美國
證券交易委員會
華盛頓特區20549
表格
截至季度結束日期的財務報告
過渡期從__________到_____________
佣金文件號
|
|
| (根據其章程規定的註冊人準確名稱) |
| （註冊或組織的）州或其他司法轄區 公司的合併或組織） |
（聯邦稅號 (識別號) |
| 主執行官辦公室的地址，包括郵政編碼 |
| ( |
| （註冊人的電話號碼，包括區號） |
| 不適用 |
| （前名稱、地址及財政年度，如果自上次報告以來有更改） |
請用複選標記指示登記者（1）在過去12個月內（或者登記者需要提交此類報告的更短時期內）是否已經按照1934年交易所法案第13或15(d)條的規定提交了所有報告，並且（2）在過去90天內是否已經受到此類提交要求的約束。
請用複選標記表示，公司是否在過去12個月內（或者公司被要求提交此類文件的較短時期內）按照S-T條例第232.405條規定提交併發佈了規定提交併發佈的每一個互動數據文件。
請用複選標記指示註冊者是否爲大型加速文件提交者、加速文件提交者、非加速文件提交者、較小的報告公司或新興成長型公司。請參閱《交易所法》第120億.2條中「大型加速文件提交者」、「加速文件提交者」、「較小的報告公司」和「新興成長型公司」的定義。
| 大型加速提交者 | ☐ | 加速報告人 | ☐ |
| ☒ | 小型報告公司 | ||
| 新興成長公司 |
如果是新興增長型企業，請勾選該框表示公司已選擇不使用交易所法案第13(a)條提供的遵守任何新的或修訂後的財務會計準則的擴展過渡期。
請通過勾選表示註冊人是否爲殼公司（如《交易所法》第120億.2條所定義）。是 ☐
每個交易所的名稱
| 每一類的名稱 | 交易標誌 | 在其上註冊的交易所的名稱 | ||
截至2024年11月5日， 公司已發行並流通的普通股股份。
關於前瞻性聲明的注意事項
在這份第10-Q表格的季度報告中討論的內容包含反映我們當前預期的前瞻性陳述，涉及風險和不確定性。這些前瞻性陳述包括但不限於我們的策略、競爭、未來業務和生產能力、供應鏈和物流、未來財務狀況、未來收入、預計成本、盈利能力、預期的成本降低、資本充足、關於我們技術的需求和接受程度的期望、市場中的增長機會和趨勢、前景和計劃，以及管理層的目標。"預期"、"相信"、"可能"、"估計"、"預計"、"打算"、"可能"、"計劃"、"方案"、"將"、"會"等類似表達旨在識別前瞻性陳述，儘管並非所有前瞻性陳述都包含這些識別詞。我們實際可能無法實現在我們的前瞻性陳述中披露的計劃、意圖或期望，您不應過度依賴我們的前瞻性陳述。實際結果或事件可能與我們在前瞻性陳述中披露的計劃、意圖和期望有實質性差異。這些前瞻性陳述涉及可能導致我們實際結果與前瞻性陳述中有實質差異的風險和不確定因素，包括但不限於本季度報告第II部分第1A條「風險因素」中列出的風險，截至2023年12月31日的第10-k年度報告中的風險，以及我們提交給美國證券交易委員會的其他備案文件。我們不承擔任何更新前瞻性陳述的義務，除非法律要求。
創新眼鏡有限公司
目錄
| 頁碼。 | ||||
| 第一部分財務信息 | 1 | |||
| 項目 1。 | 簡略的基本報表(未經審計) | 1 | ||
| 2024年9月30日的簡明資產負債表（未經審計）和2023年12月31日 | 1 | |||
| 2024年9月30日和2023年（未經審計）三個月及九個月的簡明損益表 | 2 | |||
| 2024年9月30日和2023年（未經審計）三個月及九個月的簡明股東權益表 | 3 | |||
| 2024年9月30日和2023年（未經審計）九個月的簡明現金流量表 | 4 | |||
| 財務報表附註（未經審計） | 5 | |||
| 項目 2。 | 分銷計劃 | 18 | ||
| 項目3。 | 有關市場風險的定量和定性披露 | 32 | ||
| 項目4。 | 控制和程序 | 32 | ||
| 第二部分其他信息 | 33 | |||
| 項目 1。 | 法律訴訟 | 33 | ||
| 項目1A。 | 風險因素 | 33 | ||
| 項目 2。 | 未註冊的股票股權銷售和籌款用途 | 33 | ||
| 項目 3。 | 對優先證券的違約 | 33 | ||
| 第四條。 | 礦山安全披露 | 33 | ||
| 項目5。 | 其他信息 | 33 | ||
| 項目6。 | 展示資料 | 34 | ||
| 簽名 | 35 | |||
i
除非另有規定，本報告中使用的術語「Innovative Eyewear」，「公司」，「我們」，「我們的」，「我們的」，「我們的」等類似術語均指Innovative Eyewear, Inc。出現在我們網站lucyd.co上的信息不包含在本報告中。
第一部分 - 財務信息
項目1. 基本財務報表
創新眼鏡公司
簡明資產負債表
2024年9月30日（未經審計）和2023年12月31日
| 2024 | 2023 | |||||||
| 資產 | ||||||||
| 流動資產 | ||||||||
| 現金及現金等價物 | $ | $ | ||||||
| 投資於債務證券（美國國債） | ||||||||
| 應收賬款淨額 | ||||||||
| 預付費用 | ||||||||
| 存貨預付款 | ||||||||
| 庫存 | ||||||||
| Tekcapital及關聯公司應收款項 | ||||||||
| 其他流動資產 | ||||||||
| 流動資產合計 | ||||||||
| 非流動資產 | ||||||||
| 專利成本，淨額 | ||||||||
| 資本化的軟件成本 | ||||||||
| 資產和設備，淨值 | ||||||||
| 其他非流動資產 | ||||||||
| 資產總計 | $ | $ | ||||||
| 負債和股東權益 | ||||||||
| 負債 | ||||||||
| 流動負債 | ||||||||
| 應付賬款和應計費用 | $ | $ | ||||||
| 遞延收入 | ||||||||
| 總流動負債 | ||||||||
| 非流動負債 | ||||||||
| 遞延營業收入 | ||||||||
| 負債合計 | ||||||||
| 承諾和或有事項（見注7） | ||||||||
| 股東權益 | ||||||||
| 普通股（面值 $, 股份得到授權，和 和 分別爲2024年9月30日和2023年12月31日，已發行和流通股份(1) | ||||||||
| 額外實收資本(1) | ||||||||
| 累積赤字 | ( |
) | ( |
) | ||||
| 總股東權益 | ||||||||
| 負債和股東權益總計 | $ | $ | ||||||
| (1) |
請查閱簡明基本報表附註。
1
創新眼鏡公司
捷凱收購公司二期有限公司
截至2024年和2023年9月30日的三個月和九個月結束
(未經審計)
| 截止日期爲三個月 September 30, |
截止日期爲九個月 September 30, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 營業收入, 淨收入 | $ | $ | $ | $ | ||||||||||||
| 營業成本減少 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 毛利潤 | ||||||||||||||||
| 營業費用： | ||||||||||||||||
| 總務和行政 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 銷售與營銷 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 研發費用 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 關聯方管理費 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 總營業費用 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 其他收入 | ||||||||||||||||
| 利息費用 | ( |
) | ||||||||||||||
| 總其他收益（費用），淨額 | ||||||||||||||||
| 淨損失 | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| 加權平均股本數(1) | ||||||||||||||||
| 基本和稀釋每股虧損(1) | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| (1) |
請查閱簡明基本報表附註。
2
創新眼鏡有限公司
股東權益變動簡明報表
截至2024年和2023年9月30日的三個月和九個月結束
(未經審計)
| 普通股 | 額外的 支付的 |
積累的 | 總計 股東股本 |
|||||||||||||||||
| 股份(1) | 金額(1) | 資本(1) | 赤字 | 股權 | ||||||||||||||||
| 2024年1月1日的餘額 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 向第三方服務提供商發行股份 | ||||||||||||||||||||
| 與限制性股票單位歸屬有關的發行股份 | ||||||||||||||||||||
| 以股票爲基礎的薪酬 | - | |||||||||||||||||||
| 淨損失 | - | ( |
) | ( |
) | |||||||||||||||
| 截至2024年3月31日的餘額 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 市場發售。 | ||||||||||||||||||||
| 首次註冊直接發售 | ||||||||||||||||||||
| 第二次註冊直接發售 | ||||||||||||||||||||
| 向品牌大使發行股份 | ||||||||||||||||||||
| 與限制性股票單位分配相關的股份發行 | ||||||||||||||||||||
| 以股票爲基礎的薪酬 | - | |||||||||||||||||||
| 淨虧損 | - | ( |
) | ( |
) | |||||||||||||||
| 2024年6月30日餘額 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 市場價格交易 | ||||||||||||||||||||
| 與誘因協議相關的認購權行權 | ||||||||||||||||||||
| 認購權行權 | ||||||||||||||||||||
| 股權補償 | - | |||||||||||||||||||
| 淨損失 | - | ( |
) | ( |
) | |||||||||||||||
| 2024年9月30日餘額 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 2023年1月1日餘額 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 股東行使認股權證 | ||||||||||||||||||||
| 以股票爲基礎的薪酬 | - | |||||||||||||||||||
| 淨虧損 | - | ( |
) | ( |
) | |||||||||||||||
| 截至2023年3月31日的餘額 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 股票期權行權 | ||||||||||||||||||||
| 股東行使認股權證 | ||||||||||||||||||||
| 與定向增發交易相關的認股權證行使 | ||||||||||||||||||||
| 第二次公開發行 | ||||||||||||||||||||
| 基於股票的補償 | - | ( |
) | ( |
) | |||||||||||||||
| 淨虧損 | - | ( |
) | ( |
) | |||||||||||||||
| 截至2023年6月30日的餘額 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 基於股票的補償 | - | |||||||||||||||||||
| 淨虧損 | - | ( |
) | ( |
) | |||||||||||||||
| 2023年9月30日的餘額 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| (1) |
