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Item 9A. Controls and Procedures

2026-03-25 compared with 2025-03-24 · 583 added, 531 removed, 786 unchanged (59% of the section changed)

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

Under the supervision and with the participation of our management, including our Chief Executive Officer and 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.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15 of the Exchange Act.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of fiscal year 2025.

Management’s Report on Internal Control Over Financial Reporting

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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.

Based on this assessment, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025, for the reasons outlined below.

Background and Remediation of Material Weakness

In connection with our evaluation of disclosure controls and procedures covering our financial statements as of December 31, 2025, we identified material weaknesses in our internal control over financial reporting.

We have concluded that material weaknesses exist in our disclosure controls and procedures, including internal control over financial reporting, as we do not have the necessary business processes, personnel, and related internal controls to operate in a manner to fully satisfy the accounting and financial reporting requirements of a public company.

These material weaknesses manifested themselves in ways that included the improper segregation of duties relating to review of the recording of journal entries and the reconciliation of key accounts and safeguarding of assets, as well as the analysis of accounting for certain transactions and accounts, inadequate controls related to information technology, and inadequate documentation and monitoring of processes, accounting policies, and procedures.

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

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

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

These planned actions are subject to ongoing evaluation by management and will require testing and validation of design and operating effectiveness of internal control over financial reporting over future periods.

We are committed to the continuous improvement of our internal control over financial reporting and will continue to review the internal control over financial reporting.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

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Other Information .

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

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

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

The aggregate number of shares sold pursuant to this arrangement during 2025 was 8,967.

On December 9, 2025 , Harrison Gross , our Chief Executive Officer , adopted a Rule 10b5-1 trading plan, which is effective through August 31, 2026 .

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

Gross’ income tax withholding obligations associated with the issuance of 49,200 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of 35% of the net shares of common stock received from such vesting, at the prevailing market price.

As such, the estimated aggregate number of shares to be sold pursuant to this arrangement is 26,702.

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

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

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

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

The aggregate number of shares sold pursuant to this arrangement during 2025 was 5,296.

On December 9, 2025 , Konrad Dabrowski , our Chief AI and Growth Officer , adopted a Rule 10b5-1 trading plan, which is effective through August 31, 2026 .

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

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As such, the estimated aggregate number of shares to be sold pursuant to this arrangement is 12,394.

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.

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

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

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

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.

The aggregate number of shares sold pursuant to this arrangement during 2025 was 8,935.

On December 9, 2025 , Oswald Gayle , our Chief Financial Officer , adopted a Rule 10b5-1 trading plan, which is effective through August 31, 2026 .

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

Gayle’s income tax withholding obligations associated with the issuance of 32,466 shares of common stock in connection with the vesting of restricted stock units, plus (ii) the sale of 4,870 shares of common stock received from such vesting at the prevailing market price.

As such, the estimated aggregate number of shares to be sold pursuant to this arrangement is 14,496.

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

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

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

The aggregate number of shares sold pursuant to this arrangement during 2025 was 7,689.

On December 9, 2025 , David Eric Cohen , our Chief Technology Officer , adopted a Rule 10b5-1 trading plan, which is effective through December 2, 2026 .

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As such, the estimated minimum aggregate number of shares to be sold pursuant to this arrangement is 10,793, and the estimated maximum aggregate number of shares that may be sold pursuant to this arrangement is 18,233.

On December 13, 2024, Joaquin Abondano , our Chief Operating Officer , adopted a Rule 10b5-1 trading plan, which was effective through December 8, 2025 .

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

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

The aggregate number of shares sold pursuant to this arrangement in 2025 was 4,389.

On December 9, 2025 , Joaquin Abondano , our Chief Operating Officer , adopted a Rule 10b5-1 trading plan, which is effective through December 18, 2026 .

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As such, the estimated minimum aggregate number of shares to be sold pursuant to this arrangement is 8,776, and the estimated maximum aggregate number of shares that may be sold pursuant to this arrangement is 17,106.

Regarding Foreign Jurisdictions that Prevent Inspections .

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .

Not applicable.

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Chief Executive Officer and Director

Chief Financial Officer

Konrad Dabrowski

Co-Chief Financial Officer

Chief AI and Growth Officer

David Eric Cohen

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Gross is well qualified to serve as a director due to his substantial knowledge of our product and his experience in marketing, product, and app development.

Konrad Dabrowski has served as our 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.

Oswald Gayle has served as our Chief Financial Officer since November 1, 2025.

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

He was later named Co-Chief Financial Officer in October 2024, and served in that role until being named Chief Financial Officer in November 2025.

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

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

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

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

Konrad Dabrowski has served as our Chief AI and Growth Officer on a part-time basis since November 1, 2025;

prior to this, he served as Co-Chief Financial Officer on a part-time basis from October 2024 through October 2025, and served as our Chief Financial Officer on a part-time basis from August 2019 through October 2024.

Since July 2020, Mr.

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

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

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

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

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

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

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

Prior to his employment at Innovative Eyewear, from August 2017 to August 2019, Mr.

Cohen served as the chief technology

officer of Lucyd Ltd., a smart eyewear development company, where he led the company’s technological advancements and digital ad

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.

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

performance monitoring, website design and mobile applications.

Cohen served as President of Emaze Design Agency, a digital design agency, where he led the development of web and applications for e-commerce, web performance monitoring, website design and mobile applications.

Prior to his employment at Emaze Design Agency, Mr.

Cohen was lead

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

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

from Hadassah University.

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

McLaughlin has 25 years’ experience launching,

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

Since October 2021, Kristen has served

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

and communications to drive sales and support key accounts.

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

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

Kristen McLaughlin has served as one of our directors since August 2021.

McLaughlin has 25 years’ experience launching, managing and developing products in the eyewear, accessories, cosmetics and skincare industries.

Since October 2021, Kristen has served as Marketing Director at Tura, inc., an eyewear design and distribution company where she is responsible for strategic marketing initiatives and communications to drive sales and support key accounts.

From March 2019 to April 2020, Ms.

McLaughlin served

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

marketing strategy and new product development.

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

McLaughlin 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:

Manufacturer, Regional Sales Manager, and Brand Manager:

Eyewear Manufacturer, Regional Sales Manager, and Brand Manager:

Daniel Swarovski Crystal Eyewear.

While at Silhouette International, Ms.

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

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.

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

eyewear industry and her experience in brand and product development.

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

Bartlett has been in the eyewear industry for over 45

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

as an industry consultant.

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

McLaughlin is well qualified to serve as a director due to her substantial experience in the eyewear industry and her experience in brand and product development.

Bartlett has served as one

of our directors since August 2021.

Bartlett has been in the eyewear industry for over 45 years holding various roles

including optician, optical manager, marketing manager and operations management, where she currently acts as an industry

From September 2015 - June 2020, Ms.

