UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Smaller reporting company | Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes
As of May 10, 2022, there were
Vuzix Corporation
INDEX
2
Part 1: FINANCIAL INFORMATION
Item 1: Consolidated Financial Statements
VUZIX CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited) |
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March 31, | December 31, | |||||
| 2022 |
| 2021 | |||
ASSETS |
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Current Assets |
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Cash and Cash Equivalents | $ | | $ | | ||
Accounts Receivable |
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Inventories, Net |
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Manufacturing Vendor Prepayments |
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Prepaid Expenses and Other Assets |
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Total Current Assets |
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Long-Term Assets |
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Fixed Assets, Net |
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Operating Lease Right-of-Use Asset | | | ||||
Patents and Trademarks, Net |
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Licenses, Net |
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Intangible Asset, Net |
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Other Assets, Net |
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Total Assets | $ | | $ | | ||
LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities |
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Accounts Payable | $ | | $ | | ||
Unearned Revenue |
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Accrued Expenses |
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Income and Other Taxes Payable |
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Operating Lease Right-of-Use Liability | | | ||||
Total Current Liabilities |
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Long-Term Liabilities | ||||||
Operating Lease Right-of-Use Liability | | | ||||
Total Liabilities |
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Stockholders' Equity |
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Common Stock - $ |
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Additional Paid-in Capital |
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Accumulated Deficit |
| ( |
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Treasury Stock, at cost, |
| ( |
| — | ||
Total Stockholders' Equity |
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Total Liabilities and Stockholders' Equity | $ | | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
3
VUZIX CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
Preferred Stock | Common Stock | Additional | Accumulated | Treasury Stock | ||||||||||||||||||||
| Shares |
| Amount |
| Shares |
| Amount |
| Paid-In Capital |
| Deficit |
| Shares |
| Amount |
| Total | |||||||
Balance - January 1, 2022 | — | $ | — |
| | $ | | $ | | $ | ( | — | $ | — | $ | | ||||||||
Stock-Based Compensation Expense |
| — |
| — |
| — |
| — |
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| — |
| — |
| — |
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Stock Option Exercises |
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Purchases of Treasury Stock |
| — |
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| ( |
| ( |
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Net Loss |
| — |
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| — |
| — |
| — |
| ( |
| — |
| — |
| ( | ||||||
Balance - March 31, 2022 |
| — | $ | — |
| | $ | | $ | | $ | ( |
| ( | $ | ( | $ | |
Preferred Stock | Common Stock | Additional | Accumulated | Treasury Stock | ||||||||||||||||||||
| Shares |
| Amount |
| Shares |
| Amount |
| Paid-In Capital |
| Deficit |
| Shares |
| Amount |
| Total | |||||||
Balance - January 1, 2021 | | $ | |
| | $ | | $ | | $ | ( | — | $ | — | $ | | ||||||||
Stock-Based Compensation Expense |
| — |
| — |
| — |
| — |
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| — |
| — |
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Stock Option Exercises |
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Stock Warrant Exercises |
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Proceeds from Common Stock Offerings |
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Direct Costs of Common Stock Offerings |
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| ( |
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Shared Redeemed to Cover Employee Tax Withholdings |
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| ( |
| ( |
| ( |
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| — |
| — |
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Preferred Stock Converted & Preferred Dividend Settlement |
| ( |
| ( |
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| ( |
| — |
| — |
| — |
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Net Loss (as Restated) |
| — |
| — |
| — |
| — |
| — |
| ( |
| — |
| — |
| ( | ||||||
Balance - March 31, 2021 (as Restated) |
| — | $ | — |
| | $ | | $ | | $ | ( |
| — | $ | — | $ | |
The accompanying notes are an integral part of these consolidated financial statements.
