Filed pursuant to Rule 424(b)(5)

Registration No. 333-252673

 

PROSPECTUS SUPPLEMENT

To the Prospectus dated February 21, 2021

 

4,146,342 Shares

Common Stock

 

 

 

Vuzix Corporation is offering 4,146,342 shares of our common stock pursuant to this prospectus supplement and the accompanying prospectus.

 

Our common stock is listed on the Nasdaq Capital Market under the symbol “VUZI.” On March 25, 2021, the last reported sale price of our common stock on the Nasdaq Capital Market was $26.32 per share.

 

Investing in our securities involves significant risks. See “Risk Factors” beginning on page S-5 of this prospectus supplement and in the documents incorporated by reference into this prospectus supplement.

  

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus supplement. Any representation to the contrary is a criminal offense.

 

    Per
Share
    Total  
Offering price   $ 20.50      $ 85,000,011   
Underwriting discounts and commissions (1)   $ 1.1275      $ 4,675,000   
Proceeds, before expenses, to us(2)   $ 19.37250      $ 80,325,010   

 

(1) We have also agreed to reimburse the representative of the underwriter for certain expenses.  See “Underwriting.”
(2)

Assumes no exercise of the underwriters’ over-allotment option to purchase shares of our common stock we

Granted to the underwriters described below.

 

We have granted the underwriters an over-allotment option, exercisable for a period of 30 days from the date of closing of this offering, to purchase up to an aggregate of 621,951 additional shares of common stock.

 

The underwriters expect to deliver our shares to purchasers in the offering on or about March 30, 2021.

 

 

 

 

Sole Book-Running Manager

 

BTIG

 

Co-Manager

 

Craig-Hallum

 

 

 

The date of this prospectus supplement is March 25, 2021. 

 

 

 

 

TABLE OF CONTENTS 

 

PROSPECTUS SUPPLEMENT Page  
   
ABOUT THIS PROSPECTUS SUPPLEMENT S-1
PROSPECTUS SUPPLEMENT SUMMARY S-2
THE OFFERING S-4
RISK FACTORS S-5
FORWARD-LOOKING INFORMATION S-6
USE OF PROCEEDS S-7
CAPITALIZATION S-8
DILUTION S-9
PLAN OF DISTRIBUTION  
LEGAL MATTERS S-13
EXPERTS S-13
WHERE YOU CAN FIND MORE INFORMATION S-13
INCORPORATION OF DOCUMENTS BY REFERENCE S-14

  

PROSPECTUS Page
   
ABOUT THIS PROSPECTUS 3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 3
ABOUT VUZIX 4
RISK FACTORS 5
USE OF PROCEEDS 5
DESCRIPTION OF COMMON STOCK 5
DESCRIPTION OF PREFERRED STOCK 6
DESCRIPTION OF WARRANTS 7
DESCRIPTION OF UNITS 8
PLAN OF DISTRIBUTION 8
EXPERTS 10
WHERE YOU CAN FIND MORE INFORMATION 10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 11

 

You should rely only on the information incorporated by reference or provided in this prospectus supplement and the accompanying prospectus. Neither we nor the underwriter have authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus supplement and the accompanying prospectus do not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this prospectus supplement and the accompanying prospectus in any jurisdiction where it is unlawful to make such offer or solicitation. You should assume that the information contained in this prospectus supplement or the accompanying prospectus, or any document incorporated by reference in this prospectus supplement or the accompanying prospectus, is accurate only as of the date of those respective documents. Neither the delivery of this prospectus supplement nor any distribution of securities pursuant to this prospectus supplement shall, under any circumstances, create any implication that there has been no change in the information set forth or incorporated by reference into this prospectus supplement or in our affairs since the date of this prospectus supplement. Our business, financial condition, results of operations and prospects may have changed since that date.

 

i 

 

 

ABOUT THIS PROSPECTUS SUPPLEMENT

 

This prospectus supplement and the accompanying prospectus relate to the offering of our common stock. Before buying any of the common stock that we are offering, we urge you to carefully read this prospectus supplement and the accompanying prospectus, together with the information incorporated by reference as described under the headings “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” in this prospectus supplement. These documents contain important information that you should consider when making your investment decision.

 

This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference herein or therein. The second part, the accompanying prospectus, provides more general information. Generally, when we refer to this prospectus, we are referring to both parts of this document combined. To the extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information contained in any document incorporated by reference into this prospectus supplement that was filed with the Securities and Exchange Commission (the “SEC”), before the date of this prospectus supplement, on the other hand, you should rely on the information in this prospectus supplement. If any statement in one of these documents is inconsistent with a statement in another document having a later date—for example, a document incorporated by reference into this prospectus supplement—the statement in the document having the later date modifies or supersedes the earlier statement.

 

We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference herein or in the accompanying prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreement, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.

 

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus and any free writing prospectuses we may provide to you in connection with this offering. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell or seeking an offer to buy our common stock under this prospectus in any jurisdiction where the offer or sale is not permitted. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities and the distribution of this prospectus outside the United States. Furthermore, you should not consider this prospectus to be an offer or solicitation relating to the securities if the person making the offer or solicitation is not qualified to do so, or if it is unlawful for you to receive such an offer or solicitation. You should not assume that the information contained in this prospectus or any free writing prospectus is accurate as of any date other than the date on the front cover of those documents, or that the information contained in any document incorporated by reference is accurate as of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those dates. It is important for you to read and consider all information contained in this prospectus supplement, the accompanying prospectus, the documents incorporated by reference herein and therein, and any free writing prospectus prepared by or on behalf of us that we may authorize for use in connection with this offering, in their entirety, before making an investment decision. You should also read and consider the information in the documents to which we have referred you in the sections entitled “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” in this prospectus supplement and in the accompanying prospectus.

 

This prospectus supplement, the accompanying prospectus and the information incorporated herein and therein by reference includes trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included or incorporated by reference into this prospectus supplement or the accompanying prospectus are the property of their respective owners.

 

S-1

 

 

Unless the context indicates otherwise, in this prospectus supplement and the accompanying prospectus the terms, the terms “Vuzix,” the “Company,” “we,” “our” or “us” in this prospectus refer to Vuzix Corporation and its wholly-owned subsidiary.

 

PROSPECTUS SUPPLEMENT SUMMARY

 

This summary highlights selected information about our company, this offering and information appearing elsewhere in this prospectus supplement, in the accompanying prospectus, and in the documents we incorporate by reference. This summary is not complete and does not contain all the information that you should consider before investing in our common stock. You should read this entire prospectus supplement and the accompanying prospectus carefully, including the “Risk Factors” contained in this prospectus supplement beginning on page S-5, and the risk factors, financial statements and notes incorporated by reference herein, before making an investment decision. This prospectus supplement may add to, update or change information in the accompanying prospectus.