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

Prior to her time at Todd Rogers Eyewear,

from March 2010 to May 2015, Ms.

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

for Safilo USA, a specialty eyewear company.

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

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

Prior to her time at Todd Rogers

Eyewear, from March 2010 to May 2015, Ms.

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

Massachusetts for Safilo USA, a specialty eyewear company.

Additionally, from September 2013 to May 2018, Ms.

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

From February 2020 to February

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

educational, legislative and regulatory interests of opticianry.

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.

Bartlett has received a number of awards

through her time in the industry, including but not limited to, the 2020 Eyecare Business Game Changer Award and the 2020 and 2018 Vision

Monday Most Influential Woman Executive.

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

an ABO certified speaker.

Bartlett received her BA in Political Science from Clark University.

Bartlett is well qualified to

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

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

Castro is an experienced public company director and chartered

Castro is currently on the board of directors of the following public companies:

(1) Tekcapital, where he has been

a director since December 2019, (2) Orosur Mining Inc.

(TSE:OMI), a company exploring for minerals in South America, where he has

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

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

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

a director since January 2021.

From September 2012 to June 2016, Mr.

Castro was a director and, from September 2014

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

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

Bartlett has been a

director for fifteen years for the Opticians Association of Massachusetts and currently holds the position of Treasurer.

Bartlett has received a number of awards through her time in the industry, including but not limited to, the 2020 Eyecare

Business Game Changer Award and the 2020 and 2018 Vision Monday Most Influential Woman Executive.

Bartlett received her

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

Bartlett received her BA in

Political Science from Clark University.

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

Louis Castro has served as one of our

directors since August 2021.

Castro is an experienced public company director and chartered accountant.

is currently on the board of directors of the following public companies:

(1) Tekcapital, where he has been a director since December 2019,

(2) Orosur Mining Inc.

(TSE:OMI), a company exploring for minerals in South America, where he has been executive chairman of the board

since April 2020, (3) Tomco Energy plc (LON:TOM), an oil exploration and technology company, where he has been a director since April 2021,

and (4) Veteran Capital Corp.

(TSX-V:VCC), a capital pool company, where he has been a director since January 2021.

From September 2012

to June 2016, Mr.

Castro was a director and,

from September 2014 to June 2016 served as the Chief Financial Officer, of Eland Oil & Gas plc, a Nigerian focused upstream oil and natural gas exploration and production company, where he was responsible for the company’s finance, legal and corporate finance activities.

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

Castro served as Head of Capital Markets and then as

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

He is a fellow of the Institute of Chartered Accountants of England & Wales, has a double degree in Engineering Production

and Economics from Birmingham University and attended the Postgraduate Advanced Course in Production Management and Methods at Cambridge

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

and his distinction as chartered accountant.

Castro served as Head of Capital Markets and then as Chief Executive Officer of Northland Capital Partners, an investment bank, where he was responsible for the investment banks day-to-day activities.

He is a fellow of the Institute of Chartered Accountants of England & Wales, has a double degree in Engineering Production and Economics from Birmingham University and attended the Postgraduate Advanced Course in Production Management and Methods at Cambridge University.

Castro is well qualified to serve as a director due to his substantial experience as a director of public companies and his distinction as chartered accountant.

Number and Terms of Office of Officers and Directors

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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.

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

Code of Ethics

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

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

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Incentive Plan

Other Compensation (5)

Compensation (4)

Executive Officer

Financial Officer (2)

AI and Growth Officer (1)

Technology Officer

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

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

Dabrowski was our Chief Financial Officer through October 11, 2024, at which point he became Co-Chief Financial Officer and served in that role through October 31, 2025.

Effective November 1, 2025, Mr.

Dabrowski became our Chief AI and Growth Officer.

Gayle became Co-Chief Financial Officer effective October 11, 2024, and later became Chief Financial Officer effective November 1, 2025.

Compensation amounts shown for Mr.

Gayle include amounts paid to Mr.

Gayle in 2024 include amounts paid to Mr.

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

Includes Restricted Stock Units awarded to Messrs.

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

Includes stock options granted to Messrs.

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

Also includes stock options granted to Messrs.

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

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

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.

2025 amounts include Restricted Stock Units awarded to Messrs.

Gross, Gayle, Dabrowski, and Cohen on November 14, 2025 in the amounts of 90,000, 65,000, 75,000, and 66,000 units, respectively 2024 amounts include Restricted Stock Units awarded to Messrs.

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

Includes health and welfare benefits.

Employment Arrangements with our Executive Officers

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Option Awards

Incentive Plan Compensation

Incentive Plan

Pension Value

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

Option awards

unexercisable

shares, units

Harrison Gross

Konrad Dabrowski

David Eric Cohen

Option Exercises and Stock Vested

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

During the year ended December 31, 2025, 19,200, 10,800, 16,800, and 14,400 restricted stock units vested and were issued as shares of common stock to Messrs.

Gross, Gayle, Dabrowski, and Cohen, respectively.

There were restricted stock units vested for our named executive officers during the year ended December 31, 2024.

Employee Benefit Plans

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

As of December 31, 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).

of December 31, 2025, awards covering 741,248 shares of Common Stock were outstanding, of which 53,100 option awards had been

granted subject to the Plan and were currently outstanding, 31,039 stock grants had been granted subject to the Plan (and were fully

vested), and 657,109 RSU awards had been granted subject to the Plan (of which, 94,461 had vested).

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

Incentive Stock Option Limit.

25,000,000 shares of Common Stock may be issued under the 2021 Equity Incentive Plan upon the exercise of ISOs.

Employees (including officers),

non-employee directors, and consultants who render services to the Company or a parent or subsidiary thereof (whether now existing or

subsequently established) are eligible to receive awards under the 2021 Equity Incentive Plan.

ISOs may only be granted to employees

of the Company or a parent or subsidiary thereof (whether now existing or subsequently established).

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

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

ISOs may only be granted to employees of the Company or a parent or subsidiary thereof (whether now existing or subsequently established).

Stock Options.

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Shareholder approval is not required for any amendment of the 2021 Equity Incentive Plan, unless required by applicable law, government regulation or exchange listing standards.

Timing of Awards.

Awards are made pursuant to a predetermined

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

The timing of these grants is not influenced by the possession

or consideration of material nonpublic information (MNPI).

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

and alignment with best governance practices.

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

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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.

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

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

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5% Stockholders

Vladimir Galkin ( 10 )

Kelly Jospeh Chapman (9)

Intracoastal Capital LLC (10)

Less than 1%.

1 unchanged sentence

Unless otherwise noted, the shares of common stock listed above are owned as of the date of this 10-K, and are owned of record by each individual named as beneficial owner and such individual has sole voting and dispositive power with respect to the shares of common stock owned by each of them.

