2017 Q3 Form 10-Q Financial Statement

#000114420417057779 Filed on November 09, 2017

View on sec.gov

Income Statement

Concept 2017 Q3 2016 Q3
Revenue $1.405M $583.00
YoY Change 240894.85% -99.94%
Cost Of Revenue $1.497M $819.1K
YoY Change 82.77% 27.14%
Gross Profit -$92.00K -$237.00
YoY Change 38718.57% -100.07%
Gross Profit Margin -6.55% -40.65%
Selling, General & Admin $2.521M $2.114M
YoY Change 19.26% 32.93%
% of Gross Profit
Research & Development $1.506M $2.178M
YoY Change -30.84% 130.61%
% of Gross Profit
Depreciation & Amortization $320.0K $270.0K
YoY Change 18.52% 68.75%
% of Gross Profit
Operating Expenses $5.430M $4.292M
YoY Change 26.52% 69.33%
Operating Profit -$5.522M -$4.725M
YoY Change 16.88% 105.71%
Interest Expense $12.59K $33.98K
YoY Change -62.94% -17.03%
% of Operating Profit
Other Income/Expense, Net $20.25K -$310.8K
YoY Change -106.52% 142.85%
Pretax Income -$5.502M -$5.036M
YoY Change 9.26% 107.67%
Income Tax $0.00 $0.00
% Of Pretax Income
Net Earnings -$5.502M -$5.036K
YoY Change 109153.38% -99.79%
Net Earnings / Revenue -391.6% -863.81%
Basic Earnings Per Share
Diluted Earnings Per Share -$257.4K -$292.7K
COMMON SHARES
Basic Shares Outstanding
Diluted Shares Outstanding

Balance Sheet

Concept 2017 Q3 2016 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $8.700M $5.900M
YoY Change 47.46% -63.35%
Cash & Equivalents $8.677M $5.942M
Short-Term Investments
Other Short-Term Assets $900.0K $1.000M
YoY Change -10.0% -37.5%
Inventory $2.800M $4.000M
Prepaid Expenses
Receivables $1.200M $100.0K
Other Receivables $0.00 $0.00
Total Short-Term Assets $13.60M $11.10M
YoY Change 22.52% -44.78%
LONG-TERM ASSETS
Property, Plant & Equipment $3.900M $3.070M
YoY Change 27.02% 283.81%
Goodwill
YoY Change
Intangibles $540.1K
YoY Change
Long-Term Investments
YoY Change
Other Assets
YoY Change
Total Long-Term Assets $4.900M $3.868M
YoY Change 26.66% 93.42%
TOTAL ASSETS
Total Short-Term Assets $13.60M $11.10M
Total Long-Term Assets $4.900M $3.868M
Total Assets $18.50M $14.97M
YoY Change 23.59% -32.27%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.800M $1.530M
YoY Change 17.68% 282.39%
Accrued Expenses $1.200M $1.053M
YoY Change 13.93% 50.47%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $1.334M
YoY Change -100.0% 1233.71%
Total Short-Term Liabilities $3.300M $4.354M
YoY Change -24.21% 234.93%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change -100.0%
Other Long-Term Liabilities $0.00 $300.0K
YoY Change -100.0% 0.0%
Total Long-Term Liabilities $0.00 $328.8K
YoY Change -100.0% -78.08%
TOTAL LIABILITIES
Total Short-Term Liabilities $3.300M $4.354M
Total Long-Term Liabilities $0.00 $328.8K
Total Liabilities $3.300M $4.683M
YoY Change -29.53% 73.44%
SHAREHOLDERS EQUITY
Retained Earnings $76.84M
YoY Change
Common Stock $17.48K
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $15.20M $10.29M
YoY Change
Total Liabilities & Shareholders Equity $18.50M $14.97M
YoY Change 23.59% -32.27%

Cashflow Statement

Concept 2017 Q3 2016 Q3
OPERATING ACTIVITIES
Net Income -$5.502M -$5.036K
YoY Change 109153.38% -99.79%
Depreciation, Depletion And Amortization $320.0K $270.0K
YoY Change 18.52% 68.75%
Cash From Operating Activities -$4.540M -$3.650M
YoY Change 24.38% 1.96%
INVESTING ACTIVITIES
Capital Expenditures -$820.0K -$760.0K
YoY Change 7.89% 80.95%
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities -$820.0K -$760.0K
YoY Change 7.89% -116.59%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $7.978M
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 7.920M 5.770M
YoY Change 37.26% 19133.33%
NET CHANGE
Cash From Operating Activities -4.540M -3.650M
Cash From Investing Activities -820.0K -760.0K
Cash From Financing Activities 7.920M 5.770M
Net Change In Cash 2.560M 1.360M
YoY Change 88.24% 32.04%
FREE CASH FLOW
Cash From Operating Activities -$4.540M -$3.650M
Capital Expenditures -$820.0K -$760.0K
Free Cash Flow -$3.720M -$2.890M
YoY Change 28.72% -8.54%