請查閱簡明基本報表附註。
3
創新眼鏡公司
精簡現金流量表
2024年9月30日結束的九個月和2023年
(未經審計)
| 2024 | 2023 | |||||||
| 經營活動 | ||||||||
| 淨虧損 | $ | ( |
) | $ | ( |
) | ||
| 調整爲淨損失到經營活動現金流量淨使用： | ||||||||
| 折舊 | ||||||||
| 攤銷 | ||||||||
| 非現金利息費用 | ||||||||
| 股份補償費用 | ||||||||
| 由Tekcapital和附屬公司支付的費用 | ||||||||
| (恢復)存疑帳戶撥備 | ( |
) | ( |
) | ||||
| 以前資本化的軟件成本清理 | ||||||||
| 經營性資產和負債變動: | ||||||||
| 應收賬款 | ||||||||
| 應付賬款和應計費用 | ( |
) | ||||||
| 預付費用 | ( |
) | ||||||
| 庫存 | ( |
) | ( |
) | ||||
| 合同資產和負債 | ||||||||
| 經營活動產生的現金流量淨額 | ( |
) | ( |
) | ||||
| 投資活動 | ||||||||
| 購買債務證券（美國國債票據） | ( |
) | ( |
) | ||||
| 向Tekcapital 歐洲 有限公司提供的貸款。 | ( |
) | ||||||
| 償還借給Tekcapital 歐洲 有限公司的金額。 | ||||||||
| 專利費用 | ( |
) | ( |
) | ||||
| 購買固定資產 | ( |
) | ( |
) | ||||
| 投資活動產生的現金流量淨額 | ( |
) | ( |
) | ||||
| 籌資活動 | ||||||||
| 普通股和warrants發行的收入 | ||||||||
| 普通股市場發行收入 | ||||||||
| 執行認股權所得款項 | ||||||||
| 行使股票期權所得 | ||||||||
| 償還關聯方可轉換債務 | ( |
) | ||||||
| 償還到Tekcapital和關聯方的款項 | ( |
) | ( |
) | ||||
| 來自籌資活動的淨現金流量 | ||||||||
| 現金淨變動 | ||||||||
| 期初現金餘額 | $ | $ | ||||||
| 期末現金餘額 | $ | $ | ||||||
| 重要的非現金交易 | ||||||||
| 由Tekcapital及關聯公司支付的費用，報告爲Due to/from Tekcapital及關聯公司以及關聯方可轉換債的增加 | ||||||||
| 發行股份以預付給第三方服務提供商 | ||||||||
| 發行股份以預付給品牌大使 | ||||||||
請查閱簡明基本報表附註。
4
創新眼鏡公司
基本報表附註
2024年9月30日和2023年（未經審計）
注1 - Guochun International Inc.（以下簡稱「公司」或「國春」）於2018年8月2日在內華達州成立。到2022年6月27日，公司正在開發一種聊天應用程序，旨在爲用戶在與他人對話時提供變聲的機會以及類似的即時通訊應用程序的全部功能。公司計劃在iOS，Google Play，Amazon和Ethereum平台上開發和發佈移動應用。 Guochun International Inc.打算通過出售品牌廣告和通過消費者交易（包括應用內購買）來產生收入。公司管理層計劃利用各種平台將應用程序分發到全球各地。概要
創新眼鏡公司（以下簡稱「公司」，「我們」或「我們」）是根據佛羅里達州法律組織的一家公司，開發和銷售尖端眼鏡和太陽鏡，旨在讓我們的客戶保持與數字生活的聯繫，同時提供處方眼鏡和防曬功能。該公司由Lucyd Ltd.創立，後者是Tekcapital Plc通過Tekcapital歐洲有限公司（以下簡稱「Tekcapital及關聯公司」）的投資組合公司創立的，截至2024年9月30日，該公司擁有的已發行和流通股的約10.8％。創新眼鏡已經獲得了Lucyd的獨家授權，包括使用Lucyd的所有知識產權，包括我們的主要產品Lucyd Lyte眼鏡。® 品牌的獨家使用權，其中包括Lucyd Ltd.的主要產品Lucyd Lyte眼鏡。 ® 眼鏡。
注2 - 重要會計政策摘要
報告範圍
附註：2023年12月31日的附表（參照審計基本報表編制）以及未經審計的中期基本報表，已根據美國通用會計準則（「GAAP」）編制，符合美國證券交易委員會（「SEC」）頒佈的《表10-Q》和《S-X條例第8條》的規定。根據SEC關於中期財務報告的規則和法規，某些通常包括在按照GAAP編制的財務報表中的信息或註腳披露已經被壓縮或省略。因此，它們不包括爲全面展示財務狀況、業務成果或現金流量而必要的所有信息和註腳。
根據管理層的意見，所有必要的調整已納入到所呈現的基本報表中，以便公正呈現。截至2024年9月30日三個月和九個月的運營結果未必能反映未來期間或整個年度的預期結果。
爲符合當前期間報告的形式，某些往期數額已重新分類；先前報告在"資本化軟件成本"內的約$22,000與公司網站相關的資本化成本現在歸入"財產和設備，淨額"。
資本結構的變化
如備註9中更詳細地描述，自2024年7月18日起，公司進行了1比20的反向股票拆分，適用於所有已發行和流通的普通股。所有在這些基本報表及其附帶說明中呈現的股份及每股相關金額，包括但不限於已發行和流通的股份、普通股的美元金額和額外實收資本、每股收益/(虧損)以及warrants和期權，均已追溯調整，以反映資本結構的這一變化，適用於所有呈現的期間。此次變化並未導致授權普通股的總數或每股面值的變化。
使用估計
按照通用會計準則準備基本報表需要管理層進行估計和假設，影響資產和負債的報告金額以及在基本報表日期時披露的相關資產和負債金額，以及報告期間收入和支出的金額。實際結果可能與這些估計不同，尤其是考慮到當前地緣政治和經濟環境所帶來的重大不確定性。
5
現金等價物
所有流動性高的投資，包括存款證書、美國國債和購買的原始期限爲三個月或更短的貨幣市場基金，在到期日不足三個月的被視爲現金等價物。
投資
截至2024年9月30日，公司持有到期日爲2025年3月的美國國債投資。這些投資被分類爲「持有到期日投資」，以攤銷成本記錄在附表中。這些投資的累計公允價值爲$
應收賬款和信用政策
交易應收款項來自未提供抵押品的顧客義務，根據正常交易條款到期。交易應收款項的付款被分配給客戶匯款通知上標識的特定發票，如果未指定，則應用於最早未支付的發票。公司根據政策定期評估客戶的財務實力。我們通常對批發訂單提供「淨30」付款條款，訂單金額爲$1,500或更多，取決於批發客戶完成信用審核申請和信用卡授權表格。對於直銷客戶，產品發貨前需要付款。
應收賬款以向客戶開具的金額減去應收賬款壞賬準備後報告。 壞賬準備根據各種判斷和因素確定。 決定壞賬準備的因素包括歷史收款情況、覈銷經驗以及管理層對客戶收款能力的評估，其中包括當前狀況、合理預測以及對未來收款能力和收款努力的期望。 管理層持續評估應收款項的收款能力，並根據實際經驗和基於經濟因素的未來預期調整估計值。 當認定賬面餘額無法收回時，應收賬款餘額將根據準備金覈銷。
截至2024年和2023年9月30日的應收賬款計提調整如下:
| 2024 | 2023 | |||||||
| 1月1日結餘 | $ | $ | ||||||
| 壞賬費用（恢復） | ( |
) | ||||||
| 沖銷(1) | ( |
) | ||||||
| 其他(1) | ( |
) | ||||||
| 9月30日餘額 | $ | $ | ||||||
| (1) |
庫存
公司的存貨包括購買的眼鏡，並以成本或淨實現價值的較低者計量，成本根據庫存成本的具體識別方法確定，該方法將實際成本附加到可識別的產品單位。
根據定期評估的歷史銷售、當前經濟趨勢、預測銷售、估計產品生命週期和估計庫存水平，記錄超額、過時或滯銷庫存的準備金。此類準備金爲$
截至2024年9月30日和2023年12月31日，公司錄得預付存貨款項金額$
6
無形資產
無形資產涉及與公司的初始資本化以及內部開發的實用性和設計專利相關的專利成本。公司根據專利的預估有用生命週期攤銷這些資產。每當情況變化表明資產的賬面價值可能無法收回時，公司會審查其無形資產是否存在減值。
資本化的軟件
公司以前曾經因Vyrb軟件應用程序的開發而產生了成本，在技術可行性建立後公司曾將大約$88,000的這些編碼、開發和測試成本資本化，因爲公司的意圖是在外部推廣和銷售這款軟件。
雖然我們在2021年推出了Vyrb的公測版本，並在2022年和2023年不斷爲Vyrb增加新功能，但我們並沒有正式推出Vyrb應用程序。在2024年，管理團隊決定將我們的主要軟件開發重點轉向Lucyd應用，該應用於2023年4月推出，是一款免費應用，讓用戶可以在我們的眼鏡上與極其受歡迎的chatgpt概念股人工智能語言模型進行對話。爲Vyrb應用開發的某些元素和功能可能會被納入未來Lucyd應用的版本中。
根據這項決定，在2024年9月30日結束的九個月內，我們將先前資本化的Vyrb軟件開發成本支出約爲$
資產和設備
固定資產和設備資產按其估計的使用壽命或更短的租賃期限採用直線法折舊。對於所得稅目的，通常使用加速折舊方法。維修和維護費用在發生時作爲支出處理。
所得稅
公司採用資產和負債方法來確認所得稅，按照金融報表賬面金額與資產和負債的稅基之間的差額，基於在預計差額會反轉的年份中有效的法定稅率確認遞延稅資產和負債。
公司遵循更可能是而非門檻，對納稅申報中採納或預計採納的稅收立場進行財務報表確認和計量。與不確定稅收立場相關的利息和罰款計入稅費支出。
公司定期評估其淨遞延稅資產的實現情況。如果在考慮所有相關的積極和消極證據後，有更大可能性表明部分或全部淨遞延稅資產將無法實現，公司將通過計提減值準備來減少淨遞延稅資產。淨遞延稅資產的實現取決於幾個因素，包括在淨稅前虧損結轉到期之前產生足夠的應稅收入。
以股票爲基礎的補償
公司確認對員工、董事和其他人發放的基於股票的獎勵的補償費用，根據這些獎勵的授予日公允價值。放棄將按照發生放棄時期內的補償費用減少進行覈算。
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對於股票期權獎勵，使用Black-Scholes-Merton期權定價模型來估算以股票爲基礎的獎勵的公允價值。 Black-Scholes-Merton期權定價模型包括各種高度主觀的假設，包括預期期限和股價波動性。
| ● | 股票期權的預期期限是根據《工作人員會計公報第107號》允許的簡化方法估算的。 |
| ● | 股價波動率是根據歷史股票價格估算的，以期權授予的預期期限爲基礎，使用類似利基公衆公司的股票價格。 |
| ● | 無風險利率假設是通過使用類似於被定價的獎勵的預期期限的美國國債零息債券的利率來確定的。 |
對於受限制股單位和普通股的獎勵，獎勵的公允價值基於我們普通股在納斯達克交易所的報價市場價格。
收入確認
我們的營業收入主要來自處方和非處方眼鏡，太陽眼鏡的銷售以及運費，這些費用被收取給客戶與這些購買相關。我們通過零售商店經銷商、分銷商、我們自己的網站Lucyd.co以及亞馬遜出售產品。我們最近還開始通過銷售Lucyd app「Pro」版的訂閱來產生營業收入，該版本提供無限的chatgpt概念股互動和優先技術支持，需支付月度或年度費用。
爲了判斷營業收入確認，我們執行以下步驟：(i) 確定與客戶的合同，(ii) 確定合同中的履約義務，(iii) 確定交易價格，(iv) 將交易價格分配給合同中的履約義務，以及 (v) 在我們滿足履約義務時（或在滿足時）確認營業收入。在合同簽訂時，我們評估每個合同中承諾的商品或服務，並確定履約義務，並評估每個承諾的商品或服務是否是獨立的。然後，我們確認作爲營業收入的交易價格部分分配給各自的履約義務，當（或在）履約義務得到滿足時。
在銷售時合同對價的收回性不確定的情況下，我們在資產負債表上將營業收入作爲合同責任遞延，將相關的營業成本作爲合同資產遞延；隨後，我們在收到付款時確認這些營業收入和營業成本。截至2024年9月30日的九個月，我們分別確認了2024年和2023年的營業收入$
所有板塊的收入，包括在線銷售和零售商和經銷商銷售額淨額扣除從客戶那裏代繳給稅務機關的銷售稅、退貨和折扣後報告。 向客戶收取的運輸和處理費用被報告爲營業收入；發生的運輸和處理成本將在確認相關收入時計入營業成本。
對於通過我們的電子商務渠道產生的銷售，我們在線上眼鏡購買後識別與客戶簽訂的合同，並根據製造商建議的零售價格（「MSRP」）識別非處方、偏光太陽鏡和藍光阻擋眼鏡在所有在線渠道銷售。我們的電子商務營業收入是在完成維修義務時確認，即眼鏡運送給最終客戶時。美國消費者在我們網站處理的訂單中，訂單超過$149可享受免費的USPS頭等郵費，也可選擇更快遞送方式，額外收費。對於亞馬遜的銷售，美國消費者免費送貨，而國際客戶需額外支付運費。與在線平台收取的費用（shopify適用於Lucyd.co網站和亞馬遜）相關的任何成本均不向客戶收費，並根據發生的情況記錄爲營業成本的組成部分。公司除了MSRP外還向適用州的銷售稅客戶收取適用的州銷售稅，同時適用於公司銷售產品的所有在線渠道和其他所有市場。