Includes 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.

Includes 13,733 shares of common stock held by Mr.

12,000 shares of common stock issuable upon exercise of stock options held by Mr.

Gross exercisable within 60 days of the date of this 10-K;

and 24,600 shares of common stock issuable upon the vesting of restricted stock units held by Mr.

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

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.

Includes 12,804 shares of common stock held by Mr.

10,500 shares of common stock issuable upon exercise of stock options held by Mr.

Dabrowski exercisable within 60 days of the date of this 10-K, and 20,900 shares of common stock issuable upon the vesting of restricted stock units held by Mr.

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

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.

Includes 2,865 shares of common stock held by Mr.

7,000 shares of common stock issuable upon exercise of stock options held by Mr.

Gayle exercisable within 60 days of the date of this 10-K;

and 16,233 shares of common stock issuable upon the vesting of restricted stock units held by Mr.

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

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.

Includes 6,711 shares of common stock held by Mr.

6,500 shares of common stock issuable upon exercise of stock options held by Mr.

Cohen exercisable within 60 days of the date of this 10-K;

and 18,200 shares of common stock issuable upon the vesting of restricted stock units held by Mr.

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

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

Includes 259,455 shares of common stock.

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

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.

Clifford Gross, the Chief Executive Officer of Tekcapital plc, is the father of Mr.

Harrison Gross, our Chief Executive Officer.

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

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

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

Includes 450,440 shares of common stock, held by an individual with sole voting power and dispositive power over 450,440 shares of common stock.

The address of this holder is 7559 Preservation Rd.

Tallahassee, Florida.

Includes 593,804 shares of common stock issuable upon exercise of certain warrants held by Intracoastal Capital LLC.

Excludes 1,734,413 shares of common stock issuable upon the exercise of certain other warrants because of blocker provisions under which the holder thereof does not have the right to exercise such warrants to the extent that such exercise would result in beneficial ownership by the holder thereof of more than certain thresholds.

The address of Intracoastal Capital LLC is 245 Palm Trail, Delray Beach, Florida.

Certain Relationships and Related Transactions, and Director Independence .

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License Agreement

On April 1, 2020, we entered into an exclusive, worldwide license agreement with Lucyd Ltd., 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.

We were founded by Lucyd Ltd., the inventor and licensor of the technology that our products are based upon, which is a portfolio company of Tekcapital, one of our larger stockholders.

On April 1, 2020, we entered into an exclusive, worldwide license agreement with Lucyd Ltd.

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

The License Agreement was a royalty-free, fully paid up, perpetual license, for the exclusive use of all Lucyd patents and patent applications, trademarks, logos, software, and other intellectual property, as well as website domain names, social media accounts, advertising material, supply and endorsement agreements, and other assets.

Under the terms of the License Agreement, we had the exclusive right to effectuate sublicenses, either exclusively or non-exclusively, to any or all of our licensed intellectual property, at our sole discretion.

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

For all new intellectual property, Innovative Eyewear, Inc.

will own and control it and be responsible for all prosecution and maintenance costs.

On August 12, 2025, Lucyd Ltd.

executed an intellectual property assignment agreement to confirm that all registered intellectual property rights under the License Agreement, to the extent they had not previously been assigned to the Innovative Eyewear, Inc.

in any previously executed assignments, were irrevocably assigned to the Company, and that all unregistered intellectual property rights and other assets that were licensed exclusively to the Company under the License Agreement were also irrevocably assigned to the Company.

As such, we have acquired full ownership of all registered and unregistered intellectual property and assets that were previously exclusively licensed to us from Lucyd Ltd., and the License Agreement was no longer necessary;

thus Lucyd Ltd.

and Innovative Eyewear, Inc.

mutually agreed to terminate the License Agreement.

Management Service Agreement

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we also recognized $116,684 and $92,312 of rent expense for the years ended December 31, 2025 and 2024, 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.

New Financing Agreement

Financing Agreement

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

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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.

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

The Company may prepay the convertible notes at any time with the written consent of Lucyd Ltd.

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

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

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

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

On March 11, 2026, the Company and Lucyd Ltd.

entered into a further amendment of the March 1, 2024 convertible note financing agreement, such that upon issuance, the convertible note will have a maturity date of September 1, 2027.

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

We have not borrowed any amounts under this agreement.

Loan to Tekcapital Europe

Loans to Tekcapital Europe

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

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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.

The loan bore simple interest at a rate of 10% per annum, and Tekcapital Plc executed the agreement as guarantor for Tekcapital Europe Ltd.

on the full amount of the loan.

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

On April 23, 2025, we entered into an intercompany loan agreement (as lender) with Tekcapital Europe, Ltd.

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

Pursuant to this agreement, we loaned $250,000 to Tekcapital Europe, Ltd.

The loan bore simple interest at a rate of 10% per annum, and Tekcapital Plc executed the agreement as guarantor for Tekcapital Europe, Ltd.

on the full amount of the loan.

In June 2025, Tekcapital Europe, Ltd.

repaid such borrowing in full along with $2,503 of interest.

As of December 31, 2025, no amounts remained outstanding or payable to us under this agreement.

On December 19, 2025, we entered into an intercompany loan agreement (as lender) with Tekcapital Europe, Ltd.

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

Pursuant to this agreement, we agreed to make a loan facility available to Tekcapital Europe, Ltd.

for up to a maximum of $300,000.

Any amounts advanced to Tekcapital Europe, Ltd.

bear simple interest at a rate of 12% per annum, and Tekcapital Plc executed the agreement as guarantor for Tekcapital Europe, Ltd.

on the full amount of the loan.

On December 23, 2025, Tekcapital Europe, Ltd.

borrowed $300,000 under this agreement;

the $300,000 outstanding principal balance of this loan, plus accrued interest receivable of $789, is included within Due from Tekcapital and Affiliates on our balance sheet as of December 31, 2025.

On February 24, 2026, Tekcapital Europe, Ltd.

repaid such borrowing in full along with $6,115 of interest.

Employment Agreements

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Principal Accounting Fees and Services .

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.

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

Audit-Related Fees

There were approximately $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.

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

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

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

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

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

Form of Representative’s Warrant Agreement (Incorporated by reference to Exhibit 4.1 to the Amended Registration Statement filed on Form S-1/A 2 (File No.

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

Form of Purchase Warrant (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No.

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

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

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

Form of Purchase Warrant (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No.

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

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

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

Form of Series A Warrant (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No.

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

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

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

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

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

Form of Series C Warrant (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No.

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

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

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

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

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

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

and VStock Transfer LLC, as rights agent.

(Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No.

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

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

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

Form of Series E Warrant (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No.

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

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

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

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

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

License Agreement between Innovative Eyewear, Inc.

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

Representation Agreement by and between Innovative Eyewear, Inc.

