Innovative Eyewear Inc
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 9, 2026
LUCY$0.84+1.2%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001829126-26-008847
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0001829126-26-012133
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 113 current paragraphs.
53 unchanged; 43 reworded; 14 added; 8 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
With these new partners, we expect our products to be offered in approximately 900 retail locations across the U.S. and Canada by the end of 2026.
Current report
Our revenues for the three months ended September 30, 2026 were $1,009,696, representing an increase of 51% as compared to revenues of $668,128 during the three months ended September 30, 2025. The increase in revenue was predominantly attributable to significant volume increases, of which the majority related to the initial shipments to major new retail partners in the U.S. and Canada. The impact of volume increases on revenue was partially offset by unfavorable price/mix impacts.
Current report
The unfavorable price/mix impacts were related to the combination of (i) the aforementioned demonstration units and (ii) channel mix. The unfavorable channel mix impact was driven by the significant number of products sold to our major new retail partners in the U.S. and Canada in the current quarter, as we earn lower revenue per unit on sales to retail partners due to the inherent nature of wholesale pricing, which is lower than pricing on direct-to-consumer sales generated through e-commerce channels.
Current report
Our total cost of goods sold increased to $688,786 for the three months ended September 30, 2026, as compared to $423,291 for the prior year quarter. This year-over-year increase of 63% outpaced our 51% growth in revenues and was primarily driven by the recognition of significant provisions for excess and slow-moving inventory during the current quarter related to certain cobranded smart eyewear products; this was partially offset by the positive impact of tariff refunds received during the current quarter, which reduced our cost of goods sold. The impact of volume increases was essentially offset by ongoing improvements in product sourcing costs.
Current report
Cost of goods sold for the three months ended September 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 $359,976; tariff refunds of $(124,854); provisions for excess and slow-moving inventory of $301,341; the cost of prescription lenses incurred with our third-party vendor of $13,512; commissions, affiliate referral fees, and e-commerce platform fees of $83,762; shipping and logistics costs of $33,045; and product certification costs of $21,085.
Current report
Cost of goods sold for the three months ended September 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 $324,030; the cost of prescription lenses incurred with our third-party vendor of $45,365; commissions, affiliate referral fees, and e-commerce platform fees of $30,759; and shipping and logistics costs of $23,137.
Current report
Our research and development costs were $423,353 for the three months ended September 30, 2026, as compared to $129,984 for the three months ended September 30, 2025, representing a year-over-year increase of $293,369 or approximately 226%, primarily driven by development fees paid to third parties for new product development initiatives. Due to the overwhelming growth and success of the Lucyd Armor line, we are investing heavily in the advancement of this product line, with end-to-end hardware and software enhancements in development for an updated and upgraded collection in the first half of 2027. We are seeking to build a comprehensive enterprise offering on this platform, which will answer diverse needs for practical applications of smart safety eyewear in many workplaces. Our research and development resources are substantially invested in this new platform, alongside improvements to our optical lines.
Current report
Price/mix impacts had a minimal net effect on the year-over-year change in revenue, as (i) unfavorable impacts related to channel mix, driven by the higher proportion of sales at wholesale pricing due to the significant number of products sold to our major new retail partners in the U.S. and Canada in the current period, were largely offset by (ii) favorable impacts related to product mix, driven by increased sales of the higher-priced Lucyd Armor line following price increases implemented in 2026 and the April 2026 launch of the Reebok optical collection at premium price points.
Current report
Cost of goods sold for the nine months ended September 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 $1,303,859; tariff refunds of $(124,854); provisions for excess and slow-moving inventory of $331,763; the cost of prescription lenses incurred with our third-party vendor of $134,533; commissions, affiliate referral fees, and e-commerce platform fees of $230,836; shipping and logistics costs of $91,826; and product certification costs of $59,228.
Current report
Cost of goods sold for the nine months ended September 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 $890,966; the cost of prescription lenses incurred with our third-party vendor of $184,513; commissions, affiliate referral fees, and e-commerce platform fees of $90,011; and shipping and logistics costs of $65,901.