8
針對我們的零售店合作伙伴的銷售，我們通過shopify批發門戶或直接採購訂單確認客戶的合同收到我們眼鏡的訂單。營業收入在履行業務義務之後確認，即將公司眼鏡產品交付給零售店，並且減去退貨和折扣後進行登記。我們銷售給零售店合作伙伴的眼鏡的批發定價包括成交量折扣，由於大宗訂單的性質。定價包括運費，不包括任何適用的州銷售稅費。由於批發零售訂單的性質，不適用任何電子商務費。
對於銷售給經銷商的銷售業務，我們在通過直接採購訂單收到我們眼鏡訂單後確定與客戶的合同。如果基本可以收回幾乎所有的合同對價，就會在滿足履行義務的情況下確認營業收入，即將眼鏡產品交付給經銷商，並扣除退貨和折扣後記錄。我們銷售給零售店合作伙伴和經銷商的眼鏡的批發定價包括成交量折扣，由於大數量訂單的特性。定價不包括運費。由於批發零售訂單的性質，不適用市場費用，僅適用信用卡處理費。
對於我們Lucyd應用的「Pro」版本訂閱銷售，我們通過來自Apple App Store或Google Play Store的詳細交易報告確定與客戶的個別合同，每筆獨立交易代表一個單獨的合同。營業收入在滿足履約義務後確認，即每位客戶享有訪問Lucyd應用「Pro」功能的權利和可用性。對於按月購買此訪問權限的客戶，我們在購買行爲產生的當月確認收入。對於購買年度訂閱的客戶，我們以直線方式在訂閱期間內按比例確認收入，採用中間月份計算。作爲合同負債在我們資產負債表上推遲的與應用訂閱相關的未賺收入餘額爲$
我們允許客戶根據我們的退款政策退還我們的實體產品，該政策允許任何客戶出於任何原因退還我們的實體產品，在我們的網站（Lucyd.co）的銷售中在頭7天內獲得全額退款，Amazon銷售中爲30天，在大多數批發零售商和分銷商處的銷售中爲30天（儘管對獨立分銷商的某些銷售不符合退貨資格）。截至2024年1月，我們更新了我們的退貨政策，禁止處方鏡片的自由退貨，並對標準鏡框退貨收取了標準的$
對於我們所有的產品銷售，在銷售時，根據歷史經驗和預期未來退貨，我們建立退貨準備金，並將其記錄爲銷售減少。此外，我們審核在資產負債表日期後一個月內收到的所有單獨退貨，這些退貨單是在資產負債表日期之前處理的訂單，以判斷是否需要提供銷售退貨準備金。 公司分別記錄了截至2024年9月30日和2023年12月31日的銷售退貨準備金爲$
注3 - 經營情況
公司具有有限的經營歷史。公司的業務和運營對美國的一般商業和經濟狀況敏感。公司無法控制的一系列因素可能導致這些情況出現波動。不利條件可能包括經濟衰退、經濟低迷，或者其他因素，如法規變化或進口限制、競爭激烈、或消費者品味變化。這些不利條件可能會影響公司的財務狀況和經營業績。
公司通過銷售眼鏡和發行股票籌集資金，以滿足其日常營運資金需求。在截至2024年9月30日的九個月期間，公司通過市場發行、註冊直接發行和認股權證行使等方式，籌集了約1040萬美元的淨現金收入（詳見第9條）。公司還與關聯方簽訂了協議，根據該協議，公司可以借款最多125萬美元（詳見第6條）；截至2024年9月30日，公司尚未根據此協議借入任何款項。公司的預測和預期表明，公司預計將有足夠的流動性來資助運營，至少持續到 接下來的12個月。然而，如果管理層認爲這樣做是有益的，公司可能會籌集額外基金。
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注4-關所得稅準備金 / 利潤
在每個中期報告期結束時，公司估計其預計適用於全年的有效稅率。此估計用於判斷年度基礎的所得稅費用或利益，並可能在隨後的中期報告期內發生變化。公司已
注5——有形資產和無形資產
| 9月30日, | 12月31日， | |||||||
| 財產和設備 | 2024 | 2023 | ||||||
| 移動機箱展示 | $ | $ | ||||||
| 計算機設備 | ||||||||
| 辦公設備 | ||||||||
| 內部使用的軟件和網站成本 | ||||||||
| 234,036 | ||||||||
| 減：累計折舊 | ( |
) | ( |
) | ||||
| 資產和設備，淨值 | $ | $ | ||||||
2024年和2023年截至9月30日的折舊費用均爲$
截至2024年9月30日止九個月的折舊費用分別爲$2024和$2023。
| 9月30日, | 12月31日， | |||||||
| 2024年3月31日和2023年3月31日結束的三個月的攤銷費用爲$ | 2024 | 2023 | ||||||
| 專利成本 | $ | $ | ||||||
| 減少：累計攤銷 | ( |
) | ( |
) | ||||
| 無形資產, 淨額 | $ | $ | ||||||
2024年9月30日結束的三個月攤銷費爲$
2024年和2023年截至9月30日的攤銷費用爲$
附註6 -關聯方交易和協議
可轉換票據到期給Tekcapital和附屬公司
截至2023年12月1日，公司可以從Tekcapital和聯屬公司獲取集團內融資，形式爲貨幣預付或者在可轉換票據下借款，但並無合同權利。可轉換票據餘額爲$
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新的Lucyd有限公司融資協議
公司於2024年3月1日與Lucyd Ltd.簽訂協議，根據該協議，公司最多可以收到$
向Tekcapital歐洲有限公司提供貸款。
於2024年1月11日，公司與Tekcapital歐洲有限公司（作爲借款人）及Tekcapital Plc（Tekcapital歐洲有限公司的母公司）簽訂了一項公司內部貸款協議（作爲出借人）。根據該協議，公司向Tekcapital歐洲有限公司出借了60萬英鎊（相當於約$
管理服務協議
公司與Tekcapital Europe, Ltd.簽訂了一項管理服務協議，公司每季度需支付3.5萬美元。雖然協議沒有規定具體到期日，但任何一方都可以在30個日曆日的書面通知後終止協議。
相關方目前提供以下服務：
| ● | 根據其專業領域爲公司提供支持和建議； |
| ● | 研究、技術和法律審查、招聘、軟件開發、營銷、公共關係和廣告；以及 |
| ● | 爲支持公司或與任何其他相關事項有關提供建議、援助和諮詢服務。 |
在2024年和2023年截至9月30日的三個月內，公司分別根據管理服務協議發生$費用。
辦公空間租金
根據公司與Tekcapital之間的協議，Tekcapital代表公司支付租金，並向公司開具賬單。公司確認了2024年9月30日和2023年各三個月的合同安排相關費用，分別確認了$
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未以公允價值計量的金融工具承諾和 contingencies
法律事項
目前我們並沒有成爲任何重大未決法律訴訟的主體；不過，在業務正常運作過程中，我們可能不時成爲各種法律訴訟的一方。
2024年1月3日，我們與第三方解決了某些事項，包括國際貿易委員會之前提起的投訴和國際貿易委員會在2023年發起的調查，並與第三方簽署了多年的非獨佔許可協議，涵蓋多項智能眼鏡專利（如下所述）。
許可協議
在2022年和2023年，我們簽訂了各種多年許可協議，授予我們在全球範圍內銷售特定品牌智能眼鏡的權利，包括Nautica、Eddie Bauer和Reebok品牌。這些協議要求我們根據許可期間零售和批發銷售額的百分比支付版稅，並要求支付保證的最低版稅。
根據這些許可協議，未來的最低支付總額如下：
| 2024年餘下的時間 | $ | ||||
| 2025 | |||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 此後（至2033年） | |||||
| 總計 | $ |
此外，2024年1月3日，我們與第三方（IngenioSpec，LLC）簽訂了一項爲期多年的非獨家許可協議，涉及多項智能眼鏡專利。根據這項許可協議，公司新增了46項新專利的許可，納入了公司擁有和許可的專利和申請組合中。公司已提前完全支付了該許可協議的費用，不受該協議下未來付款的任何義務。
租賃
我們的行政辦公室位於佛羅里達州邁阿密33181號聯邦大道11900號630室。我們的行政辦公室由關聯方提供（參見附註6）。我們認爲我們目前的辦公空間足夠滿足我們目前的運營需求。
其他承諾
請參閱第六條討論的關聯方管理服務協議。
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股票期權
關於截至2024年9月30日及在截至2024年9月30日爲止的九個月期間的期權數量、行權價和剩餘合同期限的摘要信息（根據附註9中描述的股票拆分逆轉進行了回溯調整）如下：
| Options （數量） |
加權平均 行權價格 。 ($) |
加權平均 剩餘 Contractual Life （年） |
||||||||||
| 截至2024年1月1日 | ||||||||||||
| 已授權 | ||||||||||||
| 已行使 | ||||||||||||
| 取消/過期 | ( |
) | ||||||||||
| 截至2024年9月30日 | ||||||||||||
| 截至2024年9月30日可行使 | ||||||||||||
截至2024年9月30日止的三個月和九個月，我們分別確認了支出$ 的費用與2024年9月30日和2023年各九個月的合同安排相關。 ，與期權相關的支出。截至2024年9月30日，所有期權的總內在價值以及所有可行使的期權的內在價值均爲零，未確認的股票期權支出約爲$ ，其餘的將在接下來的 年。
於2024年1月11日，我們授予了購買總計某些個股的期權
受限股票單位
在2024年9月30日結束的三個月和九個月中，我們認定了$的費用
股票授予
2024年3月28日，我們與第三方簽訂協議，由其向我們提供財務諮詢和投資銀行服務，最短期限爲六個月。作爲對公司提供的服務的補償，我們向交易對手發行了 公司普通股股份。根據發行日期的公司普通股公允價值，轉讓的對價總價值爲$
在2024年4月1日，我們與個人簽訂了一份爲期兩年的品牌大使協議。作爲協議第一年的補償，我們向該個人發放了
我們普通股的股份。轉讓的對價價值，通過在發行日按我們普通股的公允價值衡量，金額爲$
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NOTE 9 – STOCKHOLDERS’ EQUITY
Change in Capital Structure – Reverse Stock Split
At our annual meeting of shareholders on July 8, 2024, the Company’s shareholders approved an amendment to the Company’s articles of incorporation to effect a reverse stock split of our issued and outstanding common stock at a ratio between 1-for-14 and 1-for-24. Subsequently, the board of directors authorized a reverse stock split in a ratio of
從2024年7月18日起，公司已發行和流通的每20股普通股合併爲一股普通股，除非逆向股票拆分將導致公司的任何股東擁有部分股份，在這種情況下，這種部分股份會被四捨五入爲下一個最高的整股。此外，根據協議，公司未行使的普通股股票和期權相應進行調整，並相應調整其行權價格。
All share and per share amounts presented in these financial statements and accompanying notes, included but not limited to shares issued and outstanding, earnings/(loss) per share, and warrants and options, as well as the dollar amounts of common stock and additional paid-in capital, have been retroactively adjusted for all periods presented in order to reflect this change in capital structure.
