Vuzix(US:VUZI)2024-11-14 21:01Sales Performance - Total sales decreased by 36% to $1,385,714 for the three months ended September 30, 2024, compared to $2,180,007 in the same period in 2023[101][103] - Sales of products decreased by 28% to $988,328, primarily due to reduced sales of smart glasses, especially the M400 product[101][104] - Sales of engineering services decreased by 51% to $397,386 compared to $808,156 in the same period in 2023[101][105] - Total sales for the nine months ended September 30, 2024 decreased by $6,580,050, 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, or 66%, compared to the same period in 2023[118] - Sales of engineering services for the nine months ended September 30, 2024 decreased by $10,341, or 1%, compared to the same period in 2023[119] Gross Profit and Loss - Gross loss increased to $259,848 (19% of total sales) from $237,544 (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, compared to a profit of $1,610,847 in the same period in 2023[116] - Gross loss from total sales for the nine months ended September 30, 2024 was $646,245, or 14%, compared to a gross profit of $1,610,847, or 15% in the same period in 2023[121] Manufacturing and Overhead Costs - Unapplied manufacturing overhead costs increased by 69% to $549,728, representing 40% of total sales, due to lower production levels[108] - Unapplied manufacturing overhead costs increased by $274,234, 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 $2,333,798 compared to $2,912,562 in the same period in 2023[101] - Total research and development expenses for the three months ended September 30, 2024 decreased by $578,764, or 20%, compared to the same period in 2023[111] - Total research and development expenses decreased by $1,411,998, 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 $1,766,246 compared to $2,832,031 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, or 38%, compared to the same period in 2023[113] - Total selling and marketing expenses decreased by $1,636,201, 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, or 3%, compared to the same period in 2023[115] - Total general and administrative expenses decreased by $917,660, 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 $181,807 due to full amortization of certain manufacturing assets[109] - Depreciation and amortization included in cost of sales decreased by $178,323, 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 $327,427 for the nine months ended September 30, 2024, due to a significant decrease in amortization expense related to the Atomistic technology license[132] Net Loss and Impairment - Net loss improved by 16% to $9,222,279 compared to $10,983,008 in the same period in 2023[101] - Net loss for the nine months ended September 30, 2024 was $59,882,054, compared to a net loss of $30,268,511 in the same period in 2023[116] - Impairment on intangible asset and equity investment for the nine months ended September 30, 2024 was $30,301,355[116] - Total impairment charge on an intangible asset and equity investment was $30,301,355 for the nine months ended September 30, 2024, due to the termination of the Atomistic technology license and impairment of the related equity investment[133] Cash Flow and Financial Position - Cash and cash equivalents decreased by $12,283,926 to $14,271,666 as of September 30, 2024, compared to December 31, 2023[137] - Net cash used in operating activities was $19,717,197 for the nine months ended September 30, 2024, with significant changes in working capital items including a $2,611,906 decrease in trade accounts payables and accrued expenses[139] - The company incurred net losses of $59,882,054 for the nine months ended September 30, 2024, $50,149,077 for the year ended December 31, 2023, and $40,763,573 for the year ended December 31, 2022[142] - The company had net cash outflows from operations of $19,717,197 for the nine months ended September 30, 2024, $26,277,824 for the year ended December 31, 2023, and $24,521,082 for the year ended December 31, 2022[142] - The company's cash outflows for investing activities were $2,566,729 for the nine months ended September 30, 2024, $19,280,966 for the year ended December 31, 2023, and $21,170,816 for the year ended December 31, 2022[142] - The company's accumulated deficit as of September 30, 2024, was $353,866,847[142] Cost of Sales - Cost of sales for the nine months ended September 30, 2024 decreased by $4,322,958, 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 $10,000,000 under the closing of the first tranche of a securities purchase agreement for the sale of up to $20,000,000 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] - The company's current weekly gross cash salary costs are now approximately $162,000 versus $263,000 at the beginning of 2024, a decrease of $101,000 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]