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

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

333-261616) filed with the Securities and

Exchange Commission on January 10, 2022)

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

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

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

Note Agreement with Lucyd Ltd.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

of Code of Ethics of innovative Eyewear, Inc.

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

S-1 (File No.

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)

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

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

Insider trading policy (Incorporated by reference to Exhibit 19.1 to the Annual Report filed on Form 10-K (File No.

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

Consent of Cherry Bekaert LLP, Independent Registered Public Accounting Firm

Consent of Cherry Bekaert LLP, Independent Registered Public Accounting Firm (PCAOB ID 00677)

Power of Attorney

Certification

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

Certification

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

Certification

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

Certification

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

Innovative Eyewear, Inc., Executive Compensation Clawback Policy

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

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

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

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

Innovative Eyewear, Inc., Executive Compensation Clawback Policy (Incorporated by reference to Exhibit 97 to the Annual Report filed on Form 10-K (File No.

001-41392) filed with the Securities and Exchange Commission on March 24, 2025)

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Calculation Linkbase

XBRL Taxonomy Definition Linkbase

XBRL Taxonomy Calculation Linkbase Document

XBRL Taxonomy Definition Linkbase Document

XBRL Taxonomy Label Linkbase Document

XRL Taxonomy Presentation Linkbase

XRL Taxonomy Presentation Linkbase Document

Previously filed

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/s/ Oswald Gayle

Co-Chief Financial Officer

Chief Financial Officer

March 25, 2026

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Opinion on the Financial Statements

We have audited the accompanying balance sheets

of Innovative Eyewear, Inc.

(the “Company”) as of December 31, 2024 and 2023, and the related statements of operations, stockholders’

equity, and cash flows for each of the years then ended and the related notes (collectively referred to as the “financial statements”).

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

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

principles generally accepted in the United States of America.

Emphasis of Matter

The accompanying financial statements have been

prepared assuming the Company will continue as a going concern.

As more fully described in Note 3 to the financial statements, the Company

has incurred losses and negative cash flows from operations.

Management’s plans regarding liquidity matters are also described in

Our opinion is not modified with respect to this matter.

We have audited the accompanying balance sheets of

Innovative Eyewear, Inc.

(the “Company”) as of December 31, 2025 and 2024, and the related statements of operations,

stockholders’ equity, and cash flows for each of the years then ended and the related notes.

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results

of its operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the

United States of America.

Basis for Opinion

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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.

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.

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We have served as the Company’s auditor since

Tampa, Florida

Chicago, Illinois

March 25, 2026

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Cash and cash equivalents

Investments in debt securities (U.S.

Treasury bills)

Accounts receivable, net

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Inventory prepayments

Inventory, net

Due from Tekcapital and Affiliates

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Non-Current Assets

Patent costs, net

Capitalized software costs

Intangible assets, net

Property and equipment, net

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Non-Current Liabilities

Long-term payment plan with vendor

Deferred revenue

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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)

Common stock (par value $ 0.00001 , 50,000,000 shares authorized:

5,479,861 and 2,452,632 shares issued and outstanding as of December 31, 2025 and 2024, respectively)

Additional paid-in capital

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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

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

See Note 2 and Note 8.

See accompanying Notes to the Financial Statements.

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Cost of Goods Sold

Gross Profit (Deficit)

Operating Expenses:

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Total Operating Expenses

Interest Expense

Total Other Income (Expense), net

Other Income (Expense), net

Weighted average number of shares outstanding

Loss per share, basic and diluted

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.

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Balances as of January 1, 2025

Exercises of stock options

Exercises of warrants by stockholders

Second public offering

Exercises of warrants related to private placement transaction

Cancellation of shares by stockholder

Issuance of shares to brand ambassador

Issuance of shares related to vesting of restricted share units

At-the-Market Offerings

Exercises of warrants related to inducement agreements

Other exercises of warrants in ordinary course

Stock-based compensation

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Exercises of warrants related to inducement agreements

Exercises of warrants

Other exercises of warrants in ordinary course

Stock-based compensation

Balances as of December 31, 2024

See Note 2 and Note 8.

See accompanying Notes to the Financial Statements.

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

Non-cash interest expense

Non-cash interest income

Realized gains on debt securities (U.S.

Treasury bills)

Stock-based compensation and nonemployee stock-based payment expense

Expenses paid by Tekcapital and Affiliates

Provision for (recovery of) doubtful accounts

Realized gain on debt securities (U.S.

Treasury bills)

Loss on sale of assets

Provision for doubtful accounts

Write-off of previously-capitalized software costs

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Prepaid expenses

Contract assets and liabilities

Inventory prepayments

Contract assets and deferred revenue

Net cash flows from operating activities

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Treasury bills)

Loan made to Tekcapital Europe, Ltd.

Loans made to Tekcapital Europe, Ltd.

Repayment of amounts loaned to Tekcapital Europe, Ltd.

Purchases of property and equipment

Proceeds from sale of property and equipment

Net cash flows from investing activities

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Proceeds from exercises of warrants

Proceeds from exercise of stock options

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

Repayment of related party convertible debt

Incurrence of obligation under long-term payment plan with vendor

Payments made under long-term payment plan with vendor

Repayment of amounts due to Tekcapital and Affiliates

Net cash flows from financing activities

Net Change In Cash

Cash at Beginning of Year

Cash at End of Year

Net Change in Cash and cash equivalents

Cash and cash equivalents at Beginning of Period

Cash and cash equivalents at End of Period

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

Expenses paid for by Tekcapital and Affiliates, reported as change in Due to/from Tekcapital and Affiliates

Issuance of shares for prepayment to third party service provider

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Innovative Eyewear, Inc.

(the “Company,”

“us,” “we,” or “our”) is a corporation organized under the laws of the State of Florida that develops

and sells cutting-edge eyeglasses and sunglasses, which are designed to allow our customers to remain connected to their digital lives,

while also offering prescription eyewear and sun protection.

The Company was founded by Lucyd Ltd., a portfolio company of Tekcapital

Plc through Tekcapital Europe, Ltd.

(collectively, together with Lucyd Ltd., “Tekcapital and Affiliates”), which owned approximately

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.

(the “Company,” “us,” “we,” or “our”) is a corporation organized under the laws of the State of Florida that develops and sells cutting-edge smart eyewear – including prescription eyeglasses, ready-to-wear sunglasses, safety glasses, and sport glasses – which are designed to allow our customers to remain connected to their digital lives.

We sell smart eyewear under our own Lucyd brand, which includes the Lucyd Lyte ® and Lucyd Armor product lines, as well as cobranded smart eyewear under the Nautica ® Powered by Luycd , Eddie Bauer ® Powered by Luycd , and Reebok ® Powered by Luycd product lines.

