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What changed in Innovative Eyewear Inc's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Innovative Eyewear Inc's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+385 added−397 removedSource: 10-K (2025-03-24) vs 10-K (2024-03-25)

Top changes in Innovative Eyewear Inc's 2024 10-K

385 paragraphs added · 397 removed · 243 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

89 edited+45 added−61 removed52 unchanged
Biggest changeWe view the popularity of voice assistants as an important catalyst for the smart eyewear market since hands-free access to voice-based AI is a notable feature thereof. The common denominator among markets for the hearables and digital assistant is that they facilitate real-time access to digital data, whether it is through music, calls, navigational directions, or information, among other uses.
Biggest changeThe common denominator among markets for hearables and digital assistants is that they facilitate real-time access to digital data, whether it is through music, calls, navigational directions, or information, among other uses. The combination of hearables and digital assistants provides a transparent, ergonomic interface between the users and their digital lives.
The term of the Representation Agreement is five years, and the contract may be terminated for “good cause” with 90 days’ notice by either party. Upon termination, commissions of orders procured will extend 180 days beyond the termination date. Thus far, the Representation Agreement has resulted in a successful launch of the Company’s products on BestBuy.com.
The term of the agreement is five years, and the contract may be terminated for “good cause” with 90 days’ notice by either party. Upon termination, commissions of orders procured will extend 180 days beyond the termination date. Thus far, this representation agreement has resulted in a successful launch of the Company’s products on BestBuy.com.
We have licensed and filed numerous patents covering all of our current product designs and certain advanced features such as Vyrb, replaceable front frames, and multi-channel Bluetooth connectivity. The Company will seek to file new intellectual property to protect new styles and features of its smart eyewear as they are introduced.
We have licensed and filed numerous patents covering all of our current product designs and certain advanced features such as replaceable front frames and multi-channel Bluetooth connectivity. The Company will seek to file new intellectual property to protect new styles and features of its smart eyewear as they are introduced.
However, through Amazon, we are still able to offer color lens sunglass variants and blue light blocker pairs, in addition to our charging dock accessory item. We continually monitor and test traffic flow to Lucyd.co versus Amazon.com to ensure our online ad spend is fully optimized. 3.
However, through Amazon, we are still able to offer color lens sunglass variants and blue light blocker pairs, in addition to our charging dock accessory item. We continually monitor and test traffic flow to Lucyd.co versus Amazon.com to ensure our online ad spend is fully optimized. 7 3.
All Lucyd logos such as, but not limited to: Lucyd ® word mark, Lucyd Hexagon, Upgrade Your Eyewear ® slogan and the Vyrb ® trademark. 5. All Lucyd company developed software and any new software developed by Innovative Eyewear, utilizing the Lucyd software, will be owned by Innovative Eyewear. 16 6. Lucyd Store portals through Shopify, Amazon and Walmart. 7.
All Lucyd logos such as, but not limited to: Lucyd ® word mark, Lucyd Hexagon, Upgrade Your Eyewear ® slogan and the Vyrb ® trademark. 5. All Lucyd company developed software and any new software developed by Innovative Eyewear, utilizing the Lucyd software, will be owned by Innovative Eyewear. 6. Lucyd Store portals through Shopify, Amazon and Walmart. 7.
The Shopify affiliate program enables Lucyd brand enthusiasts to get a financial reward for sharing the brand, and operates on similar terms as the Shareasale program where we provide a commission rate in exchange for converting web traffic. 8 Retail Channels 1.
The Shopify affiliate program enables Lucyd brand enthusiasts to get a financial reward for sharing the brand, and operates on similar terms as the Shareasale program where we provide a commission rate in exchange for converting web traffic. Retail Channels 1.
“Send a voice message to (contact)”: this command begins the recording of an audio message to be sent to named contact. 2. “Send a text to (contact)”: begins recording of a speech-to-text message to be sent by SMS to named contact. 3. “Call (contact)”: speed-dials the named contact. 1 4.
“Send a voice message to (contact)”: this command begins the recording of an audio message to be sent to named contact. 2. “Send a text to (contact)”: begins recording of a speech-to-text message to be sent by SMS to named contact. 3. “Call (contact)”: speed-dials the named contact. 4.
At 12 hours of playback per charge, our current product offering of Lucyd eyewear outpaces most, if not all, of the competition on battery life. Capital Light Business Model .
At 12 hours of playback per charge, our current product offering of Lucyd eyewear outpaces most, if not all, of the competition on battery life. 6 Capital Light Business Model .
Walmart.com, BestBuy.com, DicksSportingGoods.com, Brookstone.com, and eBay In addition to our key online sales channel through Lucyd.co, our products are also sold on Walmart.com, BestBuy.com, DicksSportingGoods.com, Brookstone.com, and eBay. 4.
Walmart.com, Target.com, BestBuy.com, DicksSportingGoods.com, Brookstone.com, and eBay In addition to our key online sales channel through Lucyd.co, our products are also sold on Walmart.com, Target.com, BestBuy.com, DicksSportingGoods.com, Brookstone.com, and eBay. 4.
Based on our current discussion with several major optical businesses (by store size), we believe at least one additional major optical chain or national optical buying group will onboard our product line in 2024. However, there can be no assurances that any of these retailers and distributors will sell our products. 3.
Based on our current discussion with several major optical businesses (by store size), we believe at least one additional major optical chain or national optical buying group will onboard our product line in 2025. However, there can be no assurances that any of these retailers and distributors will sell our products. 3.
September 8, 2023 Pending n/a 14 Registered Patent Applications Licensed from Ingeniospec, LLC App/Patent Number Title Country 7,192,136 Tethered Electrical Components for Eyeglasses U.S. 7,255,437 Eyeglasses with Activity Monitoring U.S. 7,380,936 Eyeglasses with a Clock or Other Electrical Component U.S. 7,401,918 Eyeglasses with Activity Monitoring U.S. 7,438,410 Tethered Electrical Components for Eyeglasses U.S. 7,481,531 Eyeglasses with User Monitoring U.S. 7,500,746 Eyewear with Radiation Detection System U.S. 7,500,747 Eyeglasses with Electrical Components U.S. 7,581,833 Eyewear Supporting After-Market Electrical Components U.S. 7,621,634 Tethered Electrical Components for Eyeglasses U.S. 7,677,723 Eyeglasses with a Heart Rate Monitor U.S. 7,771,046 Eyewear with Monitoring Capability U.S. 7,792,552 Eyeglasses for Wireless Communications U.S. 8,109,629 Eyewear Supporting Electrical Components and Apparatus Therefor U.S. 8,337,013 Eyeglasses with RFID Tags or with a Strap U.S. 8,430,507 Eyewear with Touch-Sensitive Input Surface U.S. 8,434,863 Eyeglasses with a Printed Circuit Board U.S. 8,465,151 Eyewear with Multi-Part Temple for Supporting One or More Electrical Components U.S. 8,500,271 Eyewear Supporting After-Market Electrical Components U.S. 8,770,742 Eyewear with Radiation Detection System U.S. 8,905,542 Eyewear Supporting Bone Conducting Speaker U.S. 9,033,493 Eyewear Supporting Electrical Components and Apparatus Therefor U.S. 9,488,520 Eyewear with Radiation Detection System U.S. 9,547,184 Eyewear Supporting Embedded Electronic Components U.S. 9,690,121 Eyewear Supporting One or More Electrical Components U.S. 10,060,790 Eyewear with Radiation Detection System U.S. 10,061,144 Eyewear Supporting Embedded Electronic Components U.S. 10,310,296 Eyewear with Printed Circuit Board U.S. 10,330,956 Eyewear Supporting Electrical Components and Apparatus Therefor U.S. 10,345,625 Eyewear with Touch-Sensitive Input Surface U.S. 10,359,311 Eyewear with Radiation Detection System U.S. 10,539,459 Eyewear with Detection System U.S. 11,086,147 Eyewear Supporting Electrical Components and Apparatus Therefor U.S. 11,204,512 Eyewear Supporting Embedded and Tethered Electronic Components U.S. 11,243,416 Eyewear Supporting Embedded Electronic Components U.S. 15 11,326,941 Eyewear with Detection System U.S. 11,513,371 Eyewear with Printed Circuit Board Supporting Messages U.S. 11,536,988 Eyewear Supporting Embedded Electronic Components for Audio Support U.S. 11,630,331 Eyewear with Touch-Sensitive Input Surface U.S. 11,644,361 Eyewear with Detection System U.S. 11,644,693 Wearable Audio System Supporting Enhanced Hearing Support U.S. 11,733,549 Eyewear Having Removable Temples That Support Electrical Components U.S. 11,762,224 Eyewear Having Extended Endpieces to Support Electrical Components U.S. 11,803,069 Eyewear with Connection Region U.S. 11,829,518 Head-worn Device with Connection Region U.S.
March 20, 2024 Pending n/a Registered Patent Applications Licensed from Ingeniospec, LLC App/Patent Number Title Country 7,192,136 Tethered Electrical Components for Eyeglasses U.S. 7,255,437 Eyeglasses with Activity Monitoring U.S. 7,380,936 Eyeglasses with a Clock or Other Electrical Component U.S. 7,401,918 Eyeglasses with Activity Monitoring U.S. 7,438,410 Tethered Electrical Components for Eyeglasses U.S. 7,481,531 Eyeglasses with User Monitoring U.S. 7,500,746 Eyewear with Radiation Detection System U.S. 7,500,747 Eyeglasses with Electrical Components U.S. 7,581,833 Eyewear Supporting After-Market Electrical Components U.S. 7,621,634 Tethered Electrical Components for Eyeglasses U.S. 7,677,723 Eyeglasses with a Heart Rate Monitor U.S. 7,771,046 Eyewear with Monitoring Capability U.S. 7,792,552 Eyeglasses for Wireless Communications U.S. 8,109,629 Eyewear Supporting Electrical Components and Apparatus Therefor U.S. 8,337,013 Eyeglasses with RFID Tags or with a Strap U.S. 8,430,507 Eyewear with Touch-Sensitive Input Surface U.S. 8,434,863 Eyeglasses with a Printed Circuit Board U.S. 8,465,151 Eyewear with Multi-Part Temple for Supporting One or More Electrical Components U.S. 8,500,271 Eyewear Supporting After-Market Electrical Components U.S. 8,770,742 Eyewear with Radiation Detection System U.S. 8,905,542 Eyewear Supporting Bone Conducting Speaker U.S. 9,033,493 Eyewear Supporting Electrical Components and Apparatus Therefor U.S. 13 9,488,520 Eyewear with Radiation Detection System U.S. 9,547,184 Eyewear Supporting Embedded Electronic Components U.S. 9,690,121 Eyewear Supporting One or More Electrical Components U.S. 10,060,790 Eyewear with Radiation Detection System U.S. 10,061,144 Eyewear Supporting Embedded Electronic Components U.S. 10,310,296 Eyewear with Printed Circuit Board U.S. 10,330,956 Eyewear Supporting Electrical Components and Apparatus Therefor U.S. 10,345,625 Eyewear with Touch-Sensitive Input Surface U.S. 10,359,311 Eyewear with Radiation Detection System U.S. 10,539,459 Eyewear with Detection System U.S. 11,086,147 Eyewear Supporting Electrical Components and Apparatus Therefor U.S. 11,204,512 Eyewear Supporting Embedded and Tethered Electronic Components U.S. 11,243,416 Eyewear Supporting Embedded Electronic Components U.S. 11,326,941 Eyewear with Detection System U.S. 11,513,371 Eyewear with Printed Circuit Board Supporting Messages U.S. 11,536,988 Eyewear Supporting Embedded Electronic Components for Audio Support U.S. 11,630,331 Eyewear with Touch-Sensitive Input Surface U.S. 11,644,361 Eyewear with Detection System U.S. 11,644,693 Wearable Audio System Supporting Enhanced Hearing Support U.S. 11,733,549 Eyewear Having Removable Temples That Support Electrical Components U.S. 11,762,224 Eyewear Having Extended Endpieces to Support Electrical Components U.S. 11,803,069 Eyewear with Connection Region U.S. 11,829,518 Head-worn Device with Connection Region U.S.
March 22, 2019 Issued October 27, 2020 D900,205 Smart Glasses U.S. March 22, 2019 Issued October 27, 2020 D900,920 Smart Glasses U.S. March 22, 2019 Issued November 3, 2020 D900,206 Smart Glasses U.S. March 22, 2019 Issued October 27, 2020 D899,497 Smart Glasses U.S. March 22, 2019 Issued October 20, 2020 D899,498 Smart Glasses U.S.
March 22, 2019 Issued October 27, 2020 D900,205 Smart Glasses U.S. March 22, 2019 Issued October 27, 2020 10 D900,920 Smart Glasses U.S. March 22, 2019 Issued November 3, 2020 D900,206 Smart Glasses U.S. March 22, 2019 Issued October 27, 2020 D899,497 Smart Glasses U.S. March 22, 2019 Issued October 20, 2020 D899,498 Smart Glasses U.S.
All of our products are designed in Miami, manufactured in China, and sold through e-commerce channels, including on our website (Lucyd.co), BestBuy.com, DicksSportingGoods.com, Brookstone.com, and Amazon.com, and sold by over 300 optical and sporting goods retailers. Additionally, we are pursuing online and in-store big box retailers, and in-store and online specialty retailers.
All of our products are designed in Miami, manufactured in China, and sold through e-commerce channels, including on our website (Lucyd.co), BestBuy.com, DicksSportingGoods.com, Brookstone.com, Walmart.com, Target.com, and Amazon.com, and sold by over 300 optical and sporting goods retailers. Additionally, we are pursuing online and in-store big box retailers, and in-store and online specialty retailers.
Our frame fronts are made with what we believe are high quality optical materials to ensure easy lens fitting by any optician. Customizable Product Offering . There are 80+ lens types available for Lucyd Lyte, making it the most customizable smart eyewear in the world.
Our frame fronts are made with what we believe are high quality optical materials to ensure easy lens fitting by any optician. Customizable Product Offering . There are 100+ lens types available for Lucyd Lyte, making it the most customizable smart eyewear in the world.
Sales We have two major sales channels: (1) e-commerce via Lucyd.co and Amazon, and (2) our ongoing development of a network of eyewear, sporting goods, and electronics resellers, including but not limited to, BestBuy.com, DicksSportingGoods.com, and Brookstone, to offer our frames.
Sales We have two major sales channels: (1) e-commerce via Lucyd.co and Amazon, and (2) our ongoing development of a network of eyewear, sporting goods, and electronics resellers, including but not limited to, BestBuy.com, DicksSportingGoods.com, Brookstone.com, Walmart.com, and Target.com, to offer our frames.
All of our products are sold through multiple e-commerce channels, including on our website (Lucyd.co), BestBuy.com, DicksSportingGoods.com and Amazon.com, and are distributed through optical or other retailers (such as, but not limited to, Metro Optics Eyewear and Marca Eyewear Group, Inc.). We believe this capital light approach is highly scalable and efficient in the deployment of resources.
All of our products are sold through multiple e-commerce channels, including on our website (Lucyd.co), BestBuy.com, DicksSportingGoods.com, Brookstone.com, Walmart.com, Target.com, and Amazon.com, and are distributed through optical or other retailers (such as, but not limited to, Metro Optics Eyewear and Marca Eyewear Group, Inc.). We believe this capital light approach is highly scalable and efficient in the deployment of resources.
No. 17/104,849 n/a 12 D954,137 Flat Connector Hinges for Smartglasses Temples U.S. December 19, 2019 Issued June 7, 2022 D974,456 Pivot Hinges and Smartglasses Temples U.S. December 19, 2019 Issued n/a 11,282,523 Voice Assistant Management U.S. March 25, 2020 Issued March 22, 2022 D1,010,718 Wayfarer Smartglasses U.S. July 20, 2020 Issued January 9, 2024 D951,334 Round Smartglasses U.S.
