Innovative Eyewear Inc 10-K

Item 9A. Controls and Procedures . Disclosure Controls and Procedures We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and 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 Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our management, including the principal executive officer and principal financial officer, does not expect that our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, cannot provide full assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, we conducted an evaluation as to the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, our management used the criteria for effective internal control set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the 2013 Internal Control – Integrated Framework . Based on this assessment, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024. This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to a permanent exemption of the Commission that permits the Company to provide only management’s report in this Annual Report on Form 10-K. Accordingly, our management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024 has not been audited by our auditors, Cherry Bekaert LLP. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during the fourth quarter of fiscal year 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Item 9B. Other Information . 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. 55 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. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . Not applicable. 56 PART III Item 10. Directors, Executive Officers and Corporate Governance . The following table sets forth certain information regarding our board of directors, our executive officers, and some of our key employees. Name Age Position Harrison R. Gross 32 Chief Executive Officer and Director Konrad Dabrowski 42 Co-Chief Financial Officer Oswald Gayle 65 Co-Chief Financial Officer David Eric Cohen 52 Chief Technology Officer Kristen McLaughlin 52 Director Olivia C. Bartlett 66 Director Louis Castro 66 Director Harrison Gross is one of the founders of Innovative Eyewear and has served as our Chief Executive Officer and as a director since August 2019, where he guides the company’s product and brand development. Prior to his employment at Innovative Eyewear, from August 2017 to August 2019, Mr. Gross served in various positions, including chief executive officer and media & UX lead, of Lucyd Ltd. (one of our largest stockholders and the licensor of our smart eyewear technology) where he developed the Lucyd brand identity and oversaw general operations and product development. Additionally, from November 2015 to August 2021, Mr. Gross served as the Digital Media Manager of Tekcapital plc (“Tekcapital”) (LON: TEK), a university intellectual property investment firm that is the parent company of Tekcapital Europe Limited, and Lucyd Ltd, the holding company for Tekcapital’s shares in Innovative Eyewear, where he created, developed, and marketed the company’s licensed properties. Prior to that, from October 2013 to September 2014, Mr. Gross worked as a credit analyst for a Verizon, Inc. contractor, where he managed credit systems and provided support to Verizon agents. Mr. Gross is a graduate of Columbia University with a BA in Writing and received a BA in Jewish Studies from the Jewish Theological Seminary. Mr. Gross is well qualified to serve as a director due to his substantial knowledge of our product and his experience in marketing, product, and app development. 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 served as the group controller of Tekcapital. Prior to his employment at Tekcapital, from March 2016 to June 2017, Mr. Dabrowski was a Global Accounting Manager for Restaurant Brands International (NYSE:QSR), a multinational fast food holding company, where he oversaw accounting and tax projects for Burger King within the Europe Middle East and Africa (EMEA) market. Prior to his employment at Restaurant Brands International, Mr. Dabrowski was an Audit Manager at Deloitte, where he managed end-to-end accounting audits for a portfolio of public and private corporate clients. Mr. Dabrowski has a Master’s in Finance and Banking from the Warsaw School of Economics and is a Certified Public Accountant. Oswald Gayle has served as our Co-Chief Financial Officer on a full-time basis since October 2024. Mr. Gayle joined Innovative Eyewear as Vice President of Finance in January 2022, and served in that role until his promotion in August 2024 to Senior Vice President of Finance. Prior to his employment at Innovative Eyewear, from September 2018 to January 2022, Mr. Gayle worked with Vaco Resources in Miami, Florida in the position of Executive Financial Consultant. Mr. Gayle has over 30 years’ experience finance and accounting, initially starting with PricewaterhouseCoopers and including numerous senior and executive level management positions in corporate finance, SEC reporting, investor relations, and business development in the manufacturing and retail industries. Mr. Gayle has a bachelor’s degree in accounting and finance with honors from the University of London and is a Chartered Global Management Accountant and a member of the American Institute of Certified Public Accountants. 57 David Eric Cohen is one of the founders of Innovative Eyewear and has served as our Chief Technology Officer since September 2019. Prior to his employment at Innovative Eyewear, from August 2017 to August 2019, Mr. Cohen served as the chief technology officer of Lucyd Ltd., a smart eyewear development company, where he led the company’s technological advancements and digital ad campaigns. Also, prior to his employment at Innovative Eyewear, from September 2009 to October 2019, Mr. Cohen served as President of Emaze Design Agency, a digital design agency, where he led the development of web and applications for e-commerce, web performance monitoring, website design and mobile applications. Prior to his employment at Emaze Design Agency, Mr. Cohen was lead Business Intelligence Specialist at Jewish General Hospital where he assisted with the data solutions and business processes and requirements. He received a BS in Computer Science from the Academy of Bordeaux and an MS in Advanced Technician & Information Systems Management from Hadassah University. Kristen McLaughlin has served as one of our directors since August 2021. Ms. McLaughlin has 25 years’ experience launching, managing and developing products in the eyewear, accessories, cosmetics and skincare industries. Since October 2021, Kristen has served as Marketing Director at Tura, inc., an eyewear design and distribution company where she is responsible for strategic marketing initiatives and communications to drive sales and support key accounts. From March 2019 to April 2020, Ms. McLaughlin served as the Global Marketing Director at DePasquale Companies, a skincare, hair care and cosmetics manufacturer, where she led the global marketing strategy and new product development. Prior to her employment at DePasquale Companies, from March 2000 to January 2019, Ms. McLaughlin was employed at Silhouette International, an eyewear manufacturer, where she served as the Director of Marketing: Eyewear Manufacturer, Regional Sales Manager, and Brand Manager: Daniel Swarovski Crystal Eyewear. While at Silhouette International, Ms. McLaughlin led the company’s brand portfolio in the U.S. and its brand direction, product development and campaign content. She has a BS and MBA from Ramapo College of New Jersey. Ms. McLaughlin is well qualified to serve as a director due to her substantial experience in the eyewear industry and her experience in brand and product development. Olivia C. Bartlett has served as one of our directors since August 2021. Ms. Bartlett has been in the eyewear industry for over 45 years holding various roles including optician, optical manager, marketing manager and operations management, where she currently acts as an industry consultant. From September 2015 - June 2020, Ms. Bartlett held the position of Chief Operating Officer of Todd Rogers Eyewear, a specialty eyewear company, where she managed the day-to-day operations of the company. Prior to her time at Todd Rogers Eyewear, from March 2010 to May 2015, Ms. Bartlett was the sales representative for eyewear sales in the northeast of Massachusetts for Safilo USA, a specialty eyewear company. Additionally, from September 2013 to May 2018, and again currently Ms. Bartlett is an Adjunct Professor at Benjamin Franklin Institute of Technology in Boston, Massachusetts. From February 2020 to February 2022, Ms. Bartlett was the President of the Opticians Association of America, a national organization representing the professional, business, educational, legislative and regulatory interests of opticianry. Additionally, Ms. Bartlett has been a director for fifteen years for the Opticians Association of Massachusetts and currently holds the position of Treasurer. Ms. Bartlett has received a number of awards through her time in the industry, including but not limited to, the 2020 Eyecare Business Game Changer Award and the 2020 and 2018 Vision Monday Most Influential Woman Executive. Ms. Bartlett received her Massachusetts Opticians license in 1987 and is ABO certified and is an ABO certified speaker. Ms. Bartlett received her BA in Political Science from Clark University. Ms. Bartlett is well qualified to serve as a director due to her substantial experience in the optical industry. Louis Castro has served as one of our directors since August 2021. Mr. Castro is an experienced public company director and chartered accountant. Mr. Castro is currently on the board of directors of the following public companies: (1) Tekcapital, where he has been a director since December 2019, (2) Orosur Mining Inc. (TSE:OMI), a company exploring for minerals in South America, where he has been executive chairman of the board since April 2020, (3) Tomco Energy plc (LON:TOM), an oil exploration and technology company, where he has been a director since April 2021, and (4) Veteran Capital Corp. (TSX-V:VCC), a capital pool company, where he has been a director since January 2021. From September 2012 to June 2016, Mr. Castro was a director and, from September 2014 to June 2016 served as the Chief Financial Officer, of Eland Oil & Gas plc, a Nigerian focused upstream oil and natural gas exploration and production company, where he was responsible for the company’s finance, legal and corporate finance activities. Prior to his employment at Eland, from May 2011 to May 2014, Mr. Castro served as Head of Capital Markets and then as Chief Executive Officer of Northland Capital Partners, an investment bank, where he was responsible for the investment banks day-to-day activities. He is a fellow of the Institute of Chartered Accountants of England & Wales, has a double degree in Engineering Production and Economics from Birmingham University and attended the Postgraduate Advanced Course in Production Management and Methods at Cambridge University. Mr. Castro is well qualified to serve as a director due to his substantial experience as a director of public companies and his distinction as chartered accountant. 