# EDGAR Filing Document

**Accession Number:** 0001808377
**File Stem:** 0001829126-26-002695
**Filing Date:** 2026-3
**Character Count:** 382887
**Document Hash:** 56f23d9f36f9a3efffd2753b2518c9c4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001829126-26-002695.hdr.sgml**: 20260325

**ACCESSION NUMBER**: 0001829126-26-002695

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 66

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260325

**DATE AS OF CHANGE**: 20260325

**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-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41392
- **FILM NUMBER:** 26792427

**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-K**

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

For the fiscal year ended December 31, 2025

or

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

For the transition period from ________ to ________

Commission file number: 001-41392

**INNOVATIVE EYEWEAR, INC.**

![](img_001.jpg)

(Exact Name of Registrant as Specified in its Charter)

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| | |
|:---|:---|
| **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) | (Zip Code) |

---

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

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

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| | | |
|:---|:---|:---|
| **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 |

---

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ 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 the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter was approximately $6,993,000 based upon the closing price of such common stock on June 30, 2025.

As of March 25, 2026, the registrant had outstanding 6,300,661 shares of common stock, par value $0.00001 per share, which is the registrant's only class of common stock.

DOCUMENTS INCORPORATED BY REFERENCE:

NONE

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **[PART I](#a_001)** | **[PART I](#a_001)** | **[PART I](#a_001)** |
| [Item 1.](#a_002) | [Business](#a_002) | 1 |
| [Item 1A.](#a_003) | [Risk Factors](#a_003) | 17 |
| [Item 1B.](#a_004) | [Unresolved Staff Comments](#a_004) | 39 |
| [Item 1C.](#a_005) | [Cybersecurity](#a_005) | 39 |
| [Item 2.](#a_006) | [Properties](#a_006) | 40 |
| [Item 3.](#a_007) | [Legal Proceedings](#a_007) | 40 |
| [Item 4.](#a_008) | [Mine Safety Disclosures](#a_008) | 40 |
| **[PART II](#a_009)** | **[PART II](#a_009)** | **[PART II](#a_009)** |
| [Item 5.](#a_010) | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#a_010) | 41 |
| [Item 6.](#a_011) | [Reserved](#a_011) | 41 |
| [Item 7.](#a_012) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_012) | 42 |
| [Item 7A.](#a_013) | [Quantitative and Qualitative Disclosures about Market Risk](#a_013) | 54 |
| [Item 8.](#a_014) | [Financial Statements and Supplementary Data](#a_014) | 54 |
| [Item 9.](#a_015) | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#a_015) | 55 |
| [Item 9A.](#a_016) | [Controls and Procedures](#a_016) | 55 |
| [Item 9B.](#a_017) | [Other Information](#a_017) | 56 |
| [Item 9C.](#a_018) | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#a_018) | 57 |
| **[PART III](#a_019)** | **[PART III](#a_019)** | **[PART III](#a_019)** |
| [Item 10.](#a_020) | [Directors, Executive Officers and Corporate Governance](#a_020) | 58 |
| [Item 11.](#a_021) | [Executive Compensation](#a_021) | 61 |
| [Item 12.](#a_022) | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#a_022) | 67 |
| [Item 13.](#a_023) | [Certain Relationships and Related Transactions, and Director Independence](#a_023) | 69 |
| [Item 14.](#a_024) | [Principal Accounting Fees and Services](#a_024) | 71 |
| **[PART IV](#a_025)** | **[PART IV](#a_025)** | **[PART IV](#a_025)** |
| [Item 15.](#a_026) | [Exhibit and Financial Statement Schedules](#a_026) | 72 |
| [Item 16.](#a_027) | [Form 10-K Summary](#a_027) | 73 |

---

i

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

*Information included in this Annual Report on Form 10-K (this "Report") contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We generally use the words "believes," "expects," "intends," "plans," "anticipates," "likely," "will" and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in this Report under "Item 1A. – Risk Factors" below. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Report.*

CERTAIN TERMS USED IN THIS REPORT

References in this Report to "we," "us," "our," the "Company" or "Innovative Eyewear" means Innovative Eyewear, Inc. unless otherwise indicated.

ii

**PART I**

**Item 1. <u>Business</u>.**

**Our History**

We develop and sell cutting-edge smart eyewear – including prescription eyeglasses, ready-to-wear sunglasses, safety glasses, and sport glasses – that is designed to allow our customers to remain connected to their digital lives.

Founded and headquartered in Miami, Florida, we were initially organized as a Florida limited liability company effective August 15, 2019. On March 26, 2020, we converted from a Florida limited liability company into a Florida corporation.

We were founded by Lucyd Ltd., the inventor of the technology that our products are based upon, which is a portfolio company of Tekcapital Europe Ltd. ("Tekcapital"). Tekcapital is a U.K. based university intellectual property accelerator which builds portfolio companies around new technologies.

**Our Products**

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<sup>®</sup> (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 styles that have consistently performed well since the introduction of Lucyd Lyte and new styles to align with market trends and evolving consumer demand. We currently offer seven different models under the Lucyd Lyte collection.

● Our Lucyd Armor product line provides all of the powerful features of Lucyd eyewear in stylish safety glasses designed for all-day wear. Lucyd Armor smart safety glasses have been certified to meet safety standards in the U.S., Canada, United Kingdom, and European Union. First launched in October 2024, Armor has rapidly become one of our best-selling products, and in November 2025, we launched additional new variants of the Lucyd Armor glasses, in order to expand the collection to a wider audience and build on the success of the original model with important variations in lens functionality and sizing. We currently offer five different models of Lucyd Armor smart safety glasses.

Our current product offering consists of 34 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) line, and Lucyd Armor (safety) line, we believe we are the first smart-eyewear company with products concurrently in the traditional, sport, and safety eyewear categories. Our cobranded license arrangements 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).

Some of the many things our customers can do with their Lucyd smartglasses include:

&nbsp;&nbsp;&nbsp;&nbsp;1. "Send a voice message to (contact)": this command begins the recording of an audio message to be sent to named contact.

&nbsp;&nbsp;&nbsp;&nbsp;2. "Send a text to (contact)": begins recording of a speech-to-text message to be sent by SMS to named contact.

&nbsp;&nbsp;&nbsp;&nbsp;3. "Call (contact)": speed-dials the named contact.

&nbsp;&nbsp;&nbsp;&nbsp;4. "Send $___ to (contact)": this command allows the user to send money to a contact via Venmo or Apple Cash.

&nbsp;&nbsp;&nbsp;&nbsp;5. "Check my messages": this command reads out the user's latest incoming text messages and offers a prompt to reply to each.

&nbsp;&nbsp;&nbsp;&nbsp;6. "Check my mailbox": this command announces the number of unread emails, and reads them out with a prompt to continue after each one. In the prompt after each one, the user can tell their digital assistant "Reply" and dictate an email response to the previous email.

&nbsp;&nbsp;&nbsp;&nbsp;7. "Find (cuisine type) food nearby": this command reads through a list of nearby restaurants and their ratings, and prompts the user for directions or to call after each one.

&nbsp;&nbsp;&nbsp;&nbsp;8. "Call me an Uber": this command prompts the user on which type of Uber ride they want, then asks to confirm to send a car to the user's location.

&nbsp;&nbsp;&nbsp;&nbsp;9. "What time is it?": announces the current time.

&nbsp;&nbsp;&nbsp;&nbsp;10. "Play (song/album/artist)": this command begins playing the requested song, album, or artist via Apple Music.

&nbsp;&nbsp;&nbsp;&nbsp;11. "Get me directions to (location)": this command begins navigating on phone, with audible directions on glasses.

&nbsp;&nbsp;&nbsp;&nbsp;12. "Take a memo": this command begins recording a speech-to-text memo in Notes, which can also be played back to the user.

Since the initial launch of Lucyd Lyte, we have witnessed growing interest and demand from customers throughout the United States and have sold thousands of our smart glasses. We believe smart eyewear is a product category whose time has come, and we believe we are well positioned to capitalize on and help develop this exciting new sector – where eyewear meets electronics in a user-friendly, mass market format, priced similarly to designer eyewear.

The Company currently has an overall portfolio of owned and licensed intellectual property of over 120 patents and applications.

***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 monthly or annual fee. 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.

***Kiosks and Retail Fixtures***

We provide certain retail partners with point-of-sale display materials, including virtual try-on kiosks, modular display units, and interactive LCD fixtures designed to support in-store product education and demonstrations. Many of our retail fixtures allow for customization to suit our retail store partners' needs, and our newer fixtures feature a proprietary kiosk app that we developed in-house.

During 2025, we continued to develop and enhance our merchandising display systems, including updated designs intended to support features such as video content, product education, and interactive product demonstrations (e.g., audio testing and/or digital try-on content).

The Company currently offers three key display systems: (1) Hero Displays, which are unpowered branding stands, (2) Counter Kiosks, which offer digital and interactive demo experiences, and (3) the Lucyd Kiosk, which is a freestanding screen for larger stores. Across all display systems offered by the Company, approximately 60 displays have been deployed to vendors as of December 31, 2025.

**Our Mission**

Our mission is to Upgrade Your Eyewear<sup>®</sup>. 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.

In a sense, we view this integration of technology and vision correction/protection as the next evolutionary step in the development of eyewear. Over the entire course of eyewear development and history, many of the innovations have dealt with improving the lenses of the glasses. Notably, eyewear frames have not improved much in the past 400 years, with the exception, in our view, of the utilization of plastic to reduce weight and provide a wider range of designs and finishes, and the introduction of new hinge types. We view the integration of Bluetooth technology into the arms of the glasses as one of the key next steps to enhance one of the world's most important wearables: eyewear.

Additionally, as part of our commitment to a great customer experience, we listen to feedback from our customers, and continuously strive to improve customer satisfaction and experience with our products.

We have made strong strides towards our goal of making smart eyewear accessible to the mass market. Several developments towards this end include developing our smart frames in multiple temple lengths; the introduction of smart eyewear specifically for women and youth, which are typically missing from similar offerings; and the introduction of smart eyewear for adults with petite or narrow faces. Our expansive product offering currently consists of 34 different models, which offers a similar amount of style variety as many traditional eyewear collections. When paired with the Lucyd app, our smartglasses provide a new and safer wearable user experience suitable for everyone.

Our goal is to become a meaningful player in the smart eyewear market. Our successes to date demonstrate our ability to not only compete, but to lead in the rapidly changing and expanding technological eyewear market, and we intend to continue spearheading innovation in the field.

***Giving Back***

The Company believes good vision is a human right, and to this end makes regular frame donations to charitable organizations in South Florida and beyond. We have supported those in need through our donation of glasses frames to New Eyes (*https://new-eyes.org/about-us*), a charity dedicated to helping children and adults in need of eyewear. We have also participated in a partnership with the Miami Rescue Mission to support our local community with eyewear. Most recently, we donated 125 pairs of Lucyd Lyte smart glasses to North Miami High School in 2025.

Additionally, university students, educators, healthcare workers, uniformed service members, and veterans are eligible for an ongoing 18% discount off all frames and lens upgrades on *www.lucyd.co*.

**Our Market Opportunity**

One of our key opportunities is converting traditional eyeglass and sunglass wearers to smart eyewear consumers, since these customers are already familiar with wearing optical products. According to a 2021 report of the Vision Council, a non-profit trade association that serves member companies of the optical industry, there are approximately 167 million adults wearing prescription eyeglasses in the United States.

According to the Vision Council, the total addressable market for eyewear in the U.S. was $69.5 billion in 2025, up 4.4% from 2024. The smartglass market size was estimated at $2.5 billion worldwide in 2025, and is expected to grow at a compounded annual growth rate of 24% from 2026 to 2033 according to Grand View Research.

At the same time, the market for digital assistants like Siri, Google Voice, Bixby, and Alexa has grown rapidly worldwide in recent years, estimated at over 8 billion voice assistant-enabled devices in use in 2024, doubling the amount from 2020 and indicating strong proliferation of voice-controlled devices. We view the popularity of voice assistants as an important catalyst for the smart eyewear market, since hands-free access to voice-based AI is a notable feature thereof and a key advantage of our products over standalone smartphone usage.

The common denominator among markets for hearables and digital assistants is that they facilitate real-time access to digital data, whether it is through music, calls, navigational directions, or information, among other uses. The combination of hearables and digital assistants provides a transparent, ergonomic interface between the users and their digital lives. At Innovative Eyewear, we are dedicated to a touch-free interface and untethering our customers' eyes from their smartphone screens, through our smart eyewear product.

The synergistic fusion of these three markets (eyewear, digital assistants, and hearables) enables, in our view, an opportunity to create a completely new experience of connected eyewear, which smoothly delivers the functionality of both optical glasses and headphones, eliminating the need for either on its own. Nevertheless, several orthodoxies of the eyewear industry still hold, namely: if you want to sell a lot of eyewear, we believe it should be attractive, stylish, comfortable (e.g., lightweight, which we believe to be approximately one ounce), and cost roughly the same as traditional eyewear. This is what we have sought to achieve, and in our view have accomplished with the introduction of Lucyd Lyte eyewear.

A key indicator of the potential future success of smart eyewear in the consumer market is the rise of smartwatches, which as early as 2018 have intermittently surpassed traditional wristwatches in unit sales in the United States. We believe that the similarities between smartwatches and smart eyewear compared to their traditional counterparts indicate that the future of eyewear will also be *smart*.

**Our Business Strategy**

When we first started our company, there was, in our view, no attractive smart eyewear that addressed the basic consumer need for good looking designer glasses that were stylish, comfortable, lightweight, and provided the functionality of hearables, and priced around the same as regular glasses.

At the core of our strategy are the following principles:

&nbsp;&nbsp;&nbsp;&nbsp;1. Consumers prefer smart eyewear that looks and feels like traditional glasses and sunglasses; this is a key element in the design of all of our frames, and makes it easier for traditional eyewear users to switch to our products.

&nbsp;&nbsp;&nbsp;&nbsp;2. For a smart eyewear line to achieve mass market penetration, it should cost a similar amount to traditional designer eyewear, especially while the category is still emerging and most consumers are not yet familiar with it.

&nbsp;&nbsp;&nbsp;&nbsp;3. Smart eyewear must be user-friendly and have an interface that is easy to navigate by the wearer, even when their hands are wet or gloved. As such, we deploy highly tactile interfaces on our eyewear.

&nbsp;&nbsp;&nbsp;&nbsp;4. The battery life of smart eyewear should be sufficient to support smart functionalities throughout the day without needing to be recharged mid-day.

&nbsp;&nbsp;&nbsp;&nbsp;5. Rather than burdening our hardware with mechanical features such as cameras and microdisplays which may be unnecessary for many users, we instead leverage software platforms that can add functionality without increasing the weight or size of the frames.

&nbsp;&nbsp;&nbsp;&nbsp;6. By adhering to the above principles, we can eliminate any "costs of switching" from traditional eyewear to smart eyewear, and build customer lifetime value by offering a more powerful combination of fashion, smart features, and vision correction and protection than available from other companies.

All of our products are designed in Miami, manufactured in China, and sold through a combination of e-commerce channels and wholesale and retail partners, including independent optical stores and certain national and specialty retailers., Currently, our products are sold in over 400 retail stores (across over 300 unique wholesale accounts), primarily in the U.S. and Canada. During the latter half of 2025, we have begun to focus more efforts on international expansion, including the development of new partnerships with distributors and retailers in the UK, EU, Canada, and Latin America, as well as securing initial orders from key European markets. Domestically, our strategy has recently been focused on pursuing online and in-store big box retailers, and in-store and online specialty retailers.

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 introduce new models in an effort to offer a wide variety of designs. We continuously present new models of eyewear to our network of followers to vote on those styles they find most appealing. We view this as community approved design.

**Competition**

The smart eyewear industry in which we operate is competitive and is subject to changes as it continues to evolve. The smart eyewear market encompasses multiple product categories, including: (i) audio-enabled smart glasses that provide open-ear audio and access to voice assistants; (ii) camera-enabled smart glasses that combine audio with photo/video capture and social-media features; and (iii) augmented reality ("AR") and virtual reality ("VR") headsets and glasses.

We primarily compete in the audio-enabled smart glasses category, and we also compete with certain camera-enabled smart glasses and with traditional (non-smart) eyewear and headphones. AR/VR headsets and glasses generally target different use cases, price points, and form factors than our products, and we do not currently focus our product strategy on AR/VR headset devices.

Our competitors include large technology companies, consumer electronics companies, eyewear brands, and manufacturers of industrial safety eyewear. Many of these competitors – such as, for example, Amazon, Meta, and Solos – have substantially greater manufacturing, financial, research and development, personnel, and marketing resources than we do. As a result, although we believe our products are currently superior, our competitors may be able to develop superior products, and compete more aggressively and sustain their competitive advantage over a longer period of time than us. Our products may be rendered obsolete in the face of competition.

**Our Competitive Strengths**

*Affordable Price Point*. We generally price our smart eyewear in a range intended to be competitive with traditional designer eyewear. The Manufacturer's Suggested Retail Price ("MSRP") for our Lucyd smart eyewear starts at $149, with advanced options and customizations available at higher price points, which are at the discretion of the customer. A basic prescription lens upgrade is offered for $40. By comparison, most of our U.S.-based competitors offer products that are more expensive, starting at approximately $249 or higher, with higher costs to add prescriptions.

*Camera-Free, Voice-First Design*. Our products are designed to deliver hands-free audio and voice assistant access without a camera, which we believe can support user privacy preferences, enable longer battery life, and lighter weight compared to certain camera-enabled alternatives, and help maintain price parity with traditional eyewear.

*Quality*. All of our frames can be outfitted in-house or by optical resellers with any combination of prescription, sunglass, reading, and blue light lens formats. Our frame fronts are made with what we believe are high quality optical materials to ensure easy lens fitting by any optician.

*Customizable Product Offering*. There are 100+ lens types available for our smart glasses, making our products the most customizable smart eyewear in the world. Our partnership with a third-party optical lab in Florida allows us to offer custom lenses and direct prescription fulfillment to our customers quickly and affordably.

*Comfort*. At just 1.0 - 1.75 ounces, our eyewear has a feather-light fit, suitable for all day vision correction or sun protection (traditional glasses weigh about 1 ounce). This is especially important while on the go. Our 1.0 ounce titanium aviators are among the lightest smart eyewear ever made.

*Long Battery Life*. At 8 - 12 hours of playback per charge, our current product offering of Lucyd eyewear outpaces most, if not all, of the competition on battery life.

*Capital Light Business Model*. All of our products are sold through multiple e-commerce channels, and are distributed through optical or other retailers. We believe this capital light approach is highly scalable and efficient in the deployment of resources. We view "capital light" as being more efficient by obviating the need to build factories and retail stores, while partnering with existing companies in both of these groups.

*Multiple-Channel Approach*. We sell our products both through multiple online channels and multiple categories of brick-and-mortar retail stores. We believe this multi-channel approach provides us with an advantage against our competitors who sell in a narrower selection of channels.

*Vertical-Specific Product Strategy.* We design and market smart eyewear for multiple segments, including industrial safety, sport/performance, and everyday optical/lifestyle use. While we face competitors in each segment, we believe our focus on mass-market use cases and familiar eyewear form factors differentiates our approach from certain competitors that emphasize more technology-heavy devices.

*Compliance and Safety Positioning.* Lucyd Armor products are designed and marketed as safety eyewear and have been certified to meet applicable safety standards, including ANSI Z87.1 (United States), CSA Z94.3 (Canada), and EN ISO 166 (European Union).

*Intellectual property and know-how.* We have developed and acquired intellectual property related to smart eyewear design and software integrations, and we continue to pursue additional patent protection where appropriate.

*Experienced Management Team*. We have an experienced board of directors with more than 100 years of combined experience in the eyewear industry, and a management team with substantial experience in software and electronics engineering and operating eyewear and technology companies.

**Sales**

We have two major sales channels: (1) e-commerce (primarily via Lucyd.co and Amazon.com), and (2) a growing network of retail stores across a variety of resellers. Additionally, we have a robust presence on multiple e-commerce and social media platforms, which facilitates several customer on-ramps for the Lucyd brand, and numerous ad campaign strategies. Building on our early successes of driving traffic to our website Lucyd.co, from Facebook, Instagram, and TikTok, we deploy high quality content on multiple platforms to continuously keep customers engaged and drive brand awareness.

Online retail sales accounted for the majority of our sales in 2025 and 2024, and have represented the majority of our sales since inception.

E-commerce Channels

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Company website: Lucyd.co** 

Lucyd.co is our primary e-commerce point of sale. The site offers the most customization options of any of our sales channels and a full prescription lens lab, offering over 100 different lens types, including transition lenses and progressive bifocals. Additionally, the Lucyd website ships worldwide and provides a quick and smooth buying experience.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Amazon** 

Amazon.com/lucyd is our brand shop on Amazon. It drives a significant portion of our online sales, but limits the number of variations we can offer on our frames (e.g., prescription lenses are not permitted on Amazon). However, through Amazon, we are still able to offer color lens sunglass variants and blue light blocker pairs, in addition to our charging dock accessory item. We continually monitor and test traffic flow to Lucyd.co versus Amazon.com to ensure our online ad spend is fully optimized.

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Other Major Websites** 

In addition to our online sales through Lucyd.co and Amazon.com, our products are also sold on Walmart.com, Target.com, BestBuy.com, DicksSportingGoods.com, and eBay.

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Social Selling** 

Not only do we use social media to drive traffic to our main sales channels, but we also take advantage of intra-social shops as well, and have deployed shopping experiences through Facebook, Instagram, and TikTok to gain further brand awareness.

We also offer two affiliate platforms via Awin and Shopify for peer-driven sales. The Awin program is for professional affiliate and deal promotion companies, and increases revenue on Lucyd.co by offering direct commissions in exchange for converting web traffic. The Shopify affiliate program enables Lucyd brand enthusiasts to get a financial reward for sharing the brand, and operates on similar terms as the Shareasale program where we provide a commission rate in exchange for converting web traffic.

Retail Channels

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Independent Eyewear Stores** 

The core of our B2B business is formed by our relationship with numerous eyewear store retailers across the United States and Canada, which provide our smart frames directly to their optical customers. Many of these retail stores have placed multiple stocking orders since first launching our wholesale business in 2021. To support our resellers, we offer a strong co-op marketing program that includes free store display materials. As part of this strategy, we provide customizable modular display systems and interactive LCD retail fixtures to our resellers to provide an immersive virtual try-on experience along with detailed product info and videos for prospective customers.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **National Eyewear Chains** 

Thanks to aggressive promotion from competing glasses, retailers are now more open to introducing smart eyewear in their stores and on their e-commerce platforms. Based on our current discussions with several major optical businesses (by store size), we believe at least one additional major optical chain or national optical buying group will onboard our product line in 2026. However, there can be no assurances that any of these retailers and distributors will sell our products.

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Big Box Retail Stores (electronics, sporting goods, home improvement, general merchandise)** 

In addition to mainstream optical channels, we distribute our Lucyd eyewear through leading big box stores, such as Best Buy and Dick's Sporting Goods, through either their eyewear or electronics departments. We have recently expanded our electronics retail presence through partnerships with specialized electronics retailers, further strengthening our position in the consumer electronics segment.

Additionally, with the successful launch and explosive growth of Lucyd Armor Safety Smart Eyewear, we are expanding into the safety eyewear market. Our distribution strategy targets major home improvement retailers including Home Depot, Lowe's, Ace Hardware, and Canadian Tire, as well as leading industrial PPE (personal protective equipment) distributors such as Grainger and Fastenal. This certification-backed entry into the safety market represents a significant expansion of our addressable market.

**Manufacturing and Supply Chain**

Our products are designed in the United States and subsequently manufactured in China. The products are designed in-house, and 3-D Computer-Aided Design (CAD) files are produced with product renderings. We then subject these rendered images to focus group review, to determine which designs we should move to the prototype development stage. Pre-production prototypes are developed by our factories in China, to our specifications. Our factories source components for the smart eyewear in China, including plastic and titanium for the frames, electronic components, speakers, microphones, and batteries. All packaging is designed in Miami and fabricated in China. Once completed, our products are tested in the United States, to assess functionality, fit, and finish. Production orders are placed and fabricated in China based on anticipated demand, whereupon they undergo a rigorous thirteen-point third-party product inspection process. This inspection is conducted on 100% of our manufactured products. Inspections include testing procedures to help ensure our customers receive only functional, high-quality products. For large bulk orders from clients, we are able to order this inventory on demand, due to the expected lead times in the traditional frame sourcing business.

All of our frames are manufactured with prefabricated, ready-to-wear sunglass or blue light lenses, and are directly shipped to the customer in this state if the customer declines to purchase custom lens upgrades. If a customer orders with prescription or specialty lenses, then the smart eyewear frames are sent to an optical contractor laboratory in Miami, Florida, to have the lenses cut, ground, and mounted in the frames, whereupon they are directly shipped to customers.

Beginning in April of 2025, the United States government has announced new or increased tariffs on goods imported from various countries to the U.S. 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, 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. Additionally, 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.

These and other actions taken by management to date to mitigate the impacts of tariffs have been largely successful thus far, and restored our third and fourth quarter 2025 gross profit margins to a level that was 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.

**Marketing**

We market our products through a combination of digital advertising, online marketplaces, social media, influencer and user-generated content, email marketing, affiliate programs, public relations, and wholesale partner co-marketing initiatives. We employ a 360-degree marketing strategy that encompasses both brand and user-generated content syndication across earned, owned, and paid platforms. As the first smart eyewear manufacturer developing tailored products for specific use cases, our marketing approach uniquely addresses distinct segments through our All-Day Wear, Sun, Sports, and Safety product lines. This segmented strategy enables us to deliver targeted messaging to professional users seeking AI-enabled daily eyewear, active individuals requiring high-performance features, and industrial users needing certified protective equipment with smart capabilities.

Long form and video content generation are key focus points for the brand, as they allow us to better leverage both emerging and critical smart eyewear narratives through persistent search engine optimization (SEO), increasing our organic brand awareness across the board, in addition to strategic loyalty, influencer, and affiliate marketing campaigns.

Our online marketing strategy is primarily driven by pay-per-click advertisements on mainstream search engines, social media apps, and Amazon and other marketplaces. In addition, we support our primary efforts with influencer created and promoted "UGC" (user-generated content), email automations and newsletters, and website push notifications.

Our wholesale marketing strategy includes traditional sales email and call outreach; attendance at national, international, and regional optical trade shows; optical, athletic, and safety trade advertisements; and B2B mailer and digital mailer campaigns to inform optical businesses about our new releases.

We seek to create memorable experiences and products that resonate with our customers, coupled with premium content and campaigns designed to expand our brand presence and market share across all our target segments. We intend to continue to refine and expand our marketing efforts in 2026 and going forward.

***Our influencers***

To accelerate brand awareness and product sales, we have implemented an influencer strategy to engage leading figures in sports and the arts, who like and enjoy wearing Lucyd smart glasses. Our influencers promote our products on social media, provide us with product placement opportunities at sporting events and other cultural events, and have granted us contractual rights to use their names and likenesses in connection with the advertisement and sale of our products. We have engaged UK football legend and Olympic athlete Micah Richards as our lead brand ambassador. The Company also regularly engages popular influencers on TikTok and Instagram to promote its products, and envisions TikTok will become a significant e-commerce channel in the future. We plan to add additional influencers in the future to enhance awareness and sell-through for a number of key demographics.

**Intellectual Property**

Our current U.S. and foreign patent portfolio is as listed below.