No. 17/104,849 n/a D954,137 Flat Connector Hinges for Smartglasses Temples U.S. December 19, 2019 Issued June 7, 2022 D974,456 Pivot Hinges and Smartglasses Temples U.S. December 19, 2019 Issued January 3, 2023 11,282,523 Voice Assistant Management U.S. March 25, 2020 Issued March 22, 2022 D1,010,718 Wayfarer Smartglasses U.S. July 20, 2020 Issued January 9, 2024 D951,334 Round Smartglasses U.S.
Based on the existing demand for our products, current distribution, and recently consummated supply agreements, we anticipate that our products will be available in a significant number of new third-party retail locations in 2024.
Based on the existing demand for our products, current distribution, and recently consummated supply agreements, we anticipate that our products will be available in a significant number of new third-party retail locations in 2025.
Our Lucyd Lyte eyewear provides both optical-quality glasses and a Bluetooth headset together, at roughly the same price as a traditional pair of designer glasses, which is core to the disruptive potential of our product.
Affordable Price Point . Our Lucyd Lyte eyewear provides both optical-quality glasses and a Bluetooth headset together, at roughly the same price as a traditional pair of designer glasses, which is core to the disruptive potential of our product.
Independent Eyewear Stores The core of our B2B business is formed by our relationship with numerous eyewear store retailers across the United States and Canada, which provide Lucyd Lyte frames directly to their optical customers. Many of these retail stores have placed multiple stocking orders since launching our wholesale business in 2021.
Independent Eyewear Stores The core of our B2B business is formed by our relationship with numerous eyewear store retailers across the United States and Canada, which provide our smart frames directly to their optical customers. Many of these retail stores have placed multiple stocking orders since launching our wholesale business in 2021.
Intellectual Property We license from Lucyd Ltd., a subsidiary of our largest stockholder, an intellectual property portfolio designed to protect our unique eyewear designs and certain technological features in current and anticipated future products. Since 2021, the Company has begun filing patents under its own name.
Intellectual Property We license from Lucyd Ltd., a subsidiary of one of our largest stockholders, an intellectual property portfolio designed to protect our unique eyewear designs and certain technological features in current and anticipated future products. Since 2021, the Company has begun filing patents under its own name.
To date, we have onboarded Chris Clark, a pro golfer; Monique Billings, a WNBA basketball player; Emmanuel Ogbah, an NFL football player; and Hadar Adora, an up-and-coming musical artist. We plan to add additional influencers to enhance awareness and sell-through for a number of key demographics.
In addition, we have onboarded Chris Clark, a pro golfer; Monique Billings, a WNBA basketball player; Emmanuel Ogbah, an NFL football player; and Hadar Adora, an up-and-coming musical artist. We plan to add additional influencers to enhance awareness and sell-through for a number of key demographics.
We were founded by Lucyd Ltd., the inventor and licensor of the technology that our products are based upon, which is a portfolio company of Tekcapital, our largest stockholder. The License Agreement is a royalty-free, fully paid up, perpetual license, for the exclusive use of the following assets: 1.
We were founded by Lucyd Ltd., the inventor and licensor of the technology that our products are based upon, which is a portfolio company of Tekcapital, one of our largest stockholders. The License Agreement is a royalty-free, fully paid up, perpetual license, for the exclusive use of the following assets: 1.
Furthermore, through the quick and easy touch controls on Lucyd Lyte glasses, the wearer can perform many tasks for which they would normally pull out their phone – thus our glasses help untether the eyes of the user from their smartphones throughout the day and enable them to remain more visually vigilant and aware of the traffic around them. 6 Affordable Price Point .
Furthermore, through the quick and easy touch controls on Lucyd Lyte glasses, the wearer can perform many tasks for which they would normally pull out their phone – thus our glasses help untether the eyes of the user from their smartphones throughout the day and enable them to remain more visually vigilant and aware of the traffic around them.
In January 2024, we entered into a multi-year licensing agreement with a third party (IngenioSpec, LLC) for multiple smart eyewear patents, bringing our overall portfolio of owned and licensed intellectual property to over 100 patents. Our current U.S. and foreign patent portfolio is as listed below. 11 Pending and Registered Patent Applications Licensed from Lucyd Ltd.
In January 2024, we entered into a multi-year licensing agreement with a third party (IngenioSpec, LLC) for multiple smart eyewear patents, bringing our overall portfolio of owned and licensed intellectual property to 115 patents and applications. Our current U.S. and foreign patent portfolio is as listed below. Pending and Registered Patent Applications Licensed from Lucyd Ltd.
Amazon Amazon.com/lucyd is our brand shop on Amazon. It drives approximately half of our online sales, but limits the number of variations we can offer on our frames (e.g., prescription lenses are not permitted on Amazon).
Amazon Amazon.com/lucyd is our brand shop on Amazon. It drives approximately one third of our online sales, but limits the number of variations we can offer on our frames (e.g., prescription lenses are not permitted on Amazon).
September 1, 2021 Pending n/a 207516 Smartglasses Canada October 29, 2021 Issued May 23, 2023 207517 Smartglasses Canada October 29, 2021 Issued May 23, 2023 207518 Smartglasses Canada October 29, 2021 Issued May 23, 2023 207519 Smartglasses Canada October 29, 2021 Issued May 23, 2023 29/814,016 Safety Smartglasses U.S. November 2, 2021 Pending n/a 29/814,017 Safety Shields U.S.
September 1, 2021 Issued June 11, 2024 207516 Smartglasses Canada October 29, 2021 Issued May 23, 2023 207517 Smartglasses Canada October 29, 2021 Issued May 23, 2023 207518 Smartglasses Canada October 29, 2021 Issued May 23, 2023 207519 Smartglasses Canada October 29, 2021 Issued May 23, 2023 29/814,016 Safety Smartglasses U.S. November 2, 2021 Pending n/a 29/814,017 Safety Shields U.S.
If a customer orders with prescription or specialty lenses, then the smart eyewear frames are sent to an optical contractor laboratory in Boston, Massachusetts, to have the lenses cut, ground, and mounted in the frames, whereupon they are directly shipped to customers.
If a customer orders with prescription or specialty lenses, then the smart eyewear frames are sent to an optical contractor laboratory in Miami, Florida, to have the lenses cut, ground, and mounted in the frames, whereupon they are directly shipped to customers.
November 10, 2021 Pending n/a 63/297,056 Charging Cradle for Smartglasses U.S. January 6, 2022 Non-Provisional Application filed on December 29, 2022; U.S. App. No. 18/147,002 n/a 212589 Charging Cradle Canada May 9, 2022 Pending n/a ZL 2022302715131 Charging Cradle China May 10, 2022 Issued October 21, 2022 18/147,002 Charging Cradle for Smartglasses U.S.
November 10, 2021 Issued November 19, 2024 63/297,056 Charging Cradle for Smartglasses U.S. January 6, 2022 Non-Provisional Application filed on December 29, 2022; U.S. App. No. 18/147,002 n/a 212589 Charging Cradle Canada May 9, 2022 Issued February 27, 2024 ZL 2022302715131 Charging Cradle China May 10, 2022 Issued October 21, 2022 18/147,002 Charging Cradle for Smartglasses U.S.
No. 18/048,715 n/a 207956 Safety Smartglasses Canada November 17, 2021 Issued May 23, 2023 207957 Safety Shields Canada November 17, 2021 Issued May 30, 2023 2021307950576 Safety Smartglasses China December 2, 2021 Pending n/a ZL 2021307955902 Safety Shields China December 2, 2021 Issued May 3, 2022 18/048,715 Safety Glasses U.S.
No. 18/048,715 n/a 207956 Safety Smartglasses Canada November 17, 2021 Issued May 23, 2023 207957 Safety Shields Canada November 17, 2021 Issued May 30, 2023 2021307950576 Safety Smartglasses China December 2, 2021 Issued March 26, 2024 ZL 2021307955902 Safety Shields China December 2, 2021 Issued May 3, 2022 18/048,715 Safety Glasses U.S.
We make available free of charge on or through our Internet website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission (the “SEC”).
Other Information Our official Internet website is www.lucyd.co, through which we make available free of charge our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission (the “SEC”).
October 21, 2022 Pending n/a 3180624 Safety Glasses Canada November 1, 2022 Pending n/a 202211367067X Safety Glasses China November 2, 2022 Pending n/a 42023078694.9 Safety Glasses Hong Kong September 5, 2023 Pending n/a 13 Pending and Registered Patent Applications Owned by Innovative Eyewear, Inc. App/Patent Number Title Country Filing Date Status Grant Date 29/815,040 Charging Cradle U.S.
October 21, 2022 Pending n/a 3180624 Safety Glasses Canada November 1, 2022 Pending n/a 202211367067X Safety Glasses China November 2, 2022 Pending n/a 42023078694.9 Safety Glasses Hong Kong September 5, 2023 Pending n/a Pending and Registered Patent Applications Owned by Innovative Eyewear, Inc. App/Patent Number Title Country Filing Date Status Grant Date D1,051,829 Charging Cradle U.S.
While we believe that our products are a hybrid of eyeglasses and Bluetooth audio technology, which gives us a unique product that provides us with competitive advantages, we may face competition from many different entities now and in the future. Currently, we face competition from the following products: 5 ● Bose Corporation’s Bose Frames .
While we believe that our products are a hybrid of eyeglasses and Bluetooth audio technology, which gives us a unique product that provides us with competitive advantages, we may face competition from many different entities now and in the future.
In January 2024, we launched the Nautica ® Powered by Lucyd smart eyewear collection in eight different styles, along with various branded accessories including a power brick, cleaning cloth, and a slipcase adorned with the iconic Nautica sail logo.
We currently offer 13 different models under the Lucyd Lyte collection. ● In January 2024, we launched the Nautica ® Powered by Lucyd smart eyewear collection in eight different styles, along with various branded accessories including a power brick, cleaning cloth, and a slipcase adorned with the iconic Nautica sail logo.
Our company’s early successes have demonstrated our ability to not only compete, but to lead in the rapidly changing and expanding technological eyewear market, and we intend to continue spearheading innovation in the field. Giving Back We donate an optical frame for every Lucyd Lyte sold at retail.
Our successes to date demonstrate our ability to not only compete, but to lead in the rapidly changing and expanding technological eyewear market, and we intend to continue spearheading innovation in the field. 3 Giving Back We donate an optical frame for every Lucyd Lyte sold at retail.
Our most recent donation was in December 2023 and consisted of 3000 eyeglass, sunglass, and reading glass frames. Additionally, university students, educators, healthcare workers, uniformed service members, and veterans are eligible for an ongoing 18% discount off all frames and lens upgrades on www.lucyd.co .
Our most recent donation was made in January 2024, and consisted of 3,000 eyeglass, sunglass, and reading glass frames. Additionally, university students, educators, healthcare workers, uniformed service members, and veterans are eligible for an ongoing 18% discount off all frames and lens upgrades on www.lucyd.co .
Pursuant to this agreement, we received a license to utilize received a license to utilize the iconic athletic brand Reebok® for our smart eyewear products. We plan to launch a cobranded line of Reebok® Powered by Lucyd smartglasses later in 2024.
Pursuant to this agreement, we received a license to utilize received a license to utilize the iconic athletic brand Reebok ® for our smart eyewear products. We plan to launch a cobranded line of Reebok ® Powered by Lucyd sport smartglasses in the second quarter of 2025.
At the core of our strategy are the following principles: 1. Consumers prefer smart eyewear that looks and feels like traditional glasses and sunglasses; this is a key element in the design of all of our frames, and makes it easier for traditional eyewear users to switch to our products. 2.
Consumers prefer smart eyewear that looks and feels like traditional glasses and sunglasses; this is a key element in the design of all of our frames, and makes it easier for traditional eyewear users to switch to our products. 2.
We plan to launch a cobranded line of Eddie Bauer® Powered by Lucyd smartglasses later in 2024. On June 12, 2023, we entered into a multi-year global licensing agreement with Authentic Brands Group, which became effective April 1, 2023.
We launched the first line of cobranded line of Eddie Bauer ® Powered by Lucyd smartglasses in April 2024. On June 12, 2023, we entered into a multi-year global licensing agreement with Authentic Brands Group, which became effective April 1, 2023.
“What time is it?”: announces the current time. 10. “Play (song/album/artist)”: this command begins playing the requested song, album, or artist via Apple Music. 11. “Get me directions to (location)”: this command begins navigating on phone, with audible directions on glasses. 12. “Take a memo”: this command begins recording a speech-to-text memo in Notes.
“What time is it?”: announces the current time. 10. “Play (song/album/artist)”: this command begins playing the requested song, album, or artist via Apple Music. 11. “Get me directions to (location)”: this command begins navigating on phone, with audible directions on glasses. 12.
Recent data from the Governors Highway Safety Association indicates that from 2010 to 2021, the number of pedestrian deaths rose by 77%, while all other traffic deaths increased by 25% (Pedestrian Traffic Fatalities by State: 2022 Preliminary Data – (https://www.ghsa.org/resources/Pedestrians23).
Recent data from the Governors Highway Safety Association indicates that since 2010, the number of pedestrian deaths rose by 77%, while all other traffic deaths increased by 22% (Pedestrian Traffic Fatalities by State: 2023 Preliminary Data – (https://www.ghsa.org/resources/Pedestrians24).
Additionally, we issued 3,750,000 shares of our common stock to Lucyd Ltd. as compensation for entering into the License Agreement and for the contribution of certain other assets.
Additionally, we issued 3,750,000 shares of our common stock (187,500 shares on a post-reverse-split basis) to Lucyd Ltd. as compensation for entering into the License Agreement and for the contribution of certain other assets.
We believe smart eyewear is a product category whose time has come, and we believe we are well positioned to capitalize on and help develop this exciting new sector – where eyewear meets electronics in a user-friendly, mass market format, priced similarly to designer eyewear. In first quarter of 2022 we introduced a virtual try-on kiosk for select retail stores.
We believe smart eyewear is a product category whose time has come, and we believe we are well positioned to capitalize on and help develop this exciting new sector – where eyewear meets electronics in a user-friendly, mass market format, priced similarly to designer eyewear.
“Send $___ to (contact)”: this command allows the user to send money to a contact via Venmo or Apple Pay. Follow the digital assistant’s prompts to confirm. 5. “Check my messages”: this command reads out the user’s latest incoming text messages and offers a prompt to reply to each. Close out the digital assistant to end the readout. 6.
“Send $___ to (contact)”: this command allows the user to send money to a contact via Venmo or Apple Cash. 5. “Check my messages”: this command reads out the user’s latest incoming text messages and offers a prompt to reply to each. 6.
November 2, 2021 Pending n/a 63/274,920 Safety Glasses U.S. November 2, 2021 Non-Provisional Application filed on October 21, 2022; U.S. App.
November 2, 2021 Issued November 19, 2024 11 63/274,920 Safety Glasses U.S. November 2, 2021 Non-Provisional Application filed on October 21, 2022; U.S. App.
The Representation Agreement provides for D. Landstrom to act as our commission-based manufacturer’s representative, with the exclusive right to solicit offers on behalf of us to purchase our products in the United States, for the named big box stores.
Landstrom Associates, Inc. for prospecting wholesale relationships with Walmart, Target, and Best Buy stores in the United States. This agreement provides for D. Landstrom to act as our commission-based manufacturer’s representative, with the exclusive right to solicit offers on behalf of us to purchase our products in the United States, for the named big box stores.
Our influencers promote our products on social media, provide us with product placement opportunities at sporting events and other cultural events, and have granted us contractual rights to use their names and likenesses in connection with the advertisement and sale of our products.
Our influencers promote our products on social media, provide us with product placement opportunities at sporting events and other cultural events, and have granted us contractual rights to use their names and likenesses in connection with the advertisement and sale of our products. We have engaged UK football legend and Olympic athlete Micah Richards as our lead brand ambassador.
This free application 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. The app deploys a powerful and unique Siri integration with the Open AI API for ChatGPT, developed internally by the Company.
This free application 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.