58 Number and Terms of Office of Officers and Directors Our board of directors consists of four members. Our directors are appointed for one-year terms to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our second amended and restated bylaws. Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our second amended and restated bylaws, as it deems appropriate. Director Independence and Committees of the Board of Directors Director Independence Of our directors, we have determined that Mr. Louis Castro, Ms. Kristen McLaughlin, and Ms. Olivia Bartlett are “independent” directors under NASDAQ listing standards, while Mr. Harrison Gross is not independent under such standards. We have also determined that each of the three members of the Audit Committee is “independent” for purposes of Section 10A(m)(3) of the Exchange Act and the rules promulgated thereunder and under the NASDAQ listing standards. Further, the Board has determined that each of the two members of both the Compensation Committee and the Nominating and Corporate Governance Committee is “independent” under NASDAQ listing standards. Board Committees We have three standing committees of the Board: Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. Each of the board committees act pursuant to a separate written charter adopted by our board of directors, each of which is available on our website at www.lucyd.co . Our board of directors may at any time or from time to time appoint certain other committees in its sole discretion as it deems necessary or appropriate to carry out its functions. Audit Committee The Audit Committee consists of Mr. Louis Castro (Chair), Ms. Kristen McLaughlin, and Ms. Olivia Bartlett. The Board has determined that all of the members of the Audit Committee are “independent,” as defined by NASDAQ listing standards and by applicable SEC rules. In addition, the Board has determined that Mr. Castro is an audit committee financial expert, as that term is defined by the SEC rules, by virtue of having the following attributes through relevant experience: (i) an understanding of generally accepted accounting principles and financial statements; (ii) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves; (iii) experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities; (iv) an understanding of internal controls and procedures for financial reporting; and (v) an understanding of audit committee functions. The function of the Audit Committee relates to oversight of the auditors, the auditing, accounting, and financial reporting processes, and the review of the Company’s financial reports and information. In addition, the functions of the Audit Committee will include, among other things, recommending to the Board the engagement or discharge of independent auditors, discussing with the auditors their review of the Company’s quarterly results and the results of their audit, and reviewing the Company’s internal accounting controls. 59 Compensation Committee The Compensation Committee consists of Ms. Kristen McLaughlin (Chair) and Mr. Louis Castro. The Board has determined that all of the members of the Compensation Committee are “independent,” as defined by NASDAQ listing standards. The responsibility of the Compensation Committee is to review and approve the compensation and other terms of employment of our President and Chief Executive Officer and our other executive officers, including all of the executive officers named in the Summary Compensation Table under the heading “Executive Compensation” below (the “named executive officers”). Among its other duties, the Compensation Committee oversees all significant aspects of the Company’s compensation plans and benefit programs. The Compensation Committee annually reviews and approves corporate goals and objectives for the President and Chief Executive Officer’s compensation and evaluates the Chief Executive Officer’s performance in light of those goals and objectives. The Compensation Committee also recommends to the Board the compensation and benefits for members of the Board. The Compensation Committee has also been appointed by the Board to administer our 2021 Equity Incentive Plan. The Compensation Committee does not delegate any of its authority to other persons. Nominating and Corporate Governance Committee The Nominating and Corporate Governance Committee consists of Ms. Olivia Bartlett (Chair) and Ms. Kristen McLaughlin. All of the committee members are independent under applicable NASDAQ rules and regulations. The Nominating and Corporate Governance Committee is responsible for, among other things, considering potential board members, making recommendations to the full board as to nominees for election to the board, assessing the effectiveness of the board, and implementing our corporate governance guidelines. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires that our directors and executive officers and persons who beneficially own more than 10% of our common stock (referred to herein as the “reporting persons”) file with the SEC various reports as to their ownership of and activities relating to our common stock. Such reporting persons are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based solely upon a review of copies of Section 16(a) reports and representations received by us from reporting persons, and without conducting any independent investigation of our own, in fiscal year 2024, all Forms 3, 4 and 5 were timely filed with the SEC by such reporting persons. Code of Ethics We have adopted a formal code of ethics that applies to our directors and principal executives and financial officers or persons performing similar functions. A copy of our Code of Ethical Conduct can be found on our website under “Investors” at www.lucyd.co . 60 Item 11. 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(s), and our Chief Technology Officer. Summary Compensation Table Name and Principal Position Year Salary ($) Bonus ($) Stock Awards (3) ($) Option Awards (4) ($) Nonequity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation (5) ($) Total ($) Harrison Gross, 2024 167,385 - 351,936 - - - 8,089 527,410 Chief Executive Officer 2023 154,102 - - 129,800 - - 5,832 289,734 Konrad Dabrowski, 2024 97,794 - 307,944 - - - 6,502 412,240 Co-Chief Financial Officer (1) 2023 105,347 - - 121,357 - - - 226,704 Oswald Gayle, 2024 143,923 - 197,964 - - - 8,089 349,976 Co-Chief Financial Officer (2) 2023 140,731 - - 101,657 - - 5,832 248,220 David Eric Cohen, 2024 142,000 - 263,952 - - - 8,536 414,488 Chief Technology Officer 2023 144,198 - - 78,090 - - 6,154 228,442 (1) Mr. Dabrowski was our Chief Financial Officer for all of 2023 and through October 11, 2024, at which point he became Co-Chief Financial Officer. (2) Mr. 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. (3) 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. (4) Includes stock options granted to Messrs. 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. (5) Includes the Company-paid portion of health and welfare benefits. Refer to Note 2 and Note 9 of the Company’s audited financial statements as included in Item 8 of this Annual Report on Form 10-K for disclosure of the various assumptions made in the valuation of stock options. Employment Arrangements with our Executive Officers Harrison Gross On August 11, 2021, we entered into an employment agreement with Harrison Gross to serve in the capacity of the Chief Executive Officer of the Company. We agreed to pay Mr. Gross an annual base salary of $85,800 for the remainder of 2021, and we also agreed that from the initial public offering date in August 2022, we increased his base salary to $150,000 per year. Effective August 2, 2024, we agreed to increase his Mr. Gross’ base salary to $190,000 annually. Pursuant to the terms of the employment agreement, our Board may exercise its sole discretion to grant Mr. Gross an annual bonus, the amount of which bonus shall be determined in the sole discretion of our Board. The employment agreement has an initial term of three years, and will terminate on the third anniversary of the effective date unless Mr. Gross and the Company agree otherwise in writing. If we terminate the employment agreement for any reason other than for cause (as such is defined in the agreement) or Mr. Gross terminates his employment for good reason (as such is defined in the agreement): (1) Mr. Gross shall be entitled to payment of his base salary for the balance of the agreement’s term; (2) if Mr. Gross elects to continue group health insurance benefits, we shall reimburse Mr. Gross for any COBRA premiums he pays for the duration of COBRA’s coverage; and, (3) we shall provide Mr. Gross with payment of all accrued amounts (as defined in the agreement). 