4
VUZIX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31, | ||||||
(as Restated) | ||||||
| 2022 |
| 2021 | |||
Sales: |
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Sales of Products | $ | | $ | | ||
Sales of Engineering Services |
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Total Sales |
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Cost of Sales: |
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Cost of Sales - Products Sold |
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Cost of Sales - Engineering Services |
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Total Cost of Sales |
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Gross Profit (exclusive of depreciation shown separately below) |
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Operating Expenses: |
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Research and Development |
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Selling and Marketing |
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General and Administrative |
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Depreciation and Amortization |
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Loss on Fixed Asset Disposal |
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Impairment of Patents and Trademarks |
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Total Operating Expenses |
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Loss From Operations |
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Other Income (Expense): |
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Investment Income |
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Income and Other Taxes |
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Foreign Exchange Loss |
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Total Other Expense, Net |
| ( |
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Loss Before Provision for Income Taxes |
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Provision for Income Taxes |
| — |
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Net Loss |
| ( |
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Basic and Diluted Loss per Common Share | ( | ( | ||||
Weighted-average Shares Outstanding - Basic and Diluted |
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The accompanying notes are an integral part of these consolidated financial statements.
5
VUZIX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31, | ||||||
(as Restated) | ||||||
| 2022 |
| 2021 | |||
Cash Flows from Operating Activities |
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Net Loss | $ | ( | $ | ( | ||
Non-Cash Adjustments |
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Depreciation and Amortization |
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Amortization of Software Development Costs and Prepaid Licenses in Cost of Sales - Products |
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Stock-Based Compensation |
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Impairment of Patents and Trademarks |
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Loss on Fixed Asset Disposal |
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(Increase) Decrease in Operating Assets |
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Accounts Receivable |
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Revenues in Excess of Billings | — | ( | ||||
Inventories |
| ( |
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Manufacturing Vendor Prepayments |
| ( |
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Prepaid Expenses and Other Assets |
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Increase (Decrease) in Operating Liabilities |
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Accounts Payable |
| ( |
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Accrued Expenses |
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Unearned Revenue |
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Income and Other Taxes |
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Net Cash Flows Used in Operating Activities |
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Cash Flows from Investing Activities |
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Purchases of Fixed Assets |
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Investments in Patents and Trademarks |
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Investments in Licenses, Intangible and Other Assets |
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Net Cash Flows Used in Investing Activities |
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Cash Flows from Financing Activities |
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Proceeds from Exercise of Warrants |
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Proceeds from Exercise of Stock Options |
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Proceeds from Common Stock Offering, Net | — | | ||||
Purchases of Treasury Stock | ( | — | ||||
Preferred Dividend Settlement Payment |
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Employee Tax Withholdings Payment |
| — |
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Net Cash Flows (Used in) Provided from Financing Activities |
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Net (Decrease) Increase in Cash and Cash Equivalents |
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Cash and Cash Equivalents - Beginning of Period |
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Cash and Cash Equivalents - End of Period | $ | | $ | | ||
Supplemental Disclosures |
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Unamortized Common Stock Expense included in Prepaid Expenses and Other Assets | $ | | $ | | ||
Stock-Based Compensation Expense - Expensed less Previously Issued | | |
The accompanying notes are an integral part of these consolidated financial statements.
6
VUZIX CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Basis of Presentation
The accompanying unaudited consolidated financial statements of Vuzix Corporation (“the Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, the unaudited consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Certain re-classifications may have been made to prior periods to conform with current reporting. The results of the Company’s operations for the three months ended March 31, 2022 are not necessarily indicative of the results of the Company’s operations for the full fiscal year or any other period.
The accompanying interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto of the Company as of December 31, 2021, as reported in the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2022.
Restatement
As described in additional detail in Note 14 to the financial statements included in its 2021 Form 10-K, the Company restated its previous unaudited quarterly results in the Form 10-K for the year ended December 31, 2021. Previously filed 2021 quarterly reports on Form 10-Q for the periods affected by the restatement were not amended. See Note 14, Long-Term Incentive Plan and Note 19, Quarterly Financial Information (Unaudited) of the Notes to the consolidated financial statements in the 2021 Form 10-K for the impact of these adjustments on each of the quarterly periods in fiscal year 2021.
