| Schedule of calculation of net earnings per common share - basic and diluted | Schedule of calculation of net earnings per common share - basic and diluted
For the For the
September 30, September 30, September 30, September 30,
2023 2022 2023 2022
Basic and diluted:
Net loss $ (1,551,105 ) $ (1,404,321 ) $ (4,269,717 ) $ (3,804,692 )
Weighted-average number of common shares 12,917,239 6,673,020 9,705,053 6,266,709
Basic and diluted net loss per common share $ (0.12 ) $ (0.21 ) $ (0.44 ) $ (0.61 ) I The following discussion and analysis of our financial condition and results of operations
should be read together with our financial statements and the related notes and the
other financial information included elsewhere in this Quarterly Report. This discussion
contains forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking statements
as a result of various factors, including those discussed below and elsewhere in this
Quarterly Report. Overview The mission of our company is to upgrade
the world’s eyewear, by adding useful tech features to comfortable and stylish sunglasses and eyeglasses. Our products enable
seamless Bluetooth connection to your digital life and prescription vision correction in one affordable and convenient package.
Our flagship brand of smart eyewear is called Lucyd ® In January 2021, we officially launched
our first commercial product, Lucyd Lyte ® We recently launched version 2.0 of our Lucyd Lyte eyewear, and our current product
offering consists of 21 version 2.0 models, which offers a similar amount of style variety as many traditional
eyewear collections. Six of the 21 styles are from a new sub-collection called Lyte XL, which boasts our
most advanced features yet, launched in October 2023. All styles are each available with 80+ different lens types, resulting in hundreds
of variations of products currently available. The new Lucyd Lyte version 2.0 collection features several key breakthroughs for the smart eyewear product category:
1. Music playback and call time were extended to 12 hours, a 50% increase over the version 1.0 and making Lyte one of the longest-lasting true wireless audio devices on the
market.
2. A four-speaker array was introduced, improving audio fidelity significantly compared
to the version 1.0 model and many other smart eyewear products.
3. Styling of the frames deployed the Company’s new expert design team, producing smart eyewear that follows trending styles in
2023 in the traditional eyeglasses and sunglasses markets. The collection features many style firsts for a smart eyewear collection
designed in the United States, that have proven commercially successful in traditional eyewear, such as titanium
rose gold and champagne crystal styles for women, and gunmetal gray and acetate aviator
styles for men.
4. The upgrade to a Bluetooth 5.2 chip improves connection stability, especially for
older devices.
5. Responsiveness of touch controls improved with an audible tone added to alert the
wearer when they have used a command successfully.
6. The transition of the LED status indicators to the interior of the temples, a change
based on consumer feedback, makes the product more discreet. Since the launch of Lucyd Lyte, we witnessed interest and demand from customers throughout
the United States and have sold thousands of our smart glasses. Within six months
of the launch of Lucyd Lyte, several optical stores in the United States and Canada
have on-boarded the product and we have had discussions with several other large
eyewear chains (by number of locations) regarding onboarding our product. We believe
smart eyewear is a product category whose time has come, and we believe we are well
positioned to capitalize on and help develop this exciting new sector–where eyewear
meets electronics in a user-friendly, mass market format, priced similarly to designer
eyewear. In first quarter of 2022 we introduced a virtual try-on kiosk for select retail stores.
This device introduces our products to prospective retail customers and enables them to digitally try on our line of smart glasses in
a touch-free manner. In 2023, we launched a total of 21 new styles of Lucyd Lyte eyewear, and entered production
for our first licensed product, the Nautica Powered by Lucyd Other recent product developments are as follows:
● In October 2023, the Company launched six new styles of smart eyewear under the Lucyd line, branded as Lyte XL, bringing several key innovations to the core product line. The new frames feature
patent-pending flexible hinges which enable a more comfortable fit and a wider range
of suitable head sizes for each frame, significant improvements to speaker and microphone
quality, thinner and more ergonomic temples, multi-lingual packaging for global sales,
and the use of 99% post-consumer recycled materials in the packaging. Additionally, the new packaging design is more compact and more clearly advertises
the frame style within, making it more retail-friendly. These key improvements will
be rolled out across all of the Company’s smart eyewear products to come, and marks notable R&D advancements towards the Company’s goal to develop the global standard in smart eyewear. These improvements also come
just eight months after the Company’s previous frame launch, showing our ability to rapidly improve our products on a
short timetable.
● The patent-pending Lucyd Charging Dock accessory will be upgraded to feature a charging status LED and USB data capability, enabling
it to be used as a USB multi-device hub for computers in addition to a charging hub. Additionally, the new Dock has a special spring-action connector that enables it
to function perfectly with any pair of glasses from the Company, whereas the original
Dock had difficulty with some petite and wide fit frames.
● We completed an overhaul of our retail fixtures in the third quarter of 2023, offering our new enhanced video and audio demo displays to all current and prospective
retail partners. The new displays were designed in-house and purpose-built for enhancing sell-through
of our smart eyewear. Our new modular display system incorporates two different center stations focused on audio and video experiences,
along with side pieces for stores with additional counter space to exhibit any number
of our frames. Over the course of the third quarter of this year, we began upgrading the store fixtures of our retail partners to the new display systems, which we believe will enhance sell-through of our products. Initial retailer feedback on the new display system has been
positive, as it eliminates key issues with our previous displays, by providing enough consumer information to make an educated buying
decision, including allowing the customer to interact with and listen to music on live products, and also including the addition of a security tether to make it suitable for all retail environments.
● We introduced a proprietary new custom lens in the third quarter of 2023, called the Lucyd Blueshift lens. This new lens transitions from clear indoors to dark outdoors, and has a handmade
blue light blocking coating that was independently lab tested to block 40% of harmful
blue light. This is an achievement since blue light lenses with this degree of filtration
normally have a yellowish or amber tint, while the Blueshift lens is fully clear indoors.
The Blueshift lens is offered in polarized and nonpolarized variants in any prescription
or as a non-prescription custom lens. In the fourth quarter of 2022, we introduced key features in the Vyrb app, including
live broadcasts for up to 100 users in one digital “room”, and the ability to upload
external audio content into Vyrb, enabling longstanding content creators to import
their existing libraries swiftly into the platform. This new feature allows content creators to share content they made outside of Vyrb
on the Vyrb network, and in the future we plan to allow users to monetize this content
as well as the content they generate originally on the platform. For example, we plan
to enable podcasters to import their existing podcast library into Vyrb, and set a
paywall for other users to access the content. Also in the fourth quarter of 2022, we completed development of core audio eyewear
product improvements, such as upgrading all frames to quadraphonic sound, which have
been rolled out across all new eyewear models as of January 2023. In April 2023, we introduced a major software upgrade for our glasses with the launch of the
Lucyd app for iOS/Android. This free application enables the user to converse with
the extremely popular ChatGPT AI language model on the glasses, to instantly gain
the benefit of one of the world’s most powerful AI assistants in a hands-free ergonomic interface. The app deploys a powerful and unique Siri and Google Voice
integration with the Open AI API for ChatGPT, developed internally by the company
and now pending patent. This development instantly makes all Lucyd eyewear perhaps the smartest We subsequently launched version 2.0 of the Lucyd app in August 2023 for iOS, which included an upgraded visual interface, new AI tool, and usability improvements, with the same updates planned for the Android version of the app in the fourth quarter of 2023. The new state-of-the-art interface makes perhaps the world’s most powerful commercial AI easier to use than ever on our smart glasses. We plan
to introduce more features, a shop, and a pro version of the app in the near future. We apply a manufacturer suggested retail price (“MSRP”) of $199 (for our standard frames) to $229 (for our titanium frames) for non-prescription, polarized sunglass and blue light
blocking glasses across our online channels, with our wholesale pricing offering volume
discounts to these prices. Please refer to discussion in the Components of Results
of Operations section below for more details regarding our pricing structure. Our business model is capital light, as we have elected not to build our own manufacturing facilities and Company-owned retail distribution,
but rather have contracted with existing sources of production and proven consumer-facing retail distribution. In summation, the ultimate synopsis from management on the status of the Company at
the end of the third quarter of 2023 is as follows:
● The Company has made notable advancements in both hardware and software products, fostering a
market-leading smart eyewear user experience. This follows the Company’s mission to continuously iterate and improve its products to better serve the customer, shown by the development of new custom components launching in the third quarter; the overall
improvement of fit, style, and functionality coming to our products with each successive
launch; and the combination of our core technology with the globally renowned Nautica,
Eddie Bauer, and Reebok brands pending launch over the next three to six months.
● The Company has built its strongest team to date, with 12 full-time staff extremely
devoted to building the global standard in smart eyewear, and several capable design, promotion, and sales contractors supplementing the core team.
● The Company was the first to market with a touch-free voice interface for ChatGPT,
demonstrating our ability to rapidly incorporate new innovations into our core product
to the immediate and great benefit of all users.
● The Company has launched a very sophisticated and attractive modular display system
that is primed to introduce smart eyewear to lay customers and maximize sell-through
in any retail environment suitable for our products. The new display system features a 10” video monitor continuously running promotional
videos, can be programmed with new videos seasonally via an SD card slot, and describes
to passerby how to conduct a music demo on the pair of Lucyd glasses on the display.
The display also features modular side pieces enabling retail locations to take advantage
of varied amounts of counter space to display Lucyd products.
● The optical industry itself has begun to recognize us as a leader of innovation in
optics, as shown in recent coverage that lists us alongside major, well-established
players in the space.
● Although we underwent some significant challenges with product defects and returns,
primarily in 2022 but also leading into 2023, the result of this was a total overhaul
of our supply chain that yielded more reliable factories and an overall significant
quality improvement on all of our glasses, positioning us well for the future.
● The Company began adopting aggressive influencer marketing strategies in the third quarter of 2023, some of which have already been successful in generating high-quality, authentic
user content to support advertising our products, as well as growing our social media
following. The Company believes influencer marketing will be a cornerstone of its
marketing efforts going forward, given the nature of smart eyewear as a complex new
product that typically requires detailed exposition for consumer adoption.
● Optical retailer feedback at the Vision Expo West conference on the new Lyte XL frames
and pre-production Nautica smart eyewear samples was extremely positive, indicating
the strong potential of the optical channel for our products. Reception of the Nautica
samples was some of the best feedback the Company had ever received. With the optical industry being a largely brand-driven marketplace, the introduction
of the Powered by Lucyd Key Factors Affecting Performance Expansion of retail points of purchase In addition to sustained growth of our e-commerce business, our future revenues are
correlated positively with our placement of Lucyd glasses in optical stores, as well
as sporting goods stores and other specialty stores such as cellular shops. To address
this, we assembled a team with decades of experience in the eyewear industry and are
offering a strong co-op marketing program and reordering incentives program. We currently
offer an expansive line of 21 different styles and several accessories, with plans to continuously expand this offering
over time. In the first quarter of 2023, we added approximately 50 new retail partners, comprised
of independent optical stores, and in the second quarter of 2023 we added approximately
25 new independent optical stores and seven Duty Free stores operated by Privato Inc. In the third quarter of 2023, we added 37 new accounts, entirely optical stores. Retail store client retention and re-orders Our ability to sustain and increase revenue is correlated positively with our ability
to receive re-orders from stores, either directly or through our wholesale distributors.
To support our sales to retail stores directly, we offer a strong co-op marketing
program that includes free and paid store display materials. As part of this strategy,
we have launched a new modular display system with engaging video screens and audio testing capabilities
for our resellers to help educate their in-store customers about Lucyd Lyte and enable
customers to try them on. This proprietary display system is central to our efforts to introduce traditional retail customers to Lucyd eyewear,
and we are planning further enhancements to our merchandising displays to enable more
immersive experiences. Additionally, we consistently incorporate retail partner feedback directly into our
frames to better serve our end users. 44 display systems have been deployed so far to retailers. Investing in business growth We believe that people care about what they wear on their faces, and because we understand
that customers have diverse preferences about the shape, size and design of their
eyewear, we aim to continuously invest in the design and development of new models
in an effort to provide the consumer with a wide selection of styles, colors, and finishes. We are offering a strong co-op marketing program with retail stores, and intend to
expand our sales, marketing and brand ambassador teams to broaden our brand awareness
and online presence. We will also increase our general and administrative expenses
in the foreseeable future to cover the additional costs for finance, compliance, supply
chain, quality assurance and investor relations as we grow as a public company. Key Performance Indicators Store Count (B2B) We believe that one of the key indicators for our business is the number of retail
stores onboarded to sell Lucyd Lyte. We started onboarding our first retail stores
in June 2021. Currently, we have approximately 350 retail stores selling Lucyd Lyte, primarily located within the United States and Canada, across just over 300 unique wholesale accounts. Based on the existing demand for our products, current
distribution, and recently consummated supply agreements, we anticipate that our products will
be available in a significant number of new third-party retail locations in 2024. We expect this number to gradually increase as we continue to improve our product,
roll out our co-op marketing program and introduce more of our modular display systems into retail stores, to facilitate customer education and product sell-through. The Company has consistently introduced its products in dozens of new points of sale
every quarter; however, we expect a more notable increase with the rollout of our Powered by Lucyd Customer Ratings (B2C) The Lucyd Lyte version 2.0 product is receiving higher ratings online compared to
our previous products, indicating that customers are appreciative of improvements
in product design, functionality and build quality. Many of our version 2.0 variants carry a 4.0/5 rating or higher, compared to most products with an approximate 3.5/5 rating from our previous collection.
This is a strong signal of positive feedback on our products that indicates our ability
to grow and scale with America’s largest online retailer and other platforms. Number of online orders (B2C) For our e-commerce business, we track the number of online orders as an indicator
of the success of our online marketing efforts. As of September 30, 2023, we had 17,173 cumulative total orders from customers online since inception, up from a cumulative total of 10,435 as of September 30, 2022. We believe that the addition of new styles, as well as further investment in brand
awareness, product ambassadors, and influencer campaigns, will enable continued growth
of online orders in the foreseeable future. We expect to allocate a significant portion
of our advertising expenditures towards influencer marketing programs. Components of Results of Operations Net Revenue 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,
on our own website Lucyd.co, and on Amazon.com. Our flagship product line increased in price with the launch of the version 2.0 models,
from $149 to $199 on acetate models, and $179 to $229 on titanium models for non-prescription
glasses across all of our online channels. In addition, we have introduced a minimum
advertised price on the new models of $139 and $159, respectively, to support our retail partners with guaranteed minimum pricing. When adding a prescription lens upgrade to
our glasses on the Lucyd.co website, the price can increase from between $40 for a basic clear prescription lens, all the way up
to $450 for the latest Transitions ® U.S. consumers enjoy free USPS first class postage, with faster delivery options available
for extra cost, for sales processed through our website. For Amazon sales, shipping
is free for U.S consumers while international customers pay shipping charges. Any
costs associated with fees charged by the online platforms (Shopify for Lucyd.co website
and Amazon) are not recharged to customers. We charge applicable state sales taxes
for both online channels and all other marketplaces on which we sell. Our wholesale pricing for eyewear sold to retail store partners and 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 retail orders, no e-commerce fees are applicable. Cost of Goods Sold Cost of goods sold includes the costs incurred to acquire materials, assemble, and
sell our finished products. For retail sales placed on one of our e-commerce channels, these costs include (i)
product costs held at the lesser of cost and net realizable value and inclusive of
inventory reserves, (ii) freight, import, and inspection costs, (iii) optical laboratory
costs for prescription glasses, (iv) merchant fees, (v) fees paid to third-party e-commerce
platforms, and (vi) cost of shipping the product to the consumer. For wholesale sales these costs include (i) product costs stated at the lesser of
cost and net realizable value and inclusive of inventory reserves, (ii) freight, import,
and inspection costs, and (iii) credit card fees. When consumers place their orders directly on our online store, we save approximately
12-15% on marketplace fees than when consumers place their orders directly from third-party
platforms like Amazon and eBay. We expect our cost of goods sold to fluctuate as a percentage of net revenue primarily
due to product mix, customer preferences and resulting demand, customer shipping costs,
and management of our inventory and merchandise mix. Over time we expect our total cost of goods sold on a per unit basis to decrease as
a result of an increase in scale. Increase in scale is achieved as a result of increase
in volumes from both business to consumer and business to business (retail store)
orders. We continue to expand our products with line extensions and new models and
broaden our presence in retail stores carrying our products. Gross Profit and Gross Margin We define gross profit as net revenues less cost of goods sold. Gross margin is gross
profit expressed as a percentage of net revenues. Our gross margin may fluctuate in
the future based on a number of factors, including the cost at which we can obtain,
transport, and assemble our inventory, the rate at our vendor network expands, and
how effective we can be at controlling costs, in any given period. We anticipate our cost of goods sold, on a per unit basis, will decrease with scale,
and this will likely have a positive impact on our gross margins. Gross margins in 2022 and the first half
of 2023 were adversely impacted by supply chain challenges with our previous manufacturer. We received a high number of defective frames
in 2022 despite our rigorous inspection procedure, which involves a third-party inspection agency reviewing 100% of new units as they
come off the production line, testing every pair of glasses for sound quality and basic functionality. Despite this, a large number of
inaccurately-tested frames made it to our customers, precipitating a large number of replacement units and lenses which negatively impacted
margins. To address this problem, we immediately underwent a new manufacturer search program in 2022 which we believe yielded two higher-quality
factories, that are now producing all of our glasses to a higher quality standard. These issues were resolved and remediated by the end
of the second quarter of 2023, and we do not expect such impacts on our gross margins going forward. Additionally, in late 2022, the cost
of nearly all lenses produced by our supplier increased by approximately 10% from previous levels, which adversely impacted our gross
margins in 2023; we do not anticipate similar increases in the cost of lenses in the foreseeable future Operating Expenses Our operating expenses consist primarily of:
● general & administrative expenses that include primarily consulting and payroll expenses,
IT & software, legal, and other administrative expense;
● sales and marketing expenses including cost of online and TV advertising, marketing
agency fees, influencers, trade shows, and other initiatives;
● related party management fees for a range of back-office services and occupancy costs provided by Tekcapital LLC; and
● research and development expenses related to (i) development of new styles and features of our smart eyewear, (ii) development and improvement of our e-commerce website, and (iii) development of our Vyrb social media app for wearables. Interest and Other Income, Net Interest and other income, net, primarily includes interest, dividends, and investment returns from our investments in money market funds
and U.S. Treasury bills, and interest expense paid on convertible note loan due to the Parent. Provision for Income Taxes Provision for income taxes consists of income taxes related to foreign and domestic
federal and state jurisdictions in which we conduct business, adjusted for allowable
credits, deductions, and valuation allowance against deferred tax assets. Results of Operations Three Months Ended September 30,
2023 and 2022 The following table summarizes our results of operations for the three months ended
September 30, 2023 (the “current quarter”) and the three months ended September 30, 2022 (the “prior year quarter”):
Three months ended % of Three months ended % of Change between
the three months ended September 30, 2023
and 2022 % Change
Revenues, net $ 221,875 100 % $ 151,957 100 % $ 69,918 46 %
Less: Cost of Goods Sold (141,531 ) 64 % (129,092 ) 85 % (12,439 ) 10 %
Gross Profit 80,344 36 % 22,865 15 % 57,479 251 %
Operating Expenses:
General and administrative (915,537 ) 413 % (479,983 ) 316 % (435,554 ) 91 %
Sales and marketing (533,902 ) 241 % (568,901 ) 374 % 34,999 -6 %
Research & development (192,701 ) 87 % (304,691 ) 201 % 111,990 -37 %
Related party management fee (35,000 ) 16 % (35,000 ) 23 % - 0 %
Total Operating Expenses (1,677,140 ) 756 % (1,388,575 ) 914 % (288,565 ) 21 %
Other Income (Expense) 45,691 -21 % (735 ) 0 % 46,426 -6316 %
Interest Expense - 0 % (37,876 ) 25 % 37,876 -100 %
Total Other Income (Expense), net 45,691 -21 % (38,611 ) 25 % 84,302 -218 %
Net Loss $ (1,551,105 ) 699 % $ (1,404,321 ) 924 % $ (146,784 ) 10 % Revenue Our revenues for the three months ended September 30, 2023 were $221,875, representing an increase of approximately 46% as compared to revenues of $151,957 during the three months ended September 30, 2022. The increase in revenue was primarily attributable to significant growth in the wholesale channel, with our net wholesale
revenues increasing by approximately 72% over the prior year quarter as we continue to add new independent optical stores
as retail partners and grow our distribution network. Net sales through Amazon and our website also grew significantly from the prior year quarter, increasing by approximately 59% and 26%, respectively. However, the aforementioned increases were partially offset by significant price discounts we granted in the current quarter, in order to respond to aggressive discounts offered by key competing products, and to support our continued market share growth. Additionally, our revenues for the current quarter were somewhat negatively impacted by a slight decrease in spending on marketing by the Company compared to the prior year quarter, due to our decision to preserve more of our marketing budget for the fourth quarter of 2023, in order to align with the October 2023 announcement of our significantly improved Lyte XL collection. On a sequential quarter basis, our current quarter net revenues grew approximately
31% from the three months ended June 30, 2023, after growing approximately 17% from the three months ended March 31, 2023 to the three months ended June 30, 2023. For the three months ended September 30, 2023, approximately 42% of sales were processed on our online store (Lucyd.co), 29% on Amazon.com, and 29% with reseller partners. This sales channel mix negatively impacted our revenue for the current quarter as compared with the prior year quarter, due to the fact we charge an additional $35 to $275 for our prescription lenses available only on Lucyd.co, and that channel represented a higher proportion of our total product sales in the
prior year quarter than in the current quarter. For the three months ended September 30, 2023, we generated $187,086 of revenue from sales of non-prescription frames and accessories, and $34,789 from sales of frames with prescription lenses. All of the $63,027 in sales generated on Amazon.com during the current quarter were for non-prescription frames and accessories, as we only offer prescription lenses through our website. Of the $93,704 in online sales generated through Lucyd.co, $34,789 was related to frames with prescription lenses and $58,915 was related to glasses with non-prescription lenses. For the three months ended September 30, 2022, approximately 49% of sales were processed on our online store (Lucyd.co), 26% on Amazon.com, and 25% with retail store partners. For the three months ended September 30, 2022, we generated $91,661 of revenue from sales of non-prescription frames, and $22,706 from sales of frames with prescription lenses. All of the $33,432 in sales generated on Amazon.com during the period were for non-prescription frames, as we only offer prescription lenses through our website. Of the $80,934 in online sales generated through Lucyd.co, $22,706 was related to frames with prescription lenses and $58,228 was related to glasses with non-prescription lenses. Over time, we expect third-party retail stores will become our primary sales channel as we onboard
additional stores, while the online portion of our sales will gradually decrease on a percentage basis but
remain an important component of our total sales. We currently have a retail store presence in approximately 350 stores. Cost of goods sold Cost of goods sold for the three months ended September 30, 2023 included the cost of frames of $79,410; cost of prescription lenses incurred with our third-party vendor of $76,346; and other items including affiliate referral fees, e-commerce platform fees, commissions, and custom duties and importation fees for a total of $(14,225). Out of $141,531 of our total cost of goods sold for the three months ended September 30, 2023, $76,346 related to orders with prescription lenses, while $65,185 pertained to non-prescription orders. Cost of goods sold for the three months ended September 30, 2022 included the cost of frames of $89,768; cost of prescription lenses incurred with our third-party vendor of $15,482; and affiliate referral fees, sales commission expense, and e-commerce platform fees of $23,719. Of our total cost of goods sold for the prior year quarter, $15,482 related to orders with prescription lenses, while $113,610 pertained to non-prescription orders. Over time, we expect third-party retail stores will become our primary sales channel as we
onboard additional stores, while the online portion of our sales will remain an important component of our
total sales. Consequently, we expect sales of prescription lenses offered through our website to decrease, as our third-party retail partners outfit
our Lyte frames with more prescriptions. We anticipate growth in both wholesale and
e-commerce channel sales for the remainder of 2023 and heading into 2024, and we also expect corresponding growth in total cost of goods sold, primarily from
increases in core product costs due to licensed brand royalties, and the addition of more expensive materials such as recycled packaging, improved hardware, and improved electronic components. We believe this growth will be attributable to several factors: our products continue
to improve with each successive launch, notably in terms of comfort and sound quality;
consumer awareness of our category continues to grow with smart eyewear sales overall increasing every year; and finally, the Company is deploying new marketing efforts focused heavily on influencer content which we believe will better inform consumers about our products. Gross profit Our gross profit was $80,344 for the three months ended September 30, 2023, as compared to $22,865 for the prior year quarter. This increase was primarily due to the combination of (i) increased sales during the current quarter, and (ii) the fact that the prior year
quarter cost of goods sold included significant write-offs of damaged inventory related
to product quality and supply chain issues in 2022, that have since been remediated
and resolved and thus did not recur in the current quarter. These factors were partially
offset by significant discounts offered during the current quarter in order to help drive |
