Core Insights - Innovative Eyewear Inc. reported a net revenue of $454,501 for Q1 2025, marking a 19% increase from $383,471 in Q1 2024, driven by growth in unit sales and successful product launches [2][4] - The gross profit margin improved significantly to 49% in Q1 2025 from just 2% in Q1 2024, attributed to lower costs of frames and prescription lenses [3] - The company experienced a net loss of $1,778,703 in Q1 2025, which is an improvement compared to a net loss of $1,971,311 in Q1 2024 [4] Revenue Growth - The increase in revenue was primarily due to the successful launches of the Nautica® Powered by Lucyd and Eddie Bauer® Powered by Lucyd collections, as well as the Lucyd Armor safety smart glasses line [2] - Continued investments in marketing and advertising initiatives contributed to the revenue growth, alongside rising public interest in smart glasses and wearable products [2] Cost Management - The gross profit margin increase was driven by lower frame costs and reduced prescription lens fulfillment costs, achieved through better economies of scale and management actions taken in the previous year [3] - The company engaged a new lower-cost lens supplier, which further contributed to the reduction in lens fulfillment costs [3] Operating Expenses - Total operating expenses for Q1 2025 were $2,124,324, reflecting an 11% increase from $2,021,542 in Q1 2024, although expenses remained relatively consistent between these periods [4] Product Development and Market Position - The company launched the Reebok® Powered by Lucyd sport smart sunglasses collection in April 2025, featuring advanced audio technology tailored for outdoor activities [6] - The success of the Lucyd Armor product line indicates a strong market potential for smart eyewear tailored to specific user niches [6] - The company has expanded its sales team to support the growth of its product lines, indicating a strategic focus on enhancing market presence [6][7]

Part I. Financial Information [Item 1. Condensed Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed financial statements for the quarter ended March 31, 2025, compared to prior periods [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) Total assets decreased to $7.94 million as of March 31, 2025, due to maturing investments that increased cash reserves Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $5,258.2 | $2,629.0 | | Investments | $0.0 | $4,895.2 | | Total Current Assets | $7,329.2 | $9,238.2 | | **Total Assets** | **$7,941.3** | **$9,838.3** | | **Liabilities & Equity** | | | | Total Current Liabilities | $447.2 | $737.7 | | **Total Liabilities** | **$447.2** | **$743.2** | | **Total Stockholders' Equity** | **$7,494.0** | **$9,095.1** | [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) The company reported Q1 2025 revenues of $454,501 and a reduced net loss of $1.78 million, with significant gross profit improvement Q1 2025 vs. Q1 2024 Statement of Operations | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues, net | $454,501 | $383,471 | | Gross Profit | $220,533 | $6,951 | | Total Operating Expenses | ($2,124,324) | ($2,021,542) | | Net Loss | ($1,778,703) | ($1,971,311) | | Loss per share, basic and diluted | ($0.72) | ($2.59) | [Condensed Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity decreased by approximately $1.6 million to $7.49 million in Q1 2025, primarily driven by the quarterly net loss - Total stockholders' equity decreased by approximately **$1.6 million** during Q1 2025, mainly due to the net loss for the period[15](index=15&type=chunk) [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased by $2.63 million in Q1 2025, driven by cash from investing activities offsetting cash used in operations Q1 2025 vs. Q1 2024 Cash Flow Summary | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from operating activities | ($2,311,049) | ($1,467,355) | | Net cash from investing activities | $4,940,232 | ($95,538) | | Net cash from financing activities | $0 | ($75,988) | | **Net Change In Cash** | **$2,629,183** | **($1,638,881)** | [Notes to the Financial Statements](index=9&type=section&id=Notes%20to%20the%20Financial%20Statements) Notes detail the smart eyewear business, a subsequent warrant transaction, significant royalty commitments, and a new related-party loan facility - The company develops and sells smart eyewear and has exclusive license rights for the Lucyd brand and rights to sell branded eyewear under the Nautica, Eddie Bauer, and Reebok brands[20](index=20&type=chunk) - In April 2025, the company closed a warrant inducement transaction for gross proceeds of approximately **$1.8 million**[50](index=50&type=chunk)[79](index=79&type=chunk) Future Minimum Royalty Payments Under License Agreements | Year | Minimum Payment | | :--- | :--- | | 2025 | $60,000 | | 2026 | $834,000 | | 2027 | $1,290,000 | | 2028 | $1,543,000 | | 2029 | $1,778,000 | | Thereafter (through 2033) | $8,129,000 | | **Total** | **$13,634,000** | - In April 2025, the company established a new intercompany loan facility, agreeing to lend up to **$500,000** to Tekcapital Europe, Ltd[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 19% YoY revenue increase, significant gross margin expansion, new product lines, and sufficient liquidity for the next year - Revenues for Q1 2025 improved **19% YoY**, while gross margins expanded significantly from **2% to 49%**[90](index=90&type=chunk) - The company has launched several new product lines, including Lucyd Armor safety glasses and Reebok sport smart sunglasses, and plans to offer over **40 total smart eyewear SKUs** by the end of 2025[90](index=90&type=chunk)[98](index=98&type=chunk) - The Lucyd app, featuring ChatGPT integration, is a key part of the company's strategy to enhance user experience and create new revenue streams through a 'Pro' subscription model[92](index=92&type=chunk)[93](index=93&type=chunk) - The company is actively monitoring new U.S. tariffs on goods from China but notes that smart eyewear currently faces a lower effective duty rate (**27.5%**) compared to traditional eyewear (**155%**), which could be a competitive advantage[105](index=105&type=chunk)[120](index=120&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q1 2025 revenue grew 19% YoY to $454,501, with gross margin surging to 49% due to lower costs, while operating expenses rose 5% Q1 2025 vs. Q1 2024 Operational Results | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues, net | $454,501 | $383,471 | 19% | | Cost of Goods Sold | ($233,968) | ($376,520) | -38% | | Gross Profit | $220,533 | $6,951 | n/m | | Gross Margin | 49% | 2% | 47 p.p. | | Total Operating Expenses | ($2,124,324) | ($2,021,542) | 5% | - The increase in revenue was primarily due to higher sales volumes from new product lines (Nautica, Eddie Bauer, Lucyd Armor) and improved pricing strategies[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - The significant decrease in cost of goods sold was driven by **greater economies of scale** in manufacturing and engaging a new, **lower-cost lens supplier**[115](index=115&type=chunk)[116](index=116&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $5.3 million in cash with no debt, and a recent $1.8 million financing ensures sufficient liquidity for the next twelve months - As of March 31, 2025, cash and cash equivalents were approximately **$5.3 million**, and the company had **no debt obligations**[130](index=130&type=chunk)[131](index=131&type=chunk) - In April 2025, a warrant inducement transaction closed, providing gross proceeds of approximately **$1.8 million** for working capital and general corporate purposes[137](index=137&type=chunk)[138](index=138&type=chunk) - Management believes existing cash and access to a related-party credit facility will be **sufficient to fund operations for at least the next twelve months**[139](index=139&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is not required to provide these disclosures as a smaller reporting company - This disclosure is **not required** for smaller reporting companies[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses - Management concluded that due to material weaknesses in internal control over financial reporting, the company's disclosure controls and procedures were **not effective** as of March 31, 2025[144](index=144&type=chunk) - **No changes** in internal control over financial reporting occurred during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, internal controls[145](index=145&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material pending legal proceedings - The company is **not currently the subject of any material pending legal proceedings**[147](index=147&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to risk factors from those disclosed in the 2024 Annual Report on Form 10-K - There have been **no material changes** in risk factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[148](index=148&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) An April 2025 warrant inducement transaction generated $1.8 million in gross proceeds through the issuance of new unregistered warrants - On April 11, 2025, the company entered into inducement agreements with certain warrant holders, allowing them to exercise warrants for cash at a reduced price of **$2.60 per share**[149](index=149&type=chunk)[150](index=150&type=chunk) - The transaction closed on April 14, 2025, with gross proceeds of approximately **$1.8 million**[153](index=153&type=chunk) - The newly issued Series G and H warrants, along with the underlying shares, were sold without registration under the Securities Act, in reliance on exemptions provided by **Section 4(a)(2) and Rule 506**[155](index=155&type=chunk) [Item 3. Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities - None[156](index=156&type=chunk) [Item 4. Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[157](index=157&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this period - None[158](index=158&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including Sarbanes-Oxley certifications and Inline XBRL financial data files - The filing includes certifications from the CEO and CFO pursuant to **Sections 302 and 906 of the Sarbanes-Oxley Act**, along with various Inline XBRL documents[159](index=159&type=chunk)

Core Insights - Innovative Eyewear Inc. has launched Reebok Smart Eyewear, expanding its product line under the Reebok brand, available globally on Lucyd.co with further availability expected on Reebok.com and other retailers later this quarter [1][3]. Product Launch - The launch of Reebok Smart Eyewear is seen as a significant milestone for the smart eyewear category, with the company positioning itself at the forefront of the transition from traditional eyewear to smart, connected solutions [3][5]. - The smart eyewear features high-fidelity speakers and amplifiers tailored for outdoor and sports use, ensuring audio clarity while allowing users to remain aware of their surroundings, which is crucial for safety [4]. Market Positioning - The global smart glasses market is projected to reach approximately $13 billion by 2030, indicating a strong growth potential for Innovative Eyewear in this sector [3]. - The product's appeal spans across various retail environments, attracting interest from both sporting goods and consumer electronics retailers, highlighting its versatility at the intersection of fashion, technology, and athletic performance [7]. Distribution Strategy - Innovative Eyewear has initiated a global distribution strategy, starting with a partnership with MTB Mexico, a leading technology distributor in Latin America, to meet the rising consumer demand for smart technology [5][6]. Celebrity Endorsement - Micah Richards, a former professional athlete, serves as a brand ambassador for the Reebok Smart Eyewear, emphasizing the product's blend of performance and style, and its ability to keep users connected while being aware of their environment [8][9].

Core Insights - Innovative Eyewear Inc. highlights its competitive advantage in the smart eyewear market due to favorable tariff rates compared to traditional eyewear [2][3] Tariff Impact - Smart eyewear products imported from China face an effective duty of approximately 27.5%, while traditional eyewear faces a combined duty of about 155%, creating a price parity opportunity for smart eyewear [2] - The CEO of Innovative Eyewear states that the current tariff situation allows smart eyewear to compete on price with traditional designer eyewear, potentially increasing market demand [2] Market Position - The company emphasizes that the recent tariff exemptions on Chinese electronics position U.S. smart eyewear companies favorably in the market [2] - Approximately 90% of the world's eyewear is manufactured in China, indicating a significant reliance on Chinese production for traditional eyewear [2] Product Offering - Innovative Eyewear develops smart eyewear under various brands, including Lucyd®, Nautica®, Eddie Bauer®, and Reebok®, featuring Bluetooth audio capabilities [3]

Core Viewpoint - Innovative Eyewear, Inc. has entered into agreements for the immediate exercise of outstanding warrants, allowing the purchase of 601,686 shares at a reduced price of $2.60 per share, generating approximately $1.8 million in gross proceeds for the company [1][3]. Group 1: Warrant Exercise Details - The warrants were originally issued on September 4, 2024, and September 24, 2024, with original exercise prices of $5.00 and $9.50 per share, respectively [1]. - The closing of the warrant exercise transaction is expected to occur around April 14, 2025, pending customary closing conditions [1]. Group 2: New Warrants Issuance - In exchange for the immediate exercise of the warrants, the company will issue new unregistered Series G and Series H warrants, allowing the purchase of up to 221,895 and 1,741,059 shares, respectively, at a price of $0.125 per warrant [4]. - The new Series G and Series H warrants will have an exercise price of $2.60 per share and will be exercisable immediately, with expiration periods of five and a half years and eighteen months, respectively [4]. Group 3: Use of Proceeds - The net proceeds from the warrant exercise are intended for working capital and general corporate purposes [3]. Group 4: Regulatory Compliance - The new warrants and shares are being offered in a private placement and have not been registered under the Securities Act of 1933, meaning they cannot be sold in the U.S. without an effective registration statement or applicable exemption [5]. - The company has committed to filing a registration statement with the SEC within 30 days to cover the resale of shares from the new warrants [5]. Group 5: Company Overview - Innovative Eyewear, Inc. develops smart eyewear under the Lucyd®, Nautica®, Eddie Bauer®, and Reebok® brands, focusing on Bluetooth audio glasses that enhance user connectivity [7].

Core Insights - Innovative Eyewear, Inc. has announced that its Lucyd Armor™ smart safety glasses have received certification to meet European Union EN 166:2002 safety standards, allowing entry into important European markets [1][2] - Lucyd Armor has quickly become the company's fastest-selling product since its launch in Q4 2024, featuring unique attributes such as photochromic lenses and a suite of smart features [2][4] - The European safety eyewear market was valued at $1.3 billion in 2024 and is projected to grow to $1.6 billion by 2030, with a compound annual growth rate of 3.5% from 2025 to 2030 [3] Company Strategy - The company plans to focus on international expansion, particularly with the Lucyd Armor and the upcoming Reebok Powered by Lucyd collection, as a key growth strategy for 2025 [4] - The company is in discussions with a notable eyewear distributor to offer Lucyd Armor in Europe, as well as distributors for other frames in Asia and Latin America [3][4] - Additional variants of Lucyd Armor, including sunglasses and full-range prescription versions, are set to be introduced later this year [5] Product Features - Lucyd Armor is designed to enhance communication in various environments, making it suitable for professionals in factories and construction sites [7] - The product combines functionality, style, and affordability, positioning it as a "need-to-have" tool for working professionals who require eye protection and hands-free communication [8] - The smart eyewear features include open-ear audio technology, seamless voice assistant integration, and built-in Walkie features for global VOIP conferencing [10]

Core Insights - Innovative Eyewear, Inc. has launched a new AI-integrated eyewear product named Moonbeam, designed for all-day comfort and targeting underserved demographics [1][4] - The Moonbeam features a round-frame style, lightweight construction, and is aimed at enhancing user connectivity and productivity [2][4] Product Features - Moonbeam offers a contemporary round frame that is stylish and timeless [7] - The eyewear is lightweight, designed for prolonged wear, ensuring comfort throughout the day [7] - It includes open-ear audio technology for clear sound while keeping users aware of their surroundings [7] - Seamless integration with voice assistants, including ChatGPT, allows for hands-free access to AI [7] - Enhanced ergonomic controls facilitate intuitive management of calls, audio playback, and voice commands [7] Availability - The Moonbeam is currently available for purchase on Lucyd.co with options for any prescription and will also be distributed through select retail partners and online marketplaces [4]

Core Insights - Innovative Eyewear Inc. reported a 42% increase in net revenue for the year ended December 31, 2024, reaching $1,636,440 compared to $1,152,479 in 2023, driven by new product launches and increased marketing efforts [2][12] - The gross profit margin improved significantly to 13% in 2024 from a negative 10% in 2023, attributed to lower costs of frames and lenses [3] - The company experienced a net loss of $7,766,515 in 2024, which is an increase in loss compared to $6,663,428 in 2023, despite revenue growth [5][17] Financial Performance - Total operating expenses rose by 21% to $8,138,892 in 2024 from $6,736,213 in 2023, primarily due to increased sales and marketing expenses [4][17] - The fourth quarter of 2024 marked the highest quarterly revenue since inception at $690,688, a 12% increase from the same quarter in 2023 [7] - The gross profit margin for the fourth quarter improved to 14%, up 43 percentage points from negative 29% in the same quarter of 2023 [8] Product Development and Market Position - The company launched several new smart eyewear products in 2024, including the Lucyd Armor safety smart glasses and co-branded collections with Nautica and Eddie Bauer [2][10] - Future product launches include the Reebok Powered by Lucyd smart glasses line anticipated in the second quarter of 2025 [10] - The company is actively pursuing distribution through major national retailers, which could positively impact revenues in the near term [11] Cash Position and Investments - Cash and cash equivalents at the end of 2024 were $2,628,987, with additional short-term U.S. Treasury investments of $4,895,184 [6] - The weighted average number of shares outstanding increased significantly from 613,000 in 2023 to 1,496,357 in 2024, reflecting the company's capital structure changes [5]

Revenue Growth - Revenues for the year ended December 31, 2024, were $1,636,440, representing a 42% increase from $1,152,479 in 2023[250]. - E-commerce sales accounted for approximately 64% of total sales in 2024, with significant growth in net sales through Lucyd.co (up 89%) and Amazon.com (up 14%) compared to the prior year[251]. - The company sold over 2,000 units of the Lucyd Armor glasses in Q4 2024, contributing to overall revenue growth driven by new product launches[252]. - The decline in wholesale revenues was approximately 27%, attributed to a strategic shift towards major national retailers with slower approval cycles[253]. Cost and Profitability - Total cost of goods sold increased to $1,421,250 in 2024 from $1,271,808 in 2023, driven by higher volumes sold[260]. - Gross profit for the year ended December 31, 2024, was $215,190, or 13% of net sales, compared to a gross deficit of $119,329, or negative 10% of net sales for the prior year, reflecting an improvement of 23 percentage points[268]. - The cost of frames increased by approximately 14% on an absolute dollar basis from the prior year, but as a percentage of net sales, it declined by 13 percentage points due to new suppliers and economies of scale[261]. - The cost of lenses decreased by approximately 5% on an absolute dollar basis and by 8 percentage points as a percentage of net sales, driven by management actions and a shift to a lower-cost lens supplier[262]. - The company expects gross profit margins to continue improving in 2025 due to reduced unit costs from new product lines[269]. Operating Expenses - Operating expenses increased by 21% to $8,138,892 for the year ended December 31, 2024, compared to $6,736,213 for the prior year, primarily due to increased general and administrative expenses and sales and marketing expenses[270]. - Research and development costs increased by 24% to $819,387 for the year ended December 31, 2024, compared to $662,184 for the prior year, influenced by product development cycles and a shift in focus to the Lucyd app[276]. Future Plans and Product Development - The company plans to expand its product offerings to over 40 smart eyewear SKUs by the end of 2025, including cobranded collections with Reebok[242]. - The anticipated launch of Reebok Powered by Lucyd smartglasses is expected to generate significant revenue growth in 2025, targeting the sport/active lifestyle segment[258]. - The company aims to enhance brand awareness through expanded marketing initiatives and a strong co-op marketing program with retail partners[246]. - The company expects total marketing spending in 2025 to be between 2023 and 2024 levels, focusing on brand awareness and product rollouts[273]. Cash Flow and Financing - The net cash flows from operating activities for the year ended December 31, 2024, were $(6,739,630), compared to $(5,766,303) for the prior year, reflecting increased operating costs[280]. - The company raised approximately $4.7 million from a public offering in June 2023, with net proceeds of approximately $4,116,000 used for working capital[287][288]. - The Company has entered into a financing agreement with Lucyd Ltd. for up to $1,250,000, which will bear interest at 10% per annum and can be converted into shares of common stock[300]. - The Company has not borrowed any amounts under the financing agreement with Lucyd Ltd. as of the latest reporting date[302]. - The Company expects operating losses to continue in the foreseeable future as it invests in business expansion and development, but believes existing cash and cash equivalents will be sufficient to fund operations for at least the next twelve months[303]. Inventory and Revenue Recognition - As of December 31, 2024, the Company recorded an inventory prepayment of $424,594 related to down payments on eyewear purchased from the manufacturer[311]. - The Company recognized $30,000 and $17,500 of revenue during the years ended December 31, 2024 and 2023, respectively, that was included in the contract liability balance at the beginning of each year[325]. - Revenue for eyewear sales is recognized upon delivery to retail store partners and distributors, net of returns and discounts[328][329]. - Revenue for monthly app subscriptions is recognized in the month of purchase, while annual subscriptions are recognized on a straight-line basis[330]. - The Company establishes a reserve for returns based on historical experience and expected future returns[331]. Customer Engagement and Retail Presence - Customer ratings for new products have improved, with the Lucyd Armor receiving a 4/5 rating on Amazon, indicating positive consumer feedback[248]. - The company currently has over 540 retail stores selling its products, with plans to increase this number significantly in 2025[247]. - The company anticipates that third-party retail stores will become the primary sales channel, leading to a decrease in sales of prescription lenses through its website[266].

Core Insights - Innovative Eyewear, Inc. has launched an update to the Lucyd App's Walkie feature, enabling secure and private communication channels for premium subscribers [1][6] - The new secure walkie channels are designed for businesses and organizations that require confidential communication, enhancing operational efficiency and protecting sensitive information [4][5] Company Overview - Innovative Eyewear, Inc. develops and retails ChatGPT-enabled smart eyewear under brands such as Lucyd®, Nautica®, Eddie Bauer®, and Reebok® [7] - The company aims to upgrade eyewear by providing Bluetooth smart glasses that connect users to their digital lives [7] Product Features - The updated Walkie feature allows users to communicate hands-free through Lucyd glasses, with the addition of private, encrypted channels for premium users [3][5] - The secure communication feature is particularly beneficial for sectors such as corporate teams, healthcare, retail operations, and logistics, where sensitive information needs to be transmitted securely [8] Pricing and Availability - The secure walkie channels are available for premium subscribers at a cost of $7.99 per month, with the update officially launched on February 24, 2025 [6]