The effect of these changes on non-cash stock-based compensation expense included in 2021 unaudited quarterly operating results was as follows:
| Q1-2021 | |
Additional Paid-in Capital |
| Increase of $ |
Research and Development Expense | Increase of $ | |
Sales and Marketing |
| Increase of $ |
General and Administrative | Increase of $ | |
Net Loss |
| Increase of $ |
Loss per Share | Increase of $ |
Customer Concentrations
For the three months ended March 31, 2022,
As of March 31, 2022,
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Treasury Stock
Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares will be credited or charged to paid-in capital in excess of par value using the average-cost method.
Recent Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). ASU 2016-13 provides for a new impairment model which requires measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to accounts receivable. ASU 2016-13 will become effective for the Company on January 1, 2023 and early adoption is permitted. The Company does not anticipate that the adoption of this standard will have a material impact on our consolidated financial statements.
Note 2 – Revenue Recognition and Contracts with Customers
Disaggregated Revenue
The Company’s total revenue was comprised of
Three Months Ended | ||||||
March 31, | ||||||
| 2022 |
| 2021 | |||
Revenues |
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Smart Glasses Sales | $ | | $ | | ||
Engineering Services |
| — |
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Total Revenue | $ | | $ | |
Significant Judgments
Under Topic 606 “Revenue from Contracts with Customers”, we use judgments that could potentially impact both the timing of our satisfaction of performance obligations and our determination of transaction prices used in determining revenue recognized by major product line. Such judgments include considerations in determining our transaction prices and when our performance obligations are satisfied for our standard product sales that include an end-user 30-day right to return if not satisfied with product and general payment terms that are between Net 30 and 60 days. For our engineering services, performance obligations are recognized over time using the input method and the estimated costs to complete each project are considered significant judgments.
Performance Obligations
Revenues from our performance obligations are typically satisfied at a point in time for Smart Glasses, Waveguides and Display Engines, and our OEM Products, which are recognized when the customer obtains control and ownership, which is generally upon shipment. The Company also records revenue for performance obligations relating to our engineering services over time by using the input method measuring progress toward satisfying the performance obligations. Satisfaction of our performance obligations related to our engineering services is measured by the Company’s costs incurred as a percentage of total expected costs to project completion as the inputs of actual costs incurred by the Company are directly correlated with progress toward completing the contract. As such, the Company believes that our methodologies for recognizing revenue over time for our engineering services correlate directly with the transfer of control of the underlying assets to our customers.
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Our standard product sales include a
The following table presents a summary of the Company’s sales by revenue recognition method as a percentage of total net sales for the three months ended March 31, 2022:
| % of Total Net Sales | ||||
2022 |
| 2021 |
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Point-in-Time |
| | % | | % |
Over Time – Input Method |
| - | % | | % |
Total |
| | % | | % |
Remaining Performance Obligations
As of March 31, 2022, the Company had
Note 3 – Loss Per Share
Basic loss per share is computed by dividing the loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution from the assumed exercise of stock options and warrants, and the conversion of convertible preferred shares. During periods of net loss, all common stock equivalents are excluded from the diluted EPS calculation because they are anti-dilutive. Since the Company reported a net loss for the three months ended March 31, 2022 and 2021, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive. At March 31, 2022 and 2021, there were
Note 4 – Inventories, Net
Inventories are stated at the lower of cost and net realizable value, and consisted of the following:
March 31, | December 31, | |||||
| 2022 |
| 2021 | |||
Purchased Parts and Components | $ | | $ | | ||
Work-in-Process |
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Finished Goods |
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Less: Reserve for Obsolescence |
| ( |
| ( | ||
Inventories, Net | $ | | $ | |
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Note 5 – Licenses, Net
March 31, | December 31, | |||||
| 2022 |
| 2021 | |||
Licenses | $ | | $ | | ||
Additions |
| — |
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Less: Accumulated Amortization |
| ( |
| ( | ||
Licenses, Net | $ | | $ | |
The Company acquired
Note 6 – Intangible Asset, Net
| March 31, |
| December 31, | |||
2022 | 2021 | |||||
Intangible Asset | $ | | $ | | ||
Less: Accumulated Amortization |
| ( |
| ( | ||
Intangible Asset, Net | $ | | $ | |
On October 4, 2018, the Company entered into amendment No. 1 to agreements (the “TDG Amendment”) with TDG Acquisition Company, LLC (“TDG”), aka Six15 Technologies, LLC. The TDG Amendment amends certain provisions of prior agreements between Vuzix and TDG, including an asset purchase agreement dated June 15, 2012, and an authorized reseller agreement dated June 15, 2012.
