美国
证券交易委员会
华盛顿特区20549
表格
截至季度结束日期的财务报告
过渡期从__________到_____________
佣金文件号
|
|
| (根据其章程规定的注册人准确名称) |
| （注册或组织的）州或其他司法辖区 公司的合并或组织） |
（联邦税号 (识别号) |
| 主执行官办公室的地址，包括邮政编码 |
| ( |
| （注册人的电话号码，包括区号） |
| 不适用 |
| （前名称、地址及财政年度，如果自上次报告以来有更改） |
请用复选标记指示登记者（1）在过去12个月内（或者登记者需要提交此类报告的更短时期内）是否已经按照1934年交易所法案第13或15(d)条的规定提交了所有报告，并且（2）在过去90天内是否已经受到此类提交要求的约束。
请用复选标记表示，公司是否在过去12个月内（或者公司被要求提交此类文件的较短时期内）按照S-T条例第232.405条规定提交并发布了规定提交并发布的每一个互动数据文件。
请用复选标记指示注册者是否为大型加速文件提交者、加速文件提交者、非加速文件提交者、较小的报告公司或新兴成长型公司。请参阅《交易所法》第120亿.2条中“大型加速文件提交者”、“加速文件提交者”、“较小的报告公司”和“新兴成长型公司”的定义。
| 大型加速提交者 | ☐ | 加速报告人 | ☐ |
| ☒ | 小型报告公司 | ||
| 新兴成长公司 |
如果是新兴增长型企业，请勾选该框表示公司已选择不使用交易所法案第13(a)条提供的遵守任何新的或修订后的财务会计准则的扩展过渡期。
请通过勾选表示注册人是否为壳公司（如《交易所法》第120亿.2条所定义）。是 ☐
每个交易所的名称
| 每一类的名称 | 交易标志 | 在其上注册的交易所的名称 | ||
截至2024年11月5日， 公司已发行并流通的普通股股份。
关于前瞻性声明的注意事项
在这份第10-Q表格的季度报告中讨论的内容包含反映我们当前预期的前瞻性陈述，涉及风险和不确定性。这些前瞻性陈述包括但不限于我们的策略、竞争、未来业务和生产能力、供应链和物流、未来财务状况、未来收入、预计成本、盈利能力、预期的成本降低、资本充足、关于我们技术的需求和接受程度的期望、市场中的增长机会和趋势、前景和计划，以及管理层的目标。"预期"、"相信"、"可能"、"估计"、"预计"、"打算"、"可能"、"计划"、"方案"、"将"、"会"等类似表达旨在识别前瞻性陈述，尽管并非所有前瞻性陈述都包含这些识别词。我们实际可能无法实现在我们的前瞻性陈述中披露的计划、意图或期望，您不应过度依赖我们的前瞻性陈述。实际结果或事件可能与我们在前瞻性陈述中披露的计划、意图和期望有实质性差异。这些前瞻性陈述涉及可能导致我们实际结果与前瞻性陈述中有实质差异的风险和不确定因素，包括但不限于本季度报告第II部分第1A条“风险因素”中列出的风险，截至2023年12月31日的第10-k年度报告中的风险，以及我们提交给美国证券交易委员会的其他备案文件。我们不承担任何更新前瞻性陈述的义务，除非法律要求。
创新眼镜有限公司
目录
| 页码。 | ||||
| 第一部分财务信息 | 1 | |||
| 项目 1。 | 简略的基本报表(未经审计) | 1 | ||
| 2024年9月30日的简明资产负债表（未经审计）和2023年12月31日 | 1 | |||
| 2024年9月30日和2023年（未经审计）三个月及九个月的简明损益表 | 2 | |||
| 2024年9月30日和2023年（未经审计）三个月及九个月的简明股东权益表 | 3 | |||
| 2024年9月30日和2023年（未经审计）九个月的简明现金流量表 | 4 | |||
| 财务报表附注（未经审计） | 5 | |||
| 项目 2。 | 分销计划 | 18 | ||
| 项目3。 | 有关市场风险的定量和定性披露 | 32 | ||
| 项目4。 | 控制和程序 | 32 | ||
| 第二部分其他信息 | 33 | |||
| 项目 1。 | 法律诉讼 | 33 | ||
| 项目1A。 | 风险因素 | 33 | ||
| 项目 2。 | 未注册的股票股权销售和筹款用途 | 33 | ||
| 项目 3。 | 对优先证券的违约 | 33 | ||
| 第四条。 | 矿山安全披露 | 33 | ||
| 项目5。 | 其他信息 | 33 | ||
| 项目6。 | 展示资料 | 34 | ||
| 签名 | 35 | |||
i
除非另有规定，本报告中使用的术语“Innovative Eyewear”，“公司”，“我们”，“我们的”，“我们的”，“我们的”等类似术语均指Innovative Eyewear, Inc。出现在我们网站lucyd.co上的信息不包含在本报告中。
第一部分 - 财务信息
项目1. 基本财务报表
创新眼镜公司
简明资产负债表
2024年9月30日（未经审计）和2023年12月31日
| 2024 | 2023 | |||||||
| 资产 | ||||||||
| 流动资产 | ||||||||
| 现金及现金等价物 | $ | $ | ||||||
| 投资于债务证券（美国国债） | ||||||||
| 应收账款净额 | ||||||||
