Ann: Quarterly Activities Report and Appendix 4C, page-69

A few observations from the quarterly - some of which have already been covered in this thread. Apologies in advanced for being long-winded:

Production exceeded forecasts - the report from the previous quarter estimated $1.6m, vs. true expenditure of $1.776m. The main catalyst (IMO) for the SP drop 3 months ago was a forecast of $1.5m, and only $475k actually being spent on product manufacturing - i.e. production was 68% lower than expected last quarter. This quarter it was 11% higher.

Production of over 17,000 IQbuds and COGS of ~$1.8 million = ~$104 to produce and distribute each unit. It will be interesting to see if the cost per unit decreases with greater volume next quarter.

Nuheara held 6,433 units in their warehouses on June 30. This means approx. 10,500 units were shipped for the quarter. A maximum of 6,000 of these went towards fulfilling backorders - so a minimum of 4,500 units sold this quarter at a maximum average of $378/ea, after backorders were cleared (which was announced on May 30).

With $475k being spent on production last quarter, at most 4,500 units had been produced to March 30 (per unit cost was likely higher) - i.e. max. 9,000 sales for the June quarter @ min. $189/ea. Best Buy also commenced sales on February 21, and appeared to be receiving at least 50% of production. Also given the comments on IGG and HC at the time, it's safe that less than half of early backers had received their orders. That's saying the June quarter sales volume was probably much closer to 4,500 than 9,000.

News of the Hong Kong warehouse is significant. The Asia Pacific earphone & headphone market (which includes China and India) is roughly the same size as the North American market, with over 25% of global sales each. The key difference between the two markets is that Asia Pacific much more heavily favours earphones (over 50% of revenue, according to Grand View Research), whereas the US market favours headphones (77% of volume, according to WiFore). Also interesting to note than the US warehouse has shifted location from New York to Los Angeles. I noted a couple of months ago that distribution appeared to be coming out of California, not New York, judging from the shipping dates on Best Buy.