The Company was originally founded by Lucyd Ltd., a portfolio company of Tekcapital Plc through Tekcapital Europe, Ltd.

(collectively, together with Lucyd Ltd., “Tekcapital and Affiliates”), which owned approximately 5% of our issued and outstanding shares of common stock as of December 31, 2025.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The results of operations for the years ended December 31, 2025 and 2024 are not necessarily indicative of the results to be expected for future periods.

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

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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.

Actual results could differ from those estimates, particularly given the significant uncertainties associated with the current state of international trade and the overall economic environment.

Segment Reporting

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

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

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

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

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

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

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

Cash Equivalents

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

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 .

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

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

These investments were classified as “held-to-maturity” and were recorded at amortized cost of $ 4,895,184 in the accompanying balance sheet as of December 31, 2024;

the aggregate fair value of these investments as of December 31, 2024, based on quoted prices (unadjusted) in active markets for identical assets, was $ 4,957,750 .Upon maturity of these investments in March 2025, the Company recognized a realized gain $ 104,816 .

Additionally, during the year ended December 31, 2025, the Company purchased an investment in U.S.

Treasury bills for $ 1,274,320 in April 2025, which subsequently matured in October 2025 and for which the Company recognized a realized gain of $ 25,680 .

Accounts Receivable

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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.

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

The allowance for credit losses is determined based upon a variety of judgments and factors.

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

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

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

The Company recognized bad debt expense of $ 7,993 and $ 19,859 for the years ended December 31, 2025 and 2024, respectively.

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

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

Schedule of allowance for doubtful account

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Bad debt expense

Write-offs (1)

Balance at December 31

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

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

Our inventory 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.

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

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

Also included within inventory at December 31, 2025 was $72,864 of electronic components purchased from a third-party supplier for use by our manufacturer in their future production of our eyewear;

there were no such comparable amounts in inventory at December 31, 2024.

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

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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.

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.

Prior to 2024, the Company had incurred certain costs related to development of the Vyrb software application, and had capitalized approximately $ 88,000 of such costs related to coding, development, and testing (subsequent to establishing technical feasibility of the app), as it was the Company’s intention to market and sell this software externally.

During 2024, management decided to shift its primary software development focus to the Lucyd app.

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

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

Property and Equipment

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Depreciation expense for the years ended December 31, 2025 and 2024 was $ 66,788 and $ 109,489 , respectively.

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

Repair and maintenance costs are expensed as incurred.

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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.

However, some significant concentrations exist.

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

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

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

the accounts receivable balance for this customer was zero as of December 31, 2025.

Revenue Recognition

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

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

E-commerce channels

Wholesale channels

App store subscriptions

Total revenues, net

To determine revenue recognition, we perform the following steps:

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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;

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

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

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.

With respect to such instances, during the years ended December 31, 2025 and 2024, we recognized $ 30,000 of revenue for each period, that was included in the contract liability balance of $ 47,950 and $ 77,950 as of January 1, 2025 and 2024, respectively.

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

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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.

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

For sales processed through our website, U.S.

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

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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.

Any costs associated with fees charged by the online platforms (i.e., Amazon.com, or Shopify for sales through our Lucyd.co website) are not recharged to customers and are recorded as a component of cost of goods sold as incurred.

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

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

If 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.

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

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

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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.

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

The balance of unearned revenue related to app subscriptions that has been deferred on our balance sheet as a contract liability was $ 4,506 and $ 2,401 as of December 31, 2025 and 2024, respectively.

During the year ended December 31, 2025, we recognized $2,401 of revenue that was included in the contract liability balance as of January 1, 2025.

We allow our customers to return our physical products, subject to our refund policy, which allows any customer to return our physical products for any reason and receive a full refund for frames (prescription lenses excluded) within the first:

7 days for sales made through our website (Lucyd.co), 30 days for sales made through Amazon, and 30 days for sales to most wholesale retailers and distributors (although certain sales to independent distributors are ineligible for returns).

We charge a standard $15 restocking fee for standard frame returns, which is deducted from applicable refunds to cover shipping and restocking costs, and our return policy prohibits discretionary returns of glasses with prescription lenses.

For all of our product sales, at the time of sale, we establish a reserve for returns, based on historical experience and expected future returns, as well as review all individual returns received in the month following the balance sheet date;

such reserve is recorded as a reduction of sales.

The Company recorded an allowance for sales returns of $ 14,669 and $ 15,746 as of December 31, 2025 and 2024, respectively.

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

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

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

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

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

Segment Reporting

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

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

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

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

The 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):

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

Improvements to Income Tax Disclosures .

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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.

ASU 2023-09 was effective for the Company for the fiscal year ending December 31, 2025.

We adopted the new standard, which primarily resulted in expanded disclosures in the rate reconciliation table and regarding certain reconciling items.

Refer to Note 4 for additional information.

As the requirements of this ASU relate to disclosure only, the adoption of this ASU did not have a significant impact on our financial statements.

Recently Issued Accounting Pronouncements

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

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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.

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

See Note 11 for additional information.

NOTE 3 – GOING CONCERN

NOTE 3 – LIQUIDITY

The Company has a limited operating history.

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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.

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

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

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

During the 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.

During the years ended December 31, 2025 and 2024, the Company raised approximately $ 6.8 million and $ 10.5 million, respectively, of net cash proceeds through the issuance of equity via a combination of at-the-market offerings, registered direct offerings, and warrant exercises (see Note 8 for details).

The Company has also entered into agreements with related parties, under which the Company may make net borrowings of up to $ 0.95 million (see Note 6 for details);

as of December 31, 2025, the Company has not borrowed any amounts under such agreements.

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

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

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

On July 4, 2025, the United States enacted budget

reconciliation bill H.R.

1, referred to as the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA includes a broad range of tax

reform provisions, including extending and modifying various provisions of the 2017 Tax Cuts and Jobs Act and expanding certain incentives

in the 2022 Inflation Reduction Act while accelerating the phase-out of other incentives.

The OBBBA has multiple effective dates, with

certain provisions effective in 2025 and other provisions effective in 2026 and subsequent years.

OBBBA provisions include the restoration

of the current deductibility for domestic research expenditures beginning in 2025, with transition options for previously capitalized

OBBBA’s changes to the deductibility of domestic research and experimental expenditures decreased our deferred tax asset

position as a change in tax law is accounted for in the period of enactment.

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

federal statutory tax rate for the following reasons:

Schedule of effective tax rate on income/(loss) before income taxes

federal statutory tax rate

State and local income taxes, net of federal (national) income tax expense (a)

Nontaxable or nondeductible items

Restricted Stock Units (RSUs)

Changes in valuation allowance

Effective tax rate

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

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

federal statutory tax rate for the following reasons:

Schedule of reconciliation of federal statutory tax rate

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State income tax benefits, net of federal benefit

valuation allowance and other items

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

Schedule of deferred tax assets

Change in valuation allowance and other items

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

Cash Paid for Income Taxes

For the year ended December 31, 2025, the Company did not make any cash payments for income taxes as it generated net operating losses during the period.

