Innovative Eyewear Inc 10-Q for FY2026 Q1
Innovative Eyewear Inc (LUCY)
About this 10-Q
Innovative Eyewear Inc filed this 10-Q on May 14, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $773.56K
- up 70.2% from $454.5K a year earlier
- Net loss
- $2.31M
- compared with a net loss of $1.78M a year earlier
- Diluted EPS
- -$0.37
- compared with -$0.72 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from __________ to __________
Commission
file number
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files.)
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated Filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
As of May 8, 2026, there were shares of the registrant’s common stock issued and outstanding.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The discussions in this Quarterly Report on Form 10-Q contain forward-looking statements reflecting our current expectations that involve risks and uncertainties. These forward-looking statements include, but are not limited to, our strategy, competition, future operations and production capacity, our supply chain and logistics, future financial position, future revenues, projected costs, profitability, expected cost reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the market in which we operate, prospects and plans, and objectives of management. The words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2025, and in our other filings with the Securities and Exchange Commission. We do not assume any obligation to update any forward-looking statements except as required by law.
INNOVATIVE EYEWEAR, Inc.
Table of Contents
i
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INNOVATIVE EYEWEAR, INC.
CONDENSED BALANCE SHEETS
March 31, 2026 (Unaudited) and December 31, 2025
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Investments | ||||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses | ||||||||
| Inventory prepayments | ||||||||
| Inventory, net | ||||||||
| Due from Tekcapital and Affiliates | ||||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Intangible assets, net | ||||||||
| Property and equipment, net | ||||||||
| Other non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Liabilities | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Deferred revenue | ||||||||
| Due to Tekcapital and Affiliates | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Long-term payment plan with vendor | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies (see Note 7) | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock (par value $, shares authorized: and shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively) | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying Notes to the Condensed Financial Statements.
1
INNOVATIVE EYEWEAR, INC.
CONDENSED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2026 and 2025
(Unaudited)
| 2026 | 2025 | |||||||
| Revenues, net | $ | $ | ||||||
| Less: Cost of Goods Sold | ( |
) | ( |
) | ||||
| Gross Profit | ||||||||
| Operating Expenses: | ||||||||
| General and administrative | ( |
) | ( |
) | ||||
| Sales and marketing | ( |
) | ( |
) | ||||
| Research and development | ( |
) | ( |
) | ||||
| Related party management fee | ( |
) | ( |
) | ||||
| Total Operating Expenses | ( |
) | ( |
) | ||||
| Other Income (Expense), net | ||||||||
| Net Loss | $ | ( |
) | $ | ( |
) | ||
| Weighted average number of shares outstanding | ||||||||
| Loss per share, basic and diluted | $ | ) | $ | ) | ||||
See accompanying Notes to the Condensed Financial Statements.
2
INNOVATIVE EYEWEAR, INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the three months ended March 31, 2026 and 2025
(Unaudited)
| Common Stock | Additional Paid In |
Accumulated | Total Stockholders’ |
|||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balances as of January 1, 2026 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| At-the-Market Offerings | ||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||
| Balances as of March 31, 2026 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| Balances as of January 1, 2025 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| Cancellation of shares by stockholder | ( |
) | ||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||
| Balances as of March 31, 2025 | $ | $ | $ | ( |
) | $ | ||||||||||||||
See accompanying Notes to the Condensed Financial Statements.
3
INNOVATIVE EYEWEAR, INC.