Facts In Submission

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us-gaap Lease Expiration Date1
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2020-10-03
vuzi Operating Lease Commencement Date
OperatingLeaseCommencementDate
2015-10-03
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due
OperatingLeasesFutureMinimumPaymentsDue
1091254 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due In Five Years
OperatingLeasesFutureMinimumPaymentsDueInFiveYears
0 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due Current
OperatingLeasesFutureMinimumPaymentsDueCurrent
93053 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due In Two Years
OperatingLeasesFutureMinimumPaymentsDueInTwoYears
348900 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due In Three Years
OperatingLeasesFutureMinimumPaymentsDueInThreeYears
341990 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due In Four Years
OperatingLeasesFutureMinimumPaymentsDueInFourYears
307311 USD
us-gaap Lease And Rental Expense
LeaseAndRentalExpense
344227 USD
us-gaap Lease And Rental Expense
LeaseAndRentalExpense
371239 USD
us-gaap Stock Issued During Period Value Conversion Of Convertible Securities
StockIssuedDuringPeriodValueConversionOfConvertibleSecurities
1861283 USD
vuzi Stock Issued During Period Value Exercise Of Warrants
StockIssuedDuringPeriodValueExerciseOfWarrants
0 USD
us-gaap Stock Issued During Period Value Stock Options Exercised
StockIssuedDuringPeriodValueStockOptionsExercised
0 USD
us-gaap Stock Issued During Period Value Share Based Compensation Gross
StockIssuedDuringPeriodValueShareBasedCompensationGross
912102 USD
CY2017Q3 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
49626 shares
CY2016Q4 us-gaap Common Stock Par Or Stated Value Per Share
CommonStockParOrStatedValuePerShare
0.001
CY2016Q4 us-gaap Common Stock Shares Authorized
CommonStockSharesAuthorized
100000000 shares
CY2017Q3 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
22178911 shares
us-gaap Stock Issued During Period Value Issued For Services
StockIssuedDuringPeriodValueIssuedForServices
100000 USD
CY2016Q4 us-gaap Common Stock Shares Issued
CommonStockSharesIssued
19569247 shares
CY2016Q4 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
19569247 shares
CY2016Q4 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliations Recurring Basis Liability Value
FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
173131 USD
CY2016Q4 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
41132 USD
CY2017Q3 us-gaap Long Term Debt
LongTermDebt
0 USD
CY2016Q4 us-gaap Long Term Debt
LongTermDebt
1416480 USD
CY2017Q3 us-gaap Stock Issued During Period Shares New Issues
StockIssuedDuringPeriodSharesNewIssues
1490000 shares
CY2017Q3 us-gaap Shares Issued Price Per Share
SharesIssuedPricePerShare
5.75
CY2017Q3 us-gaap Proceeds From Issuance Of Common Stock
ProceedsFromIssuanceOfCommonStock
7978321 USD
CY2017Q3 us-gaap Inventory Write Down
InventoryWriteDown
1151482 USD
us-gaap Stock Issued During Period Value Share Based Compensation
StockIssuedDuringPeriodValueShareBasedCompensation
335000 USD
us-gaap Stock Issued During Period Value New Issues
StockIssuedDuringPeriodValueNewIssues
8628500 USD
us-gaap Adjustments To Additional Paid In Capital Stock Issued Issuance Costs
AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts
650179 USD
us-gaap Inventory Write Down
InventoryWriteDown
0 USD
CY2016Q3 us-gaap Inventory Write Down
InventoryWriteDown
0 USD
us-gaap Inventory Write Down
InventoryWriteDown
1151482 USD
CY2017Q3 us-gaap Gain Loss On Disposition Of Assets1
GainLossOnDispositionOfAssets1
-585 USD
CY2016Q3 us-gaap Gain Loss On Disposition Of Assets1
GainLossOnDispositionOfAssets1
-25890 USD
us-gaap Gain Loss On Disposition Of Assets1
GainLossOnDispositionOfAssets1
-585 USD
us-gaap Gain Loss On Disposition Of Assets1
GainLossOnDispositionOfAssets1
-25890 USD
vuzi Common Stock Awards Compensation Expense
CommonStockAwardsCompensationExpense
83750 USD
vuzi Common Stock Awards Compensation Expense
CommonStockAwardsCompensationExpense
174025 USD
us-gaap Proceeds From Issuance Of Common Stock
ProceedsFromIssuanceOfCommonStock
8567500 USD
us-gaap Proceeds From Issuance Of Common Stock
ProceedsFromIssuanceOfCommonStock
6612500 USD
us-gaap Payments Of Stock Issuance Costs
PaymentsOfStockIssuanceCosts
650179 USD
us-gaap Payments Of Stock Issuance Costs
PaymentsOfStockIssuanceCosts
847805 USD
CY2017Q3 us-gaap Derivative Liabilities Current
DerivativeLiabilitiesCurrent
122533 USD
CY2016Q4 us-gaap Derivative Liabilities Current
DerivativeLiabilitiesCurrent
0 USD
CY2016Q4 us-gaap Class Of Warrant Or Right Number Of Securities Called By Each Warrant Or Right
ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight
38100 shares
CY2017Q3 vuzi Subscription Receivable From Officer
SubscriptionReceivableFromOfficer
61000 USD
CY2016Q4 vuzi Subscription Receivable From Officer
SubscriptionReceivableFromOfficer
0 USD
us-gaap Increase Decrease In Due From Officers And Stockholders Current
IncreaseDecreaseInDueFromOfficersAndStockholdersCurrent
0 USD
us-gaap Increase Decrease In Due From Officers And Stockholders Current
IncreaseDecreaseInDueFromOfficersAndStockholdersCurrent
61000 USD
us-gaap Basis Of Accounting
BasisOfAccounting