Current report
The negligible net change year-over-year in gross profit margin was reflective of the combination of (i) the aforementioned provision recorded in the current period for excess and slow-moving inventory related to certain cobranded smart eyewear, which reduced gross profit margin by approximately 12 percentage points, and (ii) higher commissions, affiliate referral fees, and e-commerce platform fees, which reduced gross profit margin by approximately 3 percentage points, partially offset by (iii) 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 – which increased gross profit margin by approximately 12 percentage points, and (iv) the positive impact of tariff refunds received in the current nine months, which increased gross profit margin by approximately 4 percentage points.
Current report
Our research and development costs were $703,555 for the nine months ended September 30, 2026, as compared to $608,784 for the nine months ended September 30, 2025, representing a year-over-year increase of approximately 16%. This increase was primarily driven by new product development cycles in the current nine months. Specifically, during the earlier portion of the current period, we incurred various costs to develop the Reebok optical collection, which launched in April 2026, and in the third quarter of 2026, we incurred significant development fees related to the planned update and upgrade to our Lucyd Armor line.
Current report
Due to the overwhelming growth and success of the Lucyd Armor line, we are investing heavily in the advancement of this product line, with end-to-end hardware and software enhancements in development for an updated and upgraded collection in the first half of 2027. We are seeking to build a comprehensive enterprise offering on this platform, which will answer diverse needs for practical applications of smart safety eyewear in many workplaces. Our research and development resources are substantially invested in this new platform, alongside improvements to our optical lines.
Current report
We had previously entered into a financing agreement with Lucyd Ltd. (a related party), under which we could borrow up to $1,250,000 in exchange for issuing a convertible note to Lucyd Ltd (see Note 8 for details). On October 23, 2026, the Company and Lucyd Ltd. entered into an amendment of this financing agreement, such that upon issuance, the convertible note will have a maturity date of April 30, 2028. The amendment also gives the Company an irrevocable right to draw down up to $1,250,000, funded within ten business days of each request, and limits conversions to 19.99% of the Company’s common stock outstanding on the date of the amendment, and the holding of Lucyd Ltd. and its affiliates to 19.99%, in each case unless stockholder approval is obtained. The principal amount, the 10% interest rate, and the conversion events are unchanged, and no fee is payable. The Company has not borrowed any amounts under this agreement.
Removed paragraphs (8)
Previous report
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 report
The gross deficit and negative profit margin in the prior year quarter was largely reflective of incremental and increased tariffs imposed on goods imported from various countries to the U.S. that began in April 2025; additionally, we also incurred significantly higher shipping costs during the second quarter of 2025 to import large quantities of product using faster shipping methods, in order to move those goods into the U.S. before increased tariff rates went into effect.
Previous report
The year-over-year increase in profitability compared with the prior year quarter was predominantly attributable to the various actions taken by management over the past year to mitigate the tariff impacts. These actions have been largely successful thus far, and have largely restored our gross profit margins to a level that is mostly consistent with our pre-tariff business plan.
Previous report
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 report
Cost of goods sold for the six 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 $974,305; the cost of prescription lenses incurred with our third-party vendor of $121,021; commissions, affiliate referral fees, and e-commerce platform fees of $147,074; shipping and logistics costs of $58,781; and product certification costs of $38,143. Cost of goods sold for the six 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 $566,936; the cost of prescription lenses incurred with our third-party vendor of $139,148; commissions, affiliate referral fees, and e-commerce platform fees of $59,252; and shipping and logistics costs of $42,763.
Previous report
The year-over-year increase in profitability compared with the prior year six months was primarily attributable to the combination of (i) continued improvements in product sourcing costs related to the realization of greater economies of scale, as discussed above, and (ii) various actions taken by management over the past year to mitigate the negative impacts of tariffs.
Previous report
Our research and development costs were $280,202 for the six months ended June 30, 2026, as compared to $478,800 for the six months ended June 30, 2025, representing a year-over-year decrease of approximately 41%, 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 report
Subsequent to June 30, 2026, the Company raised approximately $3.0 million of aggregate gross proceeds through a warrant inducement transaction (see below for details).
Reworded paragraphs (43)
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 34 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 over 40 different models of glasses and several accessories.