***Registered and Pending Patent Applications Owned by Innovative Eyewear, Inc.***

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **App/Patent Number** | **Title** | **Country** | **Filing Date** | **Status** | **Grant Date** |
| 10908419 | Smartglasses and Methods and Systems for Using Artificial Intelligence to Control Mobile Devices Used for Displaying and Presenting Tasks and Applications and Enhancing Presentation and Display of Augmented Reality Information | U.S. | June 28, 2018 | Issued | February 2, 2021 |
| D899,493 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 20, 2020 |
| D900,203 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 27, 2020 |
| D899,494 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 20, 2020 |
| D899,495 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 20, 2020 |
| D899,496 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 20, 2020 |
| D900,204 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 27, 2020 |
| D900,205 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 27, 2020 |
| D900,920 | Smart Glasses | U.S. | March 22, 2019 | Issued | November 3, 2020 |
| D900,206 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 27, 2020 |
| D899,497 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 20, 2020 |
| D899,498 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 20, 2020 |
| D899,499 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 20, 2020 |
| D899,500 | Smart Glasses | U.S. | March 22, 2019 | Issued | October 20, 2020 |
| D954,135 | Round Smartglasses Having Flat Connector Hinges | U.S. | December 12, 2019 | Issued | June 7, 2022 |
| D958,234 | Round Smartglasses Having Pivot Connector Hinges | U.S. | December 12, 2019 | Issued | July 19, 2022 |
| D955,467 | Sport Smartglasses Having Flat Connector Hinges | U.S. | December 12, 2019 | Issued | June 21, 2022 |
| D954,136 | Smartglasses Having Pivot Connector Hinges | U.S. | December 12, 2019 | Issued | June 7, 2022 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **App/Patent Number** | **Title** | **Country** | **Filing Date** | **Status** | **Grant Date** |
| 62/941,466 | Wireless Smartglasses with Quick Connect Front Frames | U.S. | November 27, 2019 | Non-Provisional Application filed on November 25, 2020; U.S. App. No. 17/104,849 | n/a |
| D954,137 | Flat Connector Hinges for Smartglasses Temples | U.S. | December 19, 2019 | Issued | June 7, 2022 |
| D974,456 | Pivot Hinges and Smartglasses Temples | U.S. | December 19, 2019 | Issued | January 3, 2023 |
| 11282523 | Voice Assistant Management | U.S. | March 25, 2020 | Issued | March 22, 2022 |
| D1,010,718 | Wayfarer Smartglasses | U.S. | July 20, 2020 | Issued | January 9, 2024 |
| D951,334 | Round Smartglasses | U.S. | July 20, 2020 | Issued | May 10, 2022 |
| 12216341 | Wireless Smartglasses with Quick Connect Front Frames | U.S. | November 25, 2020 | Issued | February 4, 2025 |
| D1,013,765 | Smartglasses | U.S. | September 1, 2021 | Issued | February 6, 2024 |
| D1,030,851 | Smartglasses | U.S. | September 1, 2021 | Issued | June 11, 2024 |
| D1,030,852 | Smartglasses | U.S. | September 1, 2021 | Issued | June 11, 2024 |
| D1,030,853 | Smartglasses | U.S. | September 1, 2021 | Issued | June 11, 2024 |
| 207516 | Smartglasses | Canada | October 29, 2021 | Issued | May 17, 2023 |
| 207517 | Smartglasses | Canada | October 29, 2021 | Issued | May 23, 2023 |
| 207518 | Smartglasses | Canada | October 29, 2021 | Issued | May 23, 2023 |
| 207519 | Smartglasses | Canada | October 29, 2021 | Issued | May 23, 2023 |
| 29/814,016 | Safety Smartglasses | U.S. | November 2, 2021 | Pending | n/a |
| D1,051,978 | Safety Shields | U.S. | November 2, 2021 | Issued | November 19, 2024 |
| 63/274,920 | Safety Glasses | U.S. | November 2, 2021 | Non-Provisional Application filed on October 21, 2022; U.S. App. No. 18/048,715 | n/a |
| 207956 | Safety Smartglasses | Canada | November 17, 2021 | Issued | May 23, 2023 |
| 207957 | Safety Shields | Canada | November 17, 2021 | Issued | May 30, 2023 |
| 2021307950576 | Safety Smartglasses | China | December 2, 2021 | Issued | March 26, 2024 |
| ZL 2021307955902 | Safety Shields | China | December 2, 2021 | Issued | May 3, 2022 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **App/Patent Number** | **Title** | **Country** | **Filing Date** | **Status** | **Grant Date** |
| 18/048,715 | Safety Glasses | U.S. | October 21, 2022 | Pending<br>| n/a |
| 3180624 | Safety Glasses | Canada | November 1, 2022 | Pending | n/a |
| 202211367067X | Safety Glasses | China | November 2, 2022 | Pending / published | n/a |
| 42023078694.9 / 40089894 | Safety Glasses | Hong Kong | September 5, 2023 | Pending / published | n/a |
| D1,051,829 | Charging Cradle | U.S. | November 10, 2021 | Issued | November 19, 2024 |
| 63/297,056 | Charging Cradle for Smartglasses | U.S. | January 6, 2022 | Non-Provisional Application filed on December 29, 2022; U.S. App. No. 18/147,002 | n/a |
| 212589 | Charging Cradle | Canada | May 9, 2022 | Issued | February 27, 2024 |
| ZL 2022302715131 | Charging Cradle | China | May 10, 2022 | Issued | October 21, 2022 |
| 18/147,002 | Charging Cradle for Smartglasses | U.S. | December 27, 2022 | Pending | n/a |
| D1,020,849 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,019,750 | Smartglasses | U.S. | February 9, 2023 | Issued | March 26, 2024 |
| D1,020,850 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,019,746 | Smartglasses | U.S. | February 9, 2023 | Issued | March 26, 2024 |
| D1,020,851 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,024,177 | Smartglasses | U.S. | February 9, 2023 | Issued | April 23, 2024 |
| D1,020,863 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,020,852 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,020,853 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,020,854 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,020,855 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,020,856 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,020,857 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **App/Patent Number** | **Title** | **Country** | **Filing Date** | **Status** | **Grant Date** |
| D1,020,858 | Smartglasses | U.S. | February 9, 2023 | Issued | April 2, 2024 |
| D1,023,123 | Smartglasses Temples | U.S. | February 13, 2023 | Issued | April 16, 2024 |
| 18/189,547 | System, Apparatus, and Method For Using a Chatbot | U.S. | March 24, 2023 | Pending | n/a |
| 18/463,465 | Spring-loaded Hinges For Smartglasses | U.S. | September 8, 2023 | Pending | n/a |
| D1,112,452 | SAFETY EYEWEAR | U.S. | March 1, 2024 | Granted | February 10, 2026 |
| 18/605,092 | SMART EYEWEAR HAVING ACCESSIBLE TACTILE CONTROLS | U.S. | March 14, 2024 | Pending | n/a |
| PCT/US24/20715 | SYSTEM, APPARATUS, AND METHOD FOR USING A CHATBOT | PCT | March 20, 2024 | Pending | n/a |
| BR 302024004471-2 | SAFETY EYEWEAR | Brazil | August 28, 2024 | Pending | n/a |
| MX/f/2024/002575 / 74890 | SAFETY EYEWEAR | Mexico | August 28, 2024 | Pending | n/a |
| PCT/US25/15969 | Smart Eyewear Having Accessible Tactile Controls | PCT | February 14, 2025 | Pending | n/a |
| 19/273,052 | SMARTGLASSES DEVICE WITH INTEGRATED RF AND WIRELESS COMMUNICATION CAPABILITIES AND COMPATIBLE SOFTWARE APPLICATION INTERFACE | US | July 17, 2025 | Pending | n/a |
| 3286829 | SYSTEM, APPARATUS, AND METHOD FOR USING A CHATBOT | Canada | September 22, 2025 | Pending | n/a |
| EP24781569.9 | SYSTEM, APPARATUS, AND METHOD FOR USING A CHATBOT | EP | October 22, 2025 | Pending | n/a |
| 19/413,264 | APPARATUS, SYSTEMS AND METHODS FOR INTEGRATING GENERATIVE ARTIFICIAL INTELLIGENCE (AI) CHATBOTS IN HEARABLES | US | December 9, 2025 | Pending | n/a |

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***Registered Patent Applications Licensed from Ingeniospec, LLC***

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| | | |
|:---|:---|:---|
| **App/Patent Number** | **Title** | **Country** |
| 7192136 | Tethered Electrical Components for Eyeglasses | U.S. |
| 7255437 | Eyeglasses with Activity Monitoring | U.S. |
| 7380936 | Eyeglasses with a Clock or Other Electrical Component | U.S. |
| 7401918 | Eyeglasses with Activity Monitoring | U.S. |
| 7438410 | Tethered Electrical Components for Eyeglasses | U.S. |
| 7481531 | Eyeglasses with User Monitoring | U.S. |
| 7500746 | Eyewear with Radiation Detection System | U.S. |
| 7500747 | Eyeglasses with Electrical Components | U.S. |
| 7581833 | Eyewear Supporting After-Market Electrical Components | U.S. |
| 7621634 | Tethered Electrical Components for Eyeglasses | U.S. |
| 7677723 | Eyeglasses with a Heart Rate Monitor | U.S. |
| 7771046 | Eyewear with Monitoring Capability | U.S. |
| 7792552 | Eyeglasses for Wireless Communications | U.S. |
| 8109629 | Eyewear Supporting Electrical Components and Apparatus Therefor | U.S. |
| 8337013 | Eyeglasses with RFID Tags or with a Strap | U.S. |
| 8430507 | Eyewear with Touch-Sensitive Input Surface | U.S. |
| 8434863 | Eyeglasses with a Printed Circuit Board | U.S. |
| 8465151 | Eyewear with Multi-Part Temple for Supporting One or More Electrical Components | U.S. |
| 8500271 | Eyewear Supporting After-Market Electrical Components | U.S. |
| 8770742 | Eyewear with Radiation Detection System | U.S. |
| 8905542 | Eyewear Supporting Bone Conducting Speaker | U.S. |
| 9033493 | Eyewear Supporting Electrical Components and Apparatus Therefor | U.S. |
| 9488520 | Eyewear with Radiation Detection System | U.S. |
| 9547184 | Eyewear Supporting Embedded Electronic Components | U.S. |
| 9690121 | Eyewear Supporting One or More Electrical Components | U.S. |
| 10060790 | Eyewear with Radiation Detection System | U.S. |
| 10061144 | Eyewear Supporting Embedded Electronic Components | U.S. |
| 10310296 | Eyewear with Printed Circuit Board | U.S. |
| 10330956 | Eyewear Supporting Electrical Components and Apparatus Therefor | U.S. |
| 10345625 | Eyewear with Touch-Sensitive Input Surface | U.S. |
| 10359311 | Eyewear with Radiation Detection System | U.S. |
| 10539459 | Eyewear with Detection System | U.S. |
| 11086147 | Eyewear Supporting Electrical Components and Apparatus Therefor | U.S. |
| 11204512 | Eyewear Supporting Embedded and Tethered Electronic Components | U.S. |
| 11243416 | Eyewear Supporting Embedded Electronic Components | U.S. |
| 11326941 | Eyewear with Detection System | U.S. |

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---

| | | |
|:---|:---|:---|
| **App/Patent Number** | **Title** | **Country** |
| 11513371 | Eyewear with Printed Circuit Board Supporting Messages | U.S. |
| 11536988 | Eyewear Supporting Embedded Electronic Components for Audio Support | U.S. |
| 11630331 | Eyewear with Touch-Sensitive Input Surface | U.S. |
| 11644361 | Eyewear with Detection System | U.S. |
| 11644693 | Wearable Audio System Supporting Enhanced Hearing Support | U.S. |
| 11733549 | Eyewear Having Removable Temples That Support Electrical Components | U.S. |
| 11762224 | Eyewear Having Extended Endpieces to Support Electrical Components | U.S. |
| 11803069 | Eyewear with Connection Region | U.S. |
| 11829518 | Head-worn Device with Connection Region | U.S. |
| ZL 200510067143.5 | Radiation Detection System for Eyewear and Other Products | China |

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***Registered Trademarks and Applications:***

---

| | | | |
|:---|:---|:---|:---|
| **Trademark** | **Trademark Number** | **Status** | **Jurisdiction** |
| LUCYD | UK00003258030 | Registered | UK |
| Lucyd Lens | UK00003258093 | Registered | UK |
| Lucyd Loud | UK00003400531 | Registered | UK |
| Upgrade your eyewear | UK00003400579 | Registered | UK |
| GaaS | UK00003451728 | Registered | UK |
| Vyrb | UK00003477240 | Registered | UK |
| Lyte | UK00003526151 | Registered | UK |
| Upgrade your eyewear | 90407646 | Registered | US |
| LUCYD | 90407723 | Registered | US |
| Lyte | 90381051 | Registered | US |
| Lucyd Armor | 98758973 | Pending | US |
| LUCYD LOUD | 18845889 | Registered | EU |
| LUCYD | 18846419 | Registered | EU |
| LUCYD | UK00003886937 | Registered | UK |
| LUCYD | International Reg. No. 1738602 | Examination | Mexico |
| LUCYD | International Reg. No. 1738602 | Examination | Canada |
| LUCYD | International Reg. No. 1738602 | Registered | Japan |
| AERO | 99349186 | Pending | US |
| Lucyd Aero | 99349223 | Pending | US |

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**Human Capital**

Our employees' knowledge and personality attributes enable our company to achieve its goals, develop our business, and remain innovative. As of December 31, 2025, we had 13 full time employees, spread over business development, marketing, finance, sales, app design, support, and frame design. Our employees are supported by numerous consultants, contractors, independent sales representatives, and third-party service providers. Overall, we believe that our relationship with our employees is good. None of our employees are represented by a labor union.

**Other Information**

Our official Internet website is www.lucyd.co, through which we make available free of charge our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission (the "SEC"). Alternatively, you may also access our reports at the SEC's website at www.sec.gov.

**Item 1A. <u>Risk Factors</u>.**

Our business involves a high degree of risk and uncertainty, including the following.

***Summary Risk Factors***

The risk factors described below are a summary of the principal risk factors associated with an investment in us. These are not the only risks we face. You should carefully consider these risk factors, together with the risk factors set forth in detail below and the other reports and documents filed by us with the SEC.

**Risks Related to our Business, Strategy and Industry** 

● Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our securities.

● The optical industry is highly competitive, and if we do not compete successfully, our business may be adversely impacted.

● We have a history of losses, and we may be unable to achieve or sustain profitability.

● We have limited experience in scaling a smart eyewear business. If we are unable to manage our expected growth effectively, our brand and financial performance may suffer.

● We currently derive all of our revenue from sales of our glasses. A decline in sales of our eyewear would negatively affect our business, financial condition, and results of operation.

● Increases in component costs, shipping costs, long lead times, supply shortages, and supply changes could disrupt our supply chain; factors such as wage rate increases and inflation can have a material adverse effect on our business, financial condition, and operating results.

● We face significant risks due to our dependency on foreign supply and manufacturing chains, geopolitical and economic changes, and changes in public perception about internationally sourced and manufactured products.

● We rely on a limited number of contract manufacturers and logistics partners for our products. A loss of any of these partners could negatively affect our business.

● If we fail to cost-effectively retain our existing customers or to acquire new customers, our business, financial condition, and results of operations would be harmed.

● If we fail to successfully launch or after we launch receive sufficient revenue from our cobranded collections with Nautica, Eddie Bauer, and Reebok, our business, financial condition, and results of operations would be harmed.

● Eyeglasses are regulated as medical devices by the FDA, and our failure, or the failure of any third-party manufacturer or optical laboratory, to obtain and maintain the necessary marketing authorizations for our products could have a material adverse effect on our business.

● Our profitability and cash flows may be negatively affected if we are not successful in managing our supply chain and customer demands for product deliveries.

● If we fail to maintain and enhance our brand, our ability to engage or expand our base of customers will be impaired, and our business, financial condition, and results of operations may suffer.

● We rely heavily on our information technology systems, as well as those of our third-party vendors, business partners, and service providers, for our business to effectively operate and to safeguard confidential information; any significant failure, inadequacy, interruption, or data security incident could adversely affect our business, financial condition, and operations.

● Our multichannel channel business faces distinct risks, and our failure to successfully manage it could have a negative impact on our profitability.

● If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our solutions may become less competitive.

● We depend on highly skilled personnel to grow and operate our business, and if we are unable to hire, retain, and motivate our personnel, we may not be able to grow effectively.

● A decline in sales of our eyewear would negatively affect our business, financial condition, and results of operations.

● We could be adversely affected by product liability, product recall or personal injury issues.

**Risks Related to our Intellectual Property**

● We license some of our technology from Lucyd Ltd. and from a third party. Our inability to maintain these licenses could materially affect our business, financial condition, and operating results.

● Failure to adequately maintain and protect our intellectual property and proprietary rights could harm our brand, devalue our proprietary content, and adversely affect our ability to compete effectively.

● We may incur costs to defend against, face liability or for being vulnerable to intellectual property infringement claims brought against us by others.

**Risks Related to Our Dependence on Third Parties**

● We face risks associated with suppliers from whom our products are sourced and are dependent on a limited number of suppliers.

● Our projects could be hindered due to our dependence on third parties to complete many of our contracts.

● We depend on search engines, social media platforms, digital application stores, content-based online advertising, and other online sources to attract consumers to and promote our website and our mobile applications, which may be affected by third-party interference beyond our control; and, as we grow, the cost of acquiring new customers may continue to rise and become uneconomical.

***Risks Relating to Our Business, Strategy and Industry***

***Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our securities.***

If we fail to satisfy the continued listing requirements of Nasdaq such as the corporate governance requirements or the minimum stock price requirement, Nasdaq may take steps to delist our securities. Such a delisting would likely have a negative effect on the price of our securities and would impair your ability to sell or purchase our securities when you wish to do so.

***The optical industry is highly competitive, and if we do not compete successfully, our business may be adversely impacted.***

We compete directly with large, integrated optical players that sell both at the retail level and online such as Ray-Ban<sup>®</sup> that have multiple products, well-regarded brands and retail banners, as well as established and well-regarded consumer electronics companies. This diversified and capable competition takes place both in physical retail locations as well as online, for smart glasses. To compete effectively, we must continue to create, invest in, or acquire, advanced technology, incorporate this technology into our products, obtain regulatory approvals in a timely manner where required, and process and successfully market our products.

Most if not all of our competitors have significantly greater financial and operational resources, longer operating histories, greater brand recognition, and broader geographic presence than we do. As a result, they may be able to outmaneuver us in the marketplace and offer capable products at more competitive prices, which may adversely affect our business. They also are able to spend far more than we do for advertising. We may be at a substantial disadvantage to larger competitors with greater economies of scale. If our costs are greater compared to those of our competitors, the pricing of our products may not be as attractive, thus depressing sales or the profitability of our products and services. Our competitors may expand into markets in which we currently operate, and we remain vulnerable to the marketing power and high level of customer recognition of these larger competitors and to the risk that these competitors or others could attract our customer base. Some of our competitors are vertically integrated and are also engaged in the manufacture and distribution of glasses and many of our competitors operate under a variety of brands and price points. These competitors can advantageously leverage this structure to better compete and access the market with significant market power could make it more difficult for us to compete. We purchase some of our product components from suppliers who may be affiliates of one or more competitors or may compete with ourselves in the future.

We may not continue to be able to successfully compete against existing or future competitors. Our inability to respond effectively to competitive pressures, improved performance by our competitors, and changes in the retail and e-commerce markets could result in lost market share and have a material adverse effect on our business, financial condition, and results of operations.

***We have a history of losses, and we may be unable to achieve or sustain profitability.***

We have had net losses since inception, had a net loss of $7.5 million for the year ended December 31, 2025, and had a net loss of $7.8 million for the year ended December 31, 2024. As of December 31, 2025, we had an accumulated deficit of $32.3 million. Because we have a limited operating history it is difficult for us to predict our future operating results. We will need to generate and sustain increased revenue and manage our costs to achieve profitability. Even if we do, we may not be able to increase our profitability or become profitable.

Our ability to generate profit depends on our ability to strengthen and expand our brand, continue to provide exciting products customers love, expand sales and improve margins. We are aiming to achieve profitability in the next two years, and between now and then we plan to efficiently invest in the business to bring it to scale by:

● enhancing our products with new designs, functionality, and technology to widen our appeal and delight customers in a wide variety of demographic groups; and,

● investing in our product development, supply chain, and sales and marketing capabilities to leverage external resources as efficiently as possible to ensure that smart glasses are affordable for the majority of the world's population who need them.

However, we may not succeed in any of the foregoing, and the planned investments may not result in profitability.

***We have limited experience in the smart eyewear space. If we are unable to manage our growth effectively, our brand and our financial performance may suffer, which may have a material adverse effect on our business, financial condition, and operating results.***

The smart eyewear industry is newly emerging. Whilst our directors have more than 80 years of combined experience in the eyewear industry, the smart eyewear market presents numerous new challenges. To effectively manage these challenges and continue to grow, we must continue to invest in the design of new frames and technology, expand our product line and effectively integrate several new technologies into eyewear. Achieving this could strain our existing resources, and we could experience ongoing operating difficulties in managing our business and bringing it to scale. Failure to scale could harm our competitive position and future success, including our ability to retain and recruit personnel and to effectively execute our corporate objectives.

***We currently derive principally all of our revenue from sales of our glasses and lenses. A decline in sales of our eyewear would negatively affect our business, financial condition, and results of operations.***

We derive substantially all of our revenue from the sale of smartglasses and custom lenses. Our glasses are sold in highly competitive markets with limited barriers to entry, although in our view the barriers to building commercially viable smartglasses are significant, due to the complexity of materials and assembly involved. Introduction by competitors of comparable products at lower price points, a maturing product lifecycle, a decline in consumer spending, or other factors could result in a material decline in our revenue. Because we derive most of our revenue from the sale of our glasses, any material decline in sales of our glasses would have a material adverse impact on our business, financial condition, and operating results.

***Our ability to generate net revenue will depend upon many factors, some of which we may have no control over*.**

The industry for stylish, affordable smart glasses, is rapidly evolving and may not develop as we expect. Even if our net revenue continues to increase, our net revenue growth rates may decline in the future as a result of a variety of factors, including macroeconomic factors, increased competition, and the maturation of our business. As a result, you should not rely on our net revenue growth rate for any prior period as an indication of our future performance. Overall growth of our net revenue will depend on a number of factors, including our ability to:

● Increase exogenous distribution of our products in optical stores, big box retailers, specialty retailers, and through multiple e-commerce channels;

● Price our products so that we are able to attract new customers and expand our relationships with existing customers;

● Accurately forecast our net revenue and plan our operating expenses accordingly;

● Successfully compete with other companies that are currently in, or may in the future enter, the smart eyewear industry or the markets in which we compete, and respond to developments from these competitors such as pricing changes and the introduction of new products and features, noting that most, if not all, of our competitors have stronger balance sheets and larger staffs to devote to their products;

● Comply with existing and new laws and regulations applicable to our business;

● Develop new product offerings, with services and features, including in response to new trends, competitive dynamics, or the needs of customers;

● Successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our business;

● Avoid interruptions or disruptions in our supply chain from natural disasters and political uncertainty;

● Provide customers with a high-quality experience and customer service and support that meets their needs;

● Hire, integrate, and retain talented sales, customer experience, product design, and development and other personnel;

● Effectively manage growth of our business, personnel, and operations;

● Effectively manage our costs related to our business and operations; and,

● Enhance our reputation and the value of the Lucyd brand.

Because we have a limited history operating our business, it is difficult to evaluate our current business and future prospects, including our ability to plan for and model future growth. Our limited operating experience combined with the rapidly evolving nature of the market in which we sell our products and services, substantial uncertainty concerning how these markets may develop, and other economic factors beyond our control, reduces our ability to accurately forecast quarterly or annual revenue. Failure to manage our future growth effectively could have an adverse effect on our business, financial condition, and operating results.

We also expect to continue to expend substantial financial and other resources to grow our business, and we may fail to allocate our resources in a manner that results in increased net revenue growth in our business. Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays, and other unknown factors that may result in losses in future periods. If our net revenue growth does not meet our expectations in future periods, our business, financial condition, and results of operations may be harmed, and we may not achieve or sustain profitability in the future.

***Increases in component costs, shipping costs, long lead times, supply shortages, and supply changes could disrupt our supply chain and factors such as wage rate increases and inflation can have a material adverse effect on our business, financial condition, and operating results.***

Meeting customer demand partially depends on our ability to obtain timely and adequate delivery of components for our products and services. All of the components that go into the manufacturing of our products and services are sourced from a limited number of third-party suppliers predominantly in the U.S. and China. Our contract manufacturers purchase and provide many of these components on our behalf, including sun lenses, demo lenses, hinge and chip sets and other electronic components, and we do not have long-term arrangements with most of our component suppliers. We are therefore subject to the risk of shortages and long lead times in the supply of these components and the risk that our suppliers discontinue or modify components used in our products. In addition, the lead times associated with certain components are lengthy and may preclude rapid changes in design, quantities, and delivery schedules. Our ability to meet temporary unforeseen increases in demand has been, and may in the future be, impacted by our reliance on the availability of components from these suppliers. We may in the future experience component shortages, and the predictability of the availability of these components may be limited in certain situations. In the event of a component shortage or supply interruption from suppliers of these components, we may experience supply chain delays. Developing alternate sources of supply for these components may be time-consuming, difficult, and costly, and we may not be able to source these components on terms that are acceptable to us, or at all, which may undermine our ability to fill our orders in a timely manner. Any interruption or delay in the supply of any of these parts or components, or the inability to obtain these parts or components from alternate sources at acceptable prices and within a reasonable amount of time, would harm our ability to timely ship our products to our customers.

In addition, substantially all of our components are shipped directly from our contract manufacturers to our warehouse facility in Miami or to a third-party optical laboratory in the United States, where lenses are cut and mounted into frames. These laboratories process most of the glasses ordered by our customers. Once processed at the laboratories, the finished products are then sorted and shipped using third-party carriers to our customers. Our eyeglasses are also shipped directly to our third-party distribution center in the United States for shipment directly to our customers and resellers. We depend in large part on the orderly operation of this distribution process, which depends, in turn, on adherence to shipping schedules and effective management of our optical laboratory network and third-party distribution center. Increases in transportation costs (including increases in fuel costs), issues with overseas shipments, supplier-side delays, as well as reductions in the transportation capacity of carriers, labor strikes or shortages in the transportation industry, disruptions to the national and international transportation infrastructure, and unexpected delivery interruptions or delays also have the potential to derail our distribution process.

Moreover, volatile economic conditions may make it more likely that our suppliers and logistics providers may be unable to timely deliver supplies, or at all, and there is no guarantee that we will be able to timely locate alternative suppliers of comparable quality at an acceptable price. In addition, international supply chains may be impacted by events outside of our control, and limit our ability to procure timely delivery of supplies or finished goods and services. We face additional risks related to the manufacturing facility we contract with in China and suppliers in China, including port of entry risks such as longshoremen strikes, import restrictions, foreign government regulations, trade restrictions, customs, and duties.

We source components from suppliers located in China. Effective September 2019, the U.S. government implemented a 15% tariff on specified products imported into the U.S. from China and effective February 2020, the 15% tariff was reduced to 7.5%. In June 2020, the U.S. government granted a temporary exclusion for plastic and metal frames with a retroactive effective date of September 1, 2019, and such exclusion expired in September 2020. Beginning in April of 2025, the U.S. government announced new or increased tariffs on goods imported from various countries to the U.S.; as of April 2025, smart eyewear products that entered the U.S. from China had a total effective duty of 27.5%. In February 2026, the Supreme Court of the U.S. struck down a portion of the tariffs that were announced in April 2025. Currently, there remains to be uncertainty as to whether there will be any other changes to U.S. government trade policy. Although management took actions during 2025 which were largely successful in mitigating the impacts of the tariffs in effect at the time, and continues to monitor the evolving international trade and tariff situation and has developed contingency sourcing options should conditions materially change, we cannot predict with certainty the impact that tariffs may have on our business and financial results in the future, and cannot provide any assurance that any actions we may take in the future to mitigate the impacts of tariffs will be successful.

The inability to fulfill, or any delays in processing, customer orders through third party optical laboratory optical laboratory could result in the loss of customers, issuances of refunds or credits, and may also adversely affect our income and reputation. The success of our retail and e-commerce sales depends on the timely receipt of products by our customers and any repeated, intermittent or long-term disruption in, or failures of, the operations of our distribution center and/or optical laboratories could result in lower sales and profitability, a loss of loyalty to our brands, and excess inventory.

Furthermore, increases in compensation, wage pressure, and other expenses for our employees, may adversely affect our profitability. Increases in minimum wages and other wage and hour regulations can exacerbate this risk. These cost increases may be the result of inflationary pressures which could further reduce our sales or profitability. Increases in other operating costs, may increase our cost of products sold or selling, general, and administrative expenses. Our competitive price model and pricing pressures in the optical retail industry may inhibit our ability to reflect these increased costs in the prices of our products, in which case such increased costs could have a material adverse effect on our business, financial condition, and results of operations especially since we believe that one of our competitive advantages is how the price point for our glasses is generally lower than that of certain of our competitors.