| 预付费用 | ||||||||
| 存货预付款 | ||||||||
| 库存 | ||||||||
| Tekcapital及关联公司应收款项 | ||||||||
| 其他流动资产 | ||||||||
| 流动资产合计 | ||||||||
| 非流动资产 | ||||||||
| 专利成本，净额 | ||||||||
| 资本化的软件成本 | ||||||||
| 资产和设备，净值 | ||||||||
| 其他非流动资产 | ||||||||
| 资产总计 | $ | $ | ||||||
| 负债和股东权益 | ||||||||
| 负债 | ||||||||
| 流动负债 | ||||||||
| 应付账款和应计费用 | $ | $ | ||||||
| 递延收入 | ||||||||
| 总流动负债 | ||||||||
| 非流动负债 | ||||||||
| 递延营业收入 | ||||||||
| 负债合计 | ||||||||
| 承诺和或有事项（见注7） | ||||||||
| 股东权益 | ||||||||
| 普通股（面值 $, 股份得到授权，和 和 分别为2024年9月30日和2023年12月31日，已发行和流通股份(1) | ||||||||
| 额外实收资本(1) | ||||||||
| 累积赤字 | ( |
) | ( |
) | ||||
| 总股东权益 | ||||||||
| 负债和股东权益总计 | $ | $ | ||||||
| (1) |
请查阅简明基本报表附注。
1
创新眼镜公司
捷凯收购公司二期有限公司
截至2024年和2023年9月30日的三个月和九个月结束
(未经审计)
| 截止日期为三个月 September 30, |
截止日期为九个月 September 30, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 营业收入, 净收入 | $ | $ | $ | $ | ||||||||||||
| 营业成本减少 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 毛利润 | ||||||||||||||||
| 营业费用： | ||||||||||||||||
| 总务和行政 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 销售与营销 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 研发费用 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 关联方管理费 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 总营业费用 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| 其他收入 | ||||||||||||||||
| 利息费用 | ( |
) | ||||||||||||||
| 总其他收益（费用），净额 | ||||||||||||||||
| 净损失 | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| 加权平均股本数(1) | ||||||||||||||||
| 基本和稀释每股亏损(1) | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| (1) |
请查阅简明基本报表附注。
2
创新眼镜公司
股东权益变动简明报表
截至2024年和2023年9月30日的三个月和九个月结束
(未经审计)
| 普通股 | 额外的 支付的 |
积累的 | 总计 股东股本 |
|||||||||||||||||
| 股份(1) | 金额(1) | 资本(1) | 赤字 | 股权 | ||||||||||||||||
| 2024年1月1日的余额 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 向第三方服务提供商发行股份 | ||||||||||||||||||||
| 与限制性股票单位归属有关的发行股份 | ||||||||||||||||||||
| 以股票为基础的薪酬 | - | |||||||||||||||||||
| 净损失 | - | ( |
) | ( |
) | |||||||||||||||
| 截至2024年3月31日的余额 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 市场发售。 | ||||||||||||||||||||
| 首次注册直接发售 | ||||||||||||||||||||
| 第二次注册直接发售 | ||||||||||||||||||||
| 向品牌大使发行股份 | ||||||||||||||||||||
| 与限制性股票单位分配相关的股份发行 | ||||||||||||||||||||
| 以股票为基础的薪酬 | - | |||||||||||||||||||