 

Company Overview

 

We are engaged in the design, manufacture, marketing and sale of augmented reality wearable display and computing devices, also referred to as head mounted displays (or HMDs, but also known as near-eye displays), in the form of Smart Glasses and Augmented Reality (AR) glasses. Our AR wearable display devices are worn like eyeglasses or attach to a head worn mount. These devices typically include a wearable computer, cameras, and sensors that enable the user to view, record and interact with video and digital content, such as computer data, the Internet, enterprise data, social media or entertainment applications. Our wearable display products integrate micro-display technology with our advanced optics to produce compact high-resolution display engines, less than half an inch diagonally, which when viewed through our Smart Glasses and AR products create virtual images that appear comparable in size to that of a computer monitor or a large-screen television. This includes the representative forms such as augmented reality (AR), mixed reality (MR) and virtual reality (VR) and the areas interpolated among them. Extended reality (XR) is a term referring to all real-and-virtual combined environments. Our wearable display products cover the entire spectrum from "the complete real" to "the complete virtual" in the concept of reality–virtuality.

 

For AR glasses, historically, see-through HMDs displayed the real world using semi-transparent optics placed in front of the user’s eyes. VR users wore large goggles which sealed their view of the outside world. Both types of these HMDs were large and bulky and as a result, they had little mass-market appeal. We have developed thin optics, called waveguides, that are fully see-through and enable miniature display engines to be mounted in the temples of the HMD which allows the form factor of the Smart Glasses to be comparable to conventional eyeglasses. Our Smart Glasses and AR glasses are designed for all day use cases and are small enough to fit in a user’s pocket or purse.

 

We believe that our waveguide optics and display engines offer a number of significant advantages over other wearable display solutions, including higher contrast, greater power efficiency, less weight, more compact size, and high brightness images for use outdoors. We also believe that our waveguide optics give us a substantial advantage over competitors’ optics, including other waveguides, because our solution allows us to produce optics that are fully transparent when off while also delivering the high brightness required for AR and enterprise Smart Glasses applications.

 

We believe that key growth areas for us are the enterprise, medical, consumer electronics, OEM, defense and security markets. We are addressing most of these markets by developing and selling our own finished products and building a growing eco-system of software and services internally and with our value added resellers, or VARs, developers and end customers. Another potential channel to these markets we are developing includes supplying mass production of waveguide optics and display engines to select third parties to use in their products.

 

We believe that our waveguides and compact display engine technologies are a key differentiator for enabling next generation AR and Smart Glasses hardware for the enterprise and consumer segments because they will ultimately allow us to make HMDs nearly indistinguishable from regular eyeglasses.

 

S-2

 

 

We have developed our own intellectual property portfolio that includes patents, over 22 years of manufacturing know-how, software, proprietary processes, materials and equipment to create high performance waveguides, and near-eye display products. We believe our technology, intellectual property portfolio and position in the marketplace give us a leadership position in AR and Smart Glasses products and waveguide optics and display engine technology.

 

Recent Developments

 

On January 2, 2015, the Company entered into a Series A Preferred Stock Purchase Agreement with Intel Corporation (the "Purchaser"), whereby the Company sold an aggregate of 49,626 shares of the Company’s Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), at an aggregate purchase price of $24,813,000. Each share of Series A Preferred Stock was convertible, at the option of the Purchaser, into 100 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a conversion price of $5.00 per share. Each share of Series A Preferred Stock was entitled to receive dividends at a rate of 6% per annum, compounded quarterly and payable in cash or in kind, at the Company’s sole discretion. On January 28, 2021, the Purchaser converted all of its shares of Series A Preferred Stock into 4,962,600 shares of Common Stock. The shares of Series A Preferred were retired and cannot be reissued. On the same date, the Company and the Purchaser entered into a Dividend Settlement Agreement pursuant to which the Purchaser agreed to accept $10,000,000 in cash in full payment of all accrued Series A Preferred Stock dividends in the approximate amount of $10,800,000.

 

Between September 30, 2020 and March 19, 2021, 99.2% of the Company’s 10,159,575 outstanding warrants as of September 30, 2020 have been exercised for cash by their holders resulting in total proceeds received of approximately $48.5 million by the Company. As of March 20, 2021, the Company has only 80,550 warrants outstanding which could, if exercised, result in further proceeds of $362,880.

 

Corporate Information

 

Our principal executive offices are located at 25 Hendrix Road, West Henrietta, New York 14586. Our telephone number is (585) 359-5900. We maintain an Internet website at www.vuzix.com. The information contained on, connected to or that can be accessed via our website is not part of this prospectus. We have included our website address in this prospectus as an inactive textual reference only and not as an active hyperlink.

 

S-3

 

 

THE OFFERING

 

Common stock we are offering   4,146,342 shares of common stock (or 4,768,293 shares if the underwriters exercise their over-allotment option)
     
Common stock to be outstanding after this offering   62,121,556 shares of common stock (or 62,743,507 shares if the underwriters exercise their over-allotment option)
     
Offering price   $20.50 per share  of common stock
     
Over-allotment option   We have granted the underwriters an over-allotment option, exercisable for 30 days after the date of closing of this offering, to purchase up to 621,951 additional shares of common stock (equal to 15% of the common stock sold in the offering).
     
Use of proceeds   We estimate the net proceeds to us from this offering will be approximately $80 million, after deducting underwriting discounts and fees and estimated offering expenses payable by us. We intend to use the net proceeds from the sale of the shares of common stock offered by this prospectus for general corporate purposes, including working capital to accelerate the building of finished goods inventory to address increasing customer demand, new technology development, new product development, purchases of technology, expansion of our software offerings, and possible related acquisitions of other firms.
     
Nasdaq Capital Market symbol   Our common stock is listed on the Nasdaq Capital Market under the symbol “VUZI.”
     
Risk factors   Investing in our securities involves significant risks. See “Risk Factors” beginning on page S-5 of this prospectus supplement and on page 5 of the accompanying prospectus and the documents incorporated by reference herein.

  

Unless we indicate otherwise, all information in this prospectus is based on shares of common stock outstanding as of March 25, 2021 and excludes, as of that date:

 

  · Approximately 9,390,458 shares of our common stock issuable upon exercise of outstanding stock options under our equity incentive plans having a weighted average exercise price of $14.77 per share; and

 

  · Approximately 80,550 shares of our common stock issuable upon the exercise of outstanding warrants, with a weighted average exercise price of $4.51 per share.

 

S-4

 

 

RISK FACTORS

 

Any investment in our securities involves a high degree of risk. Investors should carefully consider the risks described below and all of the information contained or incorporated by reference in this prospectus, including the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2020, before deciding whether to purchase the securities offered hereby. Our business, financial condition, results of operations and prospects could be materially and adversely affected by these risks.

 

Risks Relating to this Offering and Our Securities

 

You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.

 

Since the price per share of our common stock being offered is higher than the net tangible book value per share of our common stock, you will suffer substantial dilution in the net tangible book value of the common stock you purchase in this offering. Based on the public offering price of $20.50 per share, and after deducting the underwriting discount and estimated offering expenses payable by us, if you purchase shares of common stock in this offering, you will suffer immediate and substantial dilution of $18.09 per share in the net tangible book value of the common stock. See the section entitled “Dilution” in this prospectus for a more detailed discussion of the dilution you will incur if you purchase common stock in this offering.