CONDENSED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2026 and 2025
(Unaudited)
| 2026 | 2025 | |||||||
| Operating Activities | ||||||||
| Net Loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization | ||||||||
| Interest income on debt securities (U.S. Treasury bills) | ( |
) | ( |
) | ||||
| Stock-based compensation | ||||||||
| Nonemployee stock-based payment expense | ||||||||
| Expenses paid by Tekcapital and Affiliates | ||||||||
| Provision for doubtful accounts | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Accounts payable and accrued expenses | ( |
) | ||||||
| Prepaid expenses | ( |
) | ( |
) | ||||
| Inventory prepayments | ( |
) | ||||||
| Inventory | ( |
) | ||||||
| Other assets | ||||||||
| Contract assets and deferred revenue | ( |
) | ||||||
| Net cash flows from operating activities | ( |
) | ( |
) | ||||
| Investing Activities | ||||||||
| Purchases of debt securities (U.S. Treasury bills) | ( |
) | ||||||
| Proceeds from redemption of debt securities (U.S. Treasury bills) | ||||||||
| Repayment of amounts loaned to Tekcapital Europe, Ltd. | ||||||||
| Patent costs | ( |
) | ( |
) | ||||
| Purchases of property and equipment | ( |
) | ||||||
| Net cash flows from investing activities | ( |
) | ||||||
| Financing Activities | ||||||||
| Proceeds from at-the-market offerings of common stock | ||||||||
| Payments made under long-term payment plan with vendor | ( |
) | ||||||
| Net cash flows from financing activities | ||||||||
| Net Change in Cash and cash equivalents | ( |
) | ||||||
| Cash and cash equivalents at Beginning of Period | $ | $ | ||||||
| Cash and cash equivalents at End of Period | $ | $ | ||||||
| Significant Non-Cash Transactions | ||||||||
| Expenses paid for by Tekcapital and Affiliates, reported as change in Due to/from Tekcapital and Affiliates | ||||||||
See accompanying Notes to the Condensed Financial Statements.
4
INNOVATIVE EYEWEAR, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
March 31, 2026 and 2025 (Unaudited)
NOTE 1 – GENERAL INFORMATION
Company Description
Innovative Eyewear, Inc. (the “Company,” “us,” “we,” or “our”), is a corporation organized under the laws of the State of Florida that develops and sells cutting-edge smart eyewear – including prescription eyeglasses, ready-to-wear sunglasses, safety glasses, and sport glasses – which are designed to allow our customers to remain connected to their digital lives. We sell smart eyewear under our own Lucyd brand, which includes the Lucyd Lyte® and Lucyd Armor product lines, as well as cobranded smart eyewear under the Nautica® Powered by Luycd, Eddie Bauer® Powered by Luycd, and Reebok® Powered by Luycd product lines.
The Company was originally founded by Lucyd Ltd., a portfolio company of Tekcapital Plc through Tekcapital Europe, Ltd. (collectively, together with Lucyd Ltd., “Tekcapital and Affiliates”), which owned approximately 4% of our issued and outstanding shares of common stock as of March 31, 2026.
Basis of Presentation
The accompanying condensed balance sheet as of December 31, 2025 (which has been derived from audited financial statements) and the unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated by the United States Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. These unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 25, 2026.
In the opinion of management, all adjustments considered necessary for the fair presentation of the financial statements for the periods presented have been included. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for future periods or the full year.
Reclassifications
Certain prior period amounts have been reclassified to conform to current period presentation – specifically, $5,423 of nonemployee stock-based payment expense for the three months ended March 31, 2025 has been reclassified to a separate line on the condensed statement of cash flows, rather than aggregated with stock-based compensation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, particularly given the significant uncertainties associated with the current state of international trade and the overall economic environment.
5
Segment Reporting
The Company has a single reportable segment, which generates revenue from the sales of smartglasses, and related accessories and apps. The Company derives revenue primarily in North America and manages its business activities on a consolidated basis. The accounting policies of our single reportable segment are the same as those for the Company as a whole.
The Company’s chief operating decision maker, as such term is defined under GAAP, is our Chief Executive Officer. The chief operating decision maker assesses performance for the single reportable segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. The Company does not have intra-entity sales or transfers.
NOTE 2 – LIQUIDITY
The Company’s business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse conditions may include recession, downturn, or otherwise, changes in regulations or restrictions in imports, competition, or changes in consumer taste. These adverse conditions could affect the Company’s financial condition and the results of its operations.
The Company meets its day-to-day working capital requirements using monies raised through sales of eyewear and issuances of equity. During the three months ended March 31, 2026, the Company raised approximately $
NOTE 3 – REVENUE AND ACCOUNTS RECEIVABLE
Revenue
Our revenue is primarily generated from the sales of prescription and non-prescription optical glasses and sunglasses, and shipping charges which are charged to the customer associated with these purchases. We sell products through our retail store resellers, distributors, on our own website Lucyd.co, and on Amazon.com. We have also recently started to generate revenue from the sale of subscriptions to the “Pro” version of our Lucyd app, which provides unlimited ChatGPT interactions and priority tech support for a monthly or annual fee.
