **11900 Biscayne Blvd., Suite 630, North Miami, Florida 33181** |
| (Address of Principal Executive Offices, including zip code) |

---

---

| |
|:---|
| **(954) 826-0329** |
| (Registrant's telephone number, including area code) |

---

---

| |
|:---|
| **Not Applicable** |
| (Former name, former address and former fiscal year, if changed since last report) |

---

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data 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 such files.) Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated Filer ☐ Accelerated filer ☐ <br> Non-accelerated Filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.00001 par value | LUCY | NASDAQ Capital Market |
| Warrants to purchase Common Stock | LUCYW | NASDAQ Capital Market |

---

As of November 6, 2025, there were 5,350,183 shares of the registrant's common stock issued and outstanding.

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

*The discussions in this Quarterly Report on Form 10-Q contain forward-looking statements reflecting our current expectations that involve risks and uncertainties. These forward-looking statements include, but are not limited to, our strategy, competition, future operations and production capacity, our supply chain and logistics, future financial position, future revenues, projected costs, profitability, expected cost reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the market in which we operate, prospects and plans, and objectives of management. The words "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "projects," "will," "would," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2024, and in our other filings with the Securities and Exchange Commission. We do not assume any obligation to update any forward-looking statements except as required by law.*

**Innovative Eyewear, Inc.**

**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | **Page No.** |
| **[Part I. Financial Information](#a_001)** | **[Part I. Financial Information](#a_001)** | 1 |
| [Item 1.](#a_002) | [Condensed Financial Statements (Unaudited)](#a_002) | 1 |
|  | [Condensed Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024](#a_003) | 1 |
|  | [Condensed Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (Unaudited)](#a_004) | 2 |
|  | [Condensed Statements of Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 (Unaudited)](#a_005) | 3 |
|  | [Condensed Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (Unaudited)](#a_006) | 4 |
|  | [Notes to the Financial Statements (Unaudited)](#a_007) | 5 |
| [Item 2.](#a_008) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_008) | 15 |
| [Item 3.](#a_009) | [Quantitative and Qualitative Disclosures About Market Risk](#a_009) | 32 |
| [Item 4.](#a_010) | [Controls and Procedures](#a_010) | 32 |
| **[Part II. Other Information](#a_011)** | **[Part II. Other Information](#a_011)** | 33 |
| [Item 1.](#a_012) | [Legal Proceedings](#a_012) | 33 |
| [Item 1A.](#a_013) | [Risk Factors](#a_013) | 33 |
| [Item 2.](#a_014) | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_014) | 33 |
| [Item 3.](#a_015) | [Defaults Upon Senior Securities](#a_015) | 33 |
| [Item 4.](#a_016) | [Mine Safety Disclosures](#a_016) | 33 |
| [Item 5.](#a_017) | [Other Information](#a_017) | 33 |
| [Item 6.](#a_018) | [Exhibits](#a_018) | 34 |
| [Signatures](#a_019) |  | 35 |

---

i

**PART I - FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**INNOVATIVE EYEWEAR, INC.**

**CONDENSED BALANCE SHEETS**

**September 30, 2025 (Unaudited) and December 31, 2024**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $6699515 | $2628987 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments | 1298687 | 4895184 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 83358 | 107918 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 308188 | 266935 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory prepayments | 522939 | 424594 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | 1633115 | 831757 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from Tekcapital and Affiliates |  | 23394 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 53193 | 59447 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Assets | 10598995 | 9238216 |
| &nbsp;&nbsp;&nbsp;Non-Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets, net | 421491 | 451302 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net | 58243 | 107562 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other non-current assets | 96492 | 41229 |
| **TOTAL ASSETS** | $**11175221** | $**9838309** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $772224 | $692817 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 48591 | 44901 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to Tekcapital and Affiliates | 63836 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Liabilities | 884651 | 737718 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term payment plan with vendor | 40352 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | - | 5450 |
| **TOTAL LIABILITIES** | **925003** | **743168** |
| Commitments and contingencies (see Note 7) |  |  |
| Stockholders' Equity |  |  |
| &nbsp;&nbsp;&nbsp;Common stock (par value $0.00001, 50,000,000 shares authorized: 5,205,687 and 2,452,632 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively) | 52 | 25 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 40707160 | 33831046 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (30456994) | (24735930) |
| **TOTAL STOCKHOLDERS' EQUITY** | 10250218 | 9095141 |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $**11175221** | $**9838309** |

---

See accompanying Notes to the Condensed Financial Statements.

**INNOVATIVE EYEWEAR, INC.**

**CONDENSED STATEMENTS OF OPERATIONS**

**For the three and nine months ended September 30, 2025 and 2024**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br> September 30,** | **Three Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenues, net | $668128 | $253599 | $1701859 | $945752 |
| Less: Cost of Goods Sold | (423291) | (194255) | (1249154) | (824281) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross (Deficit) Profit | 244837 | 59344 | 452705 | 121471 |
| Operating Expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | (1277308) | (1121972) | (3679521) | (3526217) |
| &nbsp;&nbsp;&nbsp;Sales and marketing | (723372) | (533066) | (2055090) | (1636794) |
| &nbsp;&nbsp;&nbsp;Research and development | (129984) | (131369) | (608784) | (604472) |
| &nbsp;&nbsp;&nbsp;Related party management fee | (35000) | (35000) | (105000) | (105000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Operating Expenses | (2165664) | (1821407) | (6448395) | (5872483) |
| Other Income (Expense), net | 84560 | 41386 | 274626 | 110625 |
| Net Loss | $(1836267) | $(1720677) | $(5721064) | $(5640387) |
| Weighted average number of shares outstanding | 4870014 | 1736803 | 3521602 | 1178768 |
| Loss per share, basic and diluted | $(0.38) | $(0.99) | $(1.62) | $(4.78) |

---

See accompanying Notes to the Condensed Financial Statements.

**INNOVATIVE EYEWEAR, INC.**

**CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**For the three and nine months ended September 30, 2025 and 2024**

**(Unaudited)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional<br> Paid In**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total<br> Stockholders'**<br>**Equity** |
| **Balances as of January 1, 2025** | **2452632** | $**25** | $**33831046** | $**(24735930)** | $**9095141** |
| Cancellation of shares by stockholder | (5) |  |  |  |  |
| Stock-based compensation |  |  | 177576 |  | 177576 |
| Net loss | - | - | - | (1778703) | (1778703) |
| **Balances as of March 31, 2025** | **2452627** | $**25** | $**34008622** | $**(26514633)** | $**7494014** |
| April 2025 Warrant Inducement Transaction | 595188 | 6 | 1494306 |  | 1494312 |
| June 2025 Warrant Inducement Transaction | 746782 | 7 | 1890052 |  | 1890059 |
| Other exercises of warrants in ordinary course | 986532 | 10 | 2310238 |  | 2310248 |
| Issuance of shares to brand ambassador | 11539 |  | 30001 |  | 30001 |
| Issuance of shares related to vesting of restricted share units | 36216 |  |  |  |  |
| Stock-based compensation |  |  | 164714 |  | 164714 |
| Net loss | - | - | - | (2106094) | (2106094) |
| **Balances as of June 30, 2025** | **4828884** | $**48** | $**39897933** | $**(28620727)** | $**11277254** |
| At-the-Market Offerings | 341403 | 4 | 692313 |  | 692317 |
| Issuance of shares related to vesting of restricted share units | 35400 |  |  |  |  |
| Additional costs related to Warrant Inducement Transactions | **-** |  | (52390) |  | (52390) |
| Stock-based compensation |  |  | 169304 |  | 169304 |
| Net loss | - | - | - | (1836267) | (1836267) |
| **Balances as of September 30, 2025** | **5205687** | $**52** | $**40707160** | $**(30456994)** | $**10250218** |
| **Balances as of January 1, 2024** | **747416** | $**7** | $**22528234** | $**(16969415)** | $**5558826** |
| Issuance of shares to third party service provider | 15000 |  | 81900 |  | 81900 |
| Issuance of shares related to vesting of restricted share units | 815 |  |  |  |  |
| Stock-based compensation |  |  | 232154 |  | 232154 |
| Net loss | - | - | - | (1971311) | (1971311) |
| **Balances as of March 31, 2024** | **763231** | $**7** | $**22842288** | $**(18940726)** | $**3901569** |
| At-the-Market Offerings | 284471 | 3 | 2324576 |  | 2324579 |
| First Registered Direct Offering | 210043 | 2 | 737298 |  | 737300 |
| Second Registered Direct Offering | 263159 | 3 | 2134048 |  | 2134051 |
| Issuance of shares to brand ambassador | 4500 |  | 21690 |  | 21690 |
| Issuance of shares related to vesting of restricted share units | 1630 |  |  |  |  |
| Stock-based compensation |  |  | 173305 |  | 173305 |
| Net loss | - | - | - | (1948399) | (1948399) |
| **Balances as of June 30, 2024** | **1527034** | $**15** | $**28233205** | $**(20889125)** | $**7344095** |
| At-the-Market Offerings | 273517 | 3 | 1398552 |  | 1398555 |
| Exercises of warrants related to inducement agreements | 538426 | 5 | 3503874 |  | 3503879 |
| Exercises of warrants | 81957 | 1 | 299997 |  | 299998 |
| Stock-based compensation |  |  | 105075 |  | 105075 |
| Net loss | - | - | - | (1720677) | (1720677) |
| **Balances as of September 30, 2024** | **2420934** | $**24** | $**33540703** | $**(22609802)** | $**10930925** |

---

See accompanying Notes to the Condensed Financial Statements.

**INNOVATIVE EYEWEAR, INC.**

**CONDENSED STATEMENTS OF CASH FLOWS**

**For the nine months ended September 30, 2025 and 2024**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Net Loss | $(5721064) | $(5640387) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 53292 | 83907 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 48931 | 25199 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest income on debt securities (U.S. Treasury bills) | (24367) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized gain on debt securities (U.S. Treasury bills) | (104816) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation and nonemployee stock-based payment expense | 532017 | 510534 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses paid by Tekcapital and Affiliates | 215119 | 217368 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for (recovery of) doubtful accounts | 3629 | (2605) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-off of previously-capitalized software costs |  | 88073 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 26381 | 37429 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (18022) | 25964 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | (21694) | 47740 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory prepayments | (98345) | 184455 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (801358) | (381946) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (40765) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets and liabilities | 26075 | 7908 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flows from operating activities | (5924987) | (4796361) |
| **Investing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of debt securities (U.S. Treasury bills) | (1274320) | (4895184) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from redemption of debt securities (U.S. Treasury bills) | 5000000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan made to Tekcapital Europe, Ltd. | (250000) | (767940) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of amounts loaned to Tekcapital Europe, Ltd. | 250000 | 767940 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Patent costs | (19120) | (169804) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | (55483) | (35748) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flows from investing activities | 3651077 | (5100736) |
| **Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from offerings of common stock and warrants |  | 2871351 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from at-the-market offerings of common stock | 692317 | 3723134 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from exercises of warrants | 5642229 | 3803877 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of common stock withheld from employees to cover withholding taxes on vested restricted share units | 49005 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incurrence of obligation under long-term payment plan with vendor | 121059 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments made under long-term payment plan with vendor | (32283) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of amounts due to Tekcapital and Affiliates | (127889) | (244886) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flows from financing activities | 6344438 | 10153476 |
| Net Change in Cash and cash equivalents | 4070528 | 256379 |
| Cash and cash equivalents at Beginning of Period | $2628987 | $4287447 |
| Cash and cash equivalents at End of Period | $6699515 | $4543826 |
| **Significant Non-Cash Transactions** |  |  |
| Expenses paid for by Tekcapital and Affiliates, reported as change in Due to/from Tekcapital and Affiliates | 215119 | 217368 |
| Issuance of shares for prepayment to third party service provider |  | 81900 |
| Issuance of shares for prepayment to brand ambassador | 30001 | 21690 |

---

See accompanying Notes to the Condensed Financial Statements.