There was no change to the total number of authorized common shares of , and there was no change in the par value per common share of $.
At-the-Market Offerings
On April 15, 2024, the Company entered into an at-the-market offering agreement with H.C. Wainwright & Co., LLC, as sales agent (“HCW”), relating to the sale of common stock.
| ● | From April 15, 2024 through April 28, 2024, the Company sold shares of common stock and received approximately $ |
| ● | Following the first registered direct offering described below, from May 2, 2024 through May 24, 2024, the Company sold shares of common stock and received approximately $ |
| ● | Following the second registered direct offering described below, from June 13, 2024 through June 30, 2024, the Company sold shares of common stock and received approximately $ |
| ● | 從2024年7月12日至2024年8月30日，公司出售了 普通股份，並獲得約$ |
公司在截至2024年9月30日的九個月期間還支付了 $
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First Registered Direct Offering
On May 1, 2024, the Company closed on a registered direct offering of shares of its common stock and, in a concurrent private placement, warrants to purchase up to
Approximately $
Second Registered Direct Offering
On May 29, 2024, the Company closed on a registered direct offering of shares of its common stock and, in a concurrent private placement, warrants to purchase up to
Warrant Exercises
During September 2024, the Company entered into multiple warrant inducement transactions with certain holders of its existing warrants. The Company intends to use the net proceeds from these transactions for working capital and general corporate purposes.
| ● | On September 3, 2024, the
Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on June 26, 2023) to
purchase an aggregate of |
| ● | On September 18, 2024, the
Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on May 1, 2024 in
connection with the First Registered Direct Offering described above) to purchase an aggregate of |
| ● | On September 22, 2024, the
Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on May 29, 2024 in
connection with the Second Registered Direct Offering described above) to purchase an aggregate of |
In connection with each of the aforementioned warrant inducement transactions, the Company issued placement agent warrants to HCW, the relevant details of which are outlined in the table below.
On September 23, 2024,
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In addition, on September 24, 2024,
As of September 30, 2024, the Company’s remaining outstanding warrants were as follows:
| Warrant Type | Warrants Outstanding to Purchase X Shares |
Exercise Price | Issuance Date | Expiration Date | ||||||||||
| Listed (IPO) Warrants | $ | |||||||||||||
| Common (SPO) Warrants | $ | |||||||||||||
| Private Warrants | $ | |||||||||||||
| Series A Warrants | $ | |||||||||||||
| Series B Warrants | $ | |||||||||||||
| Series C Warrants | $ | |||||||||||||
| Series D Warrants | $ | |||||||||||||
| Series E Warrants | $ | |||||||||||||
| Series F Warrants | $ | |||||||||||||
| Underwriter / Placement Agent Warrants | $ | |||||||||||||
| Underwriter / Placement Agent Warrants | $ | |||||||||||||
| Underwriter / Placement Agent Warrants | $ | |||||||||||||
| Underwriter / Placement Agent Warrants | $ | |||||||||||||
| Underwriter / Placement Agent Warrants | $ | |||||||||||||
| Underwriter / Placement Agent Warrants | $ | |||||||||||||
| Underwriter / Placement Agent Warrants | $ | |||||||||||||
| Total | ||||||||||||||
Rights Plan
On September 25, 2024, our board of directors approved the adoption of a limited duration stockholder rights plan (the “Rights Plan”), and declared a dividend to stockholders of record at the close of business on September 25, 2024 of one common stock purchase right (a “Right”) for each outstanding share of our common stock. Each Right entitles the holder to purchase from the Company six shares of our common stock at an exercise price of $
Under the Rights Plan, the Rights generally will become exercisable only if a person or group acquires beneficial ownership of 20% or more of our common stock in a transaction not approved by our board of directors. In that situation, each holder of a Right (other than the acquiring person or group, whose rights will become void and will not be exercisable) will have the right to purchase, upon payment of the exercise price and in accordance with the terms of the Rights Plan, a number of shares of our common stock having a market value of twice such price.
The Rights expire at or prior to the earlier of (i) September 25, 2025, (ii) the redemption or exchange of the Rights in accordance with the terms of the Rights Plan, (iii) the closing of certain merger or other acquisition transactions involving the Company, and (iv) the date of the Company’s next meeting of its stockholders.
The Rights Plan is not intended to prevent a takeover of the Company and should not interfere with any merger or other business combination approved by our board of directors. However, the Rights Plan may cause substantial dilution to a person or group that acquires beneficial ownership of twenty percent (20%) or more of our outstanding common stock.
Other Matters
During the nine months ended September 30, 2024, the Company made a release payment of $
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The Company calculates earnings/(loss) per share data by calculating the quotient of earnings/(loss) divided by the weighted average number of common shares outstanding during the respective period.
Due to the net losses for all periods presented in the unaudited condensed statements of operations, all shares underlying the common stock options, common stock warrants, and related party convertible debt were excluded from the earnings per share calculation due to their anti-dilutive effect.
The calculation of net earnings/(loss) per share (as retroactively adjusted for the reverse stock split described in Note 9) is as follows:
| For the three months ended |
For the nine months ended | |||||||||||||||
| September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 | |||||||||||||
| Basic and diluted: | ||||||||||||||||
| Net loss | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Weighted-average number of common shares | ||||||||||||||||
| Basic and diluted net loss per common share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
NOTE 11 – SUBSEQUENT EVENTS
In October 2024, the Company issued an aggregate
of
shares of common stock to certain holders of the Company’s Series A and Series B Warrants who had elected to exercise such warrants; the Company received approximately
$
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and the other financial information included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report.
Overview
Our mission is to Upgrade Your Eyewear®. 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. Our smart eyewear is a fusion of headphones with glasses, bringing vision correction and protection together with digital connectivity and clear audio, while also offering a safer solution for listening to music outdoors (as compared to in-ear headphones). The convenience of having a Bluetooth headset and comfortable glasses in one, especially for those who are already accustomed to all-day eyewear use, offers a lifestyle upgrade at a price most consumers can afford.
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. Notably, by the end of the first quarter of 2025 the Company anticipates completing its mission to introduce a smart upgrade for all four of the major types of eyewear: prescription eyeglasses, ready-to-wear sunglasses, safety glasses, and sport glasses. We believe this will expand our customer base significantly by having a large eyeglass and sunglass offering that better aligns with the needs of optical retailers. To date, most Lucyd products have been designed for sunglass use, but starting in 2024 we have begun to offer alternative lens options such as blue light and transitional lenses on our stock frames, allowing for more customization without increasing unit price. Additionally, the Lucyd Armor and Reebok® Powered by Lucyd frames will align with the style and performance needs of safety and sport eyewear users respectively, for which we have not previously had a suitable product offering.
The Company believes its diversification into safety and sport smartglasses (Lucyd Armor and Reebok®), for which high-quality competing products are scarce, will buttress our position in the emerging smart eyewear market by offering a unique value proposition to customers. Since these products are very competitively priced against their traditional counterparts, we believe in their potential to enhance the Company’s revenues and open new retail partnerships with businesses outside of the optical market.
Products and History
In January 2020, we introduced our first beta product and began market testing.
In January 2021, we officially launched our first commercial product, Lucyd Lyte. 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 lightweight and comfortable, and enables the wearer to remain connected to their digital lives. The product was initially launched with six styles, and in September 2021, an additional six styles were added, including the Company’s first titanium-front smart eyewear. A final four styles were added to this collection in 2022, including the Company’s first matte finish and tortoise style models, along with improvements to hinge design.
In the first quarter of 2022 we introduced a virtual try-on kiosk for select retail stores. This device introduces our products to prospective retail customers and enables them to digitally try-on our line of smart glasses in a touch-free manner. In the fourth quarter of 2022, we completed development of core audio eyewear product improvements, such as upgrading all frames to quadraphonic sound, which was subsequently rolled out across all of our new eyewear models.
In February 2023, we launched version 2.0 of our Lucyd Lyte eyewear with 15 different styles, incorporating several key breakthroughs for the smart eyewear product category – including a four-speaker audio array, 12-hour music playback and call time, and improved styling as well as technical upgrades. In October 2023, we launched six new styles of smart eyewear, branded as Lyte XL, bringing even more advancements – including patent-pending flexible hinges for a more comfortable fit and a wider range of suitable head sizes, significant improvements to speaker and microphone quality, thinner and more ergonomic temples, and post-consumer recycled packaging.
