Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Sep. 22, 2022 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-41392 | |
Entity Registrant Name | INNOVATIVE EYEWEAR, INC. | |
Entity Central Index Key | 0001808377 | |
Entity Tax Identification Number | 84-2794274 | |
Entity Incorporation, State or Country Code | FL | |
Entity Address, Address Line One | 11900 Biscayne Blvd. | |
Entity Address, Address Line Two | Suite 630 | |
Entity Address, City or Town | North Miami | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33181 | |
City Area Code | (786) | |
Local Phone Number | 785-5178 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,307,157 | |
Common Stock, $0.00001 par value | ||
Title of 12(b) Security | Common Stock, $0.00001 par value | |
Trading Symbol | LUCY | |
Security Exchange Name | NASDAQ | |
Warrants to purchase Common Stock | ||
Title of 12(b) Security | Warrants to purchase Common Stock | |
Trading Symbol | LUCYW | |
Security Exchange Name | NASDAQ |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 34,878 | $ 79,727 |
Accounts receivable, net | 186,881 | 43,394 |
Prepaid expenses | 53,611 | 68,381 |
Deferred offering costs | 173,816 | 111,149 |
Inventory prepayment | 59,409 | 64,715 |
Inventory | 325,414 | 275,501 |
Other current assets | 1,460 | 1,460 |
Total Current Assets | 835,469 | 644,327 |
Non-Current Assets | ||
Patent costs, net | 121,637 | 87,306 |
Capitalized software costs | 91,248 | 72,400 |
Property and equipment, net | 52,779 | 20,284 |
TOTAL ASSETS | 1,101,133 | 824,317 |
Current Liabilities | ||
Accounts payable and accrued expenses | 284,604 | 167,050 |
Due to Parent and Affiliates | 231,030 | 160,722 |
Related party convertible debt | 1,937,768 | 289,029 |
Total Current Liabilities | 2,453,402 | 616,801 |
TOTAL LIABILITIES | 2,453,402 | 616,801 |
Commitments and contingencies | ||
Stockholders’ Equity (Deficit) | ||
Common stock (50,000,000 shares authorized, 6,060,187 shares issued and outstanding as of June 30, 2022 and December 31, 2021, at par value $0.00001) | 60 | 60 |
Additional paid-in capital | 5,676,738 | 4,842,836 |
Stock subscription receivable | (4,542) | (11,226) |
Accumulated deficit | (7,024,525) | (4,624,154) |
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY | (1,352,269) | 207,516 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,101,133 | $ 824,317 |
CONDENSED BALANCE SHEETS (Una_2
CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 6,060,187 | 6,060,187 |
Common stock, shares Outstanding | 6,060,187 | 6,060,187 |
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 204,741 | $ 127,027 | $ 440,763 | $ 244,152 |
Less: Cost of Goods Sold | (161,494) | (94,371) | (323,126) | (202,156) |
Gross Profit | 43,247 | 32,656 | 117,637 | 41,996 |
Operating Expenses: | ||||
General and administrative | (710,135) | (225,545) | (1,317,108) | (298,428) |
Sales and marketing | (391,919) | (270,811) | (976,714) | (390,857) |
Research & development | (52,560) | (19,128) | (88,367) | (26,897) |
Related party management fee | (35,000) | (34,975) | (70,000) | (59,975) |
Total Operating Expenses | (1,189,614) | (550,459) | (2,452,189) | (776,157) |
Other Expense | (2,059) | (3,837) | (2,558) | |
Interest Expense | (45,386) | (14,960) | (63,261) | (24,152) |
Total Other Expenses | (47,445) | (18,797) | (65,819) | (24,152) |
Net Loss | $ (1,193,812) | $ (536,600) | $ (2,400,371) | $ (758,313) |
Weighted average number of shares outstanding | 6,060,187 | 5,136,686 | 6,060,187 | 4,710,620 |
Earnings per share, basic and diluted | $ (0.20) | $ (0.10) | $ (0.40) | $ (0.16) |
CONDENSED STATEMENTS OF CHANGES
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Stock Subscription Receivable [Member] | Retained Earnings [Member] | Total |
Balances, March 2021 at Dec. 31, 2020 | $ 41 | $ 845,417 | $ (20,647) | $ (1,379,648) | $ (554,837) |
Beginnig balance, shares at Dec. 31, 2020 | 4,131,469 | ||||
Issuance of shares net of offering costs of $217,958 | $ 5 | 307,126 | (29,248) | 277,883 | |
Issuance of shares net of offering costs of $217,958, shares | 542,863 | ||||
Net loss | (221,713) | (221,713) | |||
Stock based compensation | 38,065 | 38,065 | |||
Ending balance, value at Mar. 31, 2021 | $ 46 | 1,190,608 | (49,895) | (1,601,361) | (460,602) |
Ending balance, shares at Mar. 31, 2021 | 4,674,332 | ||||
Shares issued for convertible note exercise | $ 8 | 778,492 | 778,500 | ||
Shares issued for convertible note exercise, shares | 778,500 | ||||
Issuance of shares, net of offering costs of $28,230 | $ 2 | 130,340 | (8,861) | 121,481 | |
Issuance of shares, net of offering costs of $28,230, shares | 167,385 | ||||
Net loss | (536,600) | (536,600) | |||
Stock based compensation | 160,934 | 160,934 | |||
Collection of stock subscription receivable | 40,765 | 40,765 | |||
Ending balance, value at Jun. 30, 2021 | $ 56 | 2,260,374 | (17,991) | (2,137,961) | 104,478 |
