Innovative Eyewear Inc

Previous wording

We develop and sell cutting-edge smart eyewear – including prescription eyeglasses, ready-to-wear sunglasses, safety glasses, and sport glasses. Our smart eyewear products enable the wearer to listen to music, take and make calls, and use voice assistants and ChatGPT to perform many common smartphone tasks hands-free.

Current wording

We develop and sell cutting-edge smart eyewear – including prescription eyeglasses, ready-to-wear sunglasses, safety glasses, and sport glasses. Our smart eyewear products enable the wearer to listen to music, take and make calls, and use voice assistants and ChatGPT and/or Claude to perform many common smartphone tasks hands-free.

Previous wording

Since the initial launch of Lucyd Lyte in 2021, we have sold thousands of our smartglasses, and have continued to expand our product offerings over the years – including the launch of Lucyd Lyte 2.0 and Lyte XL smartglasses in 2023, the launch of the Lucyd Armor, Nautica® Powered by Lucyd, and Eddie Bauer® Powered by Lucyd smart eyewear collections in 2024, the launch of the Reebok® Powered by Lucyd sport collection in 2025, and the recent launch of the Reebok® Powered by Lucyd optical collection in April 2026. The variety of smartglasses we offer underpins our goal to provide a smart alternative for all of the major types of eyewear used by consumers, offering a seamless upgrade in styles of eyewear they already enjoy. We currently offer an expansive line of 37 different models of glasses and several accessories.

Current wording

Since the initial launch of Lucyd Lyte in 2021, we have sold thousands of our smartglasses, and have continued to expand our product offerings over the years – including the launch of Lucyd Lyte 2.0 and Lyte XL smartglasses in 2023, the launch of the Lucyd Armor, Nautica® Powered by Lucyd, and Eddie Bauer® Powered by Lucyd smart eyewear collections in 2024, the launch of the Reebok® Powered by Lucyd sport collection in 2025, and the recent launch of the Reebok® Powered by Lucyd optical collection in April 2026. The variety of smartglasses we offer underpins our goal to provide a smart alternative for all of the major types of eyewear used by consumers, offering a seamless upgrade in styles of eyewear they already enjoy. We currently offer an expansive line of 34 different models of glasses and several accessories.

Previous wording

We currently offer three key display systems: (1) Hero Displays, which are unpowered branding stands, (2) Counter Kiosks, which offer digital and interactive demo experiences, and (3) the Lucyd Kiosk, which is a freestanding screen for larger stores. Across all display systems offered by the Company, approximately 100 displays have been deployed to vendors as of March 31, 2026.

Current wording

We currently offer three key display systems: (1) Hero Displays, which are unpowered branding stands, (2) Counter Kiosks, which offer digital and interactive demo experiences, and (3) the Lucyd Kiosk, which is a freestanding screen for larger stores. Across all display systems offered by the Company, approximately 160 displays have been deployed to retail partners as of June 30, 2026.

Previous wording

Store Count (B2B) – We believe that the number of retail stores selling our products is an important indicator of wholesale growth. The Company has increased the number of retail store locations in which its products are sold from over 350 at the beginning of 2025 to over 400 by the end of the 2025. We remain optimistic that partnership with a national retailer will increase our store count significantly in 2026.

Current wording

Store Count (B2B) – We believe that the number of retail stores selling our products is an important indicator of wholesale growth. The Company has increased the number of retail store locations in which its products are sold from over 350 at the beginning of 2025 to over 400 by the end of 2025. The recently-announced partnership with FYihealth group, operators of the FYidoctors optical chain in Canada, is expected to add approximately 345 retail locations, with initial shipments having commenced in July 2026. Together with our previously-announced retail test with a major U.S. retailer and other partnerships in progress, we expect the number of retail locations offering our products to approximately double during 2026.

Previous wording

The increase in revenue is primarily attributable to significant volume increases, which were predominantly driven by our award-winning and highly popular Lucyd Armor line of smart safety glasses. We sold approximately 4,100 units of Lucyd Armor smartglasses in the current quarter, which represented approximately two-thirds of our total smartglass units sold during the quarter. According to a recent third-party analysis, Lucyd Armor holds an approximate 44% market share of smart safety glasses on Amazon.com, and to the Company’s knowledge, remains the only smart safety glass on the platform with full safety certification in the U.S., Canada, and the European Union. We believe this product line will continue to grow in future quarters, as several leading industrial and logistics companies are testing Lucyd products for their workforce use. The volume increases from Lucyd Armor were partially offset by volume declines in certain of our other smartglass product lines.

