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Item 9A. Controls and Procedures

2025-03-24 compared with 2024-03-25 · 631 added, 454 removed, 686 unchanged (61% of the section changed)

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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.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Co-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 Co-Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of fiscal year 2024.

Management’s Report on Internal Control Over Financial Reporting

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Other Information .

Disclosure Regarding

Foreign Jurisdictions that Prevent Inspections .

On December 13, 2024 , Harrison Gross , our Chief Executive Officer , adopted a Rule 10b5-1 trading plan, which is effective through August 31, 2025 .

The terms of this arrangement provide for (i) the sale of stock to cover Mr.

Gross’ income tax withholding obligations associated with the issuance of 19,200 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of 2,880 shares of common stock.

As such, the estimated aggregate number of shares to be sold pursuant to this arrangement is 8,718.

On December 13, 2024 , Konrad Dabrowski , our Co-Chief Financial Officer , adopted a Rule 10b5-1 trading plan, which is effective through August 31, 2025 .

The terms of this arrangement provide for the sale of stock to cover Mr.

Dabrowski’s income tax withholding obligations associated with the issuance of 16,800 shares of common stock in connection with the vesting of restricted stock units.

As such, the estimated aggregate number of shares to be sold pursuant to this arrangement is 4,982.

On December 13, 2024 , Oswald Gayle , our Co-Chief Financial Officer , adopted a Rule 10b5-1 trading plan, which is effective through December 2, 2025 .

The terms of this arrangement provide for (i) the sale of stock to cover Mr.

Gayle’s income tax withholding obligations associated with the issuance of 10,800 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of up to 100% of the net vested shares of common stock at certain specified limit prices.

As such, the estimated minimum aggregate number of shares to be sold pursuant to this arrangement is 3,204, and the maximum aggregate number of shares that may be sold pursuant to this arrangement is 10,800.

On December 13, 2024 , David Eric Cohen , our Chief Technology Officer , adopted a Rule 10b5-1 trading plan, which is effective through December 2, 2025 .

The terms of this arrangement provide for (i) the sale of stock to cover Mr.

Cohen’s income tax withholding obligations associated with the issuance of 14,400 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of up to 3,038 of the net vested shares of common stock at certain specified limit prices.

As such, the estimated minimum aggregate number of shares to be sold pursuant to this arrangement is 4,270, and the estimated maximum aggregate number of shares that may be sold pursuant to this arrangement is 7,308.

On December 13, 2024 , Joaquin Abondano , our Chief Operating Officer , adopted a Rule 10b5-1 trading plan, which is effective through December 18, 2025 .

The terms of this arrangement provide for (i) the sale of stock to cover Mr.

Abondano’s income tax withholding obligations associated with the issuance of 9,600 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of up to 40% of the net vested shares of common stock at certain specified limit prices.

As such, the estimated minimum aggregate number of shares to be sold pursuant to this arrangement is 2,848, and the estimated maximum aggregate number of shares that may be sold pursuant to this arrangement is 5,548.

Regarding Foreign Jurisdictions that Prevent Inspections .

Not applicable.

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Konrad Dabrowski

Chief Financial Officer

Co-Chief Financial Officer

David Eric Cohen

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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.

Gross served in various positions, including chief executive officer and media & UX lead, of Lucyd Ltd.

(one of our largest stockholders and the licensor of our smart eyewear technology) where he developed the Lucyd brand identity and oversaw general operations and product development.

Additionally, from November 2015 to August 2021, Mr.

Gross served as the Digital Media Manager of Tekcapital plc (“Tekcapital”) (LON:

TEK), a university intellectual property investment firm that is the parent company of Tekcapital Europe Limited, and Lucyd Ltd, the holding company for Tekcapital’s shares in Innovative Eyewear, where he created, developed and marketed for the company’s licensed properties.

TEK), a university intellectual property investment firm that is the parent company of Tekcapital Europe Limited, and Lucyd Ltd, the holding company for Tekcapital’s shares in Innovative Eyewear, where he created, developed, and marketed the company’s licensed properties.

Prior to that, from October 2013 to September 2014, Mr.

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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.

Konrad Dabrowski has served as our Co-Chief Financial Officer on a part-time basis since October 2024, and served as our Chief Financial Officer on a part-time basis from August 2019 through October 2024.

Since July 2020, Mr.

Dabrowski has also served as the chief financial officer of Tekcapital, where he co-manages Tekcapital’s investment strategy and oversees financial reporting for all of its portfolio companies.

Between June 2017 and July 2020, Mr.

Dabrowski 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.

Dabrowski served as the group controller of Tekcapital.

Prior to his employment at Tekcapital, from March 2016 to June 2017, Mr.

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

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

Oswald Gayle has served as our Co-Chief Financial Officer on a full-time basis since October 2024.

Gayle joined Innovative Eyewear as Vice President of Finance in January 2022, and served in that role until his promotion in August 2024 to Senior Vice President of Finance.

Prior to his employment at Innovative Eyewear, from September 2018 to January 2022, Mr.

Gayle worked with Vaco Resources in Miami, Florida in the position of Executive Financial Consultant.

Gayle has over 30 years’ experience finance and accounting, initially starting with PricewaterhouseCoopers and including numerous senior and executive level management positions in corporate finance, SEC reporting, investor relations, and business development in the manufacturing and retail industries.

Gayle has a bachelor’s degree in accounting and finance with honors from the University of London and is a Chartered Global Management Accountant and a member of the American Institute of Certified Public Accountants.

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

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.

as President of Emaze Design Agency, a digital design agency, where he led the development of web and applications for e-commerce, web

performance monitoring, website design and mobile applications.

Prior to his employment at Emaze Design Agency, Mr.

Cohen was lead Business Intelligence Specialist at Jewish General Hospital where he assisted with the data solutions and business processes and requirements.

He received a BS in Computer Science from the Academy of Bordeaux and an MS in Advanced Technician & Information Systems Management from Hadassah University.

Kristen Mclaughlin has served as one of

our directors since August 2021.

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:

Swarovski Crystal Eyewear.

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.

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.

Since October 2021, Kristen has served

as Marketing Director at Tura, inc., an eyewear design and distribution company where she is responsible for strategic marketing initiatives

and communications to drive sales and support key accounts.

From March 2019 to April 2020, Ms.

McLaughlin served

as the Global Marketing Director at DePasquale Companies, a skincare, hair care and cosmetics manufacturer, where she led the global

marketing strategy and new product development.

Prior to her employment at DePasquale Companies, from March 2000 to January 2019,

McLaughlin was employed at Silhouette International, an eyewear manufacturer, where she served as the Director of Marketing:

Manufacturer, Regional Sales Manager, and Brand Manager:

Daniel Swarovski Crystal Eyewear.