We launched the first line of cobranded Nautica® Powered by Lucyd sport lifestyle audio glasses in January 2024. On December 23, 2022, we entered into a multi-year global licensing agreement with Authentic Brands Group, which became effective October 1, 2022. Pursuant to this agreement, we received a license to utilize the outdoor brand Eddie Bauer® for our smart eyewear products.
On December 23, 2022, we entered into a multi-year global licensing agreement with Authentic Brands Group, which became effective October 1, 2022. Pursuant to this agreement, we received a license to utilize the outdoor brand Eddie Bauer ® for our smart eyewear products.
Long form and video content generation are key focus points for the brand, as they allow us to better leverage both emerging and critical smart eyewear narratives through persistent search engine optimization (SEO), increasing our organic brand awareness across the board, in addition to strategic loyalty, influencer, and affiliate marketing campaigns. 10 Our online marketing strategy is primarily driven by pay-per-click advertisements on mainstream search engines, social media apps, and Amazon and other marketplaces.
Long form and video content generation are key focus points for the brand, as they allow us to better leverage both emerging and critical smart eyewear narratives through persistent search engine optimization (SEO), increasing our organic brand awareness across the board, in addition to strategic loyalty, influencer, and affiliate marketing campaigns.
We believe that the similarities between smartwatches and smart eyewear compared to their traditional counterparts indicate that the future of eyewear will also be smart . 4 Our Business Strategy When we initially organized Innovative Eyewear four years ago, there was, in our view, no attractive smart eyewear that addressed the basic consumer need for good looking designer glasses that were stylish, comfortable, lightweight, and provided the functionality of hearables, and priced around the same as regular glasses.
Our Business Strategy When we initially organized Innovative Eyewear five years ago, there was, in our view, no attractive smart eyewear that addressed the basic consumer need for good looking designer glasses that were stylish, comfortable, lightweight, and provided the functionality of hearables, and priced around the same as regular glasses. 4 At the core of our strategy are the following principles: 1.
We have also deployed B2B mailer and digital mailer campaigns to inform optical businesses about our new releases. Strategically offering stylish optical smart eyewear, coupled with expansive end-user customization, plus our ChatGPT app, has the potential to rapidly expand our brand awareness and revenue.
Strategically offering stylish optical smart eyewear, coupled with expansive end-user customization, plus our ChatGPT app, has the potential to rapidly expand our brand awareness and revenue.
The combination of hearables and digital assistants provides a transparent, ergonomic interface between the users and their digital lives. At Innovative Eyewear, we are dedicated to a touch-free interface and untethering our customers eyes from their smartphone screens, through our smart eyewear product.
At Innovative Eyewear, we are dedicated to a touch-free interface and untethering our customers eyes from their smartphone screens, through our smart eyewear product.
This initial product offering embodied our goal of creating smart eyewear for all day wear that looks like and is priced similarly to designer eyewear, but is also light weight and comfortable, and enables the wearer to remain connected to their digital lives.
Since the official launch of our first commercial product, our goal has been to create 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.
We believe this will enable a new software revenue stream for the business and allow us to capture revenue from users of other hearables such as Apple Airpods that want an audio interface for ChatGPT.
This is a new revenue stream for our business, and represents our first diversification in product revenue from frames and lenses. We believe this may also potentially allow us to capture revenue from users of other hearables such as Apple Airpods that want an audio interface for ChatGPT.
Our current product offering consists of 29 different models, which offers a similar amount of style variety as many traditional eyewear collections. All styles are each available with 80+ different lens types, resulting in thousands of variations of products currently available. The Company currently has over 100 licensed patents and applications.
Our current product offering consists of 26 different models (soon to increase to 34 different styles with the pending launch of the Reebok ® sport collection), which offers a similar amount of style variety as many traditional eyewear collections. All styles are available with 100+ different lens types, resulting in thousands of variations of products currently available.
February 9, 2023 Allowed n/a 29/871,111 Smartglasses Temples U.S. February 13, 2023 Pending n/a 18/189,547 System, Apparatus, and Method For Using a Chatbot U.S. March 24, 2023 Pending n/a 18/463,465 Spring-loaded Hinges For Smartglasses U.S.
February 9, 2023 Issued April 2, 2024 D1,020,857 Smartglasses U.S. February 9, 2023 Issued April 2, 2024 12 D1,020,858 Smartglasses U.S. February 9, 2023 Issued April 2, 2024 D1,023,123 Smartglasses Temples U.S. February 13, 2023 Issued April 16, 2024 18/189,547 System, Apparatus, and Method For Using a Chatbot U.S. March 24, 2023 Pending n/a 18/463,465 Spring-loaded Hinges For Smartglasses U.S.
All of the competitors discussed above have substantially greater manufacturing, financial, research and development, personnel, and marketing resources than we do. As a result, although we believe our products are currently superior, our competitors may be able to develop superior products, and compete more aggressively and sustain their competitive advantage over a longer period of time than us.
As a result, although we believe our products are currently superior, our competitors may be able to develop superior products, and compete more aggressively and sustain their competitive advantage over a longer period of time than us. Our products may be rendered obsolete in the face of competition.
Building on our early successes of driving traffic to Lucyd.co, the website run by a subsidiary of our largest stockholder, from Facebook, Instagram, and TikTok, we deploy high quality content on multiple platforms to continuously keep customers engaged and drive brand awareness. 7 We have two levels of margins, one for business to consumers (“B2C”), and one for business to business (“B2B”).
Building on our early successes of driving traffic to our website Lucyd.co, from Facebook, Instagram, and TikTok, we deploy high quality content on multiple platforms to continuously keep customers engaged and drive brand awareness.
Our influencers To accelerate brand awareness and product sales, we are embarking on an influencer strategy to engage leading figures in sports and the arts, who like and enjoy wearing Lucyd Lyte®.
We also attend major regional eyewear, sporting goods, and safety equipment trade shows to build awareness among our potential retail partners. 9 Our influencers To accelerate brand awareness and product sales, we are embarking on an influencer strategy to engage leading figures in sports and the arts, who like and enjoy wearing Lucyd Lyte ® .
The site offers the most customization options of any of our sales channels and a full prescription lens lab, offering over 80 different lenses (21 key lens tints offered in plano, single prescription and progressive bifocal; seven types of reading lenses). Additionally, the Lucyd website ships worldwide and is used to provide a quick and smooth buying experience. 2.
Company website: Lucyd.co Lucyd.co is our primary e-commerce point of sale. The site offers the most customization options of any of our sales channels and a full prescription lens lab, offering over 100 different lens types, including transition lenses and progressive bifocals. Additionally, the Lucyd website ships worldwide and is used to provide a quick and smooth buying experience. 2.
ZL200510067143.5 Radiation Detection System for Eyewear and Other Products China Additionally, we have acquired the exclusive rights to 11 registered trademarks and applications as follows: Trademark Trademark Number Status Jurisdiction LUCYD UK00003258030 Registered UK Lucyd Lens UK00003258093 Registered UK Lucyd Loud UK00003400531 Registered UK Upgrade your eyewear UK00003400579 Registered UK GaaS UK00003451728 Registered UK Vyrb UK00003477240 Registered UK Lyte UK00003526151 Registered UK Upgrade your eyewear Application No. 90/407,646 Application US LUCYD Application No. 90/407,723 Application US Lyte Application No. 90/381051 Application US Vyrb Application No. 90/820713 Application US Material Agreements License Agreement between Innovative Eyewear, Inc. and Lucyd Ltd.
ZL200510067143.5 Radiation Detection System for Eyewear and Other Products China Additionally, we have acquired the exclusive rights to 11 registered trademarks and applications as follows: Trademark Trademark Number Status Jurisdiction LUCYD UK00003258030 Registered UK Lucyd Lens UK00003258093 Registered UK Lucyd Loud UK00003400531 Registered UK Upgrade your eyewear UK00003400579 Registered UK GaaS UK00003451728 Registered UK Vyrb UK00003477240 Registered UK Lyte UK00003526151 Registered UK Upgrade your eyewear 90407646 Registered US LUCYD 90407723 Registered US Lyte 90381051 Registered US Vyrb 90820713 Pending US LUCYD LOUD 18845889 Pending EU LUCYD 18846419 Examination EU LUCYD UK00003886937 Registered UK LUCYD International Reg.
Big Box Retail Stores (Electronics, sporting goods, general merchandise) In addition to mainstream optical channels, we distribute our Lucyd eyewear through leading big box stores, such as Bestbuy.com and Dickssportinggoods.com, through either their eyewear or electronics departments. 4. License Agreements and Specialty Retail Stores We are leaving no stone unturned in our mission to bring smart eyewear mainstream.
Big Box Retail Stores (Electronics, sporting goods, general merchandise) In addition to mainstream optical channels, we distribute our Lucyd eyewear through leading big box stores, such as Best Buy and Dick’s Sporting Goods, through either their eyewear or electronics departments.
For large bulk orders from clients, we are able to order this inventory on demand, due to the expected lead times in the traditional frame sourcing business. 9 All of our frames are manufactured with prefabricated, ready-to-wear sunglass or blue light lenses, and are directly shipped to the customer in this state if the customer declines to purchase custom lens upgrades.
All of our frames are manufactured with prefabricated, ready-to-wear sunglass or blue light lenses, and are directly shipped to the customer in this state if the customer declines to purchase custom lens upgrades.
Our expansive product offering currently consists of 29 different models, which offers a similar amount of style variety as many traditional eyewear collections. When paired with the Vyrb application, Lucyd Lyte glasses will provide a new and safer wearable user experience suitable for everyone. 3 Our goal is to become a meaningful player in the smart eyewear market.
Our expansive product offering currently consists of 26 different models (soon to increase to 34 different styles with the pending launch of the Reebok ® sport collection), which offers a similar amount of style variety as many traditional eyewear collections. When paired with the Lucyd app, our smartglasses provide a new and safer wearable user experience suitable for everyone.
Proprietary Software Sharpens our Competitive Edge Lucyd App The Lucyd app was launched in April 2023 to provide voice access to ChatGPT in Lucyd eyewear. This is a simple and powerful app that provides significant new AI functionality to our glasses at no additional cost to the user, differentiating our products from other smart eyewear.
The Lucyd app is a simple and powerful app that provides significant new AI functionality to our glasses at no additional cost to the user, differentiating our products from other smart eyewear. The app also sports a powerful visual interface for interacting with ChatGPT in a variety of ways.
July 20, 2020 Issued May 10, 2022 17/104,849 Wireless Smartglasses with Quick Connect Front Frames U.S. November 25, 2020 Pending n/a D1,013,765 Smartglasses U.S. September 1, 2021 Issued February 6, 2024 29/806,204 Smartglasses U.S. September 1, 2021 Pending n/a 29/806,207 Smartglasses U.S. September 1, 2021 Pending n/a 29/806,209 Smartglasses U.S.
July 20, 2020 Issued May 10, 2022 12,216,341 Wireless Smartglasses with Quick Connect Front Frames U.S. November 25, 2020 Issued February 4, 2025 D1,013,765 Smartglasses U.S. September 1, 2021 Issued February 6, 2024 D1,030,851 Smartglasses U.S. September 1, 2021 Issued June 11, 2024 D1,030,852 Smartglasses U.S. September 1, 2021 Issued June 11, 2024 D1,030,853 Smartglasses U.S.
We seek to create memorable experiences and products that resonate with our customers, coupled with premium content and campaigns designed to expand our brand presence and market share. We also attend major regional eyewear and sporting goods trade shows to build awareness among our potential retail partners.
We seek to create memorable experiences and products that resonate with our customers, coupled with premium content and campaigns designed to expand our brand presence and market share across all our target segments.
We were founded by Lucyd Ltd., the inventor and licensor of the technology that our products are based upon, which is a portfolio company of Tekcapital Europe Ltd. (“Tekcapital”). Tekcapital is a U.K. based university intellectual property accelerator which builds portfolio companies around new technologies.
On March 26, 2020, we converted from a Florida limited liability company into a Florida corporation. We were founded by Lucyd Ltd., the inventor and licensor of the technology that our products are based upon, which is a portfolio company of Tekcapital Europe Ltd. (“Tekcapital”).
We are addressing this need by developing an exciting software application called Vyrb, as described above. We have made strong strides towards our goal of making smart eyewear accessible to the mass market.
We have made strong strides towards our goal of making smart eyewear accessible to the mass market.
We anticipate launching the cobranded collections with Eddie Bauer and Reebok later in 2024. Manufacturing and Supply Chain Our products are designed in the United States and subsequently manufactured in China. The products are designed in-house, and 3-D Computer-Aided Design (CAD) files are produced with product renderings.
This certification-backed entry into the safety market represents a significant expansion of our addressable market. 8 Manufacturing and Supply Chain Our products are designed in the United States and subsequently manufactured in China. The products are designed in-house, and 3-D Computer-Aided Design (CAD) files are produced with product renderings.
The agreements have base terms of 10 years but are cancellable at our option during the fifth year. 17 Sales Representation Agreement On March 4, 2021, we entered into a commission-only, sale representation agreement with D. Landstrom Associates, Inc. for prospecting wholesale relationships with Walmart, Target, and Best Buy stores in the United States (the “Representation Agreement”).
The aforementioned agreements require us to pay royalties based on a percentage of net retail and wholesale sales, and also require guaranteed minimum royalty payments. The agreements have base terms of 10 years but are cancellable at our option during the fifth year. Sales Representation Agreement On March 4, 2021, we entered into a commission-only, sale representation agreement with D.
We view the integration of Bluetooth technology into the arms of the glasses as one of the key next steps to Upgrade Your Eyewear ® . Our focus therefore is to enhance one of the world’s most important wearables: eyewear.
We view the integration of Bluetooth technology into the arms of the glasses as one of the key next steps enhance one of the world’s most important wearables: eyewear. Additionally, as part of our commitment to a great customer experience, we listen to feedback from our customers, and continuously strive to improve customer satisfaction and experience with our products.
Say “Read my Notes” to play back. Since the launch of Lucyd Lyte, we witnessed interest and demand from customers throughout the United States and have sold thousands of our smart glasses.
“Take a memo”: this command begins recording a speech-to-text memo in Notes, which can also be played back to the user. Since the initial launch of Lucyd Lyte, we witnessed growing interest and demand from customers throughout the United States and have sold thousands of our smart glasses.
For all new intellectual property, Innovative Eyewear will own and control it and be responsible for all prosecution and maintenance costs. The Addendum also confirms that Innovative Eyewear issued Lucyd Ltd. 3,750,000 shares of its common stock as consideration for the license.
For all new intellectual property, Innovative Eyewear will own and control it and be responsible for all prosecution and maintenance costs.
In addition, we support our primary efforts with influencer created and promoted “UGC” (user-generated content), email automations and newsletters, and website push notifications. In 2024, we plan to scale up our affiliate and email marketing efforts to augment our core social ads campaigns.
Our online marketing strategy is primarily driven by pay-per-click advertisements on mainstream search engines, social media apps, and Amazon and other marketplaces. In addition, we support our primary efforts with influencer created and promoted “UGC” (user-generated content), email automations and newsletters, and website push notifications.
Once this update to the interface is completed, the app will be considered officially launched, and the Company will begin to promote it and capitalize on it in earnest. In April 2023, we introduced another major software upgrade for our glasses with the launch of the Lucyd app for iOS and Android.
Proprietary Software Sharpens our Competitive Edge In April 2023, we introduced a major software upgrade for our glasses with the launch of the Lucyd app for iOS and Android.
To support our resellers, we offer a strong co-op marketing program that includes free store display materials. As part of this strategy, we provide digital try-on kiosks to our resellers to help educate their in-store customers about Lucyd eyewear and increase our brand’s physical presence in the optical industry.
To support our resellers, we offer a strong co-op marketing program that includes free store display materials. As part of this strategy, we provide customizable modular display systems and interactive LCD retail fixtures to our resellers to provide an immersive virtual try-on experience along with detailed product info and videos for prospective customers.
Cobranded License Agreements On September 28, 2022, we entered into a multi-year global licensing agreement with Nautica Apparel, Inc., which became effective July 1, 2022. Pursuant to this agreement, we received a license to utilize the global lifestyle brand Nautica® for our smart eyewear products.