<div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt 34.55pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> </div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; BACKGROUND: transparent; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <b><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">Note&#160;1&#160;&#151; Basis of Presentation</font></font></b></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt 34.55pt; FONT-FAMILY: Calibri,sans-serif; BACKGROUND: transparent; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <b><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></b></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The accompanying unaudited Condensed Consolidated Financial Statements of Vuzix Corporation and Subsidiaries (&#8220;the Company") have been prepared in accordance with generally accepted accounting principles in the United States of America (&#8220;GAAP&#8221;) for interim financial information and with the instructions to Form 10-Q and Regulation S-X of the Securities and Exchange Commission. Accordingly, the unaudited Condensed Consolidated Financial Statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The condensed consolidated balance sheet as of December 31, 2016 was derived from the audited Consolidated Financial Statements included in the Company&#8217;s Annual Report on Form 10-K for the year ended December 31, 2016 (the &#8220;Annual Report&#8221;).</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of the Company as of December 31, 2016, as reported in the Company&#8217;s Annual Report.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The results of the Company&#8217;s operations for any interim period are not necessarily indicative of the results of the Company&#8217;s operations for any other interim period or for a full fiscal year.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"></font> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">For the nine months ended September 30, 2017, Toshiba Japan represented substantially all of engineering revenues and <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 24</font>% of total revenues as compared to <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0</font>% in the same 2016 period. As of September 30, 2017 and 2016, Toshiba Japan accounted for <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 59</font>% and <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0</font>% of accounts receivables and accrued project revenue, respectively.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"></font> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The accompanying Condensed Consolidated Financial Statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. These Condensed Consolidated Financial Statements do not include any adjustments to the specific amounts and classifications of assets and liabilities, which might be necessary should we be unable to continue as a going concern. The Company incurred a net loss for the nine months ended September 30, 2017 of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">13,754,038</font>. The Company has incurred a net loss consistently over recent years. The Company incurred annual net losses of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">19,250,082</font> in 2016 and $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">13,427,478</font> in 2015, and has an accumulated deficit of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">90,592,988</font> as of September 30, 2017.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"></font> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The Company&#8217;s cash requirements are primarily for funding operating losses, research, capital expenditures and working capital. Historically, the Company has met these cash needs by borrowings under notes, sales of convertible debt, and the sales of equity. In 2016, we received total net proceeds from public equity offerings of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">19,238,015</font>, after underwriting discounts and commissions and other offering expenses. On August 14, 2017 the Company closed on the sale of <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 1,490,000</font> shares of its common stock to investors in a public offering at an offering price of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">5.75</font> per share. <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">As part of the same offering, we sold an additional <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 10,000</font> shares of common stock to an executive officer at the closing market price of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">6.10</font> per share, to comply with certain Nasdaq rules. As of September 30, 2017, there was a subscription receivable&#160;</font> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">of $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">61,000</font> related to the above offering due from that executive officer. The total balance of that subscription receivable was paid in-full on October 3, 2017. The Company&#8217;s net proceeds after commissions and expenses wer</font>e&#160;$<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">7,978,321</font>.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">Our cash requirements related to funding operating losses depend upon numerous factors, including new product development activities, our ability to commercialize our products, our products&#8217; timely market acceptance, selling prices and gross margins, and other factors. In order for us to achieve positive cash flow from operations, our product sales will need to significantly increase</font>.