While at Silhouette International, Ms.

Mclaughlin led the company’s brand portfolio in the U.S.

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.

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, Ms.

Bartlett was the sales representative for eyewear sales in the

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

led the company’s brand portfolio in the U.S.

and its brand direction, product development and campaign content.

She has a BS and

MBA from Ramapo College of New Jersey.

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.

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

Bartlett has been in the eyewear industry for over 45

years holding various roles including optician, optical manager, marketing manager and operations management, where she currently acts

as an industry consultant.

From September 2015 - June 2020, Ms.

Bartlett held the position of Chief Operating Officer of Todd Rogers

Eyewear, a specialty eyewear company, where she managed the day-to-day operations of the company.

Prior to her time at Todd Rogers Eyewear,

from March 2010 to May 2015, Ms.

Bartlett was the sales representative for eyewear sales in the northeast of Massachusetts

for Safilo USA, a specialty eyewear company.

Additionally, from September 2013 to May 2018, and again currently Ms.

is an Adjunct Professor at Benjamin Franklin Institute of Technology in Boston, Massachusetts.

From February 2020 to February 2022,

Bartlett was the President of the Opticians Association of America, a national organization representing the professional, business,

educational, legislative and regulatory interests of opticianry.

Additionally, Ms.

Bartlett 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 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 has been a director for fifteen years for

the Opticians Association of Massachusetts and 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.

Bartlett is well qualified to

serve as a director due to her substantial experience in the optical industry.

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 executive chairman of the board since April 2020, (3) Tomco Energy plc (LON:TOM), an oil exploration and technology company,

where he has been a director since April 2021, and (4) Veteran Capital Corp.

(TSX-V:VCC), a capital pool company, where he has been

a director since January 2021.

From September 2012 to June 2016, Mr.

Castro was a director and, from September 2014

to June 2016 served as the Chief Financial Officer, of Eland Oil & Gas plc, a Nigerian focused upstream oil and natural gas

exploration and production company, where he was responsible for the company’s finance, legal and corporate finance activities.

Prior to his employment at Eland, from May 2011 to May 2014, Mr.

Castro served as Head of Capital Markets and then as

Chief Executive Officer of Northland Capital Partners, an investment bank, where he was responsible for the investment banks day-to-day

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

Castro is well qualified to serve as a director due to his substantial experience as a director of public companies

and his distinction as chartered accountant.

Number and Terms of Office of Officers and Directors

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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 .

The following table sets forth the aggregate compensation paid to our named executive officers for the fiscal years ended December 31, 2024 and 2023.

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

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

Summary Compensation Table

and Principal Position

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.

Incentive Plan

Other Compensation (5)

Executive Officer

Financial Officer (1)

Financial Officer (2)

Technology Officer

Dabrowski was our Chief Financial Officer for all of 2023 and through October 11, 2024, at which point he became Co-Chief Financial Officer.

Gayle became Co-Chief Financial Officer effective October 11, 2024.

Compensation amounts shown for Mr.

Gayle include amounts paid to Mr.

Gayle in his previous capacities as Vice President and Senior Vice President of Finance prior to his appointment as Co-Chief Financial Officer.

Includes Restricted Stock Units awarded to Messrs.

Gross, Dabrowski, Gayle, and Cohen on December 13, 2024 in the amounts of 57,600, 50,400, 32,400, and 43,200 units, respectively.

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.

Gross, Dabrowski, Gayle, and Cohen on January 13, 2023 to purchase 4,500, 4,500, 4,500, and 3,000 shares of the Company’s common stock, respectively, at an exercise price of $25.50 per share.

Also includes stock options granted to Messrs.

Gross, Dabrowski, Gayle, and Cohen on December 18, 2023 to purchase 7,500, 6,000, 2,500, and 3,500 shares of the Company’s common stock, respectively, at an exercise price of $9.00 per share.

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

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Gross an annual base salary of $85,800 for the remainder of 2021, and we also agreed that from the initial public offering date in August 2022, we increased his base salary to $150,000 per year.

Effective August 2, 2024, we agreed to increase his Mr.

Gross’ base salary to $190,000 annually.

Pursuant to the terms of the employment agreement, our Board may exercise its sole discretion to grant Mr.

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Option Awards

Incentive Plan

Incentive Plan Compensation

Pension Value

and Nonqualified

Frank Rescigna

Kristen McLaughlin

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, 2024 was 3,750 in aggregate.

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The following table sets forth outstanding equity awards to our named executive officers as of December 31, 2024.

of securities underlying unexercised options

unexercisable

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

shares, units

Option Exercises and Stock Vested

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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, 2024, awards covering 352,561 shares of Common Stock were outstanding, of which 30,000 option awards had been granted by the Company prior to the approval of the Plan, 53,800 option awards had been granted subject to the Plan, 19,500 stock grants had been granted subject to the Plan (and were fully vested), and 249,261 RSU awards had been granted subject to the Plan (of which, 14,461 had vested).

As of December 31, 2024, there were 167,665 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).

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.

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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.

Timing of Awards.

Awards are made pursuant to a predetermined

schedule approved by the Board of Directors and the Compensation Committee.

The timing of these grants is not influenced by the possession

or consideration of material nonpublic information (MNPI).

The timing and value of these grants are established in advance, ensuring transparency

and alignment with best governance practices.

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

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Konrad Dabrowski (3)

Oswald Gayle (4)

David Eric Cohen ( 5 )

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5% Stockholders

Vladimir Galkin ( 10 )

Less than 1%.

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Includes 39,500 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.

Gross exercisable within 60 days of the date of this 10-K, plus 9,600 shares of common stock issuable upon the vesting of restricted stock units held by Mr.

Gross, which shall vest within 60 days of the date of this 10-K.

Includes 8,500 shares of common stock issuable upon exercise of stock options held by Mr.

Dabrowski exercisable within 60 days of the date of this 10-K.

Dabrowski exercisable within 60 days of the date of this 10-K, plus 8,400 shares of common stock issuable upon the vesting of restricted stock units held by Mr.

Dabrowski, which shall vest within 60 days of the date of this 10-K.

Includes 6,166 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.

Gayle exercisable within 60 days of the date of this 10-K, plus 5,400 shares of common stock issuable upon the vesting of restricted stock units held by Mr.

Gayle, which shall vest within 60 days of the date of this 10-K.

Includes 5,334 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, plus 7,200 shares of common stock issuable upon the vesting of restricted stock units held by Mr.

Cohen, which shall vest within 60 days of the date of this 10-K.

Includes 666 shares of common stock issuable upon exercise of stock options held by Ms.