***We face significant risks due to our dependency on foreign supply and manufacturing chains, geopolitical and economic changes, and changes in public perception about internationally sourced and manufactured products.***

Since our component materials are sourced in China, our production may face additional risks such as, but not limited to: increased shipping costs, imposition of additional import or trade restrictions, increased custom duties and tariffs, legal or economic restrictions on our supplier and manufacturer's ability to meet our needs, unforeseen delays in customs clearance of goods, transportation delays, issues with ports of entry, new and adverse foreign government regulations, political instability, war, natural disasters, and overall economic uncertainty. Public opinion about internationally sourced and manufactured products could be changed by negative press, which could have an impact on our customers' confidence and satisfaction and could also have a negative impact on our public image and brand perception.

***If we fail to cost-effectively retain our existing customers or to acquire new customers, our business, financial condition, and results of operations would be harmed.***

The growth of our business is dependent upon our ability to continue to grow by cost-effectively retaining our existing customers and adding new customers. To a high degree, we rely on word of mouth to increase revenue. We also rely on the use of influencers which are expensive and may not provide the anticipated return on investment. Although we believe that many customers originate from word-of-mouth and paid and non-paid referrals, we expect to continue to expend resources and run marketing campaigns to acquire additional customers, all of which could impact our overall profitability. If we are not able to continue to expand our customer base, or fail to retain customers, our net revenue will grow slower than expected or decline.

The growth of our e-commerce channel is critical to our continued customer retention and growth. Historically, consumers have been slower to adopt online shopping for glasses than e-commerce offerings in other industries such as consumer electronics and apparel. Improving upon the consumer in-store experience through an online platform is difficult due to broad consumer demands on selection, quality, convenience, and affordability. Changing traditional optical retail habits is difficult, and if consumers and retailers do not embrace smart eyewear as we expect, our business and operations could be harmed.

Our ability to attract new customers and increase net revenue from existing customers also depends in large part on our ability to enhance and improve our existing products and to introduce new products and services, in each case, in a timely manner. We also must be able to identify and originate styles and trends as well as to anticipate and react to changing consumer demands in a timely manner. The success of new and/or enhanced products and services depends on several factors, including their timely introduction and completion, sufficient demand, and cost-effectiveness. New products that we develop may not be well received and could negatively impact our financial performance.

Our number of customers may decline materially or fluctuate as a result of many factors, including, among other things:

● the quality, consumer appeal, price, and reliability of products and services offered by us;

● intense competition in the optical retail industry by better financed participants;

● negative publicity related to our brand or brand influencers; and

● customer dissatisfaction with changes we make to our products and services.

In addition, if we are unable to provide high-quality support to customers or help resolve issues in a timely and acceptable manner, our ability to attract new customers and retain customers could be adversely affected. If our number of customers declines or fluctuates for any of these reasons among others, our business would suffer.

***Our profitability and cash flows may be negatively affected if we are not successful in managing our inventory balances and inventory shrinkage.***

Efficient inventory management is a key component of our business success and profitability. To be successful, we must maintain sufficient inventory levels to meet our customers' demands without allowing those levels to increase to such an extent that the costs to hold the goods unduly impact our financial results. We must balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of inventory obsolescence because of changing customer requirements, fluctuating commodity prices, changes to our products, product transfers, or the life cycle of our products. If we fail to adequately forecast demand for any product, or fail to determine the optimal product mix for production purposes, we may face production capacity issues in processing sufficient quantities of a given product. If our buying and distribution decisions do not accurately predict customer trends or spending levels in general or if we inappropriately price products, we may have to record potential write-downs relating to the value of obsolete or excess inventory. Conversely, if we underestimate future demand for a particular product or do not respond quickly enough to replenish our best performing products, we may have a shortfall in inventory of such products, likely leading to unfulfilled orders, reduced net revenue, and customer dissatisfaction. In addition, because we source components from suppliers located in China, our inventory management may be impacted by enactment or further escalation of tariffs, import restrictions, foreign government regulations, trade restrictions, customs, and duties.

Maintaining adequate inventory requires significant attention and monitoring of market trends, local markets, developments with suppliers, and our distribution network, and it is not certain that we will be effective in our inventory management.

***If we fail to maintain and enhance our brand, our ability to engage or expand our base of customers will be impaired, and our business, financial condition, and results of operations may suffer.***

Maintaining and enhancing our appeal and reputation as a stylish, innovative, and coveted brand is critical to attracting and expanding our relationships with customers. The successful promotion of our brand and the market's awareness of our products and services will depend on a number of factors, including our marketing efforts, ability to continue to develop our products and services, and ability to successfully differentiate our offerings from competitive offerings. We expect to invest substantial resources to promote and maintain our brand, but there is no guarantee that our brand development strategies will enhance the recognition of our brand or lead to increased sales. The strength of our brand will depend largely on our ability to provide stylish, technologically enhanced products and quality services at competitive prices. Brand promotion activities may not yield increased net revenue, and even if they do, the increased net revenue may not offset the expenses we incur in promoting and maintaining our brand and reputation. In order to protect our brand, we also plan to expend substantial resources to register and defend our trademarks and to prevent others from using the same or substantially similar marks. Despite these efforts, we may not always be successful in protecting our trademarks. Our trademarks may be diluted, and we may suffer harm to our reputation, or other harm to our brand. If our efforts to cost-effectively promote and maintain our brand are not successful, our results of operations and our ability to attract and engage customers, partners, and employees may be adversely affected.

Unfavorable publicity regarding our products, customer service, or privacy and security practices could also harm our reputation and diminish confidence in, and the use of, our products and services. In addition, negative publicity related to key brands that we have partnered with may damage our reputation, even if the publicity is not directly related to us. If we fail to maintain, protect, and enhance our brand successfully or to maintain loyalty among customers, or if we incur substantial expenses in unsuccessful attempts to maintain, protect, and enhance our brand, we may fail to attract or increase the engagement of customers, and our business, financial condition, and results of operations may suffer.

***We rely heavily on our information technology systems, as well as those of our third-party vendors, business partners, and service providers, for our business to effectively operate and to safeguard confidential information; any significant failure, inadequacy, interruption, or data security incident could adversely affect our business, financial condition, and operations.***

We rely heavily on our in-house information technology and enterprise resource planning systems for many functions across our operations, including managing our supply chain and inventory, processing customer transactions in our stores, allocating lens processing jobs to the appropriate laboratories, our financial accounting and reporting, compensating our employees, and operating our website, mobile applications and in-store systems. Our ability to effectively manage our business and coordinate the manufacturing, sourcing, distribution, and sale of our products depends significantly on the reliability and capacity of these systems. We are critically dependent on the integrity, security, and consistent operations of these systems, which are highly reliant on the coordination of our internal business and engineering teams. We also collect, process, and store sensitive and confidential information, including our proprietary business information and that of our customers, employees, suppliers, and business partners. The secure processing, maintenance, and transmission of this information is critical to our operations.

Our systems may be subject to damage or interruption from power outages or damages, telecommunications problems, data corruption, software errors, network failures, acts of war or terrorist attacks, fire, flood, global pandemics, and natural disasters; our existing safety systems, data backup, access protection, user management, and information technology emergency planning may not be sufficient to prevent data loss or long-term network outages. In addition, we may have to upgrade our existing information technology systems or choose to incorporate new technology systems from time to time in order for such systems to support the increasing needs of our expanding business. Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems could disrupt or reduce the efficiency of our operations.

Our systems and those of our third-party service providers and business partners may be vulnerable to security incidents, attacks by hackers, acts of vandalism, computer viruses, misplaced or lost data, human errors or other similar events. If unauthorized parties gain access to our networks or databases, or those of our third-party service providers or business partners, they may be able to steal, publish, delete, use inappropriately, or modify our private and sensitive third-party information including personal health information, credit card information, and personal identification information. In addition, employees may intentionally or inadvertently cause data or security incidents that result in unauthorized release of personal or confidential information. Because the techniques used to circumvent security systems can be highly sophisticated, change frequently, are often not recognized until launched against a target, and may originate from less regulated and remote areas around the world, we may be unable to proactively address all possible techniques or implement adequate preventive measures for all situations.

Security incidents compromising the confidentiality, integrity, and availability of this information and our systems could result from cyber-attacks, computer malware, viruses, social engineering (including spear phishing and ransomware attacks), credential stuffing, supply chain attacks, efforts by individuals or groups of hackers and sophisticated organizations, including state-sponsored organizations, errors or malfeasance of our personnel, and security vulnerabilities in the software or systems on which we rely. We anticipate that these threats will continue to grow in scope and complexity over time and such incidents have occurred in the past, and may occur in the future, resulting in unauthorized, unlawful, or inappropriate access to, inability to access, disclosure of, or loss of the sensitive, proprietary and confidential information that we handle.

We also rely on a number of third-party service providers to operate our critical business systems, provide us with software, and process confidential and personal information, such as the payment processors that process customer credit card payments, which expose us to security risks outside of our direct control and our ability to monitor these third-party service providers' data security is limited. These service providers could experience a security incident that compromises the confidentiality, integrity, or availability of the systems they operate for us or the information they process on our behalf. Cybercrime and hacking techniques are constantly evolving, and we or our third-party service providers may be unable to anticipate attempted security breaches, react in a timely manner, or implement adequate preventative measures, particularly given the increasing use of hacking techniques designed to circumvent controls, avoid detection, and remove or obfuscate forensic artifacts. While we have taken measures designed to protect the security of the confidential and personal information under our control, we cannot assure you that any security measures that we or our third-party service providers have implemented will be effective against current or future security threats.

A security breach may also cause us to breach our contractual obligations. Our agreements with certain customers, business partners, or other stakeholders may require us to use industry-standard or reasonable measures to safeguard personal information. We also may be subject to laws that require us to use industry-standard or reasonable security measures to safeguard personal information. A security incident could lead to claims by our customers, business partners, or other relevant stakeholders that we have failed to comply with such legal or contractual obligations. In addition, our inability to comply with data privacy obligations in our contracts or our inability to flow down such obligations to our vendors, collaborators, other contractors, or consultants may cause us to breach our contracts. As a result, we could be subject to legal action, or our customers or business partners could end their relationships with us. There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages.

In addition, any such access, disclosure or other loss or unauthorized use of information or data, whether actual or perceived, could result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state and foreign data protection and privacy regulations, violations of which could result in significant penalties and fines in the EU and United States. In addition, although we seek to detect and investigate all data security incidents, security breaches, and other incidents of unauthorized access to our information technology systems and data can be difficult to detect and any delay in identifying such breaches or incidents may lead to increased harm and legal exposure of the type described above.

The cost of investigating, mitigating, and responding to potential security breaches and complying with applicable breach notification obligations to individuals, regulators, partners, and others can be significant. Further, defending a suit, regardless of its merit, could be costly, divert management attention, and harm our reputation. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our reputation, business, financial condition, revenues, results of operations, or cash flows. Any material disruption or slowdown of our systems or those of our third-party service providers and business partners, could have a material adverse effect on our business, financial condition, and results of operations. Our risks are likely to increase as we continue to expand, grow our customer base, and process, store, and transmit increasing amounts of proprietary and sensitive data.

***Our e-commerce and multichannel channel business faces distinct risks, and our failure to successfully manage it could have a negative impact on our profitability.***

As an e-commerce and multichannel retailer, we encounter risks and difficulties frequently experienced by businesses with significant online and in-store sales. The successful operation of our business as well as our ability to provide a positive shopping experience that will generate orders and drive subsequent visits depends on efficient and uninterrupted operation of our e-commerce order-taking and fulfillment operations. If we are unable to allow real-time and accurate visibility to product availability when customers are ready to purchase, quickly and efficiently fulfill our customers' orders using the fulfillment and payment methods they demand, provide a convenient and consistent experience for our customers regardless of the ultimate sales channel, or effectively manage our online sales, our ability to compete and our results of operations could be adversely affected. Risks associated with our e-commerce and multichannel business include:

● uncertainties associated with our websites, mobile applications and in-store virtual try-on kiosks including changes in required technology interfaces, website downtime and other technical failures, costs and technical issues as we upgrade our systems software, inadequate system capacity, computer viruses, human error, security breaches, legal claims related to our systems operations, and fulfillment;

● our partnership with select third-party apps, through which we sell a portion of our products, are subject to changes in their technology interfaces, website downtime and other technical failures, costs, and issues;

● disruptions in internet service or power outages;

● reliance on third parties for computer hardware and software, as well as delivery of merchandise to our customers;

● rapid technology changes;

● credit or debit card fraud and other payment processing related issues;

● cybersecurity and consumer privacy; and

● natural disasters or adverse weather conditions.

In addition, we must keep up to date with competitive technology trends, including the use of new or improved technology, creative user interfaces, virtual and augmented reality, and other e-commerce marketing tools such as paid search and mobile application, among others, which may increase our costs and which may not increase sales or attract customers. Our competitors, most of whom have significantly greater resources than we do, may also be able to benefit from changes in e-commerce technologies, which could harm our competitive position.

***If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our solutions may become less competitive.***

Our success depends on our customers' willingness to adopt and use our products, as well as our ability to adapt and enhance our products. To attract new customers and increase revenue from existing customers, we need to continue to enhance and improve our products and to meet customer needs at prices that customers are willing to pay. Such efforts will require adding new features, expanding related applications and responding to technological advancements, which will increase our research and development costs. If we are unable to develop solutions that address customers' needs or enhance and improve our platform in a timely manner, we may not be able to increase or maintain market acceptance of our products. Further, we may make changes to our products that customers do not find useful. We may also face unexpected problems or challenges in connection with new applications or feature introductions.

Moreover, many competitors expend a considerably greater amount of funds on their research and development programs, and those that do not may be acquired by larger companies that would allocate greater resources to competitors' research and development programs. If we fail to compete effectively with the research and development programs of competitors, our business could be harmed. Our ability to grow is also subject to the risk of future disruptive technologies. If new technologies emerge that are able to deliver smart eyewear products at lower prices, more efficiently, more conveniently or more securely, such technologies could adversely affect our ability to compete.

***We depend on highly skilled personnel to grow and operate our business, and if we are unable to hire, retain, and motivate our personnel, we may not be able to grow effectively.***

Our success and future growth depend largely upon the continued services of our management team, including our Chief Executive Officer Harrison Gross. From time to time, there may be changes in our executive management team resulting from the hiring or departure of our executives. Our executive officers are employed on an at-will basis, which means they may terminate their employment with us at any time. The loss of one or more of our executive officers, or the failure by our executive team to effectively work with our employees and lead our company, could harm our business. We do not maintain key person life insurance with respect to any member of management or other employee.

In addition, our future success will depend, in part, upon our continued ability to identify and hire skilled employees with the skills and technical knowledge that we require, including software design and programming, eyewear design, marketing, merchandising, operations, and other key management skills and knowledge. Such efforts will require significant time, expense, and attention as there is intense competition for such individuals.

***Certain technological advances, greater availability of, or increased consumer preferences for, vision correction alternatives to prescription eyeglasses or contact lenses, and future drug development for the correction of vision-related problems may reduce the demand for our products and adversely impact our business and profitability.***

Technological advances in vision care, including the development of new or improved products, as well as future drug development for the correction of vision-related problems, could significantly change how vision care may be conducted and make our existing products less attractive or even obsolete. The greater availability and acceptance, or reductions in the cost, of vision correction alternatives to prescription eyeglasses and contact lenses, such as corneal refractive surgery procedures, including radial keratotomy, photorefractive keratotomy, or PRK, and LASIK, may reduce the demand for our products, lower our sales, and thereby adversely impact our business and profitability.

***We could be adversely affected by product liability, product recall, or personal injury issues.***

We could be adversely impacted by the supply of defective products, including the infiltration of counterfeit products into the supply chain or product mishandling issues. Product liability or personal injury claims may be asserted against us with respect to any of the products we sell or services we provide.

If the products that we sell, including those that we process, package, or label, are defective or otherwise result in product liability or personal injury claims against us, our business could be adversely affected and we could be subject to adverse regulatory action. If our products or services do not meet applicable governmental safety standards or our customers' expectations regarding quality or safety, we could experience lost sales and increased costs, be exposed to legal and reputational risk, and face fines or penalties which could materially adversely affect our financial results.

***Refunds, cancellations, and warranty claims could harm our business.***

We allow our customers to return our products, subject to our refund policy, which allows any customer to return our 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, 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). At the time of sale, we establish a reserve for returns, based on historical experience and expected future returns, which is recorded as a reduction of sales. Historically, we have experienced higher return rates on glasses with prescription lenses compared to glasses with non-prescription lenses, due to instances of improperly cut prescription lenses. If we experience a substantial increase in refunds, our cancellation reserve levels might not be sufficient and our business, financial condition, and results of operations could be harmed. However, updates to the Company's prescription lens return policy in January 2024, as mentioned above, is expected to support a reduction in excessive lens costs.

***We expect a number of factors to cause our results of operations and operating cash flows to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.***

Our results of operations could vary significantly from quarter to quarter and year to year because of a variety of factors, many of which are outside of our control. As a result, comparing our results of operations on a period-to-period basis may not be meaningful. In addition to other risk factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include:

● our ability to accurately forecast and achieve net revenues and appropriately plan our expenses;

● changes to financial accounting standards and the interpretation of those standards, which may affect the way we recognize and report our financial results;

● the effectiveness of our internal controls;

● the early-stage nature of our business and the need to scale our operations; and

● our ability to introduce our new cobranded products and product upgrades.

The impact of one or more of the foregoing and other factors may cause our results of operations to vary significantly. As such, quarter-to-quarter and year-over-year comparisons of our results of operations may not be meaningful and should not be relied upon as an indication of future performance.

***We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all.***

Since our inception, we have primarily funded our operations through net proceeds generated from the offering and sale of shares of our common stock and warrants to investors. We cannot be certain when, or if, our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments to support the development of our products and services and will require additional funds for such development. We may need additional funding for marketing expenses and to develop and expand sales resources, develop new products and improve existing products with new features or enhance our products and services with new technology, improve our operating infrastructure, or acquire complementary businesses and technologies. Accordingly, we might need or may want to engage in future equity or debt financings to secure additional funds. Additional financing may not be available on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, financial condition, and results of operations. If we are unable to obtain adequate financing or financing on terms satisfactory to us, our ability to develop our products and services, support our business growth, and respond to business challenges could be significantly impaired, and our business may be adversely affected.

If we incur additional debt, the debt holders would have rights senior to holders of common stock to make claims on our assets, and the terms of any additional debt could include restrictive covenants that restrict our operations, including our ability to pay dividends on our common stock. Furthermore, if we issue additional equity securities, stockholders will experience dilution, and the new equity securities could have rights senior to those of our common stock. Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities. As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our common stock and diluting their interests.

The occurrence of any of these foregoing risks could adversely affect our business, financial condition, and results of operations and expose us to unknown risks or liabilities.

***If we receive insufficient revenue from our cobranded collections with Nautica, Eddie Bauer, and Reebok, our business, financial condition, and results of operations would be harmed.***

We launched our cobranded collections with Nautica and Eddie Bauer in the first and second quarters of 2024, respectively, and launched our Reebok cobranded collection in the second quarter of 2025. We believe these brand partnerships will grow our company due to the global renown of these partners, and we believe that these brand partnerships will play a significant role in our future revenue growth by offering a more diversified product portfolio that speaks to consumers from different demographics (for example, Nautica generally appeals to a more fashion-forward customer, and Eddie Bauer generally appeals to an older demographic than our other lines).

However, we may not be able to grow as currently anticipated and may be required to shift our current business plans. Further, following the launch our cobranded collections with Nautica, Eddie Bauer, and Reebok, there is no guarantee that we will receive sufficient revenue to pay the licensing fees that would be owed to Nautica, Eddie Bauer, and Reebok. Specifically, the aggregate future minimum payments due under the license agreements related to these brands is $13.57 million over the next eight years, although we have the option to cancel the agreements during the fifth year of the respective agreements. If we are not able to successfully market and sell our cobranded products, we will not receive sufficient revenue to pay the licensing fees and would need to use the proceeds from our other products to pay the fees. There can be no assurance that we will be able to profitably manage these cobranded collections, or that they will achieve anticipated revenues and earnings.

***Eyeglasses are regulated as medical devices by the FDA, and our failure, or the failure of any third-party manufacturer or optical laboratory, to obtain and maintain the necessary agency authorizations for our products could have a material adverse effect on our business.***

We are an FDA registered eyewear importer, and we also engage in certain manufacturing, packaging, shipping and labeling activities that subject us and our overseas manufacturing partners to oversight by the FDA under the FDCA and its implementing regulations. The FDA regulates, among other things, with respect to medical devices: design, development and manufacturing, testing, labeling, content, and language of instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and distribution; premarket clearance, classification and approval; recordkeeping procedures; advertising and promotion; recalls and field safety corrective actions; post market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; post-market approval studies; and product import and export. The regulations to which we are subject are simpler than most medical products due to the relatively low risk classification of eyewear—regularly, only our lenses are reviewed for FDA clearance. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs, or lower than anticipated sales. The FDA enforces its regulatory requirements through, among other means, periodic unannounced inspections. Failure to comply with applicable regulations could jeopardize our or our contract manufacturers' ability to manufacture and sell our products and result in FDA enforcement actions such as: warning letters; fines; injunctions; civil penalties; termination of distribution; recalls or seizures of products; delays in the introduction of products into the market; total or partial suspension of production; refusal to grant future clearances or approvals; withdrawals or suspensions of clearances or approvals, resulting in prohibitions on sales of our products; and in the most serious cases, criminal penalties.

***Due to the nature of the Lucyd app as a social application, and our collection of customer data in the process of taking orders, we are subject to rapidly changing and increasingly stringent laws, regulations, obligations, and industry standards relating to privacy, data security, and data protection. The restrictions and costs imposed by these laws and other obligations, or our actual or perceived failure to comply with them, could subject us to liabilities that adversely affect our business, operations, and financial performance.***

We collect, process, store, and use a wide variety of data from current and prospective customers, including personal information, such as home addresses and geolocation, and health information related to their ophthalmic prescriptions. These activities are regulated by a variety of federal, state, local, and foreign privacy, data security, and data protection laws and regulations, which have become increasingly stringent in recent years.

Domestic privacy and data security laws are complex and changing rapidly. Many states have enacted laws regulating the online collection, use, and disclosure of personal information and requiring that companies implement reasonable data security measures. Laws in all states and U.S. territories also require businesses to notify affected individuals, governmental entities, and/or credit reporting agencies of certain security incidents affecting personal information. These laws are not consistent, and compliance with them in the event of a widespread data breach is complex and costly.

Further, the California Consumer Privacy Act (CCPA) took effect on January 1, 2020. The CCPA gives California residents expanded rights related to their personal information, including the right to access and delete their personal information, and receive detailed information about how their personal information is used and shared. The CCPA also created restrictions on "sales" of personal information that allow California residents to opt-out of certain sharing of their personal information and may restrict the use of cookies and similar technologies for advertising purposes. Our e-commerce platform, including our websites and mobile applications, rely on these technologies and could be adversely affected by the CCPA's restrictions. The CCPA prohibits discrimination against individuals who exercise their privacy rights, provides for civil penalties for violations, and creates a private right of action for data breaches that is expected to increase data breach litigation. Additionally, a new California ballot initiative, the California Privacy Rights Act, or CPRA, was recently passed in California. The CPRA will restrict use of certain categories of sensitive personal information that we handle; further restrict the use of cross-context behavioral advertising techniques on which our products may rely in the future; establish restrictions on the retention of personal information; expand the types of data breaches subject to the private right of action; and establish the California Privacy Protection Agency to implement and enforce the new law, as well as impose administrative fines. The majority of the CPRA's provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes will likely be required. Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. Compliance with such laws could be difficult and costly to achieve and we could be subject to fines and penalties in the event of non-compliance.

Additionally, we are subject to certain health information privacy and security laws as a result of the health information that we receive in connection with our products and services. These laws and regulations include not be adequate to indemnify us for the full extent of our potential liabilities.

Finally, since the Lucyd app allows users to speak to each other in a public space operated by the Company, the Company has a basic responsibility to ensure that users are not exposed to harmful content, which if we fail to do so, could potentially result in legal action against the Company.

***Our business could be adversely impacted by changes in the internet and mobile device accessibility of users. Companies and governmental agencies may restrict access to our products and services, our mobile applications, website, application stores, or the internet generally, which could negatively impact our operations.***

Our business depends on customers accessing our products and services via a mobile device or a personal computer, and the internet. We may operate in jurisdictions that provide limited internet connectivity. Internet access and access to a mobile device or personal computer are frequently provided by companies with significant market power that could take actions that degrade, disrupt, or increase the cost of consumers' ability to access our products and services. In addition, the internet infrastructure that we and our customers rely on in any particular geographic area may be unable to support the demands placed upon it and could interfere with the speed and availability of our products and services. Any such failure in internet or mobile device or computer accessibility, even for a short period of time, could adversely affect our results of operations.

Governmental agencies in any of the countries in which we or our customers are located could block access to or require a license for our mobile applications, website, or the internet generally for a number of reasons, including security, confidentiality, or regulatory concerns. In addition, companies may adopt policies that prohibit their employees from using our products and services. If companies or governmental entities block, limit, or otherwise restrict customers from accessing our products and services, our business could be negatively impacted, the number of customers could decline or grow more slowly, and our results of operations could be adversely affected.

***From time to time, we may be subject to legal proceedings, regulatory disputes, and governmental inquiries that could cause us to incur significant expenses, divert our management's attention, and materially harm our business, financial condition, and operating results.***

From time to time, we may be subject to claims, lawsuits, government investigations, and other proceedings involving products liability, competition and antitrust, intellectual property, privacy, false advertising, consumer protection, securities, tax, labor and employment, commercial disputes, and other matters that could adversely affect our business operations and financial condition. As we grow, we may see a rise in the number and significance of these disputes and inquiries. Litigation and regulatory proceedings may be protracted and expensive, and the results are difficult to predict. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our products or services, all of which could negatively affect our revenue growth. The results of litigation, investigations, claims, and regulatory proceedings cannot be predicted with certainty, and determining reserves for pending litigation and other legal and regulatory matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, financial condition, and results of operations.

**Risks Related to Intellectual Property**

***Failure to adequately maintain and protect our intellectual property and proprietary rights could harm our brand, devalue our proprietary content, and adversely affect our ability to compete effectively.***

Our success depends to a significant degree on our ability to obtain, maintain, protect, and enforce our intellectual property rights, including those in our proprietary technologies, know-how, and brand. To protect our rights to our intellectual property, we rely on a combination of patent, trademark, copyright and trade secret laws, domain name registrations, confidentiality agreements, and other contractual arrangements with our employees, affiliates, clients, strategic partners, and others. However, the protective steps we have taken and plan to take may be inadequate to deter misappropriation or other violation of or otherwise protect our intellectual property rights. We may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. Effective patent, trademark, copyright, and trade secret protection may not be available to us or available in every jurisdiction in which we offer or intend to offer our services. Failure to adequately protect our intellectual property could harm our brand, devalue our proprietary technology and content, and adversely affect our ability to compete effectively. Further, even if we are successful, defending our intellectual property rights could result in the expenditure of significant financial and managerial resources, which could adversely affect our business, financial condition, and results of operations.