**INNOVATIVE EYEWEAR, INC.**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**September 30, 2025 and 2024 (Unaudited)**

**NOTE 1 – GENERAL INFORMATION**

The Company was originally founded by Lucyd Ltd., a portfolio company of Tekcapital Plc through Tekcapital Europe, Ltd. (collectively, together with Lucyd Ltd., "Tekcapital and Affiliates"), which owned approximately 5% of our issued and outstanding shares of common stock as of September 30, 2025.

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Basis of Presentation*

The accompanying condensed balance sheet as of December 31, 2024 (which has been derived from audited financial statements) and the unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated by the United States Securities and Exchange Commission ("SEC"). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. These unaudited condensed financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 24, 2025.

In the opinion of management, all adjustments considered necessary for the fair presentation of the financial statements for the periods presented have been included. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for future periods or the full year.

*Use of Estimates*

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, particularly given the significant uncertainties associated with the current state of international trade and the overall economic environment.

*Cash Equivalents*

All highly liquid investments with original maturities of three months or less, including money market funds, certificates of deposit, and U.S. Treasury bills purchased three months or less from maturity, are considered cash equivalents.

*Investments*

As of December 31, 2024, the Company held investments in U.S. Treasury bills, which were purchased in September 2024 and matured in March 2025. These investments were classified as "held-to-maturity" and, as of December 31, 2024, were recorded at amortized cost of $4,895,184 in the accompanying condensed balance sheet. The aggregate fair value of these investments as of December 31, 2024, based on quoted prices (unadjusted) in active markets for identical assets, was $4,957,750. Upon maturity of these investments, the Company recognized a realized gain $104,816 for the nine months ended September 30, 2025.

As of September 30, 2025, the Company held investments in U.S. Treasury bills, which were purchased in April 2025 and subsequently matured in October 2025. These investments were classified as "held-to-maturity" and, as of September 30, 2025, were recorded at amortized cost of $1,298,687 in the accompanying condensed balance sheet. The aggregate fair value of these investments, based on quoted prices (unadjusted) in active markets for identical assets, was $1,298,830 as of September 30, 2025.

*Accounts Receivable*

Accounts receivable are uncollateralized obligations due from customers under normal trade terms. For direct-to-consumer sales, payment is required before product is shipped. For wholesale orders, we offer "net 30" payment terms on wholesale orders of $1,500 or more in accordance with industry standards. The Company, by policy, routinely assesses the financial strength of its customers.

Accounts receivable are reported at the amount billed to the customer, net of an allowance for credit losses. The allowance for credit losses is determined based upon a variety of judgments and factors. Factors considered in determining the allowance include historical collection, write-off experience, and management's assessment of collectibility from customers, including current conditions, reasonable forecasts, and expectations of future collectibility and collection efforts. Management continuously assesses the collectibility of receivables and adjusts estimates based on actual experience and future expectations. Receivable balances are written-off against the allowance when such balances are deemed to be uncollectible.

A roll forward of the allowance for credit losses for the nine months ended September 30, 2025 and 2024 is as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Balance at January 1 | $30966 | $25772 |
| Bad debt expense (recovery) | 3629 | (2605) |
| Write-offs | (87) |  |
| Other | 86 | 218 |
| Balance at September 30 | $34594 | $23385 |

---

 

*Inventory*

Our inventory predominantly consists of purchased eyewear and related accessories, and is stated at the lower of cost or net realizable value, with cost determined on a specific identification method of inventory costing which attaches the actual cost to an identifiable unit of product. Also included within inventory at September 30, 2025 was $30,360 of electronic components purchased from a third-party supplier for use by our manufacturer in their future production of our eyewear; there were no such comparable amounts in inventory at December 31, 2024.

Provisions for excess, obsolete, or slow-moving inventory are recorded after periodic evaluation of historical sales, current economic trends, forecasted sales, estimated product life cycles, and estimated inventory levels. Such provisions were $0 as of both September 30, 2025 and December 31, 2024.

*Revenue Recognition*

Our revenue is primarily generated from the sales of prescription and non-prescription optical glasses and sunglasses, and shipping charges which are charged to the customer associated with these purchases. We sell products through our retail store resellers, distributors, on our own website Lucyd.co, and on Amazon.com. We have also recently started to generate revenue from the sale of subscriptions to the "Pro" version of our Lucyd app, which provides unlimited ChatGPT interactions and priority tech support for a monthly or annual fee.

To determine revenue recognition, we perform the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation. At contract inception, we assess the goods or services promised within each contract and determine those that are performance obligations, and also assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

In instances where the collectibility of contractual consideration is not probable at the time of sale, the revenue is deferred on our balance sheet as a contract liability, and the associated cost of goods sold is deferred on our balance sheet as a contract asset; subsequently, we recognize such revenue and cost of goods sold as payments are received. During the three months ended September 30, 2025 and 2024, we recognized $7,500 of revenue for each period, that was included in the contract liability balances as of January 1, 2025 and 2024, respectively. During the nine months ended September 30, 2025 and 2024, we recognized $22,500 of revenue for each period, that was included in the contract liability balances as of January 1, 2025 and 2024, respectively.

All revenue, including sales processed online and through our retail store resellers and distributors, is reported net of discounts, returns, and sales taxes collected from customers on behalf of taxing authorities. Amounts billed to a customer for shipping and handling are reported as revenues; costs incurred for shipping and handling are included in cost of goods sold at the time the related revenue is recognized.

For sales generated through our e-commerce channels, we identify the contract with a customer upon online purchase of our eyewear and transaction price at the manufacturer suggested retail price ("MSRP"). Our e-commerce revenue is recognized upon meeting of the performance obligation when the eyewear is shipped to the end customer. For sales processed through our website, U.S. consumers enjoy free USPS first class postage on orders over $149, with faster delivery options available for extra cost. For Amazon sales, shipping is free for U.S. consumers while international customers pay shipping charges on top of MSRP. Any costs associated with fees charged by the online platforms (i.e., Amazon.com, or Shopify for sales through our Lucyd.co website) are not recharged to customers and are recorded as a component of cost of goods sold as incurred. The Company charges applicable state sales taxes in addition to the MSRP for both online channels and all other marketplaces on which we sell products.

For sales to our retail store partners, we identify the contract with a customer upon receipt of an order of our eyewear through our Shopify wholesale portal or direct purchase order. Revenue is recognized upon meeting the performance obligation, which is delivery of the Company's eyewear products to the retail store, and is also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to retail store partners includes volume discounts, due to the nature of large quantity orders. The pricing includes shipping charges, while excluding any state sales tax charges applicable. Due to the nature of wholesale retail orders, no e-commerce fees are applicable.

For sales to distributors, we identify the contract with a customer upon receipt of an order of our eyewear through a direct purchase order. If collectibility of substantially all of the contract consideration is probable, revenue is recognized upon meeting the performance obligation, which is delivery of our eyewear products to the distributor, and is also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to retail store partners and distributors includes volume discounts, due to the nature of large quantity orders. The pricing does not include shipping. Due to the nature of wholesale retail orders, no marketplace fees are applicable, only credit card processing fees.

For sales of subscriptions to the "Pro" version of our Lucyd app, we identify the individual contracts with customers through detailed transaction reports from the Apple App Store or Google Play Store, with each individual transaction representing a separate contract. Revenue is recognized upon meeting the performance obligation, which is the right and availability of each customer to access the "Pro" features of the Lucyd app. For those customers that purchase such access on a month-to-month basis, we recognize revenue in the month in which the purchase of such access is made. For those customers that purchase an annual subscription, we recognize revenue on a straight-line basis over the subscription period, using a mid-month convention. The balance of unearned revenue related to app subscriptions that has been deferred on our balance sheet as a contract liability was $3,592 and $2,401 as of September 30, 2025 and December 31, 2024, respectively. During the three and nine months ended September 30, 2025, we recognized $325 and $2,263 of revenue that was included in the contract liability balance as of January 1, 2025.

We allow our customers to return our physical products, subject to our refund policy, which allows any customer to return our physical products for any reason and receive a full refund for frames (prescription lenses excluded) within the first 7 days for sales made through our website (Lucyd.co), 30 days for sales made through Amazon, and 30 days for sales to most wholesale retailers and distributors (although certain sales to independent distributors are ineligible for returns). We charge a standard $15 restocking fee for standard frame returns, which is deducted from applicable refunds to cover shipping and restocking costs, and our return policy prohibits discretionary returns of glasses with prescription lenses.

For all of our product sales, at the time of sale, we establish a reserve for returns, based on historical experience and expected future returns as well as review of individual returns received in the month following the balance sheet date; such reserve is recorded as a reduction of sales. The Company recorded an allowance for sales returns of $11,228 and $15,746 as September 30, 2025 and December 31, 2024, respectively.

*Segment Reporting*

The Company has a single reportable segment, which generates revenue from the sales of smartglasses, and related accessories and apps. The Company derives revenue primarily in North America and manages its business activities on a consolidated basis. The accounting policies of our single reportable segment are the same as those for the Company as a whole.

The Company's chief operating decision maker, as such term is defined under GAAP, is our Chief Executive Officer. The chief operating decision maker assesses performance for the single reportable segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. The Company does not have intra-entity sales or transfers.

**NOTE 3 – GOING CONCERN**

The Company has a limited operating history. The Company's business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include recession, downturn, or otherwise, changes in regulations or restrictions in imports, competition, or changes in consumer taste. These adverse conditions could affect the Company's financial condition and the results of its operations.

The Company meets its day-to-day working capital requirements using monies raised through sales of eyewear and issuances of equity. During the nine months ended September 30, 2025, the Company raised approximately $7.3 million of aggregate gross proceeds through a combination of warrant inducement transactions, other warrant exercises, and at-the-market offerings of common stock (see Note 9 for details). The Company has also entered into agreements with related parties, under which the Company may make net borrowings of up to $0.75 million (see Note 6 for details); as of September 30, 2025, the Company has not borrowed any amounts under such agreements. The Company's forecasts and projections indicate that the Company expects to have sufficient liquidity to fund operations through at least the next 12 months. However, the Company may raise additional funds if management believes it would be beneficial to do so.

**NOTE 4 – INCOME TAX PROVISION / BENEFIT**

At the end of each interim reporting period, the Company estimates its effective tax rate expected to be applied for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods. The Company has not recorded an income tax provision or benefit for the three and nine months ended September 30, 2025 and 2024 as it maintains a full valuation allowance against its net deferred tax assets.