Previous wording
The Lucyd app, available for iOS and Android, is a free application that enables the user to converse with the extremely popular ChatGPT AI language model on our glasses, to instantly gain the benefit of one of the world’s most powerful AI assistants in a hands-free ergonomic interface. First launched in 2023, the app deploys a powerful and unique Siri and Bixby integration with the Open AI API for ChatGPT, developed internally by the Company. The Company has filed a patent application related to this software.
Current wording
The Lucyd app, available for iOS and Android, is a free application that enables the user to converse with popular AI large language models (including ChatGPT, Claude, and Gemini) on our glasses, to instantly gain the benefit of some of the world’s most powerful AI assistants in a hands-free ergonomic interface. First launched in 2023, the app deploys powerful and unique integration with AI APIs, developed internally by the Company. The Company has filed a patent application related to this software.
Previous wording
In 2024, we added a “Pro” version of the app, which provides unlimited ChatGPT interactions and priority tech support for a monthly or annual fee. We also launched a new feature called “Walkie” for the Lucyd app in 2024, which enables thousands of users to join each other on walkie-talkie style communication channels. This feature was designed with our Lucyd Armor safety glass product in mind, to enable coworking teams to communicate freely on smart eyewear.
Current wording
In 2024, we added a “Pro” version of the app, which provides unlimited AI interactions and priority tech support for a monthly or annual fee. We also launched a new feature called “Walkie” for the Lucyd app in 2024, which enables thousands of users to join each other on walkie-talkie style communication channels. This feature was designed with our Lucyd Armor safety glass product in mind, to enable coworking teams to communicate freely on smart eyewear.
Previous wording
In 2025, we updated and enhanced the Lucyd app’s Walkie feature, enabling premium subscribers access to secure and private walkie channels, providing businesses and organizations with a powerful tool to communicate confidentially and seamlessly through Lucyd smart eyewear. Also during 2025, we added a new translation feature to the Lucyd app, which allows for voice-based translation between 17 languages in real time.
Current wording
In 2025, we updated and enhanced the Lucyd app’s Walkie feature, enabling premium subscribers access to secure and private walkie channels, providing businesses and organizations with a powerful tool to communicate confidentially and seamlessly through Lucyd smart eyewear. Also during 2025, we added a new translation feature to the Lucyd app, which allows for voice-based translation between multiple languages in real time.
Previous wording
In July 2026, the Lucyd app was updated to provide for Claude AI integration, and allow users to access both Claude and ChatGPT from a single interface and switch between AI models during conversations. New features also include AI image generation, document analysis, conversation history, web-sourced responses, and an optional private chat mode. We plan to release a hands-free Claude voice interface in late Q3 2026, which will allow users to interact without unlocking their phones
Current wording
In July and August 2026, the Lucyd app was updated to provide for Claude and Gemini AI integration, and allow users to access Claude, Gemini, and ChatGPT from a single interface and switch between AI models during conversations. New features also include AI image generation, document analysis, conversation history, web-sourced responses, and an optional private chat mode. We also expanded that app’s hands-free voice interface, allowing users choose which AI model answers to the user’s verbal prompts.
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 160 displays have been deployed to retail partners as of June 30, 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, we have shipped approximately 100 display units to more than 30 retail customers as of September 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 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.
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. During 2026, we added two new large retail partners:
Previous wording
In February 2026, the U.S. Supreme Court issued a ruling invalidating some of the tariffs imposed by the U.S. government. The Company has submitted claims for refunds of certain tariffs previously paid by the Company totalling approximately $125,000, and the Company plans to file additional claims for refunds totalling approximately $136,000 in the future. However, significant uncertainty remains as to the timing and amount that will ultimately be received from such claims. Accordingly, no amounts related to such claims for potential refunds have been recognized in the Company’s condensed financial statements for the three and six months ended June 30, 2026.
Current wording
In February 2026, the U.S. Supreme Court issued a ruling invalidating some of the tariffs imposed by the U.S. government. During the three months ended September 30, 2026, the Company received refunds related to certain tariffs previously paid by the Company totaling approximately $125,000; such amounts were recognized as a reduction to cost of goods sold in the Company’s condensed financial statements.
Previous 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.
