What changed in this filing

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Item 9A. Controls and Procedures

2024-03-25 compared with 2023-03-24 · 940 added, 1204 removed, 200 unchanged (91% of the section changed)

Controls and Procedures .

Controls and Procedures

maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

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 2022.

Report on Internal Control Over Financial Reporting

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.

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, 2022.

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, 2022.

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, 2022 has not been audited by our auditors, Cherry Bekaert LLP.

in Internal Control Over Financial Reporting

were no changes in our internal control over financial reporting during the fourth quarter of fiscal year 2022 that has materially affected,

or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Disclosure Controls and Procedures

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 2023.

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, 2022.

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, 2023.

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, 2023 has not been audited by our auditors, Cherry Bekaert LLP.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the fourth quarter of fiscal year 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other Information .

Disclosure Regarding

Foreign Jurisdictions that Prevent Inspections .

Not applicable.

Directors, Executive Officers and Corporate Governance .

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

Chief Executive Officer

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

Chief Executive Officer and Director

Konrad Dabrowski

2 unchanged sentences

Chief Technology Officer

Frank Rescigna

Kristen Mclaughlin

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.,

our largest stockholder and the licensor of our technology which is also a smart eyewear development company where he developed the Lucyd

brand identity and oversaw general operations and product development.

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., our largest stockholder and the licensor of our technology which is also a smart eyewear development company 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 for the company’s licensed properties.

Prior to that, from October 2013

to September 2014, Mr.

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 for 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.

Gross is a graduate of Columbia University with a BA in Writing and received a BA in Jewish Studies from

the Jewish Theological Seminary.

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.

Dabrowski has served as our Chief Financial Officer on a part-time basis since August 2019.

Between June 2017 and July 2020,

Dabrowski has served as the group controller, and starting on July 2020 the chief financial officer of Tekcapital PLC (“Tekcapital”),

where he co-manages the group’s investment strategy and oversees financial reporting for all of its portfolio companies.

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.

contractor, where he managed credit systems and provided support to Verizon agents.

Gross is a graduate of Columbia University with a BA in Writing and received a BA in Jewish Studies from the Jewish Theological Seminary.

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.

Konrad Dabrowski has served as our Chief Financial Officer on a part-time basis since August 2019.

Between June 2017 and July 2020, Mr.

Dabrowski has served as the group controller, and starting on July 2020 the chief financial officer of Tekcapital PLC (“Tekcapital”), where he co-manages the group’s investment strategy and oversees financial reporting for all of its portfolio companies.

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.

Dabrowski was an Audit Manager at Deloitte, where he managed end-to-end accounting audits for a portfolio of public and private corporate clients.

Dabrowski has a Master’s in Finance and Banking from the Warsaw School of Economics and is a Certified Public Accountant.

Eric Cohen is one of the founders of Innovative Eyewear and has served as our Chief Technology Officer since September 2019.

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.

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.

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.

Rescigna has served as a director since August 2021.

Rescigna has more than 25 years of brand building and sales experience

in the eyewear industry.

Prior to his directorship at Innovative Eyewear, from October 2019 to May 2021, Mr.

Rescigna was the

Director of Global Sales at House of Wu, a global wholesale luxury bridal and evening dress distributor, where he led the company’s

sales strategy throughout the world.

Prior to his employment at House of Wu, from September 2018 to September 2019, Mr.

was the President of Teka Eyewear, a boutique global wholesale luxury eyewear distributor specializing in exotic materials, where he

managed all aspects of its sales organization and operations.

Prior to his employment at Teka Eyewear, from March 2015 to August 2018,

Rescigna was the Senior Vice President of Global Sales at Wiley X, a multi-brand global eyewear company that designs and distributes

sunglasses, where he managed the company’s sales activities at the corporate and sales level.

Prior to his employment at Wiley

X, from February 2011 to February 2015, Mr.

Rescigna was the President of Jewelry & Global Brand Licensing for Guess Inc.

GES), a global fashion/lifestyle company with varying business models, distribution models and products, where he assisted the

company with the expansion of its brand and new brands/products.

Prior to his employment at Guess, from February 2004 to January 2011,

Rescigna was the President of Viva International Group, a large eyewear company that designs, manufactures and distributes core and

luxury global brands, where he led the company’s expansion and integration with its parent company Highmark Vision Holding Company.

He received a degree in Opticianry from Middlesex College.

Rescigna is well qualified to serve as a director due his substantial

brand and sales experience and his experience in the eyewear industry.

Mclaughlin has served as one of our directors since August 2021.

Mclaughlin has 20 years’ experience launching, managing

and developing products in the eyewear, accessories, cosmetics and skincare industries.

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:

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.

Mclaughlin has 25 years’ experience launching, managing and developing products in

the eyewear, accessories, cosmetics and skincare industries.

Kristen is currently the Director of Marketing at Tura, Inc., a leading

eyewear design and distribution company based in New York City, a position she has held since October 2021.

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.

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

its brand direction, product development and campaign content.

She has a BS and MBA from Ramapo College of New Jersey.

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.

Castro has served as one of our directors since August 2021.

Castro is an experienced public company director and chartered

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 chairman

of the board since April 2020, (3) Stanley Gibbons Group plc (LON:SGI), a company that specializes in the retailing of collectable

stamps and similar products, where he has been a director since June 2016, (4) Tomco Energy plc (LON:TOM), an oil exploration and

technology company, where he has been a director since April 2021, (5) Predator Oil & Gas Holdings plc (LON:PRD), an oil and

gas exploration company, where he has been a director since July 2020, and (6) 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.

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.

Bartlett has served as one of our directors since August 2021.

Bartlett has been in the eyewear industry for over 40

years holding various roles including optician, optical manager, marketing manager and operations management.

Since September 2015,

Bartlett has been the Chief Operating Officer of Todd Rogers Eyewear, a specialty eyewear company, where she manages the day-to-day

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.

Louis Castro has served as one of our directors

since August 2021.

Castro is an experienced public company director and chartered accountant.

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.

(TSX-V & AIM:OMI), a company exploring for minerals in South America, where he has been 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,

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.

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.

Bartlett has served as one of

our directors since August 2021.

Bartlett has been in the eyewear industry for over 40 years holding various roles including

optician, optical manager, marketing manager, and operations management.

She is currently an optical industry consultant.

served as Chief Operation Officer of Todd Rogers Eyewear, a specialty eyewear company, from 2015 to 2021, 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.

February 2020 Ms.

Bartlett has been the President of the Opticians Association of America, a national organization representing

the professional, business, educational, legislative and regulatory interests of opticianry.

Prior to her time at Todd Rogers Eyewear, Ms.

Bartlett was the sales representative for eyewear sales in the

northeast of Massachusetts for Safilo USA and REM Eyewear, both specialty eyewear companies.

Additionally, Ms.

Bartlett is an Adjunct

Professor at Franklin Cummings Institute of Technology in Boston, Massachusetts.

She is a past President (2020 – 2022) of the Opticians

Association of America, a national organization representing the professional, business, educational, legislative, and regulatory interests

of opticianry, where she held a board position for 12 years.

Prior to that, Ms.

Bartlett was a director

for ten years for the Opticians Association of Massachusetts.

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

Bartlett received her Massachusetts Opticians license in 1987 and is ABO certified.

Bartlett received her BA in Political

Science from Clark University.

Bartlett is well qualified to serve as a director due to her substantial experience in the optical

and Terms of Office of Officers and Directors

board of directors consists of five 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.

officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms

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.

Independence and Committees of the Board of Directors

our directors, we have determined that Frank Rescigna, Mr.

Louis Castro and Mss.

Kristen Mclaughlin and Olivia Bartlett are “independent”

directors under NASDAQ listing standards, while 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.

have three standing committees of the Board:

the 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 consists of Mr.

Louis Castro (Chair) and Mss.

Kristen Mclaughlin and 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.

Bartlett was President of the Opticians Association of

Massachusetts, where she currently holds the position of Treasurer.

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.

Bartlett received her Massachusetts Opticians license in 1987 and is ABO certified and is an ABO certified speaker.

Bartlett received her BA in Political Science from Clark University.

Bartlett is well qualified to serve as a director due to

her substantial experience in the optical industry.

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;

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.

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

Compensation Committee consists of Ms.

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 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.

and Corporate Governance Committee

Nominating and Corporate Governance Committee consists of Mss.

Olivia Bartlett (Chair) and Kristen Mclaughlin and Mr.

Harrison Gross.

The majority of 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.

solely upon a review of copies of Section 16(a) reports and representations received by us from reporting persons, and without conducting

any independent investigation of our own, in fiscal year 2022, all Forms 3, 4 and 5 were timely filed with the SEC by such reporting

have adopted a formal code of ethics that applies to our directors and principal executives and financial officers or persons performing

similar functions.

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.

Based solely upon a review of copies of Section 16(a) reports and representations received by us from reporting persons, and without conducting any independent investigation of our own, in fiscal year 2023, all Forms 3, 4 and 5 were timely filed with the SEC by such reporting persons.

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 .

Nasdaq Board Diversity Matrix

Board Diversity Matrix as of December 31, 2023

Total Number of Directors

Did Not Disclose Gender

Gender Identity

Demographic Background

African American or Black

Alaskan Native or Native American

Hispanic or Latinx

Native Hawaiian or Pacific Islander

Two or More Races or Ethnicities

Did Not Disclose Demographic Background

Executive Compensation .

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

2022 and 2021.

Individuals we refer to as our “named executive officers” include our Chief Executive Officer, our Chief Financial

Officer and our Chief Technology Officer.

Compensation Table

The following table sets forth the aggregate compensation paid to our named executive officers for the fiscal years ended December 31, 2023 and 2022.

Individuals we refer to as our “named executive officers” include our Chief Executive Officer, our Chief Financial Officer, and our Chief Technology Officer.

Summary Compensation Table

and Principal Position

Incentive Plan

Executive Officer

1,781,980 (2)

Financial Officer

Technology Officer

amounts shown for Mr.

Cohen include $34,500 and $38,401 paid in 2022 and 2021, respectively, to Mr.

Cohen as an independent consultant,

prior to his hire as an employee on October 1, 2022.

of 700,000 options to purchase common stock of the Company issued to Mr.

Gross for services rendered to the Company for the fiscal year

ended December 31, 2021.

Arrangements with our Executive Officers

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.

Awards (2)(3)

Compensation (4)

Harrison Gross,

Chief Executive Officer

Konrad Dabrowski,

Chief Financial Officer

David Eric Cohen,

Chief Technology Officer

Salary amounts shown for Mr.

Cohen include $34,500 paid in 2022, respectively, to Mr.

Cohen as an independent consultant, prior to his hire as an employee on October 1, 2022.

Includes stock options granted to Messrs.

Gross, Dabrowski, and Cohen on January 13, 2023 to purchase 90,000, 90,000, and 60,000 shares of the Company’s common stock, respectively, at an exercise price of $1.275 per share.