**NOTE 5 – TANGIBLE AND INTANGIBLE ASSETS**

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| | | |
|:---|:---|:---|
| <br>**Property & Equipment** | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Mobile Kiosk Display | $175974 | $162940 |
| Computer Equipment | 44901 | 44901 |
| Office Equipment | 27826 | 12991 |
| Internal-Use Software and Website Costs | 53300 | 77196 |
| &nbsp;&nbsp;&nbsp;Property and equipment, gross | 302001 | 298028 |
| Less: Accumulated depreciation | (243758) | (190466) |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | $58243 | $107562 |

---

Depreciation expense for the three months ended September 30, 2025 and 2024 was $14,922 and $23,956, respectively.

Depreciation expense for the nine months ended September 30, 2025 and 2024 was $53,292 and $83,907, respectively.

---

| | | |
|:---|:---|:---|
| <br>**Finite-lived intangible assets** | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Patent Costs | $553122 | $534002 |
| Less: Accumulated amortization | (131631) | (82700) |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | $421491 | $451302 |

---

Amortization expense for the three months ended September 30, 2025 and 2024 was $13,552 and $9,902, respectively.

Amortization expense for the nine months ended September 30, 2025 and 2024 was $48,931 and $25,199, respectively.

**NOTE 6 – RELATED PARTY TRANSACTIONS AND AGREEMENTS**

*Management Service Agreement*

The Company has entered into a management services agreement with Tekcapital Europe, Ltd., for which the Company is billed $35,000 quarterly. While the agreement does not stipulate a specific maturity date, it can be terminated with 30 calendar days written notice by any party.

The related party currently provides the following services:

● Support and advice to the Company in accordance with their area of expertise;

● Research, technical and legal review, recruitment, software development, marketing, public relations, and advertisement; and

● Advice, assistance, and consultation services to support the Company or in relation to any other related matter.

During the three months ended September 30, 2025 and 2024, the Company incurred $35,000 in each respective period under the management services agreement. During the nine months ended September 30, 2025 and 2024, the Company incurred $105,000 in each respective period under the management services agreement.

*Rent of Office Space*

Under an agreement between the Company and Tekcapital, Tekcapital bills the Company for an allocation of rent paid by Tekcapital on the Company's behalf. The Company recognized $38,730 and $22,904 of expense related to this month-to-month arrangement for the three months ended September 30, 2025 and 2024, respectively, and recognized $108,383 and $69,409 of expense related to this month-to-month arrangement for the nine months ended September 30, 2025 and 2024, respectively.

*Loan to Tekcapital Europe, Ltd.*

On January 11, 2024, the Company entered into an intercompany loan agreement (as lender) with Tekcapital Europe, Ltd. (as borrower) and Tekcapital Plc, the parent of Tekcapital Europe, Ltd. Pursuant to this agreement, the Company loaned 600,000 British pounds sterling (equivalent to approximately $768,000) to Tekcapital Europe, Ltd. The loan bore simple interest at a rate of 10% per annum and was required to be repaid on or before April 11, 2024. Tekcapital Plc executed the agreement as guarantor for Tekcapital Europe, Ltd. on the full amount of the loan.

Tekcapital Europe, Ltd. subsequently repaid all of the outstanding balance of the loan (including principal and accrued interest), and as of December 31, 2024, no amounts remained outstanding or payable to us under this agreement.

*New Loan Facility to Tekcapital Europe, Ltd.*

On April 23, 2025, the Company entered into an intercompany loan agreement (as lender) with Tekcapital Europe, Ltd. (as borrower) and Tekcapital Plc, the parent of Tekcapital Europe, Ltd. Pursuant to this agreement, the Company agreed to make a loan facility available to Tekcapital Europe, Ltd. for up to a maximum of $500,000. Tekcapital Europe, Ltd. may receive advances under this facility upon request through October 23, 2025. Any amounts advanced to Tekcapital Europe, Ltd. will bear simple interest at a rate of 10% per annum, and are required to be repaid on or before July 23, 2026. Tekcapital Plc executed the agreement as guarantor for Tekcapital Europe, Ltd. on the full amount of the loan.

In May 2025, Tekcapital Europe, Ltd. borrowed $250,000 under this agreement; subsequently in June 2025, Tekcapital Europe, Ltd. repaid such borrowing in full along with $2,503 of interest. As of September 30, 2025, there was no balance outstanding under this agreement.

*Lucyd Ltd. Financing Agreement*

On March 1, 2024, the Company entered into an agreement with Lucyd Ltd. pursuant to which the Company can receive up to $1,250,000 either (a) in services provided by Lucyd Ltd. to the Company or (b) in cash upon request of funds by the Company. Once funds or services are received by the Company, it will issue a convertible note to Lucyd Ltd. that will bear interest at 10% per annum and include the option to convert the note into shares of the Company's common stock upon certain defined events. Upon issuance, the convertible note will have a maturity date of September 1, 2025, at which time all outstanding principal and accrued interest, if any, will be payable in full in cash or in the Company's common stock. The Company will be able to prepay the convertible notes at any time with the written consent of Lucyd Ltd.

On March 1, 2025, the Company and Lucyd Ltd. entered into an amendment of this agreement, such that upon issuance, the convertible note will have a maturity date of September 1, 2026. There were no other changes to the terms and provisions of the agreement.

The Company has not borrowed any amounts under this agreement.

**NOTE 7 – COMMITMENTS AND CONTINGENCIES**

*License Agreements*

In 2022 and 2023, we entered into various multi-year license agreements which grant us the right to sell certain branded smart eyewear, including the Nautica, Eddie Bauer, and Reebok brands worldwide. These agreements require us to pay royalties based on a percentage of net retail and wholesale sales during the period of the license, and also require guaranteed minimum royalty payments. The agreements have base terms of 10 years but are cancellable at the option of the Company during the fifth year.

The aggregate future minimum payments due under these license agreements are as follows:

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| | |
|:---|:---|
| Remainder of 2025 | $20000 |
| 2026 | $834000 |
| 2027 | $1290000 |
| 2028 | $1543000 |
| 2029 | $1778000 |
| Thereafter (through 2033) | 8129000 |
| **Total** | $13594000 |

---

Also, on January 3, 2024, we entered into a multi-year non-exclusive license agreement with a third party (IngenioSpec, LLC) for multiple smart eyewear patents. Pursuant to this license agreement, the Company added licenses for 46 new patents to its portfolio of owned and licensed patents and applications. The Company fully prepaid this license for the term of the agreement and does not have any obligation for future payments under this agreement.

Additionally, the Company had previously entered into certain exclusive License Agreements dated April 1, 2020 and September 15, 2021, having Addenda dated October 5, 2021 and December 7, 2021 (herein the "LL Licenses") with Lucyd Ltd; such licenses were royalty-free, fully paid up, perpetual licenses. On August 12, 2025, Lucyd Ltd. executed an intellectual property assignment agreement to confirm that all registered intellectual property rights under the LL Licenses, to the extent they had not previously been assigned to the Company in previously executed assignments, were irrevocably assigned to the Company, and that all unregistered intellectual property rights and other assets that were licensed exclusively to the Company under the LL Licenses were also irrevocably assigned to the Company. As such, the Company has acquired full ownership of all registered and unregistered intellectual property and assets that were previously exclusively licensed to the Company from Lucyd Ltd., and the LL Licenses are no longer necessary, thus Lucyd Ltd. and the Company mutually agreed to terminate the LL Licenses.

The Company recognized $124,273 and $51,160 of expense related to all license agreements for the three months ended September 30, 2025 and 2024, respectively, and recognized $404,243 and $173,481 of expense for the nine months ended September 30, 2025 and 2024, respectively.

*Long-Term Payment Plan for Information Technology System and Services*

The Company has entered into a long-term payment plan agreement with Oracle for the payment of costs related to the implementation of the Company's new ERP system (which went live in April 2025) and related cloud services. Under this agreement, the Company is obligated to make payments of $4,035 per month through July 2027. As of September 30, 2025, the Company's remaining obligation under this arrangement was $88,776, of which $48,424 is included within Accounts payable and accrued expenses in the accompanying condensed balance sheet, and $40,352 is reflected within Non-Current Liabilities in the accompanying condensed balance sheet.

*Leases*

Our executive offices are located at 11900 Biscayne Blvd., Suite 630 Miami, Florida 33181. Our executive offices are provided to us by a related party (see Note 6). We consider our current office space adequate for our current operations.

*Other Commitments*

See related party management services agreement discussed in Note 6.

*Legal Matters*

We are not currently the subject of any material pending legal proceedings; however, we may from time to time become a party to various legal proceedings arising in the ordinary course of business.

*International Trade and Tariffs*

Beginning in April of 2025, the U.S. government announced new or increased tariffs on goods imported from various countries to the U.S., and countries subject to such tariffs have imposed or may in the future impose retaliatory tariffs and other trade measures. These recent developments have negatively impacted our results of operations. Due to their evolving nature, we cannot predict with certainty the ultimate impacts they may have on our business and results in the future, but those impacts could be material.

We are actively monitoring the ongoing tariff and international trade developments, and continue to evaluate the potential impacts to our business, cost structure, supply chain, and the broader economic environment. We have taken actions and developed contingency plans to mitigate the negative impacts of tariffs on our results, but cannot provide any assurance that such actions and strategies will be successful.

**NOTE 8 – STOCK-BASED COMPENSATION**

*Stock Options*

Summary information regarding stock options as of and during the nine months ended September 30, 2025 is as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **Options<br> (Number)** | **Weighted Average<br> Exercise Price<br> per share<br> ($)** | **Weighted Average<br> Remaining<br> Contractual Life<br> (Years)** |
| As at January 1, 2025 | 83800 | 37.21 | 2.33 |
| Granted |  |  |  |
| Exercised |  |  |  |
| Forfeited / Expired | (30700) | 70.73 |  |
| **As at September 30, 2025** | **53100** | **17.83** | **2.72** |
| **Exercisable as at September 30, 2025** | **40982** | **18.85** | **2.66** |

---

During the three and nine months ended September 30, 2025, we recognized expense related to stock options of $31,815 and $100,272, respectively. As of September 30, 2025, the aggregate intrinsic value for all options outstanding as well as all options exercisable was zero, and unrecognized stock option expense of approximately $33,000 remains to be recognized over the next 0.27 years.

*Stock Grants*

Effective April 1, 2024, pursuant to the terms of a brand ambassador agreement, we issued to an individual 4,500 shares of our common stock as compensation for the first year of the agreement. The value of the consideration transferred, measured using the fair value of our common stock at the date of issuance, was $21,690, which was recognized as expense on a straight-line basis from April 1, 2024 through March 31, 2025. We recognized $5,423 and $10,845 of expense for the three and nine months ended September 30, 2024, respectively, $0 for the three months ended September 30, 2025, and $5,423 for the nine months ended September 30, 2025, relative to this stock grant.

Effective April 1, 2025, pursuant to the terms of a brand ambassador agreement, we issued to the same individual 11,539 shares of our common stock as compensation for the second year of the agreement. The value of this consideration transferred, measured using the fair value of our common stock at the date of issuance, was $30,000, which is being recognized as expense on a straight-line basis from April 1, 2025 through March 31, 2026. We recognized $7,500 and $15,000 of expense for the three and nine months ended September 30, 2025, respectively, relative to this stock grant.

