Sales Performance - Total sales decreased by 36% to 1,385,714forthethreemonthsendedSeptember30,2024,comparedto2,180,007 in the same period in 2023[101][103] - Sales of products decreased by 28% to 988,328,primarilyduetoreducedsalesofsmartglasses,especiallytheM400product[101][104]−Salesofengineeringservicesdecreasedby51397,386 compared to 808,156inthesameperiodin2023[101][105]−TotalsalesfortheninemonthsendedSeptember30,2024decreasedby6,580,050, or 59%, compared to the same period in 2023[116] - Sales of products for the nine months ended September 30, 2024 decreased by 6,569,709,or6610,341, or 1%, compared to the same period in 2023[119] Gross Profit and Loss - Gross loss increased to 259,848(19237,544 (11% of total sales) in the comparable period in 2023[101][107] - Gross profit for the nine months ended September 30, 2024 was a loss of 646,245,comparedtoaprofitof1,610,847 in the same period in 2023[116] - Gross loss from total sales for the nine months ended September 30, 2024 was 646,245,or141,610,847, or 15% in the same period in 2023[121] Manufacturing and Overhead Costs - Unapplied manufacturing overhead costs increased by 69% to 549,728,representing40274,234, or 22%, to 33% of total sales for the nine months ended September 30, 2024, driven by lower production levels and temporary cessation of smart glasses production[121] Research and Development Expenses - Research and development expenses decreased by 20% to 2,333,798comparedto2,912,562 in the same period in 2023[101] - Total research and development expenses for the three months ended September 30, 2024 decreased by 578,764,or201,411,998, or 16%, for the nine months ended September 30, 2024, driven by reductions in external development costs, salary and benefits, and supplies expenses[124] Selling and Marketing Expenses - Selling and marketing expenses decreased by 38% to 1,766,246comparedto2,832,031 in the same period in 2023[101] - Total selling and marketing expenses for the three months ended September 30, 2024 decreased by 1,065,785,or381,636,201, or 21%, for the nine months ended September 30, 2024, primarily due to reductions in advertising, salary and benefits, and travel expenses[126] General and Administrative Expenses - Total general and administrative expenses for the three months ended September 30, 2024 decreased by 119,837,or3917,660, or 7%, for the nine months ended September 30, 2024, driven by reductions in salary and benefits, non-cash stock-based compensation, and insurance premiums[131] Depreciation and Amortization - Depreciation and amortization included in cost of sales decreased by 22% to 181,807duetofullamortizationofcertainmanufacturingassets[109]−Depreciationandamortizationincludedincostofsalesdecreasedby178,323, or 25%, for the nine months ended September 30, 2024 due to full amortization and depreciation of certain manufacturing assets[122] - Depreciation and amortization expense, not included in cost of sales, decreased by 327,427fortheninemonthsendedSeptember30,2024,duetoasignificantdecreaseinamortizationexpenserelatedtotheAtomistictechnologylicense[132]NetLossandImpairment−Netlossimprovedby169,222,279 compared to 10,983,008inthesameperiodin2023[101]−NetlossfortheninemonthsendedSeptember30,2024was59,882,054, compared to a net loss of 30,268,511inthesameperiodin2023[116]−ImpairmentonintangibleassetandequityinvestmentfortheninemonthsendedSeptember30,2024was30,301,355[116] - Total impairment charge on an intangible asset and equity investment was 30,301,355fortheninemonthsendedSeptember30,2024,duetotheterminationoftheAtomistictechnologylicenseandimpairmentoftherelatedequityinvestment[133]CashFlowandFinancialPosition−Cashandcashequivalentsdecreasedby12,283,926 to 14,271,666asofSeptember30,2024,comparedtoDecember31,2023[137]−Netcashusedinoperatingactivitieswas19,717,197 for the nine months ended September 30, 2024, with significant changes in working capital items including a 2,611,906decreaseintradeaccountspayablesandaccruedexpenses[139]−Thecompanyincurrednetlossesof59,882,054 for the nine months ended September 30, 2024, 50,149,077fortheyearendedDecember31,2023,and40,763,573 for the year ended December 31, 2022[142] - The company had net cash outflows from operations of 19,717,197fortheninemonthsendedSeptember30,2024,26,277,824 for the year ended December 31, 2023, and 24,521,082fortheyearendedDecember31,2022[142]−Thecompany′scashoutflowsforinvestingactivitieswere2,566,729 for the nine months ended September 30, 2024, 19,280,966fortheyearendedDecember31,2023,and21,170,816 for the year ended December 31, 2022[142] - The company's accumulated deficit as of September 30, 2024, was 353,866,847[142]CostofSales−CostofsalesfortheninemonthsendedSeptember30,2024decreasedby4,322,958, or 46%, compared to the same period in 2023[116] Strategic Focus and Market - The company is focused on enterprise, defense, industrial, medical, and commercial markets for its Smart Glasses and AR products[95][96] Financing and Cost Reduction Initiatives - The company received 10,000,000undertheclosingofthefirsttrancheofasecuritiespurchaseagreementforthesaleofupto20,000,000 in common stock and Series B Preferred Stock with Quanta Computer Inc[146] - The company implemented a voluntary company-wide payroll reduction program of 10% to 50%, achieving cash savings in wages of approximately 2,100,000[146]−Thecompany′scurrentweeklygrosscashsalarycostsarenowapproximately162,000 versus 263,000atthebeginningof2024,adecreaseof101,000 per week or 38.4%[146] - The company expects to reduce cash annual operating expenses by at least 20% compared to 2023 levels, including in Research and Development, Sales and Marketing, and General and Administrative areas[146] - The company has filed a Registration Statement on Form S-3 for the issuance and sale of up to $50,000,000 of common stock in an "at the market" offering[147] Termination of Technology License - The company terminated its exclusive technology license with Atomistic on July 1, 2024, and will not be paying further licensing development fees[143]
Vuzix(VUZI)2024-11-14 21:01