Includes stock options granted to Messrs.

Gross, Dabrowski, and Cohen on December 18, 2023 to purchase 150,000, 120,000, and 70,000 shares of the Company’s common stock, respectively, at an exercise price of $0.45 per share.

Includes the Company-paid portion of health and welfare benefits.

Refer to Note 2 and Note 9 of the Company’s audited financial statements as included in Item 8 of this Annual Report on Form 10-K for disclosure of the various assumptions made in the valuation of stock options.

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.

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.

Additionally, in 2021, we granted Mr.

Gross an option to purchase 100,000 shares of our common stock.

employment agreement has an initial term of three years, and will terminate on the third anniversary of the effective date unless 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.

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.

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):

shall be entitled to payment of his base salary for the balance of the agreement’s term;

Gross elects to continue group

health insurance benefits, we shall reimburse Mr.

Gross shall be entitled to payment of his base salary for the balance of the agreement’s term;

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;

(3) we shall provide Mr.

and, (3) we shall provide Mr.

Gross with payment of all accrued amounts (as defined in the agreement).

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.

Dabrowski devotes 50% of his business time to our

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.

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.

Additionally, in 2021, we granted Mr.

Dabrowski an option to purchase 60,000 shares of our common stock.

the effective date, the employment agreement shall continue, unless terminated by Mr.

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.

employment is at-will, which may be terminated by the Company or by 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.

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.

Pursuant to the terms of the employment agreement, a sixty days’ written notice of termination or resignation is required.

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;

will be entitled to receive his base salary for the duration of the sixty day notice period.

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.

Cohen was an independent consultant for the company from inception until October 1, 2022, when we offered him a full-time letter

of employment.

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 $140,000 annually to serve in

The company pays him $140,000 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.

the effective date, the employment agreement shall continue, unless terminated by 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.

Cohen’s employment

is at-will, which may be terminated by the Company or by 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.

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

Pursuant to the terms of the employment agreement, a sixty days’ written notice of termination or resignation is required.

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;

Cohen will be entitled to receive his base

salary for the duration of the sixty day notice period.

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.

Additionally,

in 2021, we granted Mr.

Cohen an option to purchase 60,000 shares of our common stock.

following table sets forth all compensation paid to our Board members during the year ended December 31, 2022:

Incentive Plan Compensation

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, 2023:

Option Awards

Incentive Plan

Pension Value

and Nonqualified Deferred

All Other Compensation

and Nonqualified

Frank Rescigna

Kristen Mclaughlin

Equity Awards

following table sets forth outstanding equity awards to our named executive officers as of December 31, 2022.

Option awards

Rescigna is no longer a Board member as of December 31, 2023.

On January 13, 2023, we granted stock options to Ms.

Mclaughlin, Mr.

Castro, and Ms.

Bartlett to purchase 20,000, 35,000, and 20,000 shares of the Company’s common stock, respectively, at an exercise price of $1.275 per share.

During the year ended December 31, 2023, option awards to purchase 20,000 shares of common stock that had been previously granted to Mr.

Castro in 2021, were modified to extend their expiration date from July 21, 2023 to July 21, 2024.

The incremental fair value (recognized as additional stock-based compensation expense for the year ended December 31, 2023) was approximately $1,300, which is not included in the table above.

The total number of option awards to our non-management Board members outstanding at December 31, 2023 was 170,000 in aggregate.

Outstanding Equity Awards

The following table sets forth outstanding equity awards to our named executive officers as of December 31, 2023.

of securities underlying unexercised options

unexercisable

shares, units

Harrison Gross

Konrad Dabrowski

David Eric Cohen

2021 Equity Incentive Plan was adopted by the Board and approved by our shareholders on July 1, 2021, under which:

Gross was issued stock options on August 11, 2021, to purchase 100,000 shares of our common stock;

Dabrowski was issued stock options on August 11, 2021, to purchase 60,000 shares of our common stock;

Eric Cohen was issued stock options on September 1, 2021, to purchase 60,000 shares of our common stock;

Rescigna was issued stock options on July 29, 2021, to purchase 25,000 shares of our common stock;

Mclaughlin was issued stock options on August 20, 2021, to purchase 25,000 shares of our common stock;

Castro was issued stock options on July 21, 2021, to purchase 20,000 shares of our common stock;

Castro was also issued stock options on July 29, 2021, to purchase an additional 25,000 shares of our common stock;

(viii) Olivia

Bartlett was issued stock options on July 29, 2021, to purchase 25,000 shares of our common stock.

of these stock options issued under our 2021 Equity Incentive Plan are subject to time-based vesting, except for Mr.

Castro’s July 21,

2021 option grant that vests upon an acquisition or flotation at a valuation greater than or equal to four times (400%) the most recent

published annual Company valuation (2020:

$2.7 million).

Additionally,

the following awards were granted by the Company prior to the approval of the 2021 Equity Incentive Plan:

Gross was issued stock options on May 5, 2021 to purchase 600,000 shares of our common stock, which are subject to time-based vesting;

Rescigna was issued stock options on May 1, 2021, to purchase 100,000 shares of our common stock, which vest upon successful completion

of an $8 million sales quota.

Exercises and Stock Vested

were no options exercised by our executive officers during the years ended December 31, 2022 or 2021.

Benefit Plans

currently do not provide retirement, health, or welfare benefits to any of our employees.

Non-qualified

Deferred Compensation

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.

incentive plan awards:

Number of securities underlying unexercised unearned options

exercise price

expiration date

of shares or units of stock that have not vested

value of shares of units of stock that have not vested

incentive plan awards:

Number of unearned shares, units or other rights that have not vested

incentive plan awards:

Market or payout value of unearned shares, units or other rights that have not vested

Option Exercises and Stock Vested

There were no options exercised by our executive officers during the years ended December 31, 2023 or 2022.

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

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;

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.

of the 2021 Equity Incentive Plan

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.

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.

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.

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.

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.

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.

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

As of December 31, 2022, awards

covering 2,332,500 shares of Common Stock were issued, of which 1,685,000 option awards were granted by the Company prior to the approval

of the Plan and 647,500 option awards were granted subject to the 2021 Equity Incentive Plan.

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.

(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).

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

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.

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, 2023, awards covering 2,959,720 shares of Common Stock were outstanding, of which 1,185,000 option awards were granted by the Company prior to the approval of the Plan, 1,709,500 option awards were granted subject to the Plan, and 65,220 were RSU awards were granted subject to the Plan.

As of December 31, 2023, there were 992,728 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.

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.

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

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.

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

A stock appreciation right may have a term of up to 10 years and will generally expire sooner if the recipient’s service

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.

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.

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.

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;

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

(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.

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.

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.

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

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.

and Termination.

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.

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.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .

solely upon information made available to us, the following table sets forth information as of March 17, 2023, regarding the beneficial

ownership of our common stock:

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

of our named executive officers and directors;

our executive officers and directors as a group.

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

Florida, 33181.

ownership shown in the following table is based on 7,715,757 shares of our common stock outstanding.

Based solely upon information made available to us, the following table sets forth information as of March 22, 2024, 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;

all our executive officers and directors as a group.

The address of each holder listed in the following table, except as otherwise indicated, is 11900 Biscayne Blvd., Suite 630, North Miami, Florida, 33181.

Percentage ownership shown in the following table is based on 12,917,239 shares of our common stock outstanding.

Name of Beneficial Owner

3 unchanged sentences

David Eric Cohen (4)

Frank Rescigna (5)

Kristen McLaughlin ( 5 )

1 unchanged sentence

Olivia Bartlett ( 7 )

All directors and executive officers as a group

All directors and executive officers as a group (6 persons)

5% Stockholders

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.

800,817 shares of common stock issuable upon exercise of stock options held by Mr.

Gross exercisable within 60 days of the date of this

64,986 shares of common stock issuable upon exercise of stock options held by Mr.

Dabrowski exercisable within 60 days of the date of

54,986 shares of common stock issuable upon exercise of stock options held by Mr.

Cohen exercisable within 60 days of the date of this

25,000 shares of common stock issuable upon exercise of stock options held by Mr.

Rescigna exercisable within 60 days of the date of

25,000 shares of common stock issuable upon exercise of stock options held by Ms.

McLaughlin exercisable within 60 days of the date of

45,000 shares of common stock issuable upon exercise of stock options held by Mr.

Castro exercisable within 60 days of the date of this

25,000 shares of common stock issuable upon exercise of stock options held by Ms.

Bartlett exercisable within 60 days of the date of

(9) Tekcapital

plc, a public company listed on the London Stock Exchange, owns all issued and outstanding securities of Tekcapital Europe Ltd., which

owns all issued and outstanding securities of Lucyd Ltd.

As such, Tekcapital plc may be deemed to beneficially own the shares held by

Less than 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.

Includes 1,226,641 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.

Includes 194,978 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.

Includes 141,645 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.

Includes 31,667 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.

Includes 56,667 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.

Includes 31,667 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.

Tekcapital plc, a public company listed on the London Stock Exchange, owns all issued and outstanding securities of Tekcapital Europe Ltd., which owns all issued and outstanding securities of Lucyd Ltd.

As such, Tekcapital plc may be deemed to beneficially own the shares held by Lucyd Ltd.

by virtue of their control over Lucyd Ltd.

3 unchanged sentences

Certain Relationships and Related Transactions, and Director Independence .

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.

Upon the consummation of offering, 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.

April 1, 2020, we entered into an exclusive, worldwide license agreement with Lucyd Ltd., the majority stockholder of the Company,

for the use of the Lucyd brand, and the associated intellectual property and assets (the “License Agreement”).

Agreement is royalty-free, fully paid up, and perpetual license for the exclusive use of certain assets of Lucyd Ltd.

related to Innovative

Eyewear current products and trademarks.

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

On April 1, 2020, we entered into an exclusive, worldwide license agreement with Lucyd Ltd., the largest stockholder of the Company, for the use of the Lucyd brand, and the associated intellectual property and assets (the “License Agreement”).

The License Agreement is royalty-free, fully paid up, and perpetual license for the exclusive use of certain assets of Lucyd Ltd.

related to Innovative Eyewear current products and trademarks.

As compensation for entrance into the License Agreement, we issued Lucyd Ltd.

3,750,000 shares

of our common stock.

On October 5, 2021, the parties to the License Agreement executed an Addendum, to the exclusive license agreement,

which clarified that Innovative Eyewear shall commercialize, continue with any on-going intellectual property prosecutions and pay all

maintenance or other patent fees (the “Addendum”).

For all new intellectual property, Innovative Eyewear will own control

it and be responsible for all prosecution and maintenance costs.

3,750,000 shares of our common stock.

On October 5, 2021, the parties to the License Agreement executed an Addendum, to the exclusive license agreement, which clarified that Innovative Eyewear shall commercialize, continue with any on-going intellectual property prosecutions and pay all maintenance or other patent fees (the “Addendum”).