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Bartlett exercisable within 60 days of the date of this 10-K.

Includes 259,455 shares of common stock.

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.

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Harrison Gross, our Chief Executive Officer.

Includes 1,000,000 shares of common stock, held jointly by Vladimir Galkin and Angelica Galkin, husband and wife.

Vladimir Galkin and Angelica Galkin have shared voting power and dispositive power over 1,000,000 shares of common stock.

The address of this holder is 10900 NW 97th Street, #102, Miami, Florida, 33178.

Certain Relationships and Related Transactions, and Director Independence .

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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”).

On April 1, 2020, we entered into an exclusive, worldwide license agreement with Lucyd Ltd., who was at the time the largest stockholder of the Company and continues to be one of our larger stockholders, 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.

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

3,750,000 shares of our common stock.

3,750,000 shares of our common stock (187,500 shares on a post-reverse-split basis).

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”).

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The Addendum also confirms that Innovative Eyewear issued Lucyd Ltd.

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

3,750,000 shares of our common stock (187,500 shares on a post-reverse-split basis) as consideration for the license.

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.

On June 1, 2020, we entered into a management service agreement with Tekcapital Europe Ltd., an affiliate one of our larger stockholders, Lucyd Ltd., and whose Chief Executive Officer is the father of our Chief Executive Officer, pursuant to which we agreed to pay Tekcapital Europe Ltd.

$25,000 per fiscal quarter for rent-free office space, utilities, advisory services, and any other services in accordance with Tekcapital Europe Ltd.’s areas of expertise.

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we also recognized $92,312 and $91,672 of rent expense for the years ended December 31, 2024 and 2023, 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.

Old 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., who was at the time the largest stockholder of the Company and continues to be one of our larger stockholders (the “Note”).

Thus, from December 1, 2020 through December 1, 2023, we had the availability of, but not the contractual right to, intercompany financing through the Note in the form of either cash advances or borrowings under a convertible note.

The convertible notes bore interest at 10% per annum, and included the option to convert the debt into the Company’s common stock at market price upon the occurrence of certain defined events.

The maximum amount of available financing under this arrangement was initially $2,000,000, but was later increased as of November 1, 2021 via an amendment to $3,000,000.

As of December 31, 2022, the aggregate outstanding balance under these convertible notes was $61,356.

In January 2023, we 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.

New Financing Agreement

On March 1, 2024, we entered into an agreement with Lucyd Ltd.

pursuant to which the Company can receive up to $1,250,000 either (a) in services provided by Lucyd Ltd.

to the Company or (b) in cash upon request of funds by the Company.

Once funds or services are received by the Company, we will issue a convertible note to Lucyd Ltd.

that will bear interest at 10% per annum and include the option to convert the note into shares of our common stock upon certain defined events.

Upon issuance, the convertible note will have a maturity date of September 1, 2025, at which time all outstanding principal and accrued interest, if any, will be payable in full in cash or in the Company’s common stock.

The Company will be able to prepay the convertible notes at any time with the written consent of Lucyd Ltd.

On March 1, 2025, the Company and Lucyd Ltd.

entered into an amendment of the March 1, 2024 convertible note financing agreement, such that upon issuance, the convertible note will have a maturity date of September 1, 2026.

There were no other changes to the terms and provisions of the agreement.

We have not borrowed any amounts under this agreement.

Loan to Tekcapital Europe

On January 11, 2024, we entered into an intercompany loan agreement (as lender) with Tekcapital Europe Ltd.

(as borrower) and Tekcapital Plc, the parent of Tekcapital Europe Ltd.

Pursuant to this agreement, we loaned 600,000 British pounds sterling (equivalent to approximately $768,000) to Tekcapital Europe Ltd.

The loan bore simple interest at a rate of 10% per annum and was required to be repaid on or before April 11, 2024.

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

on the full amount of the loan.

Tekcapital Europe Ltd.

repaid the loan in full in March 2024.

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

Employment Agreements

See “Item 11.

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

Executive Compensation” regarding employment agreements with our executives.

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.

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

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

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

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

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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)

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)

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.

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

Certificate of Amendment to Articles of Incorporation, as filed with the Secretary of State of the State of Florida on July 8, 2024 (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission on July 10, 2024)

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)

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333-272737) filed with the SEC on June 16, 2023)

Description of Securities

Form of Purchase Warrant (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 May 1, 2024)

Form of PA Warrant (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission May 1, 2024)

Form of Purchase Warrant (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 May 29, 2024)

Form of PA Warrant (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission May 29, 2024)

Form of Series A Warrant (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 September 5, 2024)

Form of Series B Warrant (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 5, 2024)

Form of PA Warrant (Incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 5, 2024)

Form of Series C Warrant (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 September 19, 2024)

Form of Series D Warrant (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 19, 2024)

Form of PA Warrant (Incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 19, 2024)

Rights Agreement, dated as of September 25, 2024, by and between Innovative Eyewear, Inc.

and VStock Transfer LLC, as rights agent.

(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 September 26, 2024)

Form of Rights Certificate (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 26, 2024)

Form of Series E Warrant (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 September 26, 2024)

Form of Series F Warrant (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 26, 2024)

Form of PA Warrant (Incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 26, 2024)

License Agreement between Innovative Eyewear, Inc.

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

Sales Representation Agreement by and between Innovative Eyewear, Inc.

Landstrom Associates, Inc., dated March 4, 2021, (Incorporated by reference to Exhibit 10.11 to the Registration Statement filed on Form S-1 (File No.

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

Form of Code of Ethics of innovative Eyewear, Inc.

(Incorporated by reference to Exhibit 14.1 to the Registration Statement filed on Form S-1 (File No.

Representation Agreement by and between Innovative Eyewear, Inc.

Landstrom Associates, Inc., dated March 4, 2021, (Incorporated

by reference to Exhibit 10.11 to the Registration Statement filed on Form S-1 (File No.

333-261616) filed with the Securities and

Exchange Commission on January 10, 2022)

At the Market Offering Agreement, dated April 15, 2024, by and between Innovative Eyewear, Inc.

Wainwright & Co., LLC (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission April 16, 2024)

Note Agreement with Lucyd Ltd.

(Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No.

001-41392) filed with the Securities and Exchange Commission May 14, 2024)

Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission May 1, 2024)

Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission May 29, 2024)

Form of Inducement Letter Agreement, dated September 3, 2024, by and between Innovative Eyewear, Inc.

and the Holders (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 5, 2024)

Form of Inducement Letter Agreement, dated September 18, 2024, by and between Innovative Eyewear, Inc.

and the Holders (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 19, 2024)

Form of Inducement Letter Agreement, dated September 22, 2024, by and between Innovative Eyewear, Inc.

and the Holders (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No.

