Financial Report: Q1 2024 - Q1 2024
The financial report highlights key events and developments, such as the issuance of common stock, warrants, and patents, as well as the acquisition of internal use software and office equipment. The report also mentions agreements with Lucyd Ltd. and Tekcapital Europe Ltd., as well as employee and counterparty matters.
Overview
Lucyd sells smart glasses and sunglasses that allow customers to connect to their phones and digital lives hands-free. Their flagship product, Lucyd Lyte, lets you listen to music, take calls, and use voice assistants while wearing the glasses.
Lucyd launched their first commercial product in January 2021 and has since expanded to over two dozen styles. They have also introduced new features like better sound quality and battery life. In 2023, Lucyd plans to launch cobranded products with brands like Nautica, Eddie Bauer, and Reebok.
Lucyd glasses are currently sold through their website, Amazon, and over 350 retail stores primarily in the U.S. and Canada. They have sold thousands of pairs so far.
Financial Performance
For the quarter ended March 31, 2024, Lucyd had:
- Revenue of $383,471, up 165% from $144,921 in the same quarter last year. The increase was mainly from e-commerce sales growth.
- A net loss of $1.97 million compared to $1.43 million loss last year. Losses widened due to higher operating costs.
- Negative cash flow from operations of $1.47 million compared to $1.36 million last year, reflecting the increased net loss.
E-commerce channels now make up over 95% of Lucyd’s sales, with their website and Amazon generating the majority. Wholesale revenue from stores declined due to Lucyd shifting focus to national retailers, which have longer purchase cycles.
Higher sales volumes drove a 180% increase in cost of goods sold. Gross profit declined to $6,951 from $10,291 last year. Gross margin dropped to 2% from 7% due to much higher costs for prescription lenses.
Operating expenses rose 40% to $2 million, led by a 155% increase in marketing spending to drive growth. Other major costs included R&D and general & administrative expenses.
Growth Plans
Lucyd intends to increase future revenue by:
- Getting their smart glasses into more national retail stores
- Continuing to invest in new styles and models
- Increasing brand awareness and online sales through marketing campaigns
They aim to improve profitability over time by lowering production costs as sales volumes increase. But losses are expected to continue in the near term as Lucyd spends on expansion.
Additional financing may be needed to fund growth if cash from operations remains negative. Lucyd recently raised $1 million through a share offering and warrant sale.
The Bottom Line
While still losing money, Lucyd saw strong sales growth in Q1 2024. Investments to boost production and marketing are key next steps to turn smart glasses into a sustainable, profitable business. Achieving scale and retail distribution remain challenges in the competitive tech eyewear market.