For all new intellectual property, Innovative Eyewear will own control it and be responsible for all prosecution and maintenance costs.

The Addendum also confirms that Innovative Eyewear issued Lucyd Ltd.

3,750,000 shares of its common stock as consideration for the license.

Please see “Business — Material Agreements”

for a more complete description of the License Agreement and Addendum.

Service Agreement

June 1, 2020, we entered into a management service agreement with Tekcapital Europe Ltd., an affiliate of our majority stockholder,

Lucyd Ltd., whose Chief Executive Officer is the father of our Chief Executive Officer, pursuant to which we agreed to pay Tekcapital

$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.

bill us for an allocation of rent paid by Tekcapital Europe Ltd.

Please see “Business — Material Agreements” for a more complete description of the License Agreement and Addendum.

Management Service Agreement

On June 1, 2020, we entered into a management service agreement with Tekcapital Europe Ltd., an affiliate of our largest stockholder, Lucyd Ltd., 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.

the years ended December 31, 2022 and 2021, we incurred $140,000 and $100,000, respectively, under our management services agreement

with Tekcapital Europe Ltd., and we also recognized $74,442 of rent expense for the year ended December 31, 2022.

Note Financing

December 1, 2020, we issued a convertible note for an aggregate principal amount of up to $2,000,000 to Lucyd Ltd., the majority

stockholder of the Company (the “Note”).

June 1, 2021, we completed the partial conversion of an aggregate of $778,500 of the outstanding balance on the Note, at $1.00 per

share, into an aggregate of 778,500 shares of common stock.

On September 5, 2021, we completed the partial conversion of an aggregate

of $500,002 of the outstanding balance on the Note, at $3.56 per share, into an aggregate of 140,449 shares of common stock.

November 1, 2021, we executed an amended and restated Note, increasing the amount of available financing from $2,000,000 to $3,000,000.

On November 16, 2021, we completed the partial conversion of an aggregate of $901,271 of the outstanding balance of the Note, at

$3.56 per share, into an aggregate of 253,166 shares of common stock.

As of December 31, 2021, $289,029 remained outstanding on

August 15, 2022, in connection with our initial public offering, we completed the partial conversion of an aggregate of $2,002,280

of the outstanding balance of the Note, at $7.50 per share, into an aggregate of 266,970 shares of common stock.

As of December 31,

2022, approximately $61,356 remains outstanding on the Note.

Note has an interest rate of 10.0% per annum, is unsecured, matures on December 1, 2023 and provides for conversion, at the election

of Lucyd Ltd., into our common stock upon the earlier of (i) the Company consummating an equity financing pursuant to which it raises

an aggregate amount of not less than $750,000, (ii) the Company entering into a transaction pursuant to which the Company sells not less

than 10% of the Company’s shares, excluding any and all convertible notes which are convertible into shares, (iii) the Company

lists its shares on a national securities exchange or (iv) the holder determines to convert the Note.

The Note can be converted by the

Holder using the price of either (i) the per share purchase price paid for by investors under the terms of recent equity financing, (ii)

the closing price of the Company’s trading shares on the relevant public exchange for the day immediately preceding the date of

conversion of the Note or (iii) the valuation of the last equity investment.

The principal amount and accrued but unpaid interest under

each note will automatically convert into shares of our common stock at the stated conversion price per share.

Loan and Debt Transfer Agreements

June 1, 2021, we entered into an intercompany loan and debt transfer agreement, whereby Lucyd Ltd, Tekcapital plc, Tekcapital Europe

Ltd or Tekcapital LLC incurred a debt on behalf of the Company in the amount of $387,328.

Pursuant to the terms of the agreement, there

is no interest payable on the amount of the debt outstanding, unless we agree otherwise with Lucyd Ltd.

The debt, along with any accrued

interest and other amounts that may be due in connection with the debt, is repayable by the Company upon demand from Lucyd Ltd, at any

time, unless we agree otherwise with Lucyd Ltd.

The Company may prepay the whole or any part of the debt at any time unless we agree

September 5, 2021, we entered into an intercompany loan and debt transfer agreement, whereby Lucyd Ltd, Tekcapital plc, Tekcapital

Europe Ltd or Tekcapital LLC incurred a debt on behalf of the Company in the amount of $500,002.

Pursuant to the terms of the agreement,

there is no interest payable on the amount of the debt outstanding, unless we agree otherwise with Lucyd Ltd.

The debt, along with any

accrued interest and other amounts that may be due in connection with the debt, is repayable by the Company upon demand from Lucyd Ltd,

at any time, unless we agree otherwise with Lucyd Ltd.

The Company may prepay the whole or any part of the debt at any time unless we

agree otherwise.

We incurred $140,000 during each of the years ended December 31, 2023 and 2022 under our management services agreement with Tekcapital Europe Ltd.;

we also recognized $91,672 and $74,442 of rent expense for the years ended December 31, 2023 and 2022, respectively.

Convertible Note Financing

On December 1, 2020, we issued a convertible note for an aggregate principal amount of up to $2,000,000 to Lucyd Ltd., the largest stockholder of the Company (the “Note”).

On June 1, 2021, we completed the partial conversion of an aggregate of $778,500 of the outstanding balance on the Note, at $1.00 per share, into an aggregate of 778,500 shares of common stock.

On September 5, 2021, we completed the partial conversion of an aggregate of $500,002 of the outstanding balance on the Note, at $3.56 per share, into an aggregate of 140,449 shares of common stock.

On November 1, 2021, we executed an amended and restated Note, increasing the amount of available financing from $2,000,000 to $3,000,000.

On November 16, 2021, we completed the partial conversion of an aggregate of $901,271 of the outstanding balance of the Note, at $3.56 per share, into an aggregate of 253,166 shares of common stock.

As of December 31, 2021, $289,029 remained outstanding on the Note.

On August 15, 2022, in connection with our initial public offering, we completed the partial conversion of an aggregate of $2,002,280 of the outstanding balance of the Note, at $7.50 per share, into an aggregate of 266,970 shares of common stock.

As of December 31, 2022, $61,356 remained outstanding on the Note.

In January 2023, we borrowed an additional $48,143 under such convertible notes, and subsequently repaid the outstanding balance of the Note in full in February 2023.

No further amounts were borrowed under the Note, and the Note matured on December 1, 2023 with no amounts outstanding.

The Note was unsecured, had an interest rate of 10.0% per annum, and provided for conversion (including both principal and accrued but unpaid interest) into our common stock at the election of Lucyd Ltd.

upon certain equity financing events (as defined in the Note) or the holder determining to convert the Note.

The Note could be converted by the holder using the price of either (i) the per share purchase price paid for by investors under the terms of recent equity financing, (ii) the closing price of our trading shares on the relevant public exchange for the day immediately preceding the date of conversion of the Note, or (iii) the valuation of the last equity investment.

Intercompany Loan

On January 11, 2024, we entered into an

intercompany loan agreement (as lender) with Tekcapital Europe Ltd.

(as borrower), an affiliate of our largest stockholder, Lucyd

Ltd., whose Chief Executive Officer is the father of our Chief Executive Officer, and Tekcapital Plc, the parent of Tekcapital

Pursuant to this agreement, we loaned 600,000 British pounds sterling to Tekcapital Europe Ltd.

The loan bears simple

interest at a rate of 10% per annum and is 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.

repaid the loan in full in March 2024.

Employment Agreements

See “ Item 11.

Executive Compensation ” regarding the employment agreements with Harrison Gross and Konrad Dabrowski.

future transactions between us and our officers, directors or five percent 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.

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).

Statement of Policy

All future transactions between us and our officers, directors, or five percent 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).

Principal Accounting Fees and Services .

aggregate fees billed for professional services rendered by our Independent Registered Public Accounting Firm, Cherry Bekaert LLP (PCAOB ID 00677),

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, 2022 and December 31, 2021 were approximately $88,800 and $69,300,

respectively.

Audit-Related

were approximately $58,700 and $13,800 of fees billed by our Independent Registered Public Accounting Firm for audit-related services

for the fiscal years ended December 31, 2022 and 2021 respectively, which included consent and comfort letter procedures related

to our Form S-1filings, initial public offering, and due diligence procedures.

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, 2022 and 2021.

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

2022 and 2021.

Committee Determination

Audit Committee considered and determined that the services performed are compatible with maintaining the independence of the independent

registered public accounting firm.

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

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.

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.

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, 2023 and December 31, 2022 were approximately $117,600 and $88,000, respectively.

Audit-Related Fees

There were approximately $58,700 of fees billed by our Independent Registered Public Accounting Firm for audit-related services for the fiscal year ended December 31, 2022, which included consent and comfort letter procedures related to our Form S-1filings, initial public offering, and due diligence procedures.

There were no fees billed by our Independent Registered Public Accounting Firm for audit-related services for the fiscal year ended December 31, 2023.

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, 2023 and 2022.

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, 2023 and 2022.

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.

Exhibits, Financial Statement Schedules .

Financial Statement Schedules

accompanying “Index to Consolidated Financial Statements.”

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)

Amended and restated Articles of Incorporation 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)

Form of Second Amended and Restated Articles of Incorporation 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.

(a)(1)(2) Financial Statement Schedules

See accompanying “Index to Consolidated Financial Statements.”

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)

Second Amended and Restated Articles of Incorporation 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)

1 unchanged sentence

333-261616) filed with the Securities and Exchange Commission on January 10, 2022)

Form of 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)

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)

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.

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)

1 unchanged sentence

333-261616) filed with the Securities Exchange Commission January 20, 2022)

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)

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)

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)

Description of Securities

License Agreement between Innovative Eyewear, Inc.

7 unchanged sentences

333-261616) filed with the Securities and Exchange Commission on January 10, 2022)

Convertible Note issued to Lucyd, Ltd., dated December 1, 2020, (Incorporated by reference to Exhibit 10.4 to the Registration Statement filed on Form S-1 (File No.

333-261616) filed with the Securities and Exchange Commission on January 10, 2022)

Amended and Restated Convertible Note issued to Lucyd Ltd., dated November 1, 2021, (Incorporated by reference to Exhibit 10.13 to the Amended Registration Statement filed on Form S-1/A 4 (File No.

333-261616) filed with the Securities and Exchange Commission on March 23, 2022)

Intercompany Loan and Debt transfer Agreement by and among Innovative Eyewear, Inc., Lucyd Ltd., Tekcapital pk, Tekcapital Europe Ltd.

And Tekcapital LLC, dated June 1, 2021, (Incorporated by reference to Exhibit 10.5 to the Registration Statement filed on Form S-1 (File No.

333-261616) filed with the Securities and Exchange Commission on January 10, 2022)

Employment Agreement by and between Innovative Eyewear, Inc.