Current wording

The increase in revenue was predominantly attributable to significant volume increases. Our unit volumes increased approximately 73% year-over-year, with this increase primarily driven by our award-winning and highly popular Lucyd Armor line of smart safety glasses. We sold approximately 4,700 units of Lucyd Armor smartglasses in the current quarter, representing a nearly 100% increase from the prior year quarter. According to a recent third-party analysis, Lucyd Armor holds an approximate 44% market share of smart safety glasses on Amazon.com, and to the Company's knowledge, remains the only smart safety glass on the platform with full safety certification in the U.S., Canada, and the European Union. Our cobranded Reebok sport smartglasses and Reebok optical smartglasses were also a significant driver of the current quarter volume increases, as we sold over 1,600 units of Reebok smartglasses in the current quarter, up from approximately 400 units of Reebok smartglasses in the prior year quarter; roughly half of this volume increase was attributable to the April 2026 launch of the new Reebok optical collection. These strong increases in unit volumes for Lucyd Armor and Reebok smartglasses were partially offset by volume declines in our other product lines.

Previous wording

For the three months ended March 31, 2026, approximately 56% of sales were processed on our online store (Lucyd.co), 40% on Amazon.com, and 3% through reseller partners, with approximately 1% of our net revenues generated from Lucyd “Pro” app subscriptions. For the three months ended March 31, 2025, approximately 40% of sales were processed on our online store (Lucyd.co), 52% on Amazon.com, and 7% through reseller partners, with approximately 1% of our net revenues generated from app subscriptions. The decline in the proportional share of reseller sales versus the prior year quarter reflects the combination of (i) the uncertainty of the current economic environment in light of the current tariff and international trade situation, which we believe has led to delays in getting large retailers to commit to placing orders for new products such as ours, and (ii) an intentional shift by the Company away from small optical accounts and the timing of purchase orders from prospective big-box and home-improvement retailers currently under evaluation.

Current wording

For the three months ended June 30, 2026, approximately 52% of sales were processed on our online store (Lucyd.co), 36% on Amazon.com, and 11% through reseller partners, with approximately 1% of our net revenues generated from Lucyd “Pro” app subscriptions. For the three months ended June 30, 2025, approximately 56% of sales were processed on our online store (Lucyd.co), 41% on Amazon.com, and 2% through reseller partners, with approximately 1% of our net revenues generated from app subscriptions.

Previous wording

Overall, e-commerce sales remain to be the most material portion of our sales since inception; however, we continue to believe that the wholesale channel is the most scalable and most promising long-term opportunity for future growth. To date, several factors have constrained wholesale sell-through: (i) the optical retail ecosystem is fragmented and insurance-driven, which supports higher margins on conventional frames and can compress retailer margins on smart eyewear at mainstream price points; (ii) smart eyewear requires interactive merchandising and in-store demos to educate consumers, which lengthens onboarding lead times; and (iii) national retailers typically require category sell-through evidence, certifications, and planogram resets with long decision cycles. However, large national retailers have recently started to recognize smart eyewear as proven category and are starting to move in the direction of selling more smart eyewear. We are currently prioritizing larger retailers whose economics are more aligned with consumer electronics and safety categories, including home-improvement and big-box stores, and believe that – with our recently expanded Lucyd Armor and Reebok® product lines – we have the product and merchandising set needed to scale wholesale placements over time. Therefore, we expect that e-commerce channels (Lucyd.co and Amazon) will remain a larger proportional share of our revenue in the near to medium term, with wholesale contributions increasing over time. In the long term, we anticipate that wholesale sales will comprise a larger proportional share of our revenue, which should bring consistent, large-scale orders with minimal marketing costs.

Current wording

To date, several factors have constrained wholesale sell-through: (i) the optical retail ecosystem is fragmented and insurance-driven, which supports higher margins on conventional frames and can compress retailer margins on smart eyewear at mainstream price points; (ii) smart eyewear requires interactive merchandising and in-store demos to educate consumers, which lengthens onboarding lead times; and (iii) national retailers typically require category sell-through evidence, certifications, and planogram resets with long decision cycles. However, large national retailers have recently started to recognize smart eyewear as proven category and are starting to move in the direction of selling more smart eyewear. We are currently prioritizing larger retailers whose economics are more aligned with consumer electronics and safety categories, including home-improvement and big-box stores, and believe that we have the product and merchandising set needed to scale wholesale placements over time. Therefore, we expect that e-commerce channels (Lucyd.co and Amazon) will remain a larger proportional share of our revenue in the near to medium term, with wholesale contributions increasing over time. In the long term, we anticipate that wholesale sales will comprise a larger proportional share of our revenue, which should bring consistent, large-scale orders with minimal marketing costs.

