Innovative Eyewear, Inc. Announces Exercise of Warrants for $1.8 Million Gross Proceeds

Rhea-AI Summary

Innovative Eyewear (Nasdaq: LUCY), developer of smart eyewear under Lucyd, Nautica, Eddie Bauer and Reebok brands, has announced warrant exercise agreements yielding $1.8 million in gross proceeds. The company secured agreements for the immediate exercise of outstanding warrants to purchase 601,686 shares of common stock, originally issued in September 2024, at a reduced exercise price of $2.60 per share from original prices of $5.00 and $9.50.

As part of the transaction, the company will issue new unregistered warrants: Series G warrants for 221,895 shares and Series H warrants for 1,741,059 shares, each priced at $0.125 per warrant with a $2.60 exercise price. The Series G warrants will expire in 5.5 years, while Series H warrants will expire in 18 months following registration statement effectiveness. The company plans to use net proceeds for working capital and general corporate purposes.

Positive

• Secured immediate cash injection of $1.8 million through warrant exercise
• All shares from warrant exercise are already registered under effective S-1

Negative

• Significant warrant exercise price reduction from $5.00-$9.50 to $2.60 indicates potential share value deterioration
• Issuance of new warrants (1,962,954 shares) represents substantial potential future dilution
• Company still requires additional working capital, suggesting ongoing cash needs

Insights

Financial Analyst

Innovative Eyewear's warrant exercise transaction reveals concerning capital dynamics. The company is securing $1.8 million in immediate funding by allowing warrant holders to exercise at $2.60 per share – significantly below the original $5.00 and $9.50 exercise prices established just months ago. This 48-73% discount to previous warrant terms signals potential challenges in the company's capital structure.

More concerning is the dilution impact. For a company with just a $5.56 million market cap, this transaction introduces substantial equity dilution through 601,686 new shares from exercised warrants, plus the potential for 1,962,954 additional shares from the newly issued Series G and H warrants. The immediate dilution represents approximately 11% of shares outstanding, while the total potential dilution exceeds 46% if all new warrants are eventually exercised.

The transaction structure – with immediate cash generation coupled with significant new warrant issuance – typically indicates a company prioritizing near-term capital needs over long-term shareholder value. While the cash infusion provides operational runway, the substantial discount to previous warrant terms and additional dilutive instruments are unfavorable signals for existing shareholders.

The use of proceeds for "working capital and general corporate purposes" lacks specificity about strategic initiatives that might offset the dilutive impact, leaving investors to question the company's immediate capital needs despite its portfolio of established eyewear brands.

MIAMI, April 11, 2025 /PRNewswire/ -- Innovative Eyewear, Inc. ("Innovative Eyewear" or the "Company") (Nasdaq: LUCY), the developer of smart eyewear under the Lucyd®, Nautica®, Eddie Bauer® and Reebok® brands, today announced the entry into definitive agreements for the immediate exercise of certain outstanding warrants to purchase an aggregate of 601,686 shares of the Company's common stock originally issued by the Company on September 4, 2024 and September 24, 2024, having original exercise prices of $5.00 and $9.50 per share, respectively, at a reduced exercise price of $2.60 per share. The closing of the warrant exercise transaction is expected to occur on or about April 14, 2025, subject to satisfaction of customary closing conditions.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The shares of common stock issuable upon exercise of the warrants are registered pursuant to an effective registration statement on Form S-1, as amended (File No. 333-282472).

The gross proceeds to the Company from the exercise of the warrants are expected to be approximately $1.8 million, prior to deducting placement agent fees and offering expenses. The Company expects to use the net proceeds from the transaction for working capital and general corporate purposes.

In consideration for the immediate exercise of the warrants for cash, the Company will issue new unregistered Series G warrants to purchase up to an aggregate of 221,895 shares of common stock and new unregistered Series H warrants to purchase up to an aggregate of 1,741,059 shares of common stock, each at a purchase price of $0.125 per warrant. The new Series G and Series H warrants will have an exercise price of $2.60 per share. The new Series G warrants will be exercisable immediately and will expire five and one-half years following the effective date of the resale registration statement registering the shares of common stock issuable upon exercise of the Series G warrants and the new Series H warrants will be exercisable immediately and will expire eighteen months following the effective date of the resale registration statement registering the shares of common stock issuable upon exercise of the Series H warrants.

The new warrants described above are being offered in a private placement and, along with the shares of common stock issuable upon exercise of the new warrants, have not been registered under the Securities Act of 1933, as amended (the "1933 Act"), or applicable state securities laws. Accordingly, the new warrants and shares of common stock issuable upon the exercise of the new warrants may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the 1933 Act and such applicable state securities laws. The Company has agreed to file a registration statement with the Securities and Exchange Commission ("SEC") as soon as practicable and within 30 days covering the resale of the shares of common stock issuable upon exercise of the new warrants.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Innovative Eyewear, Inc.

Innovative Eyewear is a developer of cutting-edge ChatGPT enabled smart eyewear, under the Lucyd®, Nautica®, Eddie Bauer® and Reebok® brands. True to our mission to Upgrade Your Eyewear®, our Bluetooth audio glasses allow users to stay safely and ergonomically connected to their digital lives and are offered in hundreds of frame and lens combinations to meet the needs of the optical market. To learn more and explore our continuously evolving collection of smart eyewear, please visit www.lucyd.co.

Forward Looking Statements

This press release contains certain forward-looking statements, including but not limited to, those relating to the satisfaction of customary closing conditions, the intended use of proceeds from the offering and the anticipated closing of the offering. Forward-looking statements are based on the Company's current expectations and assumptions. The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-looking statements. These statements may be identified by the use of forward-looking expressions, including, but not limited to, "anticipate," "believe," "continue," "estimate," "expect," "future," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K under the caption "Risk Factors."

Investor Relations Contact:

Innovative Eyewear, Inc.
Scott Powell
Skyline Corporate Communications Group, LLC
Office: +1 (646) 893-5835
Email: scott@skylineccg.com

 

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SOURCE Innovative Eyewear, Inc.

FAQ

What is the size of Innovative Eyewear's (LUCY) recent warrant exercise agreement?

The warrant exercise agreement is for $1.8 million in gross proceeds through the exercise of warrants for 601,686 shares at $2.60 per share.

What is the new exercise price for LUCY's warrants compared to the original price?

The new exercise price is $2.60 per share, reduced from original prices of $5.00 and $9.50 per share.

How many new warrants is LUCY issuing as part of this transaction?

LUCY is issuing Series G warrants for 221,895 shares and Series H warrants for 1,741,059 shares.

What are the expiration terms for LUCY's new Series G and H warrants?

Series G warrants expire in 5.5 years and Series H warrants expire in 18 months after the registration statement becomes effective.

How does LUCY plan to use the proceeds from the warrant exercise?

LUCY plans to use the net proceeds for working capital and general corporate purposes.