12 unchanged sentences

333-261616) filed with the Securities and Exchange Commission on January 10, 2022)

trading policy

Consent of Cherry Bekeart

LLP, Independent Registered Public Accounting Firm

Insider trading policy

Consent of Cherry Bekaert LLP, Independent Registered Public Accounting Firm

Power of Attorney

Certification of Principle Executive Officer Pursuant to Securities Exchange Act Rules 13A-14(A)and 15D-14(A)

2 unchanged sentences

Certification of Principle Financial Officer Pursuant to 18 U.S.C.

Innovative Eyewear, Inc., Executive Compensation Clawback Policy

XBRL Instance Document

XBRL Taxonomy Extension

Schema Document

XBRL Taxonomy Extension Schema

XBRL Taxonomy Calculation

Linkbase Document

XBRL Taxonomy Definition

Linkbase Document

XBRL Taxonomy Definition Linkbase

XBRL Taxonomy Label Linkbase

1 unchanged sentence

Linkbase Document

Previously filed

Form 10-K Summary .

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

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.

Eyewear, Inc.

Harrison Gross

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

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.

/s/ Harrison Gross

Harrison Gross

1 unchanged sentence

Chief Executive Officer

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.

Harrison Gross

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.

/s/ Harrison Gross

Harrison Gross

Chief Executive Officer

Chief Executive Officer and Director

March 25, 2024

(Principal Executive Officer)

Konrad Dabrowski

/s/ Konrad Dabrowski

Konrad Dabrowski

1 unchanged sentence

March 25, 2024

(Principal Financial and Accounting Officer)

Kristen McLaughlin

(Principal Financial and Accounting

/s/ Kristen McLaughlin

Kristen McLaughlin

March 25, 2024

/s/ Louis Castro

March 25, 2024

/s/ Olivia C.

March 25, 2024

5 unchanged sentences

(the “Company”) as of December 31, 2023 and 2022,

and the related statements of operations, changes in stockholders’ equity, and cash flows for the years then ended and the related

and the related statements of operations, stockholders’ equity, and cash flows for each of the years then ended and the related

notes (collectively referred to as the “financial statements”).

1 unchanged sentence

in all material respects, the financial position of the Company as of December 31, 2023 and 2022, 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

its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.

accompanying financial statements have been prepared assuming the Company will continue as a going concern.

As more fully described in

Note 3 to the financial statements, the Company has incurred losses and negative cash flows from operations.

Management’s plans

regarding liquidity matters are also described in Note 3.

Our opinion is not modified with respect to this matter.

financial statements are the responsibility of the Company’s management.

12 unchanged sentences

Accordingly, we express no such opinion.

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

for our opinion.

more fully described in Note 3 to the financial statements, the Company has incurred historical net losses and sustained substantial

Our opinion is not modified with respect to this matter.

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

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.

have served as the Company’s auditor since 2021.

/s/ Cherry Bekaert LLP

March 24, 2023

EYEWEAR, INC.

2022 and 2021

Bekaert LLP 677

INNOVATIVE EYEWEAR, INC.

BALANCE SHEETS

December 31, 2023 and 2022

Current Assets

Cash and cash

Accounts receivable, net

of allowance of $ 92,646 and

Cash and cash equivalents

Accounts receivable, net of allowances of $ 25,772 and $ 92,646 , respectively

Prepaid expenses

Deferred offering costs

Inventory prepayment

current assets

Current Assets

Due from Tekcapital and Affiliates

Other current assets

Total Current Assets

Non-Current Assets

1 unchanged sentence

Capitalized software costs

Property and equipment,

non-current assets

AND STOCKHOLDERS’ EQUITY

Property and equipment, net

Other non-current assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accounts payable and accrued

Accounts payable and accrued expenses

Deferred revenue

Due to Parent and Affiliates

party convertible debt

Current Liabilities

Due to Tekcapital and Affiliates

Related party convertible debt

Total Current Liabilities

Non-Current Liabilities

Commitments and contingencies

Deferred revenue

TOTAL LIABILITIES

Commitments and contingencies (Note 7)

Stockholders’ Equity

Common stock (par value

50,000,000 shares

authorized, and 7,307,157 and

6,060,187 shares

issued and outstanding as of December 31, 2022 and December 31, 2021, respectively)

Common stock (par value $ 0.00001 , 50,000,000 shares authorized, and 12,917,239 and 7,307,157 shares issued and outstanding as of December 31, 2023 and 2022, respectively)

Additional paid-in capital

Stock subscription receivable

( 10,305,987 )

( 4,624,154 )

STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying Notes to the Financial Statements.

EYEWEAR, INC.

OF OPERATIONS

the years ended December 31, 2022 and 2021

Accumulated deficit

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

See accompanying Notes to the Financial Statements.

INNOVATIVE EYEWEAR, INC.

STATEMENTS OF OPERATIONS

For the years ended December 31, 2023 and 2022

Revenues, net

Cost of Goods Sold

(Deficit) Profit

and administrative

( 2,796,669 )

( 1,386,079 )

and marketing

( 2,059,012 )

( 1,771,012 )

and development

party management fee

Gross Deficit

Operating Expenses:

( 5,520,373 )

( 3,353,327 )

$ ( 5,681,833 )

$ ( 3,244,506 )

average number of shares outstanding

per share, basic and diluted

accompanying Notes to the Financial Statements.

EYEWEAR, INC.

OF CHANGES IN STOCKHOLDERS’ EQUITY

the years ended December 31, 2022 and 2021

General and administrative

Sales and marketing

Research and development

Related party management fee

Total Operating Expenses

Other Income (Expense)

Interest Expense

Total Other Income (Expense), net

Weighted average number of shares outstanding

Loss per share, basic and diluted

See accompanying Notes to the Financial Statements.

INNOVATIVE EYEWEAR, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

For the years ended December 31, 2023 and 2022

Stockholders’

January 1, 2022

$ ( 4,624,154 )

of stock subscription receivable

of uncollectible stock subscription receivable

issued for conversion of related party convertible note

public offering (see Note 8)

based compensation

( 5,681,833 )

December 31, 2022

$ ( 10,305,987 )

January 1, 2021

$ ( 1,379,648 )

$ ( 554,837 )

issued for conversion of related party convertible note

of shares, net of offering costs of $351,411

of stock subscription receivable

based compensation

( 3,244,506 )

December 31, 2021

$ ( 4,624,154 )

accompanying Notes to the Financial Statements.

EYEWEAR, INC.

OF CASH FLOWS

the years ended December 31, 2022 and 2021

$ ( 5,681,833 )

$ ( 3,244,506 )

to reconcile net loss to net cash used in operating activities:

cash interest expense

based compensation expense

paid by parent and affiliates

for doubtful accounts

in operating assets and liabilities:

payable and accrued expenses

current assets

assets and liabilities

cash flows from operating activities

( 3,224,418 )

( 1,214,160 )

of property and equipment

software expenditures

cash flows from investing activities

from initial public offering (see Note 8)

from issuance of shares, net of offering costs

of deferred offering cost

of stock subscription receivable

from related party convertible debt

of related party convertible debt

cash flows from financing activities

Change In Cash

at Beginning of Year

at End of Year

Non-Cash Transaction

paid for by Parent reported as increase in Due to Parent and Affiliates and related party convertible debt

of uncollectible stock subscription receivable

of shares from conversion of related party convertible debt

accompanying Notes to the Financial Statements.

EYEWEAR, INC.

TO THE FINANCIAL STATEMENTS

2022 and 2021

1 – GENERAL INFORMATION

Eyewear, Inc.

(the “Company,” “us,” “we,” or “our”) is a corporation organized under

the laws of the State of Florida that develops and sells cutting-edge eyeglasses and sunglasses, which are designed to allow our customers

to remain connected to their digital lives, while also offering prescription eyewear and sun protection.

The Company was founded by Lucyd

(the “Parent” or “Lucyd”), a portfolio company of Tekcapital Plc through Tekcapital Europe, Ltd.

(collectively,

the “Parent and Affiliates”), which owned approximately 71% of our issued and outstanding shares of common stock as of December 31,

Innovative Eyewear licensed the exclusive rights to the Lucyd ® brand from Lucyd Ltd., which includes the exclusive

use of all of Lucyd’s intellectual property, including our main product, Lucyd Lyte ® glasses.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

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, 2022 and 2021

are not necessarily indicative of the results to be expected for future periods.

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 economic disruptions and uncertainties associated with the ongoing economic environment, including potential supply

chain constraints.

and Credit Policy

receivables from customers are uncollateralized customer obligations due under normal trade terms.

For direct-to-consumer sales, payment

is required before product is shipped.

Balances as of January 1, 2023

Exercises of stock options

Exercises of warrants by stockholders (see Note 8)

Second public offering (see Note 8)

Exercises of warrants related to private placement transaction (see Note 8)

Stock-based compensation (see Note 9)

Balances as of December 31, 2023

Balances as of January 1, 2022

Collection of stock subscription receivable

Write-off of uncollectible stock subscription receivable

Initial public offering (see Note 8)

Shares issued for conversion of related party convertible note (see Note 6)

Stock-based compensation (see Note 9)

Balances as of December 31, 2022

See accompanying Notes to the Financial Statements.

INNOVATIVE EYEWEAR, INC.

STATEMENTS OF CASH FLOWS

For the years ended December 31, 2023 and 2022

Operating Activities

Adjustments to reconcile net loss to net cash used in operating activities:

Non-cash interest expense

Stock-based compensation expense

Expenses paid by Tekcapital and Affiliates

(Recovery of) provision for doubtful accounts

Realized gain on debt securities (U.S.

Treasury bills)

Loss on sale of assets

Changes in operating assets and liabilities:

Accounts receivable

Accounts payable and accrued expenses

Prepaid expenses

Other current assets

Contract assets and liabilities

Net cash flows from operating activities

Investing Activities

Purchases of debt securities (U.S.

Treasury bills)

Proceeds from redemption of debt securities (U.S.

Treasury bills)

Purchases of property and equipment

Proceeds from sale of property and equipment

Capitalized software expenditures

Net cash flows from investing activities

Financing Activities

Proceeds from initial public offering (see Note 8)

Proceeds from second public offering (see Note 8)

Proceeds from exercises of warrants (see Note 8)

Proceeds from exercise of stock options

Collection of stock subscription receivable

Proceeds from related party convertible debt (see Note 6)

Repayment of related party convertible debt (see Note 6)

Repayment of amounts due to Tekcapital and Affiliates

Net cash flows from financing activities

Net Change In Cash

Cash at Beginning of Year

Cash at End of Year

Significant Non-Cash Transactions

Expenses paid for by Tekcapital and Affiliates, reported as increase in Due to/from Tekcapital and Affiliates and related party convertible debt

Write-off of uncollectible stock subscription receivable

Issuance of shares from conversion of related party convertible debt

See accompanying Notes to the Financial Statements.

INNOVATIVE EYEWEAR, INC.

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2023 and 2022

NOTE 1 – GENERAL INFORMATION

Innovative Eyewear, Inc.