The following table presents disaggregated revenue for the three months ended March 31, 2026 and 2025:
| Schedule of presents disaggregated revenue | ||||||||
| 2026 | 2025 | |||||||
| E-commerce channels | $ | $ | ||||||
| Wholesale channels | ||||||||
| App store subscriptions | ||||||||
| Total revenues, net | $ | $ | ||||||
In instances where the collectability of contractual consideration is not probable at the time of sale, the revenue is deferred on our balance sheet as a contract liability, and the associated cost of goods sold is deferred on our balance sheet as a contract asset; subsequently, we recognize such revenue and cost of goods sold as payments are received. With respect to such instances, during the three months ended March 31, 2025, we recognized $
6
The balance of revenue for orders received but not yet fulfilled that has been deferred on our balance sheet as a contract liability was $
The balance of unearned revenue related to app subscriptions that has been deferred on our balance sheet as a contract liability was $
For all of our product sales, at the time of sale, we establish a reserve for returns, based on historical experience and expected future returns as well as review of individual returns received in the month following the balance sheet date; such reserve is recorded as a reduction of sales. The Company recorded an allowance for sales returns of $
Accounts Receivable
Accounts receivable are uncollateralized obligations due from customers under normal trade terms. For direct-to-consumer sales, payment is required before product is shipped. For wholesale orders, we offer “net 30” payment terms on wholesale orders of $1,500 or more in accordance with industry standards. The Company, by policy, routinely assesses the financial strength of its customers.
Accounts receivable are reported at the amount billed to the customer, net of an allowance for credit losses. The allowance for credit losses is determined based upon a variety of judgments and factors. Factors considered in determining the allowance include historical collection, write-off experience, and management’s assessment of collectibility from customers, including current conditions, reasonable forecasts, and expectations of future collectability and collection efforts. Management continuously assesses the collectability of receivables and adjusts estimates based on actual experience and future expectations. Receivable balances are written-off against the allowance when such balances are deemed to be uncollectable.
A roll forward of the allowance for credit losses for the three months ended March 31, 2026 and 2025 is as follows:
| Schedule of allowance for credit losses | ||||||||
| 2026 | 2025 | |||||||
| Balance at January 1 | $ | $ | ||||||
| Bad debt expense | ||||||||
| Write-offs | ( |
) | ||||||
| Other | ||||||||
| Balance at March 31 | $ | $ | ||||||
NOTE 4 – INVENTORY
Our inventory predominantly consists of purchased eyewear and related accessories, and is stated at the lower of cost or net realizable value, with cost determined on a specific identification method of inventory costing which attaches the actual cost to an identifiable unit of product. Also included within inventory as of both at March 31, 2026 and December 31, 2025 was $
Provisions for excess, obsolete, or slow-moving inventory are recorded after periodic evaluation of historical sales, current economic trends, forecasted sales, estimated product life cycles, and estimated inventory levels. Such provisions were $
Our non-product inventory consists of virtual try-on kiosks, modular display systems, and interactive LCD fixtures that have not yet been deployed at retailers, as well as certain accessories that are intended to be used as promotional items, rather than sold in the normal course of business. These items are presented in the condensed balance sheet within Other current assets as of March 31, 2026. The balance of such non-product inventory was $
7
NOTE 5 – INVESTMENTS
All highly liquid investments with original maturities of three months or less, including money market funds, certificates of deposit, and U.S. Treasury bills purchased three months or less from maturity, are considered cash equivalents.
As of January 1, 2025, the Company held investments in U.S. Treasury bills, which were purchased in September 2024 and matured in March 2025. These investments were classified as “held-to-maturity” and were recorded at amortized cost. Upon maturity of these investments, the Company recognized a realized gain $
There were no amounts classified as “held-to-maturity” investments as of December 31, 2025.