Current wording
For the three months ended September 30, 2026, approximately 48% of sales were processed on our online store (Lucyd.co), 29% on Amazon.com, and 22% through reseller partners, with approximately 1% of our net revenues generated from Lucyd “Pro” app subscriptions. For the three months ended September 30, 2025, approximately 56% of sales were processed on our online store (Lucyd.co), 40% on Amazon.com, and 4% through reseller partners.
Previous wording
The current quarter results notably reflect progress made over the past year towards our long-term goals of increasing revenue in the wholesale channel, with such revenues growing to more than five times the prior year quarter in terms of absolute dollar amounts as well as a percentage of total sales. 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.
Current wording
The current quarter results notably reflect significant progress made over the past year towards our long-term goals of increasing revenue in the wholesale channel, with such revenues growing to more than eight times the prior year quarter in terms of absolute dollar amounts (from $25,796 in the third quarter of 2025 to $223,305 in the current quarter), and to more than five times the prior year quarter as a percentage of total sales. 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, and that the opportunity to grow volumes through the wholesale channel significantly outweighs the negative aspect of lower revenue per unit in that channel.
Previous 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.
Current wording
Our gross profit for the current quarter was $320,910, compared to $244,837 for the prior year quarter. Our gross profit margin was 32% in the current quarter and 37% in the prior year quarter, representing a decrease of approximately 5 percentage points from the prior year period.
Previous wording
Our total cost of goods sold increased to $768,004 for the three months ended June 30, 2026, as compared to $591,895 for the prior year quarter. This year-over-year increase of 30% was primarily driven by increased unit volumes, partially offset 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
The year-over-year decrease in gross profit margin compared with the prior year quarter was predominantly attributable to the aforementioned provision recorded in the current quarter for excess and slow-moving inventory related to certain cobranded smart eyewear; this reduced gross profit margin by approximately 30 percentage points. Higher commissions, affiliate referral fees, and e-commerce platform fees also reduced gross profit margin by approximately 4 percentage points. Partially offsetting these negative impacts to gross profit were (i) the positive impact of tariff refunds received in the current quarter, which increased gross profit margin by approximately 12 percentage points, and (ii) 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 – which increased gross profit margin by approximately 18 percentage points.
Previous wording
In the near to medium term, we anticipate growth in total cost of goods sold corresponding with anticipated future growth in revenues, and do not expect significant decreases in gross profit margins from current levels. We are continually refining our product mix with sales data, and anticipate further reducing our unit costs by focusing on the highest volume, market-tested styles. Additionally, we continue to monitor trade policy and have contingency sourcing options in Southeast Asia should the U.S.-China tariff conditions materially change.
Current wording
In the near to medium term, we anticipate growth in total cost of goods sold corresponding with anticipated future growth in revenues, and do not expect significant decreases in gross profit margins from current levels. We are continually refining our product mix with sales data, and anticipate further reducing our unit costs by focusing on the highest volume, market-tested styles. Additionally, we continue to monitor trade policy and have contingency sourcing options should conditions materially change.
Previous 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:
Current wording
Our operating expenses increased by 23% to $2,659,283 for the three months ended September 30, 2026, as compared to $2,165,664 for the three months ended September 30, 2025. This increase was primarily due to the following:
Previous wording
Our general and administrative expenses decreased by $92,296 or approximately 7% to $1,218,569 for the three months ended June 30, 2026, as compared to $1,310,865 for the prior year quarter. This decrease was mainly attributable to lower expenses for legal counsel and other outside consultants and service providers, partially offset by (i) higher spending on public relations and branding initiatives, and (ii) higher payments due under ourmulti-year license agreements, which increased our licensing expense by approximately $80,000, to approximately $227,000 for the current quarter.
Current wording
Our general and administrative expenses increased by $300,739 or approximately 24% to $1,578,047 for the three months ended September 30, 2026, as compared to $1,277,308 for the prior year quarter. This increase was mainly attributable to the combination of (i) higher employee compensation and benefit costs, which increased by approximately $90,000 as compared to the prior year quarter, and which was mainly due to the addition of staff to drive growth, (ii) higher spending on public relations and branding initiatives, for which costs increased by approximately $53,000 as compared to the prior year quarter, and (iii) higher payments due under our multi-year license agreements, which increased our licensing expense by approximately $84,000, to approximately $209,000 for the current quarter.
Previous wording
Our sales and marketing expenses for the current quarter increased slightly by $7,494 or approximately 1% to $551,812 for the current quarter, as compared to $544,318 for the prior year quarter. 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.
Current wording
Our sales and marketing expenses for the current quarter decreased by $100,489 or approximately 14% to $622,883 for the current quarter, as compared to $723,372 for the prior year quarter. This decrease was primarily driven by more efficient spending in this area. We continue to strategically allocate our sales and 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
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.
Current wording
Total other income (expense), net was $51,232 in the current quarter, reflecting a decline of $33,328 or approximately 39% from $84,560 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
The following table summarizes our results of operations for the six months ended June 30, 2026 (the “current six months” or the “current period”) and the six months ended June 30, 2025 (the “prior year six months” or the “prior year period”):
Current wording
The following table summarizes our results of operations for the nine months ended September 30, 2026 (the “current nine months” or the “current period”) and the nine months ended September 30, 2025 (the “prior year nine months” or the “prior year period”):
Previous 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.
Current wording
Our revenues for the nine months ended September 30, 2026 were $2,793,776, representing an increase of 64% as compared to revenues of $1,701,859 during the nine months ended September 30, 2025. This year-over-year growth rate in revenues is consistent with our full-year 2025 growth rate of approximately 63%, and reflects continued positive momentum across the Company’s smart eyewear portfolio.
Previous 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.
Current wording
The increase in revenue was predominantly attributable to significant volume increases, of which a significant portion related to the initial shipments to major new retail partners in the U.S. and Canada during the current nine months. Our unit volumes increased approximately 68% year-over-year, inclusive of approximately 1,100 demonstration units shipped to a new retail partner in Canada; excluding those units, unit volumes increased approximately 60% year-over-year. Overall, the increase in unit volumes was primarily driven by our award-winning and highly popular Lucyd Armor line of smart safety glasses. We sold approximately 16,600 units of Lucyd Armor smartglasses in the current nine months, representing a 119% increase from the prior year nine months, of which approximately 2,300 units were related to the fulfilment of the initial purchase order from one of the largest big-box retailers in the U.S. Additionally, 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 smartglasses were also a significant driver of the current period volume increases, as we sold nearly 3,400 units of Reebok smartglasses in the current nine months; this volume increase was predominantly 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 six months ended June 30, 2026, approximately 54% of sales were processed on our online store (Lucyd.co), 38% on Amazon.com, and 7% through reseller partners, with approximately 1% of our net revenues generated from Lucyd “Pro” app subscriptions. For the six months ended June 30, 2025, approximately 55% of sales were processed on our online store (Lucyd.co), 40% on Amazon.com, and 4% through reseller partners, with approximately 1% of our net revenues generated from app subscriptions.
Current wording
For the nine months ended September 30, 2026, approximately 52% of sales were processed on our online store (Lucyd.co), 34% on Amazon.com, and 13% through reseller partners, with approximately 1% of our net revenues generated from Lucyd “Pro” app subscriptions. For the nine months ended September 30, 2025, approximately 55% of sales were processed on our online store (Lucyd.co), 40% on Amazon.com, and 4% through reseller partners, with 1% of our net revenues generated from Lucyd “Pro” app subscriptions.
Previous wording
The current period results notably reflect progress made over the past year towards our long-term goals of increasing revenue in the wholesale channel, with such revenues growing to more than three times the prior year period in terms of absolute dollar amounts, and nearly doubling in terms of percentage of total sales. 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.
Current wording
The current period results notably reflect significant progress made over the past year towards our long-term goals of increasing revenue in the wholesale channel, with such revenues growing to more than five times the prior year period in terms of absolute dollar amounts (from $70,405 in the prior year nine months to $358,443 in the current nine months), and more than tripling in terms of percentage of total sales. 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, and that the opportunity to grow volumes through the wholesale channel significantly outweighs the negative aspect of lower revenue per unit in that channel.
Previous 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.
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 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
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.
Current wording
Our total cost of goods sold increased to $2,054,906 for the nine months ended September 30, 2026, as compared to $1,249,154 for the prior year nine months. This year-over-year increase of 65%, which was in line with our growth in revenues, was primarily driven by the combination (i) the increase in the volume of products sold, as discussed above, (ii) the recognition of significant provisions for excess and slow-moving inventory during the current nine months related to certain cobranded smart eyewear products, and (iii) higher costs related to platform / marketplace fees and commissions, partially offset by (iv) the positive impact of tariff refunds received during the current nine months, which reduced our cost of goods sold.
Previous wording
Our gross profit for the current six months was $417,960, compared to $207,868 for the prior year six months. Our gross profit margin was 23% in the current period and 20% in the prior year period, representing an increase of approximately 3 percentage points year-over-year.
Current wording
Our gross profit for the current nine months was $738,870, compared to $452,705 for the prior year nine months. Our gross profit margin was 26.4% in the current period and 26.6% in the prior year period, or essentially flat year-over-year.
Previous wording
In the near to medium term, we anticipate growth in total cost of goods sold corresponding with anticipated future growth in revenues, and do not expect significant decreases in gross profit margins from current levels. We are continually refining our product mix with sales data, and anticipate further reducing our unit costs by focusing on the highest volume, market-tested styles. Additionally, we continue to monitor trade policy and have contingency sourcing options in Southeast Asia should the U.S.-China tariff conditions materially change.
Current wording
In the near to medium term, we anticipate growth in total cost of goods sold corresponding with anticipated future growth in revenues, and do not expect significant decreases in gross profit margins from current levels. We are continually refining our product mix with sales data, and anticipate further reducing our unit costs by focusing on the highest volume, market-tested styles. Additionally, we continue to monitor trade policy and have contingency sourcing options should trade conditions materially change.
Previous wording
Our operating expenses increased by 5% to $4,494,684 for the current period, as compared to $4,282,731 for the prior year period. This decrease was primarily due to the following:
Current wording
Our operating expenses increased by 11% to $7,153,967 for the current period, as compared to $6,448,395 for the prior year period. This increase was primarily due to the following:
Previous 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.
Current wording
Our general and administrative expenses increased by $707,146 or approximately 19% to $4,386,667 for the nine months ended September 30, 2026, as compared to $3,679,521 for the prior year nine months. This increase was mainly attributable to the combination of (i) higher employee compensation and benefit costs (approximately $181,000), mainly due to the addition of staff to drive growth, (ii) higher spending on public relations and branding initiatives (approximately $141,000), and (iii) higher payments due under our multi-year license agreements, which increased our licensing expense by approximately $239,000, to approximately $644,000 for the current period.
Previous 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.
Current wording
Our sales and marketing expenses decreased by $96,345 or approximately 5% to $1,958,745 for the current nine months, as compared to $2,055,090 for the prior year nine months. This decrease was primarily driven by more efficient spending in this area. We continue to strategically allocate our sales and 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
Our related party management fee was $70,000 for each of the six-month periods ended June 30, 2026 and 2025, based on the terms of the management services agreement between us and Tekcapital.
Current wording
Our related party management fee was $105,000 for each of the nine-month periods ended September 30, 2026 and 2025, based on the terms of the management services agreement between us and Tekcapital.
Previous wording
Total other income (expense), net was $96,538 in the current period, reflecting a decline of approximately 49% from $190,066 in the prior year six months. 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 period, and lower dividend yields from money market funds and lower interest rates on U.S. Treasury bills as compared to the prior year period.
Current wording
Total other income (expense), net was $147,770 in the current period, reflecting a decline of approximately 46% from $274,626 in the prior year nine months. 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 period, and lower dividend yields from money market funds and lower interest rates on U.S. Treasury bills as compared to the prior year period.
Previous 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.
Current wording
As of September 30, 2026 and December 31, 2025, our cash and cash equivalents were approximately $3.2 million and $6.5 million, respectively. As of September 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 $4.5 million and $6.5 million, respectively.
Previous 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.
Current wording
Our working capital (current assets less current liabilities) was approximately $6.7 million and $8.4 million as of September 30, 2026 and December 31, 2025, respectively.
Previous wording
Contractual commitments for payments due under multi-year license agreements are scheduled to increase in future periods; payments due under such contracts are $90,000 for the remainder of 2026 and $1,290,000 for fiscal year 2027.
Current wording
Contractual commitments for payments due under multi-year license agreements are scheduled to increase in future periods; payments due under such contracts are $45,000 for the remainder of 2026, $1,290,000 for fiscal year 2027, and $1,543,000 for fiscal year 2028. If the Company were to exercise its contractual cancellation rights during the fifth year of each agreement, the aggregate future minimum payments due under these license agreements would be reduced from $12,785,000 to $3,428,000, although there would be no change to the payments due in fiscal year 2027 and 2028.
Previous wording
We believe our total overall liquidity, plus the availability to borrow funds via our related party agreement with Lucyd Ltd., will be sufficient to fund our operations for at least the next twelve months.
Current wording
We believe our total overall liquidity, plus the availability to borrow funds via our aforementioned financing agreement with Lucyd Ltd., will be sufficient to fund our operations for at least the next twelve months.
Previous 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.
Current wording
Net cash flows used in operating activities for the nine months ended September 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 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.
Current wording
Total use of cash in operating activities during the current nine months was relatively consistent and comparable with the prior year nine 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 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.
Current wording
Net cash flows from investing activities in both the current nine months and prior year nine 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).
Previous 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.
Current wording
Net cash flows from financing activities for the current nine months are primarily attributable to at-the-market offerings of common stock and a warrant inducement transaction (both as described in more detail below), while net cash flows from financing activities for the prior year period are primarily attributable to multiple warrant inducement transactions and other warrant exercises.
Previous wording
In January 2026, the Company sold 820,800 shares of common stock and received approximately $1.5 million of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from these transactions amounted to approximately $1.4 million, and will be used for working capital and general corporate purposes.
Current wording
In January 2026, we sold 820,800 shares of common stock and received approximately $1.5 million of gross proceeds before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from these transactions amounted to approximately $1.4 million, and will be used for working capital and general corporate purposes.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
In October 2026, the Company filed additional claims for tariff refunds; however, significant uncertainty remains as to the timing and amount that will ultimately be received from these additional claims.
Current report — wording carried from elsewhere
Our unit volumes increased approximately 89% year-over-year, inclusive of approximately 1,100 demonstration units shipped to a new retail partner in Canada; excluding those units, unit volumes increased approximately 68% year-over-year. Overall, the increase in unit volumes was primarily driven by our award-winning and highly popular Lucyd Armor line of smart safety glasses. We sold approximately 7,800 units of Lucyd Armor smartglasses in the current quarter, representing an increase from the prior year quarter of 164%, of which approximately 2,300 units were related to the fulfilment of the initial purchase order from one of the largest big-box retailers in the U.S. Our cobranded Reebok smartglasses were also a significant driver of the current quarter volume increases, as we sold over 1,400 units of Reebok smartglasses in the current quarter, up from approximately 1,100 units of Reebok smartglasses in the prior year quarter; this volume increase was predominantly 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.
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Our revenues for the three months ended June 30, 2026 were $1,010,519, representing an increase of 74% as compared to revenues of $579,230 during the three 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% compared to full-year 2024 and first quarter 2026 growth rate of 70% compared to the first quarter of 2025, and reflects continued positive momentum across the Company's smart eyewear portfolio.
Previous report — wording carried elsewhere
The increase in revenue was primarily attributable to significant volume increases, with the remainder of the increase in revenue largely driven by favorable price/mix impacts. Our unit volumes increased approximately 56% 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 8,800 units of Lucyd Armor smartglasses in the current six months, representing a 91% increase from the prior year six months. 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 period volume increases, as we sold nearly 2,000 units of Reebok smartglasses in the current six months; most of this increase was driven by the Reebok sport line, as the Reebok optical collection was only recently launched in April 2026. These strong increases in unit volumes for Lucyd Armor and Reebok smartglasses were partially offset by volume declines in our other product lines. The aforementioned positive impacts of price/mix were largely reflective of increased sales of the higher-priced Lucyd Armor line following price increases implemented in 2026 and the April 2026 launch of the Reebok optical collection at premium price points, partially offset by a higher proportion of wholesale sales at wholesale pricing. In addition, we are being more targeted and tactical in our use of promotional pricing and discounts.
Previous report — wording carried elsewhere
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.