The Company did, however, incur and pay non–income-based taxes.

Deferred Tax Assets and Liabilities

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

Schedule of deferred tax assets and liabilities

Deferred tax assets:

Stock-based compensation

Net operating losses federal

Net operating losses state

Deferred tax assets Gross

Less Valuation Allowance

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.

Stock-based compensation

Accrued expenses

Research and development expenses

Total deferred tax assets

Deferred tax liabilities:

Depreciation and amortization

Total deferred tax liabilities

Valuation Allowance

Total net deferred tax assets

At December 31, 2025, the Company had

federal net operating loss carryforwards of $ 26,240,853

and state net operating loss carryforwards of $ 14,071,375 ,

both of which may be carried forward indefinitely.

A company’s ability to utilize a portion of its net operating loss carryforwards to offset future taxable income may be subject

to certain limitations under Section 382 of the Internal Revenue Code due to changes in the equity ownership of the Company.

has not completed a formal Section 382 analysis.

In addition, future changes in ownership as defined in Section 382 of the Internal Revenue

Code could put limitations on the availability of the net operating loss carryforwards.

Unrecognized Tax Benefits

The Company follows a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return.

The Company recognizes a benefit from its tax positions only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

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

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

The Company files Federal and Florida tax returns.

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

As of December 31, 2025 and 2024, the Company did not record any uncertain tax position related to the utilization of certain federal net operating losses.

As of December 31, 2025 and 2024, The Company has no liability for unrecognized tax benefits.

Additionally, the Company has no pending or on-going audits in any tax jurisdiction.

The Company’s tax returns for the years ended 2022 – 2025 remain subject to examination by the Internal Revenue Service for U.S.

federal income tax purposes and by the applicable state taxing authorities in Florida.

NOTE 5 – INTANGIBLE ASSETS

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Amortization expense totaled $ 68,554 and $ 39,897 for the years ended December 31, 2025 and 2024, respectively.

Future amortization is expected to approximate $ 50,000 per year.

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

Schedule of estimated future amortization expense

Thereafter (through 2035)

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.

The Company is party to a management services agreement with Tekcapital Europe Ltd.

(an affiliate of Lucyd Ltd., whose Chief Executive Officer is the father of our Chief Executive Officer), which was originally entered into in 2020 and subsequently amended in 2022.

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

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

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

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

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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;

Since 2022, under an agreement between the Company and Tekcapital Europe, Ltd, Tekcapital bills the Company for an allocation of rent paid by Tekcapital on the Company’s behalf.

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

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

Old Tekcapital and Affiliates Convertible Notes

From December 1, 2020 through December 1, 2023, the Company had the availability of, but not the contractual right to, intercompany financing from Tekcapital and Affiliates in the form of either cash advances or borrowings under a convertible note.

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

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

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

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

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

New Lucyd Ltd.

Financing Agreement

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

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

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

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

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

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

The Company has not borrowed any amounts under this agreement.

Loan to Tekcapital Europe, Ltd.

The Company recognized $ 116,684 and $ 92,312 of expense related to this month-to-month arrangement for the years ended December 31, 2025 and 2024, respectively.

Loans to Tekcapital Europe, Ltd.

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

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Tekcapital Europe, Ltd.

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

On April 23, 2025, the Company entered into an intercompany loan agreement (as lender) with Tekcapital Europe, Ltd.

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

Pursuant to this agreement, the Company agreed to make a loan facility available to Tekcapital Europe, Ltd.

for up to a maximum of $ 500,000 .

Tekcapital Europe, Ltd.

could receive advances under this facility upon request through October 23, 2025;

any amounts advanced to Tekcapital Europe, Ltd.

bore simple interest at a rate of 10 % per annum, and were required to be repaid on or before July 23, 2026.

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

on the full amount of the loan.

In May 2025, Tekcapital Europe, Ltd.

borrowed $ 250,000 under this agreement;

subsequently in June 2025, Tekcapital Europe, Ltd.

repaid such borrowing in full along with $ 2,503 of interest.

As of December 31, 2025, no amounts remained outstanding or payable to us under this agreement.

On December 19, 2025, the Company entered into an intercompany loan agreement (as lender) with Tekcapital Europe, Ltd.

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

Pursuant to this agreement, the Company agreed to make a loan facility available to Tekcapital Europe, Ltd.

for up to a maximum of $ 300,000 .

Tekcapital Europe, Ltd.

may receive advances under this facility upon request through January 19, 2026;

any amounts advanced to Tekcapital Europe, Ltd.

bear simple interest at a rate of 12 % per annum, and are required to be repaid on or before March 19, 2026.

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

on the full amount of the loan.

On December 23, 2025, Tekcapital Europe, Ltd.

borrowed $ 300,000 under this agreement;

the $300,000 outstanding principal balance of this loan, plus accrued interest receivable of $ 789 , is included within Due from Tekcapital and Affiliates in the accompanying balance sheet as of December 31, 2025.

Financing Agreement

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

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

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

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

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

The Company may prepay the convertible notes at any time with the written consent of Lucyd Ltd.

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

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

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

The Company has not borrowed any amounts under this agreement.

License Agreements

The Company had previously entered into certain exclusive License Agreements dated April 1, 2020 and September 15, 2021, having Addenda dated October 5, 2021 and December 7, 2021 (herein the “LL Licenses”) with Lucyd Ltd.;

such licenses were royalty-free, fully paid up, perpetual licenses.

On August 12, 2025, Lucyd Ltd.

executed an intellectual property assignment agreement to confirm that all registered intellectual property rights under the LL Licenses, to the extent they had not previously been assigned to the Company in previously executed assignments, were irrevocably assigned to the Company, and that all unregistered intellectual property rights and other assets that were licensed exclusively to the Company under the LL Licenses were also irrevocably assigned to the Company.

As such, the Company thereby acquired full ownership of all registered and unregistered intellectual property and assets that were previously exclusively licensed to the Company from Lucyd Ltd., and the LL Licenses were determined to be no longer necessary, thus Lucyd Ltd.

and the Company mutually agreed to terminate the LL Licenses.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

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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.

On November 11, 2025, the Company entered into a settlement and release agreement with a shareholder related to certain legal matters.

Pursuant to the terms of such agreement, the Company received $570,000 from such shareholder, which is reflected within other income (expense), net in the statement of operations.

Fees paid to legal counsel associated with this matter are reflected within general and administrative expenses in the statement of operations.