(the “Company,” “us,” “we,” or “our”) is a corporation organized under the laws of the State of Florida that develops and sells cutting-edge eyeglasses and sunglasses, which are designed to allow our customers to remain connected to their digital lives, while also offering prescription eyewear and sun protection.

The Company was 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 40% of our issued and outstanding shares of common stock and was our largest stockholder as of December 31, 2023.

Innovative Eyewear licensed the exclusive rights to the Lucyd® brand from Lucyd Ltd., which includes the exclusive use of all of Lucyd’s intellectual property, including our main product, Lucyd Lyte® glasses.

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, 2023 and 2022 are not necessarily indicative of the results to be expected for future periods.

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 geopolitical and economic environment.

Cash Equivalents

All highly liquid investments with original maturities of three months or less, including money market funds, certificates of deposit, and U.S.

Treasury bills purchased three months or less from maturity, are considered cash equivalents.

Receivables and Credit Policy

Trade receivables from customers are uncollateralized customer obligations due under normal trade terms.

For direct-to-consumer sales, payment is required before product is shipped.

Trade receivables are stated at the amount billed to the customer.

Payments of trade receivables

are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest

unpaid invoice.

Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoice.

The Company, by policy, routinely assesses the financial strength of its customers.

To comply with industry standards,

we offer “net 30” payments on wholesale orders of $1,500 or more.

For wholesale orders, to acquire an order on net 30 terms,

the customer is provided a credit check application as well as a credit card authorization form.

The authorization form explicitly states

when and for much we will bill the customer via credit card.

receivable are reported net of the allowance for doubtful accounts.

The allowance for doubtful accounts is based on the Company’s

evaluation of each customer’s payment history, account aging, and financial position.

The Company recognized bad debt expense of

$ 116,230 for

the year ended December 31, 2022, and no

bad debt expense for the year ended December 31,

Company incurred software development costs related to development of the Vyrb app.

The Company capitalized these costs in accordance

with ASC 985-20, “Software – Costs of Software to be Sold, Leased, or Marketed,” considering it is the Company’s

intention to market and sell the software externally.

Planning, designing, coding, and testing occurred necessary to meet Vyrb’s

design specifications.

As such, all coding, development, and testing costs incurred subsequent to establishing technical feasibility

were capitalized.

We have launched a beta version of the Vyrb application in December 2021 that demonstrates the functionality of

the software.

We expect an estimated useful life of five years for this product.

inventory includes purchased eyewear 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.

To comply with industry standards, we offer “net 30” payments on wholesale orders of $1,500 or more.

For wholesale orders, to acquire an order on net 30 terms, the customer is provided a credit check application as well as a credit card authorization form.

The authorization form explicitly states when and for much we will bill the customer via credit card.

Accounts receivable are reported net of the allowance for doubtful accounts.

The allowance for doubtful accounts is determined based upon a variety of judgments and factors.

Factors considered in determining the allowance include historical collection, write-off experience, and management’s assessment of collectibility from customers, including current conditions, reasonable forecasts, and expectations of future collectibility and collection efforts.

Management continuously assesses the collectibility of receivables and adjusts estimates based on actual experience and future expectations based on economic indicators.

Receivable balances are written-off against the allowance when such balances are deemed to be uncollectible.

The Company recognized bad debt expense of $ 30,275 and $ 116,230 for the years ended December 31, 2023 and 2022, respectively.

A roll forward of the allowance for doubtful accounts for the year ended December 31, 2023 is as follows:

Schedule of allowance for

doubtful account

Balance at December 31, 2022

Bad debt expense

Write-offs (1)

Recoveries (1)

Balance at December 31, 2023

During the year ended December 31, 2023, the Company entered into a settlement agreement with a former wholesale customer.

As a result of this settlement, $47,646 of accounts receivable were written-off as uncollectible, while the $45,000 collected under the settlement agreement was reflected as a gain within general and administrative expenses in the statement of operations.

Our inventory includes purchased eyewear 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.

No provisions were determined as needed as of December 31, 2023 and 2022.

of December 31, 2022 and 2021, the Company recorded an inventory prepayment in the amount of $ 197,750

and $ 64,715 ,

respectively, related to down payment on eyewear purchased from the manufacturer, prior to shipment of the product that occurred after

December 31, 2022 and 2021, respectively.

assets relate to patent costs received in conjunction with the initial capitalization of the Company and internally developed utility

and design patents.

As of December 31, 2023 and 2022, the Company recorded an inventory prepayment in the amount of $ 323,520 and $ 197,750 , respectively, related to down payment 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.

and Equipment

and equipment are depreciated using the straight-line method over the estimated useful lives or lease terms if shorter.

expense for the years ended December 31, 2022 and 2021 was approximately $ 22,100

respectively.

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

The Company has incurred software development costs related to development of the Vyrb app, and has capitalized these costs in accordance with Accounting Standards Codification (“ASC”) 985-20, “Software – Costs of Software to be Sold, Leased, or Marketed,” considering it is the Company’s intention to market and sell the software externally.

Planning, designing, coding, and testing occurred necessary to meet Vyrb’s design specifications;

as such, all coding, development, and testing costs incurred subsequent to establishing technical feasibility were capitalized.

We launched an open beta version of the Vyrb application (for both iOS and Android) in December 2021 as the Company’s first social media platform, demonstrating the functionality of the software.

The app has had several new features introduced in 2023, including live audio chatrooms for users of the Company’s smart eyewear, and offers market-leading audio accessibility features for social media, including the ability to create and listen to a feed of audio content completely hands-free, using unique voice assistant commands created for the app.

The Company plans to continue to develop the expansive Vyrb platform into a feature-rich social toolbox for its customers.

This includes the introduction of revenue-generating features such as native ads and in-app upgrades, as well as gamification features such as a points and rewards system.

However, as the Company diverted most of its software development resources in 2023 to the development and launch of the Lucyd app (which provides groundbreaking Generative AI features to our smart eyewear), the revenue-generating features for the Vyrb app were delayed, and are now planned to launch in 2024.

Amortization of the capitalized software costs related to the Vyrb app will begin once revenue-generating operations associated with the software have commenced.

No software development costs have been capitalized with respect to the Lucyd app.

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, 2023 and 2022 was $ 61,093 and $ 22,101 , respectively.

For income tax purposes, accelerated depreciation methods are generally used.

Repair and maintenance costs are expensed

of estimated useful lives of property and equipment

Estimated Useful Lives

Repair and maintenance costs are expensed as incurred.

Schedule of estimated useful lives of property and equipment

Property & Equipment

Mobile Kiosk Display

Computer Equipment

Office Equipment

Internal-Use Software

Property and equipment, gross

Accumulated depreciation

and equipment, net

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.

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.

Property and equipment, net

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.

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.

Any interest and penalties accrued related to uncertain tax positions are recorded in tax expense.

Company assesses the realizability of its net deferred tax assets on an annual basis.

If, after considering all relevant positive and

negative evidence, it is more likely than not that some portion or all of the net deferred tax assets will not be realized, the Company

will reduce the net deferred tax assets by a valuation allowance.

The realization of net deferred tax assets is dependent on several

factors, including the generation of sufficient taxable income prior to the expiration of net operating loss carryforwards.

Value of Financial Instruments

certain of the Company’s financial instruments, including cash, accounts receivable, accounts payable, and cash advances provided

by the Parent and Affiliates, the carrying amounts approximate fair value due to the short-term maturities of these instruments.

carrying value of the convertible note approximates fair value because the interest rate approximates market rates.

Concentrations

of Credit Risk

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

The Company limits its credit risk with respect to cash by maintaining cash balances with high quality financial institutions.

the Company’s cash balances may exceed federally insured limits.

Concentrations of credit risk with respect to accounts receivable

are considered minimal due to collection history.

Company accounts for stock-based compensation to employees and directors in accordance with FASB ASC Topic 718, which requires that compensation

expense be recognized in the financial statements for stock-based awards based on the grant date fair value.

For stock option awards,

the Black-Scholes-Merton option pricing model was 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.

term of the stock options was estimated based on the simplified method as allowed by Staff Accounting Bulletin 107 (SAB 107).

share price volatility at the grant date 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

The Company assesses the realizability of its net deferred tax assets on an annual basis.

If, after considering all relevant positive and negative evidence, it is more likely than not that some portion or all of the net deferred tax assets will not be realized, the Company will reduce the net deferred tax assets by a valuation allowance.

The realization of net deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of net operating loss carryforwards.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash, cash equivalents, accounts receivable, accounts payable, and cash advances provided by Tekcapital and Affiliates, 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, as of December 31, 2023, $ 77,950 or approximately 50 % of the Company’s gross accounts receivable balance was related to a single customer under a long-term instalment arrangement;

the Company manages its risk related to this counterparty via other contractual arrangements with such counterparty, and incentivization through stock-based compensation.

Stock-Based Compensation

The Company accounts for stock-based compensation to employees and directors and others in accordance with FASB ASC Topic 718, which requires that compensation expense be recognized in the financial statements for stock-based awards based on the grant date fair value.

Forfeitures are accounted for as a reduction of compensation expense in the period when such forfeitures occur.

For stock option awards, the Black-Scholes-Merton option pricing model was 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 was estimated based on the simplified method as allowed by Staff Accounting Bulletin 107 (SAB 107).

The share price volatility at the grant date 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.

fair value of common stock used in the option pricing model for stock-based awards granted in 2021 was determined using the most recent

price paid by independent investors through a Regulation Crowdfunding (“CF”) securities offering undertaken by the Company.

For the majority of time during which stock option awards were granted by the Company in 2021, the Company had been raising funds from

investors under Regulation CF campaigns, with a significant number of transactions from both accredited and non-accredited investors.

revenue is generated from the sales of prescription and non-prescription optical glasses, 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.

determine revenue recognition, we perform the following steps:

(i) identify the contract(s) with a customer, (ii) identify the performance

obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations

in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation.

At contract inception, we assess the goods

or services promised within each contract and determine those that are performance obligations, and also assess whether each promised

good or service is distinct.

We then recognize as revenue the amount of the transaction price that is allocated to the respective performance

obligation when (or as) the performance obligation is satisfied.

In instances where the collectibility of contractual consideration is

not probable at the time of sale, the revenue is deferred on our balance sheet as a contract liability, and the associated cost of goods

sold is deferred on our balance sheet as a contract asset;

subsequently, we recognize such revenue and cost of goods sold as payments

are received.

revenue, including sales processed online and through our retail store resellers and distributors, is reported net of sales taxes collected

from customers on behalf of taxing authorities, returns, and discounts.

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”) for non-prescription, polarized sunglass and blue light blocking

glasses across all of our online channels.

Our e-commerce revenue is recognized upon meeting of the performance obligation when the eyewear

is shipped to end customers.

consumers enjoy free USPS first class postage, with faster delivery options available for extra

cost, for sales processed through our website and on Amazon.

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 (Shopify for Lucyd.co website

and Amazon) 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 the company sells products.

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.

