Innovative Eyewear(LUCY)2025-03-24 20:05Revenue Growth - Revenues for the year ended December 31, 2024, were 1,152,479 in 2023[250]. - E-commerce sales accounted for approximately 64% of total sales in 2024, with significant growth in net sales through Lucyd.co (up 89%) and Amazon.com (up 14%) compared to the prior year[251]. - The company sold over 2,000 units of the Lucyd Armor glasses in Q4 2024, contributing to overall revenue growth driven by new product launches[252]. - The decline in wholesale revenues was approximately 27%, attributed to a strategic shift towards major national retailers with slower approval cycles[253]. Cost and Profitability - Total cost of goods sold increased to 1,271,808 in 2023, driven by higher volumes sold[260]. - Gross profit for the year ended December 31, 2024, was 119,329, or negative 10% of net sales for the prior year, reflecting an improvement of 23 percentage points[268]. - The cost of frames increased by approximately 14% on an absolute dollar basis from the prior year, but as a percentage of net sales, it declined by 13 percentage points due to new suppliers and economies of scale[261]. - The cost of lenses decreased by approximately 5% on an absolute dollar basis and by 8 percentage points as a percentage of net sales, driven by management actions and a shift to a lower-cost lens supplier[262]. - The company expects gross profit margins to continue improving in 2025 due to reduced unit costs from new product lines[269]. Operating Expenses - Operating expenses increased by 21% to 6,736,213 for the prior year, primarily due to increased general and administrative expenses and sales and marketing expenses[270]. - Research and development costs increased by 24% to 662,184 for the prior year, influenced by product development cycles and a shift in focus to the Lucyd app[276]. Future Plans and Product Development - The company plans to expand its product offerings to over 40 smart eyewear SKUs by the end of 2025, including cobranded collections with Reebok[242]. - The anticipated launch of Reebok Powered by Lucyd smartglasses is expected to generate significant revenue growth in 2025, targeting the sport/active lifestyle segment[258]. - The company aims to enhance brand awareness through expanded marketing initiatives and a strong co-op marketing program with retail partners[246]. - The company expects total marketing spending in 2025 to be between 2023 and 2024 levels, focusing on brand awareness and product rollouts[273]. Cash Flow and Financing - The net cash flows from operating activities for the year ended December 31, 2024, were (5,766,303) for the prior year, reflecting increased operating costs[280]. - The company raised approximately 4,116,000 used for working capital[287][288]. - The Company has entered into a financing agreement with Lucyd Ltd. for up to 424,594 related to down payments on eyewear purchased from the manufacturer[311]. - The Company recognized 17,500 of revenue during the years ended December 31, 2024 and 2023, respectively, that was included in the contract liability balance at the beginning of each year[325]. - Revenue for eyewear sales is recognized upon delivery to retail store partners and distributors, net of returns and discounts[328][329]. - Revenue for monthly app subscriptions is recognized in the month of purchase, while annual subscriptions are recognized on a straight-line basis[330]. - The Company establishes a reserve for returns based on historical experience and expected future returns[331]. Customer Engagement and Retail Presence - Customer ratings for new products have improved, with the Lucyd Armor receiving a 4/5 rating on Amazon, indicating positive consumer feedback[248]. - The company currently has over 540 retail stores selling its products, with plans to increase this number significantly in 2025[247]. - The company anticipates that third-party retail stores will become the primary sales channel, leading to a decrease in sales of prescription lenses through its website[266].