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Also during 2023, we completed upgrades to our accessory products, including the charging dock and virtual try-on kiosk. The patent-pending Lucyd charging dock was upgraded to version 2.0 edition, featuring auto-adjusting connectors to fit any size of smart eyewear we produce, a new charging status LED, and USB data capability, enabling it to be used as a USB hub for computers in addition to a charging hub. The Lucyd virtual try-on kiosk was replaced with a fully modular display system, with eight available components for stores to mix and match to suit their display needs. The display can be deployed as a countertop display or freestanding, making it suitable for almost any retail environment.
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. This collection introduced the Company’s first “global fit” style, which supports low nose bridge customers.
In April 2024, we launched the Eddie Bauer® Powered by Lucyd smart eyewear collection in four different styles, which showcases the first-to-market rimless smart eyewear design. We believe the Eddie Bauer collection is the Company’s most premium product to date, and features brushed titanium hardware, improved sound quality, and includes the patent-pending Lucyd Dock with every unit.
In October 2024, we launched the Lucyd Armor line, an ANSI-certified smart safety glass designed for all-day wear. This new line provides all the powerful features of Lucyd eyewear in a stylish safety wrap.
With the addition of the Lucyd Armor line, our current product offering consists of 34 different models, which offers a similar amount of style variety as many traditional eyewear collections. The Company is continuously iterating and improving its frame lineup, offering a mixture of “Lucyd icons” (styles that have consistently performed well since the introduction of Lucyd Lyte) and new styles seasonally to align with market trends and evolving consumer demand. All styles are 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.
We plan to launch the Reebok® Powered by Lucyd sport smart glasses collection in the first quarter of 2025, followed by a Reebok® Optical Smart Eyewear collection in mid-2025.
Since the initial launch of Lucyd Lyte, we have witnessed growing interest and demand from customers throughout the United States and have sold thousands of our smart glasses. Over the past few years, numerous optical stores in the United States and Canada have onboarded our products, and we continue to pursue expansion with various large eyewear chains and other large retailers regarding our frames. 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.
Software and Apps
In April 2023, we introduced a major software upgrade for our glasses with the launch of the Lucyd app for iOS and Android. 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. The Company has filed a patent application related to this software.
In the second quarter of 2024, we added a “Pro” version of the app, which provides unlimited ChatGPT interactions and priority tech support for a modest monthly or annual fee. This is a new revenue stream for our business, and represents our first diversification in product revenue from frames and lenses.
In July 2024, we launched a new feature called “Walkie” for the Lucyd app, which enables thousands of users to join each other on walkie-talkie style communication channels. This feature was designed with the upcoming smart safety glass product in mind, to enable coworking teams to communicate freely on smart eyewear. We plan to launch more new features for the Lucyd app in the future, such as an audio equalizer enabling the user to optimize sound output for different types of content such as calls and podcasts, a “Find My Glasses” feature, and touch control customizations.
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We believe these developments make our Lucyd eyewear perhaps the smartest smartglasses available today, and represent a significant marketing opportunity for our core smartglass products.
A large part of our strategy is not just to provide a leading smart eyewear platform, but to build a highly functional mobile software and interactive retail fixture ecosystem to support user adoption and “stickiness” with our products. While the Lucyd app provides additional value to end users after purchase, we also wanted to make the purchase process itself more engaging and tech-forward. To this end, we have also developed all-new interactive LCD retail fixtures, featuring a new proprietary kiosk app that we have just recently developed in-house. These new displays offer a complete Lucyd experience, including virtual try-on, social media content, detailed product info and videos, and seamless music demos. The new display systems, installed with the Lucyd shopping app, are expected to provide an immersive onboarding experience for prospective customers in retail stores carrying our frames, and we have started deployment of these new display systems to customers as of October 2024.
Key Factors Affecting Performance
Expansion of retail points of purchase
In addition to sustained growth of our e-commerce business, we believe our future revenues are correlated positively with our placement of Lucyd glasses in optical stores, as well as sporting goods stores and other specialty stores. To support this growth, we have partnered with Windsor Eyes as our premier distributor for the optical market. Windsor Eyes brings decades of experience in the eyewear industry and a team of experienced, professional eyewear sales reps. In July 2024, they have just started to market our frames, and have already introduced our frames into three new eyewear retailers.
We currently offer an expansive line of 34 different styles and several accessories (including our co-branded product offerings with Nautica and Eddie Bauer), and are in the process of expanding our product offerings to include co-branded eyewear with other well-known brands like Reebok. In total, the Company expects to offer 38 total smart eyewear models by the end of 2024.
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. To support our sales to retail stores directly, we offer a strong co-op marketing program that includes free and paid store display materials. Additionally, we consistently incorporate retail partner feedback directly into our frames to better serve our end users.
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. 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. As of September 30, 2024, 73 digital display systems have been deployed to retailers. In October 2024, we began shipping and deploying to customers enhanced countertop and freestanding displays with large, interactive screens and engaging social media content.
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.
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.
20
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 started onboarding our first retail stores in June 2021. Currently, we have over 350 retail stores selling Lucyd Lyte primarily in the United States and Canada. 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.
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. Our newest Amazon launch of the Eddie Bauer® Powered by Lucyd smart eyewear carries a 4.8/5 rating. 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. As of September 30, 2024, we had over 20,000 cumulative total orders from customers online since inception. 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 allocate a sizeable portion of our advertising expenditures towards influencer marketing programs.
Components of Results of Operations
Revenues
Our revenue is primarily 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. We have also recently started to generate revenue from the sale of subscriptions to the “Pro” version of our Lucyd app, which provides unlimited ChatGPT interactions and priority tech support for a modest monthly or annual fee.
Our 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. Our co-branded Nautica® Powered by Lucyd and Eddie Bauer® Powered by Lucyd frames are priced at $199 – $219 and $249 – $299, respectively.
When adding a prescription lens upgrade to our glasses on the Lucyd.co website, the price can increase from between $40 for a basic clear prescription lens, all the way up to $449 for our proprietary Blueshift transitional blue light lenses in a progressive high index (ultra-thin) format. Glasses with prescription lenses are provided by the Company through our website Lucyd.co, while our sales through Amazon and to our retail partners only include non-prescription glasses (with rare exceptions, such as a reseller ordering a customized unit for display purposes). Lens customizations remain an important product differentiator and upselling opportunity.
U.S. Lucyd.co 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. For Amazon sales, shipping is free for U.S. consumers while international customers pay shipping charges. Any costs associated with fees charged by the online platforms (Shopify for our Lucyd.co website and Amazon.com) are not recharged to customers. We charge applicable state sales taxes for online channels and all other marketplaces on which sell.
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.
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Cost of Goods Sold
Cost of goods sold includes the costs incurred to acquire materials, assemble, and sell our finished products.
For retail sales placed through one of our e-commerce channels, these costs include (i) product costs stated at the lesser of cost and net realizable value and inclusive of inventory reserves, (ii) freight, import, and inspection costs, (iii) optical laboratory costs for prescription glasses, (iv) merchant fees, (v) fees paid to third-party e-commerce platforms, and (vi) cost of shipping the product to the consumer.
For wholesale sales, these costs include (i) product costs stated at the lesser of cost and net realizable value and inclusive of inventory reserves, (ii) freight, import, and inspection costs, and (iii) credit card fees.
When consumers place their orders directly on our website, we save approximately 12% - 15% on marketplace fees compared with orders placed through third-party platforms like Amazon and eBay.
We expect our cost of goods sold to fluctuate as a percentage of net revenue primarily due to product mix, customer preferences and resulting demand, customer shipping costs, and management of our inventory and merchandise mix.
Over time, we expect our total cost of goods sold on a per unit basis to decrease as a result of an increase in scale. Increase in scale is achieved as a result of increase in volumes from both business to consumer and business to business (retail store) orders. We continue to expand our products with line extensions and new models and broaden our presence in retail stores carrying our products.
Gross Profit and Gross Margin
Gross profit is net revenue less cost of goods sold. Gross margin is gross profit expressed as a percentage of net revenue.
Our gross margin may fluctuate in the future based on a number of factors, including the cost at which we can obtain, transport, and assemble our inventory, the rate at our vendor network expands, and how effective we can be at controlling costs in any given period. Over time, we anticipate that our cost of goods sold, on a per unit basis, will decrease with scale, and this will likely have a positive impact on our gross margins.
Operating Expenses
Our operating expenses consist primarily of:
| ● | general and administrative expenses that primarily include payroll and consulting expenses, IT & software, legal, and other administrative expenses; | |
| ● | sales and marketing expenses including cost of online advertising, marketing agency fees, influencers, trade shows, and other initiatives; | |
| ● | related party management fees for a range of back-office services provided by Tekcapital; and | |
| ● | research and development expenses related to (i) development of new styles and features of our smart eyewear, (ii) development and improvement of our e-commerce website, and (iii) development of software and apps for wearables. |
Interest and Other Income, Net
Interest and other income, net, primarily includes interest, dividends, and investment returns from our investments in money market funds and U.S. Treasury bills, as well as interest income and expense related to loans with related parties.
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Results of Operations – Quarterly
The following table summarizes our results of operations for the three months ended September 30, 2024 (the “current quarter”) and the three months ended September 30, 2023 (the “prior year quarter”):
| Three months ended September 30, 2024 |
Three months ended September 30, 2023 |
Change | ||||||||||||||||||||||
| Revenues, net | $ | 253,599 | 100 | % | $ | 221,875 | 100 | % | $ | 31,724 | 14 | % | ||||||||||||
| Less: Cost of Goods Sold | (194,255 | ) | 77 | % | (141,531 | ) | 64 | % | (52,724 | ) | 37 | % | ||||||||||||
| Gross Profit | 59,344 | 23 | % | 80,344 | 36 | % | (21,000 | ) | -26 | % | ||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| General and administrative | (1,121,972 | ) | 442 | % | (915,537 | ) | 413 | % | (206,435 | ) | 23 | % | ||||||||||||
| Sales and marketing | (533,066 | ) | 210 | % | (533,902 | ) | 241 | % | 836 | 0 | % | |||||||||||||
| Research and development | (131,369 | ) | 52 | % | (192,701 | ) | 87 | % | 61,332 | -32 | % | |||||||||||||
| Related party management fee | (35,000 | ) | 14 | % | (35,000 | ) | 16 | % | - | 0 | % | |||||||||||||
| Total Operating Expenses | (1,821,407 | ) | 718 | % | (1,677,140 | ) | 756 | % | (144,267 | ) | 9 | % | ||||||||||||
| Other Income (Expense) | 41,386 | -16 | % | 45,691 | -21 | % | (4,305 | ) | -9 | % | ||||||||||||||
| Interest Expense | - | 0 | % | - | 0 | % | - | |||||||||||||||||
| Total Other Income (Expense), net | 41,386 | -16 | % | 45,691 | -21 | % | (4,305 | ) | -9 | % | ||||||||||||||
| Net Loss | $ | (1,720,677 | ) | 679 | % | $ | (1,551,105 | ) | 699 | % | $ | (169,572 | ) | 11 | % | |||||||||
Revenues
Our revenues for the three months ended September 30, 2024 were $253,599, representing an increase of 14% as compared to revenues of $221,875 during the three months ended September 30, 2023. This increase is primarily attributable to strategic reductions in price discounts and adjustments to our pricing and Manufacturer’s Suggested Retail Price, aimed at enhancing profitability and attracting distributors to manage our wholesale channel. While the total number of units sold remained relatively stable compared to the prior year quarter, the higher average order value and focused efforts in specific channels contributed to the overall revenue growth. We believe these strategies reflect customers’ recognition of the quality and value proposition of our recent new product launches and support our long-term growth objectives. Additionally, we believe consumer awareness of smart eyewear is increasing, thanks in part to aggressive marketing from our main competitor, and the overall concept of our product is becoming less of a novelty and more of an accepted mobile computing platform.