001-41392) filed with the Securities and Exchange Commission September 26, 2024)

of Code of Ethics of innovative Eyewear, Inc.

(Incorporated by reference to Exhibit 14.1 to the Registration Statement filed on Form

S-1 (File No.

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

Insider trading policy

Insider trading policy (Incorporated by reference to Exhibit 19.1 to the

Annual Report filed on Form 10-K (File No.

001-41392) filed with the Securities and Exchange Commission on March 25, 2024)

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)

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

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

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

Certification

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

Certification

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

Certification

of Principle Executive Officer Pursuant to 18 U.S.C.

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

XBRL Taxonomy Calculation

Linkbase Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Calculation Linkbase

XBRL Taxonomy Definition Linkbase

XBRL Taxonomy Label Linkbase

XRL Taxonomy Presentation

Linkbase Document

XBRL Taxonomy Label Linkbase Document

XRL Taxonomy Presentation Linkbase

Previously filed

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(Principal Executive Officer)

/s/ Konrad Dabrowski

Konrad Dabrowski

Chief Financial Officer

/s/ Oswald Gayle

Co-Chief Financial Officer

March 24, 2025

(Principal Financial and Accounting

(Principal Financial and Accounting Officer)

/s/ Kristen McLaughlin

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March 24, 2025

of Independent Registered Public Accounting Firm

the Board of Directors and Stockholders

Eyewear, Inc.

on the Financial Statements

have audited the accompanying balance sheets of Innovative Eyewear, Inc.

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

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”).

In our opinion, the financial statements present fairly,

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 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.

Report of Independent Registered Public Accounting

To the Board of Directors and Stockholders

Innovative Eyewear, Inc.

Miami, Florida

Opinion on the Financial Statements

We have audited the accompanying balance sheets

of Innovative Eyewear, Inc.

(the “Company”) as of December 31, 2024 and 2023, 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”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended in conformity with accounting

principles generally accepted in the United States of America.

Emphasis of Matter

The 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

Our opinion is not modified with respect to this matter.

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

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

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.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

have served as the Company’s auditor since 2021.

Bekaert LLP 677

/s/ Cherry Bekaert LLP

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

Tampa, Florida

March 24, 2025

INNOVATIVE EYEWEAR, INC.

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Cash and cash equivalents

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

Investments in debt securities (U.S.

Treasury bills)

Accounts receivable, net

Prepaid expenses

Inventory prepayment

Inventory prepayments

Due from Tekcapital and Affiliates

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Deferred revenue

Due to Tekcapital and Affiliates

Related party convertible debt

Total Current Liabilities

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TOTAL LIABILITIES

Commitments and contingencies (Note 7)

Commitments and contingencies (see Note 7)

Stockholders’ Equity

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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

The values of Common stock and Additional paid-in capital, as well as the number of shares issued and outstanding, have been retroactively adjusted in order to give effect to the Company’s 1-for-20 reverse stock split.

See Note 2 and Note 8.

See accompanying Notes to the Financial Statements.

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Cost of Goods Sold

Gross Deficit

Gross Profit (Deficit)

Operating Expenses:

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Total Operating Expenses

Other Income (Expense)

Interest Expense

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Loss per share, basic and diluted (1)

Shares outstanding and per share information have been retroactively adjusted in order to give effect to the Company’s 1-for-20 reverse stock split.

See accompanying Notes to the Financial Statements.

INNOVATIVE EYEWEAR, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the years ended December 31, 2024 and 2023

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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)

Exercises of warrants by stockholders

Second public offering

Exercises of warrants related to private placement transaction

Stock-based compensation

Balances as of December 31, 2023

Balances as of January 1, 2024

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)

Issuance of shares to third party service provider

Issuance of shares to brand ambassador

Issuance of shares related to vesting of restricted share units

At-the-Market Offerings

First Registered Direct Offering

Second Registered Direct Offering

Exercises of warrants related to inducement agreements

Exercises of warrants

Stock-based compensation

Balances as of December 31, 2024

See Note 2 and Note 8.

See accompanying Notes to the Financial Statements.

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Non-cash interest expense

Stock-based compensation expense

Stock-based compensation and nonemployee stock-based payment expense

Expenses paid by Tekcapital and Affiliates

(Recovery of) provision for doubtful accounts

Provision for (recovery of) doubtful accounts

Realized gain on debt securities (U.S.

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Loss on sale of assets

Write-off of previously-capitalized software costs

Changes in operating assets and liabilities:

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Prepaid expenses

Other current assets

Contract assets and liabilities

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Treasury bills)

Loan made to Tekcapital Europe, Ltd.

Repayment of amounts loaned to Tekcapital Europe, Ltd.

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 offerings of common stock and warrants

Proceeds from at-the-market offerings of common stock

Proceeds from exercises of warrants

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)

Proceeds from sale of common stock withheld from employees to cover withholding taxes on vested restricted share units

Repayment of related party convertible debt

Repayment of amounts due to Tekcapital and Affiliates

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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

Issuance of shares for prepayment to third party service provider

Issuance of shares for prepayment to brand ambassador

See accompanying Notes to the Financial Statements.

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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.

(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

11% of our issued and outstanding shares of common stock as of December 31, 2024.

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 ® smartglasses.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The results of operations for the years ended December 31, 2024 and 2023 are not necessarily indicative of the results to be expected for future periods.

Certain prior period amounts have been reclassified to conform to current period presentation;

approximately $22,000 of capitalized costs related to the Company’s website previously reported within Capitalized software costs are now reported within Property and equipment, net.

Change in Capital Structure

As described more fully in Note 8, effective July 18, 2024, the Company effected a 1-for-20 reverse stock split for all of its issued and outstanding common stock.

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

There were no changes to the total number of authorized common shares or par value per common share as a result of this change.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates, particularly given the significant uncertainties associated with the current geopolitical and economic environment.

Actual results could differ from those estimates.

Cash Equivalents

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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.

As of December 31, 2024, the Company held investments in U.S.

Treasury bills, which were purchased in September 2024 and mature in March 2025.

These investments are classified as “held-to-maturity” and are recorded at amortized cost of $ 4,895,184 in the accompanying balance sheet.

The aggregate fair value of these investments, based on quoted prices (unadjusted) in active markets for identical assets, is $ 4,957,750 as of December 31, 2024, which includes an unrealized gain of $ 62,566 .

Accounts Receivable

Accounts receivable are uncollateralized obligations due from customers under normal trade terms.

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

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.

For wholesale orders, we offer “net 30” payment terms on wholesale orders of $1,500 or more in accordance with industry standards.

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

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.