| 净亏损 | - | ( |
) | ( |
) | |||||||||||||||
| 2024年6月30日余额 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 市场价格交易 | ||||||||||||||||||||
| 与诱因协议相关的认购权行权 | ||||||||||||||||||||
| 认购权行权 | ||||||||||||||||||||
| 股权补偿 | - | |||||||||||||||||||
| 净损失 | - | ( |
) | ( |
) | |||||||||||||||
| 2024年9月30日余额 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 2023年1月1日余额 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 股东行使认股权证 | ||||||||||||||||||||
| 以股票为基础的薪酬 | - | |||||||||||||||||||
| 净亏损 | - | ( |
) | ( |
) | |||||||||||||||
| 截至2023年3月31日的余额 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 股票期权行权 | ||||||||||||||||||||
| 股东行使认股权证 | ||||||||||||||||||||
| 与定向增发交易相关的认股权证行使 | ||||||||||||||||||||
| 第二次公开发行 | ||||||||||||||||||||
| 基于股票的补偿 | - | ( |
) | ( |
) | |||||||||||||||
| 净亏损 | - | ( |
) | ( |
) | |||||||||||||||
| 截至2023年6月30日的余额 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| 基于股票的补偿 | - | |||||||||||||||||||
| 净亏损 | - | ( |
) | ( |
) | |||||||||||||||
| 2023年9月30日的余额 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| (1) |
请查阅简明基本报表附注。
3
创新眼镜公司
精简现金流量表
2024年9月30日结束的九个月和2023年
(未经审计)
| 2024 | 2023 | |||||||
| 经营活动 | ||||||||
| 净亏损 | $ | ( |
) | $ | ( |
) | ||
| 调整为净损失到经营活动现金流量净使用： | ||||||||
| 折旧 | ||||||||
| 摊销 | ||||||||
| 非现金利息费用 | ||||||||
| 股份补偿费用 | ||||||||
| 由Tekcapital和附属公司支付的费用 | ||||||||
| (恢复)存疑账户拨备 | ( |
) | ( |
) | ||||
| 以前资本化的软件成本清理 | ||||||||
| 经营性资产和负债变动: | ||||||||
| 应收账款 | ||||||||
| 应付账款和应计费用 | ( |
) | ||||||
| 预付费用 | ( |
) | ||||||
| 库存 | ( |
) | ( |
) | ||||
| 合同资产和负债 | ||||||||
| 经营活动产生的现金流量净额 | ( |
) | ( |
) | ||||
| 投资活动 | ||||||||
| 购买债务证券（美国国债票据） | ( |
) | ( |
) | ||||
| 向Tekcapital 欧洲 有限公司提供的贷款。 | ( |
) | ||||||
| 偿还借给Tekcapital 欧洲 有限公司的金额。 | ||||||||
| 专利费用 | ( |
) | ( |
) | ||||
| 购买固定资产 | ( |
) | ( |
) | ||||
| 投资活动产生的现金流量净额 | ( |
) | ( |
) | ||||
| 筹资活动 | ||||||||
| 普通股和warrants发行的收入 | ||||||||
| 普通股市场发行收入 | ||||||||
| 执行认股权所得款项 | ||||||||
| 行使股票期权所得 | ||||||||
| 偿还关联方可转换债务 | ( |
) | ||||||
| 偿还到Tekcapital和关联方的款项 | ( |
) | ( |
) | ||||
| 来自筹资活动的净现金流量 | ||||||||
| 现金净变动 | ||||||||
| 期初现金余额 | $ | $ | ||||||
| 期末现金余额 | $ | $ | ||||||
| 重要的非现金交易 | ||||||||
| 由Tekcapital及关联公司支付的费用，报告为Due to/from Tekcapital及关联公司以及关联方可转换债的增加 | ||||||||