As
of March 31, 2026, the Company held investments in U.S. Treasury bills, which were purchased in January 2026 and matured
in April 2026. During the three months ended March 31, 2026, the Company recognized $
| Schedule of investments aggregate fair value | ||||||||||||||||
| Quoted prices in active markets for identical assets (Level 1) |
Significant observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
Total | |||||||||||||
| Investments in U.S. Treasury bills | $ | $ | $ | $ | ||||||||||||
NOTE 6 – TANGIBLE AND INTANGIBLE ASSETS
| Schedule of property, plant and equipment | ||||||||
| March 31, | December 31, | |||||||
| Property & Equipment | 2026 | 2025 | ||||||
| Display Booths and Kiosks | $ | $ | ||||||
| Computer Equipment | ||||||||
| Office Equipment | ||||||||
| Internal-Use Software and Website Costs | ||||||||
| Property and equipment, gross | ||||||||
| Less: Accumulated depreciation | ( |
) | ( |
) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation expense for the three months ended March 31, 2026 and 2025 was $
| Schedule of intangible assets | ||||||||
| March 31, | December 31, | |||||||
| Finite-lived intangible assets | 2026 | 2025 | ||||||
| Patent Costs | $ | $ | ||||||
| Less: Accumulated amortization | ( |
) | ( |
) | ||||
| Intangible assets, net | $ | $ | ||||||
Amortization expense for the three months ended March 31, 2026 and 2025 was $
8
NOTE 7 – INCOME TAXES
At the end of each interim reporting period, the Company estimates its effective tax rate expected to be applied for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods. The Company has
NOTE 8 – RELATED PARTY TRANSACTIONS AND AGREEMENTS
Management Service Agreement
The Company is party to a management services agreement with Tekcapital Europe, Ltd. (an affiliate of Lucyd Ltd., whose Chief Executive Officer is the father of our Chief Executive Officer), which was originally entered into in 2020 and subsequently amended in 2022. While the agreement does not stipulate a specific maturity date, it can be terminated with 30 calendar days written notice by any party.
Under this agreement, the related party provides the following services to us, for which we are billed $35,000 per quarter:
| ● | Support and advice to the Company in accordance with their area of expertise; |
| ● | Research, technical and legal review, recruitment, software development, marketing, public relations, and advertisement; and |
| ● | Advice, assistance, and consultation services to support the Company or in relation to any other related matter. |
During the three months ended March 31, 2026 and 2025, the Company incurred $
Rent of Office Space
Since 2022, under an agreement between the Company and Tekcapital Europe, Ltd, Tekcapital bills the Company for an allocation of rent paid by Tekcapital on the Company’s behalf. The underlying lease between Tekcapital and its landlord has an end date of January 31, 2027. The Company recognized $
Loan to Tekcapital Europe, Ltd.
On December 19, 2025, the Company entered into an intercompany loan agreement (as lender) with Tekcapital Europe, Ltd. (as borrower) and Tekcapital Plc, the parent of Tekcapital Europe, Ltd. Pursuant to this agreement, the Company agreed to make a loan facility available to Tekcapital Europe, Ltd. for up to a maximum of $
On February 24, 2026, Tekcapital Europe, Ltd. repaid in full all of the outstanding balance of the loan that the Company had made to Tekcapital on December 19, 2025. The total amount paid to the Company was $
9
Lucyd Ltd. Financing Agreement
On March 1, 2024, the Company entered into an agreement with Lucyd Ltd. pursuant to which the Company could receive up to $
On March 1, 2025, the Company and Lucyd Ltd. entered into an amendment of this agreement, such that upon issuance, the convertible note would have a maturity date of September 1, 2026. There were no other changes to the terms and provisions of the agreement.
On March 11, 2026, the Company and Lucyd Ltd. entered into a further amendment of this agreement, such that upon issuance, the convertible note will have a maturity date of September 1, 2027. There were no other changes to the terms and provisions of the agreement.
The Company has not borrowed any amounts under this agreement with Lucyd Ltd.
NOTE 9 – COMMITMENTS AND CONTINGENCIES
License Agreements
In 2022 and 2023, we entered into various multi-year license agreements which grant us the right to sell certain branded smart eyewear, including the Nautica, Eddie Bauer, and Reebok brands worldwide. These agreements require us to pay royalties based on a percentage of net retail and wholesale sales during the period of the license, and also require guaranteed minimum royalty payments. The agreements have base terms of 10 years but are cancellable at the option of the Company during the fifth year (i.e., 2027 and 2028).