Accounts receivable are reported at the amount billed to the customer, net of an allowance for doubtful accounts.

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

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The Company recognized bad debt expense of $ 19,859 and $ 30,275 for the years ended December 31, 2024 and 2023, 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

A roll forward of the allowance for doubtful accounts for the years ended December 31, 2024 and 2023 is as follows:

Schedule of allowance for doubtful account

Balance at January 1

Bad debt expense

Write-offs (1)

Recoveries (1)

Balance at December 31

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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.

Our inventory consists of purchased eyewear and related accessories, and is stated at the lower of cost or net realizable value, with cost determined on a specific identification method of inventory costing which attaches the actual cost to an identifiable unit of product.

Provisions for excess, obsolete, or slow-moving inventory are recorded after periodic evaluation of historical sales, current economic trends, forecasted sales, estimated product life cycles, and estimated inventory levels.

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

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.

Such provisions were $ 0 and $ 31,637 as of December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, the Company recorded an inventory prepayment in the amount of $ 424,594 and $ 323,520 , respectively, related to down payments on eyewear purchased from the manufacturer, prior to shipment of the product that occurred after the respective balance sheet dates.

Intangible Assets

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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.

The Company had previously incurred costs related to development of the Vyrb software application, and had previously capitalized approximately $ 88,000 of these costs related to coding, development, and testing (subsequent to establishing technical feasibility of the app), as it was the Company’s intention to market and sell this software externally.

Although we launched Vyrb as an open beta version in 2021, and continued to add new features to Vyrb throughout 2022 and 2023, we had not officially launched the Vyrb app.

During 2024, management decided to shift our primary software development focus to the Lucyd app, which was launched in April 2023 as a free application that enables the user to converse with the extremely popular ChatGPT AI language model through our glasses.

Certain elements and features developed for the Vyrb app may potentially be incorporated into future releases of the Lucyd app.

Based on this decision, during the year ended December 31, 2024, we expensed the previously-capitalized Vyrb software development costs totaling approximately $ 88,000 to research and development expense.

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

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Repair and maintenance costs are expensed as incurred.

Schedule of estimated useful lives of property and equipment

Schedule of property and equipment

Estimated Useful Lives

Property & Equipment

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Office Equipment

Internal-Use Software

Internal-Use Software and Website Costs

Property and equipment, gross

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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.

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.

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

Concentrations of Credit Risk

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However, as of December 31, 2024, $ 47,950 or approximately 33 % of the Company’s gross accounts receivable balance was related to a single customer under a long-term instalment arrangement;

this same customer represented $ 77,950 or approximately 50 % of the Company’s gross accounts receivable balance as of December 31, 2023.

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.

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.

Additionally, as of December 31, 2024, $ 53,184 or approximately 37 % of the Company’s gross accounts receivable balance was related to another unrelated wholesale customer, under normal trade terms.

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.

Our revenue is primarily generated from the sales of prescription and non-prescription optical glasses and sunglasses, and shipping charges which are charged to the customer associated with these purchases.

We sell products through our retail store resellers, distributors, on our own website Lucyd.co, and on Amazon.com.

We have also recently started to generate revenue from the sale of subscriptions to the “Pro” version of our Lucyd app, which provides unlimited ChatGPT interactions and priority tech support for a monthly or annual fee.

To determine revenue recognition, we perform the following steps:

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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.

During the years ended December 31, 2024 and 2023, we recognized $ 30,000 and $ 17,500 of revenue, respectively, that was included in the contract liability balance as of January 1, 2024 and 2023, respectively.

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

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

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

For sales generated through our e-commerce channels, we identify the contract with a customer upon online purchase of our eyewear and transaction price at the manufacturer suggested retail price (“MSRP”) 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.

consumers enjoy free USPS first class postage on orders over $149, with faster delivery options available for extra cost, for sales processed through our website.

For Amazon sales, shipping is free for U.S.

consumers while international customers pay shipping charges on top of MSRP.

Any costs associated with fees charged by the online platforms (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.

The Company charges applicable state sales taxes in addition to the MSRP for both online channels and all other marketplaces on which we sell products.

For sales to our retail store partners, we identify the contract with a customer upon receipt of an order of our eyewear through our Shopify wholesale portal or direct purchase order.

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.

Revenue is recognized upon meeting the performance obligation, which is delivery of the Company’s eyewear products to the retail store, and is also recorded net of returns and discounts.

Our wholesale pricing for eyewear sold to retail store partners includes volume discounts, due to the nature of large quantity orders.

The pricing includes shipping charges, while excluding any state sales tax charges applicable.

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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.

If collectibility of substantially all of the contract consideration is probable, revenue is recognized upon meeting the performance obligation, which is delivery of our eyewear products to the distributor, and is also recorded net of returns and discounts.

Our wholesale pricing for eyewear sold to retail store partners and distributors includes volume discounts, due to the nature of large quantity orders.

The pricing does not include shipping.

Due to the nature of wholesale retail orders, no marketplace fees are applicable, only credit card processing fees.

For sales of subscriptions to the “Pro” version of our Lucyd app, we identify the individual contracts with customers through detailed transaction reports from the Apple App Store or Google Play Store, with each individual transaction representing a separate contract.

Revenue is recognized upon meeting the performance obligation, which is the right and availability of each customer to access the “Pro” features of the Lucyd app.

For those customers that purchase such access on a month-to-month basis, we recognize revenue in the month in which the purchase of such access is made.

For those customers which purchase an annual subscription, we recognize revenue on a straight-line basis over the subscription period, using a mid-month convention.

The balance of unearned revenue related to app subscriptions that has been deferred on our balance sheet as a contract liability was $ 2,401 as of December 31, 2024.

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

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The Company recorded an allowance for sales returns of $ 15,746 and $ 25,933 as of December 31, 2024 and 2023, 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.

Stock-Based Compensation

The Company recognizes compensation expense for stock-based awards to employees and directors and others based on the grant date fair value of such awards.

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

For stock option awards, the Black-Scholes-Merton option pricing model is used to estimate the fair value of share-based awards.

The Black-Scholes-Merton option pricing model incorporates various and highly subjective assumptions, including expected term and share price volatility.

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

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

The risk-free interest rate assumption is determined using the rates for U.S.

Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

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

Segment Reporting

The Company has a single reportable segment, which generates revenue from the sales of smartglasses, and related accessories and apps.

The Company derives revenue primarily in North America and manages its business activities on a consolidated basis.

The Company’s chief operating decision maker, as such term is defined under GAAP, is our Chief Executive Officer.

The accounting policies of our single reportable segment are the same as those for the Company as a whole.

The chief operating decision maker assesses performance for the single reportable segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The Company does not have intra-entity sales or transfers.

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.