Pursuant to the TDG Amendment, the Company is permitted to engage in sales of heads-up display components or subsystems (and any services to support such sale) for incorporation into a finished good or system for sale to military organizations, subject to certain conditions. The Company is also permitted to sell its products to defense and security organizations that include business customers and governmental entity customers that primarily provide security and defense services, including police, fire fighters, EMTs, other first responders, and homeland and border security. The Company will owe TDG commissions with respect to all such sales until June 15, 2022, when the amendment and original non-compete agreements expire, after which the Company will be permitted to sell any product to any customer world-wide without owing any commission to TDG.
Total commissions expense under this agreement for the three months ended March 31, 2022 and 2021 was $
Total amortization expense for this intangible asset for the three months ended March 31, 2022 and 2021 was $
10
Note 7 - Other Assets
March 31, | December 31, | |||||
| 2022 |
| 2021 | |||
Private Corporation Investments (at cost) | $ | | $ | | ||
Software Development Costs | | | ||||
Additions | | | ||||
Less: Accumulated Amortization | ( | ( | ||||
Software Development Costs, Net | | | ||||
Unamortized Common Stock Expense included in Long-Term Prepaid Expenses | | | ||||
Total Other Assets | $ | | $ | |
During 2020, the Company invested $
Note 8 – Accrued Expenses
Accrued expenses consisted of the following:
March 31, | December 31, | |||||
| 2022 |
| 2021 | |||
Accrued Wages and Related Costs | $ | | $ | | ||
Accrued Professional Services |
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Accrued Warranty Obligations |
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Other Accrued Expenses |
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| — | ||
Total | $ | | $ | |
The Company has warranty obligations in connection with the sale of certain of its products. The warranty period for its products is generally
The changes in the Company’s accrued warranty obligations for the three months ended March 31, 2022 and the balance as of December 31, 2021 were as follows:
Accrued Warranty Obligations at December 31, 2021 | $ | | |
Reductions for Settling Warranties |
| ( | |
Warranties Issued During Year |
| | |
Accrued Warranty Obligations at March 31, 2022 | $ | |
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Note 9 – Income Taxes
The Company’s effective income tax rate is a combination of federal, state and foreign tax rates and differs from the U.S. statutory rate due to taxes on foreign income, permanent differences including tax-exempt interest, and the resolution of tax uncertainties, offset by a valuation allowance against U.S. deferred income tax assets.