| 发行股份以预付给第三方服务提供商 | ||||||||
| 发行股份以预付给品牌大使 | ||||||||
请查阅简明基本报表附注。
4
创新眼镜公司
基本报表附注
2024年9月30日和2023年（未经审计）
注1 - Guochun International Inc.（以下简称“公司”或“国春”）于2018年8月2日在内华达州成立。到2022年6月27日，公司正在开发一种聊天应用程序，旨在为用户在与他人对话时提供变声的机会以及类似的即时通讯应用程序的全部功能。公司计划在iOS，Google Play，Amazon和Ethereum平台上开发和发布移动应用。 Guochun International Inc.打算通过出售品牌广告和通过消费者交易（包括应用内购买）来产生收入。公司管理层计划利用各种平台将应用程序分发到全球各地。概要
创新眼镜公司（以下简称“公司”，“我们”或“我们”）是根据佛罗里达州法律组织的一家公司，开发和销售尖端眼镜和太阳镜，旨在让我们的客户保持与数字生活的联系，同时提供处方眼镜和防晒功能。该公司由Lucyd Ltd.创立，后者是Tekcapital Plc通过Tekcapital欧洲有限公司（以下简称“Tekcapital及关联公司”）的投资组合公司创立的，截至2024年9月30日，该公司拥有的已发行和流通股的约10.8％。创新眼镜已经获得了Lucyd的独家授权，包括使用Lucyd的所有知识产权，包括我们的主要产品Lucyd Lyte眼镜。® 品牌的独家使用权，其中包括Lucyd Ltd.的主要产品Lucyd Lyte眼镜。 ® 眼镜。
注2 - 重要会计政策摘要
报告范围
附注：2023年12月31日的附表（参照审计基本报表编制）以及未经审计的中期基本报表，已根据美国通用会计准则（“GAAP”）编制，符合美国证券交易委员会（“SEC”）颁布的《表10-Q》和《S-X条例第8条》的规定。根据SEC关于中期财务报告的规则和法规，某些通常包括在按照GAAP编制的财务报表中的信息或注脚披露已经被压缩或省略。因此，它们不包括为全面展示财务状况、业务成果或现金流量而必要的所有信息和注脚。
根据管理层的意见，所有必要的调整已纳入到所呈现的基本报表中，以便公正呈现。截至2024年9月30日三个月和九个月的运营结果未必能反映未来期间或整个年度的预期结果。
为符合当前期间报告的形式，某些往期数额已重新分类；先前报告在"资本化软件成本"内的约$22,000与公司网站相关的资本化成本现在归入"财产和设备，净额"。
资本结构的变化
如备注9中更详细地描述，自2024年7月18日起，公司进行了1比20的反向股票拆分，适用于所有已发行和流通的普通股。所有在这些基本报表及其附带说明中呈现的股份及每股相关金额，包括但不限于已发行和流通的股份、普通股的美元金额和额外实收资本、每股收益/(亏损)以及warrants和期权，均已追溯调整，以反映资本结构的这一变化，适用于所有呈现的期间。此次变化并未导致授权普通股的总数或每股面值的变化。
使用估计
按照通用会计准则准备基本报表需要管理层进行估计和假设，影响资产和负债的报告金额以及在基本报表日期时披露的相关资产和负债金额，以及报告期间收入和支出的金额。实际结果可能与这些估计不同，尤其是考虑到当前地缘政治和经济环境所带来的重大不确定性。
5
现金等价物
所有流动性高的投资，包括存款证书、美国国债和购买的原始期限为三个月或更短的货币市场基金，在到期日不足三个月的被视为现金等价物。
投资
截至2024年9月30日，公司持有到期日为2025年3月的美国国债投资。这些投资被分类为“持有到期日投资”，以摊销成本记录在附表中。这些投资的累计公允价值为$
应收账款和信用政策
交易应收款项来自未提供抵押品的顾客义务，根据正常交易条款到期。交易应收款项的付款被分配给客户汇款通知上标识的特定发票，如果未指定，则应用于最早未支付的发票。公司根据政策定期评估客户的财务实力。我们通常对批发订单提供“净30”付款条款，订单金额为$1,500或更多，取决于批发客户完成信用审核申请和信用卡授权表格。对于直销客户，产品发货前需要付款。
应收账款以向客户开具的金额减去应收账款坏账准备后报告。 坏账准备根据各种判断和因素确定。 决定坏账准备的因素包括历史收款情况、核销经验以及管理层对客户收款能力的评估，其中包括当前状况、合理预测以及对未来收款能力和收款努力的期望。 管理层持续评估应收款项的收款能力，并根据实际经验和基于经济因素的未来预期调整估计值。 当认定账面余额无法收回时，应收账款余额将根据准备金核销。
截至2024年和2023年9月30日的应收账款计提调整如下:
| 2024 | 2023 | |||||||
| 1月1日结余 | $ | $ | ||||||
| 坏账费用（恢复） | ( |
) | ||||||
| 冲销(1) | ( |
) | ||||||
| 其他(1) | ( |
) | ||||||
| 9月30日余额 | $ | $ | ||||||
| (1) |
库存
公司的存货包括购买的眼镜，并以成本或净实现价值的较低者计量，成本根据库存成本的具体识别方法确定，该方法将实际成本附加到可识别的产品单位。