The aggregate future minimum payments due under these license agreements are as follows:
| Schedule of future minimum payments due | ||||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter (through 2033) | ||||
| Total | $ |
The Company recognized $
Long-Term Payment Plan for Information Technology System and Services
The Company has entered into a long-term payment plan agreement with Oracle for the payment of costs related to the implementation of the Company’s new ERP system (which went live in April 2025) and related cloud services. Under this agreement, the Company is obligated to make payments of $4,035 per month through July 2027. As of March 31, 2026, the Company’s remaining obligation under this arrangement was $
10
Leases
Our executive offices are located at 11900 Biscayne Blvd., Suite 630 Miami, Florida 33181. Our executive offices are provided to us by a related party (see Note 8). We consider our current office space adequate for our current operations.
Other Commitments
See related party management services agreement discussed in Note 8.
Legal Matters
We are not currently the subject of any material pending legal proceedings; however, we may from time to time become a party to various legal proceedings arising in the ordinary course of business.
International Trade and Tariffs
Beginning in April 2025, the U.S. government announced new or increased tariffs on goods imported from various countries to the U.S., and countries subject to such tariffs have imposed or may in the future impose retaliatory tariffs and other trade measures. These developments negatively impacted our results of operations during the year ended December 31, 2025. Management has taken various actions to mitigate the negative impacts of tariffs on our financial results; these actions have been largely successful thus far. However, the current international geopolitical climate related to tariffs is fluid and continues to evolve, and we cannot provide any assurance that actions that have been taken by management or that may be taken by management in the future will be successful in future periods. As such, we cannot predict with certainty the ultimate impacts that international trade and tariff developments may have on our business and financial results in the future, but those impacts could be material.
In February 2026, the U.S. Supreme Court issued a ruling invalidating some of the tariffs imposed by the U.S. government; however, the ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. As such, we cannot reasonably estimate the impact, if any, on our business and financial results at this time.
Stock Options
Summary information regarding stock options as of and during the three months ended March 31, 2026 is as follows:
| Schedule of stock option | ||||||||||||
| Options (Number) |
Weighted Average Exercise Price per share ($) |
Weighted Average Remaining Contractual Life (Years) |
||||||||||
| As at January 1, 2026 | ||||||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Forfeited / Expired | ||||||||||||
| As at March 31, 2026 | ||||||||||||
| Exercisable as at March 31, 2026 | ||||||||||||
During the three months ended March 31, 2026 and 2025, we recognized $ and $ of expense, respectively, related to stock options. As of March 31, 2026, the aggregate intrinsic value for all options outstanding as well as all options exercisable was zero , and remaining unrecognized stock option expense was zero .
11
Restricted Stock Units
Summary information regarding restricted stock units as of and during the three months ended March 31, 2026 is as follows:
| Schedule of restricted stock units | ||||||||
| Restricted Stock Units (Number) |
Weighted Average Grant Date Fair Value ($) |
|||||||
| As at January 1, 2026 | ||||||||
| Granted | ||||||||
| Vested | ||||||||
| Forfeited | ) | |||||||
| As at March 31, 2026 | ||||||||
During the three months ended March 31, 2026 and 2025, we recognized $
Stock Grants
Effective April 1, 2024, pursuant to the terms of a brand ambassador agreement, we issued to an individual shares of our common stock as compensation for the first year of the agreement. The value of the consideration transferred, measured using the fair value of our common stock at the date of issuance, was $
Effective April 1, 2025, pursuant to the terms of a brand ambassador agreement, we issued to the same individual shares of our common stock as compensation for the second year of the agreement. The value of this consideration transferred, measured using the fair value of our common stock at the date of issuance, was $
NOTE 11 – STOCKHOLDERS’ EQUITY
At-the-Market Offerings
The Company has entered into an at-the-market offering agreement with H.C. Wainwright & Co., LLC, as sales agent, relating to the sale of common stock. During the three months ended March 31, 2026, the Company sold shares of common stock and received approximately $
Warrants
There were no grants, exercises, or expirations of warrants during the three months ended March 31, 2026.
12
The Company calculates earnings/(loss) per share data by calculating the quotient of earnings/(loss) divided by the weighted average number of common shares outstanding during the respective period. Due to the net losses for all periods presented in the unaudited condensed statements of operations, all shares underlying the common stock options, common stock warrants, and related party convertible debt were excluded from the earnings per share calculation due to their anti-dilutive effect.