The Addendum also confirms that Innovative Eyewear issued Lucyd Ltd. 3,750,000 shares of its common stock (187,500 shares on a post-reverse-split basis) as consideration for the license. 15 Cobranded License Agreements On September 28, 2022, we entered into a multi-year global licensing agreement with Nautica Apparel, Inc., which became effective July 1, 2022.
Our products may be rendered obsolete in the face of competition. Our Competitive Strengths A Unique Solution to a Common Problem . While immensely useful, smartphones can present a safety hazard to motorists, pedestrians, and cyclists because smartphones can distract people from the task or activity at hand.
While immensely useful, smartphones can present a safety hazard to motorists, pedestrians, and cyclists because smartphones can distract people from the task or activity at hand. According to the Governors Highway Safety Association, there were over 7,000 pedestrian deaths in the U.S. in 2023, and experts believe smartphones were partially to blame.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA loss of any of these partners could negatively affect our business. ● If we fail to cost-effectively retain our existing customers or to acquire new customers, our business, financial condition, and results of operations would be harmed. ● If we fail to successfully launch or after we launch receive sufficient revenue from our cobranded collections with Nautica, Eddie Bauer, and Reebok, our business, financial condition, and results of operations would be harmed. ● Eyeglasses are regulated as medical devices by the FDA, and our failure, or the failure of any third-party manufacturer or optical laboratory, to obtain and maintain the necessary marketing authorizations for our products could have a material adverse effect on our business. ● Our profitability and cash flows may be negatively affected if we are not successful in managing our supply chain and customer demands for product deliveries. ● If we fail to maintain and enhance our brand, our ability to engage or expand our base of customers will be impaired, and our business, financial condition, and results of operations may suffer. ● We rely heavily on our information technology systems, as well as those of our third-party vendors, business partners, and service providers, for our business to effectively operate and to safeguard confidential information; any significant failure, inadequacy, interruption, or data security incident could adversely affect our business, financial condition, and operations. ● Our multichannel channel business faces distinct risks, and our failure to successfully manage it could have a negative impact on our profitability. ● If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our solutions may become less competitive. ● We depend on highly skilled personnel to grow and operate our business, and if we are unable to hire, retain, and motivate our personnel, we may not be able to grow effectively. ● A decline in sales of our eyewear would negatively affect our business, financial condition, and results of operations. ● We could be adversely affected by product liability, product recall or personal injury issues. 21 Risks Related to our Intellectual Property ● We license some of our technology from Lucyd Ltd., the largest stockholder of the Company, and our inability to maintain this license could materially affect our business, financial condition, and operating results. ● Failure to adequately maintain and protect our intellectual property and proprietary rights could harm our brand, devalue our proprietary content, and adversely affect our ability to compete effectively. ● We may incur costs to defend against, face liability or for being vulnerable to intellectual property infringement claims brought against us by others.
Biggest changeA loss of any of these partners could negatively affect our business. 17 ● If we fail to cost-effectively retain our existing customers or to acquire new customers, our business, financial condition, and results of operations would be harmed. ● If we fail to successfully launch or after we launch receive sufficient revenue from our cobranded collections with Nautica, Eddie Bauer, and Reebok, our business, financial condition, and results of operations would be harmed. ● Eyeglasses are regulated as medical devices by the FDA, and our failure, or the failure of any third-party manufacturer or optical laboratory, to obtain and maintain the necessary marketing authorizations for our products could have a material adverse effect on our business. ● Our profitability and cash flows may be negatively affected if we are not successful in managing our supply chain and customer demands for product deliveries. ● If we fail to maintain and enhance our brand, our ability to engage or expand our base of customers will be impaired, and our business, financial condition, and results of operations may suffer. ● We rely heavily on our information technology systems, as well as those of our third-party vendors, business partners, and service providers, for our business to effectively operate and to safeguard confidential information; any significant failure, inadequacy, interruption, or data security incident could adversely affect our business, financial condition, and operations. ● Our multichannel channel business faces distinct risks, and our failure to successfully manage it could have a negative impact on our profitability. ● If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our solutions may become less competitive. ● We depend on highly skilled personnel to grow and operate our business, and if we are unable to hire, retain, and motivate our personnel, we may not be able to grow effectively. ● A decline in sales of our eyewear would negatively affect our business, financial condition, and results of operations. ● We could be adversely affected by product liability, product recall or personal injury issues.
Risks associated with our e-commerce and multichannel business include: ● uncertainties associated with our websites, mobile applications and in-store virtual try-on kiosks including changes in required technology interfaces, website downtime and other technical failures, costs and technical issues as we upgrade our systems software, inadequate system capacity, computer viruses, human error, security breaches, legal claims related to our systems operations, and fulfillment; ● our partnership with select third-party apps, through which we sell a portion of our products, are subject to changes in their technology interfaces, website downtime and other technical failures, costs, and issues; 30 ● disruptions in internet service or power outages; ● reliance on third parties for computer hardware and software, as well as delivery of merchandise to our customers; ● rapid technology changes; ● credit or debit card fraud and other payment processing related issues; ● cybersecurity and consumer privacy; and ● natural disasters or adverse weather conditions.
Risks associated with our e-commerce and multichannel business include: ● uncertainties associated with our websites, mobile applications and in-store virtual try-on kiosks including changes in required technology interfaces, website downtime and other technical failures, costs and technical issues as we upgrade our systems software, inadequate system capacity, computer viruses, human error, security breaches, legal claims related to our systems operations, and fulfillment; ● our partnership with select third-party apps, through which we sell a portion of our products, are subject to changes in their technology interfaces, website downtime and other technical failures, costs, and issues; ● disruptions in internet service or power outages; ● reliance on third parties for computer hardware and software, as well as delivery of merchandise to our customers; ● rapid technology changes; ● credit or debit card fraud and other payment processing related issues; ● cybersecurity and consumer privacy; and ● natural disasters or adverse weather conditions.
In addition to other risk factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include: ● our ability to accurately forecast and achieve net revenues and appropriately plan our expenses; ● changes to financial accounting standards and the interpretation of those standards, which may affect the way we recognize and report our financial results; ● the effectiveness of our internal controls; 32 ● the early-stage nature of our business and the need to scale our operations; and ● our ability to introduce our new cobranded products and product upgrades.
In addition to other risk factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include: ● our ability to accurately forecast and achieve net revenues and appropriately plan our expenses; ● changes to financial accounting standards and the interpretation of those standards, which may affect the way we recognize and report our financial results; ● the effectiveness of our internal controls; ● the early-stage nature of our business and the need to scale our operations; and ● our ability to introduce our new cobranded products and product upgrades.
If we are unable to manage our expected growth effectively, our brand, and financial performance may suffer, which may have a material adverse effect on our business, financial condition, and operating results. ● Increases in component costs, shipping costs, long lead times, supply shortages, and supply changes could disrupt our supply chain; factors such as wage rate increases and inflation can have a material adverse effect on our business, financial condition, and operating results. 20 ● We currently derive all of our revenue from sales of our glasses.
If we are unable to manage our expected growth effectively, our brand, and financial performance may suffer, which may have a material adverse effect on our business, financial condition, and operating results. ● Increases in component costs, shipping costs, long lead times, supply shortages, and supply changes could disrupt our supply chain; factors such as wage rate increases and inflation can have a material adverse effect on our business, financial condition, and operating results. ● We currently derive all of our revenue from sales of our glasses.
The CPRA will restrict use of certain categories of sensitive personal information that we handle; further restrict the use of cross-context behavioral advertising techniques on 34 which our products may rely in the future; establish restrictions on the retention of personal information; expand the types of data breaches subject to the private right of action; and establish the California Privacy Protection Agency to implement and enforce the new law, as well as impose administrative fines.
The CPRA will restrict use of certain categories of sensitive personal information that we handle; further restrict the use of cross-context behavioral advertising techniques on which our products may rely in the future; establish restrictions on the retention of personal information; expand the types of data breaches subject to the private right of action; and establish the California Privacy Protection Agency to implement and enforce the new law, as well as impose administrative fines.
Our competitors, most of whom have significantly greater resources than we do, may also be able to benefit from changes in e-commerce technologies, which could harm our competitive position. If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our solutions may become less competitive.
Our competitors, most of whom have significantly greater resources than we do, may also be able to benefit from changes in e-commerce technologies, which could harm our competitive position. 26 If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our solutions may become less competitive.
If our products or services do not meet applicable governmental safety standards or our customers’ expectations regarding quality or safety, we could experience lost sales and increased costs, be exposed to legal and reputational risk, and face fines or penalties which could materially adversely affect our financial results. Refunds, cancellations, and warranty claims could harm our business.
If our products or services do not meet applicable governmental safety standards or our customers’ expectations regarding quality or safety, we could experience lost sales and increased costs, be exposed to legal and reputational risk, and face fines or penalties which could materially adversely affect our financial results. 27 Refunds, cancellations, and warranty claims could harm our business.
While we have taken measures designed to protect the security of the confidential and personal information under our control, we cannot assure you that any security measures that we or our third-party service providers have implemented will be effective against current or future security threats. 29 A security breach may also cause us to breach our contractual obligations.
While we have taken measures designed to protect the security of the confidential and personal information under our control, we cannot assure you that any security measures that we or our third-party service providers have implemented will be effective against current or future security threats. A security breach may also cause us to breach our contractual obligations.
The benefits we currently experience from our suppliers’ relationships could be adversely affected if our suppliers: 38 ● discontinue selling products to us; ● raise their prices; ● increase lead times for products and/or key components We also source inputs directly from suppliers outside of the United States, including China.
The benefits we currently experience from our suppliers’ relationships could be adversely affected if our suppliers: ● discontinue selling products to us; ● raise their prices; ● increase lead times for products and/or key components We also source inputs directly from suppliers outside of the United States, including China.
Increases in transportation costs (including increases in fuel costs), issues with overseas shipments, supplier-side delays, as well as reductions in the transportation capacity of carriers, labor strikes or shortages in the transportation industry, disruptions to the national and international transportation infrastructure, and unexpected delivery interruptions or delays also have the potential to derail our distribution process. 25 Moreover, volatile economic conditions may make it more likely that our suppliers and logistics providers may be unable to timely deliver supplies, or at all, and there is no guarantee that we will be able to timely locate alternative suppliers of comparable quality at an acceptable price.
Increases in transportation costs (including increases in fuel costs), issues with overseas shipments, supplier-side delays, as well as reductions in the transportation capacity of carriers, labor strikes or shortages in the transportation industry, disruptions to the national and international transportation infrastructure, and unexpected delivery interruptions or delays also have the potential to derail our distribution process. 21 Moreover, volatile economic conditions may make it more likely that our suppliers and logistics providers may be unable to timely deliver supplies, or at all, and there is no guarantee that we will be able to timely locate alternative suppliers of comparable quality at an acceptable price.
To maintain a proprietary market position in foreign countries, we may seek to protect some of our proprietary inventions through 36 foreign counterpart patent applications. Statutory differences in patentable subject matter may limit the protection we can obtain on some of our inventions outside of the United States.
To maintain a proprietary market position in foreign countries, we may seek to protect some of our proprietary inventions through foreign counterpart patent applications. Statutory differences in patentable subject matter may limit the protection we can obtain on some of our inventions outside of the United States.
Pursuant to Section 107 of the JOBS 41 Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies.
Pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies.
These agreements may be breached, and we may not have adequate remedies for any such breach. We may be required to spend significant resources to monitor and protect our intellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets.
These agreements may be breached, and we may not have adequate remedies for any such breach. 32 We may be required to spend significant resources to monitor and protect our intellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets.
We do not intend to pay dividends for the foreseeable future. We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. We expect to retain future earnings, if any, to fund the development and growth of our business.
We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. We expect to retain future earnings, if any, to fund the development and growth of our business.
Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, and we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities.
Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities.
Since the completion of our initial public offering in August 2022, we have been required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.
Since the completion of our initial public offering in August 2022, we have been required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which requires management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.
Overall growth of our net revenue will depend on a number of factors, including our ability to: ● Increase exogenous distribution of our products in optical stores, big box retailers, specialty retailers and through multiple e-commerce channels; ● Price our products so that we are able to attract new customers, and expand our relationships with existing customers; ● Accurately forecast our net revenue and plan our operating expenses accordingly; ● Successfully compete with other companies that are currently in, or may in the future enter, the smart eyewear industry or the markets in which we compete, and respond to developments from these competitors such as pricing changes and the introduction of new products and features, noting that most, if not all, of our competitors have stronger balance sheets and larger staffs to devote to their products; ● Comply with existing and new laws and regulations applicable to our business; ● Develop new product offerings, with services and features, including in response to new trends, competitive dynamics, or the needs of customers; ● Successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our business; ● Avoid interruptions or disruptions in our supply chain from natural disasters and political uncertainty; ● Provide customers with a high-quality experience and customer service and support that meets their needs; ● Hire, integrate, and retain talented sales, customer experience, product design, and development and other personnel; ● Effectively manage growth of our business, personnel, and operations; 24 ● Effectively manage our costs related to our business and operations; and, ● Enhance our reputation and the value of the Lucyd brand.
Overall growth of our net revenue will depend on a number of factors, including our ability to: ● Increase exogenous distribution of our products in optical stores, big box retailers, specialty retailers and through multiple e-commerce channels; ● Price our products so that we are able to attract new customers, and expand our relationships with existing customers; ● Accurately forecast our net revenue and plan our operating expenses accordingly; ● Successfully compete with other companies that are currently in, or may in the future enter, the smart eyewear industry or the markets in which we compete, and respond to developments from these competitors such as pricing changes and the introduction of new products and features, noting that most, if not all, of our competitors have stronger balance sheets and larger staffs to devote to their products; ● Comply with existing and new laws and regulations applicable to our business; ● Develop new product offerings, with services and features, including in response to new trends, competitive dynamics, or the needs of customers; ● Successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our business; ● Avoid interruptions or disruptions in our supply chain from natural disasters and political uncertainty; ● Provide customers with a high-quality experience and customer service and support that meets their needs; ● Hire, integrate, and retain talented sales, customer experience, product design, and development and other personnel; ● Effectively manage growth of our business, personnel, and operations; ● Effectively manage our costs related to our business and operations; and, ● Enhance our reputation and the value of the Lucyd brand. 20 Because we have a limited history operating our business, it is difficult to evaluate our current business and future prospects, including our ability to plan for and model future growth.
However, we may not succeed in any of the foregoing, and the planned investments may not result in profitability. 23 We have limited experience in the smart eyewear space.
However, we may not succeed in any of the foregoing, and the planned investments may not result in profitability. 19 We have limited experience in the smart eyewear space.
The market price of our securities could be subject to wide fluctuations in response to a variety of factors, which include: ● actual or anticipated fluctuations in our quarterly or annual operating results; ● publication of research reports by securities analysts about us or our competitors or our industry; ● the public’s reaction to our press releases, our other public announcements and our filings with the SEC; ● our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; ● additions and departures of key personnel; ● strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● the passage of legislation or other regulatory developments affecting us or our industry; ● speculation in the press or investment community; ● changes in accounting principles; 43 ● terrorist acts, acts of war or periods of widespread civil unrest; ● natural disasters and other calamities; and ● changes in general market and economic conditions.
The market price of our securities could be subject to wide fluctuations in response to a variety of factors, which include: ● actual or anticipated fluctuations in our quarterly or annual operating results; ● publication of research reports by securities analysts about us or our competitors or our industry; ● the public’s reaction to our press releases, our other public announcements and our filings with the SEC; ● our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; ● additions and departures of key personnel; ● strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● the passage of legislation or other regulatory developments affecting us or our industry; ● speculation in the press or investment community; ● changes in accounting principles; ● terrorist acts, acts of war or periods of widespread civil unrest; ● natural disasters and other calamities; and ● changes in general market and economic conditions. 37 In addition, the stock market has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies.
