Innovative Eyewear(US:LUCY)2022-11-10 22:00Revenue Performance - Revenue for the three months ended September 30, 2022, was $151,957, a decrease of 11% from $171,033 in the same period of 2021[90]. - For the nine months ended September 30, 2022, total revenue was $592,720, a 43% increase from $415,185 in the same period of 2021, due to the launch of Lucyd Lytes[104]. Gross Profit and Margins - Gross profit for the three months ended September 30, 2022, was $22,865, representing a gross margin of 15%, down from 24% in the prior year[90]. - Gross profit for the three months ended September 30, 2022, was $22,865, down from $40,810 in the same period of 2021, attributed to promotional pricing and increased shipping costs[97]. - Gross profit for the nine months ended September 30, 2022, was $140,502, an increase from $82,807 in the same period of 2021, due to higher pricing of new models[111]. Operating Expenses - Total operating expenses for the three months ended September 30, 2022, were $1,388,575, an increase of 23% compared to $1,132,088 in the same period of 2021[90]. - Operating expenses increased to $1,388,575 for the three months ended September 30, 2022, compared to $1,132,090 in the same period of 2021, driven by business expansion[98]. - Operating expenses for the nine months ended September 30, 2022, rose to $3,840,764 from $1,908,247 in the same period of 2021, largely due to increased staffing and consulting fees[112]. Research and Development - Research and development expenses surged to $304,691 for the three months ended September 30, 2022, compared to only $9,224 in the prior year, marking a 3203% increase[90]. - Research and development costs increased significantly to $304,691 for the three months ended September 30, 2022, compared to $9,224 in the same period of 2021, due to product line expansion[102]. E-commerce and Wholesale Growth - The company has engaged over 150 unique wholesale accounts to expand its market reach[63]. - The company received over 10,435 online orders as of September 30, 2022, indicating growth in its e-commerce business[75]. - For the three months ended September 30, 2022, total revenue was $91,661 from non-prescription frames and accessories, and $22,706 from prescription lenses, with online sales accounting for 48.9% of total sales[92]. Inventory and Sales Returns - As of September 30, 2022, the company recorded an inventory prepayment of $197,750 related to eyewear purchased from the manufacturer[126]. - The company recorded an allowance for sales returns of $12,604 as of September 30, 2022, down from $22,266 as of December 31, 2021[140]. Future Outlook and Financing - The company anticipates guaranteed minimum royalty payments totaling approximately $1 million over the next five years from a licensing agreement[65]. - The company expects operating losses to continue in the foreseeable future as it invests in business expansion and development[120]. - Future capital requirements will depend on factors such as growth in retail store customers and e-commerce needs, with potential for additional equity or debt financing if current liquidity sources are insufficient[121]. Initial Public Offering - The company raised approximately $7.35 million from its initial public offering on August 17, 2022, after deducting underwriting discounts and offering expenses, net proceeds amounted to $6,189,734[118][119]. - The company plans to use the proceeds primarily for sales and marketing, expanding inventory, and developing new smart eyewear styles and the Vyrb app[119]. Tax and Financial Obligations - The company has incurred taxable losses since inception but is current in its tax filing obligations[129]. - The company does not have any off-balance sheet arrangements as of September 30, 2022[122]. Revenue Recognition - The company recognizes revenue from sales of optical glasses and related shipping charges upon satisfying performance obligations, with e-commerce revenue recognized upon shipment[134][137].