In January 2024, we settled and resolved all outstanding matters relating to complaints filed by a third party with the International Trade Commission, alleging that certain of our products (as well as certain products of our competitors) infringed on patents held by the third party.

As part of this settlement, we entered into a multi-year non-exclusive license agreement with that third party covering multiple smart eyewear patents (as described more fully below under ‘ License Agreements ’).

License Agreements

During 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.

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

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

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The Company recognized $ 521,849 and $ 225,222 of expense related to all license agreements for the years ended December 31, 2025 and 2024, respectively.

Long-Term Payment Plan for Information Technology System and Services

The Company has entered into a long-term payment plan agreement with Oracle for the payment of costs related to the implementation of the Company’s new ERP system (which went live in April 2025) and related cloud services.

Under this agreement, the Company is obligated to make payments of $4,035 per month through July 2027.

As of December 31, 2025, the Company’s remaining obligation under this arrangement was $ 76,912 , of which $ 48,424 is included within accounts payable and accrued expenses in the accompanying balance sheet, and $ 28,488 is reflected within non-current liabilities in the accompanying balance sheet.

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

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See related party management services agreement discussed in Note 6.

International Trade and Tariffs

Beginning in April of 2025, the U.S.

government announced new or increased tariffs on goods imported from various countries to the U.S., and countries subject to such tariffs have imposed or may in the future impose retaliatory tariffs and other trade measures.

These recent developments have negatively impacted our results of operations.

Due to their evolving nature, we cannot predict with certainty the ultimate impacts they may have on our business and results in the future, but those impacts could be material.

We are actively monitoring the ongoing tariff and international trade developments, and continue to evaluate the potential impacts to our business, cost structure, supply chain, and the broader economic environment.

We have taken actions and developed contingency plans to mitigate the negative impacts of tariffs on our results, but cannot provide any assurance that such actions and strategies will be successful.

NOTE 8 – STOCKHOLDERS’ EQUITY

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There were no shares of preferred stock issued or outstanding as of December 31, 2025 and 2024.

Change in Capital Structure – Reverse Stock

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.

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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.

The Company has entered into an at-the-market offering agreement with H.C.

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

From 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.

August 15, 2025 through December 12, 2025, the Company sold 606,377 shares

of common stock and received approximately $ 1,221,000 of

gross proceeds before deducting sales agent commissions and offering expenses.

The net proceeds received by the Company from these

transactions amounted to approximately $ 1,180,000 ,

and will be used for working capital and general corporate purposes.

The Company also paid $ 2,500 of legal fees during the year ended December 31, 2025, which are reflected in the financial statements as

a reduction to additional paid in capital as they represent a related cost of the at-the-market equity offering transactions.

April 15, 2024 through August 30, 2024, the Company sold 557,987

shares of common stock and received approximately $ 3,913,000 of

gross proceeds before deducting sales agent commissions and offering expenses.

The net proceeds received by the Company from these

transactions amounted to approximately $ 3,773,000 ,

and will be used for working capital and general corporate purposes.

The Company also paid $ 50,000 of

legal fees during the year ended December 31, 2024, which are reflected in the financial statements as a reduction to

additional paid in capital as they represent a related cost of the at-the-market equity offering transactions.

First Registered Direct Offering

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

On August 17, 2022, as part of the Company’s initial public offering, the Company issued warrants to purchase 112,700 shares of common stock, which began trading and are currently trading on the Nasdaq Capital Market, under the symbol “LUCYW” (which we refer to as the “Listed Warrants”).

In February 2023, holders of the Company’s Listed Warrants exercised such warrants to purchase an aggregate of 22,926 shares of the Company’s common stock, at an adjusted exercise price of $ 75.00 per share, resulting in net cash proceeds to the Company of approximately $ 1,532,000 .

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

On April 17, 2023, the Company entered into a warrant exercise inducement letter agreement with certain accredited investors that were existing holders of the Company’s Listed Warrants to purchase an aggregate of 8,417 shares of the Company’s common stock for cash, wherein the investors agreed to exercise all of their existing Listed Warrants at an exercise price of $ 75.00 per share.

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

In consideration for the immediate exercise of the existing Listed Warrants for cash, the exercising holders received new warrants to purchase up to an aggregate of 15,000 shares of common stock (the “Private Warrants”) in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

The Private Warrants are immediately exercisable upon issuance at an exercise price of $ 75.00 per common share and will expire on April 19, 2028.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Schedule of stockholders' equity note, warrants or rights

Warrants Outstanding to Purchase X Shares

Exercise Price

Issuance Date

Expiration Date

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

of outstanding warrants

Outstanding to

Purchase X Shares

Listed (IPO) Warrants

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Series F Warrants

Underwriter / Placement Agent Warrants

Series G Warrants

Series I Warrants

Underwriter / Placement Agent Warrants

3.25 -$ 164.56

8/17/2022 - 6/24/2025

4/30/2026 - 11/19/2030

April 2025 Warrant Inducement Transaction

On April 11, 2025, the Company entered into inducement letter agreements with certain holders of certain of its existing warrants to purchase an aggregate of 595,188 shares of the Company’s common stock, consisting of 60,750 Series A Warrants, 60,750 Series B Warrants, 157,896 Series E Warrants, and 315,792 Series F Warrants.

Pursuant to the inducement letter agreements, the holders agreed to exercise the existing warrants for cash at a reduced exercise price of $ 2.60 per share in consideration of the Company’s agreement to issue new unregistered Series G Warrants to purchase up to an aggregate of 218,646 shares of common stock and new unregistered Series H Warrants to purchase up to an aggregate of 1,724,814 shares of common stock, each at a purchase price of $ 0.125 per warrant.

The relevant details of the Series G Warrants are outlined in the table above.

The Series H Warrants had an exercise price of $ 2.60 per share, were exercisable immediately upon issuance, and had an expiration date of November 19, 2026.

This transaction closed on April 14, 2025, and the gross proceeds to the Company were approximately $ 1.8 million prior to deducting placement agent fees and offering expenses.

HCW acted as the exclusive placement agent for the offering;

as compensation for such placement agent services, the Company paid HCW an aggregate cash fee equal to 7.5% of the gross proceeds received by the Company from this transaction, plus a management fee equal to 1.0% of the gross proceeds received by the Company.

The Company also issued to HCW or its designees warrants to purchase up to 44,639 shares of common stock;

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

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

June 2025 Warrant Inducement Transaction

On June 20, 2025, the Company entered into inducement letter agreements with certain holders of certain of its Series H Warrants to purchase an aggregate of 746,782 shares of the Company’s common stock, which were originally issued to the holders on April 14, 2025.

Pursuant to the inducement letter agreements, the holders agreed to exercise the existing warrants for cash at an exercise price of $ 2.60 per share in consideration of the Company’s agreement to issue new unregistered Series I Warrants to purchase up to an aggregate 2,240,346 shares of common stock, each at a purchase price of $ 0.125 per warrant.