61 Konrad Dabrowski On August 11, 2021, we entered into an employment agreement with Konrad Dabrowski to serve as the Chief Financial Officer of the Company on a part-time basis, which agreement became effective on September 1, 2021. Mr. Dabrowski devotes 50% of his business time to our Company. We agreed to pay Mr. Dabrowski an annual base salary of $100,000. Pursuant to the terms of the employment agreement, we may exercise our discretion to grant Mr. Dabrowski an annual bonus, the amount of which bonus shall be determined in the sole discretion of the Company. Following the effective date, the employment agreement shall continue, unless terminated by Mr. Dabrowski or the Company. Mr. Dabrowski’s employment is at-will, which may be terminated by the Company or by Mr. Dabrowski at any time and for any reason. Pursuant to the terms of the employment agreement, a sixty days’ written notice of termination or resignation is required. If Mr. Dabrowski notifies us of his resignation, or if we terminate Mr. Dabrowski’s employment agreement, the Company reserves the right to determine, in its sole discretion, whether Mr. Dabrowski will be required to actively work during the sixty-day notice period; however, Mr. Dabrowski will be entitled to receive his base salary for the duration of the sixty-day notice period. The Company has the right to terminate Mr. Dabrowski’s employment agreement for cause (as defined in the agreement), which termination shall be effective immediately. David Eric Cohen David Cohen was an independent consultant for the company from inception until October 1, 2022, when we offered him a full-time letter of employment. He accepted and has been the full-time Chief Technology since then. The company pays him $140,000 annually to serve in this role. Pursuant to the terms of the employment agreement, we may exercise our discretion to grant Mr. Cohen an annual bonus, the amount of which bonus shall be determined in the sole discretion of the Company. Following the effective date, the employment agreement shall continue, unless terminated by Mr. Cohen or the Company. Mr. Cohen’s employment is at-will, which may be terminated by the Company or by Mr. Cohen at any time and for any reason. Pursuant to the terms of the employment agreement, a sixty days’ written notice of termination or resignation is required. If Mr. Cohen notifies us of his resignation, or if we terminate Mr. Cohen’s employment agreement, the Company reserves the right to determine, in its sole discretion, whether Mr. Cohen will be required to actively work during the sixty-day notice period; however, Mr. Cohen will be entitled to receive his base salary for the duration of the sixty-day notice period. The Company has the right to terminate Mr. Cohen’s employment agreement for cause (as defined in the agreement), which termination shall be effective immediately. Compensation of Directors The following table sets forth all compensation paid to our non-management Board members during the year ended December 31, 2024: Name Fees Earned or Paid in Cash ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Kristen McLaughlin 60,000 - - - - - 60,000 Louis Castro 40,500 - - - - - 40,500 Olivia C. Bartlett 10,000 - - - - - 10,000 The total number of option awards to our non-management Board members outstanding at December 31, 2024 was 3,750 in aggregate. 62 Outstanding Equity Awards The following table sets forth outstanding equity awards to our named executive officers as of December 31, 2024. Option awards Stock awards Name Number of securities underlying unexercised options (#) exercisable Number of securities underlying unexercised options (#) unexercisable Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) Option exercise price ($) Option expiration date Number of shares or units of stock that have not vested (#) Market value of shares of units of stock that have not vested ($) Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) Harrison Gross 30,000 - - $ 71.20 05/05/2025 - - - - 3,000 1,500 - $ 25.50 01/13/2028 - - - - 5,000 2,500 - $ 9.00 12/18/2028 - - - - - - - - - 57,600 $ 283,392 - - Konrad Dabrowski 3,000 1,500 - $ 25.50 01/13/2028 - - - - 4,000 2,000 - $ 9.00 12/18/2028 - - - - - - - - - 50,400 $ 247,968 - - Oswald Gayle 3,000 1,500 - $ 25.50 01/13/2028 - - - - 1,666 834 - $ 9.00 12/18/2028 - - - - - - - - - 32,400 $ 159,408 - - David Eric Cohen 2,000 1,000 - $ 25.50 01/13/2028 - - - - 2,334 1,166 - $ 9.00 12/18/2028 - - - - - - - - 43,200 $ 212,544 - - Option Exercises and Stock Vested There were no options exercised by our executive officers during the years ended December 31, 2024 or 2023. Employee Benefit Plans We currently provide health insurance coverage to our full-time W-2 employees, as well as free prescription eyeglasses to them and their immediate families. The Company also provides a complimentary gym membership to full-time staff. Non-qualified Deferred Compensation None of our employees participate in or have account balances in non-qualified defined contribution plans or other non-qualified deferred compensation plans maintained by us. Our Compensation Committee may elect to provide our officers and other employees with non-qualified defined contribution or other non-qualified compensation benefits in the future if it determines that doing so is in the Company’s best interest. 63 2021 Equity Incentive Plan General Our 2021 Equity Incentive Plan was adopted by the Board and approved by our shareholders on July 1, 2021. The general purposes of the 2021 Equity Incentive Plan are to (i) enable the Company and its subsidiaries to attract and retain the types of employees, consultants, and directors who will contribute to the Company’s long-range success; (ii) provide incentives that align the interests of employees, consultants, and directors with those of our shareholders; and (iii) promote the success of the Company’s business. Description of the 2021 Equity Incentive Plan The following description of the principal terms of the 2021 Equity Incentive Plan is a summary and is qualified in its entirety by the full text of the 2021 Equity Incentive Plan. Administration. The 2021 Equity Incentive Plan is administered by a committee appointed by our Board, or in the Board’s discretion, by the Board (as applicable, the “Incentive Plan Administrator”). Subject to the terms of the 2021 Equity Incentive Plan, the Incentive Plan Administrator has the authority to (a) determine the eligible individuals who are to receive awards, (b) determine the terms and conditions of each award, including exercise price, vesting or performance criteria, performance period, and terms of the award, (c) determine whether vesting and performance criteria have been achieved, (d) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, or otherwise modify or amend awards, (e) construe and interpret the 2021 Equity Incentive Plan, including the ability to reconcile any inconsistency in, correct any defect in and/or supply any omission in the plan and award agreement; any instrument or agreement, (f) promulgate, amend, and rescind rules and regulations relating to the administration of the 2021 Equity Incentive Plan, and (g) exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the 2021 Equity Incentive Plan and awards granted thereunder. The Incentive Plan Administrator may also delegate its authority to a subcommittee or to one or more officers of the Company, subject to terms and conditions determined by the Incentive Plan Administrator. All decisions made by the Incentive Plan Administrator are final and binding on the Company and the participants. Types of Awards. The 2021 Equity Incentive Plan provides for the grant of stock options, which may be incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance share awards, and other cash-based or equity-based awards, or collectively, awards. Share Reserve. A total equal to 20% of our issued and outstanding common stock shall be available for the grant of awards under the 2021 Equity Incentive Plan. If options, stock appreciation rights, restricted stock units or any other awards are forfeited, cancelled or expire before being exercised or settled in full, the shares subject to such awards will again be available for issuance under the 2021 Equity Incentive Plan. If restricted stock or shares issued upon exercise of an option are reacquired by the Company pursuant to a forfeiture provision, repurchase right or for any other reason, then such shares will again be available for issuance under the 2021 Equity Incentive Plan. Notwithstanding the foregoing, shares applied to pay the exercise price of an option or satisfy withholding taxes related to any award will not become available for issuance under the 2021 Equity Incentive Plan. Shares issued under the 2021 Equity Incentive Plan may be authorized but unissued shares or treasury shares. As of December 31, 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). 64 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. Eligibility. Employees (including officers), non-employee directors, and consultants who render services to the Company or a parent or subsidiary thereof (whether now existing or subsequently established) are eligible to receive awards under the 2021 Equity Incentive Plan. ISOs may only be granted to employees of the Company or a parent or subsidiary thereof (whether now existing or subsequently established). Stock Options. A stock option is the right to purchase a certain number of shares of stock at a fixed exercise price which, pursuant to the 2021 Equity Incentive Plan, may not be less than 100% of the fair market value of Common Stock on the date of grant. Subject to limited exceptions, an option may have a term of up to 10 years and will generally expire sooner if the optionholder’s service terminates. Options will vest at the rate determined by the Incentive Plan Administrator. An optionholder may pay the exercise price of an option in cash, or, with the Incentive Plan Administrator’s consent, with shares of stock the optionholder already owns, with proceeds from an immediate sale of the option shares, through a net exercise procedure or by any other method permitted by applicable law. Tax Limitations on Incentive Stock Options. The aggregate fair market value, determined at the time of grant, of the Common Stock with respect to ISOs that are exercisable for the first time by an optionholder during any calendar year under all of the Company’s stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of the Company’s total combined voting power or that of any of the Company’s affiliates unless (a) the option exercise price is at least 110% of the fair market value of Common Stock on the date of grant and (b) the term of the ISO does not exceed five years from the date of grant. Stock Appreciation Rights . A stock appreciation right provides the recipient with the right to the appreciation in a specified number of shares of stock. The Incentive Plan Administrator determines the exercise price of stock appreciation rights granted under the 2021 Equity Incentive Plan, which may not be less than 100% of the fair market value of Common Stock on the date of grant. A stock appreciation right may have a term of up to 10 years and will generally expire sooner if the recipient’s service terminates. SARs will vest at the rate determined by the Incentive Plan Administrator. Upon exercise of a SAR, the recipient will receive an amount in cash, stock, or a combination of stock and cash determined by the Incentive Plan Administrator, equal to the excess of the fair market value of the shares being exercised over their exercise price. Restricted Stock Awards. Shares of restricted stock may be issued under the 2021 Equity Incentive Plan and may be subject to vesting, as determined by the Incentive Plan Administrator. Recipients of restricted stock generally have all of the rights of a shareholder with respect to those shares, including voting rights and dividends, except as provided in the award agreement. Restricted Stock Units. A restricted stock unit is a right to receive a share, at no cost to the recipient, upon satisfaction of certain conditions, including vesting conditions, established by the Incentive Plan Administrator. RSUs vest at the rate determined by the Incentive Plan Administrator and any unvested RSUs will generally be forfeited upon termination of the recipient’s service. Settlement of restricted stock units may be made in the form of cash, stock or a combination of cash and stock, as provided in the award agreement and as determined by the Incentive Plan Administrator. Recipients of restricted stock units generally will have no voting or dividend rights prior to the time the vesting conditions are satisfied, and the award is settled. Performance Share Award . A performance share award is a right to receive a share or share units based upon the Company’s performance during a specified performance period, as determined by the Incentive Plan Administrator. The Incentive Plan Administrator has the discretion to determine: (i) the number of shares or stock-denominated units subject to a Performance Share Award granted to any recipient; (ii) the performance period applicable to any award; (iii) the conditions that must be satisfied for a recipient to earn an award; and (iv) the other terms, conditions and restrictions of the award. 