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;&#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The Company&#8217;s management intends to take actions necessary to continue as a going concern, as discussed herein. The Company will need to grow its business significantly to become profitable and self-sustaining on a cash flow basis. Management&#8217;s plans concerning these matters and managing our liquidity include among other things:</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 22.5pt; MARGIN: 0in 0in 0pt 0.5in; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;size: 8.5in 11.0in"> <table style="BORDER-BOTTOM: 0px solid; BORDER-LEFT: 0px solid; LINE-HEIGHT: 107%; WIDTH: 100%; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; BORDER-TOP: 0px solid; BORDER-RIGHT: 0px solid" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 0.5in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top" width="48"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 0.25in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top" width="24"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt"> &#8901;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">the commencement of full and higher volume manufacturing of the new M300 Smart Glasses with assembly offshore in the summer of 2017, on a turnkey basis, which should result in further product margin improvements and supply chain investments, as demonstrated in our third quarter;</font></font></div> </td> </tr> </table> </div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;&#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;size: 8.5in 11.0in"> <table style="BORDER-BOTTOM: 0px solid; BORDER-LEFT: 0px solid; LINE-HEIGHT: 107%; WIDTH: 100%; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; BORDER-TOP: 0px solid; BORDER-RIGHT: 0px solid" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 0.5in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top" width="48"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 0.25in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top" width="24"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: Symbol; FONT-SIZE: 10pt"> &#8901;</font></div> </td> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"></font> <div style="CLEAR:both;CLEAR: both"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">the award of a Smart Glasses development program with Toshiba, which we expect to be completed by end of 2017 and represents approximately a further $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">221,000</font> in revenues, <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">which thereafter should move into volume production in early 2018 with a proposed supply and purchase agreement that we expect will&#160;result in a minimum of&#160;$<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">5,000,000</font> in new revenues for the Company in the 12 month period following the commencement of volume deliveries;</font></font></div> </div> </td> </tr> </table> </div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;size: 8.5in 11.0in"> <table style="BORDER-BOTTOM: 0px solid; BORDER-LEFT: 0px solid; LINE-HEIGHT: 107%; WIDTH: 100%; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; BORDER-TOP: 0px solid; BORDER-RIGHT: 0px solid" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td style="PADDING-BOTTOM: 0in; PADDING-LEFT: 0in; WIDTH: 0.5in; PADDING-RIGHT: 0in; PADDING-TOP: 0in" valign="top" width="48"> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; 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FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">attempting to utilize conventional bank operating loan financing to help grow our working capital base to support our investments in accounts receivable and inventory as sales revenues grow.</font></div> </td> </tr> </table> </div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;&#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">However, if these actions are not successful in the near term, we will have to raise additional capital to maintain operations and/or materially reduce our operating and new product development costs.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">If the Company raises additional funds by selling equity, the ownership interest of existing stockholders may be diluted. The amount of such dilution could increase further due to the issuance of securities with new warrants or convertibility features with other dilutive characteristics, such as anti-dilution clauses or price resets</font>.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt 0.5in; FONT-FAMILY: Calibri,sans-serif; BACKGROUND: transparent; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt; size: 8.5in 11.0in"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">Based upon our current amount of cash on hand, management&#8217;s historical ability to raise capital, and our ability to manage our cost structure and adjust operating plans if and as required, we have concluded that substantial doubt of our ability to continue as a going concern has been alleviated.</font></div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>
CY2017Q3 vuzi Subscription Receivable From Officer
SubscriptionReceivableFromOfficer
61000 USD
CY2017Q3 us-gaap Significant Supply Commitment Remaining Minimum Amount Committed
SignificantSupplyCommitmentRemainingMinimumAmountCommitted
5000000 USD

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