If we encounter problems with our third-party warehouse, we may be unable to meet customer expectations, manage our inventory and fulfillment capacity, complete sales, fulfill orders in a timely fashion, and our ability to achieve objectives for operating efficiencies could be adversely affected, all of which could harm our reputation and our relationship with our customers.
If we encounter problems with our third-party warehouse, we may be unable to meet customer expectations, manage our inventory and fulfillment capacity, complete sales, fulfill orders in a timely fashion, and our ability to achieve objectives for operating efficiencies could be adversely affected, all of which could harm our reputation and our relationship with our customers. 34 Our projects could be hindered due to our dependence on third parties to complete many of our contracts.
Risks Related to Our Dependence on Third Parties ● We face risks associated with suppliers from whom our products are sourced and are dependent on a limited number of suppliers. ● Our projects could be hindered due to our dependence on third parties to complete many of our contracts. ● We depend on search engines, social media platforms, digital application stores, content-based online advertising, and other online sources to attract consumers to and promote our website and our mobile applications, which may be affected by third-party interference beyond our control; and, as we grow, the cost of acquiring new customers may continue to rise and become uneconomical.
Risks Related to Our Dependence on Third Parties ● We face risks associated with suppliers from whom our products are sourced and are dependent on a limited number of suppliers. ● Our projects could be hindered due to our dependence on third parties to complete many of our contracts. ● We depend on search engines, social media platforms, digital application stores, content-based online advertising, and other online sources to attract consumers to and promote our website and our mobile applications, which may be affected by third-party interference beyond our control; and, as we grow, the cost of acquiring new customers may continue to rise and become uneconomical. 18 Risks Relating to Our Business, Strategy and Industry Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our securities.
Some of our current intellectual property is licensed from Lucyd Ltd., the largest stockholder of the Company, pursuant to a license agreement we entered into with Lucyd Ltd. on April 1, 2020 (the “License Agreement”).
Some of our current intellectual property is licensed from Lucyd Ltd., one of our larger stockholders, pursuant to a license agreement we entered into with Lucyd Ltd. on April 1, 2020 (the “License Agreement”).
We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of our listing; (2) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC.
In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards. 36 We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of our listing; (2) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC.
Pursuant to the License Agreement, we acquired an exclusive, worldwide license that is royalty-free, fully paid up, and perpetual license for the exclusive use of certain assets of Lucyd Ltd. related to Innovative Eyewear current products and trademarks.
Pursuant to the License Agreement, we acquired an exclusive, worldwide license that is royalty-free, fully paid up, and perpetual license for the exclusive use of certain assets of Lucyd Ltd. related to Innovative Eyewear current products and trademarks. Please see “Business—Material Agreements” for a more complete description of the License Agreement.
If companies or governmental entities block, limit, or otherwise restrict customers from accessing our products and services, our business could be negatively impacted, the number of customers could decline or grow more slowly, and our results of operations could be adversely affected.
In addition, companies may adopt policies that prohibit their employees from using our products and services. If companies or governmental entities block, limit, or otherwise restrict customers from accessing our products and services, our business could be negatively impacted, the number of customers could decline or grow more slowly, and our results of operations could be adversely affected.
We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all. We have funded our operations since inception primarily through net proceeds from the sale of convertible loan notes common stock sales through two registered crowdfunds and our initial public offering.
We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all. Since our inception, we have primarily funded our operations through net proceeds generated from the offering and sale of shares of our common stock and warrants to investors.
Our success depends to a significant degree on Lucyd Ltd.’s ability to obtain, maintain, protect, and enforce our licensed intellectual property rights, including those in our proprietary technologies, know-how, and brand.
Failure to adequately maintain and protect our intellectual property and proprietary rights could harm our brand, devalue our proprietary content, and adversely affect our ability to compete effectively. Our success depends to a significant degree on Lucyd Ltd.’s ability to obtain, maintain, protect, and enforce our licensed intellectual property rights, including those in our proprietary technologies, know-how, and brand.
If we fail to successfully launch or after we launch receive sufficient revenue from our cobranded collections with Nautica, Eddie Bauer, and Reebok, our business, financial condition, and results of operations would be harmed.
If we fail to successfully launch, or after we launch receive insufficient revenue from our cobranded collections with Nautica, Eddie Bauer, and Reebok, our business, financial condition, and results of operations would be harmed. We recently launched our cobranded collections with Nautica and Eddie Bauer in the first and second quarters of 2024, respectively.
In the event we are required to develop alternative, non-infringing technology, this could require significant time (during which we would be unable to continue to offer our affected offerings), effort and expense, and may ultimately not be successful. Any of these events could harm our business and cause our results of operations, liquidity, and financial condition to suffer.
In the event we are required to develop alternative, non-infringing technology, this could require significant time (during which we would be unable to continue to offer our affected offerings), effort and expense, and may ultimately not be successful.
If we lose the ability to use a domain name, we could incur significant additional expenses to market our products within that country, including the development of new branding.
If we lose the ability to use a domain name, we could incur significant additional expenses to market our products within that country, including the development of new branding. This could substantially harm our business, results of operations, financial condition and prospects.
We compete directly with large, integrated optical players that sell both at the retail level and online such as Ray-Ban ® that have multiple products, well regarded brands and retail banners, as well as established and well-regarded consumer electronics companies such as Bose ® .
We compete directly with large, integrated optical players that sell both at the retail level and online such as Ray-Ban ® that have multiple products, well regarded brands and retail banners, as well as established and well-regarded consumer electronics companies. This diversified and capable competition takes place both in physical retail locations as well as online, for smart glasses.
The inability to obtain financing could adversely affect a third party’s ability to provide materials, equipment or services which could have a material adverse impact on our business, financial condition, and results of operations.
In the current economic environment, third parties may find it difficult to obtain sufficient financing to help fund their operations. The inability to obtain financing could adversely affect a third party’s ability to provide materials, equipment or services which could have a material adverse impact on our business, financial condition, and results of operations.
In addition, although we seek to detect and investigate all data security incidents, security breaches, and other incidents of unauthorized access to our information technology systems and data can be difficult to detect and any delay in identifying such breaches or incidents may lead to increased harm and legal exposure of the type described above.
In addition, although we seek to detect and investigate all data security incidents, security breaches, and other incidents of unauthorized access to our information technology systems and data can be difficult to detect and any delay in identifying such breaches or incidents may lead to increased harm and legal exposure of the type described above. 25 The cost of investigating, mitigating, and responding to potential security breaches and complying with applicable breach notification obligations to individuals, regulators, partners, and others can be significant.
Such efforts will require significant time, expense, and attention as there is intense competition for such individuals. 31 Certain technological advances, greater availability of, or increased consumer preferences for, vision correction alternatives to prescription eyeglasses or contact lenses, and future drug development for the correction of vision-related problems may reduce the demand for our products and adversely impact our business and profitability.
Certain technological advances, greater availability of, or increased consumer preferences for, vision correction alternatives to prescription eyeglasses or contact lenses, and future drug development for the correction of vision-related problems may reduce the demand for our products and adversely impact our business and profitability.
In addition, if we are unable to provide high-quality support to customers or help resolve issues in a timely and acceptable manner, our ability to attract new customers and retain customers could be adversely affected.
In addition, if we are unable to provide high-quality support to customers or help resolve issues in a timely and acceptable manner, our ability to attract new customers and retain customers could be adversely affected. If our number of customers declines or fluctuates for any of these reasons among others, our business would suffer.
The market price of our common stock is highly volatile, and since our initial public offering in August 2022, the market price of our common stock has ranged from $0.37 to $7.00 per share.
The market price of our common stock is highly volatile, and since our initial public offering in August 2022, the market price of our common stock has ranged from $3.31 to $96.00 per share (as adjusted for our reverse stock split).
Our competitive price model and pricing pressures in the optical retail industry may inhibit our ability to reflect these increased costs in the prices of our products, in which case such increased costs could have a material adverse effect on our business, financial condition, and results of operations.
Our competitive price model and pricing pressures in the optical retail industry may inhibit our ability to reflect these increased costs in the prices of our products, in which case such increased costs could have a material adverse effect on our business, financial condition, and results of operations especially since we believe that one of our competitive advantages is how the price point for our glasses is generally lower than that of certain of our competitors.
Unanticipated fluctuations in our quarterly operating results could result in a decline in our stock price.
Unanticipated fluctuations in our quarterly operating results could result in a decline in our stock price. Item 1B. Unresolved Staff Comments . None.
Failure to comply with applicable regulations could jeopardize our or our contract manufacturers’ ability to manufacture and sell our products and result in FDA enforcement actions such as: warning letters; fines; injunctions; civil penalties; termination of distribution; recalls or seizures of products; delays in the introduction of products into the market; total or partial suspension of production; refusal to grant future clearances or approvals; withdrawals or suspensions of clearances or approvals, resulting in prohibitions on sales of our products; and in the most serious cases, criminal penalties.
Failure to comply with applicable regulations could jeopardize our or our contract manufacturers’ ability to manufacture and sell our products and result in FDA enforcement actions such as: warning letters; fines; injunctions; civil penalties; termination of distribution; recalls or seizures of products; delays in the introduction of products into the market; total or partial suspension of production; refusal to grant future clearances or approvals; withdrawals or suspensions of clearances or approvals, resulting in prohibitions on sales of our products; and in the most serious cases, criminal penalties. 29 Due to the nature of the Lucyd app as a social application, and our collection of customer data in the process of taking orders, we are subject to rapidly changing and increasingly stringent laws, regulations, obligations, and industry standards relating to privacy, data security, and data protection.
Risks Relating to Our Business, Strategy and Industry Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our securities. If we fail to satisfy the continued listing requirements of Nasdaq such as the corporate governance requirements or the minimum stock price requirement, Nasdaq may take steps to delist our securities.
If we fail to satisfy the continued listing requirements of Nasdaq such as the corporate governance requirements or the minimum stock price requirement, Nasdaq may take steps to delist our securities.
This diversified and capable competition takes place both in physical retail locations as well as online, for smart glasses. To compete effectively, we must continue to create, invest in, or acquire, advanced technology, incorporate this technology into our products, obtain regulatory approvals in a timely manner where required, and process and successfully market our products.
To compete effectively, we must continue to create, invest in, or acquire, advanced technology, incorporate this technology into our products, obtain regulatory approvals in a timely manner where required, and process and successfully market our products.
If our number of customers declines or fluctuates for any of these reasons among others, our business would suffer. 27 Our profitability and cash flows may be negatively affected if we are not successful in managing our inventory balances and inventory shrinkage. Efficient inventory management is a key component of our business success and profitability.
Our profitability and cash flows may be negatively affected if we are not successful in managing our inventory balances and inventory shrinkage. Efficient inventory management is a key component of our business success and profitability.
There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, financial condition, and results of operations. 35 Risks Related to Intellectual Property We license some of our technology from Lucyd Ltd., the largest stockholder of the Company, and our inability to maintain this license could materially affect our business, financial condition, and operating results.
There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, financial condition, and results of operations.
While it is too early to predict how the current and future China tariffs will impact our business, our financial results may also be impacted by any resulting economic slowdown. The Company has researched alternate manufacturing solutions outside of China and believes it can shift production elsewhere if necessary.
While it is too early to predict how the current and future China tariffs will impact our business, our financial results may also be impacted by any resulting economic slowdown.
Such a delisting would likely have a negative effect on the price of our securities and would impair your ability to sell or purchase our securities when you wish to do so.
Such a delisting would likely have a negative effect on the price of our securities and would impair your ability to sell or purchase our securities when you wish to do so. The optical industry is highly competitive, and if we do not compete successfully, our business may be adversely impacted.
Risks Related to Our Dependence on Third Parties We face risks associated with suppliers from whom our products are sourced and are dependent on a limited number of suppliers.
Any of these events could harm our business and cause our results of operations, liquidity, and financial condition to suffer. 33 Risks Related to Our Dependence on Third Parties We face risks associated with suppliers from whom our products are sourced and are dependent on a limited number of suppliers.
If we fail to maintain, protect, and enhance our brand successfully or to maintain loyalty among customers, or if we incur substantial expenses in unsuccessful attempts to maintain, protect, and enhance our brand, we may fail to attract or increase the engagement of customers, and our business, financial condition, and results of operations may suffer. 28 We rely heavily on our information technology systems, as well as those of our third-party vendors, business partners, and service providers, for our business to effectively operate and to safeguard confidential information; any significant failure, inadequacy, interruption, or data security incident could adversely affect our business, financial condition, and operations.
We rely heavily on our information technology systems, as well as those of our third-party vendors, business partners, and service providers, for our business to effectively operate and to safeguard confidential information; any significant failure, inadequacy, interruption, or data security incident could adversely affect our business, financial condition, and operations.
If we are not able to successfully market and sell our cobranded products, we will not receive sufficient revenue to pay the licensing fees and would need to use the proceeds from our other products to pay the fees. 33 Eyeglasses are regulated as medical devices by the FDA, and our failure, or the failure of any third-party manufacturer or optical laboratory, to obtain and maintain the necessary agency authorizations for our products could have a material adverse effect on our business.
Eyeglasses are regulated as medical devices by the FDA, and our failure, or the failure of any third-party manufacturer or optical laboratory, to obtain and maintain the necessary agency authorizations for our products could have a material adverse effect on our business.
Our systems and those of our third-party service providers and business partners may be vulnerable to security incidents, attacks by hackers, acts of vandalism, computer viruses, misplaced or lost data, human errors or other similar events.
Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems could disrupt or reduce the efficiency of our operations. 24 Our systems and those of our third-party service providers and business partners may be vulnerable to security incidents, attacks by hackers, acts of vandalism, computer viruses, misplaced or lost data, human errors or other similar events.
Even if we are able to successfully launch our cobranded collections with Nautica, Eddie Bauer, and Reebok, there is no guarantee that we will receive sufficient revenue to pay the licensing fees that would be owed to Nautica, Eddie Bauer, and Reebok. Specifically, we minimally owe $14,171,210 over the next ten years in licensing fees.
Further, following the launch our cobranded collections with Nautica, Eddie Bauer, and Reebok, there is no guarantee that we will receive sufficient revenue to pay the licensing fees that would be owed to Nautica, Eddie Bauer, and Reebok.
To a high degree, we rely on word of mouth to increase revenue. We also rely on the use of influencers which are expensive and may not provide the anticipated return on investment.
The growth of our business is dependent upon our ability to continue to grow by cost-effectively retaining our existing customers and adding new customers. To a high degree, we rely on word of mouth to increase revenue. We also rely on the use of influencers which are expensive and may not provide the anticipated return on investment.
Further, even if we are successful, defending our intellectual property rights could result in the expenditure of significant financial and managerial resources, which could adversely affect our business, financial condition, and results of operations.
Further, even if we are successful, defending our intellectual property rights could result in the expenditure of significant financial and managerial resources, which could adversely affect our business, financial condition, and results of operations. 31 If we fail to protect our intellectual property rights adequately, our competitors may gain access to our licensed intellectual property and proprietary technology and develop and commercialize substantially identical offerings or technologies.
In June 2020, the U.S. government granted a temporary exclusion for plastic and metal frames with a retroactive effective date of September 1, 2019, and such exclusion expired in September 2020. There remains to be uncertainty as to whether there will be, and the resulting impacts of, any changes to U.S. government trade policy.
In June 2020, the U.S. government granted a temporary exclusion for plastic and metal frames with a retroactive effective date of September 1, 2019, and such exclusion expired in September 2020. Recently, the tariff was increased to 20%.
If we incur additional debt, the debt holders would have rights senior to holders of common stock to make claims on our assets, and the terms of any additional debt could include restrictive covenants that restrict our operations, including our ability to pay dividends on our common stock.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, our ability to develop our products and services, support our business growth, and respond to business challenges could be significantly impaired, and our business may be adversely affected. 28 If we incur additional debt, the debt holders would have rights senior to holders of common stock to make claims on our assets, and the terms of any additional debt could include restrictive covenants that restrict our operations, including our ability to pay dividends on our common stock.
Third parties may assert claims against us alleging that we infringe upon, misappropriate, dilute or otherwise violate their intellectual property rights, particularly as we expand our business and the number of products we offer. These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims.
We may incur costs to defend against, face liability or for being vulnerable to intellectual property infringement claims brought against us by others. Third parties may assert claims against us alleging that we infringe upon, misappropriate, dilute or otherwise violate their intellectual property rights, particularly as we expand our business and the number of products we offer.
Maintaining adequate inventory requires significant attention and monitoring of market trends, local markets, developments with suppliers, and our distribution network, and it is not certain that we will be effective in our inventory management.
Maintaining adequate inventory requires significant attention and monitoring of market trends, local markets, developments with suppliers, and our distribution network, and it is not certain that we will be effective in our inventory management. 23 If we fail to maintain and enhance our brand, our ability to engage or expand our base of customers will be impaired, and our business, financial condition, and results of operations may suffer.
There can be no assurance that the license will not be terminated by Lucyd Ltd. and if we are unable to continue to license the technology (because of, for example, intellectual property infringement claims brought by third-parties against us or against Lucyd Ltd.) then our business, financial condition and operating results would be adversely affected.
There can be no assurance that these licenses will not be terminated by the respective counterparty and if we are unable to continue to license such technology then our business, financial condition and operating results would be adversely affected.
As an “emerging growth company,” as defined in the JOBS Act, we may take advantage of certain temporary exemptions from various reporting requirements, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes Oxley Act (and the rules and regulations of the Securities and Exchange Commission thereunder).
As an “emerging growth company,” as defined in the JOBS Act, which will be in effect until after five years from our initial public offering, we may take advantage of certain temporary exemptions from various reporting requirements, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes Oxley Act (and the rules and regulations of the Securities and Exchange Commission thereunder). 35 Based on the number of personnel available to serve the Company’s accounting function, management believes we are not able to adequately segregate responsibility over financial transaction processing and reporting.
In addition, a failure by a third-party subcontractor, supplier or manufacturer to comply with applicable laws, regulations or client requirements could negatively impact our business and, for government clients, could result in fines, penalties, suspension or even debarment being imposed on us, which could have a material adverse impact on our business, financial condition, and results of operations. 39 We depend on search engines, social media platforms, digital application stores, content-based online advertising, and other online sources to attract consumers to and promote our website and our mobile applications, which may be affected by third-party interference beyond our control and as we grow our customer acquisition costs may rise.
In addition, a failure by a third-party subcontractor, supplier or manufacturer to comply with applicable laws, regulations or client requirements could negatively impact our business and, for government clients, could result in fines, penalties, suspension or even debarment being imposed on us, which could have a material adverse impact on our business, financial condition, and results of operations.
Because we derive most of our revenue from the sale of our glasses, any material decline in sales of our glasses would have a material adverse impact on our business, financial condition, and operating results. 26 We face significant risks due to our dependency on foreign supply and manufacturing chains, geopolitical and economic changes, and changes in public perception about internationally sourced and manufactured products.
Because we derive most of our revenue from the sale of our glasses, any material decline in sales of our glasses would have a material adverse impact on our business, financial condition, and operating results.
Public opinion about internationally sourced and manufactured products could be changed by negative press, which could have an impact on our customers’ confidence and satisfaction and could also have a negative impact on our public image and brand perception.
Public opinion about internationally sourced and manufactured products could be changed by negative press, which could have an impact on our customers’ confidence and satisfaction and could also have a negative impact on our public image and brand perception. 22 If we fail to cost-effectively retain our existing customers or to acquire new customers, our business, financial condition, and results of operations would be harmed.
We believe that the launch of our cobranded collections with Nautica, Eddie Bauer, and Reebok will grow our brand and company due to the global renown of those partners. If we are unable to successfully launch these cobranded collections, we may not be able to grow as currently anticipated and may be required to shift our current business plans.
However, if we are unable to successfully launch the Reebok cobranded collection, we may not be able to grow as currently anticipated and may be required to shift our current business plans.
Finally, since the Vyrb social app allows users to create and share various types of multimedia content in a public space operated by the Company, the Company has a basic responsibility to ensure that illegal or otherwise personally harmful content is removed from the platform with speed, which if we fail to do so, could potentially result in legal action against the Company.
Finally, since the Lucyd app allows users to speak to each other in a public space operated by the Company, the Company has a basic responsibility to ensure that users are not exposed to harmful content, which if we fail to do so, could potentially result in legal action against the Company.
Governmental agencies in any of the countries in which we or our customers are located could block access to or require a license for our mobile applications, website, or the internet generally for a number of reasons, including security, confidentiality, or regulatory concerns. In addition, companies may adopt policies that prohibit their employees from using our products and services.
Any such failure in internet or mobile device or computer accessibility, even for a short period of time, could adversely affect our results of operations. 30 Governmental agencies in any of the countries in which we or our customers are located could block access to or require a license for our mobile applications, website, or the internet generally for a number of reasons, including security, confidentiality, or regulatory concerns.
We may be particularly vulnerable to such claims, as companies having a substantial online presence are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights. As we gain an increasingly high public profile, the possibility of intellectual property rights claims against us grows.
These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims. We may be particularly vulnerable to such claims, as companies having a substantial online presence are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights.
This could substantially harm our business, results of operations, financial condition and prospects. 37 We may incur costs to defend against, face liability or for being vulnerable to intellectual property infringement claims brought against us by others.
Our inability to maintain these licenses could materially affect our business, financial condition, and operating results. ● Failure to adequately maintain and protect our intellectual property and proprietary rights could harm our brand, devalue our proprietary content, and adversely affect our ability to compete effectively. ● We may incur costs to defend against, face liability or for being vulnerable to intellectual property infringement claims brought against us by others.
Claims exceeding our insurance coverage could create significant increases in internal costs. This could even have a material adverse effect on our business, financial condition, and operating results. We may decide to pursue strategic licensing deals to accelerate our growth. These potential brand acquisitions may not be successful.
We currently have General Liability and Product Liability policies covering our business. These policies may not provide sufficient coverage in the face of significant claims or multiple claims. Claims exceeding our insurance coverage could create significant increases in internal costs. This even could have a material adverse effect on our business, financial condition, and operating results.
Our competitors and others may now and in the future have significantly larger and more mature patent portfolios than us.
As we gain an increasingly high public profile, the possibility of intellectual property rights claims against us grows. Our competitors and others may now and in the future have significantly larger and more mature patent portfolios than us.
A decline in sales of our eyewear would negatively affect our business, financial condition, and results of operations. We derive all of our revenue from the sale of one product line, our Lucyd Lyte smart eyewear. Our glasses are sold in highly competitive markets with limited barriers to entry.
We currently derive principally all of our revenue from sales of our glasses and lenses. A decline in sales of our eyewear would negatively affect our business, financial condition, and results of operations. We derive substantially all of our revenue from the sale of smartglasses and custom lenses.
In addition, the stock market has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies. Broad market and industry factors may negatively affect the market price of our common stock and Warrants, regardless of our actual operating performance.
Broad market and industry factors may negatively affect the market price of our common stock and Warrants, regardless of our actual operating performance. In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price.
In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.
This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation. We do not intend to pay dividends for the foreseeable future.
We will need to generate and sustain increased revenue and manage our costs to achieve profitability. Even if we do, we may not be able become or increase our profitability. Our ability to generate profit depends on our ability to strengthen and expand our brand, continue to provide exciting products customers love, expand sales and improve margins.
Our ability to generate profit depends on our ability to strengthen and expand our brand, continue to provide exciting products customers love, expand sales and improve margins.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile. If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile. Our current insurance coverage may not be adequate, and we may not be able to obtain insurance at acceptable rates, or at all.
If we fail to maintain and enhance our brand, our ability to engage or expand our base of customers will be impaired, and our business, financial condition, and results of operations may suffer. Maintaining and enhancing our appeal and reputation as a stylish, innovative, and coveted brand is critical to attracting and expanding our relationships with customers.
Maintaining and enhancing our appeal and reputation as a stylish, innovative, and coveted brand is critical to attracting and expanding our relationships with customers.
There can be no assurance that the IP we acquire in the future will achieve anticipated revenues and earnings.
There can be no assurance that we will be able to profitably manage these cobranded collections, or that they will achieve anticipated revenues and earnings.
The cost of investigating, mitigating, and responding to potential security breaches and complying with applicable breach notification obligations to individuals, regulators, partners, and others can be significant. Further, defending a suit, regardless of its merit, could be costly, divert management attention, and harm our reputation.
Further, defending a suit, regardless of its merit, could be costly, divert management attention, and harm our reputation.
If we are unable to mitigate the full impact of the enacted tariffs or if there is a further escalation of tariffs, costs on a significant portion of our products may increase further and our financial results may be negatively affected.
If we are unable to mitigate the full impact of the enacted and increased tariffs (including whether we could pass these tariff costs on to our customers through pricing adjustments, and if so, whether such increased prices would decrease the number of glasses that we sell), our financial results may be negatively affected.
We had a net loss of $6,616,791 for the year ended December 31, 2023, and a net loss of $5,681,833 for the year ended December 31, 2022. As of December 31, 2023, we had an accumulated deficit of $16,922,778. Because we have a limited operating history it is difficult for us to predict our future operating results.
We have had net losses since inception, had a net loss of $7,665,515 for the year ended December 31, 2024, and had a net loss of $6,663,428 for the year ended December 31, 2023. As of December 31, 2024, we had an accumulated deficit of $24,735,930.
Removed
In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our securities from dropping below the Nasdaq minimum stock price requirement, or prevent future non-compliance with Nasdaq’s listing requirements.
Added
Risks Related to our Intellectual Property ● We license some of our technology from Lucyd Ltd. and from a third party.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity program is managed by our executive management team, including our Chief Executive Officer and Chief Technology Officer, and includes mechanisms, controls, technologies, systems, policies, and other processes designed to prevent or mitigate data loss, theft, misuse, or other security incidents or vulnerabilities affecting the systems and data residing in them.
Biggest changeWhile we have taken measures designed to protect the security of the confidential and personal information under our control, we cannot provide absolute assurance that any security measures that we or our third-party service providers have implemented will be effective against current or future security threats. 38 Our cybersecurity program is managed by our executive management team, including our Chief Executive Officer and Chief Technology Officer, and includes mechanisms, controls, technologies, systems, policies, and other processes designed to prevent or mitigate data loss, theft, misuse, or other security incidents or vulnerabilities affecting the systems and data residing in them.
Removed
While we have taken measures designed to protect the security of the confidential and personal information under our control, we cannot provide absolute assurance that any security measures that we or our third-party service providers have implemented will be effective against current or future security threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeTekcapital now bills us for an allocation of rent paid by Tekcapital on our behalf. Our agreement with Tekcapital does not stipulate a specific end date, and can be terminated with 30 calendar days written notice by any party.
Biggest changeThis arrangement does not have a specific end date, and can be terminated with 30 calendar days written notice by any party. We consider our current office space adequate for our current operations.
Item 2. Properties . Our executive offices are located at 11900 Biscayne Blvd., Suite 630, North Miami, Florida 33181. Our executive offices are provided to us by Tekcapital. We consider our current office space adequate for our operations.
Item 2. Properties . Our executive offices are located at 11900 Biscayne Blvd., Suite 630, North Miami, Florida 33181. Our executive offices are provided to us by Tekcapital, who bills us for an allocation of rent paid by Tekcapital on our behalf.
Removed
Prior to February 1, 2022, we were provided with rent-free office space by Tekcapital pursuant to the terms of a management service agreement. Effective February 1, 2022, the management services agreement was amended such that (among other things) the office space provided by Tekcapital is no longer rent-free.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. 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 4. Mine Safety Disclosures . Not applicable. 45 P ART II
Biggest changeItem 3. 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 4. Mine Safety Disclosures . Not applicable. 39 P ART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Securities There were no sales of unregistered securities during the three months ended December 31, 2023. Purchases of Securities by the Issuer and Affiliated Purchasers On April 12, 2023, an individual cashlessly exercised of 300,000 stock options and received 85,638 shares of common stock. Item 6. Reserved .
Biggest changeRecent Sales of Unregistered Securities There were no sales of unregistered securities during the three months ended December 31, 2024. Purchases of Securities by the Issuer and Affiliated Purchasers On April 12, 2023, an individual cashlessly exercised of 300,000 stock options and received 85,638 shares of common stock.
Holders As of December 31, 2023, the approximate number of holders of record of our common stock was 3,780 and the closing price of our common stock was $0.42 per share. As of December 31, 2023, the approximate number of holders of record of our Warrants was 1 and the closing price of our Warrants was $0.05 per Warrant.
Holders As of December 31, 2024, the approximate number of holders of record of our common stock was 3,775 and the closing price of our common stock was $4.92 per share. As of December 31, 2024, the approximate number of holders of record of our Warrants was 1 and the closing price of our Warrants was $0.045 per Warrant.
Added
On September 23, 2024, an investor cashlessly exercised 40,000 warrants and received 20,482 shares of common stock.
Added
On December 13, 2024, a total of 3,322 shares of common stock were exchanged from employees in connection with the income tax withholding obligations on behalf of such employees from the vesting of restricted stock units; the Company immediately sold such shares in the market. Item 6. Reserved .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Years Ended December 31, 2023 (“current year”) and December 31, 2022 (“prior year”) Year ended December 31, 2023 Year ended December 31, 2022 Change between the year ended December 31, 2023 and 2022 Revenues, net $ 1,152,479 100 % $ 659,788 100 % $ 492,691 75 % Less: Cost of Goods Sold (1,271,808 ) 110 % (716,077 ) 109 % (555,731 ) 78 % Gross Deficit (119,329 ) -10 % (56,289 ) -9 % (63,040 ) 112 % Operating Expenses: General and administrative (3,886,960 ) 337 % (2,796,669 ) 424 % (1,090,291 ) 39 % Sales and marketing (2,047,069 ) 178 % (2,059,012 ) 312 % 11,943 -1 % Research & development (662,184 ) 57 % (524,692 ) 80 % (137,492 ) 26 % Related party management fee (140,000 ) 12 % (140,000 ) 21 % - 0 % Total Operating Expenses (6,736,213 ) 584 % (5,520,373 ) 837 % (1,215,839 ) 22 % Other Income (Expense) 195,150 -17 % - 195,150 n/m Interest Expense (3,036 ) 0 % (105,171 ) 16 % 102,135 -97 % Total Other Income (Expense), net 192,114 -17 % (105,171 ) 16 % 297,285 -283 % Net Loss $ (6,663,428 ) 578 % $ (5,681,833 ) 861 % $ (981,595 ) 17 % 50 Revenue Our revenues for the year ended December 31, 2023, were $1,167,479, representing an increase of approximately 77% as compared to revenues of $659,788 during the year ended December 31, 2022.
Biggest changeThis 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. 42 Results of Operations Years Ended December 31, 2024 (“current year”) and December 31, 2023 (“prior year”) Year ended December 31, 2024 Year ended December 31, 2023 Change Revenues, net $ 1,636,440 100 % $ 1,152,479 100 % $ 483,961 42 % Less: Cost of Goods Sold (1,421,250 ) 87 % (1,271,808 ) 110 % (149,442 ) 12 % Gross Profit (Deficit) 215,190 13 % (119,329 ) -10 % 334,519 280 % Operating Expenses: General and administrative (4,473,292 ) 273 % (3,886,960 ) 337 % (586,332 ) 15 % Sales and marketing (2,706,213 ) 165 % (2,047,069 ) 178 % (659,144 ) 32 % Research and development (819,387 ) 50 % (662,184 ) 57 % (157,203 ) 24 % Related party management fee (140,000 ) 9 % (140,000 ) 12 % - 0 % Total Operating Expenses (8,138,892 ) 497 % (6,736,213 ) 584 % (1,402,679 ) 21 % Other Income (Expense) 157,187 10 % 195,150 17 % (37,963 ) -19 % Interest Expense - 0 % (3,036 ) 0 % 3,036 100 % Total Other Income (Expense), net 157,187 10 % 192,114 17 % (34,927 ) -18 % Net Loss $ (7,766,515 ) 475 % $ (6,663,428 ) 578 % $ (1,103,087 ) 17 % Revenue Our revenues for the year ended December 31, 2024, were $1,636,440, representing an increase of approximately 42% as compared to revenues of $1,152,479 during the year ended December 31, 2023.