 

The trading price of our common stock may to continue to be volatile.

 

The trading price of our common stock has been highly volatile and could continue to be subject to wide fluctuations in response to various factors, some of which are beyond our control. During the 12 months prior to the date of this prospectus, our common stock has traded at a low of $0.93 and a high of $30.65.  From the beginning of 2021 through March 22, 2021, our common stock has traded at a low of $8.19 and a high of $30.65. The stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Public perception and other factors outside of our control may additionally impact the stock price of companies like us that garner a disproportionate degree of public attention, regardless of actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies.

 

Because we will have broad discretion and flexibility in how we use the net proceeds from this offering, we may use the net proceeds in ways in which you disagree.

 

We currently intend to use the net proceeds from this offering for general corporate purposes, including working capital to accelerate the building of finished goods inventory to address increasing customer demand, new technology development, new product development, purchases of technology, expansion of our software offerings, and possible related acquisitions of other firms. See “Use of Proceeds.” Our management will have significant discretion and flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. The failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results and cash flow.

 

Additional stock offerings in the future may dilute then existing stockholders’ percentage ownership of our company.

 

Given our plans and expectations for our internal growth, investment activities, continued research and product development and our history of operating losses, we may need additional capital secured by issuing additional shares of common stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, convertible notes, stock options or warrants. Any required additional financing may not be available on terms acceptable to us, or at all. If we raise additional funds by issuing equity securities, you may experience significant dilution of your ownership interest and the newly issued securities may have rights senior to those of the holders of our common stock. The price per share at which we sell additional securities in future transactions may be higher or lower than the price per share in this offering. Alternatively, if we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility and would also require us to fund additional interest expense.

 

S-5

 

 

FORWARD-LOOKING INFORMATION

 

This prospectus supplement and the documents and information incorporated by reference in this prospectus supplement include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include statements concerning:

 

  · trends in our operating expenses, including personnel costs, research and development expense, sales and marketing expense, and general and administrative expense;

 

  · the effect of competitors and competition in our markets;

 

  · our wearable products and their market acceptance and future potential;

 

  · our ability to develop, timely introduce, and effectively manage the introduction of new products and services or improve our existing products and services;

 

  · expected technological advances by us or by third parties and our ability to leverage them;

 

  · our ability to attract and retain customers;

 

  · our ability to accurately forecast consumer demand and adequately manage our inventory;

 

  · our ability to deliver an adequate supply of product to meet demand;

 

  · our ability to maintain and promote our brand and expand brand awareness;

 

  · our ability to detect, prevent, or fix defects in our products;

 

  · our reliance on third-party suppliers, contract manufacturers and logistics providers and our limited control over such parties;

 

  · trends in revenue, costs of revenue, and gross margin and our possible or assumed future results of operations;

 

  · our ability to attract and retain highly skilled employees;

 

  · the impact of foreign currency exchange rates;

 

  · the effect of future regulations;

 

  · the sufficiency of our existing cash and cash equivalent balances and cash flow from operations to meet our working capital and capital expenditure needs for at least the next 12 months; and

 

  · general market, political, economic and business conditions.

 

S-6

 

 

All statements in this prospectus supplement and the documents and information incorporated by reference in this prospectus supplement that are not historical facts are forward-looking statements. We may, in some cases, use terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions or the negative of such items that convey uncertainty of future events or outcomes to identify forward-looking statements.

 

Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as may be required by applicable law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. 

 

USE OF PROCEEDS

 

We estimate that the net proceeds from this offering, after underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $80 million (or approximately $92 million if the underwriter exercises its option to purchase additional shares in full).

 

We currently intend to use the net proceeds from this offering for general corporate purposes, including working capital to accelerate the building of finished goods inventory to address increasing customer demand, new technology development, new product development, purchases of technology, expansion of our software offerings, and possible related acquisitions of other firms.

 

Until we use the net proceeds of this offering for the above purposes, we intend to invest the funds in short-term, investment grade, interest-bearing securities. We cannot predict whether the proceeds invested will yield a favorable return. We have not yet determined the amount or timing of the expenditures for the categories listed above, and these expenditures may vary significantly depending on a variety of factors. As a result, we will retain broad discretion over the use of the net proceeds from this offering.

 

S-7

 

 

CAPITALIZATION

 

The following table sets forth our consolidated cash and cash equivalents and capitalization as of December 31, 2020. Such information is set forth on the following basis:

 

  · on an actual basis.

 

  ·

on a pro forma basis, which reflects certain activity which occurred in 2021, including:  (i) $34,352,848 in proceeds received by the Company from the exercise of common stock warrants and the payment of $10,000,000 in payment of  accumulated dividends on the Company’s Series A Preferred Stock, (ii) the issuance of 4,962,600 shares of common stock to Intel Corporation upon the conversion of their 49,626 shares of Series A Preferred Stock, and (iii) the issuance of 7,196,378 shares of common stock upon the exercise of warrants.

 

  · on an as adjusted basis, giving effect to the sale of the 4,146,342 shares of common stock in this offering at an offering price of $20.50 per share, after deducting estimated underwriting discounts and commissions fees and estimated offering expenses payable by us.

 

You should read this table together with the section of this prospectus supplement entitled “Use of Proceeds” and with the financial statements and related notes and the other information that we incorporate by reference into this prospectus supplement and the accompanying prospectus.

 

   As December 31, 2020 
   Actual   Pro Forma   Pro Forma, as
Adjusted
 
Cash and cash equivalents  $36,069,508   $60,422,356   $140,363,366 
                
Total liabilities   4,168,299    4,168,299    4,168,299 
                
Stockholders' equity:               
Preferred Stock, par value $0.001 per share; 5,000,000 shares authorized; 49,626 shares of Series A Preferred Stock issued and outstanding   50    -    - 
Common Stock, par value $0.001 per share; 100,000,000 shares authorized; 45,645,166 shares outstanding actual; 57,975,214 shares outstanding pro forma; 62,121,556 shares outstanding pro forma, as adjusted   45,645    57,975    62,121 
Additional paid-in capital   210,952,473    235,298,125    315,234,989 
Accumulated deficit   (162,694,983)   (162,694,983)   (162,694,983)
                
Total Stockholders' equity   48,303,185    72,661,117    152,602,127 

 

Except as otherwise indicated, we have presented the information in this prospectus supplement assuming no exercise by the underwriters of their over-allotment option.

 

S-8

 

 

DILUTION

 

If you invest in our common stock, your interest will be diluted immediately to the extent of the difference between the offering price per share and the adjusted net tangible book value per share of our common stock after this offering.