Revenue generated through the e-commerce channel increased significantly from the prior year quarter, with net sales through our Lucyd.co website growing by 46%.
Wholesale revenue decreased approximately 11% from the prior year quarter, largely driven by a change in our focus from small, independent retailers to major national retailers, the latter of which have slower product approval and purchasing cycles. However, we believe that focusing on introducing our product in major national retailers will have a significant positive impact on the Company’s revenues in the next 3 to 18 months.
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For the three months ended September 30, 2024, approximately 54% of sales were processed on our online store (Lucyd.co), 22% on Amazon.com, and 23% through reseller partners, with 1% of our net revenues generated from Lucyd “Pro” app subscriptions. This sales channel mix positively impacted our revenue for the current quarter as compared with the prior year quarter, due to the fact we charge an additional $35 to $275 for our prescription lenses available only on Lucyd.co. For the three months ended September 30, 2024, we generated an aggregate of $187,568 of revenue from sales of non-prescription frames and accessories, $63,459 from sales of frames with prescription lenses, and $2,572 of revenue from app subscriptions. All of the $56,194 in sales generated on Amazon.com during the current quarter were for non-prescription frames and accessories, as we only offer prescription lenses through our website. Of the $137,135 in online sales generated through Lucyd.co, $63,459 was related to frames with prescription lenses and $73,676 was related to glasses with non-prescription lenses. E-commerce sales remain to be the most material portion of our sales to date; however, out of all of our sales channels, we believe that the wholesale optical channel represents the most promising opportunity for future growth. We anticipate that as smart eyewear becomes more normalized for prescription wear, major national eye care providers will begin to onboard smart eyewear products, and we believe we are the value leader in that sector.
For the three months ended September 30, 2023, approximately 42% of sales were processed on our online store (Lucyd.co), 29% on Amazon.com, and 29% with reseller partners. For the three months ended September 30, 2023, we generated $187,086 of revenue from sales of non-prescription frames and accessories, and $34,789 from sales of frames with prescription lenses. All of the $63,027 in sales generated on Amazon.com during the 2023 period were for non-prescription frames and accessories, as we only offer prescription lenses through our website. Of the $93,704 in online sales generated through Lucyd.co, $34,789 was related to frames with prescription lenses and $58,915 was related to glasses with non-prescription lenses.
Cost of Goods Sold
Our total cost of goods sold increased to $194,255 for the three months ended September 30, 2024, as compared to $141,531 for the prior year quarter. This year-over-year increase of 37% was driven by a combination of factors, including: (i.) higher cost of frames, largely attributable to the new Eddie Bauer® Powered by Lucyd collection, due to the increased number of components, deluxe finishes, and materials associated with that product line, (ii.) higher shipping and logistics costs, and (iii.) the impact of certain period costs and other one-off items, most notably including approximately $44,000 of credits related to custom duties and taxes included in the prior year quarter amounts which did not recur in the current quarter.
These increased costs were partially offset by significant decreases in lens fulfilment costs, which decreased by approximately 50% from the prior year quarter. This is primarily attributable to actions taken by management in the current year to better manage these costs, including (i.) the launch of the new Lucyd Shift and Lucyd Blueshift transitional lenses in place of branded third-party transitional lenses, offering similar functionality for a lower cost of goods, while also enabling a slightly lower cost to the customer, and (ii.) the engagement of a new lower-cost lens supplier based in Miami, Florida.
Cost of goods sold for the three months ended September 30, 2024 included the cost of frames of $107,469; cost of prescription lenses incurred with third-party vendors of $38,247; commissions, affiliate referral fees, and e-commerce platform fees of $24,413; and shipping and logistics costs of $22,512. Out of our total cost of goods sold for the current quarter of $194,255, $38,247 related to orders with prescription lenses, while $156,008 pertained to non-prescription orders. We anticipate that our cost of goods sold will improve in future periods as new products – i.e., Lucyd Armor and Reebok® Powered by Lucyd – sourced from a new supplier are launched in the fourth quarter of 2024 and first quarter of 2025, respectively, as the frames for these product lines are designed differently from our other products and accordingly have fewer components, thus reducing their price. We estimate that the unit cost of these new product lines will be at least 30% lower than our Lucyd Lyte models.
Cost of goods sold for the three months ended September 30, 2023 included the cost of frames of $79,410; cost of prescription lenses incurred with third-party vendors of $76,346; period costs (credits) of approximately $(44,000) related to custom duties and taxes; and other items including affiliate referral fees, e-commerce platform fees, commissions, and custom duties and importation fees for a total of $22,312. Out of our total cost of goods sold for the three months ended September 30, 2023 of $141,531, $76,346 related to orders with prescription lenses, while $65,185 pertained to non-prescription orders.
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We anticipate further growth in revenues in the fourth quarter of 2024, largely in part to the launch of our the new Lucyd Armor product line, along with corresponding growth in total cost of goods sold. As we continue to refine our product mix with sales data, we anticipate reducing our unit costs by focusing only on the highest volume, market-tested styles. Additionally, our new lower-cost supplier has indicated significant price breaks of up to 50% are possible as we increase unit volume, demonstrating the profit potential for Lucyd Armor and Reebok sunglasses.
Gross Profit
Our gross profit for the current quarter was $59,344, as compared to $80,344 for the prior year quarter. Our gross margin was 23% in the current quarter and 36% in the prior year quarter, representing a decline of approximately 13 percentage points from the prior year period. This decrease in gross profit and gross margin was primarily the result of higher cost of goods sold as a result of the factors described above, as well as the impact of period costs (credits) as described above. That said, the current quarter gross margin of 23% represents an improvement from our gross margin of 2% in the quarter ended March 31, 2024 and 18% in the quarter ended June 30, 2024. This indicates a positive trend, and we expect our gross margin to continue to improve given the ongoing impact of lower lens fulfilment costs coupled with the anticipated lower unit costs associated with the Lucyd Armor product line launching the fourth quarter of 2024 and the Reebok® Powered by Lucyd product line launching in the first quarter of 2025.
We believe that in the long term, the majority of our business will ultimately come from frame sales to distributors and eyewear retailers. We anticipate that the upcoming launches of new product lines in the fourth quarter of 2024 and first half of 2025 will help us progress towards our long-term goal of shifting our sales mix more towards the wholesale channel, which should bring consistent, large-scale orders with minimal marketing costs.
Operating Expenses
Our operating expenses increased by 9% to $1,821,407 for the three months ended September 30, 2024, as compared to $1,677,140 for the three months ended September 30, 2023. This increase was primarily due to the following:
General and administrative expenses
Our general and administrative expenses increased by $206,435 or 23% to $1,121,972 for the three months ended September 30, 2024, as compared to $915,537 for the prior year quarter. This increase was primarily attributable to an increase in legal costs of approximately $168,000, largely as a result of various shareholder and equity-related matters during the current quarter.
The Company maintains a lean staff salaried at market rates, and a significant portion of our general and administrative expenses consist of corporate overhead type costs which are fixed or semi-fixed in nature (e.g., rent, compliance, legal and professional services, etc.); as such, our general and administrative expenses are not expected to scale up significantly as our revenue increases over time.
Sales and marketing expenses
Our sales and marketing expenses were $533,066 for the three months ended September 30, 2024 and $533,902 for the three months ended September 30, 2023, or essentially flat year-over-year. Compared to the prior year quarter, we spent more on events and trade shows, and less on influencers and paid ads, in the current quarter; this reflects short-term tactical shifts in our marketing approach to react to current trends and opportunities as they arise, and make smart investments in advertising and marketing spending that we believe will maximize our impact and provide for future growth.
From a long-term perspective, while we expect that our total sales and marketing expenses will scale up to some degree as our revenue increases, we anticipate that such increases in sales and marketing expenses will be mitigated somewhat by our planned focus on growing the wholesale optical channel, which, due to the nature of that channel, inherently does not require costly marketing campaigns to acquire each customer and as a result typically carries a lower marketing cost per unit sold. Additionally, we generally expect that a retailer who is successful with our products will reorder in large quantities, also without significant marketing expenditure.
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Research and development costs
Our research and development costs decreased by 32% to $131,369 for the three months ended September 30, 2024, as compared to $192,701 for the three months ended September 30, 2023, primarily due to product development cycle timing.
Related party management fee
Our related party management fee was $35,000 for each of the three-month periods ended September 30, 2024 and 2023, based on the terms of the management services agreement between us and Tekcapital.
Other Income (Expense), net
Total other income (expense), net in the three months ended September 30, 2024 was $41,386. This amount was primarily comprised of dividends from our investments in money market funds, partially offset by other unrelated expenses.
Total other income (expense), net in the three months ended September 30, 2023 was $45,691. This amount was primarily comprised of interest, dividends, and investment returns from our investments in money market funds and U.S. Treasury bills.