Our 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 the 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

sales to distributors, we identify the contract with a customer upon receipt of an order of our eyewear through a direct purchase order

and after collectibility of substantially all of the contract consideration is probable.

Our 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 distributors 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 distributor orders, no e-commerce

fees are applicable.

Company’s sales do not contain any variable consideration.

allow our customers to return our products, subject to our refund policy, which allows any customer to return our products for any reason

within the first:

7 days for sales made through

our website (Lucyd.co)

30 days for sales made

through Amazon

30 days for sales to most

wholesale retailers and distributors (although certain sales to independent distributors are ineligible for returns)

all of our sales, 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.

Additionally, we review all individual returns received in the month following the balance

sheet date pertaining to orders processed prior to the balance sheet date in order to determine whether an allowance for sales returns

is necessary.

The Company recorded an allowance for sales returns of $ 24,897

as of December 31, 2022 and 2021, respectively.

incurred for shipping and handling are included in cost of revenue at the time the related revenue is recognized.

Amounts billed to a

customer for shipping and handling are reported as revenues.

Accounting Pronouncements

February 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016-02, “Leases (Topic 842),” that requires organizations that lease assets, referred to as “lessees,” to

recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with lease terms of

more than 12 months.

ASU 2016-02 also requires disclosures to help investors and other financial statement users better understand the

amount, timing, and uncertainty of cash flows arising from leases and will include qualitative and quantitative requirements.

adopted ASU 2016-02 as of January 1, 2021.

The Company’s management determined that the adoption of this guidance had no material

impact on the Company’s financial statements due to the lack of long-term leasing arrangements.

May 2018, the FASB issued ASU 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20), and Derivatives

and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contract’s

in Entity’s Own Equity.” The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible

preferred stock by removing the previous guidance related to debt with conversion and other options that required entities to account

for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock.

In addition, the amendments revised the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments

and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing

certain criteria required for equity classification.

The amendments in ASU 2020-06 further revised the guidance in ASC 260, Earnings

Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method.

The Company adopted ASU 2020-06 as of January 1, 2021.

The Company’s management determined that the adoption of this guidance

had no material impact on the Company’s financial statements due to the lack of beneficial conversion features contained within

the Company’s debt.

connection with the preparation of these financial statements, the Company has evaluated subsequent events through March 24, 2023,

which is the date the financial statements were available to be issued.

3 – GOING CONCERN

Company has a limited operating history.

The Company’s business and operations are sensitive to general business and economic conditions

in the United States.

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

Revenue Recognition

Our revenue is generated from the sales of prescription and non-prescription optical glasses, 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.

To determine revenue recognition, we perform the following steps:

(i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation.

At contract inception, we assess the goods or services promised within each contract and determine those that are performance obligations, and also assess whether each promised good or service is distinct.

We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

In instances where the collectibility of contractual consideration is not probable at the time of sale, the revenue is deferred on our balance sheet as a contract liability, and the associated cost of goods sold is deferred on our balance sheet as a contract asset;

subsequently, we recognize such revenue and cost of goods sold as payments are received.

During the year ended December 31, 2023, we recognized $ 17,500 of revenue that was included in the contract liability balance as of January 1, 2023.

All revenue, including sales processed online and through our retail store resellers and distributors, is reported net of sales taxes collected from customers on behalf of taxing authorities, returns, and discounts.

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”) for non-prescription, polarized sunglass and blue light blocking glasses across all of our online channels.

Our e-commerce revenue is recognized upon meeting of the performance obligation when the eyewear is shipped to end customers.

consumers enjoy free USPS first class postage, with faster delivery options available for extra cost, for sales processed through our website and on Amazon.

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 (Shopify for Lucyd.co website and Amazon) 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 the company sells 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.

Our 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 the 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, our 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 distributors 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 distributor orders, no e-commerce fees are applicable.

The Company’s sales do not contain any variable consideration.

We allow our customers to return our products, subject to our refund policy, which allows any customer to return our products for any reason within the first:

7 days for sales made through our website (Lucyd.co)

30 days for sales made through Amazon

30 days for sales to most wholesale retailers and distributors (although certain sales to independent distributors are ineligible for returns)

For all of our sales, 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.

Additionally, we review all individual returns received in the month following the balance sheet date pertaining to orders processed prior to the balance sheet date in order to determine whether an allowance for sales returns is necessary.

The Company recorded an allowance for sales returns of $ 25,933 and $ 24,897 as of December 31, 2023 and 2022, respectively.

Shipping and Handling

Costs incurred for shipping and handling are included in cost of revenue at the time the related revenue is recognized.

Amounts billed to a customer for shipping and handling are reported as revenues.

Recently Adopted Accounting Pronouncements

Effective January 1, 2023, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (as amended by ASU 2018-19 in November 2018, ASU 2019-05 in May 2019, ASU 2019-10 and 2019-11 in November 2019, ASU 2020-02 in February 2020, and ASU 2022-02 in March 2022).

This standard requires entities to estimate lifetime expected credit losses for financial instruments, including trade and other receivables, which will generally result in earlier recognition of credit losses.

The adoption of this new guidance did not have a significant impact on our results of operations, cash flows, or financial condition.

Recently Issued Accounting Pronouncements

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements .

This ASU amends the presentation and disclosure of a variety of topics in the ASC, including derivatives, diluted earnings per share, changes in reporting entity, preferred stock, certain industry-specific items, and various other topics, in order to align them with SEC regulations.

The amendments to the various topics should be applied prospectively, and the effective date will be determined for each individual disclosure based on the effective date of the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K.

We do not anticipate that the adoption of this ASU will have a significant impact on our financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the ASU enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, and contains other disclosure requirements.

The ASU does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

ASU 2023-07 is required to be applied retrospectively to all periods presented in the financial statements, and is effective for Innovative Eyewear, Inc.

for fiscal years beginning after December 15, 2023 (i.e., January 1, 2024) and interim periods within fiscal years beginning after December 15, 2024 (i.e., January 1, 2025).

We do not anticipate that the adoption of this ASU will have a significant impact on our financial statements.

In December 2023, the FASB issued 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.

The ASU is required to be applied prospectively, with the option to apply it retrospectively.

The ASU is effective for Innovative Eyewear, Inc.

for fiscal years beginning after December 15, 2024.

We do not anticipate that the adoption of this ASU will have a significant impact on our financial statements.

Subsequent Events

In connection with the preparation of these financial statements, the Company has evaluated subsequent events through March 24, 2024, which is the date the financial statements were available to be issued.

See Note 11 for additional information.

NOTE 3 – GOING CONCERN

The Company has a limited operating history.

The Company’s business and operations are sensitive to general business and economic conditions in the United States.

A host of factors beyond the Company’s control could cause fluctuations in these conditions.

Adverse conditions

may include recession, downturn, or otherwise, changes in regulations or restrictions in imports, competition, or changes in consumer

taste including the economic impacts from the COVID-19 pandemic.

These adverse conditions could affect the Company’s financial

condition and the results of its operations.

Company meets its day to day working capital requirements through monies raised through sales of eyewear and issuances of equity, including

past crowdfunding transactions, and more recently an initial public offering completed in August 2022.

The Company also has issued

a convertible note held by its parent company.

The Company’s forecasts and projections indicate that the Company expects to have

sufficient cash reserves and future income to operate within the level of its current facilities.

The Company anticipates that its available

liquidity will be sufficient to fund operations through at least the end of March 2024.

4 – INCOME TAX PROVISION

following is a reconciliation of tax computed at the statutory federal rate to the income tax benefit in the statements of operations:

of reconciliation of federal statutory tax rate

Income tax benefit

at the statutory federal rate

State income tax benefits,

net of federal benefit

in valuation allowance

( 1,228,334 )

components of the Company’s deferred tax assets are as follows:

of deferred tax assets

Adverse conditions may include recession, downturn, or otherwise, changes in regulations or restrictions in imports, competition, or changes in consumer taste.

These adverse conditions could affect the Company’s financial condition and the results of its operations.

The Company meets its day-to-day working capital

requirements using monies raised through sales of eyewear and issuances of equity, including our initial public offering completed

in August 2022, a secondary public offering completed in June 2023, and exercises of warrants by stockholders (see Note 8

for additional details).

The Company also previously issued a convertible note held by Tekcapital and Affiliates, which was repaid

in full during the year ended December 31, 2023 (see Note 6).

Effective March 1, 2024, the Company issued a new 18-month convertible note to Tekcapital and Affiliates (see Note

11 for details).

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’s existing cash and cash equivalents (including the proceeds from the aforementioned second public offering and proceeds received from investors’ exercises of warrants), plus planned capital-raising activities in 2024, will be sufficient to fund operations through at least end of March 2025.

NOTE 4 – INCOME TAX PROVISION

The following is a reconciliation of tax computed at the statutory federal rate to the income tax benefit in the statements of operations:

Schedule of reconciliation of federal statutory tax rate

Income tax benefit at the statutory federal rate

State income tax benefits, net of federal benefit

Change in valuation allowance

The components of the Company’s deferred tax assets are as follows:

Schedule of deferred tax assets

Deferred tax assets:

Stock-based compensation

Net operating losses –

operating losses – state

tax assets Gross

Valuation Allowance

( 2,161,397 )

( 1,011,207 )

deferred tax assets

tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities.

Deferred tax assets or liabilities at the end of each period are determined using the tax rate expected to be in effect when taxes are

actually paid or recovered.

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 available positive and negative evidence needs to be considered, including a 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 the evidence, the Company has recorded a full valuation allowance against its deferred

December 31, 2022, the Company had federal net operating loss carryforwards of $ 6,413,441

and state net operating loss carryforwards of

$ 3,653,332 ,

both of which do not expire.

Company files Federal and Florida tax returns.

The years that remain subject to examination are the years ended December 31, 2020,

2021, and 2022.

As of December 31, 2022 and 2021, the Company does no t

believe that is has any liabilities for uncertain tax positions.

5 – INTANGIBLE ASSETS

of intangible assets

intangible assets

Net operating losses – federal

Net operating losses – state

Deferred tax assets Gross

Less Valuation Allowance

Net deferred tax assets

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities.

Deferred tax assets or liabilities at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered.

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 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 the evidence, the Company has recorded a full valuation allowance against its deferred tax assets.

At December 31, 2023, the Company had federal net operating loss carryforwards of $ 11,826,332 and state net operating loss carryforwards of $ 6,515,176 , both of which do not expire.

The Company files Federal and Florida tax returns.

The years that remain subject to examination are the years ended December 31, 2020, 2021, 2022, and 2023.

As of December 31, 2023 and 2022, the Company does no t believe that is has any liabilities for uncertain tax positions.

NOTE 5 – INTANGIBLE ASSETS

Schedule of intangible assets

Finite-lived intangible assets

Intangible assets, gross

Accumulated amortization

expense totalled approximately $ 10,500

for the years ended December 31, 2022 and

2021, respectively.