根据定期评估的历史销售、当前经济趋势、预测销售、估计产品生命周期和估计库存水平，记录超额、过时或滞销库存的准备金。此类准备金为$
截至2024年9月30日和2023年12月31日，公司录得预付存货款项金额$
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无形资产
无形资产涉及与公司的初始资本化以及内部开发的实用性和设计专利相关的专利成本。公司根据专利的预估有用生命周期摊销这些资产。每当情况变化表明资产的账面价值可能无法收回时，公司会审查其无形资产是否存在减值。
资本化的软件
公司以前曾经因Vyrb软件应用程序的开发而产生了成本，在技术可行性建立后公司曾将大约$88,000的这些编码、开发和测试成本资本化，因为公司的意图是在外部推广和销售这款软件。
虽然我们在2021年推出了Vyrb的公测版本，并在2022年和2023年不断为Vyrb增加新功能，但我们并没有正式推出Vyrb应用程序。在2024年，管理团队决定将我们的主要软件开发重点转向Lucyd应用，该应用于2023年4月推出，是一款免费应用，让用户可以在我们的眼镜上与极其受欢迎的chatgpt概念股人工智能语言模型进行对话。为Vyrb应用开发的某些元素和功能可能会被纳入未来Lucyd应用的版本中。
根据这项决定，在2024年9月30日结束的九个月内，我们将先前资本化的Vyrb软件开发成本支出约为$
资产和设备
固定资产和设备资产按其估计的使用寿命或更短的租赁期限采用直线法折旧。对于所得税目的，通常使用加速折旧方法。维修和维护费用在发生时作为支出处理。
所得税
公司采用资产和负债方法来确认所得税，按照金融报表账面金额与资产和负债的税基之间的差额，基于在预计差额会反转的年份中有效的法定税率确认递延税资产和负债。
公司遵循更可能是而非门槛，对纳税申报中采纳或预计采纳的税收立场进行财务报表确认和计量。与不确定税收立场相关的利息和罚款计入税费支出。
公司定期评估其净递延税资产的实现情况。如果在考虑所有相关的积极和消极证据后，有更大可能性表明部分或全部净递延税资产将无法实现，公司将通过计提减值准备来减少净递延税资产。净递延税资产的实现取决于几个因素，包括在净税前亏损结转到期之前产生足够的应税收入。
以股票为基础的补偿
公司确认对员工、董事和其他人发放的基于股票的奖励的补偿费用，根据这些奖励的授予日公允价值。放弃将按照发生放弃时期内的补偿费用减少进行核算。
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对于股票期权奖励，使用Black-Scholes-Merton期权定价模型来估算以股票为基础的奖励的公允价值。 Black-Scholes-Merton期权定价模型包括各种高度主观的假设，包括预期期限和股价波动性。
| ● | 股票期权的预期期限是根据《工作人员会计公报第107号》允许的简化方法估算的。 |
| ● | 股价波动率是根据历史股票价格估算的，以期权授予的预期期限为基础，使用类似利基公众公司的股票价格。 |
| ● | 无风险利率假设是通过使用类似于被定价的奖励的预期期限的美国国债零息债券的利率来确定的。 |
对于受限制股单位和普通股的奖励，奖励的公允价值基于我们普通股在纳斯达克交易所的报价市场价格。
收入确认
我们的营业收入主要来自处方和非处方眼镜，太阳眼镜的销售以及运费，这些费用被收取给客户与这些购买相关。我们通过零售商店经销商、分销商、我们自己的网站Lucyd.co以及亚马逊出售产品。我们最近还开始通过销售Lucyd app“Pro”版的订阅来产生营业收入，该版本提供无限的chatgpt概念股互动和优先技术支持，需支付月度或年度费用。
为了判断营业收入确认，我们执行以下步骤：(i) 确定与客户的合同，(ii) 确定合同中的履约义务，(iii) 确定交易价格，(iv) 将交易价格分配给合同中的履约义务，以及 (v) 在我们满足履约义务时（或在满足时）确认营业收入。在合同签订时，我们评估每个合同中承诺的商品或服务，并确定履约义务，并评估每个承诺的商品或服务是否是独立的。然后，我们确认作为营业收入的交易价格部分分配给各自的履约义务，当（或在）履约义务得到满足时。
在销售时合同对价的收回性不确定的情况下，我们在资产负债表上将营业收入作为合同责任递延，将相关的营业成本作为合同资产递延；随后，我们在收到付款时确认这些营业收入和营业成本。截至2024年9月30日的九个月，我们分别确认了2024年和2023年的营业收入$
所有板块的收入，包括在线销售和零售商和经销商销售额净额扣除从客户那里代缴给税务机关的销售税、退货和折扣后报告。 向客户收取的运输和处理费用被报告为营业收入；发生的运输和处理成本将在确认相关收入时计入营业成本。
对于通过我们的电子商务渠道产生的销售，我们在线上眼镜购买后识别与客户签订的合同，并根据制造商建议的零售价格（“MSRP”）识别非处方、偏光太阳镜和蓝光阻挡眼镜在所有在线渠道销售。我们的电子商务营业收入是在完成维修义务时确认，即眼镜运送给最终客户时。美国消费者在我们网站处理的订单中，订单超过$149可享受免费的USPS头等邮费，也可选择更快递送方式，额外收费。对于亚马逊的销售，美国消费者免费送货，而国际客户需额外支付运费。与在线平台收取的费用（shopify适用于Lucyd.co网站和亚马逊）相关的任何成本均不向客户收费，并根据发生的情况记录为营业成本的组成部分。公司除了MSRP外还向适用州的销售税客户收取适用的州销售税，同时适用于公司销售产品的所有在线渠道和其他所有市场。