Ending balance, shares at Jun. 30, 2021 | 5,620,217 | ||||
Balances, March 2021 at Dec. 31, 2021 | $ 60 | 4,842,836 | (11,226) | (4,624,154) | 207,516 |
Beginnig balance, shares at Dec. 31, 2021 | 6,060,187 | ||||
Net loss | (1,206,559) | (1,206,559) | |||
Stock based compensation | 416,951 | 416,951 | |||
Ending balance, value at Mar. 31, 2022 | $ 60 | 5,259,787 | (11,226) | (5,830,713) | (582,092) |
Ending balance, shares at Mar. 31, 2022 | 6,060,187 | ||||
Net loss | (1,193,812) | (1,193,812) | |||
Stock based compensation | 416,951 | 416,951 | |||
Collection of stock subscription receivable | 6,684 | 6,684 | |||
Ending balance, value at Jun. 30, 2022 | $ 60 | $ 5,676,738 | $ (4,542) | $ (7,024,525) | $ (1,352,269) |
Ending balance, shares at Jun. 30, 2022 | 6,060,187 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Activities | ||
Net (Loss) | $ (2,400,371) | $ (758,313) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization | 4,181 | 3,483 |
Depreciation | 7,899 | |
Non cash interest expense | 64,512 | 24,152 |
Stock compensation expense | 833,902 | 198,999 |
Expenses paid by parent and affiliates | 474,047 | 325,402 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (143,487) | (9,513) |
Increase (Decrease) in accounts payable and accrued expenses | 53,042 | 24,552 |
(Increase) Decrease in prepaid expenses | 14,770 | (26,000) |
(Increase) Decrease in inventory | (44,607) | (90,810) |
Other current assets | ||
(Increase) Decrease in other current assets | (32,034) | |
Net cash flows from operating activities | (1,136,112) | (340,082) |
Investing Activities | ||
Patent costs | (38,512) | (12,590) |
Purchases of property and equipment | (40,394) | (2,035) |
Capitalized software expenditures | (18,848) | (36,000) |
Net cash flows from investing activities | (97,754) | (50,625) |
Financing Activities | ||
Proceeds from issuance of shares net of offering expenses | 399,364 | |
Collection of stock subscription receivable | 6,684 | 40,765 |
Payment of deferred offering cost | (62,667) | |
Proceeds from related party convertible debt | 1,245,000 | 106,000 |
Repayment of related party agreements | (52,801) | |
Repayments of Amounts Due to Parent and Affiliates | (4,000) | |
Net cash flows from financing activities | 1,189,017 | 489,328 |
Net Change In Cash | (44,849) | 98,621 |
Cash at Beginning of Period | 79,727 | 27,023 |
Cash at End of Period | 34,878 | 125,644 |
Significant Non-Cash Transaction | ||
Expenses paid for by Parent reported as increase in Due to Parent and Affiliates and related party convertible debt | 474,047 | 325,402 |
Shares issued from conversion of related party convertible debt | $ 778,500 |
GENERAL INFORMATION
GENERAL INFORMATION | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL INFORMATION | NOTE 1 – GENERAL INFORMATION General Information – INNOVATIVE EYEWEAR, INC., (“the “Company” or “we”) is a corporation organized under the laws of the State of Florida that develops and sells cutting-edge eyeglasses and sunglasses, which are designed to allow our customers to remain connected to their digital lives, while also offering prescription eyewear and sun protection. The Company was founded by Lucyd Ltd. (the “Parent” or “Lucyd”), which currently owns approximately 71% of our issued and outstanding shares of common stock, a portfolio company of Tekcapital Plc through Tekcapital Europe, Ltd. (collectively, the “Parent and Affiliates”). Innovative Eyewear licensed the exclusive rights to the Lucyd® brand, from Lucyd Ltd., which includes the exclusive use of all of Lucyd’s intellectual property, including our main product, Lucyd Lyte® glasses. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all adjustments considered necessary for the fair presentation of the financial statements for the periods presented have been included. The results of operations for the six months ended June 30, 2022, are not necessarily indicative of the results to be expected for future periods or the full year. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, particularly given the significant social and economic disruptions and uncertainties associated with the ongoing coronavirus pandemic (“COVID-19”) and COVID-19 control responses. Receivables and Credit Policy Trade receivables from customers are uncollateralized customer obligations due under normal trade terms, primarily requiring payment before product is shipped. Trade receivables are stated at the amount billed to the customer. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoice. The Company, by policy, routinely assesses the financial strength of its customers. To comply with industry standards, we offer “net 30” payments on wholesale orders of $1,500 or more. For Wholesale orders, to acquire an order on net 30 terms, the customer is provided a credit check application as well as a credit card authorization form. The authorization form explicitly states when and for much we will bill the customer via credit card. As a result, the Company believes that its accounts receivable credit risk exposure is limited and it has not experienced any significant write-downs in its accounts receivable balances. As of June 30, 2022, and December 31, 2021, the Company had no Capitalized Software The Company incurred software development costs related to development of the Vyrb app. The Company capitalized these costs in accordance with ASC 985-20, Software – Costs of Software to be Sold, Leased, or Marketed, considering it is the Company’s intention to market and sell the software externally. Planning, designing, coding and testing occurred necessary to meet Vyrb’s design specifications. As such, all coding, development and testing costs incurred subsequent to establishing technical feasibility were capitalized. We have launched a beta version of the Vyrb application in December 2021 that demonstrates the functionality of the software. We expect an estimated useful life of five years for this product. Inventory Our inventory includes purchased eyewear and is stated at the lower of cost or net realizable value, with cost determined on a specific identification method of inventory costing which attaches the actual cost to an identifiable unit of product. Provisions for excess, obsolete or slow-moving inventory are recorded after periodic evaluation of historical sales, current economic trends, forecasted sales, estimated product life cycles and estimated inventory levels. No provisions were determined as needed at June 30, 2022 and as of December 31, 2021. As of June 30, 2022 and December 31, 2021, the Company recorded an inventory prepayment in the amount of $ 59,409 64,715 Intangible Assets Intangible assets as of June 30, 2022 and December 31, 2021 relate to patents costs received in conjunction with the initial capitalization of the Company and internally developed utility and design patents. The Company amortizes these assets of the estimated useful life of the patents. The Company reviews its intangibles assets for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Property and Equipment Property and equipment are depreciated using the straight-line method over the estimated useful lives or lease terms if shorter. Depreciation expense for the three and six months ended June 30, 2022 was $ 3,916 7,899 0 Income Taxes The Company accounts for income taxes under an asset and liability approach that recognizes deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company follows a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. The guidance relates to, among other things, classification, accounting for interest and penalties associated with tax positions, and disclosure requirements. Any interest and penalties accrued related to uncertain tax positions are recorded in tax expense. The Company assesses the realizability of its net deferred tax assets on an annual basis. If, after considering all relevant positive and negative evidence, it is more likely than not that some portion or all of the net deferred tax assets will not be realized, the Company will reduce the net deferred tax assets by a valuation allowance. The realization of net deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of net operating loss carryforwards. Stock-Based Compensation The Company accounts for stock-based compensation to employees and directors in accordance with FASB ASC Topic 718, which requires that compensation expense be recognized in the financial statements for stock-based awards based on the grant date fair value. For stock option awards, the Black-Scholes-Merton option pricing model was used to estimate the fair value of share-based awards. The Black-Scholes-Merton option pricing model incorporates various and highly subjective assumptions, including expected term and share price volatility. The expected term of the stock options was estimated based on the simplified method as allowed by Staff Accounting Bulletin 107 (SAB 107). The share price volatility at the grant date is estimated using historical stock prices based upon the expected term of the options granted, using stock prices of comparably profiled public companies. The risk-free interest rate assumption is determined using the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. Revenue Recognition Our revenue is generated from the sales of prescription and non-prescription optical glasses, sunglasses and shipping charges, which are charged to the customer, associated with these purchases. We sell products through our retail store resellers, distributors and on our own website Lucyd.co and on Amazon. To determine revenue recognition, we perform the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, we assess the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. All revenue, including sales processed online and through our retail store resellers and distributors, is reported net of sales taxes collected from customers on behalf of taxing authorities, returns and discounts. For sales generated through our e-commerce channels, we identify the contract with a customer upon online purchase of our eyewear and transaction price at the manufacturer suggested retail price (“MSRP”) for non-prescription, polarized sunglass and blue light blocking glasses across all of our online channels. Our e-commerce revenue is recognized upon meeting of the performance obligation when the eyewear is shipped to end customers. Only U.S. consumers enjoy free USPS first class postage, with faster delivery options available for extra cost, for sales processed through our website and on Amazon. For Amazon sales, shipping is free for U.S consumers while international customers pay shipping charges on top of MSRP. Any costs associated with fees charged by the online platforms (Shopify for Lucyd.co website and Amazon) are not recharged to customers and are recorded as a component of cost of goods sold as incurred. The Company charges applicable state sales taxes in addition to the MSRP for both online channels and all other marketplaces on which the company sells products. For sales to our retail store partners, we identify the contract with a customer upon receipt of an order of our eyewear through our Shopify wholesale portal or direct purchase order. Our revenue is recognized upon meeting the performance obligation which is delivery of the Company’s eyewear products to the retail store and also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to the retail store partners includes volume discounts, due to the nature of large quantity orders. The pricing includes shipping charges, while excluding any state sales tax charges applicable. Due to the nature of wholesale retail orders, no e-commerce fees are applicable. For sales to distributors, we identify the contract with a customer upon receipt of an order of our eyewear through a direct purchase order. Our revenue is recognized upon meeting the performance obligation, which is delivery of our eyewear products to the distributor and is also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to distributors includes volume discounts, due to the nature of large quantity orders. The pricing includes shipping charges, while excluding any state sales tax charges applicable. Due to the nature of wholesale distributor orders, no e-commerce fees are applicable. The Company’s sales do not contain any variable consideration. We allow our customers to return our products, subject to our refund policy, which allows any customer to return our products for any reason within the first: ● 7 days for sales made through our website (Lucyd.co) ● 30 days for sales made through Amazon ● 30 days for sales to wholesale retailers and distributors For all of our sales, at the time of sale, we establish a reserve for returns, based on historical experience and expected future returns, which is recorded as a reduction of sales. Additionally, we reviewed all individual returns received in July and August 2022 pertaining to orders processed prior to June 30, 2022. As a result, the Company determined that an allowance for sales returns was necessary. The Company recorded $ 22,266 12,604 Shipping and Handling Costs incurred for shipping and handling are included in cost of revenue at the time the related revenue is recognized. Amounts billed to a customer for shipping and handling are reported as revenues. Earnings/loss per share The Company presents earnings and loss per share data by calculating the quotient of earnings/(loss) and loss divided by the number of common shares outstanding (common shares as of June 30, 2022 and December 31, 2021) as required by ASC 260-10-50. As of June 30, 2022 and December 31, 2021, all shares underlying the related party convertible debt and common stock options were excluded from the earnings per share calculation due to their anti-dilutive effect. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN The Company has a limited operating history. The Company’s business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse conditions may include recession, downturn or otherwise, changes in regulations or restrictions in imports, competition or changes in consumer taste including the economic impacts from the COVID-19 pandemic. These adverse conditions could affect the Company’s financial condition and the results of its operations. The Company meets its day to day working capital requirements through monies raised through sales of eyewear and issues of equity including crowdfunding. The Company also has issued a convertible note held by its parent company. Company’s forecasts and projections indicate that the Company expects to have sufficient cash reserves and future income to operate within the level of its current facilities. In August 2022, the Company completed its initial public offering and received net proceeds totaling approximately $6.2 million. The Company anticipates that this available liquidity will be sufficient to fund operations through at least the end of 2023. |
INCOME TAX PROVISION
INCOME TAX PROVISION | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX PROVISION | NOTE 4 – INCOME TAX PROVISION At the end of each interim reporting period, the Company estimates its effective tax rate expected to be applied for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods. Accordingly, the Company’s effective tax rate for the six months ended June 30, 2022, was 0 0 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 5 – INTANGIBLE ASSETS Schedule of intangible assets June 30, December 31, Finite-lived intangible assets 2022 2021 Patent Costs $ 133,992 $ 95,480 Intangible assets, gross 133,992 95,480 Less: Accumulated amortization (12,355 ) (8,174 ) Intangible assets, net $ 121,637 $ 87,306 Amortization expense totaled $ 2,442 4,181 0 3,483 11,500 |
RELATED PARTY ADVANCES AND OTHE
RELATED PARTY ADVANCES AND OTHER INTERCOMPANY AGREEMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY ADVANCES AND OTHER INTERCOMPANY AGREEMENTS | NOTE 6 – RELATED PARTY ADVANCES AND OTHER INTERCOMPANY AGREEMENTS Convertible Note and Due to Parent and Affiliates During the six months ended June 30, 2022 and during 2021, the Company had the availability, but not the contractual right to intercompany financing from the Parent and Affiliates in the form of either cash advances or borrowings under a convertible note (as discussed below). The convertible notes balances were $ 1,937,768 289,029 1,648,739 Management Service Agreement In 2020, the Company entered into a management services agreement with a related party (related through common ownership). The Company is billed $25,000 quarterly. Effective February 1, 2022, the original management services agreement was amended to have the Company billed at $35,000 quarterly. While the agreement does not stipulate a specific maturity date, it can be terminated with 30 calendar days written notice by any party. The related party provides the following services: ● Provision of support and advise to the Company in accordance with their area of expertise ● Undertake research, technical review, legal review, recruitment, software development, marketing, public relations and advertisement ● Provide advice, assistance and consultation services to support the Company or in relation to any other related matter ● Rent-free office space. During the last three and six months ended June 30, 2022, the Company incurred $ 35,000 70,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 – COMMITMENTS AND CONTINGENCIES Legal Matters The Company is not currently involved in or aware of threats of any litigation. Leases Our executive offices are located at 11900 Biscayne Blvd., Suite 630 Miami, Florida 33181. Our executive offices are provided to us by the parent of our majority stockholder, Tekcapital. We consider our current office space adequate for our current operations. Commitments See related party management services agreement discussed in Note 6. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
STOCK BASED COMPENSATION | NOTE 8 – STOCK BASED COMPENSATION No option awards were granted during the six months ended June 30, 2022. Details of the number of share options and the weighted average exercise price outstanding as of and during the six months ended June 30, 2022 and are as follows: Schedule of stock based compensation activity Av. Exercise Options As at January 1, 2022 2.61 2,332,500 Granted - - Exercised - - Forfeited - - As at June 30, 2022 2.61 2,332,500 Exercisable as at June 30, 2022 2.61 591,366 Unrecognized stock compensation expense of $ 2,049,919 2 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS On August 17, 2022, the Company closed on its initial public offering of 980,000 980,000 1,960,000 7.50 7.35 Company granted the underwriters a 45-day option to purchase up to an additional 147,000 shares of common stock and/or warrants to purchase up to an additional 294,000 shares of common stock to cover over-allotments, of which Maxim Group LLC has exercised its option to purchase additional warrants to purchase 294,000 shares of common stock. The shares of common stock and warrants began trading on The Nasdaq Capital Market on August 15, 2022, under the symbols “LUCY” and “LUCYW,” respectively. Also, pursuant to the terms of the underwriting agreement for the offering, the Company issued Maxim Group LLC certain other warrants to purchase up to 58,800 8.228 The net proceeds received by the Company amounted to $ 6,189,734 On August 15, 2022, in connection with the Company’s initial public offering, Lucyd Ltd. converted $2,002,280 of the $2,256,214 outstanding on its convertible promissory note from the Company into 260,970 shares of our common stock. After this conversion, approximately $254,000 was outstanding on the convertible promissory note issued to Lucyd. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all adjustments considered necessary for the fair presentation of the financial statements for the periods presented have been included. The results of operations for the six months ended June 30, 2022, are not necessarily indicative of the results to be expected for future periods or the full year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, particularly given the significant social and economic disruptions and uncertainties associated with the ongoing coronavirus pandemic (“COVID-19”) and COVID-19 control responses. |
Receivables and Credit Policy | Receivables and Credit Policy Trade receivables from customers are uncollateralized customer obligations due under normal trade terms, primarily requiring payment before product is shipped. Trade receivables are stated at the amount billed to the customer. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoice. The Company, by policy, routinely assesses the financial strength of its customers. To comply with industry standards, we offer “net 30” payments on wholesale orders of $1,500 or more. For Wholesale orders, to acquire an order on net 30 terms, the customer is provided a credit check application as well as a credit card authorization form. The authorization form explicitly states when and for much we will bill the customer via credit card. As a result, the Company believes that its accounts receivable credit risk exposure is limited and it has not experienced any significant write-downs in its accounts receivable balances. As of June 30, 2022, and December 31, 2021, the Company had no |
Capitalized Software | Capitalized Software The Company incurred software development costs related to development of the Vyrb app. The Company capitalized these costs in accordance with ASC 985-20, Software – Costs of Software to be Sold, Leased, or Marketed, considering it is the Company’s intention to market and sell the software externally. Planning, designing, coding and testing occurred necessary to meet Vyrb’s design specifications. As such, all coding, development and testing costs incurred subsequent to establishing technical feasibility were capitalized. We have launched a beta version of the Vyrb application in December 2021 that demonstrates the functionality of the software. We expect an estimated useful life of five years for this product. |
Inventory | Inventory Our inventory includes purchased eyewear and is stated at the lower of cost or net realizable value, with cost determined on a specific identification method of inventory costing which attaches the actual cost to an identifiable unit of product. Provisions for excess, obsolete or slow-moving inventory are recorded after periodic evaluation of historical sales, current economic trends, forecasted sales, estimated product life cycles and estimated inventory levels. No provisions were determined as needed at June 30, 2022 and as of December 31, 2021. As of June 30, 2022 and December 31, 2021, the Company recorded an inventory prepayment in the amount of $ 59,409 64,715 |
Intangible Assets | Intangible Assets Intangible assets as of June 30, 2022 and December 31, 2021 relate to patents costs received in conjunction with the initial capitalization of the Company and internally developed utility and design patents. The Company amortizes these assets of the estimated useful life of the patents. The Company reviews its intangibles assets for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable. |
Property and Equipment | Property and Equipment Property and equipment are depreciated using the straight-line method over the estimated useful lives or lease terms if shorter. Depreciation expense for the three and six months ended June 30, 2022 was $ 3,916 7,899 0 |
Income Taxes | Income Taxes The Company accounts for income taxes under an asset and liability approach that recognizes deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company follows a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. The guidance relates to, among other things, classification, accounting for interest and penalties associated with tax positions, and disclosure requirements. Any interest and penalties accrued related to uncertain tax positions are recorded in tax expense. The Company assesses the realizability of its net deferred tax assets on an annual basis. If, after considering all relevant positive and negative evidence, it is more likely than not that some portion or all of the net deferred tax assets will not be realized, the Company will reduce the net deferred tax assets by a valuation allowance. The realization of net deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of net operating loss carryforwards. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation to employees and directors in accordance with FASB ASC Topic 718, which requires that compensation expense be recognized in the financial statements for stock-based awards based on the grant date fair value. For stock option awards, the Black-Scholes-Merton option pricing model was used to estimate the fair value of share-based awards. The Black-Scholes-Merton option pricing model incorporates various and highly subjective assumptions, including expected term and share price volatility. The expected term of the stock options was estimated based on the simplified method as allowed by Staff Accounting Bulletin 107 (SAB 107). The share price volatility at the grant date is estimated using historical stock prices based upon the expected term of the options granted, using stock prices of comparably profiled public companies. The risk-free interest rate assumption is determined using the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. |
Revenue Recognition | Revenue Recognition Our revenue is generated from the sales of prescription and non-prescription optical glasses, sunglasses and shipping charges, which are charged to the customer, associated with these purchases. We sell products through our retail store resellers, distributors and on our own website Lucyd.co and on Amazon. To determine revenue recognition, we perform the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, we assess the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. All revenue, including sales processed online and through our retail store resellers and distributors, is reported net of sales taxes collected from customers on behalf of taxing authorities, returns and discounts. For sales generated through our e-commerce channels, we identify the contract with a customer upon online purchase of our eyewear and transaction price at the manufacturer suggested retail price (“MSRP”) for non-prescription, polarized sunglass and blue light blocking glasses across all of our online channels. Our e-commerce revenue is recognized upon meeting of the performance obligation when the eyewear is shipped to end customers. Only U.S. consumers enjoy free USPS first class postage, with faster delivery options available for extra cost, for sales processed through our website and on Amazon. For Amazon sales, shipping is free for U.S consumers while international customers pay shipping charges on top of MSRP. Any costs associated with fees charged by the online platforms (Shopify for Lucyd.co website and Amazon) are not recharged to customers and are recorded as a component of cost of goods sold as incurred. The Company charges applicable state sales taxes in addition to the MSRP for both online channels and all other marketplaces on which the company sells products. For sales to our retail store partners, we identify the contract with a customer upon receipt of an order of our eyewear through our Shopify wholesale portal or direct purchase order. Our revenue is recognized upon meeting the performance obligation which is delivery of the Company’s eyewear products to the retail store and also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to the retail store partners includes volume discounts, due to the nature of large quantity orders. The pricing includes shipping charges, while excluding any state sales tax charges applicable. Due to the nature of wholesale retail orders, no e-commerce fees are applicable. For sales to distributors, we identify the contract with a customer upon receipt of an order of our eyewear through a direct purchase order. Our revenue is recognized upon meeting the performance obligation, which is delivery of our eyewear products to the distributor and is also recorded net of returns and discounts. Our wholesale pricing for eyewear sold to distributors includes volume discounts, due to the nature of large quantity orders. The pricing includes shipping charges, while excluding any state sales tax charges applicable. Due to the nature of wholesale distributor orders, no e-commerce fees are applicable. The Company’s sales do not contain any variable consideration. We allow our customers to return our products, subject to our refund policy, which allows any customer to return our products for any reason within the first: ● 7 days for sales made through our website (Lucyd.co) ● 30 days for sales made through Amazon ● 30 days for sales to wholesale retailers and distributors For all of our sales, at the time of sale, we establish a reserve for returns, based on historical experience and expected future returns, which is recorded as a reduction of sales. Additionally, we reviewed all individual returns received in July and August 2022 pertaining to orders processed prior to June 30, 2022. As a result, the Company determined that an allowance for sales returns was necessary. The Company recorded $ 22,266 12,604 |
Shipping and Handling | Shipping and Handling Costs incurred for shipping and handling are included in cost of revenue at the time the related revenue is recognized. Amounts billed to a customer for shipping and handling are reported as revenues. |
Earnings/loss per share | Earnings/loss per share The Company presents earnings and loss per share data by calculating the quotient of earnings/(loss) and loss divided by the number of common shares outstanding (common shares as of June 30, 2022 and December 31, 2021) as required by ASC 260-10-50. As of June 30, 2022 and December 31, 2021, all shares underlying the related party convertible debt and common stock options were excluded from the earnings per share calculation due to their anti-dilutive effect. |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets June 30, December 31, Finite-lived intangible assets 2022 2021 Patent Costs $ 133,992 $ 95,480 Intangible assets, gross 133,992 95,480 Less: Accumulated amortization (12,355 ) (8,174 ) Intangible assets, net $ 121,637 $ 87,306 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Schedule of stock based compensation activity | Schedule of stock based compensation activity Av. Exercise Options As at January 1, 2022 2.61 2,332,500 Granted - - Exercised - - Forfeited - - As at June 30, 2022 2.61 2,332,500 Exercisable as at June 30, 2022 2.61 591,366 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||||
Allowance for bad debt | $ 0 | $ 0 | $ 0 | ||
Inventory prepayment | 59,409 | 59,409 | 64,715 | ||
Depreciation expense | 3,916 | $ 0 | 7,899 | $ 0 | |
Allowance for sales returns | $ 12,604 | $ 12,604 | $ 22,266 |
INCOME TAX PROVISION (Details N
INCOME TAX PROVISION (Details Narrative) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 0% | 0% |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 133,992 | $ 95,480 |
Less: Accumulated amortization | (12,355) | (8,174) |
Intangible assets, net | 121,637 | 87,306 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 133,992 | $ 95,480 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 2,442 | $ 0 | $ 4,181 | $ 3,483 |
Future amortization | $ 11,500 | $ 11,500 |
RELATED PARTY ADVANCES AND OT_2
RELATED PARTY ADVANCES AND OTHER INTERCOMPANY AGREEMENTS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||
Convertible notes balances | $ 1,937,768 | $ 1,937,768 | $ 289,029 | ||
Contributions from Parent | 1,648,739 | ||||
Management fee | 35,000 | $ 34,975 | 70,000 | $ 59,975 | |
Tekcapital Europe Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Management fee | $ 35,000 | $ 70,000 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Equity [Abstract] | |
Av. Exercise price per share, Option Outstanding at beginnig | $ / shares | $ 2.61 |
Option Outstanding at beginnig | shares | 2,332,500 |
Av. Exercise price per share, Option Granted | $ / shares | |
Option Granted | shares | |
Av. Exercise price per share, Option Exercised | $ / shares | |
Option Exercised | shares | |
Av. Exercise price per share, Option Forfeited | $ / shares | |
Option Forfeited | shares | |
Av. Exercise price per share, Option Outstanding at ending | $ / shares | $ 2.61 |
Option Outstanding at ending | shares | 2,332,500 |
Av. Exercise price per share, Option Exercisable | $ / shares | $ 2.61 |
Option Exercisable | shares | 591,366 |
STOCK BASED COMPENSATION (Det_2
STOCK BASED COMPENSATION (Details Narrative) | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Equity [Abstract] | |
Unrecognized stock compensation expense | $ 2,049,919 |
Unrecognized stock compensation expense, term | 2 years |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | 1 Months Ended | |
Aug. 15, 2022 | Aug. 17, 2022 | |
Subsequent Event [Line Items] | ||
Issauance of common stock | 980,000 | |
Number of warrants purchased | 1,960,000 | |
Share Price | $ 7.50 | |
Proceeds from offering | $ 6,189,734 | $ 7,350,000 |
Underwriters description | Company granted the underwriters a 45-day option to purchase up to an additional 147,000 shares of common stock and/or warrants to purchase up to an additional 294,000 shares of common stock to cover over-allotments, of which Maxim Group LLC has exercised its option to purchase additional warrants to purchase 294,000 shares of common stock. | |
Initial public offering description | Company’s initial public offering, Lucyd Ltd. converted $2,002,280 of the $2,256,214 outstanding on its convertible promissory note from the Company into 260,970 shares of our common stock. After this conversion, approximately $254,000 was outstanding on the convertible promissory note issued to Lucyd. | |
Maxim [Member] | ||
Subsequent Event [Line Items] | ||
Number of warrants purchased | 58,800 | |
Exercise price | $ 8.228 | |
Common Stock [Member] | ||
Subsequent Event [Line Items] | ||
Issauance of common stock | 980,000 |