Results of Operations – Year to Date
The following table summarizes our results of operations for the nine months ended September 30, 2024 (the “current nine months”) and the nine months ended September 30, 2023 (the “prior year nine months”):
| Nine months ended September 30, 2024 |
Nine months ended September 30, 2023 |
Change | ||||||||||||||||||||||||||
| Revenues, net | 14 | % | $ | 945,752 | 100 | % | $ | 536,725 | 100 | % | $ | 409,027 | 76 | % | ||||||||||||||
| Less: Cost of Goods Sold | 37 | % | (824,281 | ) | 87 | % | (475,906 | ) | 89 | % | (348,375 | ) | 73 | % | ||||||||||||||
| Gross Profit | -26 | % | 121,471 | 13 | % | 60,819 | 11 | % | 60,652 | 100 | % | |||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||
| General and administrative | 23 | % | (3,526,217 | ) | 373 | % | (2,877,663 | ) | 536 | % | (648,554 | ) | 23 | % | ||||||||||||||
| Sales and marketing | 0 | % | (1,636,794 | ) | 173 | % | (896,842 | ) | 167 | % | (739,952 | ) | 83 | % | ||||||||||||||
| Research and development | -32 | % | (604,472 | ) | 64 | % | (541,348 | ) | 101 | % | (63,124 | ) | 12 | % | ||||||||||||||
| Related party management fee | 0 | % | (105,000 | ) | 11 | % | (105,000 | ) | 20 | % | - | 0 | % | |||||||||||||||
| Total Operating Expenses | 9 | % | (5,872,483 | ) | 621 | % | (4,420,853 | ) | 824 | % | (1,451,629 | ) | 33 | % | ||||||||||||||
| Other Income (Expense) | -9 | % | 110,625 | -12 | % | 93,353 | -17 | % | 17,272 | 19 | % | |||||||||||||||||
| Interest Expense | - | 0 | % | (3,036 | ) | 1 | % | 3,036 | -100 | % | ||||||||||||||||||
| Total Other Income (Expense), net | -9 | % | 110,625 | -12 | % | 90,317 | -17 | % | 20,308 | 22 | % | |||||||||||||||||
| Net Loss | 11 | % | $ | (5,640,387 | ) | 596 | % | $ | (4,269,717 | ) | 796 | % | $ | (1,370,670 | ) | 32 | % | |||||||||||
Revenues
Our revenues for the nine months ended September 30, 2024 were $945,752, representing an increase of 76% as compared to revenues of $536,725 during the nine months ended September 30, 2023. 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 190% and 45%, respectively, from the prior year nine months, while wholesale revenues declined by approximately 33%.
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Overall, our revenue growth is mainly driven by our new product launches over the past year (including the Lyte XL collection in the fourth quarter of 2023 and the co-branded Nautica® Powered by Lucyd and Eddie Bauer® Powered by Lucyd collections in the current year period). We believe our brand partnerships play a significant role in our revenue growth by offering a more diversified product line that speaks to consumers from different demographics (for example, Nautica® generally appeals to a more fashion-forward customer than Lucyd Lyte, and Eddie Bauer® generally appeals to an older demographic than our other lines). Also contributing to our growth in revenues are our continued investments in marketing and advertising initiatives, as well as increased public interest and growth in smart glasses and the wearable products category.
The decline in wholesale revenues was largely driven by a change in our focus during the current year from small, independent retailers to major national retailers, the latter of which have slower product approval and purchasing cycles. However, we believe that focusing on introducing our product in major national retailers will have a significant positive impact on the Company’s revenues in the next 3 to 18 months.
For the nine months ended September 30, 2024, approximately 61% of sales were processed on our online store (Lucyd.co), 26% on Amazon.com, and 13% with reseller partners. This sales channel mix positively impacted our revenue for the current nine months as compared with the prior year nine months, due to the fact we charge an additional $35 to $275 for our prescription lenses available only on Lucyd.co. For the nine months ended September 30, 2024, we generated an aggregate of $687,855 of revenue from sales of non-prescription frames and accessories, $255,325 from sales of frames with prescription lenses, and $2,572 of revenue from app subscriptions. All of the $246,455 in sales generated on Amazon.com during the current nine months were for non-prescription frames and accessories, as we only offer prescription lenses through our website. Of the $575,577 in online sales generated through Lucyd.co, $255,325 was related to frames with prescription lenses and $320,252 was related to glasses with non-prescription lenses. E-commerce sales remain to be the most material portion of our sales to date; however, out of all of our sales channels, we believe that the wholesale optical channel represents the most promising opportunity for future growth. We anticipate that as smart eyewear becomes more normalized for prescription wear, major national eye care providers will begin to onboard smart eyewear products, and we believe we are the value leader in that sector.
For the nine months ended September 30, 2023, approximately 37% of sales were processed on our online store (Lucyd.co), 32% on Amazon, and 31% with reseller partners. For the nine months ended September 30, 2023, we generated $454,233 of revenue from sales of non-prescription frames and accessories, and $82,492 from sales of frames with prescription lenses. All of the $170,284 in sales generated on Amazon.com during the period were for non-prescription frames and accessories as we only offer prescription lenses through our website. Of the $193,591 in online sales generated through Lucyd.co, $82,492 was related to frames with prescription lenses and $111,099 was related to glasses with non-prescription lenses.
Cost of Goods Sold
Our total cost of goods sold increased to $824,281 for the nine months ended September 30, 2024, as compared to $475,906 for the prior year nine months. This year-over-year increase of 73% was comparable to our year-over-year increase in net revenue of 76%, and was primarily driven by higher sales volumes and gross sales during the current nine months as compared with the prior year comparable period.
Cost of frames increased by approximately 90% from the prior year nine months, primarily related to the increase in sales volumes and also partially attributable to higher cost of goods sold associated with the new Eddie Bauer® Powered by Lucyd collection, due to the increased number of components, deluxe finishes, and materials for that product line.
Cost of lenses increased by approximately 49% from the prior year nine months, mainly driven by sales channel mix, as a higher relative proportion of our sales in the current nine months 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 cost increases were partially offset by actions taken by management in the current year to better manage these costs, including (i.) the launch of the new Lucyd Shift and Lucyd Blueshift transitional lenses in place of branded third-party transitional lenses, offering similar functionality for a lower cost of goods, while also enabling a slightly lower cost to the customer, and (ii.) the engagement of a new lower-cost lens supplier based in Miami, Florida.
27
Cost of goods sold for the nine months ended September 30, 2024 notably included, but was not limited to, the cost of frames of $434,876; cost of prescription lenses incurred with third-party vendors of $196,030; commissions, affiliate referral fees, and e-commerce platform fees of $94,444; shipping and logistics costs of $63,180; and product certification costs of $29,100. Out of our total cost of goods sold for the current nine months of $824,281, $196,030 related to orders with prescription lenses, while $628,251 pertained to non-prescription orders. We anticipate that our cost of goods sold will improve in future periods as new products – i.e., Lucyd Armor and Reebok® Powered by Lucyd – sourced from a new supplier are launched in the fourth quarter of 2024 and first quarter of 2025, respectively, as the frames for these product lines are designed differently from our other products and accordingly have fewer components, thus reducing their price. We estimate that the unit cost of these new product lines will be at least 30% lower than our Lucyd Lyte models.
Cost of goods sold for the nine months ended September 30, 2023 notably included, but was not limited to, the cost of frames of $215,713; cost of prescription lenses incurred with third-party vendors of $131,561; commissions, affiliate referral fees, and e-commerce platform fees of $89,694; and quality assurance costs related to our products sold of $11,700. Out of our total cost of goods sold for the prior year nine months of $475,906, $131,561 related to orders with prescription lenses, while $344,345 pertained to non-prescription orders.
We anticipate further growth in revenues in the fourth quarter of 2024, largely in part to the launch of our the new Lucyd Armor product line, along with corresponding growth in total cost of goods sold. As we continue to refine our product mix with sales data, we anticipate reducing our unit costs by focusing only on the highest volume, market-tested styles.
Gross Profit
Our gross profit for the current nine months was $121,471, as compared to $60,819 for the prior year nine months. Our gross margin was 13% in the current nine months and 11% in the prior year nine months, representing an improvement of approximately 2 percentage points from the prior year period.
This 100% improvement in gross profit (in absolute dollar terms) and the slight improvement in gross margins is the net result of the various factors discussed in detail above.
We continue to work with all of suppliers and vendors to reduce our unit costs. Our gross margins during the current year period are increasing and trending in a positive direction, and we expect our gross margin to continue to improve given the ongoing impact of lower lens fulfilment costs that have started to be realized in the current quarter, coupled with the anticipated lower unit costs associated with the Lucyd Armor product line launching the fourth quarter of 2024 and the Reebok® Powered by Lucyd product line launching in the first quarter of 2025.
We believe that in the long term, the majority of our business will ultimately come from frame sales to distributors and eyewear retailers. Additionally, we anticipate that the upcoming launches of new product lines in the fourth quarter of 2024 and first half of 2025 will help us progress towards our long-term goal of shifting our sales mix more towards the wholesale channel, which carries higher margins for us.
Operating Expenses
Our operating expenses increased by 33% to $5,872,483 for the nine months ended September 30, 2024, as compared to $4,420,853 for the nine months ended September 30, 2023. This increase was primarily due to the following:
General and administrative expenses
Our general and administrative expenses increased by 23% to $3,526,217 for the nine months ended September 30, 2024, as compared to $2,877,663 for the prior year nine months. This increase was largely driven by the combination of (i) a $325,000 release payment made to a shareholder counterparty during the current nine months for the waiver of certain of that counterparty’s pre-existing contractual rights related to the Company’s equity offerings during the second quarter of 2024, (ii) an increase in legal costs of approximately $187,000, largely as a result of various shareholder and equity-related matters during the current year period, (iii) the cost of various licensing agreements we have entered into in order to support our co-branding initiatives and expand our patent portfolio, and (iv) higher investor relations costs. These increases were partially offset by lower insurance costs.
28
The Company maintains a lean staff salaried at market rates, and a significant portion of our general and administrative expenses consist of corporate overhead type costs which are fixed or semi-fixed in nature (e.g., rent, compliance, legal and professional services, etc.); as such, our general and administrative expenses are not expected to scale up significantly as our revenue increases over time.
Sales and marketing expenses
Our sales and marketing expenses increased by 83% to $1,636,794 for the nine months ended September 30, 2024, as compared to $896,842 for the nine months ended September 30, 2024. This year-over-year increase is primarily attributable to the combination of the following main drivers:
| ● | the restructuring of our e-commerce business during the first half of 2023, during which we temporarily paused and postponed our marketing spending, and management made a tactical decision to preserve a significant portion of our marketing budget for later in the year, in order to better align the timing of marketing spending with major new product launches and thus maximize impact. In the latter portion of 2023 and continuing through the current nine months, we have significantly increased our advertising and marketing efforts, particularly in the areas of spending on paid ads on websites and social media platforms, in order to drive growth in our revenues and market share. |
| ● | the fact that the prior year nine months included a 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 without ever having vested, as the related performance conditions (sales quotas) for those awards were not met. |
From a long-term perspective, while we expect that our total sales and marketing expenses will scale up to some degree as our revenue increases, we anticipate that such increases in sales and marketing expenses will be mitigated somewhat by our planned focus on growing the wholesale optical channel, which, due to the nature of that channel, inherently does not require costly marketing campaigns to acquire each customer and as a result typically carries a lower marketing cost per unit sold. Additionally, we generally expect that a retailer who is successful with our products will reorder in large quantities, also without significant marketing expenditure.