During the year ended December 31, 2024, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This standard requires expanded and enhanced disclosures regarding reportable segments and significant segment expenses, but does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

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):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

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

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

ASU 2024-03 requires public business entities to disclose specified information about certain costs and expenses, including but not limited to purchases of inventory, employee compensation, depreciation, and intangible asset amortization, in a tabular format within the notes to their financial statements, as well as provide additional disclosures related to certain other specified expenses.

The ASU may be applied on either a prospective or retrospective basis, and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

Subsequent Events

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

In connection with the preparation of these financial statements, the Company has evaluated subsequent events through March xx, 2025, which is the date the financial statements were available to be issued.

See Note 11 for additional information.

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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).

The Company meets its day-to-day working capital requirements using monies raised through sales of eyewear and issuances of equity.

During the year ended December 31, 2024, the Company raised approximately $ 10.5 million of net cash proceeds through the issuance of equity via a combination of at-the-market offerings, registered direct offerings, and warrant exercises (see Note 8 for details).

The Company has also entered into an agreement with a related party, under which the Company may borrow up to $ 1.25 million (see Note 6 for details);

as of December 31, 2024, the Company has not borrowed any amounts under this agreement.

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

Management’s forecasts and projections indicate that the Company expects to have sufficient liquidity to fund operations through at least the next 12 months.

However, the Company may raise additional funds if management believes it would be beneficial to do so.

NOTE 4 – INCOME TAXES

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

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

A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized.

A review of all relevant available positive and negative evidence is considered, including the Company’s current and past performance, the market environment in which the Company operates, length of carryback and carryforward periods, and existing contracts that will result in future profits.

After reviewing all relevant available evidence, the Company has recorded a full valuation allowance against its deferred tax assets as of December 31, 2024 and 2023.

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

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State income tax benefits, net of federal benefit

Change in valuation allowance

valuation allowance and other items

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

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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, 2024, the Company had federal net operating loss carryforwards of $ 18,713,951 and state net operating loss carryforwards of $ 10,417,616 , both of which do not expire.

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.

As of December 31, 2024 and 2023, the Company does no t believe that is has any liabilities for uncertain tax positions.

The Company files Federal and Florida tax returns.

The years that remain subject to examination are the years ended December 31, 2021, 2022, 2023, and 2024.

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

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Finite-lived intangible assets

Intangible assets, gross

Accumulated amortization

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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.

Amortization expense totaled $ 39,897 and $ 24,164 for the years ended December 31, 2024 and 2023, respectively.

Future amortization is expected to approximate $ 50,000 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.

(an affiliate of 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:

Under this agreement, the related party provides the following services:

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

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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.

The Company incurred expense of $ 140,000 during each of the years ended December 31, 2024 and 2023 under this agreement.

Rent of Office Space

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the underlying lease between Tekcapital and its landlord has an end date of January 31, 2026.

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.

The Company recognized expense related to this arrangement of $ 92,312 and $ 91,672 for the years ended December 31, 2024 and 2023, respectively.

Old Tekcapital and Affiliates Convertible Notes

From December 1, 2020 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.

The convertible notes bore interest at 10 % per annum, and included the option to convert the debt into the Company’s common stock at market price upon the occurrence of certain defined events.

The maximum amount of available financing under this arrangement was initially $ 2,000,000 , but was later increased as of November 1, 2021 via an amendment to $ 3,000,000 .

As of December 31, 2022, the aggregate outstanding balance under these convertible notes was $ 61,356 .

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.

New Lucyd Ltd.

Financing Agreement

On March 1, 2024, the Company entered into an agreement with Lucyd Ltd.

pursuant to which the Company can receive up to $1,250,000 either (a) in services provided by Lucyd Ltd.

to the Company or (b) in cash upon request of funds by the Company.

Once funds or services are received by the Company, it will issue a convertible note to Lucyd Ltd.

that will bear interest at 10% per annum and include the option to convert the note into shares of the Company’s common stock upon certain defined events.

The Company will be able to prepay the convertible notes at any time with the written consent of Lucyd Ltd.

The Company has not borrowed any amounts under this agreement.

Loan to Tekcapital Europe, Ltd.

On January 11, 2024, the Company entered into an intercompany loan agreement (as lender) with Tekcapital Europe, Ltd.

(as borrower) and Tekcapital Plc, the parent of Tekcapital Europe, Ltd.

Pursuant to this agreement, the Company loaned 600,000 British pounds sterling (equivalent to approximately $ 768,000 ) to Tekcapital Europe, Ltd.

The loan bore simple interest at a rate of 10 % per annum and was required to be repaid on or before April 11, 2024.

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

on the full amount of the loan.

Tekcapital Europe, Ltd.

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.

We are not currently the subject of any material pending legal proceedings;

however, we may from time to time become a party to various legal proceedings arising in the ordinary course of business.

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.

In January 2024, we settled and resolved all outstanding matters with the third party, and entered into a multi-year non-exclusive license agreement with the third party covering multiple smart eyewear patents (as described more fully below under ‘ License Agreements ’).

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.

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.

During the years ended December 31, 2023 and 2022, we entered into various multi-year license agreements which grant us the right to sell certain branded smart eyewear, including the Nautica, Eddie Bauer, and Reebok brands worldwide.

These agreements require us to pay royalties based on a percentage of net retail and wholesale sales during the period of the license, and also require guaranteed minimum royalty payments.

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Thereafter (through 2033)

Also, on January 3, 2024, we entered into a multi-year non-exclusive license agreement with a third party (IngenioSpec, LLC) for multiple smart eyewear patents.

Pursuant to this license agreement, the Company added licenses for 46 new patents to its portfolio of owned and licensed patents and applications.

The Company fully prepaid this license for the term of the agreement and does not have any obligation for future payments under this agreement.

The Company recognized $ 225,222 and $ 156,931 of expense related to all license agreements for the years ended December 31, 2024 and 2023, respectively.

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

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

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

Other Commitments

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There were no shares of preferred stock issued or outstanding as of December 31, 2024 and 2023.

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.

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 .

Change in Capital Structure – Reverse Stock

At our annual meeting of shareholders on July 8, 2024, the Company’s shareholders approved an amendment to the Company’s articles of incorporation to effect a reverse stock split of our issued and outstanding common stock at a ratio between 1-for-14 and 1-for-24.

Subsequently, the board of directors authorized a reverse stock split in a ratio of 1-for-20 shares, and we filed with the Florida Secretary of State a certificate of amendment to our articles of incorporation.

Effective July 18, 2024, each 20 shares of the Company’s issued and outstanding common stock were combined into one share of common stock, except to the extent that the reverse stock split would have resulted in any of the Company’s stockholders owning a fractional share, in which case such fractional share was rounded up to the next highest whole share.

Additionally, pursuant to their terms, the shares of common stock underlying the Company’s outstanding stock options and warrants were similarly adjusted along with corresponding adjustments to their exercise prices.

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

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

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.

On June 26, 2023, the Company closed on a public offering of 252,494 units, with each unit consisting of one share of the Company’s common stock and warrants to purchase one share of common stock (the “Common Warrants”), in exchange for gross proceeds of approximately $ 4.7 million, before deducting underwriting discounts and offering expenses.

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 9,000 shares of the Company’s common stock at an exercise price of $26.25 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 .

The net proceeds received by the Company from this offering amounted to approximately $ 4.1 million.

At-the-Market Offerings

On April 15, 2024, the Company entered into an at-the-market offering agreement with H.C.

Wainwright & Co., LLC, as sales agent (“HCW”), relating to the sale of common stock.

From April 15, 2024 through April 28, 2024, the Company sold 2,828 shares of common stock and received approximately $ 13,000 of gross proceeds before deducting sales agent commissions and offering expenses.

The net proceeds received by the Company from these transactions amounted to approximately $ 12,000 .

Following the first registered direct offering described below, from May 2, 2024 through May 24, 2024, the Company sold 34,900 shares of common stock and received approximately $ 536,000 of gross proceeds before deducting sales agent commissions and offering expenses.

The net proceeds received by the Company from these transactions amounted to approximately $ 518,000 .

Following the second registered direct offering described below, from June 13, 2024 through June 30, 2024, the Company sold 246,742 shares of common stock and received approximately $ 1,918,000 of gross proceeds before deducting sales agent commissions and offering expenses.

The net proceeds received by the Company from these transactions amounted to approximately $ 1,845,000 .

From July 12, 2024 through August 30, 2024, the Company sold 273,517 shares of common stock and received approximately $ 1,446,000 of gross proceeds before deducting sales agent commissions and offering expenses.

The net proceeds received by the Company from these transactions amounted to approximately $ 1,399,000 .

The Company also paid $ 50,000 of legal fees to HCW during the year ended December 31, 2024;

this payment has been reflected in the financial statements as a reduction to additional paid in capital, as it represents a related cost of the at-the-market equity offering transactions.

First Registered Direct Offering

On May 1, 2024, the Company closed on a registered direct offering of 210,043 shares of its common stock and, in a concurrent private placement, warrants to purchase up to 210,043 shares of common stock at an exercise price of $ 4.88 per share, for a combined purchase price per share and warrant of $ 4.88 .

In exchange, the Company received approximately $1.0 million of gross proceeds, before deducting underwriting discounts and offering expenses.

In addition, the Company issued to the placement agent warrants to purchase up to 15,754 shares of common stock at an exercise price of $ 6.10 per share.

The net proceeds received by the Company from this transaction amounted to approximately $ 837,000 .

Approximately $ 100,000 of the net proceeds received from this registered direct offering were used to pay a former agent for their waiver of a contractual right of first refusal;

such payment has been reflected in the financial statements as a reduction to additional paid in capital, as it represents a related cost of the equity transaction.

Second Registered Direct Offering

On May 29, 2024, the Company closed on a registered direct offering of 263,160 shares of its common stock and, in a concurrent private placement, warrants to purchase up to 263,160 shares of common stock at an exercise price of $ 9.50 per share, for a combined purchase price per share and warrant of $ 9.50 .

In exchange, the Company received approximately $2.5 million of gross proceeds, before deducting underwriting discounts and offering expenses.

In addition, the Company issued to the placement agent warrants to purchase up to 19,737 shares of common stock at an exercise price of $ 11.876 per share.

The net proceeds received by the Company from this transaction amounted to approximately $ 2,134,000 .

On August 17, 2022, as part of the Company’s initial public offering, the Company issued warrants to purchase 112,700 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 22,926 shares of the Company’s common stock, at an adjusted exercise price of $ 75.00 per share, resulting in net cash proceeds to the Company of approximately $ 1,532,000 .

Between April 1, 2023 and April 16, 2023, holders of the Company’s Listed Warrants exercised such warrants to purchase an aggregate of 18,019 shares of the Company’s common stock, at an adjusted exercise price of $ 75.00 per share, resulting in net cash proceeds to the Company of approximately $ 1,204,000 .

On April 17, 2023, the Company entered into a warrant exercise inducement letter agreement with certain accredited investors that were existing holders of the Company’s Listed Warrants to purchase an aggregate of 8,417 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 $ 75.00 per share.

The net proceeds received by the Company from this transaction amounted to approximately $ 391,000 .

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 15,000 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 $ 75.00 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.

Subsequently, the shares of common stock issuable upon exercise of these warrants were registered with the SEC through a Form S-1 filing.

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

On September 3, 2024, the Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on June 26, 2023) to purchase an aggregate of 126,699 shares of common stock.

The warrant holders exercised for cash the existing warrants at a reduced exercise price of $ 5.00 per share, resulting in gross proceeds to the Company of approximately $ 633,000 ;

in addition to the shares of common stock issued as a result of the warrant exercise, the warrant holders also received new unregistered Series A and Series B warrants (the relevant details of which are outlined in the table below).

This transaction closed on September 4, 2024, and the net proceeds received by the Company amounted to approximately $ 489,000 .

On September 18, 2024, the Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on May 1, 2024 in connection with the First Registered Direct Offering described above) to purchase an aggregate of 148,567 shares of common stock.

The warrant holders exercised for cash the existing warrants at an adjusted exercise price of $ 5.13 per share, resulting in gross proceeds to the Company of approximately $ 762,000 ;

in addition to the shares of common stock issued as a result of the warrant exercise, the warrant holders also received new unregistered Series C and Series D warrants (the relevant details of which are outlined in the table below).

This transaction closed on September 19, 2024, and the net proceeds received by the Company amounted to approximately $ 672,000 .

On September 22, 2024, the Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on May 29, 2024 in connection with the Second Registered Direct Offering described above) to purchase an aggregate of 263,160 shares of common stock.

The warrant holders exercised for cash the existing warrants at an adjusted exercise price of $ 9.875 per share, resulting in gross proceeds to the Company of approximately $ 2.6 million;

in addition to the shares of common stock issued as a result of the warrant exercise, the warrant holders also received new unregistered Series E and Series F warrants (the relevant details of which are outlined in the table below).

This transaction closed on September 24, 2024, and the net proceeds received by the Company amounted to approximately $ 2,343,000 .

As of December 31, 2024, the Company’s outstanding warrants are as follows:

Schedule of stockholder’s equity

Listed Warrants

Common Warrants

Schedule of stockholders' equity note, warrants or rights

Warrants Outstanding to Purchase X Shares

Exercise Price

Issuance Date

Expiration Date

Listed (IPO) Warrants

Common (SPO) Warrants

Private Warrants

Underwriter warrants

Placement agent warrants

Series A Warrants

Series B Warrants

Series C Warrants

Series D Warrants

Series E Warrants

Series F Warrants

Underwriter / Placement Agent Warrants

On September 25, 2024, our board of directors approved the adoption of a limited duration stockholder rights plan (the “Rights Plan”), and declared a dividend to stockholders of record at the close of business on September 25, 2024 of one common stock purchase right (a “Right”) for each outstanding share of our common stock.

Each Right entitles the holder to purchase from the Company six shares of our common stock at an exercise price of $ 6.21 per share.

The Rights are evidenced by and trade with the certificates for the shares of our common stock outstanding as of September 25, 2024, and will accompany any new shares of our common stock that are issued after that date.

Under the Rights Plan, the Rights generally will become exercisable only if a person or group acquires beneficial ownership of 20% or more of our common stock in a transaction not approved by our board of directors.

In that situation, each holder of a Right (other than the acquiring person or group, whose rights will become void and will not be exercisable) will have the right to purchase, upon payment of the exercise price and in accordance with the terms of the Rights Plan, a number of shares of our common stock having a market value of twice such price.

The Rights expire at or prior to the earlier of (i) September 25, 2025, (ii) the redemption or exchange of the Rights in accordance with the terms of the Rights Plan, (iii) the closing of certain merger or other acquisition transactions involving the Company, and (iv) the date of the Company’s next meeting of its stockholders.

The Rights Plan is not intended to prevent a takeover of the Company and should not interfere with any merger or other business combination approved by our board of directors.

However, the Rights Plan may cause substantial dilution to a person or group that acquires beneficial ownership of twenty percent (20%) or more of our outstanding common stock.

Other Matters

During the year ended December 31, 2024, the Company made a release payment of $ 325,000 to a shareholder counterparty for the waiver of certain of that counterparty’s pre-existing contractual rights related to certain of the Company’s equity offerings described above.

This payment is reflected within general and administrative expenses in the statement of operations.

NOTE 9 – STOCK-BASED COMPENSATION

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During the year ended December 31, 2024, 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.

Options to purchase an aggregate of 500 shares of common stock at $ 8.402 per share were issued to an employee, of which 1/5 vested immediately, and 1/5 were to vest on each six-month anniversary of the grant date.

The options were to expire on January 11, 2029.

However, the employee later separated from the Company, and these options were all forfeited or expired as of December 31, 2024.

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

Options to purchase an aggregate of 16,500 shares of common stock at $ 25.50 per

share were issued to the Company’s officers and management, of which 1/3 vested immediately, 1/3 vested 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.

Options to purchase an aggregate of 3,750 shares of common stock at $ 25.50 per share were issued to non-management directors, which vest evenly over three years, whereby 1/3 vests 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.

Options to purchase an aggregate of 8,100 shares of common stock at $ 25.50 per share were issued to certain employees and consultants, which vest evenly over three years, whereby 1/3 vests on each of January 13, 2024, January 13, 2025, and January 13, 2026.

The options expire on January 13, 2028.

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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.

Options to purchase an aggregate of 750 shares of common stock at $ 13.18 per share were issued to certain employees and consultants, which vest evenly over two years, whereby 1/4 of the options 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.

Options to purchase an aggregate of 24,500 shares of common stock at $ 9.00 per share were issued to the Company’s officers and management, of which 1/3 vested immediately, 1/3 vested 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:

The underlying assumptions used in the option pricing model for stock option awards granted in 2024 and 2023 were as follows:

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

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Expected volatility

106 % - 133 %

Expected dividend yield

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

On March 28, 2024, we entered into an agreement for a third party to provide us with financial advisory and investment banking services, for a minimum term of six months.

As consideration for the services provided to the Company, we issued to the counterparty 15,000 shares of our common stock.

The total value of consideration transferred, measured using the fair value of our common stock at the date of issuance, was $ 81,900 , which we recognized in full during the year ended December 31, 2024.

On April 1, 2024, we entered into a brand ambassador agreement with an individual for a two-year term.

As compensation for the first year of the agreement, we issued the individual 4,500 shares of our common stock.

The value of the consideration transferred, measured using the fair value of our common stock at the date of issuance, was $ 21,690 .

During the year ended December 31, 2024, we recognized $ 16,268 of expense related to this arrangement, and will recognize the remaining expense for these shares awarded of $ 5,422 during the first three months of 2025.

Restricted Stock Unit Awards

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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.

815 shares on December 3, 2023, 815 shares on March 2, 2024, 815 shares on May 31, 2024, and 816 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.

We recognized $ 8,458 and $ 18,608 of expense related to this award during the years ended December 31, 2023 and 2024, respectively.

On November 26, 2024, the Company awarded an aggregate of 33,600 restricted stock units to non-management employees, of which 1/3 vested immediately, 1/3 shall vest on November 26, 2025, and the remaining 1/3 shall vest on November 26, 2026.

We recognized $ 83,477 of expense related to these awards during the year ended December 31, 2024, and will recognize the remaining expense of $ 147,691 on a straight-line basis over the next 23 months.

On December 13, 2024, the Company awarded an aggregate of 212,400 restricted stock units to the Company’s officers and management, of which 1/6 shall vest on each April 2 and August 19, commencing with April 2, 2025 and concluding on August 19, 2027.

We recognized $ 20,278 of expense related to these awards during the year ended December 31, 2024, and will recognize the remaining expense of $ 1,277,486 on a straight-line basis over the next 31.5 months.

NOTE 10 – EARNINGS PER SHARE

The Company calculates earnings/(loss) per share data by calculating the quotient of earnings/(loss) divided by the weighted average number of common shares outstanding during the respective period as required by ASC 260-10-50.

Due to the net losses for the years ended December 31, 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:

Due to the net losses for the years ended December 31, 2024 and 2023, all shares underlying common stock warrants, common stock options, and related party convertible debt were excluded from the earnings per share calculation due to their anti-dilutive effect.

Calculation of basic and diluted net earnings per common share is as follows:

Calculation of net earnings per common share - basic and diluted

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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.

Extension of New Lucyd Ltd.

Financing Agreement

On March 1, 2025, the Company and Lucyd Ltd.

entered into an amendment of the March 1, 2024 convertible note financing agreement (see Note 6), such that upon issuance, the convertible note will have a maturity date of September 1, 2026.

There were no other changes to the terms and provisions of the agreement, and the Company has not borrowed any amounts under this agreement.

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