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针对我们的零售店合作伙伴的销售，我们通过shopify批发门户或直接采购订单确认客户的合同收到我们眼镜的订单。营业收入在履行业务义务之后确认，即将公司眼镜产品交付给零售店，并且减去退货和折扣后进行登记。我们销售给零售店合作伙伴的眼镜的批发定价包括成交量折扣，由于大宗订单的性质。定价包括运费，不包括任何适用的州销售税费。由于批发零售订单的性质，不适用任何电子商务费。
对于销售给经销商的销售业务，我们在通过直接采购订单收到我们眼镜订单后确定与客户的合同。如果基本可以收回几乎所有的合同对价，就会在满足履行义务的情况下确认营业收入，即将眼镜产品交付给经销商，并扣除退货和折扣后记录。我们销售给零售店合作伙伴和经销商的眼镜的批发定价包括成交量折扣，由于大数量订单的特性。定价不包括运费。由于批发零售订单的性质，不适用市场费用，仅适用信用卡处理费。
对于我们Lucyd应用的“Pro”版本订阅销售，我们通过来自Apple App Store或Google Play Store的详细交易报告确定与客户的个别合同，每笔独立交易代表一个单独的合同。营业收入在满足履约义务后确认，即每位客户享有访问Lucyd应用“Pro”功能的权利和可用性。对于按月购买此访问权限的客户，我们在购买行为产生的当月确认收入。对于购买年度订阅的客户，我们以直线方式在订阅期间内按比例确认收入，采用中间月份计算。作为合同负债在我们资产负债表上推迟的与应用订阅相关的未赚收入余额为$
我们允许客户根据我们的退款政策退还我们的实体产品，该政策允许任何客户出于任何原因退还我们的实体产品，在我们的网站（Lucyd.co）的销售中在头7天内获得全额退款，Amazon销售中为30天，在大多数批发零售商和分销商处的销售中为30天（尽管对独立分销商的某些销售不符合退货资格）。截至2024年1月，我们更新了我们的退货政策，禁止处方镜片的自由退货，并对标准镜框退货收取了标准的$
对于我们所有的产品销售，在销售时，根据历史经验和预期未来退货，我们建立退货准备金，并将其记录为销售减少。此外，我们审核在资产负债表日期后一个月内收到的所有单独退货，这些退货单是在资产负债表日期之前处理的订单，以判断是否需要提供销售退货准备金。 公司分别记录了截至2024年9月30日和2023年12月31日的销售退货准备金为$
注3 - 经营情况
公司具有有限的经营历史。公司的业务和运营对美国的一般商业和经济状况敏感。公司无法控制的一系列因素可能导致这些情况出现波动。不利条件可能包括经济衰退、经济低迷，或者其他因素，如法规变化或进口限制、竞争激烈、或消费者品味变化。这些不利条件可能会影响公司的财务状况和经营业绩。
公司通过销售眼镜和发行股票筹集资金，以满足其日常营运资金需求。在截至2024年9月30日的九个月期间，公司通过市场发行、注册直接发行和认股权证行使等方式，筹集了约1040万美元的净现金收入（详见第9条）。公司还与关联方签订了协议，根据该协议，公司可以借款最多125万美元（详见第6条）；截至2024年9月30日，公司尚未根据此协议借入任何款项。公司的预测和预期表明，公司预计将有足够的流动性来资助运营，至少持续到 接下来的12个月。然而，如果管理层认为这样做是有益的，公司可能会筹集额外基金。
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注4-关所得税准备金 / 利润
在每个中期报告期结束时，公司估计其预计适用于全年的有效税率。此估计用于判断年度基础的所得税费用或利益，并可能在随后的中期报告期内发生变化。公司已
注5——有形资产和无形资产
| 9月30日, | 12月31日， | |||||||
| 财产和设备 | 2024 | 2023 | ||||||
| 移动机箱展示 | $ | $ | ||||||
| 计算机设备 | ||||||||
| 办公设备 | ||||||||
| 内部使用的软件和网站成本 | ||||||||
| 234,036 | ||||||||
| 减：累计折旧 | ( |
) | ( |
) | ||||
| 资产和设备，净值 | $ | $ | ||||||
2024年和2023年截至9月30日的折旧费用均为$
截至2024年9月30日止九个月的折旧费用分别为$2024和$2023。
| 9月30日, | 12月31日， | |||||||
| 2024年3月31日和2023年3月31日结束的三个月的摊销费用为$ | 2024 | 2023 | ||||||
| 专利成本 | $ | $ | ||||||
| 减少：累计摊销 | ( |
) | ( |
) | ||||
| 无形资产, 净额 | $ | $ | ||||||
2024年9月30日结束的三个月摊销费为$
2024年和2023年截至9月30日的摊销费用为$
附注6 -关联方交易和协议