The relevant details of the Series I Warrants are outlined in the table above.

This transaction closed on June 24, 2025, and the gross proceeds to the Company were approximately $ 2.2 million prior to deducting placement agent fees and offering expenses.

HCW acted as the exclusive placement agent for the offering;

The Company also issued to HCW or its designees warrants to purchase up to 56,009 shares of common stock;

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

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

Company also paid approximately $ 157,000 of

legal and accounting fees during the year ended December 31, 2025 related to these warrant inducement transactions;

these payments have

been reflected in the financial statements as a reduction to additional paid in capital, as they represent a related cost of the

inducement transactions.

Other 2025 Warrant Activity

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

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

September 2024 Warrant Inducement Transactions

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

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

The warrant holders exercised for cash the existing warrants at a reduced exercise price of $ 5.00 per share, resulting in gross proceeds to the Company of approximately $ 0.6 million;

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

This transaction closed on September 4, 2024, and the net proceeds received by the Company amounted to approximately $ 0.5 million.

The warrant holders exercised for cash the existing warrants at an adjusted exercise price of $ 5.13 per share, resulting in gross proceeds to the Company of approximately $ 0.8 million;

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

This transaction closed on September 19, 2024, and the net proceeds received by the Company amounted to approximately $ 0.7 million.

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

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

This transaction closed on September 24, 2024, and the net proceeds received by the Company amounted to approximately $ 2.3 million.

Other 2024 Warrant Activity

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

These transactions resulted in aggregate gross cash proceeds to the Company of approximately $ 0.4 million.

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.

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

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

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

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.

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

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

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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.

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

Availability for future awards under the 2021 Equity Incentive Plan as of December 31, 2025 was 354,424 shares.

Stock Options

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

Schedule fair value of options granted

Weighted Average

Exercise Price

Weighted Average

Average Exercise

Price per share

Average Remaining

Contractual Life

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Exercisable as at December 31, 2025

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.

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

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

During the year ended December 31, 2024, we granted options to an employee to purchase an aggregate of 500 shares of common stock at $ 8.402 per share.

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

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

Share price at date of grant

$ 8.58 - $ 25.50

Expected term (in years)

Risk free rate

3.74 % - 4.65 %

Expected volatility

106 % - 133 %

Expected dividend yield

Grant date fair value of options

$ 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.

The estimated fair value of this award, and the amount of compensation cost ultimately recognized related to this award, were both immaterial.

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

Total stock option expense recognized for the years ended December 31, 2025 and 2024 was $ 129,988 and $ 554,257 , respectively.

As of December 31, 2025, remaining unrecognized stock option expense was approximately $ 3,000 , all of which will be recognized in January 2026.

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.

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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.

Effective April 1, 2024, pursuant to the terms of a brand ambassador agreement, we issued to an individual 4,500 shares of our common stock as compensation for the first year of the agreement.

The value of the consideration transferred, measured using the fair value of our common stock at the date of issuance, was $ 21,690 , which was recognized as expense on a straight-line basis from April 1, 2024 through March 31, 2025.

We recognized $ 5,422 and $ 16,268 of expense for the years ended December 31, 2025 and 2024, respectively, relative to this stock grant.

Effective April 1, 2025, pursuant to the terms of a brand ambassador agreement, we issued to the same individual 11,539 shares of our common stock as compensation for the second year of the agreement.

The value of this consideration transferred, measured using the fair value of our common stock at the date of issuance, was $ 30,000 , which is being recognized as expense on a straight-line basis from April 1, 2025 through March 31, 2026.

We recognized $ 22,500 of expense for year ended December 31, 2025, relative to this stock grant, and will recognize the remaining expense for these shares of $ 7,500 during the first three months of 2026.

Restricted Stock Units

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

Schedule of number of restricted stock units

Weighted Average

As at January 1, 2024

As at December 31, 2024

As at January 1, 2025

As at December 31, 2025

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

We recognized $ 62,149 and $ 83,477 of expense related to these awards during the years ended December 31, 2025 and 2024, respectively, and will recognize the remaining expense of $ 58,021 on a straight-line basis over the next 11 months.

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

We recognized $ 486,662 and $ 20,278 of expense related to these awards during the years ended December 31, 2025 and 2024, respectively, and will recognize the remaining expense of $ 790,825 on a straight-line basis over the next 19.5 months.

On November 14, 2025, the Company awarded an aggregate of 406,000 restricted stock units to the Company’s officers and certain other employees, of which 1/6 vest on each April 2 and August 19, commencing with April 2, 2026 and concluding on August 19, 2028.

We recognized $ 30,265 of expense related to these awards during the year ended December 31, 2025, and will recognize the remaining expense of $ 635,575 on a straight-line basis over the next 31.5 months.

On November 18, 2025, the Company awarded 5,848 restricted stock units to an employee, of which 1/2 vest on May 18, 2026 and 1/2 vest on November 18, 2026.

We recognized $ 1,184 of expense related to this award during the year ended December 31, 2025, and will recognize the remaining expense of $ 8,290 on a straight-line basis over the next 10.5 months.

NOTE 10 – EARNINGS PER SHARE

1 unchanged sentence

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

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

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

Calculation of net earnings per common share - basic and diluted

3 unchanged sentences

NOTE 11 – SUBSEQUENT EVENTS

Extension of New Lucyd Ltd.

At-the-Market Offerings

On January 7, 2026, the Company sold 820,800 shares of common stock and received approximately $ 1,458,000 of gross proceeds before deducting sales agent commissions and offering expenses.

The net proceeds received by the Company from this sale amounted to approximately $ 1,411,000 , and will be used for working capital and general corporate purposes.

On February 20, 2026, the U.S.

Supreme Court

issued a ruling related to federal tariffs.

The Company is currently evaluating the ruling and its potential implications.

At this time,

management cannot reasonably estimate the impact, if any, on the Company’s operations or consolidated financial statements.

Repayment from Tekcapital Europe, Ltd.

On February 24, 2026, Tekcapital Europe, Ltd.

repaid in full all of the outstanding balance of the loan that the Company had made to Tekcapital on December 19, 2025 (see Note 6).

The total amount paid to the Company was $ 306,115 , of which $ 300,000 represented the principal amount and $ 6,115 represented accrued interest.

Extension of Lucyd Ltd.

Financing Agreement

On March 11, 2026, the Company and Lucyd Ltd.

entered into an amendment of the 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.

entered into an amendment of the financing agreement originally entered into on March 1, 2024 and previously amended on March 1, 2025 (see Note 6 for details), such that upon such that upon issuance, the convertible note will have a maturity date of September 1, 2027.

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

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

What changed 10-K

Item 9A. Controls and Procedures