Quarterly report pursuant to Section 13 or 15(d)

Intangible Asset, Net

v3.19.1
Intangible Asset, Net
3 Months Ended
Mar. 31, 2019
Disclosure of Intangible Asset Net [Abstract]  
Intangible Asset, Net
Note 5 – Intangible Asset, Net
 
 
 
March 31,

2019
 
 
December 31,

2018
 
 
 
 
 
 
 
 
Intangible Asset
 
$
1,500,000
 
 
$
1,500,000
 
Less: Accumulated Amortization
 
 
(204,000
)
 
 
(102,000
)
 
 
 
 
 
 
 
 
 
Intangible Asset, Net
 
$
1,296,000
 
 
$
1,398,000
 
 
On October 4, 2018, the Company entered into amendment No. 1 to the original agreements (the “TDG Amendment”) with TDG Acquisition Company, LLC (“TDG”), aka Six15 Technologies, LLC. The TDG Amendment amends certain provisions of prior agreements between Vuzix and TDG, including an asset purchase agreement dated June 15, 2012, and an authorized reseller agreement dated June 15, 2012.
 
Pursuant to the TDG Amendment, the Company will be permitted to engage in sales of heads-up display components or subsystems (and any services to support such sale) for incorporation into a finished goods or systems for sale to military organizations, subject to certain conditions. The Company will also be permitted to sell its products to defense and security organizations that include business customers and governmental entity customers that primarily provide security and defense services, including police, fire fighters, EMTs, other first responders, and homeland and border security. The Company will owe TDG commissions with respect to all such sales until June 2022.
 
This reacquired right covers the entire remaining term of the original non-compete agreement with TDG, which expires
June 15, 2022
. The capitalized cost of this reacquired right is being amortized
over 44 months, which began in
October 2018
. Total amortization expense for this intangible asset for the three months ended
March 31, 2019
 was $102,000. As of 
March 31, 2019
, there was $
250,000
 
in accrued current liabilities for the
final payment due under the terms of this agreement.