The calculation of net earnings/(loss) per share for the three months ended March 31, 2026 and 2025 is as follows:
| 2026 | 2025 | |||||||
| Basic and diluted: | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Weighted-average number of common shares | ||||||||
| Basic and diluted net loss per common share | $ | ) | $ | ) | ||||
13
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and the other financial information included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report.
Overview
Executive Summary and Outlook
| ● | We achieved strong top-line growth in the first quarter of 2026, with revenues for the three months ended March 31, 2026 increasing by 70% as compared to the comparable period in 2025. This represents an acceleration from the full-year 2024 and full-year 2025 growth rates of 42% and 63%, respectively, and demonstrates continued positive momentum across the Company’s smart eyewear portfolio. The significant growth in revenues during the first quarter of 2026 reflects continued expansion of consumer demand for our products, especially our award-winning Lucyd Armor smart safety glasses line. |
| ● | Our gross profit margin for the first quarter of 2026 was 23%, compared to 49% in the first quarter of 2025. The first quarter of 2025 notably included the positive impact of certain credits and inventory adjustments, which did not recur in subsequent quarters, while the current quarter’s gross profit is comparable to our gross profit margins for full fiscal year 2025 and the second half of fiscal year 2025 of 21% and 22%, respectively. |
| ● | Other operating expenses increased by 20% in the first quarter of 2026 as compared to the first quarter of 2025, primarily driven by higher general and administrative expenses – largely related to employee compensation, plus higher amounts paid to outside service providers for various corporate and compliance functions – partially offset by lower research and development costs. |
| ● | We believe we are strongly positioned for further revenue growth in 2026, based on the following recent developments: |
| ○ | In April 2026, we announced the launch of the new Reebok® Powered by Lucyd optical collection, for which we have secured several new retail partners. |
| ○ | We are currently in discussions with numerous other retailers – including big box stores, traditional optical chains, and hardware and automotive chains – to introduce Lucyd Armor and Reebok Powered by Lucyd products into stores across the U.S. and Canada in 2026. |
| ○ | Several leading industrial and logistics companies are testing Lucyd products for their workforce use. |
| ○ | We have also recently launched a new white-label offering, to enable retailers and legacy eyewear brands to quickly introduce smart eyewear products in partnership with our company. We already have an affirmative commitment from a customer for a white-label line of smart safety glasses. |
| ○ | Smart eyewear adoption is continuing to increase rapidly in the U.S., with a recent third-party study indicating that while only 4% of online adults had ever used smartglasses in 2024, that number increased to 17% in 2025. |
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General Product and Corporate Overview
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.
Our mission is to Upgrade Your Eyewear® by creating smart eyewear for all-day wear that looks like and is priced similarly to designer eyewear, but is also lightweight and comfortable, and enables the wearer to remain connected to their digital lives. Our smart eyewear is a fusion of headphones with glasses, bringing vision correction and protection together with digital connectivity and clear audio, while also offering a solution for listening to music outdoors (as compared to in-ear headphones). The convenience of having a Bluetooth headset and comfortable glasses in one, especially for those who are already accustomed to all-day eyewear use, offers a lifestyle upgrade at a price most consumers can afford.
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.
Our products are currently sold through two major types of channels:
| 1. | E-commerce – primarily via our website (Lucyd.co) and Amazon.com, as well as through various other websites such as Walmart.com, Target.com, BestBuy.com, and DicksSportingGoods.com; and, |
| 2. | A growing network of retail stores, including independent eyewear stores and national eyewear chains – we currently have over 400 retail stores selling our products (across over 300 unique wholesale accounts), and are continually working to expand our network. We increased the number of retail store locations in which our products are sold from over 350 at the beginning of 2025 to over 400 by the end of the 2025, and we remain optimistic that partnership with a national retailer will further increase our store count significantly in 2026. |
All of our products are designed in Miami and manufactured in Asia. We view our business model as capital light, as we have elected not to build our own manufacturing facilities and Company-owned retail distribution, but rather leverage existing sources of production and retail distribution. This allows us to focus on our core competency of smart eyewear design.
Software and Apps
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.
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.
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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.