If we fail to protect our intellectual property rights adequately, our competitors may gain access to our intellectual property and proprietary technology and develop and commercialize substantially identical offerings or technologies. Any patents, trademarks, copyrights, or other intellectual property rights that we have or may obtain may be challenged or circumvented by others or invalidated or held unenforceable through administrative process, including re-examination, *inter partes* review, interference and derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings), or litigation. There can be no assurance that our patent applications will result in issued patents and we may be unable to obtain or maintain patent protection for our technology. In addition, any patents issued from pending or future patent applications or licensed to us in the future may not provide us with claims sufficiently broad to provide meaningful competitive advantages or may be successfully challenged by third parties. There is also no guarantee that our pending trademark applications for any mark will proceed to registration; our pending applications may be opposed by a third party prior to registration; and even those trademarks that are registered could be challenged by a third party, including by way of revocation or invalidity actions. For example, we have registrations in a number of foreign countries in which we are not currently offering goods or services, and those registrations could be subject to invalidation proceedings if we cannot demonstrate use of the marks by the applicable use deadlines in those countries. In addition, because patent applications in the United States are currently maintained in secrecy for a period of time prior to issuance, and patent applications in certain other countries generally are not published until more than 18 months after they are first filed, and because publication of discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were the first creator of inventions covered by our pending patent applications or that we were the first to file patent applications on such inventions. To maintain a proprietary market position in foreign countries, we may seek to protect some of our proprietary inventions through foreign counterpart patent applications. Statutory differences in patentable subject matter may limit the protection we can obtain on some of our inventions outside of the United States. The diversity of patent laws may make our expenses associated with the development and maintenance of intellectual property in foreign jurisdictions more expensive than we anticipate. We probably will not be able to obtain the same patent protection in every market in which we may otherwise be able to potentially generate revenue. Further, the laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Moreover, policing unauthorized use of our technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming. Despite our precautions, it may be possible for unauthorized third parties to copy our offerings and capabilities and use information that we regard as proprietary to create offerings that compete with ours. Third parties may apply to register our trademarks or other trademarks similar to our trademarks in jurisdictions before us, thereby creating risks relating to our ability to use and register our trademarks in those jurisdictions. In addition, there could be potential trade name or trademark ownership or infringement claims brought by owners of other rights, including registered trademarks, in our marks or marks similar to ours. Any claims of infringement, brand dilution, or consumer confusion related to our brand (including our trademarks) or any failure to renew key license agreements on acceptable terms could damage our reputation and brand identity and substantially harm our business and results of operations. The value of our intellectual property could diminish if others assert rights in or ownership of our trademarks and other intellectual property rights, or trademarks that are similar to our trademarks. We may be unable to successfully resolve these types of conflicts to our satisfaction. In some cases, litigation or other actions may be necessary to protect or enforce our trademarks and other intellectual property rights.

We generally enter into confidentiality and invention assignment agreements with our employees and consultants, as well as confidentiality agreements with other third parties, including suppliers and other partners. However, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how, and trade secrets. Moreover, no assurance can be given that these agreements will be effective in controlling access to our proprietary information or the distribution, use, misuse, misappropriation, reverse engineering, or disclosure of our proprietary information, know-how, and trade secrets. Further, these agreements may not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our offerings and capabilities. These agreements may be breached, and we may not have adequate remedies for any such breach.

We may be required to spend significant resources to monitor and protect our intellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming, and distracting to management, and could result in the impairment or loss of portions of our intellectual property rights. Further, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights, and if such defenses, counterclaims, or countersuits are successful, we could lose valuable intellectual property rights. Further, any changes in law or interpretation of any such laws, particularly intellectual property laws, may impact our ability to protect, register, or enforce our intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management's attention and resources, could delay further sales or the implementation of our offerings and capabilities, impair the functionality of our offerings and capabilities, delay introductions of new offerings, result in our substituting inferior or more costly technologies into our offerings, or injure our reputation.

Domain names generally are regulated by internet regulatory bodies, and the regulation of domain names is subject to change. Regulatory bodies have and may continue to establish additional top-level domains, appoint additional domain name registrars, or modify the requirements for holding domain names. We may not be able to, or it may not be cost-effective to, acquire or maintain all domain names that utilize the name "Lucyd" or "Innovative Eyewear" in all of the countries in which we currently conduct or intend to conduct business. If we lose the ability to use a domain name, we could incur significant additional expenses to market our products within that country, including the development of new branding. This could substantially harm our business, results of operations, financial condition and prospects.

***We may incur costs to defend against, face liability or for being vulnerable to intellectual property infringement claims brought against us by others.***

Third parties may assert claims against us alleging that we infringe upon, misappropriate, dilute or otherwise violate their intellectual property rights, particularly as we expand our business and the number of products we offer. These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims. We may be particularly vulnerable to such claims, as companies having a substantial online presence are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights. As we gain an increasingly high public profile, the possibility of intellectual property rights claims against us grows. Our competitors and others may now and in the future have significantly larger and more mature patent portfolios than us.

We rely on contracts and releases for ownership of copyrighted materials and the right to use images of individuals on our webpage and marketing material, and we may be subject to claims that we did not properly obtain rights, consent, a release, or permission to use certain content or imagery. Many potential litigants have the ability to dedicate substantial resources to the assertion of their intellectual property rights. Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending against the claim, could distract our management from our business, could require us to cease use of such intellectual property, and could create ongoing obligations if we are subject to agreements or injunctions (stipulated or imposed) preventing us from engaging in certain acts. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, we risk compromising our confidential information during this type of litigation. Our defense of any claim, regardless of its merit, could be expensive and time consuming and could divert management resources. We cannot predict the outcome of lawsuits and cannot ensure that the results of any such actions will not have an adverse effect on our business, financial condition, or results of operations. Successful infringement claims against us could result in significant monetary liability or prevent us from selling some of our products. In addition, resolution of claims may require us to redesign or rebrand our products, license rights from third parties on potentially unfavorable terms, cease using certain brand names or other intellectual property rights altogether, make substantial payments for royalty or license fees, legal fees, settlement payments or other costs or damages, or admit liability. Such outcomes could encourage others to bring claims against us. To the extent we seek a license to continue offerings or operations found or alleged to infringe third-party intellectual property rights, such a license may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us. In the event we are required to develop alternative, non-infringing technology, this could require significant time (during which we would be unable to continue to offer our affected offerings), effort and expense, and may ultimately not be successful. Any of these events could harm our business and cause our results of operations, liquidity, and financial condition to suffer.

**Risks Related to Our Dependence on Third Parties**

***We face risks associated with suppliers from whom our products are sourced and are dependent on a limited number of suppliers.***

We purchase all of the inputs for our products, including eyeglass frames, temples with electronics embedded within them, prescription lenses, sun lenses, demo lenses, hinges, packaging materials and other components, parts, and raw materials, directly or indirectly from domestic and international suppliers. For our business to be successful, our suppliers must be willing and able to provide us with inputs in substantial quantities, in compliance with regulatory requirements, at acceptable costs and on a timely basis. Our ability to obtain a sufficient selection or volume of inputs on a timely basis at competitive prices could suffer as a result of any deterioration or change in our supplier relationships or events that adversely affect our suppliers.

We typically do not enter into long-term contracts with our suppliers and, as such, we operate without significant contractual assurances of continued supply, pricing or access to inputs. Any of our suppliers could discontinue supplying us with desired inputs in sufficient quantities or offer us less favorable terms on future transactions for a variety of reasons. The benefits we currently experience from our suppliers' relationships could be adversely affected if our suppliers:

● discontinue selling products to us;

● raise their prices;

● increase lead times for products and/or key components

We also source inputs directly from suppliers outside of the United States, including China. Global sourcing and foreign trade involve numerous factors and uncertainties beyond our control including increased shipping costs, the imposition of additional import or trade restrictions, including legal or economic restrictions on overseas suppliers' ability to produce and deliver inputs, increased custom duties and tariffs, unforeseen delays in customs clearance of goods, more restrictive quotas, loss of a most favored nation trading status, currency exchange rates, transportation delays, port of entry issues and foreign government regulations, political instability, and economic uncertainties in the countries from which we or our suppliers source our products.

***We rely on a limited number of contract manufacturers and logistics partners for our products. A loss of any of these partners could negatively affect our business.***

We rely on a limited number of third-party suppliers and contract manufacturers for the components that go into the manufacturing of our products. In particular, our frames are provided by only a handful of suppliers. We also assemble and fulfill prescription glasses at a single third-party optical laboratory. Our reliance on a limited number of contract manufacturers and logistics partners for our products increases our risks of being unable to deliver our products in a timely and cost-effective manner. In the event of interruption from any of our contract manufacturers or our own fulfillment capabilities, we should be able to increase capacity from other sources or develop alternate or secondary sources without incurring material additional costs or substantial delays.

Our business could be adversely affected if one or more of our manufacturers is impacted by a natural disaster, an epidemic, or other interruption at a particular location.

Additionally, we do not own or operate a warehouse or a warehouse management company or system, and we currently rely on three third-party warehouses. Because a significant percentage of our products are stored in and shipped out of third-party warehouses, we face significant risks such as, but not limited to: our operations could be disrupted and our inventory could be destroyed by earthquakes, floods, fires or other natural disasters or other events outside of our control, or the control of our third-party warehouse. Our dependence on third-party warehouses also exposes us to the risk that the warehouse may experience operational disruptions due to security or computer viruses, software and hardware failure, power interruptions and other system failures. If we encounter problems with our third-party warehouse, we may be unable to meet customer expectations, manage our inventory and fulfillment capacity, complete sales, fulfill orders in a timely fashion, and our ability to achieve objectives for operating efficiencies could be adversely affected, all of which could harm our reputation and our relationship with our customers.

***Our projects could be hindered due to our dependence on third parties to complete many of our contracts.***

In the current economic environment, third parties may find it difficult to obtain sufficient financing to help fund their operations. The inability to obtain financing could adversely affect a third party's ability to provide materials, equipment or services which could have a material adverse impact on our business, financial condition, and results of operations. In addition, a failure by a third-party subcontractor, supplier or manufacturer to comply with applicable laws, regulations or client requirements could negatively impact our business and, for government clients, could result in fines, penalties, suspension or even debarment being imposed on us, which could have a material adverse impact on our business, financial condition, and results of operations.

***We depend on search engines, social media platforms, digital application stores, content-based online advertising, and other online sources to attract consumers to and promote our website and our mobile applications, which may be affected by third-party interference beyond our control and as we grow our customer acquisition costs may rise.***

Our success depends in part on our ability to attract consumers to our website, mobile applications, and retail partners to convert them into customers in a cost-effective manner. We depend, in large part, on search engines, social media platforms, digital application stores, content-based online advertising, and other online sources for traffic to our website, mobile applications, and select application partners.

With respect to search engines, we are included in search results as a result of both paid search listings, where we purchase specific search terms that result in the inclusion of our advertisement, and free search listings, which depend on algorithms used by search engines. For paid search listings, if one or more of the search engines or other online sources on which we rely for purchased listings modifies or terminates its relationship with us, our expenses could rise, we could lose consumers and traffic to our website could decrease, any of which could have a material adverse effect on our business, financial condition, and results of operations.

***We plan to rely primarily on third-party insurance policies to insure our operations-related risks. If our insurance coverage is insufficient for the needs of our business or our insurance providers are unable to meet their obligations, we may not be able to mitigate the risks facing our business, which could adversely affect our business, financial condition, and results of operations.***

We procure third-party insurance policies or plan to procure policies to cover various operations-related risks including employment practices liability, workers' compensation, property and business interruptions, cybersecurity and data breaches, crime, directors' and officers' liability, and general business liabilities. We rely on a limited number of insurance providers, and should such providers discontinue or increase the cost of coverage, we cannot guarantee that we would be able to secure replacement coverage on reasonable terms or at all. If our insurance carriers change the terms of our policies in a manner not favorable to us, our insurance costs could increase. Further, if the insurance coverage we maintain is not adequate to cover losses that occur, or if we are required to purchase additional insurance for other aspects of our business, we could be liable for significant additional costs. Additionally, if any of our insurance providers becomes insolvent, it would be unable to pay any operations-related claims that we make.

**General Risk Factors**

***Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.***

Since the completion of our initial public offering in August 2022, we have been required to comply with the SEC's rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which requires management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. As an "emerging growth company," as defined in the JOBS Act, which will be in effect until after five years from our initial public offering, we may take advantage of certain temporary exemptions from various reporting requirements, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes Oxley Act (and the rules and regulations of the Securities and Exchange Commission thereunder).

Based on the number of personnel available to serve the Company's accounting function, management believes we are not able to adequately segregate responsibility over financial transaction processing and reporting. Further, the Company does not have a formal internal control environment in place and operating effectively. As such, we have identified these issues as material weaknesses in our internal control over financial reporting and insufficient controls with respect to revenue recognition, and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If our remediation of such material weaknesses is not effective, or if we fail to develop and maintain an effective system of internal controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be materially and adversely affected and the market price of our common stock could be negatively affected, which could require additional financial and management resources.

***Changes in tax treatment of companies engaged in e-commerce may adversely affect the commercial use of our sites and our financial results.***

Due to the global nature of the Internet, it is possible that various states or foreign countries might attempt to impose additional or new regulation on our business or levy additional or new sales, income, or other taxes relating to our activities. Tax authorities at the international, federal, state, and local levels are currently reviewing the appropriate treatment of companies engaged in e-commerce and digital services. New or revised international, federal, state, or local tax regulations or court decisions may subject us or our customers to additional sales, income and other taxes. For example, on June 21, 2018, the U.S. Supreme Court rendered a 5-4 majority decision in South Dakota v. Wayfair Inc., 17-494 where the Court held, among other things, that a state may require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to consumers in the state, overturning existing court precedent. Other new or revised taxes and, in particular, digital taxes, sales taxes, VAT, and similar taxes could increase the cost of doing business online and decrease the attractiveness of selling products over the Internet. New taxes and rulings could also create significant increases in internal costs necessary to capture data and collect and remit taxes. Any of these events could have a material adverse effect on our business, financial condition, and operating results.

***An overall decline in the health of the economy and other factors impacting consumer spending, such as recessionary conditions, governmental instability, inclement weather, and natural disasters, may affect consumer purchases, which could reduce demand for our products and harm our business, financial conditions, and results of operations.***

Our business depends on consumer demand for our products and, consequently, is sensitive to a number of factors that influence consumer confidence and spending, such as general economic conditions, consumer disposable income, energy and fuel prices, recession and fears of recession, unemployment, minimum wages, availability of consumer credit, consumer debt levels, conditions in the housing market, interest rates, tax rates and policies, inflation, consumer confidence in future economic conditions and political conditions, war and fears of war, inclement weather, natural disasters, terrorism, outbreak of viruses or widespread illness, and consumer perceptions of personal well-being and security. However, as eyewear is a necessary medical device for a large segment of the population, we believe our business is more insulated from economic forces compared to other consumer electronics.

***We are an "emerging growth company," and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.***

We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from reporting requirements that are applicable to other public companies that are not "emerging growth companies," including the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards.

We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of our listing; (2) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date on which we are deemed to be a "large accelerated filer" under the rules of the SEC.

We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations may not be comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

***Our current insurance coverage may not be adequate, and we may not be able to obtain insurance at acceptable rates, or at all.***

We currently have General Liability and Product Liability policies covering our business. These policies may not provide sufficient coverage in the face of significant claims or multiple claims. Claims exceeding our insurance coverage could create significant increases in internal costs. This even could have a material adverse effect on our business, financial condition, and operating results.

**Risks Related to Our Common Stock**

***The market prices of our common stock has been volatile and can fluctuate substantially, which could result in substantial losses for our investors.***

The market price of our common stock is highly volatile, and since our initial public offering in August 2022, the market price of our common stock has ranged from $1.00 to $96.00 per share (as adjusted for our reverse stock split). The market price of our securities could be subject to wide fluctuations in response to a variety of factors, which include:

● actual or anticipated fluctuations in our quarterly or annual operating results;

● publication of research reports by securities analysts about us or our competitors or our industry;

● the public's reaction to our press releases, our other public announcements and our filings with the SEC;

● our failure or the failure of our competitors to meet analysts' projections or guidance that we or our competitors may give to the market;

● additions and departures of key personnel;

● strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;

● the passage of legislation or other regulatory developments affecting us or our industry;

● speculation in the press or investment community;

● changes in accounting principles;

● terrorist acts, acts of war or periods of widespread civil unrest;

● natural disasters and other calamities; and

● changes in general market and economic conditions.

In addition, the stock market has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies. Broad market and industry factors may negatively affect the market price of our common stock and warrants, regardless of our actual operating performance. In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management's attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.

***We do not intend to pay dividends for the foreseeable future.***

We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. We expect to retain future earnings, if any, to fund the development and growth of our business. Any future determination to pay dividends on our capital stock will be at the discretion of our board of directors. Accordingly, you must rely on the sale of your common stock after price appreciation, which may never occur, as the only way to realize any future gain on your investment.

***Our quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to the introduction of technologically more advanced products, seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price.***

Our quarterly operating results may fluctuate significantly because of several factors, including:

● labor availability and costs for hourly and management personnel;

● macroeconomic conditions;

● changes in consumer preferences and competitive conditions;

● expansion to new markets;

● weather conditions in the regions we operate;

● increases in infrastructure costs; and

● fluctuations in commodity prices.

Unanticipated fluctuations in our quarterly operating results could result in a decline in our stock price.

**Item 1B. <u>Unresolved Staff Comments</u>.**

None.

**Item 1C. <u>Cybersecurity</u>.**

In the ordinary course of business, we receive, process, use, and store digitally large amounts of data, including customer data as well as confidential, sensitive, proprietary, and personal information. Maintaining the integrity and availability of our information technology systems and this information, as well as appropriate limitations on access and confidentiality of such information, is important to us and our business operations. To this end, we have implemented policies designed to assess, identify, and manage risks from potential unauthorized occurrences on or through our information technology systems that may result in adverse effects on the confidentiality, integrity, and availability of these systems and the data residing in them. While we have taken measures designed to protect the security of the confidential and personal information under our control, we cannot provide absolute assurance that any security measures that we or our third-party service providers have implemented will be effective against current or future security threats.

Our cybersecurity program is managed by our executive management team, including our Chief Executive Officer and Chief Technology Officer, and includes mechanisms, controls, technologies, systems, policies, and other processes designed to prevent or mitigate data loss, theft, misuse, or other security incidents or vulnerabilities affecting the systems and data residing in them. We consult with and received analysis reports from a cybersecurity advisor, and generally rely upon outside advisors and experts to assist us with assessing, identifying, and managing cybersecurity risks.

We consider cybersecurity, along with other significant risks that we face, within our overall enterprise risk management framework. Our Board of Directors has oversight for the most significant risks facing us and for our processes to identify, prioritize, assess, manage, and mitigate those risks. The Company intends to provide the Board of Directors with periodic updates on cybersecurity and information technology matters and related risk exposures from management.

All customer and app user information is stored directly within Shopify, Amazon Seller, and Amazon Web Services platforms, which provide market-leading data security for their centralized servers. On occasion, limited amounts of customer information such as names and emails are exported from these systems solely for the purposes of accounting and filings, and is never shared outside of the Company and its contracted accounting consultants, which are under confidentiality agreements. Highly sensitive customer payment information is generally never revealed to the Company in any capacity and is hidden by payment processors for security purposes, with the sole exception being some wholesale accounts who provide written or digital copies of credit card information for payment processing on agreed upon terms. Such information is secured on locked Company computers and never distributed.

**Item 2. <u>Properties</u>.**

Our executive offices are located at 11900 Biscayne Blvd., Suite 630, North Miami, Florida 33181. Our executive offices are provided to us by Tekcapital, who bills us for an allocation of rent paid by Tekcapital on our behalf. This arrangement does not have a specific end date, and can be terminated with 30 calendar days written notice by any party. We consider our current office space adequate for our current operations.

**Item 3. <u>Legal Proceedings</u>.**

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 4. <u>Mine Safety Disclosures</u>.**

Not applicable.

**PART II**

**Item 5. <u>Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities</u>.**

**Market Information**

Our common stock and certain of our warrants trade on the NASDAQ Capital Market under the symbols "LUCY" and "LUCYW," respectively, since August 15, 2022. Prior to that date, there was no public market for our common stock or warrants.

**Holders**

As of December 31, 2025, the approximate number of holders of record of our common stock was 3,769 and the closing price of our common stock was $0.997 per share. As of December 31, 2025, the approximate number of holders of record of our registered warrants was 1 and the closing price of such warrants was $0.042 per warrant.

**Securities Authorized for Issuance Under Equity Compensation Plans**

See "Item 11. Executive Compensation."

**Dividend Policy**

No cash dividends have been paid on our common stock since our inception. We have no present intention to pay any cash dividends in the foreseeable future.

**Recent Sales of Unregistered Securities**

There were no sales of unregistered securities during the three months ended December 31, 2025.

**Purchases of Securities by the Issuer and Affiliated Purchasers**

On April 3, 2025, a total of 11,665 shares of common stock were exchanged from employees in connection with the income tax withholding obligations on behalf of such employees from the vesting of restricted stock units; the Company immediately sold such shares in the market.

On August 19, 2025, a total of 10,985 shares of common stock were exchanged from employees in connection with the income tax withholding obligations on behalf of such employees from the vesting of restricted stock units; the Company immediately sold such shares in the market.

On December 2, 2025, a total of 2,729 shares of common stock were exchanged from employees in connection with the income tax withholding obligations on behalf of such employees from the vesting of restricted stock units; the Company immediately sold such shares in the market.

**Item 6. <u>Reserved</u>.**

**Item 7. <u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u>.**

*You should read the following discussion and analysis of our financial condition and results of operations together with the accompanying "Index to Consolidated Financial Statements" included within this Annual Report on Form 10-K. Except for historical information, the matters discussed in this Management's Discussion and Analysis of Financial Condition and Results of Operations are forward-looking statements that involve risks and uncertainties and are based upon judgments concerning factors that are beyond our control.*

**Overview**

We develop and sell cutting-edge smart eyewear – including prescription eyeglasses, ready-to-wear sunglasses, safety glasses, and sport glasses. 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.

Our mission is to Upgrade Your Eyewear<sup>®</sup> by creating 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. 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 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.

All of our products are designed in Miami, manufactured in Asia, and currently sold through two major types of channels:

&nbsp;&nbsp;&nbsp;&nbsp;1. E-commerce – primarily via our website (Lucyd.co) and Amazon.com, as well as through various other websites such as Walmart.com, Target.com, BestBuy.com, and DicksSportingGoods.com; and,

&nbsp;&nbsp;&nbsp;&nbsp;2. A growing network of retail stores, including independent eyewear stores and national eyewear chains – we currently have over 400 retail stores selling our products (across over 300 unique wholesale accounts), and are continually working to expand our network. We increased the number of retail store locations in which our products are sold from over 350 at the beginning of 2025 to over 400 by the end of the 2025, and we remain optimistic that partnership with a national retailer will further increase our store count significantly in 2026.

We apply a manufacturer suggested retail price ("MSRP") of $149 – $199 across all of our online channels, with our wholesale pricing offering volume discounts to these prices. The Company believes having pricing that is competitive with traditional designer eyewear is essential for building market share in this new category, by eliminating the "cost of switching" for the average consumer.

We view our business model as capital light, as we have elected not to build our own manufacturing facilities and Company-owned retail distribution, but rather leverage existing sources of production and retail distribution. This allows us to focus on our core competency of smart eyewear design and marketing.

***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 offer a strong co-op marketing program and reordering incentives program.

In 2025, we expanded our sales team with the addition of two new sales directors. One of these individuals brings 15 years of experience in optical sales, and has joined to support our expansion into key optical accounts and regional chains. The other individual has a multi-decade career in hardware and power tool sales, and has joined to support our pursuit of brick-and-mortar and e-commerce placements for the Lucyd Armor line.

*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, which have been installed in limited number of locations, 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 have expanded our sales and marketing teams to broaden our brand awareness and online presence.

***Key Performance Indicators***

*Store Count (B2B)*

We believe that the number of retail stores selling our products is an important indicator of wholesale growth. The Company has increased the number of retail store locations in which its products are sold from over 350 at the beginning of 2025 to over 400 by the end of the 2025. We remain optimistic that partnership with a national retailer will increase our store count significantly in 2026.

*Customer Ratings (B2C)*

The Company's latest products are receiving higher ratings online compared to our previous products, 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 year ended December 31, 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 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; although not directly related to tariffs (as lenses are filled by a company in Florida), this price increase has indirectly helped to offset 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 and fourth quarter 2025 gross profit margins to a level that was 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. The recent February 2026 ruling by the Supreme Court of the U.S. striking down certain tariffs enacted during the current administration is expected to be beneficial to the Company; however, we will continue to monitor developments, including potential legislative, regulatory, or judicial responses, that could affect the ultimate impact of the decision. 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**

*Years Ended December 31, 2025 ("current year") and December 31, 2024 ("prior year")*

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year ended**<br>**December 31,**<br>**2025** |  | **Year ended**<br>**December 31,**<br>**2024** | |<br>**Change** |  |
| Revenues, net | $2661669 | 100.0% | $1636440 | 100% | $1025229 | *63 %* |
| Less: Cost of Goods Sold | (2094218) | 79.0% | (1421250) | 87% | (672968) | *47 %* |
| &nbsp;&nbsp;&nbsp;**Gross (Deficit) Profit** | **567451** | 21.0% | **215190** | 13% | **352261** | *164 %* |
| Operating Expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | (5225834) | 196.0% | (4473292) | 273% | (752542) | *17 %* |
| &nbsp;&nbsp;&nbsp;Sales and marketing | (2971193) | 112.0% | (2706213) | 165% | (264980) | *10 %* |
| &nbsp;&nbsp;&nbsp;Research and development | (725388) | 27.0% | (819387) | 50% | 93999 | *-11 %* |
| &nbsp;&nbsp;&nbsp;Related party management fee | (140000) | 5.0% | (140000) | 9% | - | *0 %* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Operating Expenses** | **(9062415)** | 340.0% | **(8138892)** | 497% | **(923523)** | *11 %* |
| Other Income (Expense), net | 903775 | 34.0% | 157187 | 10% | 746588 | *475 %* |
| **Net Loss** | $**(7591189)** | 285.0% | $**(7766515)** | 475% | $**175326** | *-2 %* |

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***Revenues***

Our revenues for the year ended December 31, 2025, were $2,661,669, representing an increase of approximately 63% as compared to revenues of $1,636,440 during the prior year. This increase is primarily attributable to significant volume increases, slightly offset by the impacts of higher discounts on products sold and shifts in product price/mix.

Despite the significant 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 slightly lower manufacturer suggested retail price ("MSRP") than our other product lines.

For the year ended December 31, 2025, approximately 51% of sales were processed on our online store (Lucyd.co), 40% on Amazon.com, and 8% through reseller partners, with approximately 1% of our net revenues generated from Lucyd "Pro" app subscriptions. For the year ended December 31, 2024, approximately 64% of sales were processed on our online store (Lucyd.co), 26% on Amazon.com, and 10% with reseller partners, with less than 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.

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® 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® 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 $2,094,218 for the year ended December 31, 2025, as compared to $1,421,250 for the year ended December 31, 2024. This increase was primarily driven by higher volumes, partially offset by lower costs. More specifically, the increase in cost of goods sold was attributable to 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 fees and commission expenses.

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 and fourth quarter 2025 gross profit margins to a level that was 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 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 year 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 current year included but was not limited to the cost of frames (inclusive of the cost of tariffs, importation costs, and other inventory adjustments) of approximately $1,483,000; the cost of prescription lenses incurred with our third-party vendor of approximately $246,000; commissions, affiliate referral fees, and e-commerce platform fees of approximately $124,000; shipping and logistics costs of approximately $140,000; provisions for excess, obsolete, and slow-moving inventory of $59,000; and product certification costs of approximately $25,000.

Cost of goods sold for prior year included but was not limited to the cost of frames (inclusive of importation costs and inventory adjustments) of approximately $863,000; the cost of prescription lenses incurred with our third-party vendor of approximately $257,000; commissions, affiliate referral fees, and e-commerce platform fees of approximately $160,000; shipping and logistics costs of approximately $95,000; and product certification costs of approximately $33,000.

***Gross Profit***

Our gross profit for the current year was $567,451, as compared to $215,190 for the prior year. Our gross profit margin was 21% in the current year and 13% in the prior year, representing an increase of approximately 8 percentage points from the prior year period. This improvement in profitability was the primarily attributable to measures taken by management to reduce our costs per sale and increase our average order value, including changing lens suppliers in 2024, 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 year and provisions for certain excess, obsolete, and slow-moving inventory in the current year.

