Innovative Eyewear Inc Commitments Disclosure
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Legal Matters
We are not currently the subject of any material pending legal proceedings; however, we may from time to time become a party to various legal proceedings arising in the ordinary course of business.
On November 11, 2025, the Company entered into a settlement and release agreement with a shareholder related to certain legal matters. Pursuant to the terms of such agreement, the Company received $570,000 from such shareholder, which is reflected within other income (expense), net in the statement of operations. Fees paid to legal counsel associated with this matter are reflected within general and administrative expenses in the statement of operations.
In January 2024, we settled and resolved all outstanding matters relating to complaints filed by a third party with the International Trade Commission, alleging that certain of our products (as well as certain products of our competitors) infringed on patents held by the third party. As part of this settlement, we entered into a multi-year non-exclusive license agreement with that third party covering multiple smart eyewear patents (as described more fully below under ‘License Agreements’).
License Agreements
During 2022 and 2023, we entered into various multi-year license agreements which grant us the right to sell certain branded smart eyewear, including the Nautica, Eddie Bauer, and Reebok brands worldwide. These agreements require us to pay royalties based on a percentage of net retail and wholesale sales during the period of the license, and also require guaranteed minimum royalty payments. The agreements have base terms of 10 years but are cancellable at the option of the Company during the fifth year.
The aggregate future minimum payments due under these license agreements are as follows:
| 2026 | $ | 834,000 | ||
| 2027 | 1,290,000 | |||
| 2028 | 1,543,000 | |||
| 2029 | 1,778,000 | |||
| 2030 | 2,037,000 | |||
| Thereafter (through 2033) | 6,092,000 | |||
| Total | $ | 13,574,000 |
Also, on January 3, 2024, we entered into a multi-year non-exclusive license agreement with a third party (IngenioSpec, LLC) for multiple smart eyewear patents. Pursuant to this license agreement, the Company added licenses for 46 new patents to its portfolio of owned and licensed patents and applications. The Company fully prepaid this license for the term of the agreement and does not have any obligation for future payments under this agreement.
The Company recognized $521,849 and $225,222 of expense related to all license agreements for the years ended December 31, 2025 and 2024, respectively.
Long-Term Payment Plan for Information Technology System and Services
The Company has entered into a long-term payment plan agreement with Oracle for the payment of costs related to the implementation of the Company’s new ERP system (which went live in April 2025) and related cloud services. Under this agreement, the Company is obligated to make payments of $4,035 per month through July 2027. As of December 31, 2025, the Company’s remaining obligation under this arrangement was $76,912, of which $48,424 is included within accounts payable and accrued expenses in the accompanying balance sheet, and $28,488 is reflected within non-current liabilities in the accompanying balance sheet.
Leases
Our executive offices are located at 11900 Biscayne Blvd., Suite 630 Miami, Florida 33181. Our executive offices are provided to us by Tekcapital and Affiliates (see Note 6). We consider our current office space adequate for our current operations.
Other Commitments
See related party management services agreement discussed in Note 6.
International Trade and Tariffs
Beginning in April of 2025, the U.S. government announced new or increased tariffs on goods imported from various countries to the U.S., and countries subject to such tariffs have imposed or may in the future impose retaliatory tariffs and other trade measures. These recent developments have negatively impacted our results of operations. Due to their evolving nature, we cannot predict with certainty the ultimate impacts they may have on our business and results in the future, but those impacts could be material.
We are actively monitoring the ongoing tariff and international trade developments, and continue to evaluate the potential impacts to our business, cost structure, supply chain, and the broader economic environment. We have taken actions and developed contingency plans to mitigate the negative impacts of tariffs on our results, but cannot provide any assurance that such actions and strategies will be successful.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 25, 2026 | Showing above |
| 2024 | Mar 24, 2025 | |
| 2023 | Mar 25, 2024 | |
| 2022 | Mar 24, 2023 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.