Previous wording

Cost of goods sold for the three months ended March 31, 2026 included but was not limited to the cost of frames (inclusive of the cost of tariffs, importation costs, and other inventory adjustments) of $432,814; the cost of prescription lenses incurred with our third-party vendor of $67,065; commissions, affiliate referral fees, and e-commerce platform fees of $58,528; shipping and logistics costs of $25,895; and product certification costs of $13,320. Cost of goods sold for the three months ended March 31, 2025 included but was not limited to the cost of frames of $72,869; cost of prescription lenses incurred with our third-party vendor of $68,051; commissions, affiliate referral fees, and e-commerce platform fees of $31,043; shipping and logistics costs of $57,163; and quality assurance costs related to our products sold of $4,002.

Current wording

Cost of goods sold for the three months ended June 30, 2026 included but was not limited to the cost of frames (inclusive of the cost of tariffs, importation costs, and other inventory adjustments) of $541,490; the cost of prescription lenses incurred with our third-party vendor of $53,956; commissions, affiliate referral fees, and e-commerce platform fees of $88,546; shipping and logistics costs of $32,886; and product certification costs of $24,823. Cost of goods sold for the three months ended June 30, 2025 included but was not limited to the cost of frames (inclusive of the cost of tariffs, importation costs, and other inventory adjustments) of $494,236; the cost of prescription lenses incurred with our third-party vendor of $71,097; and commissions, affiliate referral fees, and e-commerce platform fees of $28,209.

Previous wording

Our gross profit for the current quarter was $175,445, compared to $220,533 for the prior year quarter. Our gross profit margin was 23% in the current quarter and 49% in the prior year quarter, representing a decrease of approximately 26 percentage points from the prior year period. This decrease in profitability compared with the prior year quarter was predominantly attributable to the aforementioned positive impact in the prior year quarter of certain credits and inventory adjustments, which did not recur in subsequent quarters. Overall, the gross profit margin for the current quarter was relatively consistent with our gross profit margin for full fiscal year 2025 (21%) and the second half of fiscal year 2025 (22%).

Current wording

Our gross profit for the current quarter was $242,515, compared to a gross deficit of $(12,665) for the prior year quarter. Our gross profit margin was 24% in the current quarter and -2% in the prior year quarter, representing an increase of approximately 26 percentage points from the prior year period.

Previous wording

Our operating expenses increased by 20% to $2,547,210 for the three months ended March 31, 2026, as compared to $2,124,324 for the three months ended March 31, 2025. This increase was primarily due to the following:

Current wording

Our operating expenses decreased by 10% to $1,947,474 for the three months ended June 30, 2026, as compared to $2,158,407 for the three months ended June 30, 2025. This decrease was primarily due to the following:

Previous wording

Our research and development costs were $138,109 for the three months ended March 31, 2026, as compared to $210,576 for the three months ended March 31, 2025, representing a year-over-year decrease of approximately 34%, primarily driven by the timing of product development cycles. We are continuously developing improvements on our core product lines, as well as new modalities of smart eyewear. The costs of these developments are primarily connected to molding and tooling costs with our manufacturing partners, as well as component sourcing and testing. These costs are ongoing and vary quarter to quarter; such costs generally tend to decrease after an initial collection launch, since the majority of research and development costs are borne in the initial production.

Current wording

Our research and development costs were $142,093 for the three months ended June 30, 2026, as compared to $268,224 for the three months ended June 30, 2025, representing a year-over-year decrease of approximately 47%, primarily driven by the timing of product development cycles. We are continuously developing improvements on our core product lines, as well as new modalities of smart eyewear. The costs of these developments are primarily connected to molding and tooling costs with our manufacturing partners, as well as component sourcing and testing. These costs are ongoing and vary quarter to quarter; such costs generally tend to decrease after an initial collection launch, since the majority of research and development costs are borne in the initial production.