 

Our net tangible book value as of December 31, 2020 was approximately $45.2 million, or approximately $0.89 per share of common stock. Since December 31, 2020, we have (i) issued an aggregate of 7,196,378 shares of common stock upon exercise of outstanding warrants for proceeds of $34,352,848, (ii) issued 4,962,600 shares of common stock to Intel Corporation upon the conversion of their 49,626 Series A Preferred Stock, and (iii) made a cash payment $10.0 million to Intel Corporation in full payment of all accrued Series A Preferred Stock dividends in the approximate amount of $10,800,000. Giving effect to (i) through (iii) above (the “Subsequent Events”), our pro forma net tangible book value as of December 31, 2020 was approximately $69.6 million, or $1.20 per share. “Net tangible book value” is total assets minus the sum of liabilities and intangible assets. “Net tangible book value per share” is net tangible book value divided by the total number of shares of common stock outstanding.

 

After giving effect to the sale of the common stock in this offering at the offering price set forth on the cover page of this prospectus supplement and after deducting estimated underwriting discounts and commissions and fees and expenses payable by us, our pro forma as adjusted net tangible book value as of December 31, 2020 would have been approximately $149.5 million or $2.41 per share of common stock. This represents an immediate increase in pro forma as adjusted net tangible book value of $1.21 per share to our existing stockholders and an immediate dilution in net tangible book value of $18.09 per share to investors participating in this offering. The following table illustrates this dilution per share to investors participating in this offering:

 

Offering price per share  $20.50 
      
Historical net tangible book value per share as of December 31, 2020  $0.89 
      
Pro forma net tangible book value per share as of December 31, 2020 after giving effect to the Subsequent Events  $1.20 
      
Increase in pro forma as adjusted net tangible book value per share attributable to this offering  $1.21 
      
Pro forma as adjusted net tangible book value per share as of December 31, 2020 after this offering  $2.41 
      
Dilution per share to new investors participating in this offering  $18.09 

 

The information above is as of December 31, 2020 and excludes, as of that date: 

 

·2,633,175 shares of our common stock issuable upon exercise of outstanding stock options under our equity incentive plans having a weighted average exercise price of $3.09 per share;

 

·7,276,928 shares of common stock issuable upon exercise of warrants, including 1,847,058 outstanding warrants that expire on March 19, 2021, with an exercise price of $5.25 per share, 950,416 outstanding warrants that expire on June 18, 2021, with an exercise price of $7.00 per share, and 4,479,454 warrants that expire on January 2, 2022 with an exercise price of $4.10.

 

The information above assumes that the underwriters do not exercise their over-allotment option. If the underwriters exercise their over-allotment option in full, the as adjusted net tangible book value will increase to $2.58 per share, representing an immediate increase to existing stockholders of $1.38 per share and an immediate dilution of $17.92 per share to new investors.

 

S-9

 

 

UNDERWRITING

 

We are offering the shares of common stock described in this prospectus through the underwriters named below. BTIG, LLC is acting as sole book-running manager of this offering. We have entered into an underwriting agreement with BTIG, LLC. Subject to the terms and conditions of the underwriting agreement, each of the underwriters has severally agreed to purchase, and we have agreed to sell to the underwriters, the number of shares of common stock listed next to its name in the following table. 

 

Underwriter  Number of
Shares
 
BTIG, LLC   3,524,391 
Craig-Hallum Capital Group LLC   621,951 
Total   4,146,342 

 

The underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers’ certificates and legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the shares of common stock if any of them are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

 

The underwriters are offering the shares of common stock subject to their acceptance of the shares of common stock from us and subject to prior sale. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. In addition, the underwriters have advised us that they do not intend to confirm sales to any account over which they exercise discretionary authority.

 

Option to Purchase Additional Shares of Common Stock

 

We have granted the underwriters an option to buy up to an aggregate of additional shares of common stock from us. The underwriters have 30 days from the date of this prospectus to exercise this option to purchase additional shares. If any shares are purchased with this option to purchase additional shares, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional shares of common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered. 

 

Discounts and Commission

 

The underwriters have advised us that they propose to offer the shares of common stock to the public at the offering price set forth on the cover page of this prospectus and to certain dealers, which may include the underwriters, at that price less a concession not in excess of $.6765 per share of common stock. After the offering, the public offering price and concession to dealers may be reduced by the representative. No such reduction will change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.

 

The following table shows the public offering price, the underwriting discounts and commissions that we are to pay the underwriters and the proceeds, before expenses, to us in connection with this offering. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ over-allotment option.

 

   Per Share   Total Without
Option
Exercise
   Total with
Full Option
Exercise
 
Public offering price  $20.50   $85,000,011   $97,750,006 
Underwriting discounts and commissions paid by us (5.50%)1  $1.1275   $4,675,000   $5,376,250 
Proceeds to us, before expenses  $19.3725   $80,325,010   $92,373,756 

 

  (1) We have also agreed to reimburse the representative of the underwriter for certain expenses as set forth below.    

 

S-10

 

 

We estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above, will be approximately $375,000. We have agreed to reimburse the Representative for actual out-of-pocket fees and expenses in connection with the offering, including up to $100,000 for legal expenses, in an aggregate amount not to exceed $120,000.

 

Listing

 

Our common stock is listed on The Nasdaq Capital Market under the trading symbol “VUZI”.

 

Indemnification of Underwriters

 

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the underwriters may be required to make in respect of those liabilities. 

 

Right of First Refusal

 

We have granted BTIG, LLC a preferential right for a period of six (6) months from the date the offering is completed to purchase for its account or to sell for the account of the company, or any subsidiary of or successor to the company any securities (whether debt or equity or any combination thereof) of the company or any such subsidiary or successor which the Company or any such subsidiary or successor may seek to sell whether with or without or through an underwriter, placement agent or broker-dealer and whether pursuant to registration under the Securities Act or otherwise (excluding, however, certain exempt issuances).

 

No Sales of Similar Securities

 

We have agreed that, subject to specified limited exceptions, for a period of 90 days from the date of this prospectus supplement (the “Lockup Period”), we will not, without the prior written consent of BTIG, LLC, (A) offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, or file with the SEC a registration statement under the Act relating to, any securities of the Company that are substantially similar to the common stock offered hereby, including but not limited to any options or warrants to purchase shares of common stock or any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or any such substantially similar securities, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing or (B) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the common stock or any such other securities, whether any such transaction described in clause (A) or (B) above is to be settled by delivery of common stock or such other securities, in cash or otherwise (other than the Securities to be sold hereunder or pursuant to employee stock option plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date hereof).

 

Additionally, our executive officers and directors have agreed that, subject to certain exceptions, without the prior written consent of BTIG, LLC, for a period of 90 days from the date of this prospectus supplement, they will not (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into, exercisable or exchangeable for or that represent the right to receive common stock (including without limitation, common stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant) whether now owned or hereafter acquired; (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the holder’s securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of common stock or such other securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to, the registration of any common stock or any security convertible into or exercisable or exchangeable for common stock; or (4) publicly disclose the intention to do any of the foregoing.