Note 10 – Capital Stock
Preferred stock
The Board of Directors is authorized to establish and designate different series of preferred stock and to fix and determine their voting powers and other rights and terms. A total of
Common Stock
The Company’s authorized common stock consists of
Treasury Stock
On March 2, 2022, our Board of Directors approved the repurchase by the Company of up to an aggregate of $
Note 11 – Stock-Based Compensation
A summary of stock option activity related to the Company’s standard employee incentive plan, excluding options awarded under the Long-Term Incentive Plan (LTIP), for the three months ended March 31, 2022 is as follows:
Weighted | |||||
Number of | Average | ||||
| Options |
| Exercise Price | ||
Outstanding at December 31, 2021 |
| | $ | | |
Granted |
| |
| | |
Exercised |
| ( |
| | |
Expired or Forfeited |
| ( |
| | |
Outstanding at March 31, 2022 |
| | $ | |
The weighted average remaining contractual term for all options as of March 31, 2022 and December 31, 2021 was
As of March 31, 2022, there were
As of March 31, 2022, there were
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The weighted average fair value of option grants was calculated using the Black-Scholes-Merton option pricing method. At March 31, 2022, the Company had $
For the three months ended March 31, 2022 and 2021, the Company recorded total stock-based compensation expense, including stock awards but excluding awards under the Company’s LTIP, of $
Note 12 – Long-Term Incentive Plan
On March 17, 2021, the Company granted options to purchase a total of
The fair value of option grants was calculated using a Monte Carlo simulation on the equity market capitalization tranches and the Black-Scholes-Merton option pricing method on the operational milestone tranches. As of March 31, 2022, we had $
The unvested remaining equity market capitalization and operational milestones under the LTIP with their total related option grants and criteria achievement weightings of the options available for meeting a target are shown in the following table. Of the total
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for the achievement of annual revenue targets, and
Award Potential | Criteria Achievement Weighting | ||
Options Available | Equity Market | Last Twelve Months Revenue | Last Twelve Months EBITDA |
| $ | $ | |
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Note 13 – Litigation
We are not currently involved in any actual or pending legal proceeding or litigation and we are not aware of any such material proceedings contemplated by or against us or involving our property.
Note 14 – Right-of-Use Assets and Liabilities
Future lease payments under operating leases as of March 31, 2022 were as follows:
2022 | $ | | |
2023 |
| | |
2024 |
| | |
Total Future Lease Payments |
| | |
Less: Imputed Interest |
| ( | |
Total Lease Liability Balance | $ | |
Operating lease costs under the operating leases totaled $
As of March 31, 2022, the weighted average discount rate was
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of financial condition and results of operations in conjunction with the financial statements and related notes appearing elsewhere in this quarterly report and in our Annual Report on Form 10-K for the year ended December 31, 2021.
As used in this report, unless otherwise indicated, the terms “Company,” “Vuzix”, “management,” “we,” “our,” and “us” refer to Vuzix Corporation.
Critical Accounting Policies and Significant Developments and Estimates
The discussion and analysis of our financial condition and results of operations is based on our unaudited consolidated financial statements and related notes appearing elsewhere in this quarterly report. The preparation of these
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statements in conformity with GAAP requires the appropriate application of certain accounting policies, many of which require us to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements, including the statement of operations, balance sheet, cash flow and related notes. We continually evaluate our estimates used in the preparation of our financial statements, including those related to revenue recognition, bad debts, inventories, warranty reserves, product warranty, carrying value of long-lived assets, fair value measurement of financial instruments, valuation of stock compensation awards, achievement of equity market capitalization and probability of operational milestones being achieved under our LTIP, and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not apparent from other sources. Since future events and their impact cannot be determined with certainty, the actual results will inevitably differ from our estimates. Such differences could be material to the consolidated financial statements.
We believe that our application of accounting policies, and the estimates inherently required therein, are reasonable. We periodically re-evaluate these accounting policies and estimates and make adjustments when facts and circumstances dictate a change. Historically, we have found our application of accounting policies to be appropriate, and actual results have not differed materially from those determined using necessary estimates.
Management believes certain factors and trends are important in understanding our financial performance. The critical accounting policies, judgments and estimates that we believe have the most significant effect on our consolidated financial statements are:
● | Valuation of inventories; |
● | Carrying value of long-lived assets; |
● | Software development costs; |
● | Revenue recognition; |
● | Product warranty; |
● | Stock-based compensation; and |
● | Income taxes. |
Our accounting policies are more fully described in the notes to our consolidated financial statements included in this quarterly report and in our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes in our accounting policies for the three months ended March 31, 2022.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, an effect on our financial condition, financial statements, revenues or expenses.