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 have only recently begun to recognize 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 $923,523, or approximately 11%, to $9,062,415 for the year ended December 31, 2025, as compared to $8,138,892 for the year ended December 31, 2024. This increase was primarily due to the following:

*General and administrative expenses*

Our general and administrative expenses increased by $752,542, or approximately 17%, to $5,225,834 for the year ended December 31, 2025, as compared to $4,473,292 for the prior year. This increase was primarily driven by the combination of (i) higher compensation (including stock-based compensation) and benefit costs (approximately $449,000), mainly as a result of hiring additional employees in the current year, and (ii) higher payments due under our multi-year license agreements, based on the contractual terms of such agreements, which increased our licensing expense by approximately $297,000. Higher IT and software costs also contributed approximately $223,000 to the year-over-year increase in general and administrative expenses. Partially offsetting these higher costs was the fact that in the prior year 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 made no similar such payments in the current year.

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 year and prior year, respectively.

Although we have recently hired some new employees to help drive and support our growth and expansion, we generally maintain 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, legal and professional services, etc.); as such, our general and administrative expenses are not expected to scale up significantly as our revenue increases over time.

*Sales and marketing expenses*

Our sales and marketing expenses increased $264,980, or approximately 10%, to $2,971,193 for the current year from $2,706,213 for the prior year. This increase was primarily driven by increased spending on events and trade shows, as we grow and expand our network of potential business partners and retailers. In the current year, we participated at both Vision Expo East and Vision Expo West in North America, the MIDO Eyewear Show in Italy, SILMO Paris 2025 in France, and a multitude of other industry events, which have helped us secure new domestic retailer accounts as well as make substantial progress in our efforts to further develop our international presence and increase our distribution into Europe and Latin America.

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. Our marketing spend in 2025 was strategically allocated to support our launch of new products, and we are using data-driven decision-making to refine and optimize our marketing campaigns, in order to make our spending in this area more efficient, thus maximizing returns on our marketing investments.

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 decreased by $93,999, or approximately 11%, to $725,388 for the current year, as compared with $819,387 for the prior year. Research and development costs in the prior year primarily related to development of the Reebok smartglasses line which launched in April 2025, ongoing improvements to the platform and molds used for our Lucyd Lyte smartglasses, and improvements to the Lucyd app. Research and development costs in the current year primarily related to development of new variants for the Lucyd Armor and Reebok collections, development of other new smartglass products, and improvements to the Lucyd app.

This decrease was primarily attributable to the prior year write-off of approximately $88,000 of previously-capitalized software costs related to the development of the Vyrb app, with no comparable write-offs in the current year. Absent this one-time non-cash charge in the prior year expense amount, the year-over-year change in research and development costs would have been less than 1% or essentially flat.

*Related party management fee*

Our related party management fee was $140,000 for each of the years ended December 31, 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 $903,775 for the current year. This amount was primarily comprised of a $570,000 payment received from a former shareholder related to the disgorgement of short-swing profits pursuant to Section 16(b) of the Securities Exchange Act of 1934. The remaining amount of other income (expense), net mainly relates to interest and dividends earned on our investments in U.S. Treasury bills and money market funds.

Total other income (expense), net in the prior year was $157,187. This amount was mainly comprised of dividends received from our investments in money market funds, and, to a lesser extent, interest income earned on a short-term loan to a related party.

**Liquidity and Capital Resources**

**Cash Flow Data:**

---

| | | |
|:---|:---|:---|
|  | **Year ended**<br>**December 31,**<br>**2025** | **Year ended**<br>**December 31,**<br>**2024** |
| Net cash flows from operating activities | $(7275301) | $(6739630) |
| Net cash flows from investing activities | 4475947 | (5162157) |
| Net cash flows from financing activities | 6681403 | 10243327 |
| **Net Change in Cash** | $**3882049** | $**(1658460)** |

---

The above table reflects changes in our cash and cash equivalents only, and reflects the Company's investments in / redemptions of short-term U.S. Treasury bills as cash flows from financing activities; the Company had net redemptions of such investments of $5,025,680 in the current year and net purchases of such investments of $4,895,184 in the prior year. Including short-term U.S. Treasury bill investments with cash and cash equivalents as part of the Company's overall liquidity (which management believes provides a more accurate depiction of the Company's liquidity and economic position), would result in a net change in the Company's overall liquidity of negative $1,143,631 for the current year and positive $3,236,724 for the prior year.

Our net working capital (current assets less current liabilities) was $8,389,807 as of December 31, 2025, a decline of approximately 1% compared with $8,500,498 as of December 31, 2024.

***Operating Activities***

Net cash flows used in operating activities for the years ended December 31, 2025 and 2024 are primarily reflective of our net losses, resulting from our operating costs to support and grow our business, including employee-related costs, sales and marketing, research and development, corporate overhead and various other costs associated with being a publicly-traded company. Additionally, our operating asset levels have grown significantly as we have procured additional inventory to position us for future anticipated sales growth.

***Investing Activities***

Net cash flows provided by investing activities for the year ended December 31, 2025 were primarily driven by net redemptions of short-term U.S. Treasury bills, partially offset by short-term loans made to a related party, and expenditures to file for various new patents.

Net cash flows used in investing activities for the year ended December 31, 2024 were primarily reflective of the investment of a portion of the proceeds from equity offerings in short-term U.S. Treasury bills. At the same time, the Company continued to invest in its growing intellectual property portfolio, making expenditures to file for various new patents.

***Financing Activities***

Net cash flows provided by financing activities for the year ended December 31, 2025 were mainly driven by proceeds from multiple equity-based financing transactions as described below.

Net cash flows provided by financing activities for the year ended December 31, 2024 were mainly driven by proceeds from multiple equity offering transactions and warrant exercises during the year.

***At-the-Market Offerings***

From August 15, 2025 through December 12, 2025, the Company sold 606,377 shares of common stock and received approximately $1.2 million of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from these transactions amounted to approximately $1.2 million, and will be used for working capital and general corporate purposes.

***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, consisting of 60,750 Series A Warrants, 60,750 Series B Warrants, 157,896 Series E Warrants, and 315,792 Series F Warrants. 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. 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. 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.

***June 2025 Warrant Inducement Transaction***

On June 20, 2025, the Company entered into inducement letter agreements with certain holders of certain of its Series H 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. 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. 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. The net proceeds received by the Company from this transaction amounted to approximately $1.8 million, which the Company intends to use for working capital and general corporate purposes.

***Other 2025 Warrant Activity***

During May and June 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. These proceeds will be used for working capital and general corporate purposes.

***Lucyd Ltd. Financing Agreement***

Pursuant to an agreement with Lucyd Ltd. originally entered into on March 1, 2024 and subsequently amended on March 1, 2025 and March 11, 2026, 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, 2027, 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 may prepay the convertible notes at any time with the written consent of Lucyd Ltd. The Company has not borrowed any amounts under this agreement.

***Obligations and Commitments***

Our capital light business model does not generally require material capital expenditures. However, we do have long-term obligations and commitments under certain multi-year license agreements, which are described in Note 7 of the financial statements within this annual report.

***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 Lucyd Ltd. financing agreement described above, 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. 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 December 31, 2025, we did not have any off-balance sheet arrangements.

**Critical Accounting Policies and Significant Developments and Estimates**

Management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods, as well as related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and the amount of revenue and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates.

We believe that our application of accounting policies, and the estimates inherently required therein, are reasonable. We periodically re-evaluate these accounting policies and estimates and make adjustments when facts and circumstances dictate a change. Historically, we have found our application of accounting policies to be appropriate, and actual results have not differed materially from those determined using necessary estimates.

*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.

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 $59,000 and $0 as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the Company recorded an inventory prepayment in the amount of $438,417 and $424,594, respectively, related to down payments on eyewear purchased from the manufacturer, prior to shipment of the product that occurred after the respective balance sheet dates.

*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 collectability 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. With respect to such instances, during the years ended December 31, 2025 and 2024, we recognized $30,000 of revenue for each period, that was included in the contract liability balance of $47,950 and $77,950 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 sales processed through our website. 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 collectability 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 $4,506 and $2,401 as of December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, we recognized $2,401 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 all 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 $14,669 and $15,746 as of December 31, 2025 and 2024, respectively.

*Stock-Based Compensation*

We recognize compensation expense for stock-based awards to employees and directors and others based on the grant date fair value of such awards. Forfeitures are accounted for as a reduction of compensation expense in the period when such forfeitures occur.

For awards of restricted stock units and shares of common stock, the fair value of the award is based on the quoted market price of our common shares on the NASDAQ stock exchange.

For stock option awards, the Black-Scholes-Merton option pricing model is used to estimate the fair value of share-based awards. The Black-Scholes-Merton option pricing model incorporates various and highly subjective assumptions, including expected term and share price volatility.

● The expected term of the stock options is estimated based on the simplified method as allowed by Staff Accounting Bulletin No. 107.

● The share price volatility is estimated using historical stock prices based upon the expected term of the options granted, using stock prices of comparably profiled public companies.

● The risk-free interest rate assumption is determined using the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

**Item 7A. <u>Quantitative and Qualitative Disclosures About Market Risk</u>.**

Not required for smaller reporting companies.

**Item 8. <u>Financial Statements and Supplementary Data</u>.**

See accompanying "Index to Consolidated Financial Statements."

**Item 9. <u>Changes in and Disagreements With Accountants on Accounting and Financial Disclosure</u>.**

None.

**Item 9A. <u>Controls and Procedures</u>.**

**<u>Disclosure Controls and Procedures</u>**

We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15 of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of fiscal year 2025.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our management, including the principal executive officer and principal financial officer, does not expect that our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, cannot provide full assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, we conducted an evaluation as to the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used the criteria for effective internal control set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the *2013 Internal Control – Integrated Framework*. Based on this assessment, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025, for the reasons outlined below.

*Background and Remediation of Material Weakness*

In connection with our evaluation of disclosure controls and procedures covering our financial statements as of December 31, 2025, we identified material weaknesses in our internal control over financial reporting. We have concluded that material weaknesses exist in our disclosure controls and procedures, including internal control over financial reporting, as we do not have the necessary business processes, personnel, and related internal controls to operate in a manner to fully satisfy the accounting and financial reporting requirements of a public company. These material weaknesses manifested themselves in ways that included the improper segregation of duties relating to review of the recording of journal entries and the reconciliation of key accounts and safeguarding of assets, as well as the analysis of accounting for certain transactions and accounts, inadequate controls related to information technology, and inadequate documentation and monitoring of processes, accounting policies, and procedures.

In order to remediate these material weaknesses, we plan to take the following actions:

● the hiring of additional accounting and finance resources with public company experience; and

● implementation of additional review controls and processes requiring timely account reconciliation and analyses of certain transactions and accounts.

These planned actions are subject to ongoing evaluation by management and will require testing and validation of design and operating effectiveness of internal control over financial reporting over future periods. We are committed to the continuous improvement of our internal control over financial reporting and will continue to review the internal control over financial reporting.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to a permanent exemption of the Commission that permits the Company to provide only management's report in this Annual Report on Form 10-K. Accordingly, our management's assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025 has not been audited by our auditors, Cherry Bekaert LLP.

**<u>Changes in Internal Control Over Financial Reporting</u>**

There were no changes in our internal control over financial reporting during the fourth quarter of fiscal year 2025 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

**Item 9B. <u>Other Information</u>.**

On December 13, 2024, Harrison Gross, our Chief Executive Officer, adopted a Rule 10b5-1 trading plan, which was effective through August 31, 2025. The terms of this arrangement provided for (i) the sale of stock to cover Mr. Gross' income tax withholding obligations associated with the issuance of 19,200 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of 2,880 shares of common stock. The aggregate number of shares sold pursuant to this arrangement during 2025 was 8,967.

On December 9, 2025, Harrison Gross, our Chief Executive Officer, adopted a Rule 10b5-1 trading plan, which is effective through August 31, 2026. The terms of this arrangement provide for (i) the sale of stock to cover Mr. Gross' income tax withholding obligations associated with the issuance of 49,200 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of 35% of the net shares of common stock received from such vesting, at the prevailing market price. As such, the estimated aggregate number of shares to be sold pursuant to this arrangement is 26,702.

On December 13, 2024, Konrad Dabrowski, who was at the time our Co-Chief Financial Officer, adopted a Rule 10b5-1 trading plan, which was effective through August 31, 2025. The terms of this arrangement provided for the sale of stock to cover Mr. Dabrowski's income tax withholding obligations associated with the issuance of 16,800 shares of common stock in connection with the vesting of restricted stock units. The aggregate number of shares sold pursuant to this arrangement during 2025 was 5,296.

On December 9, 2025, Konrad Dabrowski, our Chief AI and Growth Officer, adopted a Rule 10b5-1 trading plan, which is effective through August 31, 2026. The terms of this arrangement provide for the sale of stock to cover Mr. Dabrowski's income tax withholding obligations associated with the issuance of 41,800 shares of common stock in connection with the vesting of restricted stock units. As such, the estimated aggregate number of shares to be sold pursuant to this arrangement is 12,394.

On December 13, 2024, Oswald Gayle, who was at the time our Co-Chief Financial Officer, adopted a Rule 10b5-1 trading plan, which was effective through December 2, 2025. The terms of this arrangement provided for (i) the sale of stock to cover Mr. Gayle's income tax withholding obligations associated with the issuance of 10,800 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of up to 100% of the net vested shares of common stock at certain specified limit prices. The aggregate number of shares sold pursuant to this arrangement during 2025 was 8,935.

On December 9, 2025, Oswald Gayle, our Chief Financial Officer, adopted a Rule 10b5-1 trading plan, which is effective through August 31, 2026. The terms of this arrangement provide for (i) the sale of stock to cover Mr. Gayle's income tax withholding obligations associated with the issuance of 32,466 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of 4,870 shares of common stock received from such vesting at the prevailing market price. As such, the estimated aggregate number of shares to be sold pursuant to this arrangement is 14,496.

On December 13, 2024, David Eric Cohen, our Chief Technology Officer, adopted a Rule 10b5-1 trading plan, which was effective through December 2, 2025. The terms of this arrangement provided for (i) the sale of stock to cover Mr. Cohen's income tax withholding obligations associated with the issuance of 14,400 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of up to 3,038 of the net vested shares of common stock at certain specified limit prices. The aggregate number of shares sold pursuant to this arrangement during 2025 was 7,689.

On December 9, 2025, David Eric Cohen, our Chief Technology Officer, adopted a Rule 10b5-1 trading plan, which is effective through December 2, 2026. The terms of this arrangement provide for (i) the sale of stock to cover Mr. Cohen's income tax withholding obligations associated with the issuance of 36,400 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of up to 7,440 of the net vested shares of common stock at certain specified limit prices. As such, the estimated minimum aggregate number of shares to be sold pursuant to this arrangement is 10,793, and the estimated maximum aggregate number of shares that may be sold pursuant to this arrangement is 18,233.

On December 13, 2024, Joaquin Abondano, our Chief Operating Officer, adopted a Rule 10b5-1 trading plan, which was effective through December 8, 2025. The terms of this arrangement provided for (i) the sale of stock to cover Mr. Abondano's income tax withholding obligations associated with the issuance of 9,600 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of up to 40% of the net vested shares of common stock at certain specified limit prices. The aggregate number of shares sold pursuant to this arrangement in 2025 was 4,389.

On December 9, 2025, Joaquin Abondano, our Chief Operating Officer, adopted a Rule 10b5-1 trading plan, which is effective through December 18, 2026. The terms of this arrangement provide for (i) the sale of stock to cover Mr. Abondano's income tax withholding obligations associated with the issuance of 29,600 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of up to 40% of the net vested shares of common stock at certain specified limit prices. As such, the estimated minimum aggregate number of shares to be sold pursuant to this arrangement is 8,776, and the estimated maximum aggregate number of shares that may be sold pursuant to this arrangement is 17,106.

**Item 9C. <u>Disclosure Regarding Foreign Jurisdictions that Prevent Inspections</u>.**

Not applicable.

**PART III**

**Item 10. <u>Directors, Executive Officers and Corporate Governance</u>.**

The following table sets forth certain information regarding our board of directors, our executive officers, and some of our key employees.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Harrison R. Gross | 33 | Chief Executive Officer and Director |
| Oswald Gayle | 66 | Chief Financial Officer |
| Konrad Dabrowski | 43 | Chief AI and Growth Officer |
| David Eric Cohen | 53 | Chief Technology Officer |
| Kristen McLaughlin | 53 | Director |
| Olivia C. Bartlett | 67 | Director |
| Louis Castro | 67 | Director |

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**Harrison Gross** is one of the founders of Innovative Eyewear and has served as our Chief Executive Officer and as a director since August 2019, where he guides the company's product and brand development. Prior to his employment at Innovative Eyewear, ****from August 2017 to August 2019, Mr. Gross served in various positions, including chief executive officer and media & UX lead, of Lucyd Ltd. (one of our largest stockholders and the licensor of our smart eyewear technology) where he developed the Lucyd brand identity and oversaw general operations and product development. Additionally, from November 2015 to August 2021, Mr. Gross served as the Digital Media Manager of Tekcapital plc ("Tekcapital") (LON: TEK), a university intellectual property investment firm that is the parent company of Tekcapital Europe Limited, and Lucyd Ltd, the holding company for Tekcapital's shares in Innovative Eyewear, where he created, developed, and marketed the company's licensed properties. Prior to that, from October 2013 to September 2014, Mr. Gross worked as a credit analyst for a Verizon, Inc. contractor, where he managed credit systems and provided support to Verizon agents. Mr. Gross is a graduate of Columbia University with a BA in Writing and received a BA in Jewish Studies from the Jewish Theological Seminary. Mr. Gross is well qualified to serve as a director due to his substantial knowledge of our product and his experience in marketing, product, and app development.

**Oswald Gayle** has served as our Chief Financial Officer since November 1, 2025. Mr. Gayle joined Innovative Eyewear as Vice President of Finance in January 2022, and served in that role until his promotion in August 2024 to Senior Vice President of Finance. He was later named Co-Chief Financial Officer in October 2024, and served in that role until being named Chief Financial Officer in November 2025. Prior to his employment at Innovative Eyewear, from September 2018 to January 2022, Mr. Gayle worked with Vaco Resources in Miami, Florida in the position of Executive Financial Consultant. Mr. Gayle has over 30 years' experience finance and accounting, initially starting with PricewaterhouseCoopers and including numerous senior and executive level management positions in corporate finance, SEC reporting, investor relations, and business development in the manufacturing and retail industries. Mr. Gayle has a bachelor's degree in accounting and finance with honors from the University of London and is a Chartered Global Management Accountant and a member of the American Institute of Certified Public Accountants.

**Konrad Dabrowski** has served as our Chief AI and Growth Officer on a part-time basis since November 1, 2025; prior to this, he served as Co-Chief Financial Officer on a part-time basis from October 2024 through October 2025, and served as our Chief Financial Officer on a part-time basis from August 2019 through October 2024. Since July 2020, Mr. Dabrowski has also served as the chief financial officer of Tekcapital, where he co-manages Tekcapital's investment strategy and oversees financial reporting for all of its portfolio companies. Between June 2017 and July 2020, Mr. Dabrowski served as the group controller of Tekcapital. Prior to his employment at Tekcapital, from March 2016 to June 2017, Mr. Dabrowski was a Global Accounting Manager for Restaurant Brands International (NYSE:QSR), a multinational fast food holding company, where he oversaw accounting and tax projects for Burger King within the Europe Middle East and Africa (EMEA) market. Prior to his employment at Restaurant Brands International, Mr. Dabrowski was an Audit Manager at Deloitte, where he managed end-to-end accounting audits for a portfolio of public and private corporate clients. Mr. Dabrowski has a Master's in Finance and Banking from the Warsaw School of Economics and is a Certified Public Accountant.

**David Eric Cohen** is one of the founders of Innovative Eyewear and has served as our Chief Technology Officer since September 2019. Prior to his employment at Innovative Eyewear, ****from August 2017 to August 2019, Mr. Cohen served as the chief technology officer of Lucyd Ltd., a smart eyewear development company, where he led the company's technological advancements and digital ad campaigns. Also, prior to his employment at Innovative Eyewear, from September 2009 to October 2019, Mr. Cohen served as President of Emaze Design Agency, a digital design agency, where he led the development of web and applications for e-commerce, web performance monitoring, website design and mobile applications. Prior to his employment at Emaze Design Agency, Mr. Cohen was lead Business Intelligence Specialist at Jewish General Hospital where he assisted with the data solutions and business processes and requirements. He received a BS in Computer Science from the Academy of Bordeaux and an MS in Advanced Technician & Information Systems Management from Hadassah University.

**Kristen McLaughlin** has served as one of our directors since August 2021. Ms. McLaughlin has 25 years' experience launching, managing and developing products in the eyewear, accessories, cosmetics and skincare industries. Since October 2021, Kristen has served as Marketing Director at Tura, inc., an eyewear design and distribution company where she is responsible for strategic marketing initiatives and communications to drive sales and support key accounts. From March 2019 to April 2020, Ms. McLaughlin served as the Global Marketing Director at DePasquale Companies, a skincare, hair care and cosmetics manufacturer, where she led the global marketing strategy and new product development. Prior to her employment at DePasquale Companies, from March 2000 to January 2019, Ms. McLaughlin was employed at Silhouette International, an eyewear manufacturer, where she served as the Director of Marketing: Eyewear Manufacturer, Regional Sales Manager, and Brand Manager: Daniel Swarovski Crystal Eyewear. While at Silhouette International, Ms. McLaughlin led the company's brand portfolio in the U.S. and its brand direction, product development and campaign content. She has a BS and MBA from Ramapo College of New Jersey. Ms. McLaughlin is well qualified to serve as a director due to her substantial experience in the eyewear industry and her experience in brand and product development.

**Olivia C. Bartlett** has served as one of our directors since August 2021. Ms. Bartlett has been in the eyewear industry for over 45 years holding various roles including optician, optical manager, marketing manager and operations management, where she currently acts as an industry consultant. From September 2015 - June 2020, Ms. Bartlett held the position of Chief Operating Officer of Todd Rogers Eyewear, a specialty eyewear company, where she managed the day-to-day operations of the company. Prior to her time at Todd Rogers Eyewear, from March 2010 to May 2015, Ms. Bartlett was the sales representative for eyewear sales in the northeast of Massachusetts for Safilo USA, a specialty eyewear company. Additionally, from September 2013 to May 2018, Ms. Bartlett was an Adjunct Professor at Benjamin Franklin Institute of Technology in Boston, Massachusetts. From February 2020 to February 2022, Ms. Bartlett was the President of the Opticians Association of America, a national organization representing the professional, business, educational, legislative and regulatory interests of opticianry. Additionally, Ms. Bartlett has been a director for fifteen years for the Opticians Association of Massachusetts and currently holds the position of Treasurer. Ms. Bartlett has received a number of awards through her time in the industry, including but not limited to, the 2020 Eyecare Business Game Changer Award and the 2020 and 2018 Vision Monday Most Influential Woman Executive. Ms. Bartlett received her Massachusetts Opticians license in 1987 and is ABO certified and is an ABO certified speaker. Ms. Bartlett received her BA in Political Science from Clark University. Ms. Bartlett is well qualified to serve as a director due to her substantial experience in the optical industry.

**Louis Castro** has served as one of our directors since August 2021. Mr. Castro is an experienced public company director and chartered accountant. Mr. Castro is currently on the board of directors of the following public companies: (1) Tekcapital, where he has been a director since December 2019, (2) Orosur Mining Inc. (TSE:OMI), a company exploring for minerals in South America, where he has been executive chairman of the board since April 2020, (3) Tomco Energy plc (LON:TOM), an oil exploration and technology company, where he has been a director since April 2021, and (4) Veteran Capital Corp. (TSX-V:VCC), a capital pool company, where he has been a director since January 2021. From September 2012 to June 2016, Mr. Castro was a director and,

from September 2014 to June 2016 served as the Chief Financial Officer, of Eland Oil & Gas plc, a Nigerian focused upstream oil and natural gas exploration and production company, where he was responsible for the company's finance, legal and corporate finance activities. Prior to his employment at Eland, from May 2011 to May 2014, Mr. Castro served as Head of Capital Markets and then as Chief Executive Officer of Northland Capital Partners, an investment bank, where he was responsible for the investment banks day-to-day activities. He is a fellow of the Institute of Chartered Accountants of England & Wales, has a double degree in Engineering Production and Economics from Birmingham University and attended the Postgraduate Advanced Course in Production Management and Methods at Cambridge University. Mr. Castro is well qualified to serve as a director due to his substantial experience as a director of public companies and his distinction as chartered accountant.

**Number and Terms of Office of Officers and Directors**

Our board of directors consists of four members. Our directors are appointed for one-year terms to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our second amended and restated bylaws.

Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our second amended and restated bylaws, as it deems appropriate.

**Director Independence and Committees of the Board of Directors**

*Director Independence*

Of our directors, we have determined that Mr. Louis Castro, Ms. Kristen McLaughlin, and Ms. Olivia Bartlett are "independent" directors under NASDAQ listing standards, while Mr. Harrison Gross is not independent under such standards. We have also determined that each of the three members of the Audit Committee is "independent" for purposes of Section 10A(m)(3) of the Exchange Act and the rules promulgated thereunder and under the NASDAQ listing standards. Further, the Board has determined that each of the two members of both the Compensation Committee and the Nominating and Corporate Governance Committee is "independent" under NASDAQ listing standards.

*Board Committees*

We have three standing committees of the Board: Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. Each of the board committees act pursuant to a separate written charter adopted by our board of directors, each of which is available on our website at *www.lucyd.co*. Our board of directors may at any time or from time to time appoint certain other committees in its sole discretion as it deems necessary or appropriate to carry out its functions.

*Audit Committee*

The Audit Committee consists of Mr. Louis Castro (Chair), Ms. Kristen McLaughlin, and Ms. Olivia Bartlett. The Board has determined that all of the members of the Audit Committee are "independent," as defined by NASDAQ listing standards and by applicable SEC rules. In addition, the Board has determined that Mr. Castro is an audit committee financial expert, as that term is defined by the SEC rules, by virtue of having the following attributes through relevant experience: (i) an understanding of generally accepted accounting principles and financial statements; (ii) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves; (iii) experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company's financial statements, or experience actively supervising one or more persons engaged in such activities; (iv) an understanding of internal controls and procedures for financial reporting; and (v) an understanding of audit committee functions.

The function of the Audit Committee relates to oversight of the auditors, the auditing, accounting, and financial reporting processes, and the review of the Company's financial reports and information. In addition, the functions of the Audit Committee will include, among other things, recommending to the Board the engagement or discharge of independent auditors, discussing with the auditors their review of the Company's quarterly results and the results of their audit, and reviewing the Company's internal accounting controls.

*Compensation Committee*

The Compensation Committee consists of Ms. Kristen McLaughlin (Chair) and Mr. Louis Castro. The Board has determined that all of the members of the Compensation Committee are "independent," as defined by NASDAQ listing standards. The responsibility of the Compensation Committee is to review and approve the compensation and other terms of employment of our President and Chief Executive Officer and our other executive officers, including all of the executive officers named in the Summary Compensation Table under the heading "Executive Compensation" below (the "named executive officers"). Among its other duties, the Compensation Committee oversees all significant aspects of the Company's compensation plans and benefit programs. The Compensation Committee annually reviews and approves corporate goals and objectives for the President and Chief Executive Officer's compensation and evaluates the Chief Executive Officer's performance in light of those goals and objectives. The Compensation Committee also recommends to the Board the compensation and benefits for members of the Board. The Compensation Committee has also been appointed by the Board to administer our 2021 Equity Incentive Plan. The Compensation Committee does not delegate any of its authority to other persons.

*Nominating and Corporate Governance Committee*

The Nominating and Corporate Governance Committee consists of Ms. Olivia Bartlett (Chair) and Ms. Kristen McLaughlin. All of the committee members are independent under applicable NASDAQ rules and regulations. The Nominating and Corporate Governance Committee is responsible for, among other things, considering potential board members, making recommendations to the full board as to nominees for election to the board, assessing the effectiveness of the board, and implementing our corporate governance guidelines.

*Section 16(a) Beneficial Ownership Reporting Compliance*

Section 16(a) of the Exchange Act requires that our directors and executive officers and persons who beneficially own more than 10% of our common stock (referred to herein as the "reporting persons") file with the SEC various reports as to their ownership of and activities relating to our common stock. Such reporting persons are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.