 

S-11

 

 

The restrictions described in the immediately preceding paragraph contained in the lock-up agreements with our directors and executive officers are subject to specified exceptions, including:

 

(i)         transfers as a bona fide gift or gifts;

 

(ii)        transfers to any trust for the direct or indirect benefit of the undersigned or the immediate family of the holder;

 

(iii)       if the holder is a corporation, partnership, limited liability company, trust or other business entity (1) transfers to another corporation, partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned or (2) distributions of shares of common stock or any security convertible into or exercisable for common stock to limited partners, limited liability company members or stockholders of the holder;

 

(iv)      if the holder is a trust, transfers to the beneficiary of such trust;

 

(v)       transfers by testate succession or intestate succession;

 

(vi)      transfers pursuant to the underwriting agreement; or

 

(vii)     in the case of one officer, transfers or sales of common stock pursuant to an existing divorce decree.

 

provided, in the case of clauses (i)-(v) above, that (x) such transfer shall not involve a disposition for value, (y) the transferee agrees in writing with the underwriters to be bound by the terms of the lock-up agreement, and (z) no filing by any party under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall be required or shall be made voluntarily in connection with such transfer.

 

BTIG, LLC, in their discretion, may release the common stock and other securities subject to the lock-up agreements described above in whole or in part at any time

 

Price Stabilization, Short Positions and Penalty Bids

 

To facilitate the offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock during and after the offering. Specifically, the underwriters may over-allot or otherwise create a short position in the common stock for their own account by selling more shares of common stock than we have sold to them. Short sales involve the sale by the underwriters of a greater number of shares than the underwriters are required to purchase in the offering. The underwriters may close out any short position by either exercising their option to purchase additional shares or purchasing shares in the open market.

 

In addition, the underwriters may stabilize or maintain the price of the common stock by bidding for or purchasing shares of common stock in the open market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed to syndicate members or other broker-dealers participating in the offering are reclaimed if shares of common stock previously distributed in the offering are repurchased, whether in connection with stabilization transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market price of the common stock at a level above that which might otherwise prevail in the open market. The imposition of a penalty bid may also affect the price of the common stock to the extent that it discourages resales of the common stock. The magnitude or effect of any stabilization or other transactions is uncertain. These transactions may be affected on The Nasdaq Stock Exchange or otherwise and, if commenced, may be discontinued at any time. The underwriters may also engage in passive market making transactions in our common stock. Passive market making consists of displaying bids on The Nasdaq Stock Exchange limited by the prices of independent market makers and effecting purchases limited by those prices in response to order flow. Rule 103 of Regulation M promulgated by the SEC limits the number of net purchases that each passive market maker may make and the displayed size of each bid. Passive market making may stabilize the market price of the common stock at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.

 

S-12

 

 

Electronic Distribution

 

A prospectus in electronic format may be made available by e-mail, on the web sites or through online services maintained by one or more of the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of shares of common stock for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters’ web sites and any information contained in any other web site maintained by any of the underwriters is not part of this prospectus, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.

 

Other Activities and Relationships

 

The underwriters and certain of their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and certain of their respective affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses. In addition, from time to time, certain of the underwriters and their respective affiliates may affect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

 

LEGAL MATTERS

 

The validity of the securities being offered under this prospectus by us will be passed upon for us by Sichenzia Ross Ference LLP, New York, New York. The underwriter is being represented in connection with this offering by Ellenoff Grossman & Schole LLP, New York, New York.

 

EXPERTS

 

The consolidated financial statements of Vuzix Corporation as of December 31, 2020 and 2019, and for each of the three years in the period ended December 31, 2020, and the effectiveness of internal control over financial reporting as of December 31, 2020, appearing in Vuzix Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020, have been audited by Freed Maxick CPAs, P.C., as set forth in its report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We are subject to the reporting requirements of the Exchange Act and file annual, quarterly and current reports, proxy statements and other information with the SEC. These reports, proxy statements and other information are available at the SEC’s website at http://www.sec.gov.

 

This prospectus supplement and the accompanying prospectus are only part of a registration statement on Form S-3 that we have filed with the SEC under the Securities Act and therefore omit certain information contained in the registration statement. We have also filed exhibits and schedules with the registration statement that are excluded from this prospectus supplement and the accompanying prospectus, and you should refer to the applicable exhibit or schedule for a complete description of any statement referring to any contract or other document. The registration statement, including the exhibits and schedules, without charge, are available at the SEC’s website.

 

We also maintain a website at www.vuzix.com, through which you can access our SEC filings. The information set forth on our website is not part of this prospectus supplement or the accompanying prospectus.

 

S-13

 

 

INCORPORATION OF DOCUMENTS BY REFERENCE

 

The SEC allows us to “incorporate by reference” the information we file with the SEC. This permits us to disclose important information to you by referring to these filed documents. Any information referred to in this way is considered part of this prospectus supplement. The information incorporated by reference is an important part of this prospectus supplement and the accompanying prospectus, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the following documents that have been filed with the SEC (other than information furnished under Item 2.02 or Item 7.01 of Form 8-K and all exhibits related to such items): 

 

  · our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 15, 2021;

 

  · our Current Reports on Form 8-K filed with the SEC on January 20, 2021, January 22, 2021, January 29, 2021, March 1, 2021, March 18, 2021, March 19, 2021 and March 26, 2021;

 

  · our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 29, 2020; and

  

  · the description of our common stock contained in our Registration Statement on Form 8-A filed with the SEC on January 26, 2015 (File No. 001-35955), including any amendment or report filed for the purpose of updating such description.

 

Any information in any of the foregoing documents will automatically be deemed to be modified or superseded to the extent that information in this prospectus supplement and the accompanying prospectus or in a later filed document that is incorporated or deemed to be incorporated herein by reference modifies or replaces such information.

 

We also incorporate by reference into this prospectus all documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of any offering of securities made by this prospectus. Nothing in this prospectus shall be deemed to incorporate information furnished but not filed with the SEC (including without limitation, information furnished under Item 2.02 or Item 7.01 of Form 8-K, and any exhibits relating to such information).

 

We will provide, upon written or oral request, without charge to each person, including any beneficial owner, to whom a copy of this prospectus supplement and the accompanying prospectus is delivered, a copy of any or all of the information incorporated herein by reference (exclusive of exhibits to such documents unless such exhibits are specifically incorporated by reference herein). You may request a copy of any or all of these filings, at no cost, by writing or telephoning us at: Nathaniel Bank, Vuzix Corporation, 25 Hendrix Road, West Henrietta, New York 14586, telephone number 585-359-5900.

 

S-14

 

 

PROSPECTUS

 

$300,000,000

 

 

 

Common Stock

Preferred Stock

Warrants

Units

  

We may from time to time, in one or more offerings at prices and on terms that we will determine at the time of each offering, sell common stock, preferred stock, warrants, or a combination of these securities, or units, for an aggregate initial offering price of up to $300,000,000. This prospectus describes the general manner in which our securities may be offered using this prospectus. Each time we offer and sell securities, we will provide you with a prospectus supplement that will contain specific information about the terms of that offering. Any prospectus supplement may also add, update, or change information contained in this prospectus. You should carefully read this prospectus and the applicable prospectus supplement as well as the documents incorporated or deemed to be incorporated by reference in this prospectus before you purchase any of the securities offered hereby.

