Annual report pursuant to Section 13 and 15(d)

Intangible Asset, Net

v3.20.4
Intangible Asset, Net
12 Months Ended
Dec. 31, 2020
Intangible Asset, Net  
Intangible Asset, Net

Note 7 — Intangible Asset, Net

    

December 31, 

    

December 31, 

2020

2019

Intangible Asset

$

1,500,000

$

1,500,000

Less: Accumulated Amortization

 

(933,544)

 

(510,000)

Intangible Asset, Net

$

566,456

$

990,000

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 regarding non-competing terms between Vuzix and TDG, including an asset purchase agreement dated June 15, 2012, and an authorized reseller agreement dated June 15, 2012.

Since entering into the TDG Amendment, the Company has been 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, and 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 owes TDG commissions with respect to all such sales until June 2022. Total commissions expense under this agreement for the years ended December 31, 2020 and 2019 was $243,273 and $116,469, respectively.

Total amortization expense for this intangible asset for the years ended December 31, 2020, 2019 and 2018 was $423,544, $408,000 and $102,000, respectively. Future monthly amortization expense for the next 16 months is $35,000 per month.