During the fiscal year ended December 31, 2025, (i) Harrison Gross (Chief Executive Officer) filed one Form 5 to report two transactions involving the vesting of restricted stock units and four sales pursuant to his Rule 10b5-1 trading plan, (ii) Konrad Dabrowski (Chief AI and Growth Officer) filed one Form 5 to report two transactions involving the vesting of restricted stock units and two sales pursuant to his Rule 10b5-1 trading plan, (iii) Eric David Cohen (Chief Technology Officer) filed one Form 5 to report two transactions involving the vesting of restricted stock units and seven sales pursuant to his Rule 10b5-1 trading plan, (iv) Joaquin Abondano (Chief Operating Officer) filed one Form 5 to report two transactions involving the vesting of restricted stock units and three sales pursuant to his Rule 10b5-1 trading plan, (v) Oswald Gayle (Chief Financial Officer) filed one Form 5 to report two transactions involving the vesting of restricted stock units and six sales pursuant to his Rule 10b5-1 trading plan.

**Code of Ethics**

We have adopted a formal code of ethics that applies to our directors and principal executives and financial officers or persons performing similar functions. A copy of our Code of Ethical Conduct can be found on our website under "Investors" at *www.lucyd.co*.

**Item 11. <u>Executive Compensation</u>.**

The following table sets forth the aggregate compensation paid to our named executive officers for the fiscal years ended December 31, 2025 and 2024.

**Summary Compensation Table**

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary<br> ($)** | **Bonus<br> ($)** | **Stock<br> Awards<sup>(3)</sup><br> ($)** | **Option<br> Awards<br> ($)** | **Nonequity<br> Incentive Plan<br> Compensation<br> ($)** | **Nonqualified<br>Deferred<br> Compensation<br>Earnings<br> ($)** | **All Other<br> Compensation<sup>(4)</sup><br> ($)** | **Total<br> ($)** |
| Harrison Gross, | 2025 | 190000 | 8500 | 147600 | – |  | – | 8554 | 354654 |
| Chief Executive Officer | 2024 | 167385 |  | 351936 | – |  | – | 8089 | 527410 |
| Oswald Gayle, | 2025 | 150000 | 5000 | 106600 | – |  | – | 1339 | 262939 |
| Chief Financial Officer<sup>(2)</sup> | 2024 | 143923 |  | 197964 | – |  | – | 8089 | 349976 |
| Konrad Dabrowski, | 2025 | 100000 | 5000 | 123000 | – |  | – | 9012 | 237012 |
| Chief AI and Growth Officer<sup>(1)</sup> | 2024 | 97794 |  | 307944 | – |  | – | 6502 | 412240 |
| David Eric Cohen, | 2025 | 147000 | 5000 | 108240 | – |  | – | 20348 | 280588 |
| Chief Technology Officer | 2024 | 142000 |  | 263952 | – |  | – | 8536 | 414488 |

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(1) Mr. Dabrowski was our Chief Financial Officer through October 11, 2024, at which point he became Co-Chief Financial Officer and served in that role through October 31, 2025. Effective November 1, 2025, Mr. Dabrowski became our Chief AI and Growth Officer.

(2) Mr. Gayle became Co-Chief Financial Officer effective October 11, 2024, and later became Chief Financial Officer effective November 1, 2025. Compensation amounts shown for Mr. Gayle in 2024 include amounts paid to Mr. Gayle in his previous capacities as Vice President and Senior Vice President of Finance, prior to his appointment as Co-Chief Financial Officer.

(3) 2025 amounts include Restricted Stock Units awarded to Messrs. Gross, Gayle, Dabrowski, and Cohen on November 14, 2025 in the amounts of 90,000, 65,000, 75,000, and 66,000 units, respectively 2024 amounts include Restricted Stock Units awarded to Messrs. Gross, Gayle, Dabrowski, and Cohen on December 13, 2024 in the amounts of 57,600, 32,400, 50,400, and 43,200 units, respectively.

(4) Includes health and welfare benefits.

**Employment Arrangements with our Executive Officers**

*Harrison Gross*

On August 11, 2021, we entered into an employment agreement with Harrison Gross to serve in the capacity of the Chief Executive Officer of the Company. We agreed to pay Mr. Gross an annual base salary of $85,800 for the remainder of 2021, and we also agreed that from the initial public offering date in August 2022, we increased his base salary to $150,000 per year. Effective August 2, 2024, we agreed to increase his Mr. Gross' base salary to $190,000 annually. Pursuant to the terms of the employment agreement, our Board may exercise its sole discretion to grant Mr. Gross an annual bonus, the amount of which bonus shall be determined in the sole discretion of our Board.

The employment agreement has an initial term of three years, and will terminate on the third anniversary of the effective date unless Mr. Gross and the Company agree otherwise in writing. If we terminate the employment agreement for any reason other than for cause (as such is defined in the agreement) or Mr. Gross terminates his employment for good reason (as such is defined in the agreement): (1) Mr. Gross shall be entitled to payment of his base salary for the balance of the agreement's term; (2) if Mr. Gross elects to continue group health insurance benefits, we shall reimburse Mr. Gross for any COBRA premiums he pays for the duration of COBRA's coverage; and, (3) we shall provide Mr. Gross with payment of all accrued amounts (as defined in the agreement).

*Konrad Dabrowski*

On August 11, 2021, we entered into an employment agreement with Konrad Dabrowski to serve as the Chief Financial Officer of the Company on a part-time basis, which agreement became effective on September 1, 2021. Mr. Dabrowski devotes 50% of his business time to our Company. We agreed to pay Mr. Dabrowski an annual base salary of $100,000. Pursuant to the terms of the employment agreement, we may exercise our discretion to grant Mr. Dabrowski an annual bonus, the amount of which bonus shall be determined in the sole discretion of the Company.

Following the effective date, the employment agreement shall continue, unless terminated by Mr. Dabrowski or the Company. Mr. Dabrowski's employment is at-will, which may be terminated by the Company or by Mr. Dabrowski at any time and for any reason. Pursuant to the terms of the employment agreement, a sixty days' written notice of termination or resignation is required. If Mr. Dabrowski notifies us of his resignation, or if we terminate Mr. Dabrowski's employment agreement, the Company reserves the right to determine, in its sole discretion, whether Mr. Dabrowski will be required to actively work during the sixty-day notice period; however, Mr. Dabrowski will be entitled to receive his base salary for the duration of the sixty day notice period. The Company has the right to terminate Mr. Dabrowski's employment agreement for cause (as defined in the agreement), which termination shall be effective immediately.

*David Eric Cohen*

David Cohen was an independent consultant for the company from inception until October 1, 2022, when we offered him a full-time letter of employment. He accepted and has been the full-time Chief Technology since then. The company pays him $147,000 annually to serve in this role. Pursuant to the terms of the employment agreement, we may exercise our discretion to grant Mr. Cohen an annual bonus, the amount of which bonus shall be determined in the sole discretion of the Company.

Following the effective date, the employment agreement shall continue, unless terminated by Mr. Cohen or the Company. Mr. Cohen's employment is at-will, which may be terminated by the Company or by Mr. Cohen at any time and for any reason. Pursuant to the terms of the employment agreement, a sixty days' written notice of termination or resignation is required. If Mr. Cohen notifies us of his resignation, or if we terminate Mr. Cohen's employment agreement, the Company reserves the right to determine, in its sole discretion, whether Mr. Cohen will be required to actively work during the sixty-day notice period; however, Mr. Cohen will be entitled to receive his base salary for the duration of the sixty day notice period. The Company has the right to terminate Mr. Cohen's employment agreement for cause (as defined in the agreement), which termination shall be effective immediately.

**Compensation of Directors**

The following table sets forth all compensation paid to our non-management Board members during the year ended December 31, 2025:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Fees Earned<br> or Paid in <br> Cash<br> ($)** | **Stock Awards<br> ($)** | **Option Awards<br> ($)** | **Non-Equity <br> Incentive Plan<br> Compensation <br> ($)** | **Change in <br> Pension Value <br> and Nonqualified<br> Deferred<br> Compensation <br> Earnings<br> ($)** | **All Other<br> Compensation<br> ($)** | **Total<br> ($)** |
| Kristen McLaughlin | 15000 | – |  | – |  | – | 15000 |
| Louis Castro | 42000 | – |  | – |  | – | 42000 |
| Olivia C. Bartlett | 12500 | – |  | – |  | – | 12500 |

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The total number of option awards to our non-management Board members outstanding at December 31, 2025 was 3,750 in aggregate.

**Outstanding Equity Awards**

The following table sets forth outstanding equity awards to our named executive officers as of December 31, 2025.

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Option awards** | **Option awards** | **Option awards** | **Option awards** | **Option awards** | **Stock awards** | **Stock awards** | **Stock awards** | **Stock awards** |
| <br>**Name** | **Number of<br>securities<br>underlying<br>unexercised<br>options<br>(#)<br>exercisable** | **Number of<br>securities<br>underlying<br>unexercised<br>options<br>(#)<br>unexercisable** | **Equity<br>incentive<br>plan<br>awards:<br>Number of<br>securities<br>underlying<br>unexercised<br>unearned<br>options<br>(#)** | **Option<br>exercise<br>price<br>($)** | **Option<br>expiration<br>date** | **Number<br>of shares<br>or units<br>of stock<br>that<br>have not<br>vested<br>(#)** | **Market<br>value of<br>shares<br>of units<br>of stock<br>that<br>have not<br>vested<br>($)** | **Equity<br>incentive<br>plan<br>awards:<br>Number of<br>unearned<br>shares,<br>units or<br>other<br>rights that<br>have not<br>vested<br>(#)** | **Equity<br>incentive<br>plan awards:<br>Market or<br>payout value<br>of unearned<br>shares, units<br>or other<br>rights that<br>have not<br>vested<br>($)** |
| Harrison Gross | 4500 |  |  | $25.50 | 01/13/2028 |  |  |  |  |
|  | 7500 |  |  | $9.00 | 12/18/2028 |  |  |  |  |
|  |  |  |  |  |  | 128400 | $128015 |  |  |
| Oswald Gayle | 4500 |  |  | $25.50 | 01/13/2028 |  |  |  |  |
|  | 2500 |  |  | $9.00 | 12/18/2028 |  |  |  |  |
|  |  |  |  |  |  | 86600 | $86340 |  |  |
| Konrad Dabrowski | 4500 |  |  | $25.50 | 01/13/2028 |  |  |  |  |
|  | 6000 |  |  | $9.00 | 12/18/2028 |  |  |  |  |
|  |  |  |  |  |  | 108600 | $108274 |  |  |
| David Eric Cohen | 3000 |  |  | $25.50 | 01/13/2028 |  |  |  |  |
|  | 3500 |  |  | $9.00 | 12/18/2028 |  |  |  |  |
|  |  |  |  |  |  | 94800 | $94516 |  |  |

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**Option Exercises and Stock Vested**

There were no options exercised by our executive officers during the years ended December 31, 2025 or 2024.

During the year ended December 31, 2025, 19,200, 10,800, 16,800, and 14,400 restricted stock units vested and were issued as shares of common stock to Messrs. Gross, Gayle, Dabrowski, and Cohen, respectively. There were restricted stock units vested for our named executive officers during the year ended December 31, 2024.

**Employee Benefit Plans**

We currently provide health insurance coverage to our full-time W-2 employees, as well as free prescription eyeglasses to them and their immediate families. The Company also provides a complimentary gym membership to full-time staff.

**Non-qualified Deferred Compensation**

None of our employees participate in or have account balances in non-qualified defined contribution plans or other non-qualified deferred compensation plans maintained by us. Our Compensation Committee may elect to provide our officers and other employees with non-qualified defined contribution or other non-qualified compensation benefits in the future if it determines that doing so is in the Company's best interest.

**2021 Equity Incentive Plan**

**General**

Our 2021 Equity Incentive Plan was adopted by the Board and approved by our shareholders on July 1, 2021. The general purposes of the 2021 Equity Incentive Plan are to (i) enable the Company and its subsidiaries to attract and retain the types of employees, consultants, and directors who will contribute to the Company's long-range success; (ii) provide incentives that align the interests of employees, consultants, and directors with those of our shareholders; and (iii) promote the success of the Company's business.

**Description of the 2021 Equity Incentive Plan**

The following description of the principal terms of the 2021 Equity Incentive Plan is a summary and is qualified in its entirety by the full text of the 2021 Equity Incentive Plan.

*Administration.* The 2021 Equity Incentive Plan is administered by a committee appointed by our Board, or in the Board's discretion, by the Board (as applicable, the "Incentive Plan Administrator"). Subject to the terms of the 2021 Equity Incentive Plan, the Incentive Plan Administrator has the authority to (a) determine the eligible individuals who are to receive awards, (b) determine the terms and conditions of each award, including exercise price, vesting or performance criteria, performance period, and terms of the award, (c) determine whether vesting and performance criteria have been achieved, (d) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, or otherwise modify or amend awards, (e) construe and interpret the 2021 Equity Incentive Plan, including the ability to reconcile any inconsistency in, correct any defect in and/or supply any omission in the plan and award agreement; any instrument or agreement, (f) promulgate, amend, and rescind rules and regulations relating to the administration of the 2021 Equity Incentive Plan, and (g) exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the 2021 Equity Incentive Plan and awards granted thereunder. The Incentive Plan Administrator may also delegate its authority to a subcommittee or to one or more officers of the Company, subject to terms and conditions determined by the Incentive Plan Administrator. All decisions made by the Incentive Plan Administrator are final and binding on the Company and the participants.

*Types of Awards.* The 2021 Equity Incentive Plan provides for the grant of stock options, which may be incentive stock options ("ISOs") or nonqualified stock options ("NSOs"), stock appreciation rights ("SARs"), restricted stock, restricted stock units ("RSUs"), performance share awards, and other cash-based or equity-based awards, or collectively, awards.

*Share Reserve.* A total equal to 20% of our issued and outstanding common stock shall be available for the grant of awards under the 2021 Equity Incentive Plan.

If options, stock appreciation rights, restricted stock units or any other awards are forfeited, cancelled, or expire before being exercised or settled in full, the shares subject to such awards will again be available for issuance under the 2021 Equity Incentive Plan. If restricted stock or shares issued upon exercise of an option are reacquired by the Company pursuant to a forfeiture provision, repurchase right or for any other reason, then such shares will again be available for issuance under the 2021 Equity Incentive Plan. Notwithstanding the foregoing, shares applied to pay the exercise price of an option or satisfy withholding taxes related to any award will not become available for issuance under the 2021 Equity Incentive Plan.

Shares issued under the 2021 Equity Incentive Plan may be authorized but unissued shares or treasury shares.

As of December 31, 2025, awards covering 741,248 shares of Common Stock were outstanding, of which 53,100 option awards had been granted subject to the Plan and were currently outstanding, 31,039 stock grants had been granted subject to the Plan (and were fully vested), and 657,109 RSU awards had been granted subject to the Plan (of which, 94,461 had vested).

As of December 31, 2025, there were 354,424 shares of Common Stock available for future award grants under the Plan.

*Incentive Stock Option Limit.* No more than 25,000,000 shares of Common Stock may be issued under the 2021 Equity Incentive Plan upon the exercise of ISOs.

*Eligibility.* Employees (including officers), non-employee directors, and consultants who render services to the Company or a parent or subsidiary thereof (whether now existing or subsequently established) are eligible to receive awards under the 2021 Equity Incentive Plan. ISOs may only be granted to employees of the Company or a parent or subsidiary thereof (whether now existing or subsequently established).

*Stock Options.* A stock option is the right to purchase a certain number of shares of stock at a fixed exercise price which, pursuant to the 2021 Equity Incentive Plan, may not be less than 100% of the fair market value of Common Stock on the date of grant. Subject to limited exceptions, an option may have a term of up to 10 years and will generally expire sooner if the optionholder's service terminates. Options will vest at the rate determined by the Incentive Plan Administrator. An optionholder may pay the exercise price of an option in cash, or, with the Incentive Plan Administrator's consent, with shares of stock the optionholder already owns, with proceeds from an immediate sale of the option shares, through a net exercise procedure or by any other method permitted by applicable law.

*Tax Limitations on Incentive Stock Options.* The aggregate fair market value, determined at the time of grant, of the Common Stock with respect to ISOs that are exercisable for the first time by an optionholder during any calendar year under all of the Company's stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of the Company's total combined voting power or that of any of the Company's affiliates unless (a) the option exercise price is at least 110% of the fair market value of Common Stock on the date of grant and (b) the term of the ISO does not exceed five years from the date of grant.

*Stock Appreciation Rights*. A stock appreciation right provides the recipient with the right to the appreciation in a specified number of shares of stock. The Incentive Plan Administrator determines the exercise price of stock appreciation rights granted under the 2021 Equity Incentive Plan, which may not be less than 100% of the fair market value of Common Stock on the date of grant. A stock appreciation right may have a term of up to 10 years and will generally expire sooner if the recipient's service terminates. SARs will vest at the rate determined by the Incentive Plan Administrator. Upon exercise of a SAR, the recipient will receive an amount in cash, stock, or a combination of stock and cash determined by the Incentive Plan Administrator, equal to the excess of the fair market value of the shares being exercised over their exercise price.

*Restricted Stock Awards.* Shares of restricted stock may be issued under the 2021 Equity Incentive Plan and may be subject to vesting, as determined by the Incentive Plan Administrator. Recipients of restricted stock generally have all of the rights of a shareholder with respect to those shares, including voting rights and dividends, except as provided in the award agreement.

*Restricted Stock Units.* A restricted stock unit is a right to receive a share, at no cost to the recipient, upon satisfaction of certain conditions, including vesting conditions, established by the Incentive Plan Administrator. RSUs vest at the rate determined by the Incentive Plan Administrator and any unvested RSUs will generally be forfeited upon termination of the recipient's service. Settlement of restricted stock units may be made in the form of cash, stock or a combination of cash and stock, as provided in the award agreement and as determined by the Incentive Plan Administrator. Recipients of restricted stock units generally will have no voting or dividend rights prior to the time the vesting conditions are satisfied, and the award is settled.

*Performance Share Award*. A performance share award is a right to receive a share or share units based upon the Company's performance during a specified performance period, as determined by the Incentive Plan Administrator. The Incentive Plan Administrator has the discretion to determine: (i) the number of shares or stock-denominated units subject to a Performance Share Award granted to any recipient; (ii) the performance period applicable to any award; (iii) the conditions that must be satisfied for a recipient to earn an award; and (iv) the other terms, conditions and restrictions of the award.

*Cash Awards and Other Equity-Based Awards.* The Incentive Plan Administrator may grant cash awards and other awards based in whole or in part by reference to Common Stock, either alone or in tandem with other awards. The Incentive Plan Administrator will determine the terms and conditions of any such awards.

*Changes to Capital Structure.* In the event of certain changes in capitalization, including a stock split, reverse stock split, stock dividend, or an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, or exchange, proportionate adjustments will be made in the number and kind of shares available for issuance under the 2021 Equity Incentive Plan, the limit on the number of shares that may be issued under the 2021 Equity Incentive Plan as ISOs, the number and kind of shares subject to each outstanding award and/or the exercise price of each outstanding award.

*Change in Control.* If the Company is party to certain change in control transactions, each outstanding award will be treated as the Incentive Plan Administrator determines, which may include the continuation, assumption or substitution of an outstanding award, the cancellation of an outstanding award after an opportunity to exercise or the cancellation of an outstanding award in exchange for a payment equal to the value of the shares subject to such award less any applicable exercise price.

*Transferability of Awards.* Unless the Incentive Plan Administrator determines otherwise, an award generally will not be transferable other than by beneficiary designation, a will or the laws of descent and distribution. The Incentive Plan Administrator may permit transfer of an award in a manner consistent with applicable law.

*Amendment and Termination.* The Board may amend or terminate the 2021 Equity Incentive Plan at any time. Any such amendment or termination will not affect outstanding awards. If not sooner terminated, the 2021 Equity Incentive Plan will automatically terminate 10 years after its adoption by the Board. Shareholder approval is not required for any amendment of the 2021 Equity Incentive Plan, unless required by applicable law, government regulation or exchange listing standards.

**Item 12. <u>Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters</u>.**

Based solely upon information made available to us, the following table sets forth information as of March 15, 2026, regarding the beneficial ownership of our common stock:

● each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;

● each of our named executive officers and directors; and

● all our executive officers and directors as a group.

Unless otherwise indicated, the address of each holder listed in the following table is 11900 Biscayne Blvd., Suite 630, North Miami, Florida.

Percentage ownership shown in the following table is based on 6,300,661 shares of our common stock outstanding.

---

| | | |
|:---|:---|:---|
| **Name of Beneficial Owner** | **Shares of<br>Common Stock<br>Beneficially**<br>**Owned<sup>(1)</sup>** | **Percent of<br>Common Stock<br>Beneficially<br>Owned** |
| **Named Executive Officers and Directors** |  |  |
| Harrison Gross<sup>(2)</sup> | 50333 | \*% |
| Konrad Dabrowski<sup>(3)</sup> | 44204 | \*% |
| Oswald Gayle<sup>(4)</sup> | 26098 | \*% |
| David Eric Cohen<sup>(5)</sup> | 31411 | \*% |
| Kristen McLaughlin<sup>(6)</sup> | 1000 | \*% |
| Louis Castro<sup>(7)</sup> | 1750 | \*% |
| Olivia Bartlett<sup>(8)</sup> | 1000 | \*% |
| All directors and executive officers as a group (7 persons) | 155796 | 2.43% |
| **5% Stockholders** |  |  |
| Kelly Jospeh Chapman<sup>(9)</sup> | 450440 | 8.42% |
| Intracoastal Capital LLC<sup>(10)</sup> | 593804 | 9.99% |

---

\* Less than 1%.

(1) We have determined beneficial ownership in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, which is generally determined by voting power and/or dispositive power with respect to securities. Unless otherwise noted, the shares of common stock listed above are owned as of the date of this 10-K, and are owned of record by each individual named as beneficial owner and such individual has sole voting and dispositive power with respect to the shares of common stock owned by each of them.

(2) Includes 13,733 shares of common stock held by Mr. Gross; 12,000 shares of common stock issuable upon exercise of stock options held by Mr. Gross exercisable within 60 days of the date of this 10-K; and 24,600 shares of common stock issuable upon the vesting of restricted stock units held by Mr. Gross, which shall vest within 60 days of the date of this 10-K.

(3) Includes 12,804 shares of common stock held by Mr. Dabrowski; 10,500 shares of common stock issuable upon exercise of stock options held by Mr. Dabrowski exercisable within 60 days of the date of this 10-K, and 20,900 shares of common stock issuable upon the vesting of restricted stock units held by Mr. Dabrowski, which shall vest within 60 days of the date of this 10-K.

(4) Includes 2,865 shares of common stock held by Mr. Gayle; 7,000 shares of common stock issuable upon exercise of stock options held by Mr. Gayle exercisable within 60 days of the date of this 10-K; and 16,233 shares of common stock issuable upon the vesting of restricted stock units held by Mr. Gayle, which shall vest within 60 days of the date of this 10-K.

(5) Includes 6,711 shares of common stock held by Mr. Cohen; 6,500 shares of common stock issuable upon exercise of stock options held by Mr. Cohen exercisable within 60 days of the date of this 10-K; and 18,200 shares of common stock issuable upon the vesting of restricted stock units held by Mr. Cohen, which shall vest within 60 days of the date of this 10-K.

(6) Includes 1,000 shares of common stock issuable upon exercise of stock options held by Ms. McLaughlin exercisable within 60 days of the date of this 10-K.

(7) Includes 1,750 shares of common stock issuable upon exercise of stock options held by Mr. Castro exercisable within 60 days of the date of this 10-K.

(8) Includes 1,000 shares of common stock issuable upon exercise of stock options held by Ms. Bartlett exercisable within 60 days of the date of this 10-K.

(9) Includes 450,440 shares of common stock, held by an individual with sole voting power and dispositive power over 450,440 shares of common stock. The address of this holder is 7559 Preservation Rd. Tallahassee, Florida.

(10) Includes 593,804 shares of common stock issuable upon exercise of certain warrants held by Intracoastal Capital LLC. Excludes 1,734,413 shares of common stock issuable upon the exercise of certain other warrants because of blocker provisions under which the holder thereof does not have the right to exercise such warrants to the extent that such exercise would result in beneficial ownership by the holder thereof of more than certain thresholds. The address of Intracoastal Capital LLC is 245 Palm Trail, Delray Beach, Florida.

**Item 13. <u>Certain Relationships and Related Transactions, and Director Independence</u>.**

On occasion we may engage in certain related party transactions. All prior related party transactions were approved by our Board of Directors and a majority of our issued and outstanding shares of capital stock. Our policy is that all related party transactions will be reviewed and approved by the Audit Committee of our Board of Directors prior to our entering into any related party transactions.

**License Agreement**

We were founded by Lucyd Ltd., the inventor and licensor of the technology that our products are based upon, which is a portfolio company of Tekcapital, one of our larger stockholders. On April 1, 2020, we entered into an exclusive, worldwide license agreement with Lucyd Ltd. for all fields of use of the Lucyd<sup>®</sup> brand, and the associated intellectual property and assets (the "License Agreement"). The License Agreement was a royalty-free, fully paid up, perpetual license, for the exclusive use of all Lucyd patents and patent applications, trademarks, logos, software, and other intellectual property, as well as website domain names, social media accounts, advertising material, supply and endorsement agreements, and other assets. Under the terms of the License Agreement, we had the exclusive right to effectuate sublicenses, either exclusively or non-exclusively, to any or all of our licensed intellectual property, at our sole discretion.

On October 5, 2021, the parties to the License Agreement executed an Addendum to the exclusive license agreement (the "Addendum"), which clarified that we would commercialize, continue with any on-going intellectual property prosecutions and pay all maintenance or other patent fees. For all new intellectual property, Innovative Eyewear, Inc. will own and control it and be responsible for all prosecution and maintenance costs.

On August 12, 2025, Lucyd Ltd. executed an intellectual property assignment agreement to confirm that all registered intellectual property rights under the License Agreement, to the extent they had not previously been assigned to the Innovative Eyewear, Inc. in any 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 License Agreement were also irrevocably assigned to the Company. As such, we have acquired full ownership of all registered and unregistered intellectual property and assets that were previously exclusively licensed to us from Lucyd Ltd., and the License Agreement was no longer necessary; thus Lucyd Ltd. and Innovative Eyewear, Inc. mutually agreed to terminate the License Agreement.

**Management Service Agreement**

On June 1, 2020, we entered into a management service agreement with Tekcapital Europe Ltd., an affiliate one of our larger stockholders, Lucyd Ltd., and whose Chief Executive Officer is the father of our Chief Executive Officer, pursuant to which we agreed to pay Tekcapital Europe Ltd. $25,000 per fiscal quarter for rent-free office space, utilities, advisory services, and any other services in accordance with Tekcapital Europe Ltd.'s areas of expertise. The management agreement provided for a perpetual term, with the right of either party to terminate for any reason with 30 days' notice. Effective February 1, 2022, the original management service agreement was amended to have us billed at $35,000 quarterly for advisory and other services, and in addition, Tekcapital Europe Ltd. began to bill us for an allocation of rent paid by Tekcapital Europe Ltd. on our behalf.

We incurred $140,000 during each of the years ended December 31, 2025 and 2024 under our management services agreement with Tekcapital Europe Ltd.; we also recognized $116,684 and $92,312 of rent expense for the years ended December 31, 2025 and 2024, respectively.

**Financing Agreement**

On March 1, 2024, we 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, we 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 our common stock upon certain defined events. Upon issuance, the convertible note would have a maturity date of September 1, 2025, at which time all outstanding principal and accrued interest, if any, would be payable in full in cash or in the Company's common stock. The Company may 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 the March 1, 2024 convertible note financing agreement, such that upon issuance, the convertible note would have a maturity date of September 1, 2026. There were no other changes to the terms and provisions of the agreement.

On March 11, 2026, the Company and Lucyd Ltd. entered into a further amendment of the March 1, 2024 convertible note financing agreement, such that upon issuance, the convertible note will have a maturity date of September 1, 2027. There were no other changes to the terms and provisions of the agreement.

We have not borrowed any amounts under this agreement.

**Loans to Tekcapital Europe**

On January 11, 2024, we 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, we 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 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 remain outstanding or payable to us under this agreement.

On April 23, 2025, we 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, we loaned $250,000 to Tekcapital Europe, Ltd. in May 2025. The loan bore simple interest at a rate of 10% per annum, and Tekcapital Plc executed the agreement as guarantor for Tekcapital Europe, Ltd. on the full amount of the loan. In June 2025, Tekcapital Europe, Ltd. repaid such borrowing in full along with $2,503 of interest. As of December 31, 2025, no amounts remained outstanding or payable to us under this agreement.

On December 19, 2025, we 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, we agreed to make a loan facility available to Tekcapital Europe, Ltd. for up to a maximum of $300,000. Any amounts advanced to Tekcapital Europe, Ltd. bear simple interest at a rate of 12% per annum, and Tekcapital Plc executed the agreement as guarantor for Tekcapital Europe, Ltd. on the full amount of the loan. On December 23, 2025, Tekcapital Europe, Ltd. borrowed $300,000 under this agreement; the $300,000 outstanding principal balance of this loan, plus accrued interest receivable of $789, is included within Due from Tekcapital and Affiliates on our balance sheet as of December 31, 2025. On February 24, 2026, Tekcapital Europe, Ltd. repaid such borrowing in full along with $6,115 of interest.

**Employment Agreements**

See "Item 11. Executive Compensation" regarding employment agreements with our executives.

**Statement of Policy**

All future transactions between us and our officers, directors, or five percent or greater stockholders, and respective affiliates will be on terms no less favorable than could be obtained from unaffiliated third parties and will be approved by a majority of our independent directors who do not have an interest in the transactions and who had access, at our expense, to our legal counsel or independent legal counsel.

To the best of our knowledge, during the past three fiscal years, other than as set forth above, there were no material transactions, or series of similar transactions, or any currently proposed transactions, or series of similar transactions, to which we were or are to be a party, in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed financial years, and in which any director or executive officer, or any security holder who is known by us to own of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing persons, has an interest (other than compensation to our officers and directors in the ordinary course of business).

**Item 14. <u>Principal Accounting Fees and Services</u>**.

**Audit Fees**

The aggregate fees billed for professional services rendered by our Independent Registered Public Accounting Firm, Cherry Bekaert LLP, for the audit of our annual financial statements, review of our consolidated financial statements included in our quarterly reports, and other fees that are normally provided by the accounting firm in connection with statutory and regulatory filings or engagements for the years ended December 31, 2025 and 2024 were $155,925 and $140,175, respectively.

**Audit-Related Fees**

There were approximately $47,775 and $66,833 of fees billed by our Independent Registered Public Accounting Firm for audit-related services for the fiscal years ended December 31, 2025 and 2024, respectively, which included consent and comfort letter procedures related to our Form S-1 filings for various equity offerings.

**Tax Fees**

There were no fees billed for professional services rendered by our Independent Registered Public Accounting Firm for tax compliance, tax advice, and tax planning for the fiscal years ended December 31, 2025 and 2024.

**All Other Fees**

There were no fees billed for non-audit services by our Independent Registered Public Accounting Firm for the fiscal years ended December 31, 2025 and 2024.

**Audit Committee Determination**

The Audit Committee considered and determined that the services performed are compatible with maintaining the independence of the independent registered public accounting firm.

***Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor***

The Audit Committee is responsible for pre-approving all audit and permitted non-audit services to be performed for us by our Independent Registered Public Accounting Firm as outlined in its Audit Committee charter. Prior to engagement of the Independent Registered Public Accounting Firm for each year's audit, management or the Independent Registered Public Accounting Firm submits to the Audit Committee for approval an aggregate request of services expected to be rendered during the year, which the Audit Committee pre-approves. During the year, circumstances may arise when it may become necessary to engage the Independent Registered Public Accounting Firm for additional services not contemplated in the original pre-approval. In those circumstances, the Audit Committee requires specific pre-approval before engaging the Independent Registered Public Accounting Firm. The engagements of our Independent Registered Public Accounting Firm were approved by the Company's Audit Committee.

**PART IV**

**Item 15. <u>Exhibits, Financial Statement Schedules</u>.**

**(a)(1)(2) <u>Financial Statement Schedules</u>**

See accompanying "Index to Consolidated Financial Statements."

**(b) <u>Exhibits</u>**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 1.1\* | [Underwriting Agreement by and among Innovative Eyewear, Inc. and Maxim Group LLC, as representative of the several underwriters, dated August 14, 2022, (Incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K (File No. 001-41392) filed with the Securities and Exchange Commission August 18, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622016013/innovativeeyewear_ex1-1.htm) |
| 3.1\* | [Second Amended and Restated Articles of Incorporation of Innovative Eyewear, Inc., (Incorporated by reference to Exhibit 3.2 to the Amended Registration Statement filed on Form S-1/A 1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022)](https://www.sec.gov/Archives/edgar/data/1808377/000182912622000672/innovativeeyewear_ex3-2.htm) |
| 3.2\* | [Amended and Restated Bylaws of innovative Eyewear, Inc., (Incorporated by reference to Exhibit 3.1 to the Amended Registration Statement filed on Form S-1/A 1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022)](https://www.sec.gov/Archives/edgar/data/1808377/000182912622000672/innovativeeyewear_ex3-1.htm) |
| 4.1\* | [Form of Representative's Warrant Agreement (Incorporated by reference to Exhibit 4.1 to the Amended Registration Statement filed on Form S-1/A 2 (File No. 333-261616) filed with the Securities Exchange Commission January 20, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622001268/innovativeeye_ex4-1.htm) |
| 4.2\* | [Representative's Warrant issued to Maxim Group LLC., dated August 17, 2022, (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-41392) filed with the Securities and Exchange Commission August 18, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622016013/innovativeeyewear_ex4-1.htm) |
| 4.3\* | [Form of Common Stock Purchase Warrant, (Incorporated by reference to Exhibit 4.2 to the Amended Registration Statement filed on Form S-1/A 2 (File No. 333-261616) filed with the Securities Exchange Commission January 20, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622001268/innovativeeye_ex4-2.htm) |
| 4.4\* | [Form of Warrant (incorporated by reference to Exhibit 4.6 to the Registration Statement on Form S-1 (File No. 333-272737) filed with the SEC on June 16, 2023)](http://www.sec.gov/Archives/edgar/data/1808377/000182912623004251/innovativeeye_ex4-6.htm) |
| 4.5\* | [Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Registration Statement on Form S-1 (File No. 333-272737) filed with the SEC on June 16, 2023)](http://www.sec.gov/Archives/edgar/data/1808377/000182912623004251/innovativeeye_ex4-7.htm) |
| 4.6\* | [Form of Warrant Agency Agreement (incorporated by reference to Exhibit 4.8 to the Registration Statement on Form S-1 (File No. 333-272737) filed with the SEC on June 16, 2023)](http://www.sec.gov/Archives/edgar/data/1808377/000182912623004251/innovativeeye_ex4-8.htm) |
| 10.1\* | [License Agreement between Innovative Eyewear, Inc. and Lucyd Ltd., dated April 1, 2020, (Incorporated by reference to Exhibit 10.1 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622000672/innovativeeyewear_ex10-1.htm) |
| 10.2\* | [Addendum to License Agreement between Innovative Eyewear, Inc. and Lucyd Ltd., dated December 7, 2021, (Incorporated by reference to Exhibit 10.2 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622000672/innovativeeyewear_ex10-2.htm) |
| 10.3\* | [Management Agreement between Innovative Eyewear, Inc. and Tekcapital Europe Ltd., dated June 1, 2020, (Incorporated by reference to Exhibit 10.3 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622000672/innovativeeyewear_ex10-3.htm) |
| 10.7\* | [Employment Agreement by and between Innovative Eyewear, Inc. and Harrison Gross, dated August 11, 2021, (Incorporated by reference to Exhibit 10.6 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622000672/innovativeeyewear_ex10-6.htm) |

---

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 10.8\* | [Employment Agreement by and between Innovative Eyewear, Inc. and Konrad Dabrowski, dated August 11, 2021, (Incorporated by reference to Exhibit 10.7 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622000672/innovativeeyewear_ex10-7.htm) |
| 10.9\* | [Innovative Eyewear, Inc., 2021 Equity Incentive Plan, (Incorporated by reference to Exhibit 10.10 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622000672/innovativeeyewear_ex10-10.htm) |
| 14.1\* | [Form of Code of Ethics of innovative Eyewear, Inc. (Incorporated by reference to Exhibit 14.1 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022)](http://www.sec.gov/Archives/edgar/data/1808377/000182912622000672/innovativeeyewear_ex14-1.htm) |
| 19.1\* | [Insider trading policy (Incorporated by reference to Exhibit 19.1 to the Annual Report filed on Form 10-K (File No. 001-41392) filed with the Securities and Exchange Commission on March 25, 2024)](https://www.sec.gov/Archives/edgar/data/1808377/000182912624001847/innovativeeye_ex19-1.htm) |
| 23.1 | [Consent of Cherry Bekaert LLP, Independent Registered Public Accounting Firm (PCAOB ID 00677)](innovativeeye_ex23-1.htm) |
| 24.1 | [Power of Attorney](#poa) |
| 31.1 | [Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13A-14(A)and 15D-14(A)](innovativeeye_ex31-1.htm) |
| 31.2 | [Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13A-14(A)and 15D-14(A)](innovativeeye_ex31-2.htm) |
| 32.1 | [Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350](innovativeeye_ex32-1.htm) |
| 32.2 | [Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350](innovativeeye_ex32-2.htm) |
| 97.1\* | [Innovative Eyewear, Inc., Executive Compensation Clawback Policy (Incorporated by reference to Exhibit 97 to the Annual Report filed on Form 10-K (File No. 001-41392) filed with the Securities and Exchange Commission on March 24, 2025)](https://www.sec.gov/Archives/edgar/data/1808377/000182912624001847/innovativeeye_ex97-1.htm) |
| 101.ins | XBRL Instance Document |
| 101.sch | XBRL Taxonomy Extension Schema Document |
| 101.cal | XBRL Taxonomy Calculation Linkbase Document |
| 101.def | XBRL Taxonomy Definition Linkbase Document |
| 101.lab | XBRL Taxonomy Label Linkbase Document |
| 101.pre | XRL Taxonomy Presentation Linkbase Document |

---

\* Previously filed

**Item 16. <u>Form 10-K Summary</u>.**

The Company has elected not to include a summary pursuant to this Item 16.

**<u>SIGNATURES</u>**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | Innovative Eyewear, Inc. | Innovative Eyewear, Inc. |
|  | By: | */s/ Harrison Gross* |
|  |  | Harrison Gross |
| March 25, 2026 |  | Chief Executive Officer |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

---

| | | |
|:---|:---|:---|
|  | By: | */s/ Harrison Gross* |
|  |  | Harrison Gross |
|  |  | Chief Executive Officer and Director |
| March 25, 2026 |  | (Principal Executive Officer) |
|  | By: | */s/ Oswald Gayle* |
|  |  | Oswald Gayle |
|  |  | Chief Financial Officer |
| March 25, 2026 |  | (Principal Financial and Accounting Officer) |
|  | By: | */s/ Kristen McLaughlin* |
|  |  | Kristen McLaughlin |
| March 25, 2026 |  | Director |
|  | By: | */s/ Louis Castro* |
|  |  | Louis Castro |
| March 25, 2026 |  | Director |
|  | By: | */s/ Olivia C. Bartlett* |
|  |  | Olivia C. Bartlett |
| March 25, 2026 |  | Director |

---

**Report of Independent Registered Public Accounting Firm**

To the Board of Directors and Stockholders

Innovative Eyewear, Inc.

Miami, Florida

**Opinion on the Financial Statements**

We have audited the accompanying balance sheets of Innovative Eyewear, Inc. (the "Company") as of December 31, 2025 and 2024, and the related statements of operations, stockholders' equity, and cash flows for each of the years then ended and the related notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Cherry Bekaert LLP

We have served as the Company's auditor since 2021.

Chicago, Illinois

March 25, 2026

**INNOVATIVE EYEWEAR, INC.**

**BALANCE SHEETS**

**December 31, 2025 and 2024**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $6511036 | $2628987 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments |  | 4895184 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 142152 | 107918 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 263730 | 266935 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory prepayments | 438417 | 424594 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory, net | 1745136 | 831757 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from Tekcapital and Affiliates | 334582 | 23394 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 60 | 59447 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Assets | 9435113 | 9238216 |
| &nbsp;&nbsp;&nbsp;Non-Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets, net | 559968 | 451302 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net | 61777 | 107562 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other non-current assets | 83075 | 41229 |
| **TOTAL ASSETS** | $**10139933** | $**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 | $985417 | $692817 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 59889 | 44901 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Current Liabilities | 1045306 | 737718 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term payment plan with vendor | 28488 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | - | 5450 |
| **TOTAL LIABILITIES** | **1073794** | **743168** |
| Commitments and contingencies (see Note 7) |  |  |
| Stockholders' Equity |  |  |
| &nbsp;&nbsp;&nbsp;Common stock (par value $0.00001, 50,000,000 shares authorized: 5,479,861 and 2,452,632 shares issued and outstanding as of December 31, 2025 and 2024, respectively) | 55 | 25 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 41393203 | 33831046 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (32327119) | (24735930) |
| **TOTAL STOCKHOLDERS' EQUITY** | 9066139 | 9095141 |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $**10139933** | $**9838309** |

---

See accompanying Notes to the Financial Statements.

**INNOVATIVE EYEWEAR, INC.**

 **STATEMENTS OF OPERATIONS**

**For the years ended December 31, 2025 and 2024**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Revenues, net | $2661669 | $1636440 |
| Less: Cost of Goods Sold | (2094218) | (1421250) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross Profit | 567451 | 215190 |
| Operating Expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | (5225834) | (4473292) |
| &nbsp;&nbsp;&nbsp;Sales and marketing | (2971193) | (2706213) |
| &nbsp;&nbsp;&nbsp;Research and development | (725388) | (819387) |
| &nbsp;&nbsp;&nbsp;Related party management fee | (140000) | (140000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Operating Expenses | (9062415) | (8138892) |
| Other Income (Expense), net | 903775 | 157187 |
| Net Loss | $(7591189) | $(7766515) |
| Weighted average number of shares outstanding | 3991818 | 1496357 |
| Loss per share, basic and diluted | $(1.90) | $(5.19) |

---

See accompanying Notes to the Financial Statements.

**INNOVATIVE EYEWEAR, INC.**

 **STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**For the years ended December 31, 2025 and 2024**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **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) |  |  |  |  |
| Issuance of shares to brand ambassador | 11539 |  | 30001 |  | 30001 |
| Issuance of shares related to vesting of restricted share units | 80816 | 1 | (1) |  |  |
| At-the-Market Offerings | 606377 | 6 | 1177203 |  | 1177209 |
| Exercises of warrants related to inducement agreements | 1341970 | 13 | 3331968 |  | 3331981 |
| Other exercises of warrants in ordinary course | 986532 | 10 | 2312738 |  | 2312748 |
| Stock-based compensation |  |  | 710248 |  | 710248 |
| Net loss | - | - | - | (7591189) | (7591189) |
| **Balances as of December 31, 2025** | **5479861** | $**55** | $**41393203** | $**(32327119)** | $**9066139** |
| **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 to brand ambassador | 4500 |  | 21690 |  | 21690 |
| Issuance of shares related to vesting of restricted share units | 13645 |  |  |  |  |
| At-the-Market Offerings | 557987 | 6 | 3723128 |  | 3723134 |
| First Registered Direct Offering | 210043 | 2 | 737298 |  | 737300 |
| Second Registered Direct Offering | 263160 | 3 | 2134048 |  | 2134051 |
| Exercises of warrants related to inducement agreements | 538426 | 6 | 3503873 |  | 3503879 |
| Other exercises of warrants in ordinary course | 102455 | 1 | 424255 |  | 424256 |
| Stock-based compensation |  |  | 676620 |  | 676620 |
| Net loss | - | - | - | (7766515) | (7766515) |
| **Balances as of December 31, 2024** | **2452632** | $**25** | $**33831046** | $**(24735930)** | $**9095141** |

---

See accompanying Notes to the Financial Statements.

**INNOVATIVE EYEWEAR, INC.**

 **STATEMENTS OF CASH FLOWS**

**For the years ended December 31, 2025 and 2024**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Net Loss | $(7591189) | $(7766515) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 66788 | 109489 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 68554 | 39897 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest income | (789) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized gains on debt securities (U.S. Treasury bills) | (130496) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation and nonemployee stock-based payment expense | 738170 | 774788 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses paid by Tekcapital and Affiliates | 259703 | 281758 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for doubtful accounts | 7993 | 19859 |
| &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 | (36777) | (4566) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 191521 | 91228 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 28682 | 16356 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory prepayments | (13823) | (101074) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (913379) | (298518) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (19184) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets and deferred revenue | 68925 | 9595 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flows from operating activities | (7275301) | (6739630) |
| **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) | 6300000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans made to Tekcapital Europe, Ltd. | (550000) | (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 | (177220) | (204770) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | (72513) | (62203) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flows from investing activities | 4475947 | (5162157) |
| **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 | 1177209 | 3723134 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from exercises of warrants | 5644729 | 3928135 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of common stock withheld from employees to cover withholding taxes on vested restricted share units | 52655 | 19603 |
| &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 | (44147) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of amounts due to Tekcapital and Affiliates | (270102) | (298896) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash flows from financing activities | 6681403 | 10243327 |
| Net Change in Cash and cash equivalents | 3882049 | (1658460) |
| Cash and cash equivalents at Beginning of Period | $2628987 | $4287447 |
| Cash and cash equivalents at End of Period | $6511036 | $2628987 |
| **Significant Non-Cash Transactions** |  |  |
| Expenses paid for by Tekcapital and Affiliates, reported as change in Due to/from Tekcapital and Affiliates | 259703 | 281758 |
| 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 Financial Statements.

**INNOVATIVE EYEWEAR, INC.**

**NOTES TO THE FINANCIAL STATEMENTS**

**December 31, 2025 and 2024**

**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 December 31, 2025.

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

*Basis of Presentation*

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and in accordance with the accounting rules under Regulation S-X, as promulgated by the Securities and Exchange Commission ("SEC"). In the opinion of management, all adjustments considered necessary for the fair presentation of the financial statements for the years presented have been included. The results of operations for the years ended December 31, 2025 and 2024 are not necessarily indicative of the results to be expected for future periods.

*Change in Capital Structure*

As described more fully in Note 8, effective July 18, 2024, the Company effected a 1-for-20 reverse stock split for all of its issued and outstanding common stock. All share and per share related amounts presented in these financial statements and accompanying notes, including but not limited to shares issued and outstanding, dollar amounts of common stock and additional paid-in capital, earnings/(loss) per share, and warrants and options, have been retroactively adjusted for all periods presented in order to reflect this change in capital structure. There were no changes to the total number of authorized common shares or par value per common share as a result of this change.

*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.

*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 Company's chief operating decision maker, as such term is defined under GAAP, is our Chief Executive Officer. The accounting policies of our single reportable segment are the same as those for the Company as a whole.

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.

*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 certain 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 were recorded at amortized cost of $4,895,184 in the accompanying balance sheet as of December 31, 2024; 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 in March 2025, the Company recognized a realized gain $104,816.

Additionally, during the year ended December 31, 2025, the Company purchased an investment in U.S. Treasury bills for $1,274,320 in April 2025, which subsequently matured in October 2025 and for which the Company recognized a realized gain of $25,680.

*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 collectability from customers, giving consideration to current conditions, reasonable forecasts, and expectations of future collectability and collection efforts. Management continuously assesses the collectability 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. The Company recognized bad debt expense of $7,993 and $19,859 for the years ended December 31, 2025 and 2024, respectively.

A roll forward of the allowance for credit losses for the years ended December 31, 2025 and 2024 is as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Balance at January 1 | $30966 | $25772 |
| Bad debt expense | 7993 | 19859 |
| Write-offs | (22401) | (14883) |
| Other | 86 | 218 |
| Balance at December 31 | $16644 | $30966 |

---

As of January 1, 2024, accounts receivable, net of allowance for credit losses were $93,211.

*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 December 31, 2025 was $72,864 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 $59,000 and $0 as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the Company recorded an inventory prepayment in the amount of $438,417 and $424,594, respectively, related to down payments on eyewear purchased from the manufacturer, prior to shipment of the product that occurred after the respective balance sheet dates.

*Intangible Assets*

Intangible assets relate to patent costs received in conjunction with the initial capitalization of the Company and internally developed utility and design patents. The Company amortizes these assets over the estimated useful life of the patents. The Company reviews its intangible assets for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

*Capitalized Software*

Prior to 2024, the Company had incurred certain costs related to development of the Vyrb software application, and had capitalized approximately $88,000 of such costs related to coding, development, and testing (subsequent to establishing technical feasibility of the app), as it was the Company's intention to market and sell this software externally. During 2024, management decided to shift its primary software development focus to the Lucyd app. Based on this decision, during the year ended December 31, 2024, the Company expensed the previously-capitalized Vyrb software development costs totaling approximately $88,000 to research and development expense.

No development costs have been capitalized with respect to the Lucyd app or any other software, and there are no capitalized software costs recorded on the Company's balance sheets as of December 31, 2025 or 2024.

*Property and Equipment*

Property and equipment are depreciated using the straight-line method over the estimated useful lives or lease terms if shorter. Depreciation expense for the years ended December 31, 2025 and 2024 was $66,788 and $109,489, respectively. Repair and maintenance costs are expensed as incurred.

---

| | | | |
|:---|:---|:---|:---|
| <br>**Property & Equipment** | **December 31,**<br>**2025** | **December 31,**<br>**2024** | **Estimated Useful Lives**<br>**(in Years)** |
| Mobile Kiosk Display | $193004 | $162940 | 3 years |
| Computer Equipment | 44901 | 44901 | 3 Years |
| Office Equipment | 27826 | 12991 | 3 Years |
| Internal-Use Software and Website Costs | 53300 | 77196 | 3 to 5 Years |
| &nbsp;&nbsp;&nbsp;Property and equipment, gross | 319031 | 298028 |  |
| Less: Accumulated depreciation | (257254) | (190466) |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | $61777 | $107562 |  |

---

*Fair Value of Financial Instruments*

For certain of the Company's financial instruments, including cash, cash equivalents, accounts receivable, and accounts payable, the carrying amounts approximate fair value due to the short-term maturities of these instruments.

*Concentrations of Credit Risk*

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, and accounts receivable.

The Company limits its credit risk with respect to cash by maintaining cash and cash equivalent balances with high quality financial institutions. At times, the Company's cash balances may exceed federally insured limits.

Concentrations of credit risk with respect to accounts receivable are generally considered minimal due to collection history. However, some significant concentrations exist.

● The accounts receivable balance from Amazon.com for sales made through their website was $66,043 or approximately 42% of the Company's gross accounts receivable balance as of December 31, 2025, and was $23,834 or approximately 17% of the Company's gross accounts receivable balance as of December 31, 2024.

● The accounts receivable balance from an unrelated wholesale distributor was $18,586 or approximately 12% of the Company's gross accounts receivable balance as of December 31, 2025, and was $53,184 or approximately 37% of the Company's gross accounts receivable balance as of December 31, 2024.

● As of December 31, 2024, $47,950 or approximately 33% of the Company's gross accounts receivable balance was related to a single customer under a long-term instalment arrangement; the accounts receivable balance for this customer was zero as of December 31, 2025.

*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.

The following table presents disaggregated revenue for the years ended December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| E-commerce channels | $2431365 | $1464385 |
| Wholesale channels | 217113 | 167549 |
| App store subscriptions | 13191 | 4506 |
| Total revenues, net | $2661669 | $1636440 |

---

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 collectability 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. With respect to such instances, during the years ended December 31, 2025 and 2024, we recognized $30,000 of revenue for each period, that was included in the contract liability balance of $47,950 and $77,950 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 sales processed through our website. 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 collectability 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 $4,506 and $2,401 as of December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, we recognized $2,401 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 all 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 $14,669 and $15,746 as of December 31, 2025 and 2024, respectively.

*Stock-Based Compensation*

The Company recognizes compensation expense for stock-based awards to employees and directors and others based on the grant date fair value of such awards. Forfeitures are accounted for as a reduction of compensation expense in the period when such forfeitures occur.

For awards of restricted stock units and shares of common stock, the fair value of the award is based on the quoted market price of our common shares on the NASDAQ stock exchange.

For stock option awards, the Black-Scholes-Merton option pricing model is used to estimate the fair value of share-based awards. The Black-Scholes-Merton option pricing model incorporates various and highly subjective assumptions, including expected term and share price volatility.

● The expected term of the stock options is estimated based on the simplified method as allowed by Staff Accounting Bulletin No. 107.

● The share price volatility is estimated using historical stock prices based upon the expected term of the options granted, using stock prices of comparably profiled public companies.

● The risk-free interest rate assumption is determined using the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

*Recently Adopted Accounting Pronouncements*

In December 2023, the Financial Accounting Standards Board ("FASB") issued accounting Standards Update ("ASU") ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures*. ASU 2023-09 requires disclosure of additional categories of information about federal, state, and foreign income taxes in the rate reconciliation table and requires entities to provide more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU also requires entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements.

ASU 2023-09 was effective for the Company for the fiscal year ending December 31, 2025. We adopted the new standard, which primarily resulted in expanded disclosures in the rate reconciliation table and regarding certain reconciling items. Refer to Note 4 for additional information. As the requirements of this ASU relate to disclosure only, the adoption of this ASU did not have a significant impact on our financial statements.

*Recently Issued Accounting Pronouncements*

In November 2024, the FASB issued ASU 2024-03, *Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*. ASU 2024-03 requires public business entities to disclose specified information about certain costs and expenses, including but not limited to purchases of inventory, employee compensation, depreciation, and intangible asset amortization, in a tabular format within the notes to their financial statements, as well as provide additional disclosures related to certain other specified expenses. The ASU may be applied on either a prospective or retrospective basis, and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

*Subsequent Events*

In connection with the preparation of these financial statements, the Company has evaluated subsequent events through March 25, 2026, which is the date the financial statements were available to be issued. See Note 11 for additional information.

**NOTE 3 – LIQUIDITY**

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 an economic recession or downturn, changes in regulations or restrictions on 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 years ended December 31, 2025 and 2024, the Company raised approximately $6.8 million and $10.5 million, respectively, of net cash proceeds through the issuance of equity via a combination of at-the-market offerings, registered direct offerings, and warrant exercises (see Note 8 for details). The Company has also entered into agreements with related parties, under which the Company may make net borrowings of up to $0.95 million (see Note 6 for details); as of December 31, 2025, the Company has not borrowed any amounts under such agreements.

Management expects that operating losses could continue in the foreseeable future as we continue to invest in the expansion and development of our business. Management'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 TAXES**

The Company accounts for income taxes under an asset and liability approach that recognizes deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years in which the differences are expected to reverse (i.e., when taxes are actually paid or recovered).

The Company assesses the realizability of its net deferred tax assets on an annual basis. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all relevant available positive and negative evidence is considered, including the Company's current and past performance, the market environment in which the Company operates, length of carryback and carryforward periods, and existing contracts that will result in future profits.

After reviewing all relevant available evidence, the Company has recorded a full valuation allowance against its deferred tax assets as of December 31, 2025 and 2024.

On July 4, 2025, the United States enacted budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA includes a broad range of tax reform provisions, including extending and modifying various provisions of the 2017 Tax Cuts and Jobs Act and expanding certain incentives in the 2022 Inflation Reduction Act while accelerating the phase-out of other incentives. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and other provisions effective in 2026 and subsequent years. OBBBA provisions include the restoration of the current deductibility for domestic research expenditures beginning in 2025, with transition options for previously capitalized amounts. OBBBA's changes to the deductibility of domestic research and experimental expenditures decreased our deferred tax asset position as a change in tax law is accounted for in the period of enactment.