Previous wording

Total other income (expense), net was $62,397 in the current quarter, reflecting a decline of approximately 50% from $125,088 in the prior year quarter. These amounts were primarily comprised of dividends from our investments in money market funds and interest income from investments in U.S. Treasury bills. The year-over-year decrease in other income (expense), net was primarily attributable to lower dividend yields from money market funds and lower interest rates on U.S. Treasury bills as compared to the prior year quarter.

Current wording

Total other income (expense), net was $34,141 in the current quarter, reflecting a decline of approximately 47% from $64,978 in the prior year quarter. These amounts were primarily comprised of dividends from our investments in money market funds and interest income from investments in U.S. Treasury bills. The year-over-year decrease in other income (expense), net was primarily attributable to the combination of lower average cash equivalent and investment balances as compared to the prior year quarter, and lower dividend yields from money market funds and lower interest rates on U.S. Treasury bills as compared to the prior year quarter.

Previous wording

Our revenues for the three months ended March 31, 2026 were $773,561, representing an increase of 70% as compared to revenues of $454,501 during the three months ended March 31, 2025. This year-over-year growth in revenues represents an acceleration from the full-year 2025 growth rate of approximately 63%, and reflects continued positive momentum across the Company’s smart eyewear portfolio.

Current wording

Our revenues for the six months ended June 30, 2026 were $1,784,080, representing an increase of 73% as compared to revenues of $1,033,731 during the six months ended June 30, 2025. This year-over-year growth in revenues represents an acceleration from the full-year 2025 growth rate of approximately 63%, and reflects continued positive momentum across the Company's smart eyewear portfolio.

Previous wording

Our total cost of goods sold increased to $598,116 for the three months ended March 31, 2026, as compared to $233,968 for the prior year quarter. This year-over-year increase of 156% was primarily driven by the combination (i) the increase in the volume of products sold, as discussed above, and (ii) the fact that the prior year quarter amount was positively impacted by certain credits and inventory adjustments totalling approximately $132,000, which did not recur in subsequent quarters. These factors, which led to the year-over-year increase in cost of goods sold, were partially offset by the ongoing improvements in product sourcing costs for both frames and prescription lenses – largely related to realization of greater economies of scale as our manufacturing order volumes have grown and our cost per unit has decreased.

Current wording

Our total cost of goods sold increased to $1,366,120 for the six months ended June 30, 2026, as compared to $825,863 for the prior year six months. This year-over-year increase of 65% was primarily driven by the combination (i) the increase in the volume of products sold, as discussed above, (ii) higher costs related to platform / marketplace fees and commissions, and (iii) greater expenditures on product certification. These factors, which led to the year-over-year increase in cost of goods sold, were partially offset by ongoing improvements in product sourcing costs for both frames and prescription lenses – largely related to realization of greater economies of scale as our manufacturing order volumes have grown and our cost per unit has decreased.

Previous wording

Our general and administrative expenses increased by $498,703 or approximately 46% to $1,590,051 for the three months ended March 31, 2026, as compared to $1,091,348 for the prior year quarter. This increase was mainly attributable to the combination of (i) higher amounts paid to outside service providers for various corporate and compliance functions, including public and investor relations, audit and accounting, and legal services (approximately $178,000), (ii) higher employee compensation (including stock-based compensation) and benefit costs (approximately $137,000) and (iii) higher payments due under our multi-year license agreements, which increased our licensing expense by approximately $75,000, to approximately $209,000 for the current quarter.

Current wording

Our general and administrative expenses increased by $406,407 or approximately 17% to $2,808,620 for the six months ended June 30, 2026, as compared to $2,402,213 for the prior year six months. This increase was mainly attributable to the combination of (i) higher compensation and benefit costs (approximately $90,000), (ii) higher spending on public relations and branding initiatives (approximately $88,000), and (iii) higher payments due under ourmulti-year license agreements, which increased our licensing expense by approximately $155,000, to approximately $435,000 for the current period.

Previous wording

Our sales and marketing expenses for the current quarter were approximately $784,050, essentially flat compared with the prior year quarter expense of $787,400. We continue to strategically allocate our marketing spending between a combination of key events and trade shows (to grow and expand our network of potential business partners and retailers), paid ads (to build brand awareness, attract new customers, and increase our market share), and supporting launches of new products. We utilize data-driven decision-making to refine and optimize our marketing campaigns, in order to make our spending in this area more efficient, thus maximizing returns on our marketing investments.