Our revenue is recognized upon meeting the performance obligation, which is delivery of the Company’s eyewear products to the retail store and is also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to the retail store partners includes volume discounts, due to the nature of large quantity orders.
Revenue is recognized upon meeting the performance obligation, which is delivery of the Company’s eyewear products to the retail store, and is also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to retail store partners includes volume discounts, due to the nature of large quantity orders.
Our flagship product, Lucyd Lyte, enables the wearer to listen to music, take and make calls, and use voice assistants and ChatGPT to perform many common smartphone tasks hands-free. 46 Our mission is to Upgrade Your Eyewear ® .
Our flagship product, Lucyd Lyte, enables 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 ® .
Smart eyewear is a highly specialized product that has the combined specifications and component requirements of a wireless Bluetooth headset and optical eyewear in one, meaning it is expensive to manufacture in small quantities of a few thousand at a time.
Smart eyewear is a highly specialized product that has the combined specifications and component requirements of a wireless Bluetooth headset and optical eyewear in one, meaning it is expensive to manufacture in smaller quantities of a few thousand at a time.
Based on the existing demand for our products, current distribution, and recently consummated supply agreements, we anticipate that our products will be available in a significant number of new third-party retail locations in 2024.
Based on the existing demand for our products, current distribution, and recently consummated supply agreements, we anticipate that our products will be available in a significant number of new third-party retail locations in 2025.
The Company charges applicable state sales taxes in addition to the MSRP for both online channels and all other marketplaces on which the company sells products. For sales to our retail store partners, we identify the contract with a customer upon receipt of an order of our eyewear through our Shopify wholesale portal or direct purchase order.
The Company charges applicable state sales taxes in addition to the MSRP for both online channels and all other marketplaces on which we sell products. 53 For sales to our retail store partners, we identify the contract with a customer upon receipt of an order of our eyewear through our Shopify wholesale portal or direct purchase order.
Financing Activities Net cash flows provided by financing activities for year ended December 31, 2023 are mainly driven by the various capital-raising activities undertaken during the current year, including our second public offering completed in June 2023 and exercises of warrants by stockholders earlier in the year, partially offset by repayment of advances and convertible debt to related parties.
Net cash flows provided by financing activities for year ended December 31, 2023 were mainly driven by the various capital-raising activities undertaken during the year, including our second public offering completed in June 2023 and exercises of warrants by stockholders earlier in the year, partially offset by repayment of advances and convertible debt to related parties.
We are offering a strong co-op marketing program with retail stores, and intend to expand our sales, marketing, and brand ambassador teams to broaden our brand awareness and online presence. Key Performance Indicators Store Count (B2B) We believe that one of the key indicators for our business is the number of retail stores onboarded to sell Lucyd Lyte.
We are offering a strong co-op marketing program with retail stores, and intend to expand our sales, marketing, and brand ambassador teams to broaden our brand awareness and online presence. Key Performance Indicators Store Count (B2B) We believe that one of the key indicators for our business is the number of retail stores onboarded to sell our products.
Related party management fee Our related party management fee was $140,000 for each of the years ended December 31, 2023 and 2022, based on the terms of the management services agreement between us and Tekcapital.
Related party management fee Our related party management fee was $140,000 for each of the years ended December 31, 2024 and 2023, based on the terms of the management services agreement between us and Tekcapital.
Shipping and Handling Costs incurred for shipping and handling are included in cost of revenue at the time the related revenue is recognized. Amounts billed to a customer for shipping and handling are reported as revenues.
Amounts billed to a customer for shipping and handling are reported as revenues; costs incurred for shipping and handling are included in cost of goods sold at the time the related revenue is recognized.
As part of this strategy, we have launched a new modular display system with engaging video screens and audio testing capabilities for our resellers to help educate their in-store customers about Lucyd Lyte and enable customers to try them on.
As part of this strategy, we have launched a new modular display system with engaging video screens and audio testing capabilities for our resellers to help educate their in-store customers about Lucyd products and enable customers to virtually try them on.
For the year ended December 31, 2023, we generated $978,405 of revenue from sales of non-prescription frames and accessories, and $189,074 from sales of frames with prescription lenses.
For the year ended December 31, 2023, we generated $963,405 of revenue from sales of non-prescription frames and accessories, and $189,074 from sales of frames with prescription lenses.
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. Current geopolitical and macroeconomic factors have caused disruption in the global financial markets, which could reduce our ability to access capital and negatively affect our liquidity in the future.
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.
The Black-Scholes-Merton option pricing model incorporates various and highly subjective assumptions, including expected term and share price volatility. ● The expected term of the stock options was estimated based on the simplified method as allowed by Staff Accounting Bulletin 107 (SAB 107). ● The share price volatility at the grant date is estimated using historical stock prices based upon the expected term of the options granted, using stock prices of comparably profiled public companies. ● The risk-free interest rate assumption is determined using the rates for U.S.
The Black-Scholes-Merton option pricing model incorporates various and highly subjective assumptions, including expected term and share price volatility. ● The expected term of the stock options is estimated based on the simplified method as allowed by Staff Accounting Bulletin No. 107. ● The share price volatility is estimated using historical stock prices based upon the expected term of the options granted, using stock prices of comparably profiled public companies. ● The risk-free interest rate assumption is determined using the rates for U.S.
Inventory Our inventory includes purchased eyewear 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.
Inventory Our inventory consists of purchased eyewear and related accessories, and is stated at the lower of cost or net realizable value, with cost determined on a specific identification method of inventory costing which attaches the actual cost to an identifiable unit of product.
A growing network of retail stores, including independent eyewear stores and national eyewear chains – we currently have approximately 350 retail stores selling our products (across just over 300 unique wholesale accounts), and are continually working to expand our network.
A growing network of retail stores, including independent eyewear stores and national eyewear chains – we currently have over 540 retail stores selling our products (across over 300 unique wholesale accounts), and are continually working to expand our network.
Components of Results of Operations Net Revenue Our revenue is generated from the sales of prescription and non-prescription optical glasses and sunglasses, and shipping charges associated with these purchases, which are charged to the customer. We sell products through our retail store resellers, distributors, on our own website Lucyd.co, and on Amazon.com.
Revenue Recognition Our revenue is primarily generated from the sales of prescription and non-prescription optical glasses and sunglasses, and shipping charges which are charged to the customer associated with these purchases. We sell products through our retail store resellers, distributors, on our own website Lucyd.co, and on Amazon.com.
Our e-commerce revenue is recognized upon meeting of the performance obligation when the eyewear is shipped to end customers. Only U.S. consumers enjoy free USPS first class postage, with faster delivery options available for extra cost, for sales processed through our website and on Amazon.
Our e-commerce revenue is recognized upon meeting of the performance obligation when the eyewear is shipped to end customers. U.S. consumers enjoy free USPS first class postage on orders over $149, with faster delivery options available for extra cost, for sales processed through our website.
This proprietary display system is central to our efforts to introduce traditional retail customers to Lucyd eyewear, and we are planning further enhancements to our merchandising displays to enable more immersive experiences. Additionally, we consistently incorporate retail partner feedback directly into our frames to better serve our end users.
This proprietary display system is central to our efforts to introduce traditional retail customers to Lucyd eyewear, and we are planning further enhancements to our merchandising displays to enable more immersive experiences. Additionally, we consistently incorporate retail partner feedback directly into our frames to better serve our end users. We have deployed 45 such display systems to retailers.
Since the initial launch of Lucyd Lyte in 2021, we have sold thousands of our smartglasses, and have significantly upgraded and expanded our product offerings – including the launch of Lucyd Lyte 2.0 and Lyte XL smartglasses in 2023, and most recently with the launch of the Nautica® Powered by Lucyd smart eyewear collection in January 2024.
Since the initial launch of Lucyd Lyte in 2021, we have sold thousands of our smartglasses, and have significantly upgraded and expanded our product offerings – including the launch of Lucyd Lyte 2.0 and Lyte XL smartglasses in 2023, and most recently with the launch of the Lucyd Armor ™ , Nautica ® Powered by Lucyd , and Eddie Bauer ® Powered by Lucyd smart eyewear collections in 2024.
Out of our total cost of goods sold for the year ended December 31, 2023, $271,229 related to orders with prescription lenses, while $969,064 pertained to non-prescription orders.
Out of our total cost of goods sold for the year ended December 31, 2023, $271,229 related to orders with prescription lenses, while $1,000,579 pertained to non-prescription orders.
Additionally, we review all individual returns received in the month following the balance sheet date pertaining to orders processed prior to the balance sheet date in order to determine whether an allowance for sales returns is necessary. We recorded an allowance for sales returns of $25,933 and $24,897 as of December 31, 2023 and 2022, respectively.
Additionally, we review all individual returns received in the month following the balance sheet date pertaining to orders processed prior to the balance sheet date in order to determine whether an allowance for sales returns is necessary. The Company recorded an allowance for sales returns of $15,746 and $25,933 as of December 31, 2024 and 2023, respectively. Item 7A.
We amortize these assets over the estimated useful life of the patents. ● Capitalized software costs incurred due to development of the Vyrb app. We amortize these assets over the estimated useful life of the software application. We review our intangible assets for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
We amortize these assets over the estimated useful life of the patents, and review our intangible assets for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable. ● Capitalized software costs.
As of December 31, 2023, 45 display systems have been deployed so far to retailers. 47 Investing in business growth We believe that people care about what they wear on their faces, and because we understand that customers have diverse preferences about the shape, size, and design of their eyewear, we aim to continuously invest in the design and development of new models in an effort to provide the consumer with a wide selection of styles, colors, and finishes.
Investing in business growth We believe that people care about what they wear on their faces, and because we understand that customers have diverse preferences about the shape, size, and design of their eyewear, we aim to continuously invest in the design and development of new models in an effort to provide the consumer with a wide selection of styles, colors, and finishes.
This sales channel mix positively impacted our revenue for the current year as compared with the prior year, due to the fact we charge additional $35 to $275 for our prescription lenses available only on Lucyd.co.
As the relative proportion of sales processed through Lucyd.co for the current year increased as compared to the relative proportion of sales processed through Lucyd.co in the prior year, this shift in sales channel mix positively impacted our revenue for the current year as compared with the prior year, due to the fact we charge an additional $35 to $275 for our prescription lenses available only on Lucyd.co.
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. No provisions were determined as needed as of December 31, 2023 and 2022.
Provisions for excess, obsolete, or slow-moving inventory are recorded after periodic evaluation of historical sales, current economic trends, forecasted sales, estimated product life cycles, and estimated inventory levels. Such provisions were $0 and $31,637 as of December 31, 2024 and 2023, respectively.
All of the $384,293 in sales generated on Amazon.com during the current year were for non-prescription frames and accessories, as we only offer prescription lenses through our website and our optical store partners. Of the $554,060 in online sales generated through Lucyd.co, $189,074 was related to frames with prescription lenses and $364,986 was related to glasses with non-prescription lenses.
All of the $375,513 in sales generated on Amazon.com during the current year were for non-prescription frames and accessories, as we only offer prescription lenses through our website and our optical store partners. Of the $547,850 in online sales generated through Lucyd.co, $189,074 was related to frames with prescription lenses and $358,776 was related to glasses with non-prescription lenses.
During the year ended December 31, 2023, we recognized $17,500 of revenue that was included in the contract liability balance as of January 1, 2023.
During the years ended December 31, 2024 and 2023, we recognized $30,000 and $17,500 of revenue, respectively, that was included in the contract liability balance as of January 1, 2024 and 2023, respectively.
As of December 31, 2023 and 2022, we recorded an inventory prepayment in the amount of $323,520 and $197,750, respectively, related to down payment on eyewear purchased from the manufacturer, prior to shipment of the product that occurred after the respective balance sheet dates. Intangible Assets Intangible assets relate to: ● Internally-developed and licensed utility and design patents.
As of December 31, 2024 and 2023, the Company recorded an inventory prepayment in the amount of $424,594 and $323,520, respectively, related to down payments on eyewear purchased from the manufacturer, prior to shipment of the product that occurred after the respective balance sheet dates. 51 Intangible Assets Intangible assets recognized on the Company’s books relate to: ● Internally-developed and licensed utility and design patents.
The Company also continued to invest in its growing intellectual property portfolio, making expenditures to file for various new patents.
Treasury bills. At the same time, the Company continued to invest in its growing intellectual property portfolio, making expenditures to file for various new patents.
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.
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 December 31, 2024, we did not have any off-balance sheet arrangements.
This increase was primarily due to the following: General and administrative expenses Our general and administrative expenses increased by 39% to $3,886,960 for the year ended December 31, 2023, as compared to $2,796,669 for the year ended December 31, 2022.
This increase was primarily due to the following: General and administrative expenses Our general and administrative expenses increased by 15% to $4,473,292 for the year ended December 31, 2024, as compared to $3,886,960 for the year ended December 31, 2023.
As of the date of this Annual Report on Form 10-K, we have not borrowed any amounts under this convertible note. 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.
The Company has not borrowed any amounts under this agreement. 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.
Off-Balance Sheet Arrangements As of December 31, 2023, we did not have any off-balance sheet arrangements. 55 Critical Accounting Policies and Significant Developments and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.
Critical Accounting Policies and Significant Developments and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.
We apply a manufacturer suggested retail price (“MSRP”) of $149 – $199 for non-prescription, polarized sunglass, and blue light blocking glasses across all of our online channels, with our wholesale pricing offering volume discounts to these prices. Please refer to discussion in the Components of Results of Operations for more details regarding our pricing structure.
We apply a manufacturer suggested retail price (“MSRP”) of $149 – $199 for non-prescription, polarized sunglass, and photochromic glasses across all of our online channels, with our wholesale pricing offering volume discounts to these prices.
If collectability of substantially all of the contract consideration is probable, our revenue is recognized upon meeting the performance obligation, which is delivery of our eyewear products to the distributor, and is also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to distributors includes volume discounts, due to the nature of large quantity orders.
If collectibility of substantially all of the contract consideration is probable, revenue is recognized upon meeting the performance obligation, which is delivery of our eyewear products to the distributor, and is also recorded net of returns and discounts.
In addition, pursuant to the terms of the placement agency agreement for the offering, the Company issued to the placement agent certain other warrants to purchase up to 180,000 shares of the Company’s common stock at an exercise price of $1.31 per share. The net proceeds received by the Company from this offering amounted to $4,115,688.
In addition, pursuant to the terms of the placement agency agreement for the offering, the Company issued to the placement agent certain other warrants to purchase up to 9,000 shares of the Company’s common stock at an exercise price of $26.25 per share.
All revenue, including sales processed online and through our retail store resellers and distributors, is reported net of sales taxes collected from customers on behalf of taxing authorities, returns, and discounts. 57 For sales generated through our e-commerce channels, we identify the contract with a customer upon online purchase of our eyewear and transaction price at the manufacturer suggested retail price (“MSRP”) for non-prescription, polarized sunglass and blue light blocking glasses across all of our online channels.
For sales generated through our e-commerce channels, we identify the contract with a customer upon online purchase of our eyewear and transaction price at the manufacturer suggested retail price (“MSRP”) for non-prescription, polarized sunglass and blue light blocking glasses across all of our online channels.
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 contract with existing sources of production and proven consumer-facing retail distribution.
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 and manufacturing.
Our wholesale pricing for eyewear sold to retail store partners and distributors includes volume discounts, due to the nature of large quantity orders. The pricing includes shipping charges, while excluding any state sales tax charges applicable. Due to the nature of wholesale retail orders, no e-commerce fees are applicable.