 

This prospectus may not be used to offer and sell securities unless accompanied by a prospectus supplement.

 

Our common stock is currently traded on the NASDAQ Capital Market under the symbol “VUZI.” On February 1, 2021, the last reported sales price for our common stock was $11.56 per share. We will apply to list any shares of common stock sold by us under this prospectus and any prospectus supplement on the NASDAQ Capital Market. The prospectus supplement will contain information, where applicable, as to any other listing of the securities on the NASDAQ Capital Market or any other securities market or exchange covered by the prospectus supplement. 

 

The securities offered by this prospectus involve a high degree of risk. See “Risk Factors” beginning on page 5, in addition to Risk Factors contained in the applicable prospectus supplement.

 

Neither the Securities and Exchange Commission nor any State securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

We may offer the securities directly or through agents or to or through underwriters or dealers. If any agents or underwriters are involved in the sale of the securities their names, and any applicable purchase price, fee, commission or discount arrangement between or among them, will be set forth, or will be calculable from the information set forth, in an accompanying prospectus supplement. We can sell the securities through agents, underwriters or dealers only with delivery of a prospectus supplement describing the method and terms of the offering of such securities. See “Plan of Distribution.”

 

This prospectus is dated February 9, 2021

 

 

 

Table of Contents

 

  Page
   
ABOUT THIS PROSPECTUS 3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 3
ABOUT VUZIX 4
RISK FACTORS 5
USE OF PROCEEDS 5
DESCRIPTION OF COMMON STOCK 5
DESCRIPTION OF PREFERRED STOCK 6
DESCRIPTION OF WARRANTS 7
DESCRIPTION OF UNITS 8
PLAN OF DISTRIBUTION 8
LEGAL MATTERS 10
EXPERTS 10
WHERE YOU CAN FIND MORE INFORMATION 10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 11

  

You should rely only on the information contained or incorporated by reference in this prospectus or any prospectus supplement. We have not authorized anyone to provide you with information different from that contained or incorporated by reference into this prospectus. If any person does provide you with information that differs from what is contained or incorporated by reference in this prospectus, you should not rely on it. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You should assume that the information contained in this prospectus or any prospectus supplement is accurate only as of the date on the front of the document and that any information contained in any document, we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any prospectus supplement or any sale of a security. These documents are not an offer to sell or a solicitation of an offer to buy these securities in any circumstances under which the offer or solicitation is unlawful.

 

2

 

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration process. Under this shelf registration process, we may sell any combination of the securities described in this prospectus in one of more offerings up to a total dollar amount of proceeds of $300,000,000. This prospectus describes the general manner in which our securities may be offered by this prospectus. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus or in documents incorporated by reference in this prospectus. The prospectus supplement that contains specific information about the terms of the securities being offered may also include a discussion of certain U.S. Federal income tax consequences and any risk factors or other special considerations applicable to those securities. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus or in documents incorporated by reference in this prospectus, you should rely on the information in the prospectus supplement. You should carefully read both this prospectus and any prospectus supplement together with the additional information described under “Where You Can Find More Information” before buying any securities in this offering.

 

The terms “Vuzix,” the “Company,” “we,” “our” or “us” in this prospectus refer to Vuzix Corporation and its wholly-owned subsidiary, unless the context suggests otherwise.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus and the documents and information incorporated by reference in this prospectus include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include statements concerning:

  

  · trends in our operating expenses, including personnel costs, research and development expense, sales and marketing expense, and general and administrative expense;

  

  · the effect of competitors and competition in our markets;

  

  · our wearable products and their market acceptance and future potential;

  

  · our ability to develop, timely introduce and effectively manage the introduction of new products and services or improve our existing products and services;

  

  · expected technological advances by us or by third parties and our ability to leverage them;

  

  · our ability to attract and retain customers;

  

  · our ability to accurately forecast consumer demand and adequately manage inventory;

  

  · our ability to deliver an adequate supply of product to meet demand;

 

  · our ability to maintain and promote our brand and expand brand awareness;

  

  · our ability to detect, prevent, or fix defects in our products;

  

  · our reliance on third-party suppliers, contract manufacturers and logistics providers and our limited control over such parties;

  

3

 

 

  · trends in revenue, costs of revenue, and gross margin and our possible or assumed future results of operations;

  

  · our ability to attract and retain highly skilled employees;

  

  · the impact of foreign currency exchange rates;

  

  · the effect of future regulations;

  

  · the sufficiency of our existing cash and cash equivalent balances and cash flow from operations to meet our working capital and capital expenditure needs for at least the next 12 months; 

 

  · Our ability to obtain additional financing, if needed or on acceptable terms; and

  

  · general market, political, economic and business conditions.

 

All statements in this prospectus and the documents and information incorporated by reference in this prospectus that are not historical facts are forward-looking statements. We may, in some cases, use terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions or the negative of such items that convey uncertainty of future events or outcomes to identify forward-looking statements.

 

Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as may be required by applicable law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

 

ABOUT VUZIX

 

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, but also known as 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 micro-display technology with our advanced optics to produce compact high-resolution display engines, less than half an inch diagonally, which when viewed 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 head mounted displays to commercial, industrial and defense customers. We do not offer “works for hire” services but rather offer our services in ways that could result in advancing our technology or lead to a long-term supply or OEM relationship.

 

All of the mobile display 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 over the last decade, with ever greater capabilities and performance and, in many cases, including the rapid adoption of tablets and mobile devices with larger screen sizes and improved display resolutions, as well as declining prices on mobile phones and other computing 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. 

 

4

 

 

We reported a net loss of $17,952,172 for the year ended December 31, 2020, a net loss of $26,476,370 for the year ended December 31, 2019, and a net loss of $21,875,713 for the year ended December 31, 2018. We have an accumulated deficit of $162,694,983 as of December 31, 2020.

 

Our principal executive offices are located at 25 Hendrix Road, West Henrietta, New York 14586. Our telephone number is (585) 359-5900. We maintain an Internet website at www.vuzix.com. The information contained on, connected to or that can be accessed via our website is not part of this prospectus. We have included our website address in this prospectus as an inactive textual reference only and not as an active hyperlink.

 

RISK FACTORS

 

Investing in our securities involves a high degree of risk. Before making an investment decision, you should consider carefully the risks, uncertainties and other factors described in our most recent Annual Report on Form 10-K, as supplemented and updated by subsequent quarterly reports on Form 10-Q and current reports on Form 8-K that we have filed or will file with the SEC, which are incorporated by reference into this prospectus.

 

Our business, affairs, prospects, assets, financial condition, results of operations and cash flows could be materially and adversely affected by these risks. For more information about our SEC filings, please see “Where You Can Find More Information”.

 

USE OF PROCEEDS

 

Unless otherwise indicated in a prospectus supplement, we intend to use the net proceeds from the sale of the securities under this prospectus for general corporate purposes, including expanding our products, and for general working capital purposes.