Future amortization is expected to approximate $ 11,500

6 – RELATED PARTY TRANSACTIONS

Note and Due to Parent and Affiliates

the years ended December 31, 2022 and 2021, the Company had the availability of, but not the contractual right to, intercompany

financing from the Parent and Affiliates in the form of either cash advances or borrowings under a convertible note (as discussed below).

The convertible notes balances were $ 61,356 and

of December 31, 2022 and 2021, respectively.

December 1, 2020, the Company issued a convertible note to its Parent and Affiliates for up to $ 2,000,000

that bears interest at 10 %

per annum, which includes the option to convert the debt into the Company’s common stock at market price.

The note can be converted

into shares of common stock of the Company upon occurrence of certain conversion events, as defined.

June 1, 2021, the Company converted related party borrowings totalling $ 778,500

shares of common stock at $ 1.00

September 5, 2021, the Company converted related party borrowings totalling $ 500,002

shares of common stock at $ 3.56

November 1, 2021, the Company amended and restated its December 1, 2020, convertible note agreement with Parent and Affiliates,

increasing the amount of available financing from $2,000,000 to $ 3,000,000 .

November 16, 2021, the Company converted related party borrowings totalling $ 901,271

shares of common stock at $ 3.56

August 15, 2022, in connection with the Company’s initial public offering (see Note 8), the Company converted related party

borrowings totalling $ 2,002,280

shares of common stock at $ 7.50

Service Agreement

2020, the Company entered into a management services agreement with a related party (related through common ownership), for which the

Company was billed $25,000 quarterly.

Effective February 1, 2022, the original management services agreement was amended to have

the Company billed at $35,000 quarterly.

While the agreement does not stipulate a specific maturity date, it can be terminated with 30

calendar days written notice by any party.

related party provides the following services:

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;

Advice, assistance, and

consultation services to support the Company or in relation to any other related matter.

the years ended December 31, 2022 and 2021, the Company incurred $ 140,000

and $ 100,000 ,

respectively, under its management services agreement with Tekcapital Europe Ltd.

of Office Space

to the February 1, 2022 amendment of the aforementioned management services agreement, the Company was provided with rent-free office

space by the Parent and Affiliates.

Effective February 1, 2022, Tekcapital began to bill the Company for an allocation of rent paid

by Tekcapital on the Company’s behalf.

The Company recognized $ 74,442

of expense related to this arrangement for the

year ended December 31, 2022.

7 – COMMITMENTS AND CONTINGENCIES

are not the subject of any material pending legal proceedings, however, may from time to time become a party to various legal proceedings

arising in the ordinary course of business.

executive offices are located at 11900 Biscayne Blvd., Suite 630 Miami, Florida 33181.

Our executive offices are provided to us by the

parent of our majority stockholder, Tekcapital (see Note 6).

Intangible assets, net

These costs are amortized using the straight-line method over a period of 10 years.

Amortization expense totalled $ 24,164 and $ 10,466 for the years ended December 31, 2023 and 2022, respectively.

Future amortization is expected to approximate $ 30,000 per year.

NOTE 6 – RELATED PARTY TRANSACTIONS

Convertible Note and Due to Tekcapital and Affiliates

During the year ended December 31, 2022 and through December 1, 2023, the Company had the availability of, but not the contractual right to, intercompany financing from Tekcapital and Affiliates in the form of either cash advances or borrowings under a convertible note (as discussed below).

On December 1, 2020, the Company issued a convertible note to Tekcapital and Affiliates for up to $2,000,000 that bears interest at 10 % per annum, which includes the option to convert the debt into the Company’s common stock at market price.

The note can be converted into shares of common stock of the Company upon occurrence of certain conversion events, as defined.

On November 1, 2021, the Company amended and restated the convertible note agreement with Tekcapital and Affiliates, increasing the amount of available financing from $ 2,000,000 to $ 3,000,000 .

On August 15, 2022, in connection with the Company’s initial public offering (see Note 8), the Company converted related party borrowings totalling $ 2,002,280 into 266,970 shares of common stock at $ 7.50 per share.

The convertible notes balances were $ 61,356 at December 31, 2022.

In January 2023, the Company borrowed an additional $ 48,143 under such convertible notes, and subsequently repaid the outstanding balances of the convertible notes in full in February 2023.

No further amounts were borrowed under the convertible notes, and the convertible notes matured on December 1, 2023 with no amounts outstanding.

Subsequent to the year ended December 31, 2023 (effective March 1, 2024),

the Company issued a new 18-month convertible note to Tekcapital and Affiliates;

see Note 11 for details.

Management Service Agreement

In 2020, the Company entered into a management services agreement with Tekcapital Europe Ltd.

(an affiliate of our largest stockholder, Lucyd Ltd., whose Chief Executive Officer is the father of our Chief Executive Officer), for which the Company was billed $25,000 quarterly.

Effective February 1, 2022, the original management services agreement was amended to have the Company billed at $35,000 quarterly.

While the agreement does not stipulate a specific maturity date, it can be terminated with 30 calendar days written notice by any party.

The related party provides the following services:

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;

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

The Company incurred $ 140,000 during each of the years ended December 31, 2023 and 2022 under this management services agreement.

Rent of Office Space

Prior to the February 1, 2022 amendment of the aforementioned management services agreement, the Company was provided with rent-free office space by Tekcapital and Affiliates.

Effective February 1, 2022, Tekcapital began to bill 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, 2025.

The Company recognized expense related to this arrangement of $ 91,672 and $ 74,442 of for the years ended December 31, 2023 and 2022, respectively.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Legal Matters

In August 2023, the Company entered into a settlement agreement with a former wholesale customer who owed the Company $ 92,646 .

As a result of this settlement, $ 47,646 of accounts receivable were written-off as uncollectible, while the $ 45,000 collected under the settlement agreement was reflected as a gain within general and administrative expenses in the statement of operations.

In November 2023, a third party filed a complaint before 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.

In December 2023, the International Trade Commission instituted an investigation against the Company.

As of December 31, 2023, the Company recorded a liability of approximately $ 103,000 related to this matter.

This matter was subsequently settled and resolved in January 2024;

refer to Note 11 for details.

Additionally, the Company is currently pursuing collection of $41,452 from an individual who was both a former member of management and a former member of our board of directors.

The amount owed to us represents the remaining balance of an advance against future commissions that was previously paid to such individual under a contractual agreement.

We desire to resolve this matter amicably and expeditiously;

accordingly, we have presented this individual with a demand for repayment, and are exploring all options available to us with the assistance of legal counsel.

No amounts related to this matter have been recorded on the balance sheet and statement of operations as of and for the year ended December 31, 2023.

Our executive offices are located at 11900 Biscayne Blvd., Suite 630 Miami, Florida 33181.

Our executive offices are provided to us by the Tekcapital and Affiliates (see Note 6).

We consider our current office space adequate for our current operations.

the year ended December 31, 2022, the Company entered into license agreements which grant the Company the right to sell certain

branded smart eyewear.

These agreements require the Company to pay royalties based on a percentage of net retail and wholesale sales,

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.

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

License Agreements

During the years ended December 31, 2023 and 2022, we entered into several 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:

Schedule of future minimum payments due

(through 2032)

related party management services agreement discussed in Note 6.

8 – STOCKHOLDERS’ EQUITY

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, 2022 and 2021.

Public Offering

August 17, 2022, the Company closed on its initial public offering of 980,000

units consisting of 980,000

shares of its common stock and 1,960,000

warrants to purchase 1,960,000 shares of common

stock at a combined offering price of $ 7.50

per unit in exchange for gross proceeds of approximately

million, before deducting underwriting discounts

and offering expenses.

Thereafter (through 2032)

Other Commitments

See related party management services agreement discussed in Note 6.

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, 2023 and 2022.

Initial Public Offering

On August 17, 2022, the Company closed on its initial public offering of 980,000 units consisting of 980,000 shares of its common stock and 1,960,000 warrants to purchase 1,960,000 shares of common stock at a combined offering price of $ 7.50 per unit in exchange for gross proceeds of approximately $ 7.35 million, before deducting underwriting discounts and offering expenses.

Each share of common stock was sold together with two warrants.

Each warrant is exercisable to purchase one share

of common stock at an initial exercise price of $7.50 per share, subject to certain adjustments as set forth in the warrant agreement.

In addition, the Company

granted the underwriters a 45-day option to purchase up to an additional 147,000 shares of common stock and/or warrants to purchase up

to an additional 294,000 shares of common stock to cover over-allotments, of which the Underwriter exercised its option to purchase additional

warrants to purchase 294,000 shares of common stock concurrently with the closing.

shares of common stock and warrants began trading on The Nasdaq Capital Market on August 15, 2022, under the symbols “LUCY”

and “LUCYW,” respectively.

pursuant to the terms of the underwriting agreement for the offering, the Company issued by the Underwriter certain other warrants to

purchase up to 58,800

shares of the Company’s common stock at

an exercise price of $ 8.228

net proceeds received by the Company amounted to $ 6,189,734 .

of December 31, 2022, none of the aforementioned warrants had been exercised.

9 – STOCK BASED COMPENSATION

July 1, 2021, an Equity Incentive Plan was approved, allowing for total of 20% of our issued and outstanding common stock immediately

after the consummation of the initial public offering, less the number of outstanding option grants, or 1,124,043 ,

of total issued shares to be available for the grant of awards under the Plan.

1,685,000 option awards were granted by the Company prior

to the approval of the Plan, while 647,500 option awards were granted subject to the Plan.

the year ended December 31, 2021, the Company, granted 1,687,500

option awards, of which 1,347,500 vest rateably

over time and 340,000 vest based on certain performance conditions.

There were no

option awards granted during the year ended December 31,

fair value of options granted is calculated using the Black-Scholes-Merton option pricing model.

The underlying assumptions used in the

option pricing model for stock option awards granted in 2021 were as follows:

fair value of options granted

Share price at date of grant

Options life in years

Risk free rate

Expected volatility

Expected dividend

Grant date fair value of

weighted average grant date fair value of options outstanding as of December 31, 2022 and 2021 was $ 1.84 .

of the number of share options and the weighted average exercise price outstanding as of and during the years ended December 31,

2022 and 2021 are as follows:

of number of share options and the weighted average exercise price outstanding

price per share

Each warrant is exercisable to purchase one share of common stock at an initial exercise price of $7.50 per share, subject to certain adjustments as set forth in the warrant agreement.

In addition, the Company granted the underwriters a 45-day option to purchase up to an additional 147,000 shares of common stock and/or warrants to purchase up to an additional 294,000 shares of common stock to cover over-allotments, of which the Underwriter exercised its option to purchase additional warrants to purchase 294,000 shares of common stock concurrently with the closing.

The shares of common stock and warrants began trading on The Nasdaq Capital Market on August 15, 2022, under the symbols “LUCY” and “LUCYW,” respectively.