Current wording

Our sales and marketing expenses for the current six months of $1,335,862 were essentially flat compared to $1,331,718 for the prior year period. We continue to strategically allocate our marketing spending as needed and on a dynamic basis between a combination of key events and trade shows (to grow and expand our network of potential business partners and retailers), paid ads (to build brand awareness, attract new customers, and increase our market share), and supporting launches of new products. We utilize data-driven decision-making to refine and optimize our marketing campaigns, in order to make our spending in this area more efficient, thus maximizing returns on our marketing investments.

Previous wording

As of March 31, 2026 and December 31, 2025, our cash and cash equivalents were approximately $4.4 million and $6.5 million, respectively. As of March 31, 2026 and December 31, 2025, our total overall liquidity (cash and cash equivalents plus investments in short-term U.S. Treasury bills), which management believes provides a more accurate depiction of the Company’s liquidity and economic position, was approximately $5.7 million and $6.5 million, respectively.

Current wording

As of June 30, 2026 and December 31, 2025, our cash and cash equivalents were approximately $2.5 million and $6.5 million, respectively. As of June 30, 2026 and December 31, 2025, our total overall liquidity (cash and cash equivalents plus investments in short-term U.S. Treasury bills), which management believes provides a more accurate depiction of the Company’s liquidity and economic position, was approximately $3.7 million and $6.5 million, respectively.

Previous wording

Our working capital (current assets less current liabilities) was approximately $7.7 million and $8.4 million as of March 31, 2026 and December 31, 2025, respectively.

Current wording

Our working capital (current assets less current liabilities) was approximately $6.2 million and $8.4 million as of June 30, 2026 and December 31, 2025, respectively.

Previous wording

Net cash flows used in operating activities for the three months ended March 31, 2026 are primarily reflective of our net loss for the period, resulting from various operating costs to support and grow our business. We continue to make significant investments in marketing spending in order to build brand awareness, attract new customers, and increase our market share.

Current wording

Net cash flows used in operating activities for the six months ended June 30, 2026 are primarily reflective of our net loss for the period, resulting from various operating costs to support and grow our business. We continue to make significant investments in marketing spending in order to build brand awareness, attract new customers, and increase our market share.

Previous wording

Total use of cash in operating activities during the current quarter was of a similar order of magnitude and roughly comparable with the prior year quarter; however, the current quarter’s use of cash in operating activities notably reflects higher payments made under multi-year licensing agreements, whereas the prior year quarter’s use of cash in operating activities is more reflective of payments made to purchase inventory and the pay down of accounts payable and accrued liabilities.

Current wording

Total use of cash in operating activities during the current six months was of a similar order of magnitude and roughly comparable with the prior year six months; however, the current period’s use of cash in operating activities notably reflects higher payments made under multi-year licensing agreements, whereas the prior year period’s use of cash in operating activities is more reflective of payments made to purchase inventory.

Previous wording

Net cash flows from investing activities in both the current quarter and prior year quarter primarily reflect the timing of $1.3 million of purchases and $5.0 million of redemptions, respectively, of short-term U.S. Treasury bills, which do not impact our total overall liquidity (as previously defined above). The current quarter’s cash flows from investing activities also include the $0.3 million repayment received from a short-term loan that was made to a related party the fourth quarter of 2025.

Current wording

Net cash flows from investing activities in both the current six months and prior year six months primarily reflect the timing of purchases and redemptions of short-term U.S. Treasury bills, which do not impact our total overall liquidity (as previously defined above). The current period’s cash flows from investing activities also include the $0.3 million repayment received from a short-term loan that was made to a related party the fourth quarter of 2025.

Previous wording

Net cash flows from financing activities for the current quarter are primarily attributable to at-the-market offerings of common stock (as described in more detail below).

Current wording

Net cash flows from financing activities for the current six months are primarily attributable toat-the-market offerings of common stock(as described in more detail below), while net cash flows from financing activities for the prior period are primarily attributable to multiple warrant inducement transactions and other warrant exercises.

Previous wording

Currently, there is no remaining availability under this at-the-market facility for future sales of common stock. We may seek to open a new at-the-market facility by filing a new registration statement in the future, and raise additional funds under such facility in the future, if management believes it would be beneficial to do so.

Current wording

Currently, there is no remaining availability under the Company’s at-the-market facility for future sales of common stock. We may seek to open a new at-the-market facility by filing a new registration statement in the future, and raise additional funds under such facility in the future, if management believes it would be beneficial to do so.