65 Cash Awards and Other Equity-Based Awards. The Incentive Plan Administrator may grant cash awards and other awards based in whole or in part by reference to Common Stock, either alone or in tandem with other awards. The Incentive Plan Administrator will determine the terms and conditions of any such awards. Changes to Capital Structure. In the event of certain changes in capitalization, including a stock split, reverse stock split, stock dividend, or an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, or exchange, proportionate adjustments will be made in the number and kind of shares available for issuance under the 2021 Equity Incentive Plan, the limit on the number of shares that may be issued under the 2021 Equity Incentive Plan as ISOs, the number and kind of shares subject to each outstanding award and/or the exercise price of each outstanding award. Change in Control. If the Company is party to certain change in control transactions, each outstanding award will be treated as the Incentive Plan Administrator determines, which may include the continuation, assumption or substitution of an outstanding award, the cancellation of an outstanding award after an opportunity to exercise or the cancellation of an outstanding award in exchange for a payment equal to the value of the shares subject to such award less any applicable exercise price. Transferability of Awards. Unless the Incentive Plan Administrator determines otherwise, an award generally will not be transferable other than by beneficiary designation, a will or the laws of descent and distribution. The Incentive Plan Administrator may permit transfer of an award in a manner consistent with applicable law. Amendment and Termination. The Board may amend or terminate the 2021 Equity Incentive Plan at any time. Any such amendment or termination will not affect outstanding awards. If not sooner terminated, the 2021 Equity Incentive Plan will automatically terminate 10 years after its adoption by the Board. Shareholder approval is not required for any amendment of the 2021 Equity Incentive Plan, unless required by applicable law, government regulation or exchange listing standards. 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. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . Based solely upon information made available to us, the following table sets forth information as of March 14, 2024, regarding the beneficial ownership of our common stock: ● each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; ● each of our named executive officers and directors; and ● all our executive officers and directors as a group. The address of each holder listed in the following table, except as otherwise indicated, is 11900 Biscayne Blvd., Suite 630, North Miami, Florida, 33181. 66 Percentage ownership shown in the following table is based on 2,452,632 shares of our common stock outstanding. Name of Beneficial Owner Shares of Common Stock Beneficially Owned (1) Percent of Common Stock Beneficially Owned Named Executive Officers and Directors Harrison Gross (2) 49,100 1.96 % Konrad Dabrowski (3) 16,900 * % Oswald Gayle (4) 11,566 * % David Eric Cohen ( 5 ) 12,534 * % Kristen McLaughlin ( 6 ) 666 * % Louis Castro ( 7 ) 1,166 * % Olivia Bartlett ( 8 ) 666 * % All directors and executive officers as a group (7 persons) 92,598 3.64 % 5% Stockholders Lucyd Ltd. ( 9 ) 259,455 10.58 % Vladimir Galkin ( 10 ) 1,000,000 40.77 % * Less than 1%. (1) We have determined beneficial ownership in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, which is generally determined by voting power and/or dispositive power with respect to securities. Unless otherwise noted, the shares of common stock listed above are owned as of the date of this 10-K, and are owned of record by each individual named as beneficial owner and such individual has sole voting and dispositive power with respect to the shares of common stock owned by each of them. (2) Includes 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, 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. (3) 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, 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. (4) Includes 6,166 shares of common stock issuable upon exercise of stock options held by Mr. Gayle exercisable within 60 days of the date of this 10-K, 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. (5) 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. (6) Includes 666 shares of common stock issuable upon exercise of stock options held by Ms. McLaughlin exercisable within 60 days of the date of this 10-K. (7) Includes 1,166 shares of common stock issuable upon exercise of stock options held by Mr. Castro exercisable within 60 days of the date of this 10-K. (8) Includes 666 shares of common stock issuable upon exercise of stock options held by Ms. Bartlett exercisable within 60 days of the date of this 10-K. (9) Includes 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. As such, Tekcapital plc may be deemed to beneficially own the shares held by Lucyd Ltd. by virtue of their control over Lucyd Ltd. Tekcapital plc disclaims beneficial ownership of the shares held by Lucyd Ltd. Mr. Clifford Gross, the Chief Executive Officer of Tekcapital plc, is the father of Mr. Harrison Gross, our Chief Executive Officer. (10) 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. 67 Item 13. Certain Relationships and Related Transactions, and Director Independence . On occasion we may engage in certain related party transactions. All prior related party transactions were approved by our Board of Directors and a majority of our issued and outstanding shares of capital stock. Our policy is that all related party transactions will be reviewed and approved by the Audit Committee of our Board of Directors prior to our entering into any related party transactions. License Agreement On April 1, 2020, we entered into an exclusive, worldwide license agreement with Lucyd Ltd., 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. related to Innovative Eyewear current products and trademarks. As compensation for entrance into the License Agreement, we issued Lucyd Ltd. 3,750,000 shares of our common stock (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”). For all new intellectual property, Innovative Eyewear will own control it and be responsible for all prosecution and maintenance costs. The Addendum also confirms that Innovative Eyewear issued Lucyd Ltd. 3,750,000 shares of 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 one of our larger stockholders, Lucyd Ltd., and whose Chief Executive Officer is the father of our Chief Executive Officer, pursuant to which we agreed to pay Tekcapital Europe Ltd. $25,000 per fiscal quarter for rent-free office space, utilities, advisory services, and any other services in accordance with Tekcapital Europe Ltd.’s areas of expertise. The management agreement provided for a perpetual term, with the right of either party to terminate for any reason with 30 days’ notice. Effective February 1, 2022, the original management service agreement was amended to have us billed at $35,000 quarterly for advisory and other services, and in addition, Tekcapital Europe Ltd. began to bill us for an allocation of rent paid by Tekcapital Europe Ltd. on our behalf. We incurred $140,000 during each of the years ended December 31, 2024 and 2023 under our management services agreement with Tekcapital Europe Ltd.; we also recognized $92,312 and $91,672 of rent expense for the years ended December 31, 2024 and 2023, respectively. 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. 68 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. 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 employment agreements with our executives. Statement of Policy All future transactions between us and our officers, directors, or five percent or greater stockholders, and respective affiliates will be on terms no less favorable than could be obtained from unaffiliated third parties and will be approved by a majority of our independent directors who do not have an interest in the transactions and who had access, at our expense, to our legal counsel or independent legal counsel. To the best of our knowledge, during the past three fiscal years, other than as set forth above, there were no material transactions, or series of similar transactions, or any currently proposed transactions, or series of similar transactions, to which we were or are to be a party, in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed financial years, and in which any director or executive officer, or any security holder who is known by us to own of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing persons, has an interest (other than compensation to our officers and directors in the ordinary course of business). Item 14. Principal Accounting Fees and Services . Audit Fees The aggregate fees billed for professional services rendered by our Independent Registered Public Accounting Firm, Cherry Bekaert LLP, for the audit of our annual financial statements, review of our consolidated financial statements included in our quarterly reports, and other fees that are normally provided by the accounting firm in connection with statutory and regulatory filings or engagements for the years ended December 31, 2024 and December 31, 2023 were approximately $140,175 and $117,600, respectively. 69 Audit-Related Fees 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. Tax Fees There were no fees billed for professional services rendered by our Independent Registered Public Accounting Firm for tax compliance, tax advice, and tax planning for the fiscal years ended December 31, 2024 and 2023. All Other Fees There were no fees billed for non-audit services by our Independent Registered Public Accounting Firm for the fiscal years ended December 31, 2024 and 2023. Audit Committee Determination The Audit Committee considered and determined that the services performed are compatible with maintaining the independence of the independent registered public accounting firm. Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor The Audit Committee is responsible for pre-approving all audit and permitted non-audit services to be performed for us by our Independent Registered Public Accounting Firm as outlined in its Audit Committee charter. Prior to engagement of the Independent Registered Public Accounting Firm for each year’s audit, management or the Independent Registered Public Accounting Firm submits to the Audit Committee for approval an aggregate request of services expected to be rendered during the year, which the Audit Committee pre-approves. During the year, circumstances may arise when it may become necessary to engage the Independent Registered Public Accounting Firm for additional services not contemplated in the original pre-approval. In those circumstances, the Audit Committee requires specific pre-approval before engaging the Independent Registered Public Accounting Firm. The engagements of our Independent Registered Public Accounting Firm were approved by the Company’s Audit Committee. 70 PART IV Item 15. Exhibits, Financial Statement Schedules . (a)(1)(2) Financial Statement Schedules See accompanying “Index to Consolidated Financial Statements.” (b) Exhibits Exhibit No. Description 1.1* Underwriting Agreement by and among Innovative Eyewear, Inc. and Maxim Group LLC, as representative of the several underwriters, dated August 14, 2022, (Incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K (File No. 001-41392) filed with the Securities and Exchange Commission August 18, 2022) 3.1* Second Amended and Restated Articles of Incorporation of Innovative Eyewear, Inc., (Incorporated by reference to Exhibit 3.1 to the Amended Registration Statement filed on Form S-1/A 1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022) 3.2* Amended and Restated Bylaws of innovative Eyewear, Inc., (Incorporated by reference to Exhibit 3.1 to the Amended Registration Statement filed on Form S-1/A 1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022) 3.3* 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) 4.1* Form of Representative’s Warrant Agreement (Incorporated by reference to Exhibit 4.1 to the Amended Registration Statement filed on Form S-1/A 2 (File No. 333-261616) filed with the Securities Exchange Commission January 20, 2022) 4.2* Representative’s Warrant issued to Maxim Group LLC., dated August 17, 2022, (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-41392) filed with the Securities and Exchange Commission August 18, 2022) 4.3* Form of Common Stock Purchase Warrant, (Incorporated by reference to Exhibit 4.2 to the Amended Registration Statement filed on Form S-1/A 2 (File No. 333-261616) filed with the Securities Exchange Commission January 20, 2022) 4.4* Form of Warrant (incorporated by reference to Exhibit 4.6 to the Registration Statement on Form S-1 (File No. 333-272737) filed with the SEC on June 16, 2023) 4.5* Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.7 to the Registration Statement on Form S-1 (File No. 333-272737) filed with the SEC on June 16, 2023) 4.6* Form of Warrant Agency Agreement (incorporated by reference to Exhibit 4.8 to the Registration Statement on Form S-1 (File No. 333-272737) filed with the SEC on June 16, 2023) 4.7* 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) 4.8* 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) 4.9* 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) 4.10* 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) 4.11* 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) 4.12* 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) 71 4.13* 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) 4.14* 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) 4.15* 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) 4.16* 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) 4.17* 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) 4.18* 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) 4.19* 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) 4.20* 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) 4.21* 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) 10.1* License Agreement between Innovative Eyewear, Inc. and Lucyd Ltd., dated April 1, 2020, (Incorporated by reference to Exhibit 10.1 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022) 10.2* Addendum to License Agreement between Innovative Eyewear, Inc. and Lucyd Ltd., dated December 7, 2021, (Incorporated by reference to Exhibit 10.2 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022) 10.3 Management Agreement between Innovative Eyewear, Inc. and Tekcapital Europe Ltd., dated June 1, 2020, (Incorporated by reference to Exhibit 10.3 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022) 10.7* Employment Agreement by and between Innovative Eyewear, Inc. and Harrison Gross, dated August 11, 2021, (Incorporated by reference to Exhibit 10.6 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022) 10.8* Employment Agreement by and between Innovative Eyewear, Inc. and Konrad Dabrowski, dated August 11, 2021, (Incorporated by reference to Exhibit 10.7 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022) 10.9* Innovative Eyewear, Inc., 2021 Equity Incentive Plan, (Incorporated by reference to Exhibit 10.10 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022) 72 10.10* Sales Representation Agreement by and between Innovative Eyewear, Inc. and D. 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) 10.11* At the Market Offering Agreement, dated April 15, 2024, by and between Innovative Eyewear, Inc. and H.C. 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) 10.12* 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) 10.13* 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) 10.14* 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) 10.15* 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) 10.16* 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) 10.17* 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) 14.1* Form of Code of Ethics of innovative Eyewear, Inc. (Incorporated by reference to Exhibit 14.1 to the Registration Statement filed on Form S-1 (File No. 333-261616) filed with the Securities and Exchange Commission on January 10, 2022) 19.1* Insider trading policy (Incorporated by reference to Exhibit 19.1 to the Annual Report filed on Form 10-K (File No. 001-41392) filed with the Securities and Exchange Commission on March 25, 2024) 23.1 Consent of Cherry Bekaert LLP, Independent Registered Public Accounting Firm 24.1 Power of Attorney 31.1 Certification of Principle Executive Officer Pursuant to Securities Exchange Act Rules 13A-14(A)and 15D-14(A) 31.2 Certification of Principle Financial Officer Pursuant to Securities Exchange Act Rules 13A-14(A)and 15D-14(A) 32.1 Certification of Principle Executive Officer Pursuant to 18 U.S.C. Section 1350 32.2 Certification of Principle Financial Officer Pursuant to 18 U.S.C. Section 1350 97 Innovative Eyewear, Inc., Executive Compensation Clawback Policy 101.ins XBRL Instance Document 101.sch XBRL Taxonomy Extension Schema Document 101.cal XBRL Taxonomy Calculation Linkbase Document 101.def XBRL Taxonomy Definition Linkbase Document 101.lab XBRL Taxonomy Label Linkbase Document 101.pre XRL Taxonomy Presentation Linkbase Document * Previously filed Item 16. Form 10-K Summary . The Company has elected not to include a summary pursuant to this Item 16. 73 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Innovative Eyewear, Inc. By: /s/ Harrison Gross Harrison Gross March 24, 2025 Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated. By: /s/ Harrison Gross Harrison Gross Chief Executive Officer and Director March 24, 2025 (Principal Executive Officer) By: /s/ Oswald Gayle Oswald Gayle Co-Chief Financial Officer March 24, 2025 (Principal Financial and Accounting Officer) By: /s/ Kristen McLaughlin Kristen McLaughlin March 24, 2025 Director By: /s/ Louis Castro Louis Castro March 24, 2025 Director By: /s/ Olivia C. Bartlett Olivia C. Bartlett March 24, 2025 Director 74 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders Innovative Eyewear, Inc. Miami, Florida Opinion on the Financial Statements We have audited the accompanying balance sheets of Innovative Eyewear, Inc. (the “Company”) as of December 31, 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 Note 3. Our opinion is not modified with respect to this matter. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Cherry Bekaert LLP 677 We have served as the Company’s auditor since 2021. Tampa, Florida March 24, 2025 F- 1 INNOVATIVE EYEWEAR, INC. BALANCE SHEETS December 31, 2024 and 2023 2024 2023 ASSETS Current Assets Cash and cash equivalents $ 2,628,987 $ 4,287,447 Investments in debt securities (U.S. Treasury bills) 4,895,184 - Accounts receivable, net 107,918 93,211 Prepaid expenses 266,935 313,648 Inventory prepayments 424,594 323,520 Inventory 831,757 533,239 Due from Tekcapital and Affiliates 23,394 6,256 Other current assets 59,447 59,447 Total Current Assets 9,238,216 5,616,768 Non-Current Assets Patent costs, net 451,302 286,429 Capitalized software costs - 88,073 Property and equipment, net 107,562 154,848 Other non-current assets 41,229 72,644 TOTAL ASSETS $ 9,838,309 $ 6,218,762 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities Current Liabilities Accounts payable and accrued expenses $ 692,817 $ 581,986 Deferred revenue 44,901 42,500 Total Current Liabilities 737,718 624,486 Non-Current Liabilities Deferred revenue 5,450 35,450 TOTAL LIABILITIES 743,168 659,936 Commitments and contingencies (see Note 7) - - Stockholders’ Equity Common stock (par value $ 0.00001 , 50,000,000 shares authorized, and 2,452,632 and 747,416 shares issued and outstanding as of December 31, 2024 and 2023, respectively) (1) 25 7 Additional paid-in capital (1) 33,831,046 22,528,234 Accumulated deficit ( 24,735,930 ) ( 16,969,415 ) TOTAL STOCKHOLDERS’ EQUITY 9,095,141 5,558,826 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 9,838,309 $ 6,218,762 (1) 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. F- 2 INNOVATIVE EYEWEAR, INC. STATEMENTS OF OPERATIONS For the years ended December 31, 2024 and 2023 2024 2023 Revenues, net $ 1,636,440 $ 1,152,479 Less: Cost of Goods Sold ( 1,421,250 ) ( 1,271,808 ) Gross Profit (Deficit) 215,190 ( 119,329 ) Operating Expenses: General and administrative ( 4,473,292 ) ( 3,886,960 ) Sales and marketing ( 2,706,213 ) ( 2,047,069 ) Research and development ( 819,387 ) ( 662,184 ) Related party management fee ( 140,000 ) ( 140,000 ) Total Operating Expenses ( 8,138,892 ) ( 6,736,213 ) Other Income 157,187 195,150 Interest Expense - ( 3,036 ) Total Other Income (Expense), net 157,187 192,114 Net Loss $ ( 7,766,515 ) $ ( 6,663,428 ) Weighted average number of shares outstanding (1) 1,496,357 613,000 Loss per share, basic and diluted (1) $ ( 5.19 ) $ ( 10.87 ) (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. F- 3 INNOVATIVE EYEWEAR, INC. STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For the years ended December 31, 2024 and 2023 Common Stock Additional Paid In Accumulated Total Stockholders’ Shares (1) Amount (1) Capital (1) Deficit Equity Balances as of January 1, 2023 434,042 $ 4 $ 14,330,412 $ ( 10,305,987 ) $ 4,024,429 Exercises of stock options 11,518 - 17,650 - 17,650 Exercises of warrants by stockholders 40,945 - 2,736,450 - 2,736,450 Second public offering 252,494 3 4,115,685 - 4,115,688 Exercises of warrants related to private placement transaction 8,417 - 391,268 - 391,268 Stock-based compensation - - 936,769 - 936,769 Net loss - - - ( 6,663,428 ) ( 6,663,428 ) Balances as of December 31, 2023 747,416 $ 7 $ 22,528,234 $ ( 16,969,415 ) $ 5,558,826 Balances as of January 1, 2024 747,416 $ 7 $ 22,528,234 $ ( 16,969,415 ) $ 5,558,826 Issuance of shares to third party service provider 15,000 - 81,900 - 81,900 Issuance of shares to brand ambassador 4,500 - 21,690 - 21,690 Issuance of shares related to vesting of restricted share units 13,645 - - - - At-the-Market Offerings 557,987 6 3,723,128 - 3,723,134 First Registered Direct Offering 210,043 2 737,298 - 737,300 Second Registered Direct Offering 263,160 3 2,134,048 - 2,134,051 Exercises of warrants related to inducement agreements 538,426 6 3,503,873 - 3,503,879 Exercises of warrants 102,455 1 424,255 - 424,256 Stock-based compensation - - 676,620 - 676,620 Net loss - - - ( 7,766,515 ) ( 7,766,515 ) Balances as of December 31, 2024 2,452,632 $ 25 $ 33,831,046 $ ( 24,735,930 ) $ 9,095,141 (1) 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. F- 4 INNOVATIVE EYEWEAR, INC. STATEMENTS OF CASH FLOWS For the years ended December 31, 2024 and 2023 2024 2023 Operating Activities Net Loss $ ( 7,766,515 ) $ ( 6,663,428 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 109,489 61,093 Amortization 39,897 24,164 Non-cash interest expense - 3,036 Stock-based compensation and nonemployee stock-based payment expense 774,788 936,769 Expenses paid by Tekcapital and Affiliates 281,758 299,061 Provision for (recovery of) doubtful accounts 19,859 ( 14,725 ) Realized gain on debt securities (U.S. Treasury bills) - ( 50,796 ) Loss on sale of assets - 2,316 Write-off of previously-capitalized software costs 88,073 - Changes in operating assets and liabilities: Accounts receivable ( 4,566 ) ( 3,678 ) Accounts payable and accrued expenses 91,228 303,290 Prepaid expenses 16,356 ( 102,975 ) Inventory ( 399,592 ) ( 564,308 ) Contract assets and liabilities 9,595 3,878 Net cash flows from operating activities ( 6,739,630 ) ( 5,766,303 ) Investing Activities Purchases of debt securities (U.S. Treasury bills) ( 4,895,184 ) ( 1,949,204 ) Proceeds from redemption of debt securities (U.S. Treasury bills) - 2,000,000 Loan made to Tekcapital Europe, Ltd. ( 767,940 ) - Repayment of amounts loaned to Tekcapital Europe, Ltd. 767,940 - Patent costs ( 204,770 ) ( 173,036 ) Purchases of property and equipment ( 62,203 ) ( 78,463 ) Proceeds from sale of property and equipment - 1,950 Net cash flows from investing activities ( 5,162,157 ) ( 198,753 ) Financing Activities Proceeds from offerings of common stock and warrants 2,871,351 4,115,688 Proceeds from at-the-market offerings of common stock 3,723,134 - Proceeds from exercises of warrants 3,928,135 3,127,718 Proceeds from exercise of stock options - 17,650 Proceeds from sale of common stock withheld from employees to cover withholding taxes on vested restricted share units 19,603 - Repayment of related party convertible debt - ( 109,499 ) Repayment of amounts due to Tekcapital and Affiliates ( 298,896 ) ( 490,163 ) Net cash flows from financing activities 10,243,327 6,661,394 Net Change In Cash ( 1,658,460 ) 696,338 Cash at Beginning of Year $ 4,287,447 $ 3,591,109 Cash at End of Year $ 2,628,987 $ 4,287,447 Significant Non-Cash Transactions Expenses paid for by Tekcapital and Affiliates, reported as increase in Due to/from Tekcapital and Affiliates and related party convertible debt 281,758 299,061 Issuance of shares for prepayment to third party service provider 81,900 - Issuance of shares for prepayment to brand ambassador 21,690 - See accompanying Notes to the Financial Statements. F- 5 INNOVATIVE EYEWEAR, INC. NOTES TO THE FINANCIAL STATEMENTS December 31, 2024 and 2023 NOTE 1 – GENERAL INFORMATION Innovative Eyewear, Inc. (the “Company,” “us,” “we,” or “our”) is a corporation organized under the laws of the State of Florida that develops and sells cutting-edge eyeglasses and sunglasses, which are designed to allow our customers to remain connected to their digital lives, while also offering prescription eyewear and sun protection. The Company was founded by Lucyd Ltd., a portfolio company of Tekcapital Plc through Tekcapital Europe, Ltd. (collectively, together with Lucyd Ltd., “Tekcapital and Affiliates”), which owned approximately 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 Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in accordance with the accounting rules under Regulation S-X, as promulgated by the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments considered necessary for the fair presentation of the financial statements for the years presented have been included. The results of operations for the years ended December 31, 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. Cash Equivalents All highly liquid investments with original maturities of three months or less, including money market funds, certificates of deposit, and U.S. Treasury bills purchased three months or less from maturity, are considered cash equivalents. Investments As of December 31, 2024, the Company held investments in U.S. Treasury bills, which were purchased in September 2024 and 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 . F- 6 Accounts Receivable Accounts receivable are uncollateralized obligations due from customers under normal trade terms. For direct-to-consumer sales, payment is required before product is shipped. For wholesale orders, we offer “net 30” payment terms on wholesale orders of $1,500 or more in accordance with industry standards. The Company, by policy, routinely assesses the financial strength of its customers. Accounts receivable are reported at the amount billed to the customer, net of an allowance for doubtful accounts. The allowance for doubtful accounts is determined based upon a variety of judgments and factors. Factors considered in determining the allowance include historical collection, write-off experience, and management’s assessment of collectibility from customers, including current conditions, reasonable forecasts, and expectations of future collectibility and collection efforts. Management continuously assesses the collectibility of receivables and adjusts estimates based on actual experience and future expectations based on economic indicators. Receivable balances are written-off against the allowance when such balances are deemed to be uncollectible. The Company recognized bad debt expense of $ 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 years ended December 31, 2024 and 2023 is as follows: Schedule of allowance for doubtful account 2024 2023 Balance at January 1 $ 25,772 $ 92,646 Bad debt expense 19,859 30,275 Write-offs (1) ( 14,883 ) ( 52,149 ) Other (1) 218 ( 45,000 ) Balance at December 31 $ 30,966 $ 25,772 (1) During the year ended December 31, 2023, the Company entered into a settlement agreement with a former wholesale customer. As a result of this settlement, $47,646 of accounts receivable were written-off as uncollectible, while the $45,000 collected under the settlement agreement was reflected as a gain within general and administrative expenses in the statement of operations. Inventory 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. 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 Intangible assets relate to patent costs received in conjunction with the initial capitalization of the Company and internally developed utility and design patents. The Company amortizes these assets over the estimated useful life of the patents. The Company reviews its intangible assets for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Capitalized Software 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. F- 7 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. Property and Equipment Property and equipment are depreciated using the straight-line method over the estimated useful lives or lease terms if shorter. Depreciation expense for the years ended December 31, 2024 and 2023 was $ 109,489 and $ 61,093 , respectively. For income tax purposes, accelerated depreciation methods are generally used. Repair and maintenance costs are expensed as incurred. Schedule of property and equipment December 31, December 31, Estimated Useful Lives Property & Equipment 2024 2023 (in Years) Mobile Kiosk Display $ 162,940 $ 127,333 3 years Computer Equipment 44,901 44,901 3 Years Office Equipment 12,991 10,291 3 Years Internal-Use Software and Website Costs 77,196 53,300 3 to 5 Years Property and equipment, gross 298,028 235,825 Less: Accumulated depreciation ( 190,466 ) ( 80,977 ) Property and equipment, net $ 107,562 $ 154,848 Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash, cash equivalents, accounts receivable, and accounts payable, the carrying amounts approximate fair value due to the short-term maturities of these instruments. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, and accounts receivable. The Company limits its credit risk with respect to cash by maintaining cash and cash equivalent balances with high quality financial institutions. At times, the Company’s cash balances may exceed federally insured limits. Concentrations of credit risk with respect to accounts receivable are generally considered minimal due to collection history. However, 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. 