Also, pursuant to the terms of the underwriting agreement for the offering, the Company issued by the Underwriter certain other warrants to purchase up to 58,800 shares of the Company’s common stock at an exercise price of $ 8.228 per share.

The net proceeds received by the Company from this offering amounted to $ 6,015,918 .

Second Public Offering

On June 26, 2023, the Company closed on a public offering of 4,500,000 units consisting of 4,500,000 shares of its common stock and 4,500,000 warrants to purchase 4,500,000 shares of common stock (the “Common Warrants”) at a combined offering price of $ 1.05 per unit in exchange for gross proceeds of approximately $ 4.73 million, before deducting underwriting discounts and offering expenses.

Each share of common stock was sold together with one warrant.

Each Common Warrant is exercisable to purchase one share of common stock at an initial exercise price of $ 1.05 per share, subject to certain adjustments as set forth in the warrant agreement.

In addition, pursuant to the terms of the placement agency agreement for the offering, the Company issued to the placement agent certain other warrants to purchase up to 180,000 shares of the Company’s common stock at an exercise price of $ 1.31 per share.

The net proceeds received by the Company from this offering amounted to $ 4,115,688 .

On August 17, 2022, as part of the Company’s initial public offering described above, the Company issued a total of 2,254,000 warrants to purchase 2,254,000 shares of common stock, which began trading and are currently trading on the Nasdaq Capital Market, under the symbol “LUCYW” (which we refer to as the “Listed Warrants”).

In February 2023, holders of the Company’s Listed Warrants exercised such warrants to purchase an aggregate of 408,600 shares of the Company’s common stock, at an adjusted exercise price of $ 3.75 per share, resulting in cash proceeds to the Company of $ 1,532,250 .

Between April 1, 2023 and April 16, 2023, holders of the Company’s Listed Warrants exercised such warrants to purchase an aggregate of 321,120 shares of the Company’s common stock, at an adjusted exercise price of $ 3.75 per share, resulting in cash proceeds to the Company of $ 1,204,200 .

On April 17, 2023, the Company entered into a warrant exercise inducement letter agreement (“Inducement Letter”) with certain accredited investors that were existing holders of the Company’s Listed Warrants to purchase an aggregate of 150,000 shares of the Company’s common stock for cash, wherein the investors agreed to exercise all of their existing Listed Warrants at an exercise price of $ 3.75 per share.

The gross proceeds to the Company from this transaction, before deducting estimated expenses and fees, was $ 562,000 ;

the net proceeds received by the Company amounted to $ 391,268 .

In consideration for the immediate exercise of the existing Listed Warrants for cash, the exercising holders received new warrants to purchase up to an aggregate of 300,000 shares of common stock (the “Private Warrants”) in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

The Private Warrants are immediately exercisable upon issuance at an exercise price of $ 3.75 per common share and will expire on April 19, 2028.

Although the Private Warrants were offered in a private placement pursuant to an applicable exemption from the registration requirements of the Securities Act and, along with the shares of common stock issuable upon their exercise, were not registered under the Securities Act, subsequently in May 2023 the shares of common stock issuable upon exercise of these warrants were registered with the SEC through a Form S-1 filing.

The only exercises of warrants to date have been those exercises of Listed Warrants in February and April of 2023 as described above.

As of December 31, 2023, none of the Common Warrants, Private Warrants, nor any of the warrants issued to underwriters and placement agents have been exercised.

As of December 31, 2023, the Company’s outstanding warrants are as follows:

Schedule of stockholder’s equity

Listed Warrants

Common Warrants

Private Warrants

Underwriter warrants

Placement agent warrants

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 option grants, to be available for the grant of awards under the Plan.

There were 1,685,000 option awards granted by the Company prior to the approval of the Plan, while 1,800,500 option awards have been granted under the Plan from July 1, 2021 through December 31, 2023.

Summary information regarding the number of options, exercise price, and remaining contractual life as of and during the years ended December 31, 2023 and 2022 is as follows:

Schedule fair value of options granted

Weighted Average

Exercise Price

Weighted Average

Contractual Life

As at January 1, 2022

December 31, 2021

As at December 31, 2022

As at January 1, 2023

December 31, 2022

Forfeited / Expired

As at December 31, 2023

of December 31, 2022, the weighted average remaining contractual life of options was 1.68

years for outstanding options, and 1.79

years for exercisable options.

of December 31, 2022, unrecognized stock option expense of $ 1,409,958

remains to be recognized over next 1.41

10 – EARNINGS PER SHARE

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,

2022 and 2021, all shares underlying the related party convertible debt, common stock warrants, and common stock options were excluded

from the earnings per share calculation due to their anti-dilutive effect.

of net earnings per common share — basic and diluted:

of net earnings per common share - basic and diluted

Exercisable as at December 31, 2023

As of December 31, 2023, the aggregate intrinsic value for all options outstanding as well as all options exercisable was zero.

During the year ended December 31, 2023, we granted the following option awards:

Options to purchase an aggregate of 330,000 shares of common stock at $ 1.275 per share were issued to the Company’s officers and management, of which 1/3 vested immediately, 1/3 shall vest on January 13, 2024, and the remaining 1/3 shall vest on January 13, 2025.

The options expire on January 13, 2028.

Options to purchase an aggregate of 75,000 shares of common stock at $ 1.275 per share were issued to non-management directors, which vest evenly over three years, whereby 1/3 shall vest on each of January 13, 2024, January 13, 2025, and January 13, 2026.

The options expire on January 13, 2028.

Options to purchase an aggregate of 162,000 shares of common stock at $ 1.275 per share were issued to certain employees and consultants, which vest evenly over three years, whereby 1/3 shall vest on each of January 13, 2024, January 13, 2025, and January 13, 2026.

The options expire on January 13, 2028.

Options to purchase an aggregate of 75,000 shares of common stock at $ 1.275 per share were issued to an employee, which would have vested evenly over three years (whereby 1/6 of the options would have vested every six months).

During the year ended December 31, 2023, however, all of these options were forfeited.

Options to purchase an aggregate of 6,000 shares of common stock at $ 1.275 per share were issued to a consultant, which vested immediately.

These options were all exercised during the year ended December 31, 2023.

Options to purchase an aggregate of 15,000 shares of common stock at $ 0.66 per share were issued to certain employees and consultants, which vest evenly over two years, whereby 1/4 of the options shall vest every six months.

The options expire on September 5, 2028.

Options to purchase an aggregate of 490,000 shares of common stock at $ 0.45 per share were issued to the Company’s officers and management, of which 1/3 vested immediately, 1/3 shall vest on December 18, 2024, and the remaining 1/3 shall vest on December 18, 2025.

The options expire on December 18, 2028.

There were no option awards granted during the year ended December 31, 2022.

The fair value of options granted is calculated using the Black-Scholes-Merton option pricing model.

The underlying assumptions used in the option pricing model for stock option awards granted in 2023 were as follows:

Schedule of number of share options and the weighted average exercise price outstanding

Share price at date of grant

$ 0.43 - $ 1.28

Expected term (in years)

Risk free rate

3.74 % - 4.65

Weighted-average number

of common shares

and diluted net loss per common share

11 – SUBSEQUENT EVENTS

February 2023, holders of the Company’s warrants (see Note 8) exercised warrants to purchase an aggregate of 408,600

shares of the Company’s common stock, at

an adjusted exercise price of $ 3.75

per share, resulting in cash proceeds to the

Company of $ 1,532,250 .

Expected volatility

Expected dividend yield

Grant date fair value of options

$ 0.28 - $ 1.02

The weighted average grant date fair value of options outstanding was $ 1.49 and $ 1.84 as of December 31, 2023 and 2022, respectively.

As of December 31, 2023, unrecognized stock option expense of approximately $ 721,000 remains to be recognized over next 1.12 years.

Award Modifications

On June 1, 2023, we modified the terms of certain options previously awarded in 2021 to purchase an aggregate of 140,000 shares of common stock, in order to extend their expiration dates from July 21, 2023 to July 21, 2024.

There were no changes to the exercise price or other terms of these stock options, and these options were already fully vested prior to the modification.

As a result of this modification, we recognized incremental stock option expense of $ 9,188 for the year ended December 31, 2023.

Restricted Stock Unit Awards

On December 3, 2023, we entered into an endorsement agreement with an influencer for a one-year term, which included the award of an aggregate of 65,220 restricted stock units.

These restricted stock units vest according to the following schedule:

16,305 shares on December 3, 2023 (which will be issued on or before March 31, 2024), 16,305 shares on March 2, 2024 (which will be issued on or before March 31, 2024), 16,305 shares on May 31, 2024, and 16,305 shares on August 29, 2024.

Total stock-based compensation related to this award, based on the market price of the Company’s common stock on the date of grant, amounts to $27,066.

We recognized $ 8,458 of expense related to this award during the year ended December 31, 2023, and will recognize the remaining expense of $ 18,608 on a straight-line basis over the remaining term of the agreement in 2024.

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, 2023 and 2022, all shares underlying the related party convertible debt, common stock warrants, and common stock options were excluded from the earnings per share calculation due to their anti-dilutive effect.

Calculation of net earnings per common share — basic and diluted:

Calculation of net earnings per common share - basic and diluted

Basic and diluted:

Weighted-average number of common shares

Basic and diluted net loss per common share

NOTE 11 – SUBSEQUENT EVENTS

Settlement and License Agreement

On January 3, 2024, we settled and resolved certain matters with a third party, including a complaint that had been brought before the International Trade Commission and an investigation instituted by the International Trade Commission in 2023, and entered into a multi-year non-exclusive license agreement covering 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.

Loan to Tekcapital Europe, Ltd.

On January 11, 2024, we entered into an

intercompany loan agreement (as lender) with Tekcapital Europe, Ltd.

(as borrower), an affiliate of our largest stockholder, Lucyd

Ltd., whose Chief Executive Officer is the father of our Chief Executive Officer, and Tekcapital Plc, the parent of Tekcapital

Pursuant to this agreement, the Company loaned 600,000 British pounds sterling (equivalent to approximately $ 765,000 )

to Tekcapital Europe Ltd.

The loan bears simple interest at a rate of 10 %

per annum and is required to be repaid on or before April

Tekcapital Plc executed the agreement as guarantor for Tekcapital Europe Ltd.

on the full amount of

Tekcapital Europe Ltd.

repaid the loan in full in March 2024.

New Convertible Note

Effective March 1, 2024, the Company issued a convertible note to Lucyd Ltd., the largest stockholder of the Company, for up to $ 1,250,000 that bears interest at 10 % per annum, which includes the option to convert the debt into the Company’s common stock at market price.

The note can be converted into shares of common stock of the Company upon the occurrence of certain events, as defined in the note, or for any reason at the sole discretion of Lucyd Ltd.

The note has a maturity date of September 1, 2025 , at which time all outstanding principal and accrued interest is payable in full.

As of the date these financial statements were available to be issued, the Company has not borrowed any amounts under this convertible note.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures