Innovative Eyewear, Inc. Common Stock Sidoti Micro-Cap Virtual Conference

Thanks so much, Anthony, and welcome everyone. I'm excited to share our mission today to upgrade the world's eyewear. Let me pull up a couple slides, and I'll take you guys through everything that we're doing. Our mission is to upgrade the world's eyewear by adding useful technology features to comfortable prescription-ready glasses. We're making the world's most important wearable better by allowing you to use it to stay safely and seamlessly connected to your digital life. We have a significant amount of experience in smart glass R&D. We've actually been developing smart eyewear products all the way back to 2017 in our incubator. Since then, we've launched dozens and dozens of styles of smart glasses, more than any other U.S. company.

We've also got some significant retail partnerships I'll talk through in just a second, and we built one of the largest IP portfolios in smart glasses out there today. We have 110 patents and applications, 70 of those developed by me and my team, and 40 of them licensed from other partners. This is really one of the highest barriers of entry to the smart eyewear market. You need a strong IP position. We have significant retail traction that's picked up in the last two years quite a bit. We're sold through Best Buy and target.com. We're going into 500 new retail doors this quarter, with FYidoctors, the largest eyewear chain in Canada, putting us in 375 stores. We have a new major big box store test coming in October as well. It's going to run through Q4, putting us in another 180 shops.

We have quite a bit of retail traction starting up right now. Historically, we've been very e-commerce heavy, but we're now significantly diversifying our revenues into more brick-and-mortar locations. Which is great because brick-and-mortar is kind of where consumers usually get to try their first smart eyewear, either in their local eye doctor or at a local Walmart or a Costco. That moment of trying smart eyewear is usually the moment of conversion for a lot of people because they immediately see the value and the benefit of what our product does. Let me get into that for a second. Traditional glasses just correct your vision. Our glasses allow you to connect to AI, to speak to Google Gemini, to talk to ChatGPT and Claude as well. We have the first multi-AI smart glasses, something totally unique to us that we really pioneered.

Our glasses are also great for taking phone calls. We have a walkie-talkie feature as well, which is used on tons of job sites around the U.S. already. We also have really powerful translation features, which are excellent for workforce enterprise applications. One interesting thing about our translation feature is it actually works with no internet, so it is really good for travel. We have a lot of exciting features built into the frame, and what makes our products highly disruptive is that they cost the same as regular eyewear. All of our glasses cost between $150 and $250. We are really in the sweet spot of what consumers are already used to paying for traditional frames that do nothing but correct their vision. We are getting a lot of extra value to the customer, at no additional cost.

One interesting thing about smart eyewear is this unique product category that sits at the intersection of fashion accessories, wearable technology, AI platforms, and Bluetooth audio, and it really brings all of these together into one product that is highly functional. We see smart glasses are now emerging as sort of the centerpiece of Internet of Things, and we see smart glasses as kind of like a remote control for all of the other devices and AIs in our lives, and it is really kind of starting to fill that role, especially as voice-based AI agents become more powerful, our glasses become more powerful along with them. We were the first company to pioneer AI access on smart glasses.

Six months after ChatGPT came out in October of 2022, we developed the first voice interface for it that made it more mobile friendly and accessible through our glasses and other wearables. The rest of the smart glass space proceeded to follow us into that concept that smart glasses are really ideally used as an on-ramp into AI platforms. There is something unique about eyewear in that it is always on your face and it is close to your senses, that makes it sort of always available and always at the ready in a way that other technology devices simply are not. Smart glasses are always positioned to be able to hear your voice and to be able to give you audio feedback. That is something that is very unique about them and makes them great for work.

One other thing that is kind of unique about us is we are the first house of brands in smart eyewear. We have global multi-year licenses to several leading fashion brands, Reebok, Nautica, and Eddie Bauer. We have also developed our own Lucyd brand in-house, and this has really helped enable a much more diverse product selection in smart eyewear. We are the only company serving all four major categories of eyewear with a smart eyewear solution. Those four categories are ready-to-wear sunglasses, optical eyeglasses, safety glasses, and sport glasses. Again, we are the only one really delivering a smart solution for every glasses wearer within that. The eyewear market is actually much bigger than you might expect. Just in the U.S., it is about a $68 billion market as eyewear and managed vision care together. Right now, smart glasses only represent maybe 3% of that market.

There's a huge amount of growth ahead of us. We're in the very early days. We're sort of in the iPhone 2, iPhone 3 moment right now, where it's going from concept product to the global standard in eyewear, and that's where we really see it heading in the next few years. One thing I always compare it to is the smartwatch revolution, and the smartwatch revolution. It happened very quickly after the Apple Watch was introduced in 2015. Only 5 years later, the entire global watch market was flipped, and now the global watch market became the smartwatch market. It had a digital transformation. As of 2020, more smartwatches are sold worldwide than regular watches. That same digital transformation is coming for eyewear.

We've gotten into these form factors that really match what consumers expect out of traditional eyewear, while adding all of this additional utility at no extra cost. This is Lucyd Armor. This is our OSHA-compliant smart safety glass. It's currently our number one product, doing about two-thirds of all of our revenue, and that's because it's addressing serious needs in various workforces. We have EMS teams using them for communication in ambulances. We have oil and gas teams using them for translation across multilingual workforces. A lot of really interesting use cases have emerged in industrial sectors for these glasses, and it's a true power tool upgrade for them. It's like going from a screwdriver to a power drill.

Just going from a regular safety glass to this product that enhances your intelligence with AI, bridges all these communication gaps on your team across languages and across time and space, and really allows teams to work more closely together in a hands-free, heads-up format where they're not touching their walkie all the time or pulling out their phone all the time, but being able to talk to each other freely through their safety glasses. To support that, we have some of the best translation and walkie-talkie features in the game to really bring this product to the next level and make it a true workforce solution. There's a lot coming behind this as well. We're expanding Lucyd Armor. We're going to be adding a camera version for logistics and for inspections.

We're going to be adding a whole enterprise dashboard behind this product in the next year, which is going to allow company management to really control a fleet of smart glasses very closely. For example, if you want to disable the ability to listen to music on them for safety reasons, you'll be able to do that. If you want to be able to collect all of the photos captured on a fleet of glasses in a central repository for inspection or verification, we'll be able to do that, and that's going to be associated with a per-user monthly cost. We're going to go way beyond the original sale of the safety glass and really turn it into a SaaS as well, where we offer all these AI utilities and enterprise utilities on the glasses for a low monthly fee per user.

We are seeing this really cool combined business strategy emerge where we have the original high-margin sale of the smart eyewear frame at about a 65% margin, then incremental revenue from the sale of software utilities on those safety glasses on a monthly subscription. It is a really strong model, and it is very diverse. As part of our overall strategy to divert a little bit from, we have been very e-commerce and direct-to-consumer heavy. We are trying to diversify the business, and offer more solutions for the enterprise sector, and really move more into brick-and-mortar retail as well. We have a really strong, diverse sources of revenue. Moving on to, here are some of our Reebok frames. These have our best audio because we have a little bit of a bigger temple there you can see that allows us to put in much larger speakers.

These frames actually have audio that is better than AirPods, so it sounds more immersive, but it is also open ear. While you are running or cycling or playing golf, you can hear everything around you. It is a really important advantage of our product over traditional earbuds. There are a couple of other advantages as well. Many people do not like to wear earbuds. They find them uncomfortable. I know after I wear AirPods for a couple of hours, I start to feel it. Also, earbuds are now known to cause advanced hearing loss because it is projecting sound directly into your eardrum. That is something that our product avoids because the speakers are a couple inches outside your ear. This is a really exciting product we have coming out in October called Lucyd Armor. It is going to be the lightest smart eyewear on the market, weighs 24 grams.