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. F- 8 Revenue Recognition Our revenue is primarily generated from the sales of prescription and non-prescription optical glasses and sunglasses, and shipping charges which are charged to the customer associated with these purchases. We sell products through our retail store resellers, distributors, on our own website Lucyd.co, and on Amazon.com. We have also recently started to generate revenue from the sale of subscriptions to the “Pro” version of our Lucyd app, which provides unlimited ChatGPT interactions and priority tech support for a monthly or annual fee. To determine revenue recognition, we perform the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation. At contract inception, we assess the goods or services promised within each contract and determine those that are performance obligations, and also assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. In instances where the collectibility of contractual consideration is not probable at the time of sale, the revenue is deferred on our balance sheet as a contract liability, and the associated cost of goods sold is deferred on our balance sheet as a contract asset; subsequently, we recognize such revenue and cost of goods sold as payments are received. During the 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. U.S. consumers enjoy free USPS first class postage on orders over $149, with faster delivery options available for extra cost, for sales processed through our website. For Amazon sales, shipping is free for U.S. consumers while international customers pay shipping charges on top of MSRP. Any costs associated with fees charged by the online platforms (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 we sell products. For sales to our retail store partners, we identify the contract with a customer upon receipt of an order of our eyewear through our Shopify wholesale portal or direct purchase order. Revenue is recognized upon meeting the performance obligation, which is delivery of the Company’s eyewear products to the retail store, and is also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to retail store partners includes volume discounts, due to the nature of large quantity orders. The pricing includes shipping charges, while excluding any state sales tax charges applicable. Due to the nature of wholesale retail orders, no e-commerce fees are applicable. For sales to distributors, we identify the contract with a customer upon receipt of an order of our eyewear through a direct purchase order. If collectibility of substantially all of the contract consideration is probable, revenue is recognized upon meeting the performance obligation, which is delivery of our eyewear products to the distributor, and is also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to retail store partners and distributors includes volume discounts, due to the nature of large quantity orders. The pricing does not include shipping. Due to the nature of wholesale retail orders, no marketplace fees are applicable, only credit card processing fees. F- 9 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. We allow our customers to return our products, subject to our refund policy, which allows any customer to return our products for any reason within the first: ● 7 days for sales made through our website (Lucyd.co) ● 30 days for sales made through Amazon ● 30 days for sales to most wholesale retailers and distributors (although certain sales to independent distributors are ineligible for returns) For all of our sales, at the time of sale, we establish a reserve for returns, based on historical experience and expected future returns, which is recorded as a reduction of sales. Additionally, we review all individual returns received in the month following the balance sheet date pertaining to orders processed prior to the balance sheet date in order to determine whether an allowance for sales returns is necessary. The Company recorded an allowance for sales returns of $ 15,746 and $ 25,933 as of December 31, 2024 and 2023, respectively. Stock-Based Compensation The Company recognizes compensation expense for stock-based awards to employees and directors and others based on the grant date fair value of such awards. Forfeitures are accounted for as a reduction of compensation expense in the period when such forfeitures occur. For stock option awards, the Black-Scholes-Merton option pricing model is used to estimate the fair value of share-based awards. The Black-Scholes-Merton option pricing model incorporates various and highly subjective assumptions, including expected term and share price volatility. ● The expected term of the stock options is estimated based on the simplified method as allowed by Staff Accounting Bulletin No. 107. ● The share price volatility is estimated using historical stock prices based upon the expected term of the options granted, using stock prices of comparably profiled public companies. ● The risk-free interest rate assumption is determined using the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. 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. F- 10 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 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 December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU 2023-09 requires disclosure of additional categories of information about federal, state, and foreign income taxes in the rate reconciliation table and requires entities to provide more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU also requires entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state, and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. The ASU is required to be applied prospectively, with the option to apply it retrospectively. The ASU is effective for Innovative Eyewear, Inc. for fiscal years beginning after December 15, 2024. We do not anticipate that the adoption of this ASU will have a significant impact on our financial statements. 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 xx, 2025, which is the date the financial statements were available to be issued. See Note 11 for additional information. NOTE 3 – GOING CONCERN The Company has a limited operating history. The Company’s business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse conditions may include recession, downturn, or otherwise, changes in regulations or restrictions in imports, competition, or changes in consumer taste. These adverse conditions could affect the Company’s financial condition and the results of its operations. The Company meets its day-to-day working capital requirements using monies raised through sales of eyewear and issuances of equity. During the 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. F- 11 Management expects that operating losses could continue in the foreseeable future as we continue to invest in the expansion and development of our business. Management’s forecasts and projections indicate that the Company expects to have sufficient liquidity to fund operations through at least the next 12 months. However, the Company may raise additional funds if management believes it would be beneficial to do so. NOTE 4 – INCOME TAXES The Company accounts for income taxes under an asset and liability approach that recognizes deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years in which the differences are expected to reverse (i.e., when taxes are actually paid or recovered). The Company assesses the realizability of its net deferred tax assets on an annual basis. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all relevant available positive and negative evidence is considered, including the Company’s current and past performance, the market environment in which the Company operates, length of carryback and carryforward periods, and existing contracts that will result in future profits. After reviewing all relevant available evidence, the Company has recorded a full valuation allowance against its deferred tax assets as of December 31, 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: Schedule of reconciliation of federal statutory tax rate 2024 2023 Income tax benefit at the statutory federal rate $ 1,630,968 $ 1,389,526 State income tax benefits, net of federal benefit 68,365 50,907 Change in valuation allowance and other items ( 1,699,333 ) ( 1,440,433 ) Total $ - $ - The components of the Company’s deferred tax assets are as follows: Schedule of deferred tax assets 2024 2023 Deferred tax assets: Stock-based compensation $ 1,022,605 $ 877,645 Other – net 270,046 219,723 Net operating losses – federal 3,929,930 2,483,530 Net operating losses – state 247,869 148,177 Deferred tax assets Gross 5,470,450 3,729,075 Less Valuation Allowance ( 5,470,450 ) ( 3,729,075 ) Net 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. F- 12 NOTE 5 – INTANGIBLE ASSETS Schedule of intangible assets December 31, December 31, Finite-lived intangible assets 2024 2023 Patent Costs $ 534,002 $ 329,232 Less: Accumulated amortization ( 82,700 ) ( 42,803 ) Intangible assets, net $ 451,302 $ 286,429 These costs are amortized using the straight-line method over a period of 10 years. 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 Management Service Agreement In 2020, the Company entered into a management services agreement with Tekcapital Europe Ltd. (an affiliate of Lucyd Ltd., whose Chief Executive Officer is the father of our Chief Executive Officer), 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. Under this agreement, the related party provides the following services: ● Support and advice to the Company in accordance with their area of expertise; ● Research, technical review, legal review, recruitment, software development, marketing, public relations, and advertisement; and ● Advice, assistance, and consultation services to support the Company or in relation to any other related matter. The Company incurred expense of $ 140,000 during each of the years ended December 31, 2024 and 2023 under this agreement. Rent of Office Space Prior to the February 1, 2022 amendment of the aforementioned management services agreement, the Company was provided with rent-free office space by Tekcapital and Affiliates. Effective February 1, 2022, Tekcapital began to bill the Company for an allocation of rent paid by Tekcapital on the Company’s behalf; the underlying lease between Tekcapital and its landlord has an end date of January 31, 2026. 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. F- 13 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. 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. 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. 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. NOTE 7 – COMMITMENTS AND CONTINGENCIES Legal Matters We are not currently the subject of any material pending legal proceedings; however, we may from time to time become a party to various legal proceedings arising in the ordinary course of business. 