可转换票据到期给Tekcapital和附属公司
截至2023年12月1日，公司可以从Tekcapital和联属公司获取集团内融资，形式为货币预付或者在可转换票据下借款，但并无合同权利。可转换票据余额为$
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新的Lucyd有限公司融资协议
公司于2024年3月1日与Lucyd Ltd.签订协议，根据该协议，公司最多可以收到$
向Tekcapital欧洲有限公司提供贷款。
于2024年1月11日，公司与Tekcapital欧洲有限公司（作为借款人）及Tekcapital Plc（Tekcapital欧洲有限公司的母公司）签订了一项公司内部贷款协议（作为出借人）。根据该协议，公司向Tekcapital欧洲有限公司出借了60万英镑（相当于约$
管理服务协议
公司与Tekcapital Europe, Ltd.签订了一项管理服务协议，公司每季度需支付3.5万美元。虽然协议没有规定具体到期日，但任何一方都可以在30个日历日的书面通知后终止协议。
相关方目前提供以下服务：
| ● | 根据其专业领域为公司提供支持和建议； |
| ● | 研究、技术和法律审查、招聘、软件开发、营销、公共关系和广告；以及 |
| ● | 为支持公司或与任何其他相关事项有关提供建议、援助和咨询服务。 |
在2024年和2023年截至9月30日的三个月内，公司分别根据管理服务协议发生$费用。
办公空间租金
根据公司与Tekcapital之间的协议，Tekcapital代表公司支付租金，并向公司开具账单。公司确认了2024年9月30日和2023年各三个月的合同安排相关费用，分别确认了$
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未以公允价值计量的金融工具承诺和 contingencies
法律事项
目前我们并没有成为任何重大未决法律诉讼的主体；不过，在业务正常运作过程中，我们可能不时成为各种法律诉讼的一方。
2024年1月3日，我们与第三方解决了某些事项，包括国际贸易委员会之前提起的投诉和国际贸易委员会在2023年发起的调查，并与第三方签署了多年的非独占许可协议，涵盖多项智能眼镜专利（如下所述）。
许可协议
在2022年和2023年，我们签订了各种多年许可协议，授予我们在全球范围内销售特定品牌智能眼镜的权利，包括Nautica、Eddie Bauer和Reebok品牌。这些协议要求我们根据许可期间零售和批发销售额的百分比支付版税，并要求支付保证的最低版税。
根据这些许可协议，未来的最低支付总额如下：
| 2024年余下的时间 | $ | ||||
| 2025 | |||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 此后（至2033年） | |||||
| 总计 | $ |
此外，2024年1月3日，我们与第三方（IngenioSpec，LLC）签订了一项为期多年的非独家许可协议，涉及多项智能眼镜专利。根据这项许可协议，公司新增了46项新专利的许可，纳入了公司拥有和许可的专利和申请组合中。公司已提前完全支付了该许可协议的费用，不受该协议下未来付款的任何义务。
租赁
我们的行政办公室位于佛罗里达州迈阿密33181号联邦大道11900号630室。我们的行政办公室由关联方提供（参见附注6）。我们认为我们目前的办公空间足够满足我们目前的运营需求。
其他承诺
请参阅第六条讨论的关联方管理服务协议。
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股票期权
关于截至2024年9月30日及在截至2024年9月30日为止的九个月期间的期权数量、行权价和剩余合同期限的摘要信息（根据附注9中描述的股票拆分逆转进行了回溯调整）如下：
| Options （数量） |
加权平均 行权价格 。 ($) |
加权平均 剩余 Contractual Life （年） |
||||||||||
| 截至2024年1月1日 | ||||||||||||
| 已授权 | ||||||||||||
| 已行使 | ||||||||||||
| 取消/过期 | ( |
) | ||||||||||
| 截至2024年9月30日 | ||||||||||||
| 截至2024年9月30日可行使 | ||||||||||||
截至2024年9月30日止的三个月和九个月，我们分别确认了支出$ 的费用与2024年9月30日和2023年各九个月的合同安排相关。 ，与期权相关的支出。截至2024年9月30日，所有期权的总内在价值以及所有可行使的期权的内在价值均为零，未确认的股票期权支出约为$ ，其余的将在接下来的 年。
于2024年1月11日，我们授予了购买总计某些个股的期权
受限股票单位
在2024年9月30日结束的三个月和九个月中，我们认定了$的费用
股票授予
2024年3月28日，我们与第三方签订协议，由其向我们提供财务咨询和投资银行服务，最短期限为六个月。作为对公司提供的服务的补偿，我们向交易对手发行了 公司普通股股份。根据发行日期的公司普通股公允价值，转让的对价总价值为$