  

DESCRIPTION OF COMMON STOCK

 

General

 

We are authorized to issue 100,000,000 shares of common stock, $0.001 par value per share.

 

Holders of the Company’s common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Therefore (subject to the rights of the holders of our Series A Preferred Stock, as discussed below), holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors to our Board of Directors. Holders of the Company’s common stock representing one-third of the voting power of the Company’s capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of stockholders. A vote by the holders of a majority of the Company’s outstanding shares is required to effectuate certain fundamental corporate changes such as a liquidation, merger or an amendment to the Company’s certificate of incorporation.

 

Holders of the Company’s common stock are entitled to share in all dividends that the Board of Directors, in its discretion, declares from legally available funds. In the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. The Company’s common stock has no pre-emptive rights, no conversion rights, and there are no redemption provisions applicable to the Company’s common stock.

  

Transfer Agent and Registrar

 

The transfer agent and registrar for our common stock is Computershare Trust Company.

 

5

 

 

Listing

 

Our common stock is currently traded on the NASDAQ Capital Market under the symbol “VUZI”.

 

DESCRIPTION OF PREFERRED STOCK

 

We are authorized to issue up to 5,000,000 shares of preferred stock, par value $0.001 per share, from time to time, in one or more series.

 

On December 30, 2014, the Company filed a Certificate of Designation of Series A Preferred Stock (the “Certificate of Designation”) with the secretary of state of the State of Delaware, pursuant to which 49,626 shares of preferred stock were designated as Series A Preferred Stock. All such 49,626 shares were issued to Intel Corporation in January 2015. On January 28, 2021, Intel elected to convert all of such shares of Series A Preferred Stock into 4,962,600 shares of common stock and the shares of Series A Preferred Stock have been retired and cannot be reissued. In connection with the foregoing, the Company and Vuzix entered into an agreement on the conversion date pursuant to which Intel agreed to accept $10,000,000 in full payment of all accrued Series A Preferred Stock dividends in the approximate amount of $10,800,000.

  

Subject to the foregoing, our Certificate of Incorporation authorizes our Board of Directors to issue preferred stock from time to time with such designations, preferences, conversion or other rights, voting powers, restrictions, dividends or limitations as to dividends or other distributions, qualifications or terms or conditions of redemption as shall be determined by the Board of Directors for each class or series of stock. Preferred stock is available for possible future financings or acquisitions and for general corporate purposes without further authorization of stockholders unless such authorization is required by applicable law, the rules of the NASDAQ Capital Market or other securities exchange or market on which our stock is then listed or admitted to trading.

 

Our Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes could, under some circumstances, have the effect of delaying, deferring or preventing a change-in-control of the Company.

 

A prospectus supplement relating to any series of preferred stock being offered will include specific terms relating to the offering. Such prospectus supplement will include:

 

  · the title and stated or par value of the preferred stock;

 

  · the number of shares of the preferred stock offered, the liquidation preference per share and the offering price of the preferred stock;

 

  · the dividend rate(s), period(s) and/or payment date(s) or method(s) of calculation thereof applicable to the preferred stock;

 

  · whether dividends shall be cumulative or non-cumulative and, if cumulative, the date from which dividends on the preferred stock shall accumulate;

 

  · the provisions for a sinking fund, if any, for the preferred stock;

 

  · any voting rights of the preferred stock;

 

  · the provisions for redemption, if applicable, of the preferred stock;

 

  · any listing of the preferred stock on any securities exchange;

 

  · the terms and conditions, if applicable, upon which the preferred stock will be convertible into our common stock, including the conversion price or the manner of calculating the conversion price and conversion period;

 

6

 

 

  · if appropriate, a discussion of Federal income tax consequences applicable to the preferred stock; and

 

  · any other specific terms, preferences, rights, limitations or restrictions of the preferred stock.

 

The terms, if any, on which the preferred stock may be convertible into or exchangeable for our common stock will also be stated in the preferred stock prospectus supplement. The terms will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option, and may include provisions pursuant to which the number of shares of our common stock to be received by the holders of preferred stock would be subject to adjustment.

 

DESCRIPTION OF WARRANTS

 

 We may issue warrants for the purchase of preferred stock or common stock. Warrants may be issued independently or together with any preferred stock or common stock, and may be attached to or separate from any offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between a warrant agent specified in the agreement and us. The warrant agent will act solely as our agent in connection with the warrants of that series and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. This summary of some provisions of the securities warrants is not complete. You should refer to the securities warrant agreement, including the forms of securities warrant certificate representing the securities warrants, relating to the specific securities warrants being offered for the complete terms of the securities warrant agreement and the securities warrants. The securities warrant agreement, together with the terms of the securities warrant certificate and securities warrants, will be filed with the SEC in connection with the offering of the specific warrants.

 

The applicable prospectus supplement will describe the following terms, where applicable, of the warrants in respect of which this prospectus is being delivered:

 

  · the title of the warrants;

 

  · the aggregate number of the warrants;

 

  · the price or prices at which the warrants will be issued;

 

  · the designation, amount and terms of the offered securities purchasable upon exercise of the warrants;

 

  · if applicable, the date on and after which the warrants and the offered securities purchasable upon exercise of the warrants will be separately transferable;

 

  · the terms of the securities purchasable upon exercise of such warrants and the procedures and conditions relating to the exercise of such warrants;

 

  · any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants;

 

  · the price or prices at which and currency or currencies in which the offered securities purchasable upon exercise of the warrants may be purchased;

 

  · the date on which the right to exercise the warrants shall commence and the date on which the right shall expire;

 

  · the minimum or maximum amount of the warrants that may be exercised at any one time;

 

  · information with respect to book-entry procedures, if any;

 

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  · if appropriate, a discussion of Federal income tax consequences; and

 

  · any other material terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.

 

Warrants for the purchase of common stock or preferred stock will be offered and exercisable for U.S. dollars only. Warrants will be issued in registered form only.

 

Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement, we will, as soon as practicable, forward the purchased securities. If less than all of the warrants represented by the warrant certificate are exercised, a new warrant certificate will be issued for the remaining warrants.

 

Prior to the exercise of any securities warrants to purchase preferred stock or common stock, holders of the warrants will not have any of the rights of holders of the common stock or preferred stock purchasable upon exercise, including in the case of securities warrants for the purchase of common stock or preferred stock, the right to vote or to receive any payments of dividends on the preferred stock or common stock purchasable upon exercise.

 

DESCRIPTION OF UNITS

 

As specified in the applicable prospectus supplement, we may issue units consisting of shares of common stock, shares of preferred stock or warrants or any combination of such securities.

 

The applicable prospectus supplement will specify the following terms of any units in respect of which this prospectus is being delivered:

 

  · the terms of the units and of any of the common stock, preferred stock and warrants comprising the units, including whether and under what circumstances the securities comprising the units may be traded separately;

 

  · a description of the terms of any unit agreement governing the units; and

 

  · a description of the provisions for the payment, settlement, transfer or exchange of the units.