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. 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 various multi-year license agreements which grant us the right to sell certain branded smart eyewear, including the Nautica, Eddie Bauer, and Reebok brands worldwide. These agreements require us to pay royalties based on a percentage of net retail and wholesale sales during the period of the license, and also require guaranteed minimum royalty payments. The agreements have base terms of 10 years but are cancellable at the option of the Company during the fifth year. F- 14 The aggregate future minimum payments due under these license agreements are as follows: Schedule of future minimum payments due 2025 $ 436,000 2026 834,000 2027 1,290,000 2028 1,543,000 2029 1,778,000 Thereafter (through 2033) 8,129,000 Total $ 14,010,000 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. Leases Our executive offices are located at 11900 Biscayne Blvd., Suite 630 Miami, Florida 33181. Our executive offices are provided to us by Tekcapital and Affiliates (see Note 6). We consider our current office space adequate for our current operations. Other Commitments See related party management services agreement discussed in Note 6. NOTE 8 – STOCKHOLDERS’ EQUITY Pursuant to a corporate resolution on July 1, 2021, the Company has authority to issue up to 15,000,000 shares of preferred stock and 50,000,000 shares of common stock. There were no shares of preferred stock issued or outstanding as of December 31, 2024 and 2023. Change in Capital Structure – Reverse Stock Split At our annual meeting of shareholders on July 8, 2024, the Company’s shareholders approved an amendment to the Company’s articles of incorporation to effect a reverse stock split of our issued and outstanding common stock at a ratio between 1-for-14 and 1-for-24. Subsequently, the board of directors authorized a reverse stock split in a ratio of 1-for-20 shares, and we filed with the Florida Secretary of State a certificate of amendment to our articles of incorporation. Effective July 18, 2024, each 20 shares of the Company’s issued and outstanding common stock were combined into one share of common stock, except to the extent that the reverse stock split would have resulted in any of the Company’s stockholders owning a fractional share, in which case such fractional share was rounded up to the next highest whole share. Additionally, pursuant to their terms, the shares of common stock underlying the Company’s outstanding stock options and warrants were similarly adjusted along with corresponding adjustments to their exercise prices. All share and per share amounts presented in these financial statements and accompanying notes, included but not limited to shares issued and outstanding, earnings/(loss) per share, and warrants and options, as well as the dollar amounts of common stock and additional paid-in capital, have been retroactively adjusted for all periods presented in order to reflect this change in capital structure. F- 15 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 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 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. F- 16 Second Registered Direct Offering On May 29, 2024, the Company closed on a registered direct offering of 263,160 shares of its common stock and, in a concurrent private placement, warrants to purchase up to 263,160 shares of common stock at an exercise price of $ 9.50 per share, for a combined purchase price per share and warrant of $ 9.50 . In exchange, the Company received approximately $2.5 million of gross proceeds, before deducting underwriting discounts and offering expenses. In addition, the Company issued to the placement agent warrants to purchase up to 19,737 shares of common stock at an exercise price of $ 11.876 per share. The net proceeds received by the Company from this transaction amounted to approximately $ 2,134,000 . Warrants 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. 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 . F- 17 ● 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 stockholders' equity note, warrants or rights Warrant Type Warrants Outstanding to Purchase X Shares Exercise Price Issuance Date Expiration Date Listed (IPO) Warrants 68,714 $ 75.00 8/17/2022 8/17/2027 Common (SPO) Warrants 98,300 $ 21.00 6/26/2023 6/26/2028 Private Warrants 15,000 $ 75.00 4/17/2023 4/19/2028 Series A Warrants 96,450 $ 5.00 9/4/2024 3/4/2030 Series B Warrants 96,450 $ 5.00 9/4/2024 3/4/2026 Series C Warrants 148,567 $ 6.00 9/19/2024 3/19/2030 Series D Warrants 148,567 $ 6.00 9/19/2024 3/19/2026 Series E Warrants 263,160 $ 9.50 9/24/2024 9/24/2029 Series F Warrants 526,320 $ 9.50 9/24/2024 3/24/2026 Underwriter / Placement Agent Warrants 2,940 $ 164.56 8/17/2022 8/12/2027 Underwriter / Placement Agent Warrants 9,000 $ 26.25 6/26/2023 6/26/2028 Underwriter / Placement Agent Warrants 15,754 $ 6.10 5/1/2024 5/1/2029 Underwriter / Placement Agent Warrants 19,737 $ 11.876 5/29/2024 5/29/2029 Underwriter / Placement Agent Warrants 9,502 $ 6.25 9/4/2024 3/4/2030 Underwriter / Placement Agent Warrants 11,143 $ 6.4125 9/19/2024 3/19/2030 Underwriter / Placement Agent Warrants 19,737 $ 12.3438 9/24/2024 9/24/2030 Total 1,549,341 Rights Plan On September 25, 2024, our board of directors approved the adoption of a limited duration stockholder rights plan (the “Rights Plan”), and declared a dividend to stockholders of record at the close of business on September 25, 2024 of one common stock purchase right (a “Right”) for each outstanding share of our common stock. Each Right entitles the holder to purchase from the Company six shares of our common stock at an exercise price of $ 6.21 per share. The Rights are evidenced by and trade with the certificates for the shares of our common stock 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. F- 18 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 On July 1, 2021, an Equity Incentive Plan was approved, allowing for total of 20% of our issued and outstanding common stock, less the number of outstanding option grants, to be available for the grant of awards under the Plan. There were 84,250 option awards granted by the Company prior to the approval of the Plan, while 90,526 option awards have been granted under the Plan from July 1, 2021 through December 31, 2024. Summary information regarding the number of options, exercise price, and remaining contractual life as of and during the years ended December 31, 2024 and 2023 is as follows: Schedule fair value of options granted Options (Number) Weighted Average Exercise Price per share ($) Weighted Average Remaining Contractual Life (Years) As at January 1, 2023 116,626 52.22 Granted 57,650 18.33 Exercised ( 15,800 ) 20.10 Forfeited ( 13,750 ) 58.74 As at December 31, 2023 144,726 41.61 2.22 As at January 1, 2024 144,726 41.61 2.22 Granted 500 8.40 Exercised - - Forfeited / Expired ( 61,426 ) 47.33 As at December 31, 2024 83,800 37.21 2.33 Exercisable as at December 31, 2024 61,983 43.55 1.96 As of December 31, 2024, the aggregate intrinsic value for all options outstanding as well as all options exercisable was zero. During the year ended December 31, 2024, we granted the following option awards: ● 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. F- 19 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 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 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. ● Options to purchase an aggregate of 3,750 shares of common stock at $ 25.50 per share were issued to an employee, which would have vested evenly over three years (whereby 1/6 of the options would have vested every six months). During the year ended December 31, 2023, however, all of these options were forfeited. ● Options to purchase an aggregate of 300 shares of common stock at $ 25.50 per share were issued to a consultant, which vested immediately. These options were all exercised during the year ended December 31, 2023. ● Options to purchase an aggregate of 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 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. 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 2024 and 2023 were as follows: Schedule of number of share options and the weighted average exercise price outstanding Attribute 2024 2023 Share price at date of grant $ 8.40 $ 8.58 - $ 25.50 Expected term (in years) 3 3 - 4 Risk free rate 4.02 % 3.74 % - 4.65 % Expected volatility 101 % 106 % - 133 % Expected dividend yield 0 0 Grant date fair value of options $ 5.40 $ 5.63 - $ 20.39 The weighted average grant date fair value of options outstanding was $ 26.81 and $ 29.82 as of December 31, 2024 and 2023, respectively. As of December 31, 2024, unrecognized stock option expense of approximately $ 134,000 remains to be recognized over next 0.98 years. Award Modifications On June 1, 2023, we modified the terms of certain options previously awarded in 2021 to purchase an aggregate of 7,000 shares of common stock, in order to extend their expiration dates from July 21, 2023 to July 21, 2024. There were no changes to the exercise price or other terms of these stock options, and these options were already fully vested prior to the modification. As a result of this modification, we recognized incremental stock option expense of $ 9,188 for the year ended December 31, 2023. F- 20 Stock Grants On March 28, 2024, we entered into an agreement for a third party to provide us with financial advisory and investment banking services, for a minimum term of six months. As consideration for the services provided to the Company, we issued to the counterparty 15,000 shares of our common stock. The total value of consideration transferred, measured using the fair value of our common stock at the date of issuance, was $ 81,900 , which we recognized in full during the year ended December 31, 2024. 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 On December 3, 2023, we entered into an endorsement agreement with an influencer for a one-year term, which included the award of an aggregate of 3,261 restricted stock units. These restricted stock units vest according to the following schedule: 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 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, 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 For the year ended December 31, December 31, 2024 2023 Basic and diluted: Net loss $ ( 7,766,515 ) $ ( 6,663,428 ) Weighted-average number of common shares 1,496,357 613,000 Basic and diluted net loss per common share $ ( 5.19 ) $ ( 10.87 ) F- 21 NOTE 11 – SUBSEQUENT EVENTS 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. F- 22