在2024年4月1日，我们与个人签订了一份为期两年的品牌大使协议。作为协议第一年的补偿，我们向该个人发放了
我们普通股的股份。转让的对价价值，通过在发行日按我们普通股的公允价值衡量，金额为$
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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
从2024年7月18日起，公司已发行和流通的每20股普通股合并为一股普通股，除非逆向股票拆分将导致公司的任何股东拥有部分股份，在这种情况下，这种部分股份会被四舍五入为下一个最高的整股。此外，根据协议，公司未行使的普通股股票和期权相应进行调整，并相应调整其行权价格。
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 $ |
| ● | 从2024年7月12日至2024年8月30日，公司出售了 普通股份，并获得约$ |
公司在截至2024年9月30日的九个月期间还支付了 $
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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.
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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.
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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.
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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，公司与某些现有认股权证持有人（最初于2024年5月29日发行）签订了诱因函协议，以购买总计263,160股普通股。认股权证持有人以每股9.875美元的调整行权价现金行权现有认股权证，为公司带来约260万美元的总收益；除了作为认股权证行权结果而发行的普通股份外，认股权证持有人还收到了新的未注册的E系列和F系列权证。此交易于2024年9月24日关闭，公司获得的净收入约为230万美元。 |
关于上述每一笔认股权引诱交易，公司向H.C. Wainwright & Co., LLC.发行了配售经纪认股权。
上述证券在这些交易中发行，未经证券法注册销售，依赖于证券法第4(a)(2)条规定的豁免，作为不涉及公开发行的交易，并根据证券法制定的506条规定的销售对象于合格投资者，并依赖于适用州法律下的类似豁免。
随后，公司根据这些交易发布了一份S-1表格的注册声明，以注册上述证券发行，这一注册于2024年10月17日被证券交易委员会宣告生效。
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第3项。优先证券违约事项。
无。
第4项。矿业安全披露。
不适用。
第5项。
无。
项目6.附件
| 31.1 | 依据《萨班斯-奥克斯利法案》第302条，创新眼镜公司首席执行官的认证。 | |
| 31.2 | 依据《萨班斯-奥克斯利法案》第302条，创新眼镜公司首席财务官的认证。 | |
| 32.1 | 依据《萨班斯-奥克斯利法案》第906条，创新眼镜公司首席执行官的认证。 | |
| 32.2 | 依据《萨班斯-奥克斯利法案》第906条，创新眼镜公司首席财务官的认证。 | |
| 101.INS | 内联XBRL实例文档 | |
| 101.SCH | 内联XBRL分类扩展架构文档 | |
| 101.CAL | 内联XBRL分类扩展计算关联文档 | |
| 101.DEF | 内联XBRL分类扩展定义关联文档 | |
| 101.LAB | 内联XBRL分类扩展标签关联文档 | |
| 101.PRE | 内联XBRL分类扩展演示关联文档 | |
| 104 | 封面交互式数据文件（格式为内联XBRL，包含展品101）。 |
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签名
根据1934年修订的交易所法案的要求，登记人已正式委托本报告由下述签署人签名，具备适当的授权。
| 创新眼镜有限公司 | ||
| （注册人） | ||
| 日期：2024年11月12日 | 根据： | /s/ Harrison Gross |
| Harrison Gross | ||
| 首席执行官 | ||
| 签名：/s/ Ian Lee | ||
| 日期：2024年11月12日 | 根据： | 奥斯瓦尔德·盖尔 |
| 奥斯瓦尔德·盖尔 | ||
| 首席财务官 | ||
| （信安金融财务负责人和财务会计负责人） | ||
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