In the first quarter of 2026, the Lucyd app received an overhaul to the user interface, with general improvements to usability. The app has been redeveloped as an "app store within an app," enabling an expansive and highly customizable Lucyd software platform to be housed conveniently within the iOS and Android app stores. The Company envisions that this new structure of the app will support third party applet development for Lucyd eyewear partners and users in the near future, and help in attracting developer talent to the platform by giving them a way to monetize new features and content for Lucyd eyewear.
We believe these developments make our Lucyd eyewear perhaps the smartest smartglasses available today, and represent a significant marketing opportunity for our core smartglass products. The Lucyd app delivers an updated user experience over time without requiring costly hardware changes. Additionally, the overall flexibility of Bluetooth connectivity and ability to connect to a variety of voice assistants, including device-native assistants and AI language models, make our glasses a “device- and AI- agnostic” peripheral suitable for use with almost any desktop or mobile computing platform. This aspect of our products makes them a highly compatible interface accessory and distinguishes them from accessories designed to enhance a specific platform, such as Apple AirPods for iOS or gaming headsets for desktop computers.
Kiosks and Retail Fixtures
We provide certain retail partners with point-of-sale display materials, including virtual try-on kiosks, modular display units, and interactive LCD fixtures designed to support in-store product education and demonstrations. Many of our retail fixtures allow for customization to suit our retail store partners’ needs, and our newer fixtures feature a proprietary kiosk app that we developed in-house.
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.
Key Performance Indicators
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.
Customer Ratings (B2C) – The Company’s latest products are receiving higher ratings online compared to our previous products, indicating that customers are appreciative of improvements in product design, functionality, and build quality. This is a strong signal of positive feedback on our products that indicates our ability to grow and scale with America’s largest online retailer and other platforms.
International Trade and Tariffs
Beginning in April 2025, the U.S. government announced new or increased tariffs on goods imported from various countries to the U.S., and countries subject to such tariffs have imposed or may in the future impose retaliatory tariffs and other trade measures. These developments negatively impacted our results of operations during the year ended December 31, 2025. Management has taken various actions to mitigate the negative impacts of tariffs on our financial results; these actions have been largely successful thus far. However, the current international geopolitical climate related to tariffs is fluid and continues to evolve, and we cannot provide any assurance that actions that have been taken by management or that may be taken by management in the future will be successful in future periods. As such, we cannot predict with certainty the ultimate impacts that international trade and tariff developments may have on our business and financial results in the future, but those impacts could be material.
In February 2026, the U.S. Supreme Court issued a ruling invalidating some of the tariffs imposed by the U.S. government; however, the ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. As such, we cannot reasonably estimate the impact, if any, on our business and financial results at this time.
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Results of Operations - Quarterly
The following table summarizes our results of operations for the three months ended March 31, 2026 (the “current quarter”) and the three months ended March 31, 2025 (the “prior year quarter”):
| Three months ended | Three months ended | |||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||||||
| Revenues, net | $ | 773,561 | 100 | % | $ | 454,501 | 100 | % | $ | 319,060 | 70 | % | ||||||||||||
| Less: Cost of Goods Sold | (598,116 | ) | 77 | % | (233,968 | ) | 51 | % | (364,148 | ) | 156 | % | ||||||||||||
| Gross (Deficit) Profit | 175,445 | 23 | % | 220,533 | 49 | % | (45,088 | ) | -20 | % | ||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| General and administrative | (1,590,051 | ) | 206 | % | (1,091,348 | ) | 240 | % | (498,703 | ) | 46 | % | ||||||||||||
| Sales and marketing | (784,050 | ) | 101 | % | (787,400 | ) | 173 | % | 3,350 | 0 | % | |||||||||||||
| Research and development | (138,109 | ) | 18 | % | (210,576 | ) | 46 | % | 72,467 | -34 | % | |||||||||||||
| Related party management fee | (35,000 | ) | 5 | % | (35,000 | ) | 8 | % | - | 0 | % | |||||||||||||
| Total Operating Expenses | (2,547,210 | ) | 329 | % | (2,124,324 | ) | 467 | % | (422,886 | ) | 20 | % | ||||||||||||
| Other Income (Expense), net | 62,397 | 8 | % | 125,088 | 28 | % | (62,691 | ) | -50 | % | ||||||||||||||
| Net Loss | $ | (2,309,368 | ) | 299 | % | $ | (1,778,703 | ) | 391 | % | $ | (530,665 | ) | 30 | % | |||||||||
Revenues
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.