The effective tax rate on income/(loss) before income taxes for the year ended December 31, 2025 differed from the U.S. federal statutory tax rate for the following reasons:

---

| | | |
|:---|:---|:---|
|  | **Amount** | **Percent** |
| U.S. federal statutory tax rate | $1594150 | 21.00% |
| State and local income taxes, net of federal (national) income tax expense <sup>(a)</sup> | 78243 | 1.04% |
| Nontaxable or nondeductible items |  |  |
| &nbsp;&nbsp;&nbsp;Restricted Stock Units (RSUs) | (67171) | -0.91% |
| &nbsp;&nbsp;&nbsp;Other | (15789) | -0.21% |
| Other | (4736) | -0.09% |
| Changes in valuation allowance | (1584697) | -20.83% |
| Effective tax rate | $- | 0.00% |

---

(a) State taxes in Florida made up the majority (greater than 50%) of the tax effect in this category.

The effective tax rate on income/(loss) before income taxes for the year ended December 31, 2024 differed from the U.S. federal statutory tax rate for the following reasons:

---

| | |
|:---|:---|
|  | **2024** |
| Income tax benefit at the statutory federal rate | $1630968 |
| State income tax benefits, net of federal benefit | 68365 |
| Change in valuation allowance and other items | (1699333) |
| &nbsp;&nbsp;&nbsp;Total | $- |

---

The Company's effective tax rate for the years ended December 31, 2025 and 2024 was 0%, primarily due to the changes in the full valuation allowance on net deferred tax assets.

*Cash Paid for Income Taxes*

For the year ended December 31, 2025, the Company did not make any cash payments for income taxes as it generated net operating losses during the period. The Company did, however, incur and pay non–income-based taxes.

*Deferred Tax Assets and Liabilities*

The components of the Company's net deferred tax assets (liabilities) at December 31, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Deferred tax assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Net operating losses – federal | $5510579 | $3929930 |
| &nbsp;&nbsp;&nbsp;Net operating losses – state | 315322 | 247869 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 1056131 | 1022605 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 15922 |  |
| &nbsp;&nbsp;&nbsp;Research and development expenses | 150475 | 283969 |
| &nbsp;&nbsp;&nbsp;Other | 13712 | 19546 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total deferred tax assets** | **7062141** | **5503919** |
| **Deferred tax liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | (6994) | (33469) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total deferred tax liabilities** | **(6994)** | **(33469)** |
| Valuation Allowance | (7055147) | (5470450) |
| **Total net deferred tax assets** | $**-** | $**-** |

---

At December 31, 2025, the Company had federal net operating loss carryforwards of $26,240,853 and state net operating loss carryforwards of $14,071,375, both of which may be carried forward indefinitely. A company's ability to utilize a portion of its net operating loss carryforwards to offset future taxable income may be subject to certain limitations under Section 382 of the Internal Revenue Code due to changes in the equity ownership of the Company. The Company has not completed a formal Section 382 analysis. In addition, future changes in ownership as defined in Section 382 of the Internal Revenue Code could put limitations on the availability of the net operating loss carryforwards.

*Unrecognized Tax Benefits*

The Company follows a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. The Company recognizes a benefit from its tax positions only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Any interest and penalties accrued related to uncertain tax positions are recorded in tax expense.

As of December 31, 2025 and 2024, the Company did not record any uncertain tax position related to the utilization of certain federal net operating losses. As of December 31, 2025 and 2024, The Company has no liability for unrecognized tax benefits. Additionally, the Company has no pending or on-going audits in any tax jurisdiction.

The Company's tax returns for the years ended 2022 – 2025 remain subject to examination by the Internal Revenue Service for U.S. federal income tax purposes and by the applicable state taxing authorities in Florida.

**NOTE 5 – INTANGIBLE ASSETS**

---

| | | |
|:---|:---|:---|
| <br>**Finite-lived intangible assets** | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Patent Costs | $711222 | $534002 |
| Less: Accumulated amortization | (151254) | (82700) |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | $559968 | $451302 |

---

These costs are amortized using the straight-line method over a period of 10 years. Amortization expense totaled $68,554 and $39,897 for the years ended December 31, 2025 and 2024, respectively.

Estimated future amortization expense related to intangible assets over their remaining useful lives is as follows:

---

| | |
|:---|:---|
| 2026 | $70018 |
| 2027 | 70018 |
| 2028 | 70018 |
| 2029 | 70018 |
| 2030 | 68548 |
| Thereafter (through 2035) | 211348 |
| Total | $559968 |

---

**NOTE 6 – RELATED PARTY TRANSACTIONS**

*Management Service Agreement*

The Company is party to a management services agreement with Tekcapital Europe Ltd. (an affiliate of Lucyd Ltd., whose Chief Executive Officer is the father of our Chief Executive Officer), which was originally entered into in 2020 and subsequently amended in 2022. While the agreement does not stipulate a specific maturity date, it can be terminated with 30 calendar days written notice by any party.

Under this agreement, the related party provides the following services to us, for which we are billed $35,000 per quarter:

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

● Research, technical review, 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.

The Company incurred expense of $140,000 during each of the years ended December 31, 2025 and 2024 under this agreement.

*Rent of Office Space*

Since 2022, under an agreement between the Company and Tekcapital Europe, Ltd, Tekcapital bills the Company for an allocation of rent paid by Tekcapital on the Company's behalf. The underlying lease between Tekcapital and its landlord has an end date of January 31, 2026. The Company recognized $116,684 and $92,312 of expense related to this month-to-month arrangement for the years ended December 31, 2025 and 2024, respectively.

*Loans 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) during the year ended December 31, 2024, and as of December 31, 2024, no amounts remained outstanding or payable to us under this agreement.

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. could receive advances under this facility upon request through October 23, 2025; any amounts advanced to Tekcapital Europe, Ltd. bore simple interest at a rate of 10% per annum, and were 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 December 31, 2025, no amounts remained outstanding or payable to us under this agreement.

On December 19, 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 $300,000. Tekcapital Europe, Ltd. may receive advances under this facility upon request through January 19, 2026; any amounts advanced to Tekcapital Europe, Ltd. bear simple interest at a rate of 12% per annum, and are required to be repaid on or before March 19, 2026. Tekcapital Plc executed the agreement as guarantor for Tekcapital Europe, Ltd. on the full amount of the loan. On December 23, 2025, Tekcapital Europe, Ltd. borrowed $300,000 under this agreement; the $300,000 outstanding principal balance of this loan, plus accrued interest receivable of $789, is included within Due from Tekcapital and Affiliates in the accompanying balance sheet as of December 31, 2025.

*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 would have a maturity date of September 1, 2025, at which time all outstanding principal and accrued interest, if any, would be payable in full in cash or in the Company's common stock. The Company may 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.

*License Agreements*

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 thereby 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 were determined to be no longer necessary, thus Lucyd Ltd. and the Company mutually agreed to terminate the LL Licenses.

**NOTE 7 – COMMITMENTS AND CONTINGENCIES**

*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.

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 received $570,000 from such shareholder, which is reflected within other income (expense), net in the statement of operations. Fees paid to legal counsel associated with this matter are reflected within general and administrative expenses in the statement of operations.

In January 2024, we settled and resolved all outstanding matters relating to complaints filed by a third party with the International Trade Commission, alleging that certain of our products (as well as certain products of our competitors) infringed on patents held by the third party. As part of this settlement, we entered into a multi-year non-exclusive license agreement with that third party covering multiple smart eyewear patents (as described more fully below under '*License Agreements*').

*License Agreements*

During 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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| | |
|:---|:---|
| 2026 | $834000 |
| 2027 | 1290000 |
| 2028 | 1543000 |
| 2029 | 1778000 |
| 2030 | 2037000 |
| Thereafter (through 2033) | 6092000 |
| Total | $13574000 |

---

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.

The Company recognized $521,849 and $225,222 of expense related to all license agreements for the years ended December 31, 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 December 31, 2025, the Company's remaining obligation under this arrangement was $76,912, of which $48,424 is included within accounts payable and accrued expenses in the accompanying balance sheet, and $28,488 is reflected within non-current liabilities in the accompanying 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 Tekcapital and Affiliates (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.

*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 – STOCKHOLDERS' EQUITY**

Pursuant to a corporate resolution on July 1, 2021, the Company has authority to issue up to 15,000,000 shares of preferred stock and 50,000,000 shares of common stock. There were no shares of preferred stock issued or outstanding as of December 31, 2025 and 2024.

*Change in Capital Structure – Reverse Stock Split*

At our annual meeting of shareholders on July 8, 2024, the Company's shareholders approved an amendment to the Company's articles of incorporation to effect a reverse stock split of our issued and outstanding common stock at a ratio between 1-for-14 and 1-for-24. Subsequently, the board of directors authorized a reverse stock split in a ratio of 1-for-20 shares, and we filed with the Florida Secretary of State a certificate of amendment to our articles of incorporation.

Effective July 18, 2024, each 20 shares of the Company's issued and outstanding common stock were combined into one share of common stock, except to the extent that the reverse stock split would have resulted in any of the Company's stockholders owning a fractional share, in which case such fractional share was rounded up to the next highest whole share. Additionally, pursuant to their terms, the shares of common stock underlying the Company's outstanding stock options and warrants were similarly adjusted along with corresponding adjustments to their exercise prices.

All share and per share amounts presented in these financial statements and accompanying notes, included but not limited to shares issued and outstanding, earnings/(loss) per share, and warrants and options, as well as the dollar amounts of common stock and additional paid-in capital, have been retroactively adjusted for all periods presented in order to reflect this change in capital structure.

There was no change to the total number of authorized common shares of 50,000,000, and there was no change in the par value per common share of $0.00001.

*At-the-Market Offerings*

The Company has entered into an at-the-market offering agreement with H.C. Wainwright & Co., LLC, as sales agent ("HCW"), relating to the sale of common stock.

From August 15, 2025 through December 12, 2025, the Company sold 606,377 shares of common stock and received approximately $1,221,000 of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from these transactions amounted to approximately $1,180,000, and will be used for working capital and general corporate purposes. The Company also paid $2,500 of legal fees during the year ended December 31, 2025, which are reflected in the financial statements as a reduction to additional paid in capital as they represent a related cost of the at-the-market equity offering transactions.

From April 15, 2024 through August 30, 2024, the Company sold 557,987 shares of common stock and received approximately $3,913,000 of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from these transactions amounted to approximately $3,773,000, and will be used for working capital and general corporate purposes. The Company also paid $50,000 of legal fees during the year ended December 31, 2024, which are reflected in the financial statements as a reduction to additional paid in capital as they represent a related cost of the at-the-market equity offering transactions.

*First Registered Direct Offering*

On May 1, 2024, the Company closed on a registered direct offering of 210,043 shares of its common stock and, in a concurrent private placement, warrants to purchase up to 210,043 shares of common stock at an exercise price of $4.88 per share, for a combined purchase price per share and warrant of $4.88. In exchange, the Company received approximately $1.0 million of gross proceeds, before deducting underwriting discounts and offering expenses. In addition, the Company issued to the placement agent warrants to purchase up to 15,754 shares of common stock at an exercise price of $6.10 per share. The net proceeds received by the Company from this transaction amounted to approximately $837,000. Approximately $100,000 of the net proceeds received from this registered direct offering were used to pay a former agent for their waiver of a contractual right of first refusal; such payment has been reflected in the financial statements as a reduction to additional paid in capital, as it represents a related cost of the equity transaction.

*Second Registered Direct Offering*

On May 29, 2024, the Company closed on a registered direct offering of 263,160 shares of its common stock and, in a concurrent private placement, warrants to purchase up to 263,160 shares of common stock at an exercise price of $9.50 per share, for a combined purchase price per share and warrant of $9.50. In exchange, the Company received approximately $2.5 million of gross proceeds, before deducting underwriting discounts and offering expenses. In addition, the Company issued to the placement agent warrants to purchase up to 19,737 shares of common stock at an exercise price of $11.876 per share. The net proceeds received by the Company from this transaction amounted to approximately $2,134,000.

*Warrants*

A summary of the Company's outstanding warrants as of December 31, 2025 is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Warrant Type** | **Warrants <br> Outstanding to<br> Purchase X Shares** | **Exercise<br> Price** | **Issuance<br> Date** | **Expiration<br> Date** |
| Listed (IPO) Warrants | 68714 | $75.00 | 8/17/2022 | 8/17/2027 |
| Common (SPO) Warrants | 98300 | $21.00 | 6/26/2023 | 6/26/2028 |
| Private Warrants | 15000 | $75.00 | 4/17/2023 | 4/19/2028 |
| Series A Warrants | 35700 | $5.00 | 9/4/2024 | 3/4/2030 |
| Series B Warrants | 35700 | $5.00 | 9/4/2024 | 3/4/2026 |
| Series C Warrants | 148567 | $6.00 | 9/19/2024 | 3/19/2030 |
| Series D Warrants | 148567 | $6.00 | 9/19/2024 | 3/19/2026 |
| Series E Warrants | 105264 | $9.50 | 9/24/2024 | 9/24/2029 |
| Series F Warrants | 210528 | $9.50 | 9/24/2024 | 3/24/2026 |
| Series G Warrants | 210146 | $2.60 | 4/14/2025 | 11/19/2030 |
| Series I Warrants | 2240346 | $2.60 | 6/24/2025 | 12/24/2026 |
| Underwriter / Placement Agent Warrants | 268600 | $3.25-$164.56 | 8/17/2022 - 6/24/2025 | 4/30/2026 - 11/19/2030 |
| **Total** | **3585432** |  |  |  |

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*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, consisting of 60,750 Series A Warrants, 60,750 Series B Warrants, 157,896 Series E Warrants, and 315,792 Series F Warrants. 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 relevant details of the Series G Warrants are outlined in the table above. The Series H Warrants had an exercise price of $2.60 per share, were exercisable immediately upon issuance, and had an expiration date of November 19, 2026.

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. 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; such placement agent warrants are immediately exercisable, have an exercise price of $3.25 per share, and have an expiration date of November 19, 2030.

The net proceeds received by the Company from this transaction amounted to approximately $1,494,000, which the Company intends to use for working capital and general corporate purposes.

*June 2025 Warrant Inducement Transaction*

On June 20, 2025, the Company entered into inducement letter agreements with certain holders of certain of its Series H 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. 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 relevant details of the Series I Warrants are outlined in the table above.

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. 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; such placement agent warrants are immediately exercisable, will expire on June 20, 2030, and have an exercise price of $3.25 per share.

The net proceeds received by the Company from this transaction amounted to approximately $1,890,000, which the Company intends to use for working capital and general corporate purposes.

The Company also paid approximately $157,000 of legal and accounting fees during the year ended December 31, 2025 related to these warrant inducement transactions; these payments have been reflected in the financial statements as a reduction to additional paid in capital, as they represent a related cost of the inducement transactions.

*Other 2025 Warrant Activity*

During May and June 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.

*September 2024 Warrant Inducement Transactions*

During September 2024, the Company entered into multiple warrant inducement transactions with certain holders of its previously-issued warrants.

On September 3, 2024, the Company entered into inducement letter agreements with certain holders of existing warrants (the "Common (SPO) Warrants" originally issued on June 26, 2023) to purchase an aggregate of 126,699 shares of common stock. The warrant holders exercised for cash the existing warrants at a reduced exercise price of $5.00 per share, resulting in gross proceeds to the Company of approximately $0.6 million; in addition to the shares of common stock issued as a result of the warrant exercise, the warrant holders also received new unregistered Series A and Series B Warrants (the relevant details of which are outlined in the table above). This transaction closed on September 4, 2024, and the net proceeds received by the Company amounted to approximately $0.5 million.

On September 18, 2024, the Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on May 1, 2024 in connection with the First Registered Direct Offering described above) to purchase an aggregate of 148,567 shares of common stock. The warrant holders exercised for cash the existing warrants at an adjusted exercise price of $5.13 per share, resulting in gross proceeds to the Company of approximately $0.8 million; in addition to the shares of common stock issued as a result of the warrant exercise, the warrant holders also received new unregistered Series C and Series D Warrants (the relevant details of which are outlined in the table above). This transaction closed on September 19, 2024, and the net proceeds received by the Company amounted to approximately $0.7 million.

On September 22, 2024, the Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on May 29, 2024 in connection with the Second Registered Direct Offering described above) to purchase an aggregate of 263,160 shares of common stock. The warrant holders exercised for cash the existing warrants at an adjusted exercise price of $9.875 per share, resulting in gross proceeds to the Company of approximately $2.6 million; in addition to the shares of common stock issued as a result of the warrant exercise, the warrant holders also received new unregistered Series E and Series F Warrants (the relevant details of which are outlined in the table above). This transaction closed on September 24, 2024, and the net proceeds received by the Company amounted to approximately $2.3 million.

*Other 2024 Warrant Activity*

During September and October 2024, certain holders of the Company's warrants (including Series A Warrants, Series B Warrants, and warrants issued on May 1, 2024 in connection with the First Registered Direct Offering described above) exercised an aggregate of 121,973 of such warrants, using a combination of cashless exercise and for-cash exercise, to purchase an aggregate of 102,455 shares of the Company's common stock. These transactions resulted in aggregate gross cash proceeds to the Company of approximately $0.4 million.

*Rights Plan*

On September 25, 2024, our board of directors approved the adoption of a limited duration stockholder rights plan (the "Rights Plan"), and declared a dividend to stockholders of record at the close of business on September 25, 2024 of one common stock purchase right (a "Right") for each outstanding share of our common stock. Each Right entitles the holder to purchase from the Company six shares of our common stock at an exercise price of $6.21 per share. The Rights are evidenced by and trade with the certificates for the shares of our common stock that were outstanding as of September 25, 2024, and accompany any new shares of our common stock that were or will be issued after that date.

Under the Rights Plan, the Rights generally will become exercisable only if a person or group acquires beneficial ownership of 20% or more of our common stock in a transaction not approved by our board of directors. In that situation, each holder of a Right (other than the acquiring person or group, whose rights will become void and will not be exercisable) will have the right to purchase, upon payment of the exercise price and in accordance with the terms of the Rights Plan, a number of shares of our common stock having a market value of twice such price.

Under the Rights Plan (as subsequently amended in 2025), the Rights expire the earlier of (i) September 25, 2026, (ii) the redemption or exchange of the Rights in accordance with the terms of the Rights Plan, (iii) the closing of certain merger or other acquisition transactions involving the Company, and (iv) the date of the Company's 2026 annual meeting of its stockholders.

The Rights Plan is not intended to prevent a takeover of the Company and should not interfere with any merger or other business combination approved by our board of directors. However, the Rights Plan may cause substantial dilution to a person or group that acquires beneficial ownership of twenty percent (20%) or more of our outstanding common stock.

*Other Matters*

During the year ended December 31, 2024, the Company made a release payment of $325,000 to a shareholder counterparty for the waiver of certain of that counterparty's pre-existing contractual rights related to certain of the Company's equity offerings described above. This payment is reflected within general and administrative expenses in the statement of operations.

**NOTE 9 – STOCK-BASED COMPENSATION**

On July 1, 2021, an Equity Incentive Plan was approved, allowing for total of 20% of our issued and outstanding common stock, less the number of outstanding stock-based awards, plus forfeitures and expirations of stock options and restricted stock units, to be available for the grant of awards under the Plan. Availability for future awards under the 2021 Equity Incentive Plan as of December 31, 2025 was 354,424 shares.

*Stock Options*

Summary information regarding the number of options, exercise price, and remaining contractual life as of and during the years ended December 31, 2025 and 2024 is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Options<br> (Number)** | **Weighted<br> Average Exercise<br> Price per share**<br> ($)** | **Weighted<br> Average Remaining<br> Contractual Life<br> (Years)** |
| As at January 1, 2024 | 144726 | 41.61 | 2.22 |
| Granted | 500 | 8.40 |  |
| Exercised |  |  |  |
| Forfeited | (61426) | 47.33 |  |
| **As at December 31, 2024** | **83800** | **37.21** | **2.33** |
| As at January 1, 2025 | 83800 | 37.21 | 2.33 |
| Granted |  |  |  |
| Exercised |  |  |  |
| Forfeited / Expired | (30700) | 70.73 |  |
| **As at December 31, 2025** | **53100** | **17.83** | **2.47** |
| **Exercisable as at December 31, 2025** | **49148** | **17.21** | **2.50** |

---

As of December 31, 2025, the aggregate intrinsic value for all options outstanding as well as all options exercisable was zero 0.

There were no options granted during the year ended December 31, 2025.

During the year ended December 31, 2024, we granted options to an employee to purchase an aggregate of 500 shares of common stock at $8.402 per share. However, the employee later separated from the Company, and these options were all forfeited or expired as of December 31, 2024. The estimated fair value of this award, and the amount of compensation cost ultimately recognized related to this award, were both immaterial.

The weighted average grant date fair value of options outstanding as of December 31, 2025 and 2024 was $13.24 and $26.81, respectively.

Total stock option expense recognized for the years ended December 31, 2025 and 2024 was $129,988 and $554,257, respectively. As of December 31, 2025, remaining unrecognized stock option expense was approximately $3,000, all of which will be recognized in January 2026.

*Stock Grants*

On March 28, 2024, we entered into an agreement for a third party to provide us with financial advisory and investment banking services, for a minimum term of six months. As consideration for the services provided to the Company, we issued to the counterparty 15,000 shares of our common stock. The total value of consideration transferred, measured using the fair value of our common stock at the date of issuance, was $81,900, which we recognized in full during the year ended December 31, 2024.

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 $5,422 and $16,268 of expense for the years ended December 31, 2025 and 2024, respectively, 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 $22,500 of expense for year ended December 31, 2025, relative to this stock grant, and will recognize the remaining expense for these shares of $7,500 during the first three months of 2026.

*Restricted Stock Units*

Summary information regarding the number of restricted stock units as of and during the years ended December 31, 2025 and 2024 is as follows:

---

| | | |
|:---|:---|:---|
|  | **Restricted<br> Stock Units<br> (Number)** | **Weighted Average<br> Grant Date<br> Fair Value<br> ($)** |
| As at January 1, 2024 | 3261 | 8.30 |
| Granted | 246000 | 6.22 |
| Vested | (13645) | 7.13 |
| Forfeited | - | - |
| **As at December 31, 2024** | **235616** | **6.19** |
| As at January 1, 2025 | 235616 | 6.19 |
| Granted | 411848 | 1.64 |
| Vested | (80816) | 6.22 |
| Forfeited | (4000) | 6.88 |
| **As at December 31, 2025** | **562648** | **2.85** |

---

On November 26, 2024, the Company awarded an aggregate of 33,600 restricted stock units to non-management employees, of which 1/3 vested immediately, 1/3 vested on November 26, 2025, and the remaining 1/3 shall vest on November 26, 2026. We recognized $62,149 and $83,477 of expense related to these awards during the years ended December 31, 2025 and 2024, respectively, and will recognize the remaining expense of $58,021 on a straight-line basis over the next 11 months.

On December 13, 2024, the Company awarded an aggregate of 212,400 restricted stock units to the Company's officers and management, of which 1/6 vest on each April 2 and August 19, commencing with April 2, 2025 and concluding on August 19, 2027. We recognized $486,662 and $20,278 of expense related to these awards during the years ended December 31, 2025 and 2024, respectively, and will recognize the remaining expense of $790,825 on a straight-line basis over the next 19.5 months.

On November 14, 2025, the Company awarded an aggregate of 406,000 restricted stock units to the Company's officers and certain other employees, of which 1/6 vest on each April 2 and August 19, commencing with April 2, 2026 and concluding on August 19, 2028. We recognized $30,265 of expense related to these awards during the year ended December 31, 2025, and will recognize the remaining expense of $635,575 on a straight-line basis over the next 31.5 months.

On November 18, 2025, the Company awarded 5,848 restricted stock units to an employee, of which 1/2 vest on May 18, 2026 and 1/2 vest on November 18, 2026. We recognized $1,184 of expense related to this award during the year ended December 31, 2025, and will recognize the remaining expense of $8,290 on a straight-line basis over the next 10.5 months.

**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 as required by ASC 260-10-50. Due to the net losses for the years ended December 31, 2025 and 2024, all shares underlying common stock warrants, common stock options, and related party convertible debt were excluded from the earnings per share calculation due to their anti-dilutive effect.

Calculation of basic and diluted net earnings/(loss) per common share is as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Basic and diluted:** |  |  |
| Net loss | $(7591189) | $(7766515) |
| Weighted-average number of common shares | 3991818 | 1496357 |
| Basic and diluted net loss per common share | $(1.90) | $(5.19) |

---

**NOTE 11 – SUBSEQUENT EVENTS**

*At-the-Market Offerings*

On January 7, 2026, the Company sold 820,800 shares of common stock and received approximately $1,458,000 of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from this sale amounted to approximately $1,411,000, and will be used for working capital and general corporate purposes.

*Tariffs*

On February 20, 2026, the U.S. Supreme Court issued a ruling related to federal tariffs. The Company is currently evaluating the ruling and its potential implications. At this time, management cannot reasonably estimate the impact, if any, on the Company's operations or consolidated financial statements.

*Repayment from Tekcapital Europe, Ltd.*

On February 24, 2026, Tekcapital Europe, Ltd. repaid in full all of the outstanding balance of the loan that the Company had made to Tekcapital on December 19, 2025 (see Note 6). The total amount paid to the Company was $306,115, of which $300,000 represented the principal amount and $6,115 represented accrued interest.

*Extension of Lucyd Ltd. Financing Agreement*

On March 11, 2026, the Company and Lucyd Ltd. entered into an amendment of the financing agreement originally entered into on March 1, 2024 and previously amended on March 1, 2025 (see Note 6 for details), such that upon such that upon issuance, the convertible note will have a maturity date of September 1, 2027. There were no other changes to the terms and provisions of the agreement, and the Company has not borrowed any amounts under this agreement.

## Exhibit 23.1

**Exhibit 23.1**

**Consent of Registered Independent Public Accounting Firm**

Innovative Eyewear, Inc.

Miami, Florida

We consent to the inclusion or incorporation by reference of our report, dated March 25, 2026, with respect to the balance sheets of Innovative Eyewear, Inc. (the "Company") as of December 31, 2025 and 2024, and the related statements of operations, stockholders' equity, and cash flows for the years then ended, in (i) the Company's Registration Statement on Form S-1 (File No. 333-288777), (ii) the Company's Registration Statement on Form S-1 (File No. 333-287142), (iii) the Company's Registration Statement on Form S-8 (File No. 333-286350), (iv) the Company's Registration Statement on Form S-1 (File No. 333-279873), (v) the Company's Registration Statement on Form S-1 (File No. 333-282472), (vi) the Company's Registration Statement on Form S-3 (File No. 333-276938), and (vii) the Company's Registration Statement on Form S-8 (File No. 333-267677).

/s/ Cherry Bekaert LLP

Chicago, Illinois

March 25, 2026

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14(A) AND 15D-14(A)**

**AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Harrison Gross, Chief Executive Officer of Innovative Eyewear, Inc., certify that:

1. I have reviewed this Annual
 Report on Form 10-K 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;&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 an annual report) that has materially affected, or is
 reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's
 other certifying officer 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;&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: March 25, 2026 | */s/ Harrison Gross* |
|  | Harrison Gross |
|  | Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14(A) AND 15D-14(A)**

**AS ADOPTED PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Oswald Gayle, Chief Financial Officer of Innovative Eyewear, Inc., certify that:

1. I have reviewed this Annual
 Report on Form 10-K 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;&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 an annual report) that has materially affected, or is
 reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's
 other certifying officer 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;&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: March 25, 2026 | */s/ Oswald Gayle* |
|  | Oswald Gayle |
|  | Chief Financial 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**

Pursuant to Section 1350 of Title 18 of the United States Code, the undersigned, Harrison Gross, Chief Executive Officer of Innovative Eyewear, Inc. (the "Company"), hereby certifies that:

1. The Company's Form 10-K
 Annual Report for the fiscal year ended December 31, 2025 (the "Report") fully complies with the requirements of
 Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

---

| | |
|:---|:---|
| Date: March 25, 2026 | */s/ Harrison Gross* |
|  | Harrison Gross |
|  | Chief 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**

Pursuant to Section 1350 of Title 18 of the United States Code, the undersigned, Oswald Gayle, Chief Financial Officer of Innovative Eyewear, Inc. (the "Company"), hereby certifies that:

1. The Company's Form 10-K
 Annual Report for the fiscal year ended December 31, 2025 (the "Report") fully complies with the requirements of
 Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

---

| | |
|:---|:---|
| Date: March 25, 2026 | */s/ Oswald Gayle* |
|  | Oswald Gayle |
|  | Chief Financial Officer |

---