Business Matters
We are engaged in the design, manufacture, marketing and sale of wearable computing devices and augmented reality wearable display devices, also referred to as head mounted displays (or HMDs), heads-up displays (HUDs) or near-eye displays, in the form of Smart Glasses and Augmented Reality (AR) glasses. Our wearable display devices are worn like eyeglasses or attach to a head-worn mount. These devices typically include cameras, sensors, and a computer that enable the user to view, record and interact with video and digital content, such as computer data, the Internet, social media or entertainment applications. Our wearable display products integrate display technology with our advanced optics to produce compact high-resolution display engines, less than half an inch diagonally, which when viewed
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through our Smart Glasses products create virtual images that appear comparable in size to that of a computer monitor or a large-screen television.
With respect to our Smart Glasses and AR products, we are focused on the enterprise, industrial, commercial, security, first responder, medical markets, and, to a lesser degree, defense markets. We also provide custom solutions and engineering services to third parties, including OEMs, of waveguides to enable fully integrated wearable display systems, including HMDs to commercial, industrial and defense customers. We do not offer “work for hire” services per se but rather offer our engineering services for projects that we expect could result in advancing our technology and potentially lead to long-term supply or OEM relationships.
All of the mobile displays and wearable and mobile electronics markets in which we compete, including mobile and wearable displays and electronics, have been and continue to be subject to consistent and rapid technological change, with ever greater capabilities and performance, including mobile devices with larger screen sizes and improved display resolutions as well as, in many cases, declining prices on mobile devices. As a result, we must continue to improve our products’ performance and lower our costs. We believe our intellectual property portfolio gives us a leadership position in the design and manufacturing of micro-display projection engines, waveguides, mechanical packaging, ergonomics, and optical systems.
Recent Accounting Pronouncements
See Note 1 to the consolidated financial statements.
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Results of Operations
Comparison of Three Months Ended March 31, 2022 and 2021
The following table compares the Company’s consolidated statements of operations data for the three months ended March 31, 2022 and 2021:
Three Months Ended March 31, | ||||||||||||
|
|
| Dollar |
| % Increase |
| ||||||
2022 | 2021 | Change | (Decrease) |
| ||||||||
(as Restated) | ||||||||||||
Sales: |
|
|
|
|
|
|
|
| ||||
Sales of Products | $ | 2,503,051 | $ | 3,805,170 | $ | (1,302,119) |
| (34) | % | |||
Sales of Engineering Services |
| — |
| 110,219 |
| (110,219) |
| (100) | % | |||
Total Sales |
| 2,503,051 |
| 3,915,389 |
| (1,412,338) |
| (36) | % | |||
Cost of Sales: |
|
|
|
|
|
|
|
| ||||
Cost of Sales - Products Sold |
| 1,863,697 |
| 2,819,971 |
| (956,274) |
| (34) | % | |||
Cost of Sales - Engineering Services |
| — |
| 15,827 |
| (15,827) |
| (100) | % | |||
Total Cost of Sales |
| 1,863,697 |
| 2,835,798 |
| (972,101) |
| (34) | % | |||
Gross Profit (exclusive of depreciation shown separately below) |
| 639,354 |
| 1,079,591 |
| (440,237) |
| (41) | % | |||
Gross Profit % |
| 26 | % |
| 28 | % |
|
|
|
| ||
Operating Expenses: |
|
|
|
|
|
|
|
| ||||
Research and Development |
| 3,103,444 |
| 2,205,318 |
| 898,126 |
| 41 | % | |||
Selling and Marketing |
| 2,023,435 |
| 1,303,430 |
| 720,005 |
| 55 | % | |||
General and Administrative |
| 5,453,833 |
| 6,027,757 |
| (573,924) |
| (10) | % | |||
Depreciation and Amortization |
| 422,931 |
| 517,412 |
| (94,481) |
| (18) | % | |||
Impairment of Patents and Trademarks |
| 49,603 |
| 27,731 |
| 21,872 |
| 79 | % | |||
Loss on Fixed Asset Disposal |
| — |
| 83,908 |
| (83,908) |
| (100) | % | |||
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