Research and development costs
Our research and development costs increased by 12% to $604,472 for the nine months ended September 30, 2024, as compared to $541,348 for the nine months ended September 30, 2023.
This increase was primarily attributable to the write-off of approximately $88,000 of previously-capitalized software costs related to the development of the Vyrb app (which was launched as an open beta version in 2021, and has had new features added over time, but had never been officially launched) as a result of management’s decision in 2024 to de-emphasize the Vyrb app in favor of shifting our primary software development focus to the Lucyd app. Certain elements and features developed for the Vyrb app may potentially be incorporated into future releases of the Lucyd app.
The impact of the aforementioned write-off was partially offset by the impacts of product development cycles and timing of associated research and development spending.
Related party management fee
Our related party management fee was $105,000 for each of the nine months ended September 30, 2024 and 2023, based on the terms of the management services agreement between us and Tekcapital.
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Other Income (Expense), net
Total other income (expense), net in the nine months ended September 30, 2024 was $110,625. This amount was primarily comprised of dividends from our investments in money market funds, and, to a lesser extent, interest income earned on a short-term loan to a related party.
Total other income (expense), net in the nine months ended September 30, 2023 was $90,317, and was primarily comprised of the combination of (i) approximately $52,000 of interest, dividends, and investment returns from our investments in money market funds and U.S. Treasury bills; and (ii) approximately $35,000 of refunds of certain amounts that had been previously charged to the Company from the Parent and Affiliates in prior periods.
Liquidity and Capital Resources
As of September 30, 2024 and December 31, 2023, our cash and cash equivalents were approximately $4.5 million and $4.3 million, respectively. Our working capital (current assets less current liabilities) was approximately $10.3 million and $5.0 million as of September 30, 2024 and December 31, 2023, respectively.
Cash Flow
| Nine months ended | Nine months ended | |||||||
| September 30, | September 30, | |||||||
| 2024 | 2023 | |||||||
| Net cash flows from operating activities | $ | (4,796,361 | ) | $ | (4,425,294 | ) | ||
| Net cash flows from investing activities | (5,100,736 | ) | (2,208,678 | ) | ||||
| Net cash flows from financing activities | 10,153,476 | 6,946,531 | ||||||
| Net Change in Cash | $ | 256,379 | $ | 312,559 | ||||
Net cash flows used in operating activities for the nine months ended September 30, 2024 are primarily reflective of our net loss for the period, resulting from our operating costs to support and grow our business, including employee-related costs, sales and marketing, and research and development.
Net cash flows used in investing activities for the nine months ended September 30, 2024 are mainly related to the investment of a portion of the proceeds from our recent equity offerings (as described below) in 6-month U.S. Treasury bills.
Net cash flows provided by financing activities for the nine months ended September 30, 2024 are mainly driven by proceeds from multiple equity offering transactions as described below.
Equity Offerings
At-the-Market Offerings
On April 15, 2024, we entered into an at-the-market offering agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC, as sales agent (“HCW”), relating to the sale of common stock. Under this agreement, during the nine months ended September 30, 2024, we sold a total of 557,988 shares and received approximately $3.9 million of gross proceeds, before deducting sales agent commissions and offering expenses. The net proceeds received by the Company from sales under the ATM Agreement amounted to approximately $3.7 million. We intend to use the net proceeds from sales under the ATM Agreement primarily for working capital and general corporate purposes.
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First Registered Direct Offering
On May 1, 2024, the Company closed on a registered direct offering of 210,043 shares of its common stock and, in a concurrent private placement, warrants to purchase up to 210,043 shares of common stock at an exercise price of $4.88 per share, for a combined purchase price per share and warrant of $4.88. In exchange, the Company received approximately $1.0 million of gross proceeds, before deducting underwriting discounts and offering expenses. In addition, the Company issued to the placement agent warrants to purchase up to 15,754 shares of common stock at an exercise price of $6.10 per share. The net proceeds received by the Company from this transaction amounted to approximately $0.8 million. We intend to use the net proceeds of this offering primarily for working capital and general corporate purposes.
Approximately $0.1 million of the net proceeds received from this registered direct offering were used to pay a former agent for their waiver of a contractual right of first refusal; such payment has been reflected in the unaudited condensed financial statements as a reduction to additional paid in capital, as it represents a related cost of this equity transaction.
Second Registered Direct Offering
On May 29, 2024, the Company closed on a registered direct offering of 263,159 shares of its common stock and, in a concurrent private placement, warrants to purchase up to 263,159 shares of common stock at an exercise price of $9.50 per share, for a combined purchase price per share and warrant of $9.50. In exchange, the Company received approximately $2.5 million of gross proceeds, before deducting underwriting discounts and offering expenses. In addition, the Company issued to the placement agent warrants to purchase up to 19,737 shares of common stock at an exercise price of $11.876 per share. The net proceeds received by the Company from this transaction amounted to approximately $2.1 million. We intend to use the net proceeds of this offering primarily for working capital and general corporate purposes.
Warrant Exercises
During September 2024, the Company entered into multiple warrant inducement transactions with certain holders of its existing warrants. Through these transactions, certain holders of various existing warrants to purchase an aggregate of 538,426 shares of common stock agreed to exercise such warrants (at adjusted or reduced exercise prices) in exchange for an aggregate of 538,426 shares of common stock plus new warrants (Series A through Series F warrants, with varying terms and exercise prices) to purchase an aggregate of 1,340,012 shares of common stock. In exchange, the Company received approximately $4.0 million of gross proceeds, before deducting underwriting discounts and offering expenses. The total net proceeds received by the Company from these transactions amounted to approximately $3.5 million. We intend to use the net proceeds of this offering primarily for working capital and general corporate purposes.
On September 23, 2024, one of the holders of the Series A and Series B warrants exercised an aggregate of 40,000 warrants on a cashless basis and received 20,482 shares of common stock.
In addition, on September 24, 2024, one of the holders of the warrants issued in connection with the First Registered Direct Offering elected to exercise their warrants to purchase an aggregate of 61,475 shares of common stock. The Company received approximately $300,000 of gross proceeds from this exercise.
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. 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.
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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. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. 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. 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 September 30, 2024, we did not have any off-balance sheet arrangements.
Critical Accounting Policies and Significant Estimates
There have been no material changes in our critical accounting policies and significant estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 25, 2024.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13(a)-15(b) of the Exchange Act. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as a result of material weaknesses in our internal control over financial reporting, our disclosure controls and procedures were not effective as of September 30, 2024.
There was no change in our internal control over financial reporting during the third quarter of fiscal year 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Part II - Other Information
Item 1. 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 1A. Risk Factors
There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 25, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During September 2024, the Company entered into multiple warrant inducement transactions with certain holders of its existing warrants.
| ● | On September 3, 2024, the Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on June 26, 2023) to purchase an aggregate of 126,699 shares of common stock. The warrant holders exercised for cash the existing warrants at a reduced exercise price of $5.00 per share, resulting in gross proceeds to the Company of approximately $633,000; in addition to the shares of common stock issued as a result of the warrant exercise, the warrant holders also received new unregistered Series A and Series B warrants. This transaction closed on September 4, 2024, and the net proceeds received by the Company amounted to approximately $489,000. |
| ● | On September 18, 2024, the Company entered into inducement letter agreements with certain holders of existing warrants (originally issued on May 1, 2024) to purchase an aggregate of 148,567 shares of common stock. The warrant holders exercised for cash the existing warrants at an adjusted exercise price of $5.13 per share, resulting in gross proceeds to the Company of approximately $762,000; in addition to the shares of common stock issued as a result of the warrant exercise, the warrant holders also received new unregistered Series C and Series D warrants. This transaction closed on September 19, 2024, and the net proceeds received by the Company amounted to approximately $672,000. |
| ● | 2024年9月22日，公司與某些現有認股權證持有人（最初於2024年5月29日發行）簽訂了誘因函協議，以購買總計263,160股普通股。認股權證持有人以每股9.875美元的調整行權價現金行權現有認股權證，爲公司帶來約260萬美元的總收益；除了作爲認股權證行權結果而發行的普通股份外，認股權證持有人還收到了新的未註冊的E系列和F系列權證。此交易於2024年9月24日關閉，公司獲得的淨收入約爲230萬美元。 |
關於上述每一筆認股權引誘交易，公司向H.C. Wainwright & Co., LLC.發行了配售經紀認股權。
上述證券在這些交易中發行，未經證券法註冊銷售，依賴於證券法第4(a)(2)條規定的豁免，作爲不涉及公開發行的交易，並根據證券法制定的506條規定的銷售對象於合格投資者，並依賴於適用州法律下的類似豁免。
隨後，公司根據這些交易發佈了一份S-1表格的註冊聲明，以註冊上述證券發行，這一註冊於2024年10月17日被證券交易委員會宣告生效。
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第3項。優先證券違約事項。
無。
第4項。礦業安全披露。
不適用。
第5項。
無。
項目6.附件
| 31.1 | 依據《薩班斯-奧克斯利法案》第302條，創新眼鏡公司首席執行官的認證。 | |
| 31.2 | 依據《薩班斯-奧克斯利法案》第302條，創新眼鏡公司首席財務官的認證。 | |
| 32.1 | 依據《薩班斯-奧克斯利法案》第906條，創新眼鏡公司首席執行官的認證。 | |
| 32.2 | 依據《薩班斯-奧克斯利法案》第906條，創新眼鏡公司首席財務官的認證。 | |
| 101.INS | 內聯XBRL實例文檔 | |
| 101.SCH | 內聯XBRL分類擴展架構文檔 | |
| 101.CAL | 內聯XBRL分類擴展計算關聯文檔 | |
| 101.DEF | 內聯XBRL分類擴展定義關聯文檔 | |
| 101.LAB | 內聯XBRL分類擴展標籤關聯文檔 | |
| 101.PRE | 內聯XBRL分類擴展演示關聯文檔 | |
| 104 | 封面交互式數據文件（格式爲內聯XBRL，包含展品101）。 |
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簽名
根據1934年修訂的交易所法案的要求，登記人已正式委託本報告由下述簽署人簽名，具備適當的授權。
| 創新眼鏡有限公司 | ||
| （註冊人） | ||
| 日期：2024年11月12日 | 根據： | /s/ Harrison Gross |
| Harrison Gross | ||
| 首席執行官 | ||
| 簽名：/s/ Ian Lee | ||
| 日期：2024年11月12日 | 根據： | 奧斯瓦爾德·蓋爾 |
| 奧斯瓦爾德·蓋爾 | ||
| 首席財務官 | ||
| （信安金融財務負責人和財務會計負責人） | ||
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