*Restricted Stock Units*

During the three and nine months ended September 30, 2025, we recognized $137,489 and $411,321 of expense, respectively, related to restricted stock units that were awarded to the Company's officers, management, and non-management employees in the fourth quarter of 2024. As of September 30, 2025, unrecognized restricted stock unit expense of approximately $986,000 remains to be recognized over of the next 1.81 years.

During the three and nine months ended September 30, 2024, we recognized $5,075 and $15,225 of expense, respectively, related to restricted stock units that were awarded to an influencer in 2023. As of December 31, 2024, no expense remained to be recognized related to this award.

**NOTE 9 – STOCKHOLDERS' EQUITY**

*April 2025 Warrant Inducement Transaction*

On April 11, 2025, the Company entered into inducement letter agreements with certain holders of certain of its existing warrants to purchase an aggregate of 595,188 shares of the Company's common stock, of which warrants to purchase 121,500 shares were originally issued to the holders on September 4, 2024 with an original exercise price of $5.00 per share, and warrants to purchase 473,688 shares were originally issued to the holders on September 24, 2024 with an original exercise price of $9.50 per share.

Pursuant to the inducement letter agreements, the holders agreed to exercise the existing warrants for cash at a reduced exercise price of $2.60 per share in consideration of the Company's agreement to issue new unregistered Series G warrants to purchase up to an aggregate of 218,646 shares of common stock and new unregistered Series H warrants to purchase up to an aggregate of 1,724,814 shares of common stock, each at a purchase price of $0.125 per warrant. The Series G Warrants have an exercise price of $2.60 per share, are exercisable immediately upon issuance, and have a term of exercise equal to five and one-half years following the effective date of the Resale Registration Statement (as defined in the applicable agreements). The Series H Warrants have an exercise price of $2.60 per share, are exercisable immediately upon issuance, and have a term of exercise equal to eighteen months following the effective date of the Resale Registration Statement.

This transaction closed on April 14, 2025, and the gross proceeds to the Company were approximately $1.8 million prior to deducting placement agent fees and offering expenses (as described below). The net proceeds received by the Company from this transaction amounted to approximately $1.5 million, which the Company intends to use for working capital and general corporate purposes.

H.C. Wainwright & Co., LLC ("HCW") acted as the exclusive placement agent for the offering. As compensation for such placement agent services, the Company paid HCW an aggregate cash fee equal to 7.5% of the gross proceeds received by the Company from this transaction, plus a management fee equal to 1.0% of the gross proceeds received by the Company. The Company also issued to HCW or its designees warrants to purchase up to 44,639 shares of common stock. These placement agent warrants are immediately exercisable, have a term of five and one-half years following the effective date of the Resale Registration Statement, and have an exercise price of $3.25 per share.

The Resale Registration Statement was subsequently filed with the SEC on Form S-1 on May 9, 2025, and became effective on May 19, 2025.

*June 2025 Warrant Inducement Transaction*

On June 20, 2025, the Company entered into inducement letter agreements with certain holders of certain of its existing warrants to purchase an aggregate of 746,782 shares of the Company's common stock, which were originally issued to the holders on April 14, 2025, having an original exercise price of $2.60 per share.

Pursuant to the inducement letter agreements, the holders agreed to exercise the existing warrants for cash at an exercise price of $2.60 per share in consideration of the Company's agreement to issue new unregistered Series I warrants to purchase up to an aggregate 2,240,346 shares of common stock, each at a purchase price of $0.125 per warrant. The Series I warrants have an exercise price of $2.60 per share, are exercisable immediately upon issuance, and have a term of exercise equal to eighteen (18) months following the effective date of the Resale Registration Statement (as defined in the applicable agreements).

This transaction closed on June 24, 2025, and the gross proceeds to the Company were approximately $2.2 million prior to deducting placement agent fees and offering expenses (as described below). The net proceeds received by the Company from this transaction amounted to approximately $1.9 million, which the Company intends to use for working capital and general corporate purposes.

HCW acted as the exclusive placement agent for the offering. As compensation for such placement agent services, the Company paid HCW an aggregate cash fee equal to 7.5% of the gross proceeds received by the Company from this transaction, plus a management fee equal to 1.0% of the gross proceeds received by the Company. The Company also issued to HCW or its designees warrants to purchase up to 56,009 shares of common stock. These placement agent warrants are immediately exercisable, will expire on June 20, 2030, and have an exercise price of $3.25 per share.

The Resale Registration Statement was subsequently filed with the SEC on Form S-1 on July 18, 2025, and became effective on July 28, 2025.

*Other Warrant Activity*

From May 30, 2025 through June 20, 2025, certain holders of the Company's Series G and Series H warrants exercised such warrants to purchase an aggregate of 986,532 shares of the Company's common stock at an exercise of $2.60 per share, resulting in gross cash proceeds to the Company of approximately $2.6 million.

In connection with the above, and pursuant to the terms of an engagement agreement between the Company and HCW originally dated April 2, 2024, and subsequently amended on September 22, 2024 and March 21, 2025, the Company paid HCW aggregate cash fees of approximately $0.3 million, and also issued to HCW or its designees various placement agent warrants to purchase up to 80,139 shares of common stock, with exercise prices ranging from $3.25 to $6.25.

*At-the-Market Offerings*

The Company has entered into an at-the-market offering agreement with HCW (as sales agent) relating to the sale of common stock. From August 15, 2025 through September 30, 2025, the Company sold 341,403 shares of common stock and received approximately $716,000 of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from these transactions amounted to approximately $692,000, and will be used for working capital and general corporate purposes.

**NOTE 10 – EARNINGS PER SHARE**

The Company calculates earnings/(loss) per share data by calculating the quotient of earnings/(loss) divided by the weighted average number of common shares outstanding during the respective period. Due to the net losses for all periods presented in the unaudited condensed statements of operations, all shares underlying the common stock options, common stock warrants, and related party convertible debt were excluded from the earnings per share calculation due to their anti-dilutive effect.

The calculation of net earnings/(loss) per share is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| Schedule of calculation of net earnings per common share - basic and diluted |  |  |  |  |
|  | **For the<br> three months ended** | **For the<br> three months ended** | **For the<br> nine months ended** | **For the<br> nine months ended** |
|  | **September 30,<br> 2025** | **September 30,<br> 2024** | **September 30,<br> 2025** | **September 30,<br> 2024** |
| **Basic and diluted:** |  |  |  |  |
| Net loss | $(1836267) | $(1720677) | $(5721064) | $(5640387) |
| Weighted-average number of common shares | 4870014 | 1736803 | 3521602 | 1178768 |
| Basic and diluted net loss per common share | $(0.38) | $(0.99) | $(1.62) | $(4.78) |

---

**NOTE 11 – SUBSEQUENT EVENTS**

*Legal Settlement*

On November 11, 2025, the Company entered into a settlement and release agreement with a shareholder related to certain legal matters. Pursuant to the terms of such agreement, the Company will receive $570,000 from such shareholder.

*At-the-Market Offerings*

From October 1, 2025 through October 15, 2025, the Company sold 144,496 shares of common stock and received approximately $291,000 of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from these transactions amounted to approximately $281,000, and will be used for working capital and general corporate purposes.

**I** **tem 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

*The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and the other financial information included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report.*

**Overview**

***Executive Summary and Outlook***

● Our gross profit margin for the third quarter of 2025 was 37%, compared to 23% in the three months ended September 30, 2024. This increase of approximately 14 percentage points was primarily attributable to by lower product sourcing costs for both frames and prescription lenses as we continue to scale and develop our business. With respect to tariffs, the actions taken by management during the second quarter of 2025 to mitigate the impacts of tariffs have been largely successful thus far, and restored our third quarter 2025 gross profit margins to a level mostly consistent with our pre-tariff business plan. However, we continue to monitor trade policy and build contingency sourcing options in Southeast Asia, should the U.S.-China tariff conditions materially change.

● Other operating expenses increased by 19% in the third quarter of 2025 as compared to the comparable period in 2024, largely driven by increased sales and marketing expenses, which we believe are necessary to drive our continued growth and expansion. Higher licensing expenses related to our cobranded product lines also contributed to the increase in our operating costs.

● As a result of increasing interest in smart eyewear in the traditional optical landscape, we are building new business with white-label and wholesale partners. In the third quarter, we received wholesale orders from several new clients, including Kits Eyewear, the Optical Resources Group, and I-deal Optics, and prepared several proposals for white-label smart eyewear. Providing customized or exclusive smart eyewear SKUs to notable distributors and retailers is a promising new channel of business for the Company. This is because traditional eyewear retailers and manufacturers need a strong smart eyewear "tech stack" to be competitive in this emerging category, which is often too difficult or too costly for them to develop internally.

***General Product and Corporate Overview***

Our mission is to Upgrade Your Eyewear<sup>®</sup>. We develop and sell cutting-edge smart eyewear that is designed to allow our customers to remain connected to their digital lives. Our smart eyewear is a fusion of headphones with glasses, bringing vision correction and protection together with digital connectivity and clear audio, while also offering a safer solution for listening to music outdoors (as compared to in-ear headphones). The convenience of having a Bluetooth headset and comfortable glasses in one, especially for those who are already accustomed to all-day eyewear use, offers a lifestyle upgrade at a price most consumers can afford.

Our smart eyewear products enable the wearer to listen to music, take and make calls, and use voice assistants and ChatGPT to perform many common smartphone tasks hands-free. Since the official launch of our first commercial product, our goal has been to create smart eyewear for all-day wear that looks like and is priced similarly to designer eyewear, but is also lightweight and comfortable, and enables the wearer to remain connected to their digital lives. Through our various product offerings as described below, we have created a smart upgrade for all four of the major types of eyewear: prescription eyeglasses, ready-to-wear sunglasses, safety glasses, and sport glasses.

● Our core product line, Lucyd Lyte (which includes the Lyte XL units), was first introduced in 2021 and continues to grow and expand with the ongoing addition of new styles and multiple technological upgrades and advancements. The Company is continuously iterating and improving its frame lineup, offering a mixture of "Lucyd icons" (styles that have consistently performed well since the introduction of Lucyd Lyte) and new styles seasonally to align with market trends and evolving consumer demand. We currently offer nine different models under the Lucyd Lyte collection.

● In October 2024, we launched the Lucyd Armor line, an ANSI-certified smart safety glass designed for all-day wear. This product line provides all the powerful features of Lucyd eyewear in a stylish safety wrap. Lucyd Armor smart safety glasses have been certified to meet safety standards in the U.S., Canada, United Kingdom, and European Union.

Our current product portfolio consists of 35 different models across the traditional, sport, and safety categories. Most styles are available with 100+ different lens and prescription options, resulting in thousands of sellable variations of products currently available. With Lucyd Lyte and our Nautica<sup>®</sup> and Eddie Bauer<sup>®</sup> lines (traditional), Reebok<sup>®</sup> (sport), and Lucyd Armor (safety), we believe we are the first smart-eyewear company with products concurrently in traditional, sport, and safety eyewear. Our brand partnerships enable us to offer a more diversified product portfolio and help us reach distinct consumer segments and demographics (for example, Nautica<sup>®</sup> skews more fashion-forward than Lucyd Lyte, Eddie Bauer<sup>®</sup> reaches an older demographic, and Reebok<sup>®</sup> attracts younger, more active customers).

***Software and Apps***

The Lucyd app, available for iOS and Android, is a free application that enables the user to converse with the extremely popular ChatGPT AI language model on our glasses, to instantly gain the benefit of one of the world's most powerful AI assistants in a hands-free ergonomic interface. First launched in 2023, the app deploys a powerful and unique Siri and Bixby integration with the Open AI API for ChatGPT, developed internally by the Company. The Company has filed a patent application related to this software.

In 2024, we added a "Pro" version of the app, which provides unlimited ChatGPT interactions and priority tech support for a modest monthly or annual fee. This is a new revenue stream for our business, and represents our first diversification in product revenue from frames and lenses. We also launched a new feature called "Walkie" for the Lucyd app in 2024, which enables thousands of users to join each other on walkie-talkie style communication channels. This feature was designed with our Lucyd Armor safety glass product in mind, to enable coworking teams to communicate freely on smart eyewear.

In February 2025, we updated the Lucyd app's Walkie feature, enabling premium subscribers access to secure and private walkie channels, providing businesses and organizations with a powerful tool to communicate confidentially and seamlessly through Lucyd smart eyewear. In May 2025, we announced additional updates to the Lucyd app, including new voice prompts and further enhancements for the app's Walkie feature. Most recently, in September 2025, we announced the addition of a new translation feature to the Lucyd app, which allows for voice-based translation between 17 languages in real time. We plan to launch more new features for the Lucyd app in the future.

We believe these developments make our Lucyd eyewear perhaps the *smartest* smartglasses available today, and represent a significant marketing opportunity for our core smartglass products. The Lucyd app delivers an updated user experience over time without requiring costly hardware changes. Additionally, the overall flexibility of Bluetooth connectivity and ability to connect to a variety of voice assistants, including device-native assistants and ChatGPT, make our glasses a "device- and AI- agnostic" peripheral suitable for use with almost any desktop or mobile computing platform. This aspect of our products makes them a highly compatible interface accessory and distinguishes them from accessories designed to enhance a specific platform, such as Apple AirPods for iOS or gaming headsets for desktop computers.

A large part of our strategy is not just to provide a leading smart eyewear platform, but to build a highly functional mobile software and interactive retail fixture ecosystem to support user adoption and "stickiness" with our products. We have engineered and provided a variety of virtual try-on kiosks, modular display systems, and interactive LCD fixtures to fit any retail environment. These devices introduce our products to prospective retail customers and enable them to digitally try-on our line of smart glasses in a touch-free manner. Many of our retail fixtures allow for customization to suit our retail store partners' needs, and the most recently developed fixtures feature a proprietary kiosk app we recently developed in-house. Our latest, most advanced displays, which we plan to begin deploying in stores later this year, will offer a complete Lucyd experience, including virtual try-on, social media content, detailed product info and videos, and seamless music demos – which overall will provide an immersive onboarding experience for prospective customers in retail stores carrying our frames.

***Key Factors Affecting Performance***

*Expansion of retail points of purchase*

In addition to sustained growth of our e-commerce business, our future revenues are correlated positively with our placement of Lucyd glasses in optical stores, as well as sporting goods stores and other specialty stores. To address this, we have assembled a team with decades of experience in the eyewear industry and are offering a strong co-op marketing program and reordering incentives program. We currently offer an expansive line of 35 different models of glasses and several accessories, including cobranded eyewear with well-known brands like Nautica, Reebok, and Eddie Bauer.

*Retail store client retention and re-orders*

Our ability to sustain and increase revenue is correlated positively with our ability to receive re-orders from stores, either directly or through our wholesale distributors. To support our sales to retail stores directly, we offer a strong co-op marketing program that includes free and paid store display materials. As part of this strategy, we have launched a new modular display system with engaging video screens and audio testing capabilities for our resellers to help educate their in-store customers about Lucyd products. These display systems enable customers to engage in music demos on a physical unit, explore social and tutorial content, and virtually try on all available units, an experience offered by no other smartglass display on the market today. This proprietary display system is central to our efforts to introduce traditional retail customers to Lucyd eyewear, and we are planning further enhancements to our merchandising displays to enable more immersive experiences. Additionally, we consistently incorporate retail partner feedback directly into our frames to better serve our end users.

*Investing in business growth*

We believe that people care about what they wear on their faces, and because we understand that customers have diverse preferences about the shape, size, and design of their eyewear, we aim to continuously invest in the design and development of new models in an effort to provide the consumer with a wide selection of styles, colors, and finishes. We have two continuous trajectories of general product improvement: (i) engineering, where we seek to improve the sound quality, temple thinness, and battery life of our frames; and (ii) digital, where we are adding new features via the Lucyd app and improved component programming. We view these continually ongoing R&D investments as essential to maintaining our competitive edge.

We are offering a strong co-op marketing program with retail stores, and intend to expand our sales, marketing, and brand ambassador teams to broaden our brand awareness and online presence.

***Key Performance Indicators***

*Store Count (B2B)*

We believe that one of the key indicators for our business is the number of retail stores onboarded to sell our products. We started onboarding our first retail stores in June 2021, and since then have continue to grow through the current year. Currently, we have over 540 retail stores selling our smart eyeglasses, primarily in the United States and Canada, across over 300 wholesale accounts. Based on the existing demand for our products, current distribution, and recently consummated supply agreements, we anticipate that our products will be available in a significant number of new third-party retail locations in the near future.

*Customer Ratings (B2C)*

The Company's latest products are receiving very favorable ratings online, indicating that customers are appreciative of improvements in product design, functionality, and build quality. This is a strong signal of positive feedback on our products that indicates our ability to grow and scale with America's largest online retailer and other platforms.

***International Trade and Tariffs***

Beginning in April of 2025, the U.S. government has announced new or increased tariffs on goods imported from various countries to the U.S., and countries subject to such tariffs have imposed or may in the future impose retaliatory tariffs and other trade measures. These tariffs had a negative impact on our results of operations (more specifically, our gross profit margins) for the nine months ended September 30, 2025.

We have taken actions to mitigate the negative impacts of the tariffs, including diversifying our logistics network and modifying our product fulfilment and replenishment model. More specifically, our multi-pronged approach to respond to tariff challenges includes the following:

● We opened three new fulfillment centers (in Europe, Canada, and the Shenzhen special economic zone of China) to improve the fluidity of our international factory direct business (which is not subject to U.S. tariffs), and are working to rapidly expand this business unit with regional resellers.

● We are working to expand our lowest cost product line (Lucyd Armor) and are developing a new discounted optical line (for launch in the first half of 2026) to remain extremely competitive with traditional eyewear and other smart eyewear.

● We have conducted a thorough investigation of alternatives to Chinese manufacturing in the event that tariffs make manufacturing there untenable. Although this has not yet come to pass, the Company is prepared to shift manufacturing to Taiwan and/or Vietnam if necessary, and has developed contingency plans to do so.

● We instituted a minor price increase of $15 to most custom lens orders to help mitigate new tariff expenses. This modest increase is easily absorbed by customers and our lens pricing remains highly competitive with brick-and-mortar opticians.

The actions taken by management to date to mitigate the impacts of tariffs have been largely successful thus far, and restored our third quarter 2025 gross profit margins to a level that is mostly consistent with our pre-tariff business plan. However, the current international geopolitical climate related to tariffs is fluid and continues to evolve. We are actively monitoring the ongoing tariff and trade policy developments, and continue to evaluate the potential impacts to our business, cost structure, supply chain, and the broader economic environment. We have developed contingency sourcing options in Southeast Asia should the U.S.-China tariff conditions materially change. Due to the evolving nature of the situation related to tariffs, we cannot predict with certainty the ultimate impacts they may have on our business and results in the future, but those impacts could be material.

**Results of Operations - Quarterly**

The following table summarizes our results of operations for the three months ended September 30, 2025 (the "current quarter") and the three months ended September 30, 2024 (the "prior year quarter"):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended<br> September 30,<br> 2025** | | **Three months ended<br> September 30,<br> 2024** | | **Change** | |
| Revenues, net | $668128 | 100% | $253599 | 100% | $414529 | *163 %* |
| Less: Cost of Goods Sold | (423291) | 63% | (194255) | 77% | (229036) | *118 %* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Gross (Deficit) Profit** | **244837** | 37% | **59344** | 23% | **185493** | *313 %* |
| Operating Expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | (1277308) | 191% | (1121972) | 442% | (155336) | *14 %* |
| &nbsp;&nbsp;&nbsp;Sales and marketing | (723372) | 108% | (533066) | 210% | (190306) | *36 %* |
| &nbsp;&nbsp;&nbsp;Research and development | (129984) | 19% | (131369) | 52% | 1385 | *-1 %* |
| &nbsp;&nbsp;&nbsp;Related party management fee | (35000) | 5% | (35000) | 14% | - | *0 %* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Operating Expenses** | **(2165664)** | 324% | **(1821407)** | 718% | **(344257)** | *19 %* |
| Other Income (Expense), net | 84560 | -13% | 41386 | -16% | 43174 | *104 %* |
| **Net Loss** | $**(1836267)** | 275% | $**(1720677)** | 679% | $**(115590)** | *7 %* |

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***Revenues***

Our revenues for the three months ended September 30, 2025 were $668,128, representing an increase of 163% as compared to revenues of $253,599 during the three months ended September 30, 2024. This increase is primarily attributable to significant volume increases, partially offset by the impacts of higher discounts on products sold.

The significant volume increases were largely driven by our Lucyd Armor product line, which first launched in October 2024 and has rapidly emerged as the Company's first highly successful SKU. We sold approximately 2,800 units of Lucyd Armor smartglasses in the current quarter, which represented approximately half of our total smartglass units sold. The strong demand for the unique Lucyd Armor product has led us to develop four alternate variants for this product line, in order to address a wider range of safety glass users; three new Armor variants launched in November 2025, and the fourth variant is planned to launch in the first quarter of 2025.

For the three months ended September 30, 2025, approximately 56% of sales were processed on our online store (Lucyd.co), 40% on Amazon.com, and 4% through reseller partners. The decline in the proportional share of reseller sales versus the prior year quarter reflects the combination of (i) the uncertainty of the current economic environment in light of the current tariff and international trade situation, which we believe has led to delays in getting large retailers to commit to placing orders for new products such as ours, and (ii) an intentional shift by the Company away from small optical accounts and the timing of purchase orders from prospective big-box and home-improvement retailers currently under evaluation. For the three months ended September 30, 2025, we generated an aggregate of $499,083 of revenue from sales of non-prescription smartglasses and accessories, $165,832 from sales of smartglasses with prescription lenses, and $3,213 of revenue from app subscriptions. All of the sales generated on Amazon.com were for non-prescription smartglasses and accessories (as we only offer prescription lenses through our website), while online sales generated through Lucyd.co related to smartglasses both with and without prescription lenses.

For the three months ended September 30, 2024, approximately 54% of sales were processed on our online store (Lucyd.co), 22% on Amazon.com, and 23% through reseller partners. For the three months ended September 30, 2024, we generated $187,568 of revenue from sales of non-prescription frames and accessories, $63,459 from sales of frames with prescription lenses, and $2,572 of revenue from app subscriptions. All of the sales generated on Amazon.com were for non-prescription smartglasses and accessories (as we only offer prescription lenses through our website), while online sales generated through Lucyd.co related to smartglasses both with and without prescription lenses.

Overall, e-commerce sales remain to be the most material portion of our sales since inception; however, we continue to believe that the wholesale channel is the most scalable and most promising long-term opportunity for future growth.

To date, several factors have constrained wholesale sell-through: (i) the optical retail ecosystem is fragmented and insurance-driven, which supports higher margins on conventional frames and can compress retailer margins on smart eyewear at mainstream price points; (ii) smart eyewear requires interactive merchandising and in-store demos to educate consumers, which lengthens onboarding lead times; and (iii) national retailers typically require category sell-through evidence, certifications, and planogram resets with long decision cycles. However, large national retailers have recently started to recognize smart eyewear as proven category and are starting to move in the direction of selling more smart eyewear. Our Lucyd Armor product line has a clear "smart safety glass" use case that aligns with home-improvement, safety distribution, and industrial channels, while our Reebok<sup>®</sup> sport product line aligns with electronics and sporting goods merchandising. As such, we are prioritizing larger retailers whose economics are more aligned with consumer electronics and safety categories, including home-improvement and big-box stores. With our expanded Lucyd Armor variants, the Reebok<sup>®</sup> sport collection, and our interactive retail fixtures, we believe we now have the product and merchandising set needed to scale wholesale placements over time.

Therefore, we expect that e-commerce channels (Lucyd.co and Amazon) will remain a larger proportional share of our revenue in the near to medium term, with wholesale contributions increasing over time. In the long term, we anticipate that wholesale sales will comprise a larger proportional share of our revenue, which should bring consistent, large-scale orders with minimal marketing costs.

***Cost of Goods Sold***

Our total cost of goods sold increased to $423,291 for the three months ended September 30, 2025, as compared to $194,255 for the prior year quarter. This year-over-year increase of 118% was primarily driven by volume increases, partially offset by lower product sourcing costs for both frames and prescription lenses.

The decrease in unit sourcing costs for frames as compared to the prior year quarter was primarily attributable to the combination of:

(i.) realization of greater economies of scale – i.e., smart eyewear is a highly specialized product that is expensive to manufacture in smaller quantities, but over time as our manufacturing order volumes have grown, our cost per unit has decreased; and

(ii.) improvements in product price/mix – i.e., the majority of the units sold in the current quarter were from our newer product lines, which have a lower manufacturing cost than our other product lines (as they are designed differently and have fewer components).

The decrease in lens fulfilment costs per unit was primarily attributable to the transition of our lens fulfilment partner during the prior year quarter from the previous supplier, which was more costly, to our current lower-cost lens supplier based in Miami, Florida.

Cost of goods sold for the three months ended September 30, 2025 included but was not limited to the cost of frames (inclusive of the cost of tariffs, importation costs, and other inventory adjustments) of $324,030; the cost of prescription lenses incurred with our third-party vendor of $45,365; commissions, affiliate referral fees, and e-commerce platform fees of $30,759; and shipping and logistics costs of $23,137. Cost of goods sold for the three months ended September 30, 2024 included but was not limited to the cost of frames (inclusive of inventory adjustments) of $107,469; the cost of prescription lenses incurred with our third-party vendor of $38,247; commissions, affiliate referral fees, and e-commerce platform fees of $25,957; and shipping and logistics costs of $22,512.

***Gross Profit***

We had gross profit for the current quarter of $244,837, as compared to $59,344 for the prior year quarter. Our gross profit margin was 37% in the current quarter and 23% in the prior year quarter, representing an increase of approximately 14 percentage points from the prior year period. This increase in profitability was predominantly attributable to the aforementioned product sourcing cost improvements described above.

During the second quarter of 2025, management took decisive actions to respond to and attempt to mitigate the impacts of recently enacted increased tariffs on goods imported from various countries to the U.S., which included diversification of our supply chain and logistics network to significantly reduce our dutiable volume and monthly tariff expenses. These actions have been largely successful thus far, and restored our third quarter 2025 gross profit margins to a level that is mostly consistent with our pre-tariff business plan. However, management continues to monitor trade policy and has contingency sourcing options in Southeast Asia should the U.S.-China tariff conditions materially change.

***Operating Expenses***

Our operating expenses increased by 19% to $2,165,664 for the three months ended September 30, 2025, as compared to $1,821,407 for the three months ended September 30, 2024. This increase was primarily due to the following:

*General and administrative expenses*

Our general and administrative expenses increased by $155,336 or approximately 14% to $1,277,308 for the three months ended September 30, 2025, as compared to $1,121,972 for the prior year quarter. This increase was mainly attributable to the combination of (i) higher compensation (including stock-based compensation) and benefit costs (approximately $150,000) and (ii) higher payments due under our multi-year license agreements, which increased our licensing expense by approximately $73,000, partially offset by reductions in the amounts paid to consultants, contractors, legal counsel, and other professional services providers during the current quarter.

Non-cash expenses – including depreciation, amortization, and stock-based compensation – comprised approximately 6% and 9% of our total general and administrative expenses in the current quarter and prior year quarter, respectively.

The Company maintains a lean staff salaried at market rates, and a significant portion of our general and administrative expenses consist of corporate overhead type costs which are fixed or semi-fixed in nature (e.g., rent, compliance, professional services, etc.); as such, our general and administrative expenses are generally not expected to scale up significantly as our revenue increases over time. One key exception to this is the expense related to our multi-year license agreements which grant us the right to sell certain branded smart eyewear; these agreements require us to pay royalties based on a percentage of net retail and wholesale sales, and also require increasing guaranteed minimum royalty payments over their terms.

*Sales and marketing expenses*

Our sales and marketing expenses increased $190,306 or approximately 36% to $723,372 for the three months ended September 30, 2025 from $533,066 for the three months ended September 30, 2024. This increase was primarily driven by increased spending on events and trade shows, as we seek to grow and expand our network of potential business partners and retailers. As an example of this, during our recent appearance at Vision Expo West in September 2025, we secured approximately 40 new optical industry accounts, developed a new partnership to expand distribution into the United Kingdom, and met with enthusiastic new partners with national presences in Canada and Latin America.

In the near to medium term, we expect that our sales and marketing expenses will continue to scale up as our revenue grows. From a long-term perspective, we anticipate that increases in sales and marketing expenses will be mitigated somewhat by our plan to grow our business in the wholesale optical channel, which, due to the nature of that channel, inherently does not require costly marketing campaigns to acquire each customer and does not require the platform / selling fees associated with e-commerce sales, and as a result typically carries a lower sales and marketing cost per unit sold. Additionally, we generally expect that a retailer who is successful with our products will reorder in large quantities, also without significant marketing expenditure.

*Research and development costs*

Our research and development costs were $129,984 for the three months ended September 30, 2025, as compared to $131,369 for the three months ended September 30, 2024, representing a year-over-year decrease of approximately 1% or essentially flat compared to the prior year period.

*Related party management fee*

Our related party management fee was $35,000 for each of the three-month periods ended September 30, 2025 and 2024, based on the terms of the management services agreement between us and Tekcapital.

***Other Income (Expense), net***

Total other income (expense), net was $84,560 in the current quarter and $41,386 in the prior year quarter. These amounts were primarily comprised of dividends from our investments in money market funds. The increase in other income (expense), net from the prior year quarter to the current quarter was primarily attributable to higher average investment balances in the current quarter.

**Results of Operations – Year to Date**

The following table summarizes our results of operations for the nine months ended September 30, 2025 (the "current nine months") and the nine months ended September 30, 2024 (the "prior year nine months"):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Nine months ended<br> September 30,<br> 2025** | | **Nine months ended<br> September 30,<br> 2024** | | **Change** | |
| Revenues, net | $1701859 | 100% | $945752 | 100% | $756107 | *80 %* |
| Less: Cost of Goods Sold | (1249154) | 73% | (824281) | 87% | (424873) | *52 %* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Gross (Deficit) Profit** | **452705** | 27% | **121471** | 13% | **331234** | *273 %* |
| Operating Expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | (3679521) | 216% | (3526217) | 373% | (153304) | *4 %* |
| &nbsp;&nbsp;&nbsp;Sales and marketing | (2055090) | 121% | (1636794) | 173% | (418296) | *26 %* |
| &nbsp;&nbsp;&nbsp;Research and development | (608784) | 36% | (604472) | 64% | (4312) | *1 %* |
| &nbsp;&nbsp;&nbsp;Related party management fee | (105000) | 6% | (105000) | 11% | - | *0 %* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Operating Expenses** | **(6448395)** | 379% | **(5872483)** | 621% | **(575912)** | *10 %* |
| Other Income (Expense), net | 274626 | 16% | 110625 | 12% | 164001 | *148 %* |
| &nbsp;&nbsp;&nbsp;Interest Expense |  | 0% |  | 0% |  | *n/m* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Other Income (Expense), net** | **274626** | 16% | **110625** | 12% | **164001** | *148 %* |
| **Net Loss** | $**(5721064)** | 336% | $**(5640387)** | 596% | $**(80677)** | *1 %* |

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***Revenues***

Our revenues for the nine months ended September 30, 2025 were $1,701,859, representing an increase of 80% as compared to revenues of $945,752 during the nine months ended September 30, 2024. This increase is primarily attributable to significant volume increases, partially offset by the impacts of higher discounts on products sold and shifts in product price/mix.

However, despite the aforementioned volume growth, the shift in our product mix to be more heavily skewed towards (and in fact, predominantly composed of) the Lucyd Armor line, had an unfavorable impact on our revenues, as the Armor line carries a manufacturer suggested retail price ("MSRP") of $129, which is lower than the MSRP for our other product lines ($149 - $199).

For the nine months ended September 30, 2025, approximately 55% of sales were processed on our online store (Lucyd.co), 40% on Amazon.com, and 4% through reseller partners, with 1% of our net revenues generated from Lucyd "Pro" app subscriptions. The decline in the proportional share of reseller sales versus the prior year period reflects the combination of (i) the uncertainty of the current economic environment in light of the current tariff and international trade situation which we believe has led to delays in getting large retailers to commit to placing orders for new products such as ours, and (ii) an intentional shift by the Company away from small optical accounts and the timing of purchase orders from prospective big-box and home-improvement retailers currently under evaluation. For the nine months ended September 30, 2025, we generated an aggregate of $1,213,333 of revenue from sales of non-prescription smartglasses and accessories, $479,264 from sales of smartglasses with prescription lenses, and $9,262 of revenue from app subscriptions. All of the sales generated on Amazon.com were for non-prescription smartglasses and accessories (as we only offer prescription lenses through our website), while online sales generated through Lucyd.co related to smartglasses both with and without prescription lenses.

For the nine months ended September 30, 2024, approximately 61% of sales were processed on our online store (Lucyd.co), 26% on Amazon.com, and 13% through reseller partners. For the nine months ended September 30, 2024, we generated $687,855of revenue from sales of non-prescription smartglasses and accessories, $255,325 from sales of smartglasses with prescription lenses, and $2,572 of revenue from app subscriptions. All of the sales generated on Amazon.com were for non-prescription smartglasses and accessories (as we only offer prescription lenses through our website), while online sales generated through Lucyd.co related to smartglasses both with and without prescription lenses.

Overall, e-commerce sales remain to be the most material portion of our sales since inception; however, we continue to believe that the wholesale channel is the most scalable and most promising long-term opportunity for future growth.

To date, several factors have constrained wholesale sell-through: (i) the optical retail ecosystem is fragmented and insurance-driven, which supports higher margins on conventional frames and can compress retailer margins on smart eyewear at mainstream price points; (ii) smart eyewear requires interactive merchandising and in-store demos to educate consumers, which lengthens onboarding lead times; and (iii) national retailers typically require category sell-through evidence, certifications, and planogram resets with long decision cycles. However, large national retailers have recently started to recognize smart eyewear as proven category and are starting to move in the direction of selling more smart eyewear. Our Lucyd Armor product line has a clear "smart safety glass" use case that aligns with home-improvement, safety distribution, and industrial channels, while our Reebok<sup>®</sup> sport product line aligns with electronics and sporting goods merchandising. As such, we are prioritizing larger retailers whose economics are more aligned with consumer electronics and safety categories, including home-improvement and big-box stores. With our expanded Lucyd Armor variants, the Reebok<sup>®</sup> sport collection, and our interactive retail fixtures, we believe we now have the product and merchandising set needed to scale wholesale placements over time.

Therefore, we expect that e-commerce channels (Lucyd.co and Amazon) will remain a larger proportional share of our revenue in the near to medium term, with wholesale contributions increasing over time. In the long term, we anticipate that wholesale sales will comprise a larger proportional share of our revenue, which should bring consistent, large-scale orders with minimal marketing costs.

***Cost of Goods Sold***

Our total cost of goods sold increased to $1,249,154 for the nine months ended September 30, 2025, as compared to $824,281 for the prior year nine months. This year-over-year increase of 52% was driven by a combination of volume increases and significantly higher custom duties, tariffs, and importation (freight-in) costs, partially offset by lower product sourcing costs for both frames and prescription lenses, and also lower product certification costs.

Incremental custom duties and tariff costs accounted for a significant portion of the year-over-year increase in cost of goods sold, as a result of the new or increased tariffs imposed on goods imported from various countries to the U.S., and our first large-scale U.S. import of Lucyd smart eyewear in the second quarter of 2025. We also incurred significantly higher shipping costs during the second quarter of 2025 to import large quantities of product using faster shipping methods, in order to move those goods into the U.S. before increased tariff rates went into effect. Subsequent to those initial shipments, we took actions to mitigate the impact of these tariffs; by leveraging fast-track activation of bonded third-party logistics facilities in Shenzhen (China), Montreal (Canada), and Rotterdam (Netherlands), and by switching to a just-in-time U.S. inventory replenishment model, we significantly reduced dutiable volumes after the initial shipments. As a result of these actions, we were able to restore our third quarter 2025 gross profit margins to a level that is mostly consistent with our pre-tariff business plan. However, management continues to monitor trade policy and has contingency sourcing options in Southeast Asia should the U.S.-China tariff conditions materially change.

The decrease in unit sourcing costs for frames as compared to the prior year nine months was primarily attributable to the combination of:

(i.) realization of greater economies of scale – i.e., smart eyewear is a highly specialized product that is expensive to manufacture in smaller quantities, but over time as our manufacturing order volumes have grown, our cost per unit has decreased; and

(ii.) improvements in product price/mix – i.e., a significant portion of the units sold in the current quarter were from our newer product lines, which have a lower manufacturing cost than our other product lines (as they are designed differently and have fewer components).

The decrease in lens fulfilment costs per unit was attributable to actions taken by management in 2024 to better manage these costs, including:

(i.) the launch of Lucyd Shift and Lucyd Blueshift transitional lenses in place of branded third-party transitional lenses, offering similar functionality for a lower cost of goods, while also enabling a slightly lower cost to the customer; and

(ii.) the engagement of a new lower-cost lens supplier based in Miami, Florida during the third quarter of 2024.

Cost of goods sold for the nine months ended September 30, 2025 included but was not limited to the cost of frames (inclusive of the cost of tariffs, importation costs, and other inventory adjustments) of $890,966; the cost of prescription lenses incurred with our third-party vendor of $184,513; commissions, affiliate referral fees, and e-commerce platform fees of $90,011; and shipping and logistics costs of $65,901. Cost of goods sold for the nine months ended September 30, 2024 included but was not limited to the cost of frames (inclusive of inventory adjustments) of $434,876; cost of prescription lenses incurred with our third-party vendor of $196,030; commissions, affiliate referral fees, and e-commerce platform fees of $95,852; shipping and logistics costs of $63,180; and product certification costs of $29,100.

***Gross Profit***

Our gross profit for the current nine months was $452,705, as compared to $121,471 for the prior year nine months. Our gross profit margin was 27% in the current nine months and 13% in the prior year nine months, representing an increase of approximately 14 percentage points from the prior year period. This improvement in profitability was the primarily attributable to measures that we took in 2024 to reduce our costs per sale and increase our average order value, including changing lens suppliers, launching our own transitional lenses in place of branded third-party transitional lenses, obtaining price reductions from our frame suppliers as we have scaled up our production quantities, and engaging in a variety of promotional efforts outside of traditional pay-per-click e-commerce ads. These improvements were partially offset by the negative impacts of tariffs during the current nine months.

The optical retail market is highly fragmented and influenced by vision insurance reimbursement, which historically supports higher retailer gross margins on conventional frames. Smart eyewear carries a higher component and service cost structure, which can result in lower retailer margins at consumer price points we believe are required to broaden adoption. Large national retailers are only just now recognizing smart eyewear as proven category and are starting to move in the direction of selling more smart eyewear. As a result, we are now prioritizing larger retailers whose economics are more aligned with consumer electronics and safety categories, including home-improvement and big-box stores. In the near term, we expect e-commerce channels (Lucyd.co and Amazon) to remain a larger proportional share of our revenue while we build additional sell-through evidence, secure retailer-specific merchandising, and obtain additional certifications. As national retail programs are finalized and set in stores, we expect wholesale contribution to increase over time. We believe that in the long term, the majority of our business will ultimately come from frame sales to distributors and eyewear retailers. We anticipate that recent and upcoming launches of new product lines will help us progress towards our long-term goal of shifting our sales mix more towards the wholesale channel, which should bring consistent, large-scale orders with minimal marketing costs.

***Operating Expenses***

Our operating expenses increased by 10% to $6,448,395 for the nine months ended September 30, 2025, as compared to $5,872,483 for the nine months ended September 30, 2024. This increase was primarily due to the following:

*General and administrative expenses*

Our general and administrative expenses were $3,679,521 for the nine months ended September 30, 2025, representing an increase of approximately $153,304 or approximately 4% compared to $3,526,217 for the prior year nine months. This modest increase in costs was mainly attributable to the net result of a combination of multiple factors, including (i) higher compensation (including stock-based compensation) and benefit costs (approximately $283,000), (ii) higher payments due under our multi-year license agreements, which increased our licensing expense by approximately $231,000, and (iii) higher IT and software costs (approximately $103,000). Partially offsetting these higher costs were (i) the fact that in the prior year nine months we made a one-time release payment of $325,000 to a shareholder counterparty for the waiver of certain of that counterparty's pre-existing contractual rights related to the Company's equity offerings, and (ii) reductions in investor relations costs of approximately $134,000.

Non-cash expenses – including depreciation, amortization, and stock-based compensation – comprised approximately 9% and 14% of our total general and administrative expenses in the current nine months and prior year nine months, respectively.

The Company maintains a lean staff salaried at market rates, and a significant portion of our general and administrative expenses consist of corporate overhead type costs which are fixed or semi-fixed in nature (e.g., rent, compliance, professional services, etc.); as such, our general and administrative expenses are generally not expected to scale up significantly as our revenue increases over time. One key exception to this is the expense related to our multi-year license agreements which grant us the right to sell certain branded smart eyewear; these agreements require us to pay royalties based on a percentage of net retail and wholesale sales, and also require increasing guaranteed minimum royalty payments over their terms.

*Sales and marketing expenses*

At the same time, we have continued to make significant investments in paid ads in order to build brand awareness, attract new customers, and increase our market share.

In the near to medium term, we expect that our sales and marketing expenses will continue to scale up to some degree as our revenue grows. From a long-term perspective, we anticipate that increases in sales and marketing expenses will be mitigated somewhat by our plan to grow our business in the wholesale optical channel, which, due to the nature of that channel, inherently does not require costly marketing campaigns to acquire each customer and does not require the platform fees associated with e-commerce sales, and as a result typically carries a lower marketing cost per unit sold. Additionally, we generally expect that a retailer who is successful with our products will reorder in large quantities, also without significant marketing expenditure.

*Research and development costs*

Our research and development costs were $608,784 for the nine months ended September 30, 2025, as compared to $604,472 for the nine months ended September 30, 2024, representing a year-over-year increase of approximately 1% or essentially flat compared to the prior year period.

*Related party management fee*

Our related party management fee was $105,000 for each of the nine-month periods ended September 30, 2025 and 2024, based on the terms of the management services agreement between us and Tekcapital.

***Other Income (Expense), net***

Total other income (expense), net was $274,626 for the nine months ended September 30, 2025. This amount was primarily comprised of interest and dividends earned on our investments in U.S. Treasury bills and money market funds.

Total other income (expense), net in the nine months ended September 30, 2024 was $110,625. This amount was primarily comprised of dividends from our investments in money market funds, and, to a lesser extent, interest income earned on a short-term loan to a related party.

The increase in other income (expense), net from the prior year nine months to the current nine months was primarily attributable to higher average investment balances in the current year period.

**Liquidity and Capital Resources** 

As of September 30, 2025 and December 31, 2024, our cash and cash equivalents were approximately $6.7 million and $2.6 million, respectively.

As of September 30, 2025 and December 31, 2024, our total overall liquidity (cash and cash equivalents plus investments in short-term U.S. Treasury bills), which management believes provides a more accurate depiction of the Company's liquidity and economic position, was approximately $8.0 million and $7.5 million, respectively.

Our working capital (current assets less current liabilities) was approximately $9.7 million and $8.5 million as of September 30, 2025 and December 31, 2024, respectively.

We believe our total overall liquidity, plus the availability to borrow funds via our related party agreement with Lucyd Ltd., will be sufficient to fund our operations for at least the next twelve months.

The Company did not have any debt obligations as of September 30, 2025 or December 31, 2024.

***Cash Flow***

---

| | | |
|:---|:---|:---|
|  | **Nine months ended<br> September 30,<br> 2025** | **Nine months ended<br> September 30,<br> 2024** |
| Net cash flows from operating activities | $(5924987) | $(4796361) |
| Net cash flows from investing activities | 3651077 | (5100736) |
| Net cash flows from financing activities | 6344438 | 10153476 |
| **Net Change in Cash** | $**4070528** | $**256379** |

---

Net cash flows used in operating activities for the nine months ended September 30, 2025 are primarily reflective of our net loss for the period, resulting from our operating costs to support and grow our business, including sales and marketing activities, research and development, and employee-related costs. The increased use of cash during the current nine months as compared with the prior year nine months was primarily driven by elevated inventory purchases made in anticipation of future sales. Historically, the fourth quarter of the year represents our strongest sales period, and as both our sales volumes and the scale of our business have grown over the past year, our procurement activity has increased accordingly to meet expected demand.

Net cash flows provided by investing activities for the nine months ended September 30, 2025 are primarily attributable to the maturity and redemption of investments in 6-month U.S. Treasury bills totalling $5.0 million, and the investment in new 6-month U.S. Treasury bills totalling approximately $(1.3) million.