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.
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.
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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.
Cost of Goods Sold
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.
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.
Gross Profit
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%).
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.
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Operating Expenses
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:
General and administrative expenses
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.
Non-cash expenses – including depreciation, amortization, and stock-based compensation – comprised approximately 11% and 14% of our total general and administrative expenses in the current quarter and prior year quarter, respectively.
Sales and marketing expenses
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.
Research and development costs
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.
Related party management fee
Our related party management fee was $35,000 for each of the three-month periods ended March 31, 2026 and 2025, based on the terms of the management services agreement between us and Tekcapital.
Other Income (Expense), net
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.
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Liquidity and Capital Resources
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.
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.
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.
The Company did not have any debt obligations as of March 31, 2026 or December 31, 2025.
Cash Flow
| Three months ended | Three months ended | |||||||
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| Net cash flows from operating activities | $ | (2,490,663 | ) | $ | (2,311,049 | ) | ||
| Net cash flows from investing activities | (1,045,674 | ) | 4,940,232 | |||||
| Net cash flows from financing activities | 1,403,445 | - | ||||||
| Net Change in Cash | $ | (2,132,892 | ) | $ | 2,629,183 | |||
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.
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.
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.
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).
Equity Transactions
At-the-Market Offerings
The Company has previously entered into an at-the-market offering agreement with H.C. Wainwright & Co., LLC (as sales agent) relating to the sale of common stock.
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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.
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.
Other Factors
We expect that operating losses could continue in the foreseeable future as we continue to invest in the expansion and development of our business. We believe our existing cash and cash equivalents (including the proceeds from the equity offerings described above), plus the availability to borrow funds via the related party agreement with Lucyd Ltd., will be sufficient to fund our operations for at least the next twelve months. However, our future capital requirements will depend on many factors, including, but not limited to, growth in the number of retail store customers, licenses, the needs of our e-commerce business and retail distribution network, expansion of our product and software offerings, and the timing of investments in technology and personnel to support the overall growth of our business. We expect a modest increase in marketing and retail-support expenses over the next twelve months, with such investments being discretionary and adjustable as needed. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. In the event that additional financing is required from outside sources, we may not be able to negotiate terms acceptable to us or at all. Geopolitical and macroeconomic factors could cause disruption in the global financial markets, which could reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.
Off-Balance Sheet Arrangements
As of March 31, 2026, we did not have any off-balance sheet arrangements.
Critical Accounting Policies and Significant Estimates
There have been no material changes in our critical accounting policies and significant estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 25, 2026.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13(a)-15(b) of the Exchange Act. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as a result of material weaknesses in our internal control over financial reporting, our disclosure controls and procedures were not effective as of March 31, 2026.
There was no change in our internal control over financial reporting during the first quarter of fiscal year 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Part II. Other Information
Item 1. Legal Proceedings
We are not currently the subject of any material pending legal proceedings; however, we may from time to time become a party to various legal proceedings arising in the ordinary course of business.
Item 1A. Risk Factors
There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 25, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
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Item 6. Exhibits
23
Signatures
Pursuant to the requirements of the Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Innovative Eyewear, Inc. | ||
| (Registrant) | ||
| Date: May 14, 2026 | By: | /s/ Harrison Gross |
| Harrison Gross | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: May 14, 2026 | By: | /s/ Oswald Gayle |
| Oswald Gayle | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) | ||
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Exhibit 31.1
CERTIFICATIONS
I, Harrison Gross, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Innovative Eyewear, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of a quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 14, 2026 | By: | /s/ Harrison Gross |
| Harrison Gross | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATIONS
I, Oswald Gayle, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Innovative Eyewear, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of a quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 14, 2026 | By: | /s/ Oswald Gayle |
| Oswald Gayle | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18
U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Innovative Eyewear, Inc. (the “Company”) for the quarterly period ended March 31, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Harrison Gross, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
| 2. | To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the report. |
| Date: May 14, 2026 | By: | /s/ Harrison Gross |
| Harrison Gross | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Innovative Eyewear, Inc. (the “Company”) for the quarterly period ended March 31, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Oswald Gayle, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
| 2. | To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the report. |
| Date: May 14, 2026 | By: | /s/ Oswald Gayle |
| Oswald Gayle | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |