Our laser consoles consist of the following product lines:
Glaucoma - This product line includes our Cyclo G6® Laser and delivery devices used for the treatment of glaucoma;
Glaucoma - Probes used in our glaucoma product line include our patented MicroPulse P3® probe, G-Probe® and G-Probe Illuminate®; and
Surgical Retina - Our surgical retina probes include our EndoProbe® family of products used in vitrectomy procedures.
Sales and marketing expenses consist primarily of costs of personnel, sales commissions, travel expenses, advertising and promotional expenses.
Impact of COVID-19 to our Business
We expect our results of operations to be impacted for so long as the COVID-19 pandemic continues.
For more information on risks associated with the COVID-19 outbreak, see the section titled "Risk Factors" in Item 1A of Part II.
Gross Profit and Gross Margin.
Gross profit increased by $0.2 million, or 2.6%, from $6.1 million to $6.3 million. Gross margin increased by 0.1% from 45.5% to 45.6%. The increase in gross margin was driven by favorable geographic mix, continuing pricing discipline and an increase in recognized exclusive distribution rights revenue.
Gross margins are expected to fluctuate due to changes in the relative proportion of domestic and international sales, the product mix of sales, introduction of new products, manufacturing variances, total unit volume changes that lead to greater or lesser production efficiencies and other factors.
Research and development ("R&D") expenses increased by $0.2 million, or 15.0%, from $1.7 million to $1.9 million. The increase in spending was primarily attributable to continued investment in PASCAL product line and on new and expanded product portfolio.
Sales and marketing expenses increased by $1.0 million, or 26.4%, from $3.6 million to $4.6 million. The increase was primarily attributable to the targeted expansion of our sales and marketing programs.
General and administrative expenses remained flat at $1.9 million, helped by a decrease in personnel costs but offset by an increase in other expenses.
We recorded an income tax provision of $17 thousand and $8 thousand, respectively.
Our total revenues increased by $1.7 million, or 6.9%, from $25.4 million to $27.1 million. The increase is primarily due to an increase in service and legacy G probes revenues, an increase in recognized exclusive distribution rights revenue and continued strength of Retina product line in domestic market.
Gross Profit and Gross Margin.
Gross margins are expected to fluctuate due to changes in the relative proportion of domestic and international sales, the product mix of sales, introduction of new products, manufacturing variances, total unit volume changes that lead to greater or lesser production efficiencies and other factors.
Research and development ("R&D") expenses increased by $1.2 million, or 42.3%, from $2.8 million to $4.0 million. The increase in spending was primarily attributable to increased level of spending on new product development initiatives and on development of PASCAL product line.
Sales and marketing expenses increased by $2.3 million, or 34.4%, from $6.6 million to $8.9 million. The increase was primarily attributable to the targeted expansion of our sales and marketing programs.
We recorded an income tax provision of $37 thousand and $16 thousand, respectively.
Liquidity is our ability to generate sufficient cash flows from operating activities to meet our obligations and commitments. In addition, liquidity includes the ability to obtain appropriate financing or to raise capital.
As of July 2, 2022, we had cash and cash equivalents of $18.0 million and working capital of $27.1 million compared to cash and cash equivalents of $23.9 million and working capital of $29.6 million as of January 1, 2022.
financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.
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