Our wholesale pricing for eyewear sold to retail store partners and distributors includes volume discounts, due to the nature of large quantity orders. The pricing does not include shipping. Due to the nature of wholesale retail orders, no marketplace fees are applicable, only credit card processing fees.
We started onboarding our first retail stores in June 2021. Currently, we have approximately 350 retail stores selling Lucyd Lyte primarily in the United States and Canada, across just over 300 unique wholesale accounts.
We started onboarding our first retail stores in June 2021, and since then have continue to grow through the current year. Currently, we have over 540 retail stores selling our smart eyeglasses, primarily in the United States and Canada, across over 300 unique wholesale accounts.
Key components of cost of goods sold for the year ended December 31, 2022 included, but were not limited to, the cost of frames of $478,020, cost of prescription lenses incurred with our third-party vendor of $104,217, affiliate referral fees, sales commission expense, and e-commerce platform fees of $128,340, and quality assurance costs related to our products sold of $5,500.
Key components of cost of goods sold for the year ended December 31, 2023 included, but were not limited to, the cost of frames of $756,795; cost of prescription lenses incurred with our third-party vendor of $271,229; commissions, affiliate referral fees, and e-commerce platform fees of $201,686; shipping and logistics costs of $20,415; and quality assurance costs of $13,100.
Except for historical information, the matters discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are forward-looking statements that involve risks and uncertainties and are based upon judgments concerning factors that are beyond our control.
Except for historical information, the matters discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are forward-looking statements that involve risks and uncertainties and are based upon judgments concerning factors that are beyond our control. 40 Overview We develop and sell cutting-edge smart eyeglasses and sunglasses, which are designed to allow our customers to remain connected to their digital lives, while also offering vision correction and protection.
The net proceeds received by the Company from this offering amounted to $6,189,734.
The net proceeds received by the Company from this transaction amounted to approximately $391,000.
We believe that our income tax positions would be sustained on audit and do not anticipate any adjustments that would result in a material change to the Company’s financial position. 56 We have incurred taxable losses since inception but are current in our tax filing obligations. We are not presently subject to any income tax audit in any taxing jurisdiction.
Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our financial statements. We believe that our income tax positions would be sustained on audit and do not anticipate any adjustments that would result in a material change to the Company’s financial position.
Customer Ratings (B2C) The Lucyd Lyte version 2.0 product is receiving higher ratings online compared to our previous products, indicating that customers are appreciative of improvements in product design, functionality, and build quality. Many of our version 2.0 variants carry a 4.0/5 rating or higher, compared to most products with an approximate 3.5/5 rating from our previous collection.
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. For example, our new Lucyd Armor product has a 4/5 rating on Amazon.
E-commerce – primarily via our website (Lucyd.co) and Amazon.com, as well as through Walmart.com, BestBuy.com, DicksSportingGoods.com, Brookstone.com, and eBay; and, 2.
All of our products are designed in Miami, manufactured in Asia, and currently sold through two major types of channels: 1. E-commerce – primarily via our website (Lucyd.co) and Amazon.com, as well as through Walmart.com, Target.com, BestBuy.com, DicksSportingGoods.com, Brookstone.com, and eBay; and, 2.
However, our future capital requirements will depend on many factors, including, but not limited to, growth in the number of retail store customers, 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 believe our existing cash and cash equivalents (including the proceeds from the equity offerings described above), plus the availability to borrow funds via the March 2024 related party agreement with Lucyd Ltd., will be sufficient to fund our operations for at least the next twelve months. 50 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.
Our overall actual spending on advertising and promotions in 2023 increased significantly over prior year, particularly in the areas of spending on paid ads on websites and social media platforms, as well as spending on influencers, but was largely offset by the reversal of approximately $309,000 of previously-recognized stock-based compensation for certain individuals within the Company’s sales and marketing function whose awards expired during the current year without ever having vested, as the related performance conditions (sales quotas) for those awards were not met.
This increase was primarily driven by the combination of (i) increased spending on paid ads to drive sales growth, and (ii) higher stock-based compensation recognized expense in the current year, mainly due to the fact that the prior year expense amount included the impact of a significant reversal of previously-recognized stock-based compensation for certain individuals within the Company’s sales and marketing function whose awards expired in 2023 without ever having vested, as the related performance conditions (sales quotas) for those awards were not met.
Cost of goods sold was also impacted by sales channel mix, as a higher relative proportion of our sales in the current year were through our online store (Lucyd.co), and the cost of prescription lenses attributable to this channel increased our cost of goods sold while not impacting cost of goods sold for sales realized through Amazon or retail store partners.
These decreases were also impacted by sales channel mix, as a lower relative proportion of our sales in the current year were through our online store (Lucyd.co) in the current year than in the prior year, and all sales of glasses with prescription lenses are attributable to that channel.
The note can be converted into shares of common stock of the Company upon the occurrence of certain events, as defined in the note, or for any reason at the sole discretion of Lucyd Ltd. The note has a maturity date of September 1, 2025, at which time all outstanding principal and accrued interest is payable in full.
Upon issuance, the convertible note will have a maturity date of September 1, 2025, at which time all outstanding principal and accrued interest, if any, will be payable in full in cash or in the Company’s common stock. The Company will be able to prepay the convertible notes at any time with the written consent of Lucyd Ltd.
This increase was primarily driven by higher volumes of products sold during the current year. 51 This increase was primarily driven by increased cost of lenses and frames largely as a result of higher volumes of products sold in the current year.
This increase was primarily driven by higher volumes of products sold during the current year, partially offset by lower costs.
Initial Public Offering On August 17, 2022, the Company closed on its initial public offering of 980,000 units, consisting of 980,000 shares of its common stock and 1,960,000 warrants to purchase 1,960,000 shares of common stock, at a combined offering price of $7.50 per unit in exchange for gross proceeds of approximately $7.35 million, before deducting underwriting discounts and offering expenses.
Second Public Offering On June 26, 2023, the Company closed on a public offering of 252,494 units, with each unit consisting of one share of the Company’s common stock and warrants to purchase one share of common stock (the “Common Warrants”), in exchange for gross proceeds of approximately $4.7 million, before deducting underwriting discounts and offering expenses.
For the year ended December 31, 2022, we generated $579,214 of revenue from sales of non-prescription frames and accessories and $80,574 was generated from sales of frames with prescription lenses. All of the $252,799 in sales generated on Amazon.com during the prior year were for non-prescription frames and accessories, as we only offer prescription lenses through our website.
All of the $427,671 in sales generated on Amazon.com during the current year were for non-prescription frames and accessories, as we only offer prescription lenses through our website. Of the $1,036,713 in online sales generated through Lucyd.co, $494,085 was related to frames with prescription lenses and $542,628 was related to glasses with non-prescription lenses.
In terms of the Vyrb app, we are planning launching a full peer-to-peer content marketplace in the style of Patreon, but with a focus on audio and content designed on and for wearables. 53 Liquidity and Capital Resources Cash Flow Data: Year ended December 31, 2023 Year ended December 31, 2022 Net cash flows from operating activities $ (5,766,303 ) $ (3,224,418 ) Net cash flows from investing activities (198,753 ) (219,951 ) Net cash flows from financing activities 6,661,394 6,955,751 Net Change in Cash $ 696,338 $ 3,511,382 Operating Activities Net cash flows used in operating activities for the years ended December 31, 2023 and 2022 are primarily reflective of our net losses, resulting from our operating costs to support and grow our business, including employee-related costs, sales and marketing, research and development, and various costs associated with being a publicly-traded company.
Operating Activities Net cash flows used in operating activities for the years ended December 31, 2024 and 2023 are primarily reflective of our net losses, resulting from our operating costs to support and grow our business, including employee-related costs, sales and marketing, research and development, and various costs associated with being a publicly-traded company.
Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. ● For options granted after our initial public offering on August 17, 2022, the fair value of common stock used in the option pricing model is based on the quoted market price of our common shares on the NASDAQ stock exchange. ● For options granted prior to our initial public offering, the fair value of common stock used in the option pricing model was determined using the most recent price paid by independent investors through a Regulation Crowdfunding (“CF”) securities offering undertaken by the Company.
Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. For awards of restricted stock units and shares of common stock, the fair value of the award is based on the quoted market price of our common shares on the NASDAQ stock exchange.
Out of our total cost of goods sold for the year ended December 31, 2022, $113,024 related to orders with prescription lenses, while $639,294 pertained to non-prescription orders. Over time, we expect third-party retail stores to become our primary sales channel as we onboard additional stores.
Out of our total cost of goods sold for the year ended December 31, 2024, $256,860 related to orders with prescription lenses, while $1,164,390 pertained to non-prescription orders.
During 2023, we added approximately 136 new wholesale accounts, primarily independent optical stores. Retail store client retention and re-orders Our ability to sustain and increase revenue is correlated positively with our ability to receive re-orders from stores, either directly or through our wholesale distributors.
In total, the Company expects to offer over 40 total smart eyewear SKUs across these brands and Lucyd by the end of 2025. 41 Retail store client retention and re-orders Our ability to sustain and increase revenue is correlated positively with our ability to receive re-orders from stores, either directly or through our wholesale distributors.
We currently offer an expansive line of 29 different styles and several accessories, and are in the process of expanding our product offerings to include cobranded eyewear with well-known brands like Nautica, Eddie Bauer, and Reebok. In total, the Company expects to offer 38 total smart eyewear SKUs across these brands and Lucyd by the end of 2024.
We currently offer an expansive line of 26 different models of glasses, and by mid-2025, we will offer 34 different styles and several accessories, including cobranded eyewear with well-known brands like Nautica, Reebok, and Eddie Bauer.
Additionally, our operating asset levels grew significantly during 2023 as we have procured additional inventory to position us for future anticipated sales growth. Investing Activities During the current year, the Company used low-risk bonds and similar investment instruments for the purpose of earning interest on its cash balance.
Additionally, our operating asset levels have grown significantly during 2023 and 2024 as we have procured additional inventory to position us for future anticipated sales growth. 47 Investing Activities Net cash flows used in investing activities for the year ended December 31, 2024 were primarily reflective of the investment of a portion of the proceeds from our recent equity offerings (as described below) in 6-month U.S.
Income Taxes We are taxed as a C corporation. We comply with Financial Accounting Standards Board (FASB) ASC 740 for accounting for uncertainty in income taxes recognized in a company’s financial statements, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
We account for uncertainty in income taxes recognized in our financial statements by using a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
As demand and awareness for smart eyewear continues to grow, the Company expects that its per unit cost will decrease as its order volumes increase and we realize economies of scale.
As demand and awareness for smart eyewear continue to grow, we expect that our per unit cost will continue to decrease as order volumes increase. Cost of lenses decreased by approximately 5% on an absolute dollar basis from the prior year, and decreased as a percentage of net sales by 8 percentage points from the prior year.
We intend to use the net proceeds of this offering primarily for working capital and general purposes.
The net proceeds received by the Company from this transaction amounted to approximately $2,134,000, and were used by the Company primarily for working capital and general purposes.
Research and development costs Our research and development costs increased by 26% to $662,184 for the year ended December 31, 2023, as compared with $524,692 the year ended December 31, 2022.
Sales and marketing expenses Our sales and marketing expenses increased by 32% to $2,706,213 for the year ended December 31, 2024, as compared to $2,047,069 for the year ended December 31, 2023.
Stock-Based Compensation We account for stock-based compensation to employees and directors in accordance with FASB ASC Topic 718, which requires that compensation expense be recognized in the financial statements for stock-based awards based on the grant date fair value. For stock option awards, the Black-Scholes-Merton option pricing model is used to estimate the fair value of share-based awards.
Forfeitures are accounted for as a reduction of compensation expense in the period when such forfeitures occur. 52 For stock option awards, the Black-Scholes-Merton option pricing model is used to estimate the fair value of share-based awards.
Consequently, we expect sales of prescription lens, offered through our website to decrease, as our third-party retail partners outfit our Lyte frames with more prescriptions. As a result, over time we expect prescription lens costs to gradually decrease as a percentage of our overall cost of goods sold. We anticipate growth in both wholesale and e-commerce channel sales in 2024.
Consequently, we expect sales of prescription lens offered through our website to decrease, as our third-party retail partners outfit our Lyte frames with more prescriptions. 45 Gross profit (deficit) We had gross profit of $215,190, or 13% of net sales, for the year ended December 31, 2024, as compared to a gross deficit of $119,329, or negative 10% of net sales, for the year ended December 31, 2023.
This decrease was primarily driven by the factors outlined above. We expect gross profit for the fiscal year ending December 31, 2024, to improve, primarily due to economies of scale from large, anticipated orders.
This improvement of $334,519 or 23 percentage points was primarily driven by the factors outlined above. We expect that our gross profit margins will continue to improve in 2025, due to the factors outlined above.
New Convertible Loan Note Effective March 1, 2024, the Company issued a convertible note to Lucyd Ltd., the largest stockholder of the Company, for up to $1,250,000 that bears interest at 10% per annum, which includes the option to convert the debt into the Company’s common stock at market price.
Once funds or services are received by the Company, it will issue a convertible note to Lucyd Ltd. that will bear interest at 10% per annum and include the option to convert the note into shares of the Company’s common stock upon certain defined events.
E-commerce sales are the most material portion of our sales to date since inception. For the year ended December 31, 2022, approximately 32% of sales were processed on our online store (Lucyd.co), 38% on Amazon.com, and 30% with reseller partners.
However, we believe that focusing on introducing our product in major national retailers will have a significant positive impact on the Company’s revenues within the next 12 months. 43 For the year ended December 31, 2024, approximately 64% of sales were processed on our online store (Lucyd.co), 26% on Amazon.com, and 10% with reseller partners.
We plan to further expand our product offerings through the launch of new cobranded collections with Eddie Bauer and Reebok later in 2024. All of our products are designed in Miami, manufactured in Asia, and currently sold through two major types of channels: 1.
The variety of smartglasses we offer underpin the Company’s mission 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 plan to further expand our product offerings through the launch of new cobranded collections with Reebok in 2025.
Removed
Overview We develop and sell cutting-edge smart eyeglasses and sunglasses, which are designed to allow our customers to remain connected to their digital lives, while also offering vision correction and protection.
Added
The Company believes having pricing that is competitive with traditional designer eyewear is essential for building market share in this new category, by eliminating the “cost of switching” for the average consumer.
Removed
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. Number of online orders (B2C) For our e-commerce business, we track the number of online orders as an indicator of the success of our online marketing efforts.
Added
The increase in revenue was primarily attributable to significant growth in the e-commerce channel, with net sales through our Lucyd.co website and Amazon.com increasing by approximately 89% and 14%, respectively, from the prior year, while wholesale revenues declined by approximately 27%.
Removed
As of December 31, 2023, we had over 20,000 cumulative total orders from customers online since inception, up from a cumulative total of approximately 12,000 as of December 31, 2022.
Added
Overall, our revenue growth was primarily attributable to higher unit volumes, largely driven by our new product launches over the past year (including the cobranded Nautica ® Powered by Lucyd and Eddie Bauer ® Powered by Lucyd collections which were launched in January 2024 and April 2024, respectively, and the Lucyd Armor product line which was launched in October 2024).
Removed
We believe that the addition of new styles, as well as further investment in brand awareness, product ambassadors, and influencer campaigns, will enable continued growth of online orders in the foreseeable future. We expect to allocate a significant portion of our advertising expenditures towards influencer marketing programs.
Added
We sold over 2,000 units of Lucyd Armor glasses in the fourth quarter of 2024 alone. With respect to our cobranded collections, we sold over 3,000 units during the current year, and sales of the Nautica ® Powered by Lucyd line have continued to increase each quarter since their initial launch.
Removed
Our newest flagship Lucyd Lyte XL brand frames are priced at $179 on acetate models and $199 on titanium models for non-prescription glasses across all of our online channels.
Added
While Eddie Bauer ® Powered by Lucyd styles have not been as successful as others thus far, likely due to their higher price point, the Nautica ® cobranded collection has been very popular, with several of those styles ranking among our top products.

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