Net cash flows provided by financing activities for the nine months ended September 30, 2025 are primarily attributable to warrant exercises and other equity transactions entered into during the current period (as described in more detail below), for which we received aggregate net proceeds of approximately $6.3 million.

***Equity Transactions***

*April 2025 Warrant Inducement Transaction*

On April 11, 2025, the Company entered into inducement letter agreements with certain holders of certain of its existing warrants to purchase an aggregate of 595,188 shares of the Company's common stock, of which warrants to purchase 121,500 shares were originally issued to the holders on September 4, 2024 with an original exercise price of $5.00 per share, and warrants to purchase 473,688 shares were originally issued to the holders on September 24, 2024 with an original exercise price of $9.50 per share.

Pursuant to the inducement letter agreements, the holders agreed to exercise the existing warrants for cash at a reduced exercise price of $2.60 per share in consideration of the Company's agreement to issue new unregistered Series G warrants to purchase up to an aggregate of 218,646 shares of common stock and new unregistered Series H warrants to purchase up to an aggregate of 1,724,814 shares of common stock, each at a purchase price of $0.125 per warrant. The Series G Warrants have an exercise price of $2.60 per share, are exercisable immediately upon issuance, and have a term of exercise equal to five and one-half years following the effective date of the Resale Registration Statement (as defined in the applicable agreements). The Series H Warrants have an exercise price of $2.60 per share, are exercisable immediately upon issuance, and have a term of exercise equal to eighteen months following the effective date of the Resale Registration Statement.

This transaction closed on April 14, 2025, and the gross proceeds to the Company were approximately $1.8 million prior to deducting placement agent fees and offering expenses (as described below). The net proceeds received by the Company from this transaction amounted to approximately $1.5 million, which the Company intends to use for working capital and general corporate purposes.

H.C. Wainwright & Co., LLC ("HCW") acted as the exclusive placement agent for the offering. As compensation for such placement agent services, the Company paid HCW an aggregate cash fee equal to 7.5% of the gross proceeds received by the Company from this transaction, plus a management fee equal to 1.0% of the gross proceeds received by the Company. The Company also issued to HCW or its designees warrants to purchase up to 44,639 shares of common stock. These placement agent warrants are immediately exercisable, have a term of five and one-half years following the effective date of the Resale Registration Statement, and have an exercise price of $3.25 per share.

The Resale Registration Statement was subsequently filed with the SEC on Form S-1 on May 9, 2025, and became effective on May 19, 2025.

*June 2025 Warrant Inducement Transaction*

On June 20, 2025, the Company entered into inducement letter agreements with certain holders of certain of its existing warrants to purchase an aggregate of 746,782 shares of the Company's common stock, which were originally issued to the holders on April 14, 2025, having an original exercise price of $2.60 per share. As of June 30, 2025, 254,282 of these shares were held in abeyance and not considered outstanding; in compliance with a beneficial ownership limitation provision, such shares will be held in abeyance until the Company receives notice from the investor that the remaining shares may be issued.

Pursuant to the inducement letter agreements, the holders agreed to exercise the existing warrants for cash at an exercise price of $2.60 per share in consideration of the Company's agreement to issue new unregistered Series I warrants to purchase up to an aggregate 2,240,346 shares of common stock, each at a purchase price of $0.125 per warrant. The Series I warrants have an exercise price of $2.60 per share, are exercisable immediately upon issuance, and have a term of exercise equal to eighteen (18) months following the effective date of the Resale Registration Statement (as defined in the applicable agreements).

This transaction closed on June 24, 2025, and the gross proceeds to the Company were approximately $2.2 million prior to deducting placement agent fees and offering expenses (as described below). The net proceeds received by the Company from this transaction amounted to approximately $1.9 million, which the Company intends to use for working capital and general corporate purposes.

HCW acted as the exclusive placement agent for the offering. As compensation for such placement agent services, the Company paid HCW an aggregate cash fee equal to 7.5% of the gross proceeds received by the Company from this transaction, plus a management fee equal to 1.0% of the gross proceeds received by the Company. The Company also issued to HCW or its designees warrants to purchase up to 56,009 shares of common stock. These placement agent warrants are immediately exercisable, will expire on June 20, 2030, and have an exercise price of $3.25 per share.

The Resale Registration Statement was subsequently filed with the SEC on Form S-1 on July 18, 2025, and became effective on July 28, 2025.

*Other Warrant Activity*

During the three months ended June 30, 2025, certain holders of the Company's Series G and Series H warrants exercised such warrants to purchase an aggregate of 986,532 shares of the Company's common stock at an exercise of $2.60 per share, resulting in gross cash proceeds to the Company of approximately $2.6 million.

In connection with the above, and pursuant to the terms of an engagement agreement between the Company and HCW originally dated April 2, 2024, and subsequently amended on September 22, 2024 and March 21, 2025, the Company paid HCW aggregate cash fees of approximately $0.3 million, and also issued to HCW or its designees various placement agent warrants to purchase up to 80,139 shares of common stock, with exercise prices ranging from $3.25 to $6.25.

*At-the-Market Offerings*

The Company has entered into an at-the-market offering agreement with HCW (as sales agent) relating to the sale of common stock. From August 15, 2025 through September 30, 2025, the Company sold 341,403 shares of common stock and received approximately $716,000 of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from these transactions amounted to approximately $692,000, and will be used for working capital and general corporate purposes.

From October 1, 2025 through October 15, 2025, the Company sold 144,496 shares of common stock and received approximately $291,000 of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from these transactions amounted to approximately $281,000, and will be used for working capital and general corporate purposes.

Currently, the remaining availability under this at-the-market facility for future sales of common stock is approximately $1.7 million.

***Other Factors***

We expect that operating losses could continue in the foreseeable future as we continue to invest in the expansion and development of our business. We believe our existing cash and cash equivalents (including the proceeds from the equity offerings described above), plus the availability to borrow funds via the March 2025 amendment to the related party agreement with Lucyd Ltd., will be sufficient to fund our operations for at least the next twelve months. However, our future capital requirements will depend on many factors, including, but not limited to, growth in the number of retail store customers, licenses, the needs of our e-commerce business and retail distribution network, expansion of our product and software offerings, and the timing of investments in technology and personnel to support the overall growth of our business. We expect a modest increase in marketing and retail-support expenses over the next twelve months, with such investments being discretionary and adjustable as needed. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. In the event that additional financing is required from outside sources, we may not be able to negotiate terms acceptable to us or at all. Geopolitical and macroeconomic factors could cause disruption in the global financial markets, which could reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.

**Off-Balance Sheet Arrangements**

As of September 30, 2025, we did not have any off-balance sheet arrangements.

**Critical Accounting Policies and Significant Estimates**

There have been no material changes in our critical accounting policies and significant estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 24, 2025.

**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

Not required for smaller reporting companies.

**Item 4. Controls and Procedures**

*Disclosure Controls and Procedures*

We carried out an evaluation, under the supervision and with the participation of our management including our Chief Executive Officer and our Co-Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13(a)-15(b) of the Exchange Act. Based on such evaluation, our Chief Executive Officer and Co-Chief Financial Officer have concluded that, as a result of material weaknesses in our internal control over financial reporting, our disclosure controls and procedures were not effective as of September 30, 2025.

There was no change in our internal control over financial reporting during the third quarter of fiscal year 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Part II. Other Information**

**Item 1. Legal Proceedings**

We are not currently the subject of any material pending legal proceedings; however, we may from time to time become a party to various legal proceedings arising in the ordinary course of business.

**Item 1A. Risk Factors**

There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 24, 2025.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

None.

**Item 3. Defaults Upon Senior Securities.**

None.

**Item 4. Mine Safety Disclosures.**

Not Applicable.

**Item 5. Other Information.**

During the quarter ended September 30, 2025, Harrison Gross, our Chief Executive Officer, sold an aggregate of 3,009 shares pursuant to the terms of a Rule 10b5-1 trading plan that was adopted on December 13, 2024.

During the quarter ended September 30, 2025, Konrad Dabrowski, our Chief AI & Growth Officer, sold an aggregate of 2,596 shares pursuant to the terms of a Rule 10b5-1 trading plan that was adopted on December 13, 2024.

During the quarter ended September 30, 2025, Oswald Gayle, our Chief Financial Officer, sold an aggregate of 3,535 shares pursuant to the terms of a Rule 10b5-1 trading plan that was adopted on December 13, 2024.

During the quarter ended September 30, 2025, David Eric Cohen, our Chief Technology Officer, sold an aggregate of 3,744 shares pursuant to the terms of a Rule 10b5-1 trading plan that was adopted on December 13, 2024.

During the quarter ended September 30, 2025, Joaquin Abondano, our Chief Operating Officer, sold an aggregate of 1,485 shares pursuant to the terms of a Rule 10b5-1 trading plan that was adopted on December 13, 2024.

**Item 6. Exhibits**

---

| | |
|:---|:---|
| 31.1 | [Certification of Principal Executive Officer of Innovative Eyewear, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](innovative_ex31-1.htm) |
| 31.2 | [Certification of Principal Financial Officer of Innovative Eyewear, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](innovative_ex31-2.htm) |
| 32.1 | [Certification of Principal Executive Officer of Innovative Eyewear, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](innovative_ex32-1.htm) |
| 32.2 | [Certification of Principal Financial Officer of Innovative Eyewear, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](innovative_ex32-2.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

**Signatures**

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

---

| | | |
|:---|:---|:---|
|  | **Innovative Eyewear, Inc.** | **Innovative Eyewear, Inc.** |
|  | **(Registrant)** | **(Registrant)** |
| Date: November 13, 2025 | By: | /s/ Harrison Gross |
|  |  | Harrison Gross |
|  |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |
| Date: November 13, 2025 | By: | /s/ Oswald Gayle |
|  |  | Oswald Gayle |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial Officer and Principal Accounting Officer) |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATIONS**

I, Harrison Gross, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Innovative Eyewear, Inc.;

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

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

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

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

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

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

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

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

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

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

---

| | | |
|:---|:---|:---|
| Date: November 13, 2025 | By: | /s/ Harrison Gross |
|  |  | Harrison Gross |
|  |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATIONS**

I, Oswald Gayle, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Innovative Eyewear, Inc.;

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

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

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

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

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

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

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

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

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

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

---

| | | |
|:---|:---|:---|
| Date: November 13, 2025 | By: | /s/ Oswald Gayle |
|  |  | Oswald Gayle |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350,<br> AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of Innovative Eyewear, Inc. (the "Company") for the quarterly period ended September 30, 2025, as filed with the Securities and Exchange Commission (the "Report"), I, Harrison Gross, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company as of and for the period covered by the report.

---

| | | |
|:---|:---|:---|
| Date: November 13, 2025 | By: | /s/ Harrison Gross |
|  |  | Harrison Gross |
|  |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of Innovative Eyewear, Inc. (the "Company") for the quarterly period ended September 30, 2025, as filed with the Securities and Exchange Commission (the "Report"), I, Oswald Gayle, Co-Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company as of and for the period covered by the report.

---

| | | |
|:---|:---|:---|
| Date: November 13, 2025 | By: | /s/ Oswald Gayle |
|  |  | Oswald Gayle |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---