 

PLAN OF DISTRIBUTION

 

We may sell the securities offered through this prospectus (i) to or through underwriters or dealers, (ii) directly to purchasers, including our affiliates, (iii) through agents, or (iv) through a combination of any of these methods. The securities may be distributed at a fixed price or prices, which may be changed, market prices prevailing at the time of sale, prices related to the prevailing market prices, or negotiated prices. The prospectus supplement will include the following information:

 

  · the terms of the offering;

 

  · the names of any underwriters or agents;

 

  · the name or names of any managing underwriter or underwriters;

 

  · the purchase price of the securities;

 

  · any over-allotment options under which underwriters may purchase additional securities from us;

 

  · the net proceeds from the sale of the securities;

 

  · any delayed delivery arrangements;

 

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  · any underwriting discounts, commissions and other items constituting underwriters’ compensation;

 

  · any initial public offering price;

 

  · any discounts or concessions allowed or reallowed or paid to dealers;

 

  · any commissions paid to agents; and

 

  · any securities exchange or market on which the securities may be listed.

 

Sale Through Underwriters or Dealers

 

Only underwriters named in the prospectus supplement are underwriters of the securities offered by the prospectus supplement.

 

If underwriters are used in the sale, the underwriters will acquire the securities for their own account, including through underwriting, purchase, security lending or repurchase agreements with us. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions. Underwriters may sell the securities in order to facilitate transactions in any of our other securities (described in this prospectus or otherwise), including other public or private transactions and short sales. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless otherwise indicated in the prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers.

 

If dealers are used in the sale of securities offered through this prospectus, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the dealers at the time of resale. The prospectus supplement will include the names of the dealers and the terms of the transaction.

 

Direct Sales and Sales Through Agents

 

We may sell the securities offered through this prospectus directly. In this case, no underwriters or agents would be involved. Such securities may also be sold through agents designated from time to time. The prospectus supplement will name any agent involved in the offer or sale of the offered securities and will describe any commissions payable to the agent. Unless otherwise indicated in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.

 

We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities. The terms of any such sales will be described in the prospectus supplement.

 

Delayed Delivery Contracts

 

If the prospectus supplement indicates, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The applicable prospectus supplement will describe the commission payable for solicitation of those contracts.

 

Continuous Offering Program

 

Without limiting the generality of the foregoing, we may enter into a continuous offering program equity distribution agreement with a broker-dealer, under which we may offer and sell shares of our common stock from time to time through a broker-dealer as our sales agent. If we enter into such a program, sales of the shares of common stock, if any, will be made by means of ordinary brokers’ transactions on the NASDAQ Capital Market at market prices, block transactions and such other transactions as agreed upon by us and the broker-dealer. Under the terms of such a program, we also may sell shares of common stock to the broker-dealer, as principal for its own account at a price agreed upon at the time of sale. If we sell shares of common stock to such broker-dealer as principal, we will enter into a separate terms agreement with such broker-dealer, and we will describe this agreement in a separate prospectus supplement or pricing supplement.

 

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Market Making, Stabilization and Other Transactions

 

Unless the applicable prospectus supplement states otherwise, other than our common stock, all securities we offer under this prospectus will be a new issue and will have no established trading market. We may elect to list offered securities on an exchange or in the over-the-counter market. Any underwriters that we use in the sale of offered securities may make a market in such securities, but may discontinue such market making at any time without notice. Therefore, we cannot assure you that the securities will have a liquid trading market.

 

Any underwriter may also engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the Securities Exchange Act. Stabilizing transactions involve bids to purchase the underlying security in the open market for the purpose of pegging, fixing or maintaining the price of the securities. Syndicate covering transactions involve purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions.

 

Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it would be in the absence of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.

 

General Information

 

Agents, underwriters, and dealers may be entitled, under agreements entered into with us, to indemnification by us against certain liabilities, including liabilities under the Securities Act. Our agents, underwriters, and dealers, or their affiliates, may be customers of, engage in transactions with or perform services for us, in the ordinary course of business.

 

LEGAL MATTERS

 

The validity of the issuance of the securities offered by this prospectus will be passed upon for us by Sichenzia Ross Ference LLP, New York, New York.

 

EXPERTS

 

The consolidated financial statements of Vuzix Corporation as of and for the years ended December 31, 2019, 2018 and 2017, appearing in Vuzix Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019, have been audited by Freed Maxick CPAs, P.C., as set forth in its report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

 

WHERE YOU CAN FIND MORE INFORMATION

 

We file annual, quarterly and special reports, along with other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at http://www.sec.gov.

 

This prospectus is part of a registration statement on Form S-3 that we filed with the SEC to register the securities offered hereby under the Securities Act of 1933, as amended. This prospectus does not contain all of the information included in the registration statement, including certain exhibits and schedules. You may obtain the registration statement and exhibits to the registration statement from the SEC or from the SEC’s internet site.

 

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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

 

This prospectus is part of a registration statement filed with the SEC. The SEC allows us to “incorporate by reference” into this prospectus the information that we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. The following documents are incorporated by reference and made a part of this prospectus:

 

  · our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 16, 2020;
     
  · our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 filed with the SEC on November 9, 2020;

 

  · our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 filed with the SEC on August 10, 2020;

 

  · our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 filed with the SEC on May 11, 2020;

 

  · our Current Reports on Form 8-K filed with the SEC on March 20, 2020, April 22, 2020, May 6, 2020, May 12, 2020, May 15, 2020 (two filings), June 24, 2020; September 9, 2020; September 10, 2020, November 16, 2020,  January 20, 2021, January 22, 2021 and January 29, 2021;

 

  · our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 29, 2020; and

  

  · the description of our common stock contained in our Registration Statement on Form 8-A filed with the SEC on January 26, 2015 (File No. 001-35955), including any amendment or report filed for the purpose of updating such description.

 

Any information in any of the foregoing documents will automatically be deemed to be modified or superseded to the extent that information in this prospectus supplement and the accompanying prospectus or in a later filed document that is incorporated or deemed to be incorporated herein by reference modifies or replaces such information.

 

We also incorporate by reference into this prospectus all documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of any offering of securities made by this prospectus. Nothing in this prospectus shall be deemed to incorporate information furnished but not filed with the SEC (including without limitation, information furnished under Item 2.02 or Item 7.01 of Form 8-K, and any exhibits relating to such information).

 

Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in the applicable prospectus supplement or in any other subsequently filed document which also is or is deemed to be incorporated by reference modifies or supersedes the statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

 

The information about us contained in this prospectus should be read together with the information in the documents incorporated by reference. You may request a copy of any or all of these filings, at no cost, by writing or telephoning us at: Nathaniel Bank, Vuzix Corporation, 25 Hendrix Road, West Henrietta, New York 14586, telephone number 585-359-5900.

 

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4,146,342 Shares

Common Stock

 

 

___________________________

 

PROSPECTUS SUPPLEMENT

___________________________

 

Sole Book-Running Manager

 

BTIG

 

Co-Manager

 

Craig-Hallum

 

 

 

March 25, 2021